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The Amazon Effect

On April 30, 2018, Egon Zehnder hosted an intimate roundtable discussion on the impact of Amazon’s second headquarters, with a focus on the Washington DC, Maryland and Virginia region (DMV). The event brought together fourteen regional business leaders and several members of Egon Zehnder’s digital practice for a thought-provoking discussion on the potential opportunities and threats Amazon HQ2 presents to the region.

The gravitational pull of Amazon’s culture

Amazon is able to attract talent due to their hyper-growth and innovative businesses, however, retaining talent has proven more challenging given its fast-charging, frugal and aggressive culture.
 

Key Takeaways

  • Amazon’s entry into the market presents both a formidable competitive threat and a sizeable opportunity.

  • There are several aspects of their culture and business model that make Amazon a force to be reckoned with:

    • Cult-like Leadership Principles and compressed business titles

    • Stock compensation structure that is backloaded to ensure employee retention

    • Diversified model with a variety of businesses that are aggressively outperforming and outgrowing their competitors across industries

  • At the same time, it’s challenging for Amazon to retain talent and there is a sense that there’s a revolving door at the company.

 

 

https://www.theguardian.com/technology/ng-interactive/2018/apr/24/bezoss-empire-how-amazon-became-the-worlds-biggest-retailer 

 

The Potential to Transform the DC Area from a Political to Tech Hub

If Amazon’s headquarters were to be located in the region, the Washington DC, Maryland and Virginia area has the potential to further solidify its status as a tech hub. There would be broad scale winners and losers in the local employment market should this happen.
 

Key Takeaways

  • Similar to how Amazon and Microsoft impacted Seattle, the Washington DC, Maryland and Virginia area could quickly evolve into a region that draws start-ups, tech companies, and other innovators and investors looking to capitalize on the anticipated growth.

  • Amazon’s HQ2 could cause severe “brain drain” in the region, attracting local tech talent and underutilized, highly-trained, government talent in particular.


DC business leaders are thinking about how they can compete with Amazon

Preparing for Amazon’s arrival in the Washington DC, Maryland and Virginia region appears to be an open-ended question that presents a lot of challenges.

 

Key Takeaways

  • Business leaders should be proactive and creative when thinking about retaining their talent, competing with Amazon’s diversified set of industries and products, and imagining new ways to work alongside Amazon.

 

 

Download as PDF:

Amazon-Effect-Egon-Zehnder-Perspective

 

 

 

 

 

 

 

 

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