More from Ken
At Amazon, meetings have no PowerPoint presentations. Instead, they begin with silent reading of a six-page memo that describes a team’s proposal and thought process. Each memo can take weeks to craft. The really good memos, says Amazon CEO Jeff Bezos, “have the clarity of angels singing.”
Bezos himself constructs such a piece of writing each year in his letter to the company’s shareholders. These letters provide shareholders with a progress report, and the rest of us with a glimpse into the mind behind the world’s most innovative company. Not coincidentally, this year’s letter is six pages, and its clarity and insights show that Bezos can walk the Amazon talk.
One paragraph in particular provides a master class in today’s commercial principle for everything:
One thing I love about customers is that they are divinely discontent. Their expectations are never static—they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’ I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before—in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.
This passage should get the attention of executives in every industry, particularly healthcare.
The most overt points in the paragraph are that customer expectations continually increase and are increasing faster than ever. Those points are important, but equally important is what happens when expectations increase. In Bezos’ view, there is a constant churn from extraordinary to ordinary customer experience. For companies attempting to satisfy customers, there is no reaching a plateau, no holding ground. If a company does not constantly employ fundamentally new ways to delight customers, it loses ground, because what satisfies customers one day will dissatisfy them the next as expectations grow and opportunities change.
In fact, “satisfy” may not be the right word. Satisfaction suggests a destination, a point at which a customer’s needs are met. Bezos, on the other hand, sees providing a great customer experience as an endless pursuit of a moving target. The idea of “satisfaction” also suggests an essentially paternalistic relationship between company and customer. In that framework, a customer is grateful for what a company provides and that gratitude turns into loyalty.
The word Bezos uses is empowerment. The implications of this word are massive. Empowered customers believe that they deserve an experience designed on their terms. Empowered customers have the tools to find out about their options, and they have the inclination to find some other company to do business with if they are not getting the experience they desire. In this framework, loyalty is only as strong as the most recent customer experience. And no matter how good that experience is, the next one must be better.
Amazon itself is playing a central role in escalating customer expectations. Amazon is not waiting for customers to articulate new desires and then rushing to fulfill them. The company is creating those desires through innovations that show customers experiences they never would have imagined. As a result, traditional companies are not only vulnerable to the changing expectations of customers, they are vulnerable to companies like Amazon that anticipate and raise those expectations. Amazon’s desire to innovate has led to new models of commerce from Amazon Prime to the Amazon Go cashier-less store, and it has taken the company into services as diverse as web services, movie production, and logistics—all with a goal of creating and fulfilling new levels of expectations.
These concepts are especially important in healthcare, where the notion of consumer expectations is far newer than in other industries.
Historically, healthcare consumers were viewed as patients. Once people became patients, they entered a complex system in which decisions were made for patients by physicians and by hospital rules and procedures. Patients seemed willing to endure the many inconveniences required by this complex system for a host of reasons, including first-dollar insurance coverage, lack of information, and lack of care options.
However, we are beginning to see the Bezos principle of customer expectations come into bloom in healthcare.
First, healthcare consumers are bearing more financial responsibility, have access to more information, and are exposed to more options. They are beginning to have the incentives and tools to behave like customers rather than patients.
Second, healthcare consumers no longer are segregating their healthcare experiences from other consumer experiences, giving healthcare organizations a pass if they don’t meet contemporary standards. For some people, a passive approach to their healthcare experience is out of step with their personal inclinations. Other people simply do not have the time that the traditional healthcare experience demands.
Third and perhaps most important, innovative companies—including Amazon itself—that target consumer experience are beginning to emerge in healthcare. UnitedHealthcare/Optum is developing a nationwide outpatient-based healthcare system. CVS/Aetna plans to leverage a massive footprint of retail locations for new levels of convenient access. Apple and Amazon both recently have taken steps to reinvent the healthcare experience for their own employees; if successful, these results very well could become commercial products.
These companies aspire to the new dynamic of customer-company relationships that is at the core of Amazon’s success. These companies aim to drive new healthcare consumer expectations, initiating a cycle of rising innovations and expectations that will never stop and will only move faster. This is unfamiliar territory for legacy healthcare organizations. It is a business model that is fast, consumer-oriented, and technologically innovative. As Jeff Bezos suggests, we have entered a business environment in America where every transaction experience must be “wow” and cannot be “ordinary.” This transition to “wow” is a heavy lift for most hospital organizations. But standing on the status quo of “ordinary” really is not an option.
As Bezos ultimately writes, “the customer won’t have it.”