“At Amazon we design for good customers and merchants. If we did otherwise, we’d create friction for the masses — the normal customers — when the problem of fraud is small.”
Those were the words of the woman responsible for building the supply chain at Amazon on a recent visit to Dubai. The former executive had been invited to teach a group of future Emirati leaders on DP World’s 20Xel executive development programme about Amazon’s supply chain mechanics. And what she had to say has stayed with me.
Too often, I have to labour through meetings where the focus is on containing risk and avoiding fraud. It seems that leaders in many companies assume the world is filled with people who are out to rip them off, and sadly they plan accordingly. Judging by their actions, they should have selected careers in law enforcement, not business or government.
So, when I heard that Amazon assumes their customers and merchants are good, it made a refreshing change. Of course, the company doesn’t rely solely on faith in human nature. In the background, machine learning is monitoring people’s behaviour and if a problem or fraudulent activity is detected, the account in question is rapidly shut down.
What Amazon does not do, however, is create rules and practices based upon one customer’s bad behaviour in an attempt to prevent future incidents. While it might be tempting to take drastic measures, the company realises that doing so would amount to punishing the masses for the actions of the tiniest minority.
A comparable example of collective punishment can be found in brick-and-mortar retail and, specifically, the decision to put security tags on every item on the shop floor. It’s probable that this measure has helped to contain shoplifting, but it has also created an industry-wide practice that punishes all of the good customers, who make up the vast majority.
The result is that we now have to wait for the shop assistant to remove the tags from every item every time we make a purchase. Even worse, rogue tags inevitably get missed from time to time and trigger store alarms, making innocent customers feel like criminals.
In brick-and-mortar retail just as in online commerce, the same recurring question begs: Why punish the masses for the behaviour of the minority?
Amazon doesn’t. The tech giant is cognisant of the magnitude of a problem and treats it accordingly. When you think about it, the approach makes perfect sense. For example, if 5 per cent of your accounts are bad, then it’s logical to spend 5 per cent of your efforts on those accounts. The remaining 95 per cent of your time can then be dedicated to the 95 per cent of accounts that are good.
In following this logic, Amazon minimises its risk by focusing on the majority, not the minority. The way the e-commerce giant sees it, if you can help the majority of your customers to do more business with you, then by simple mathematics, you decrease the size of the problem. So, instead of punishing everyone, help the majority.
The best way to lessen the impact of risk is to “grow the good”, and the first step begins with a little introspection. In all likelihood, you are guilty of contributing to a culture that primarily focuses on the risks. As a leader, where you look, your team will go, so if you assume customers are inherently bad and if you focus on the potential problems, your team will do the same.
I’m not saying that you should not minimise your risk — you should. After all, there is no doubt that a small number of customers set out to take advantage and deceive.
What I am saying is use your time proportionately. Why dedicate all your efforts to preparing for unscrupulous customer behaviour when the real value for your company lies in nurturing all the good that is out there?
For a business to reach its potential, customers should be regarded as innocent until proven guilty. Don’t punish the masses for the actions of the few.
— The writer is a CEO coach and author of “Leadership Dubai Style”. Contact him at email@example.com.