New York isn’t for everyone, as Amazon just discovered.
After meeting staunch resistance from politicians, unions, and citizens, Amazon said Thursday that it is abandoning plans to build a new corporate location in Queens. Experts say that while local opposition to big industrial projects such as a new chemical plant are common, this kind of “not in my backyard” protest is unusual for a tech company wanting to build a new satellite campus, particularly one that would create 25,000 jobs.
According to Alan Guarino, vice chairman of the CEO and Board Services practice at Korn Ferry, the fierce backlash underscores the importance of contingency planning for leaders of all industries. “With Amazon, building a second headquarters was a business decision, so not being able to build one in its desired location has to be something that it planned for,” Guarino says. “A good organization will have that type of contingency planning built into both its risk management and in ongoing business processes.”
Perhaps that’s part of the reason why Amazon chose two locations instead of one in the first place. After nearly a year of considering proposals from 20 cities, Amazon announced in November that it would build new locations in Virginia and New York. Reports at the time said the decision would allow it to recruit more of the best technology talent. But New Yorkers immediately objected to Amazon’s plan, claiming the large government incentives weren’t deserved and that the company would further gentrify the community and its cultural identity.
Guarino says Amazon’s leadership is too smart not to have anticipated resistance. “Amazon had to have internal assumptions, and had an internal contingency strategy in place. It’s not unlike the military—when it plans an operation, it assumes that it won’t go perfectly and tries to anticipate what could go wrong.”
Contingency planning goes both ways, of course, and Amazon’s decision to pull out of New York means the city’s leaders need a plan B, as well. How will they stimulate job creation, for instance? How will they be able to convince other companies that want to build in New York that they won’t face the same opposition as Amazon? “What risk management plan does New York City and New York State have in place?” Guarino asks rhetorically.
Though Amazon is pulling out of New York, it said it “will continue to hire and grow across our 17 corporate offices and tech hubs in the US and Canada.” To be sure, experts say the trend of organizations moving headquarters or setting up outposts to give them access to highly skilled digital talent is likely to continue. Demand for this type of talent far exceeds supply, which means organizations have to be on the ground where digital talent lives to proactively engage with them. “Leaders are realizing that to attract the digital talent they need they need to physically be in tech-heavy centers,” says Melissa Swift, senior client partner for digital solutions at Korn Ferry.