The financial and tech marketplaces love acronyms, and there’s an exclusive group of companies that go by the scary-sounding moniker “FAANG”. This group of industry powerhouses, which includes Facebook, Amazon, Apple, Netflix and Google, are well-known as innovative leaders and disruptors of the modern economy.
You may think these businesses have nothing in common with yours — but think again. From people to technology, here are 4 lessons from the FAANG companies that can help of all sizes advance their growth and increase their competitive advantage.
1. Start with people and collaboration
Have you ever heard a company say that its people are its most important asset? The FAANG companies would say that organization is off to the right start.
In fact, they would likely go a step further by emphasizing the importance of finding the right people and giving them the freedom to innovate and collaborate. Consider the following:
- The Netflix culture manifesto states: “Our core philosophy is people over process. More specifically, we have great people working together as a dream team. With this approach, we are a more flexible, fun, stimulating, creative, collaborative and successful organization.”
- The Google offices may be known for their on-campus cafes, funky lounges and basketball courts for midday hoops breaks. But there’s more to the corporate culture than perks. The company’s people management strategy emphasizes making the right hiring decisions, working in small groups and valuing the wisdom in the crowd.
- Employee engagement is a priority at Facebook, where the company holds hackathons every two months. At these events, employees are urged to ideate and build on each other’s ideas to bring new possibilities to the company.
- A 2017 Wired article focused on the collaborative spaces at the new Apple headquarters, saying: “This would be a workplace where people were open to each other and open to nature, and the key to that would be modular sections, known as pods, for work or collaboration. [Steve] Jobs’ idea was to repeat those pods over and over: pod for office work, for teamwork, for socializing …”
Even in the digital age, it’s still the human touch that turns inspiration into action and leaves an impression. Moreover, that focus on people and collaboration is really the starting point for the greatest advantage in business today — innovation.
2. Create an organizational culture of innovation
In 2002, the Economist magazine stated: “Innovation is now recognized as the single most important ingredient in any modern economy. In short, it is innovation — more than of capital and labor — that makes the world go ‘round.”
There’s no doubt that the FAANG companies are at the forefront of this revolution.
- In a letter to shareholders, Amazon CEO Jeff Bezos said: “Invention comes in many forms and at many scales. The most radical and transformative of inventions are often those that empower others to unleash their creativity — to pursue their dreams.”
- Apple’s corporate mission statement says: “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating.”
- Facebook strives to make “innovation a daily habit” by encouraging its employees to constantly introduce new ideas into the platform. Many of Facebook’s most well-known features, including the “Like” button and the Messenger function, were introduced through employees’ “ideation” processes.
Bringing that commitment to innovation to life takes resources, energy, and most of all, time. For example, Google allocates 20 percent of each employee’s work time for innovative projects and new lines of business.
Of course, this model may not be feasible for small businesses. But any team can implement a culture of innovation by committing to using greater creativity to solve complex problems.
3. Deliver a great customer experience
companies know are more than just transactions. Your customers’ impressions of your brand — right from their initial interest through to the buying, implementation and evaluation phases — form the overall customer experience (CX) that will drive their relationship with your company.
When Netflix started as a movie rental service, CEO Reed Hastings focused their entire business model on a single goal: “Making the movie experience so much better than the regular video rental that everyone wants to do it.” Hastings’ vision was more than just a positive CX. He wanted to redefine the way customers saw the entire offering.
Amazon has arguably developed the world’s leading digital CX. Qualtrics states: “For over twenty years, Amazon has set the standards in e-commerce with almost unrivaled product inventory and competitive prices, and while that would be plenty for a successful business, what’s taken Amazon to a legendary brand is the combination of customer experience and product that keeps people coming back for more.”
For growing companies, delivering a superior CX is key for developing brand recognition and customer loyalty. Businesses can’t survive without customers, so figuring out how to serve them well should be a priority from day one.
4. Focus on customer personalization
For FAANG companies, a big part of delivering a superior CX is personalization. These companies have hundreds of millions of customers, so it would be easy for the average person to feel like they’re at the mercy of an uncaring behemoth. And yet they don’t.
On the contrary, customers feel like the CX has been personalized for their tastes and preferences. That’s mostly because it has been. The FAANG companies are at the forefront of using machine learning and AI to tailor the experience as much as possible for each consumer’s needs and wants.
An Amazon manager of personalization explains: “One of the problems with Amazon’s vast selection is it’s enormous. It becomes critical for Amazon to understand the customer deeply in order to make it easy for the customer to find what they want.” Another manager describes the goal: “We try figuring out what our customers want before they even know themselves!”
Similarly, Netflix has a content library of thousands of titles. The company uses sophisticated algorithms to personalize each user’s page with predicted likes, recommendations, and interests. As the Netflix blog says: “We don’t have one product but 100 million different products with one for each of our members with personalized recommendations and personalized visuals.”
Personalization is emerging as more than a nice-to-have feature. As the FAANG companies continue to re-define the marketplace, personalization will be an expected part of the customer journey. Successful businesses from all sectors should be striving to provide their customers with that is tailored to their needs.
Learning from the FAANG companies
The FAANG companies are more than just examples of wildly successful business ventures. They are a glimpse into the future, of what the economy will value and what your customers will expect.
The importance of collaboration, innovation, personalization, and superior CX will only continue to grow. As a result, every company’s success will depend on implementing end-to-end business processes — from lead tracking to workflow automation to customer relationship management — with these factors in mind.