The Power of Frugality
Posted on April 10, 2012 by Blake Leath
The following (also) comes to me via email from a dear friend and client. In the words of Mark Twain, "I am repeating it word for word as I heard it." I hope it informs you as much as it informed me. Happy Reading, —blake.
Fortune has good piece about Amazon.com, noting that “If such a thing as corporate DNA exists, it has animated the rise of the last decade's most successful technology companies. Google had a relentless focus on data, Apple a Zen-like obsession with simplicity, and Facebook a world of social connections to mine. Amazon has relied on an altogether more prosaic trait: thriftiness.”
The theory is that by being frugal internally, Amazon can charge its customers less, which becomes one of its keystone competitive advantages.
“For Amazon, savings are more than a competitive matter,” the story says. “Indeed, the company holds ‘frugality’ up as one of 14 leadership principles. (It ‘breeds resourcefulness, self-sufficiency and invention,’ the company says on its corporate site.) That goes back to 1994, when CEO Jeff Bezos jump-started the e-commerce company and jury-rigged a desk out of a door. ‘Door desks’ became a popular staple within the company years after it went public, and remained ‘the quintessential example’ of Amazon's frugality, ex-employee Greg Linden explained in 2006. The company still hands out the ‘Door Desk Award,’ a title given internally to select employees who have a ‘well-built idea’ that creates a significant savings for the company and enables lower prices for customers.”
KC's View: The complete story is worth reading by clicking here.
Frugality is not a new corporate virtue; it certainly has been a core value at Walmart for decades. But at a time when there are a lot of stories out there about companies where top executives seem more concerned with their own compensation packages and the trappings of office than they are with the people on the front lines and the very real day-to-day problems that they face, maybe it is fair to suggest that some folks ought to rethink their priorities.