It’s not easy following a larger-than-life founder and CEO of an iconic company, but that’s what former AWS CEO Andy Jassy faces this week as he takes over for Jeff Bezos, who moves into the executive chairman role. Jassy must deal with myriad challenges as he becomes the head honcho at the No. 2 company on the Fortune 500.
How he handles these challenges will define his tenure at the helm of the online retail giant. We asked several analysts to identify the top problems he will have to address in his new role.
Ensure a smooth transition
Handling that transition smoothly and showing investors and the rest of the world that it’s business as usual at Amazon is going to be a big priority for Jassy, said Robin Ody, an analyst at Canalys. He said it’s not unlike what Satya Nadella faced when he took over as CEO at Microsoft in 2014.
“The biggest task is that you’re following Jeff Bezos, so his overarching issue is going to be stability and continuity. … The eyes of the world are on that succession. So managing that I think is the overall issue and would be for anyone in the same position,” Ody said.
Forrester analyst Sucharita Kodali said Jassy’s biggest job is just to keep the revenue train rolling. “I think the biggest to-do is to just continue that momentum that the company has had for the last several years. He has to make sure that they don’t lose that. If he does that, I mean, he will win,” she said.
Maintain company growth
As an online retailer, the company has thrived during COVID, generating $386 billion in revenue in 2020, up more than $100 billion over the prior year. As Jassy takes over and things return to something closer to normal, will he be able to keep the revenue pedal to the metal?
Kodali thinks that the 2020 gains sped up the move to online shopping a little faster than anticipated, but overall Amazon should be able to hold the gains from 2020 moving forward — and she hasn’t heard anything to suggest otherwise from the company.
“What’s interesting is that all of the data seems to still suggest that there is continued year-over-year growth in e-commerce even in 2021. It’s not like it’s going down. So it’s basically the gains that happened in 2020, we’re holding on to them. While that’s leapfrogging a couple of years, but then you resume the growth that you had before the pandemic. So I don’t see the numbers anywhere going down for them,” she said.
Ody said that Jassy will have to manage the enormous pressure to keep growing, something his experience at AWS should help him to do as he moves into the larger role this week. Jassy will have to deal with “the growth expectations being so high at Amazon, and were at AWS as well, which is probably something that stands him in good stead when you have such strong pressure, global pressure, public pressure from investors and the press around growth rates, which even sometimes when they’re outstanding, even a slight dip creates this kind of massive furor,” he said.
Keep government regulators at bay
Amazon has come under close scrutiny from both sides of the aisle, and Jassy will have to deal with regulators in the U.S. and around the world in the coming months. Ed Anderson, an analyst with Gartner, said that how well he handles these regulatory pressures could be a defining element for him as CEO.
“In the post-COVID period, there’s going to be a lot of scrutiny, particularly around big companies that did well through the pandemic, and Amazon certainly is one of them. So I do think that’s going to be a challenge for him. I think it was inevitable whenever a company gets that big, there’s always going to be scrutiny, and I think it’s just going to be one of his responsibilities and challenges, and he’ll have to help navigate the company through that,” he said.
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Ody said he has a different set of challenges, depending on the government. So, for example, the issues he’s facing around antitrust in the U.S. might be different from the concerns around privacy in the EU, but he’s going to have to address these as he takes over.
“He’s facing different issues from that subregional perspective. So, for example, the things that they face in North America versus what they face in the EU. … Are they too big? Should they be broken up? Is this the right way to do things; should we be putting all our eggs in one basket when it comes to relying on these massive global enterprises?” He said it will be up to Jassy now to lead that conversation and try to convince political leaders and regulators that his company is not the problem.
Deal with pressure to unionize Amazon warehouses in the U.S.
As Bezos takes his leave, he has made it clear that he would not welcome unions at U.S warehouses. Amazon swiftly decided against building its HQ2 in New York in 2019 after local politicians pushed for unionization. More recently, it fought hard against a unionization effort at a warehouse in Bessemer, Alabama. Last month, the Teamsters Union announced a hard push to unionize all of Amazon’s warehouses, and this is another issue that is left to Jassy to deal with now.
Kodali doesn’t expect anything to change in that regard under Jassy’s leadership, but if there is a political and public push, he may have no choice.
“I can’t imagine any capitalist enterprise willfully embracing unions. So I can’t imagine that would change [under Jassy]. I think that that’s again where legislation is their biggest threat. They just need to probably do what they’ve always done, which is when they see the writing on the wall, how long can they hold it off, which is what they did with sales tax. And give appropriate lip service by claiming they pay higher wages,” she said.
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Ody thinks if Jassy accepts unionization, it will be a chance to get ahead of legislative action and “get on the right side of history,” especially as there is more momentum for a raise in the minimum wage in the U.S.
“It’s very possible for Jassy to see things like the unionization of Amazon workers or attempted unionization of Amazon as an opportunity rather than a trick or a challenge because we’re already seeing things like minimum wages changing, and the perception of that and the way that the people view minimum wages is changing because we’re now seeing people at both the state and federal level who are willing to back those kinds of changes and push for those kinds of changes,” he said.
Anderson sees Jassy as perhaps being more pragmatic about unionization than Bezos was. “Being such a big important company in the world, they do have to be more attuned to and sensitive to these other issues. It just can’t be about business models and making money and growing and serving customers. They have to think about the societies, the systems and ecosystems within which they work and operate. And that’s why I think Jassy’s [communication] skills and empathetic approach will help with that. Whether it changes the culture or not I don’t know, but I think it will,” he said.
Put his own stamp on the company
As Jassy takes over, he’s not going to be simply a clone of Bezos. He has his own approach and his own style, which, according to reports tends to be less confrontational than Bezos was. He has to put his own leadership style to work. There is no question about his intelligence, and he has to begin to apply that in his own way, even while his boss remains Bezos, who will stay on as executive chairman.
Ody said they chose him for who he is and what he brings, and not because he would simply maintain the status quo. “I would imagine that the reason why he’s taking over is because he has his own ideas. I imagine that he is seen as the person that can help create that evolution of Amazon and [help the company take that] next step,” he said.
Anderson said Bezos probably won’t be looking over Jassy’s shoulder — Bezos gave up the position precisely because he wanted to pursue other things and get away from the day-to-day grind of running a company for as long as he has. Now it will be up to Jassy to take it from here.
“I think he is a really great choice for that because not only does he bring some of that outside perspective that you always want in a leadership change like this, but he does have that deep foundation of Amazon culture, so he is sort of the best of both worlds in that sense.”
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