Innovation In The Age Of Amazon, Walmart, IBM and Ayn Rand

Rambling Past Amazon, Walmart, IBM and Ayn Rand

When comparing notes with a neighbor I stated we are ordering more and more from Amazon. She on the other hand ordered from Walmart. Not being a big fan of Walmart stores myself because of their labor polices, I never really gave them much consideration. They pay a low hourly rate and limit hours worked making many of their workers eligible for government subsistence. We really shouldn't be subsidizing the largest retailer, the Walton family and their investors which unknowingly might even be you through your own retirement investments.

You can't fault the money-making machine of Walmart if that's what you care about. The Walton's now have as much money as the bottom 50% of America. Old Sam is gone now and the second generation is close behind and the third generation has no innovative bone in their body. Classic American dream. And Walmart executed the classic marketing con, "Buy American," which really meant buy cheap goods from Walmart made in low wage countries. After all, think of those poor starving kids overseas, won't you? I ate many an unwanted food for those poor starving kids while growing up. Amazon is a different proposition.

Who Are You Really Buying From When You Shop on Amazon?

Most people who don't shop much on Amazon think you buy direct from Amazon. However, more than half of the sales on Amazon actually are done with independent vendors. Think of Amazon as being a giant online mall where Amazon is the management. They supply the facilities and the independent vendors pay rent in the form of a commission. Some of these vendors are big operations but many are just mom and pop operations from all over the world.

What I didn't like about online sales originally was that UPS, FedEx and the post office were all running up and down the neighborhoods all day long doing the same job and spreading excess cancer- and asthma-causing vehicle exhausts in local neighborhoods. Why not just let the post office do the job? They have to come to my house everyday anyway. Well eventually UPS and FedEx started doing a lot of the long haul and the post office the short haul. Now I see that Amazon is bypassing UPS and FedEx and moving goods from warehouses or hubs to decentralizing sorting facilities and then delivering directly to local post offices using independent contractors. Amazon is particularly good at getting people to do their bidding in an efficient and cheap way.

Amazon has also come under fire for their labor practices. Best I can tell from this soap box about Amazon is they are an intense company to work for. Not much room for slackers there. I don't believe they would have been so successful without their intensity, being customer-centric and demanding excellence from employees and 3rd party partners in an economy where it is becoming rare that large corporations actually care about their customers.

Their independent contractor fulfillment-by-Amazon system requires everything to be packaged in such a way that a robot will eventually be able to read and pull from the shelves. I understand they now have robots in some facilities that run up and down the aisles pulling orders. Jeff Bezos has definitely one-upped Henry Ford when it comes to this automation innovation.

Walmart Rolled In Late While EBay Missed The Train

Walmart on the other hand is late to the game but will compete since they have the money and the computer systems in place. What they lack is the willingness to throw everything at competing with Amazon. Once they quit pushing pickup in stores and get on with it they will join the online second tier.

EBay on the other hand could have been there but they made a classic mistake by staying with the bidding system they pioneered. After their initial success, they turned conservative. They did buy an Amazon competitor, Half.com, and instead of embracing it and expanding it, they let it rot on the vine. Amazon also had a bid system too for a while but dropped it quickly for the buy-now model and then they quickly blew past everyone. I am still flabbergasted that EBay didn't realize most of us don't have the time or inclination to play with a bidding system.

The difference here was a hired hand in CEO Meg Whitman for EBay and an ownership demanding profits, and then the opposite Jeff Bezos the "throw everything at the wall" entrepreneur and innovator willing to forgo profits for growth and innovation.

Will Walmart and EBay catch up? My guess is no. The only thing probably stopping Amazon now is Bezos's old age or climate change, whichever comes first. Of course there is always government anti-monopoly action. But because no US administration has shown any desire to enforce the Sherman Anti Trust law since the AT&T breakup and the fact that your local Congressman is most likely deep in the pocket of big business, this threat is unlikely.

That EBay mistake ranks right up with IBM trying to ignore the PC, developed by a rag tag team, by sending them to Ft. Lauderdale to get them out of the way. IBM was the classic "conservative" business: trying to keep things the same, playing defense, and forcing conformity among the staff. When the PC hardware was developed they were even too uninterested to write their own operating system. So up steps Bill Gates who said I can do it and they gave him the exclusive. That became DOS and that was the beginning of Microsoft, a company that became worth even more than IBM itself. Worse for IBM, Gates didn't even have the operating system so he had to go out and buy one for $50,000.

