As many of you probably already know, Amazon is planning to expand their grasp on American consumers by building a second primary headquarters in addition to their existing Seattle headquarters. Amazon recently released a short-list of cities that are still in consideration for the site of this “HQ2,” further pushing the conversation about the economic impact of the project on a city. Considering the exponentially growing size of Amazon, the new HQ2 will no doubt be one of the single-largest projects in recent times based on economic impact and influence. From 2010 through 2016, Amazon’s investments contributed an estimated $38 billion to Seattle’s economy. Now, as Amazon is bigger than ever in 2018, that economic contribution is certain to continue growing.
With HQ2, the stakes are incredibly high and all of Amazon’s project decisions are now in the public eye from start to finish, making their project management process crucially important. Amazon has certainly already laid out first three steps of their project planning process. At least within their organization, they have defined their scope and resources, organized a work breakdown structure, and planned their start to finish path, leaving some room for slight changes based on city choice. With $5 billion of estimated investment being put into this project, every day that they fall behind and every road block that comes up could cost millions of dollars to the project. Not to mention that any slip-ups will be in the public eye and have an effect on investor sentiment.
Certainly Amazon has already assessed their risks dozens of times, so as they push forward with this project, the crucial task is controlling. The first wall they will hit in the process that they must control for influence from the city they choose. Many cities on the short list are pitching their own ideas for HQ2. For example, if Dallas is chosen, they want to build a $15 billion bullet train transit system around the headquarters. Although proposals such as this sound attractive, they are examples of scope creep which would ultimately cause alterations the construction plans and set the project back on time and resources. A second conflict that Amazon will need to control for is community backlash. With cities offering money and resources to attract Amazon, residents are increasingly concerned about their taxes going towards “corporate welfare.” This is in addition to their prior concerns about Amazon running other local employers and businesses out of business. Such backlash may only heighten as construction begins, leading to protests and bad publicity for the company.
With the power that Amazon possesses to bolster an economy, they have a chance to lead a prosperous and successful partnership between themselves and their host region. The last thing that Amazon wants to do is isolate itself from its host city and its residents, so it is vital that they balance and control such issues throughout the project process. They must limit their scope creep while still working closely with the municipalities, and they must handle resident backlash while maintaining a positive image.
Do you see any other risks or dangers with Amazon’s HQ2 project? How do you think Amazon can best control these risks? Where do you think they will end up building HQ2 and why (just curious)?