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Note: This was a group project written for a class.

Introduction

Shoe Dog, by Phil Knight, is a memoir about how he created the iconic brand Nike. The book begins in 1962 when Phil Knight came up with his “Crazy Idea.” Knight observed that Japanese cameras made deep cuts into the camera market, which the Germans dominated, and he had the Crazy Idea that Japanese running shoes could do something similar. This paper will cover Phil Knight's uses of macromanagement, futures contracts, continuous innovation, job rotation, and transferable skills to make his Crazy Idea come true and assess how these business practices apply to Amazon.

Best Practices

Macromanagement

When the energetic Jeff Johnson worked for Knight, Johnson often wrote to his boss. While Knight occasionally felt he should respond, he was overwhelmed by the number of letters Johnson wrote and decided holding Johnson's hand was poor leadership. Knight reasoned the great leaders he looked up to never micromanaged, and he quoted Patton more than once on telling people what to do rather than how to do something. That is called “macromanagement.” According to Fraser Sherman (2019), macromanagement assumes one can trust their employees to deliver and leaves them responsible for sorting out details as they work towards their goal. Though Johnson does complain, he is ultimately grateful for the freedom Knight gives him because Johnson would never have such freedom in a traditional corporate job.

To say Amazon struggles with macromanagement puts it lightly. Forcing drivers to give “biometric consent” to track location, see movement, measure driving speed, and take photos of drivers is high-tech micromanagement (Canales, 2021). Nothing is more off-putting to workers than constantly looking over their shoulders. Jake Rossen (2021) also notes warehouse employees dislike Amazon monitoring their breaks as the company counts the time spent going to the breakroom and back as part of the break. The nature of micromanagement implies distrust of employees, and technological micromanagement ironically makes being on top of employees distant. Even having humans do the micromanaging would be a step in the right direction. Amazon must consider replacing these technological monitoring tools with more hands-off supervisors if it genuinely wants to project the warmth of its logo's smile.

Futures contracts

Knight did not simply use futures; he invented the concept. Knight describes futures as "ironclad commitments" where companies would make non-refundable orders in advance in exchange for discounts (Knight, 195). Stores were skeptical of futures initially, but after unveiling popular new shoes, futures were a hit with retailers. Amazon owes its ability to make futures contracts to Knight. Without that idea, contracts between Whole Foods, which Amazon owns, and its suppliers would be impossible, even if those relationships can get occasionally rocky (Springer, 2017). Amazon should be mindful that Whole Foods is not dependent on one or two suppliers but instead has a diverse group to prevent one supplier from causing such headaches in the future.

Continuous innovation

Bill Bowerman was Phil Knight's track and field coach at the University of Oregon and a second father figure. In 1964, Bowerman agreed to meet for lunch and later agreed to be a part of Nike. Knight met with Bowerman and his lawyer to finalize the details, and they settled on 51% of the business as Knight's and 49% as Bowerman's. Having Bowerman as a business partner was imperative for the success of Nike because Bowerman was constantly coming up with new ideas. In 1972, Knight patented Bowerman's Waffle Shoe.

Amazon utilizes continuous innovation as well. Amazon focuses innovations on their machines and technology to produce the plethora of products that they offer. Amazon has a leadership principle called "invent and simplify," and Gou (2021) says inventing does not always mean creating an entirely new product because "sometimes, there is already an existing product or process, but maybe it's not good enough.

Job rotation

Knight occasionally rotates his employees when he sees they might be a better fit for a specific position or when he wants to keep them sharp. Knight has two employees, Woodell and Johnson, switch cities when he realizes they would benefit from the other's office and duties. Another employee goes from the legal department to marketing simply to "prevent them from growing stale" (Knight, 273). Nike had management that understood employees do not thrive from monotony.

Job rotations are key to making sure the company can always run smoothly. Within the businesses, there are many different departments, and employees are getting switched around constantly. They do this to keep them fresh and try something new. Many people get sick of their positions and want to do something else. When people start not liking their positions, they tend to slack. Job rotations allow employees to begin something new in another department, and this keeps everyone fresh. That can also tie into transferable skills, as those with transferable skills can more easily change jobs.

Transferable skills

Hiring employees with transferable skills was one of Knight's best practices. He "needed to hire people with sharp minds … and accountants and lawyers had at least proved that they could master a difficult subject" (Knight, 270). Knight needed people with a general skill set that could be useful in a variety of positions. That principle can be useful for any company, and Amazon is already aware. Amazon hires using its Bar Raisers program to search for people they can be sure will be a net benefit (Amazon Staff, 2019).

Conclusion

This report highlighted macromanagement, future contracts, continuous innovation, job rotation, and transferable skills. Still, there are surely more practices that Amazon can learn from a close analysis of this successful business. Amazon needs development of macromanagement but has done well with the other four skills. A follow-up analysis should be done to find the best methods for a macromanagement strategy. Perhaps the most important lesson is that Amazon can gain valuable insights from the analysis of any company.

References

Amazon Staff (2019). How Amazon hires. US about Amazon. Retrieved from https://www.aboutamazon.com/working-at-amazon/how-amazon-hires

Canales, K. (2021). Amazon is reportedly telling delivery drivers they must give “biometric consent” so the company can track them as a condition of the job. Business Insider. Retrieved from https://www.businessinsider.com/amazon-ai-camera-driver-biometric-tracking-consent-deliver-packages-report-2021-3?op=1

Guo, T. (2021). Working like an amazonian: Leadership principles explained — 3. invent and simplify. Medium. https://medium.com/4th-coffee/working-like-an-amazonian-leadership-principles-explained-3-invent-and-simplify-13a3bb13c99a

Knight, P. (2019). Shoe Dog. Simon & Schuster.

Rossen, J. (2021). 16 secrets of Amazon warehouse employees. Mentalfloss https://www.mentalfloss.com/article/646161/secrets-amazon-warehouse-employees

Sherman, F. (2019). What is the difference between micromanagement and macromanagement? Bizfluent. https://bizfluent.com/info-8579978-difference-between-micro-macro-management.html

Springer, J. (2017). UNFI takes a hit in Whole Foods investment. Supermarket News. https://www.supermarketnews.com/retail-financial/unfi-takes-hit-whole-foods-investment