Are We Heading Straight Into The Iceberg?

We are seeing this same conservatism play out in the response to climate change. The US is now trying to keep energy policy the same or regress under Trump while other countries are blowing past with new solutions. Many American industry and investment elites know this but are content to manipulate politics and politicians to pull out as much money now and let someone else worry about innovating and the results of stagnation. This capitalistic approach worked well for centuries but now is up against the stone wall of monopoly and capital concentration that Carl Marx once predicted would happen to unregulated and unbridled capitalism.

Our government seems paralyzed to come up with the necessary adequate response to global warming or any other community ill.  To many the government seems broken and out of control and unresponsive to the people. That's because they are no longer trying. The Ted Turner days of lead, follow, or get the hell out of the way have been replaced by the incompetence, malfeasance and dishonesty at nearly every level. Many have pointed to any number of reasons for how we got here. Many have pointed to the election of Ronald Reagan. I would rather point to when the attitude changed.

Most of our troubles can be traced to a popular second class novel by the "whinny little bitch", Ayn Rand, who made selfishness and greed a badge of honor rather than something to never be discussed in public by gentlemen, like religion and politics. She spent her whole life whining about the Communists ruining her family fortune. Not to be outdone, she has ruined ours.

The dots are not hard to connect. Ayn Rand's philosophy heavily influenced Fed Reserve Chairman Alan Greenspan, who is most responsible for not preventing the 2008 crash, and certainly Paul Ryan for blocking progress under Barack Obama. And it's nearly impossible to view comments on nearly any website without her anti-government nonsense in full display as it seems that every other comment is spouting Ayn Rand's objectivism idiocy. Ours is now a dystopian world of kill all government instead of making it better.

We now live in an era where all a malcontent has to do is run out in the desert and plant a flag and we will send a B-52 to blow it up. We will keep that up long enough until we will run out of B-52s, B-53s, and B-54s if cooler heads don't prevail. Our leaders don't do this because they are stupid or unaware of its futility, but because it pays big bucks to everyone who touches this non-solution. They sell all this flimflam to us as conservatism and we buy it because conservatism does have an important place in our personal lifestyle decisions. But is this really any way to run a railroad long-term that needs to add new stops and innovations?

The moral of this story is that conservatism can keep true entrepreneurs and innovators from going down rabbit holes and self-destructing. Conservatives are needed. But make no mistake, without the starry-eyed innovators and thinkers, conservatives would eventually destroy not only themselves but everything they touch. And that applies both to businesses and governments alike.

History is full of examples of both. For in the end, conservatives can neither successfully govern nor can they innovate. Sometimes in a crisis they can inspire as did Winston Churchill but without the crisis they are lost to fumble and stumble in excess caution, fear and over-reaction. It's just the nature of their being.

About the Author

jenningsRobert Jennings is co-publisher of InnerSelf.com with his wife Marie T Russell. InnerSelf is dedicated to sharing information that allows people to make educated and insightful choices in their personal life, for the good of the commons, and for the well-being of the planet. InnerSelf Magazine is in its 30+year of publication in either print (1984-1995) or online as InnerSelf.com. Please support our work.

 Creative Commons 3.0

This article is licensed under a Creative Commons Attribution-Share Alike 3.0 License. Attribute the author Robert Jennings, InnerSelf.com. Link back to the article This article originally appeared on InnerSelf.com

Related Books

HBR's 10 Must Reads on Innovation (with featured article "The Discipline of Innovation," by Peter F. Drucker)
economyAuthor: Harvard Business Review
Binding: Paperback
Features:
  • HBR s 10 Must Reads on Innovation with featured article The Discipline of Innovation by Peter F Drucker

Publisher: Harvard Business Review Press
List Price: $24.95

Buy Now

Ten Types of Innovation: The Discipline of Building Breakthroughs
economyAuthor: Larry Keeley
Binding: Paperback
Features:
  • Ten Types of Innovation

Publisher: Wiley
List Price: $29.95

Buy Now

The Innovation Blind Spot: Why We Back the Wrong Ideas―and What to Do About It
economyAuthor: Ross Baird
Binding: Hardcover
Publisher: BenBella Books
List Price: $26.95

Buy Now