The New York Times Magazine over the weekend had a long and fascinating piece by Joe Nocera that looked at Netflix, examining both its business model and its culture and wondering, as the headline said, "Can Netflix Survive In The New World It Created?"
One of the things most interesting about the story is the way in which Netflix has continued to evolve, shape-shifting when necessary - and sometimes even when not - to adapt to what its senior management sees as a changing landscape in both the entertainment and technology worlds. In some ways, as much as Netflix has captured the popular imagination - not to mention many consumer dollars - its greater challenges lay before it as the competition on many fronts rises up to change the way they do business.
But there's also another cultural phenomenon at Netflix that grabbed my attention:
"For those who fit in, Netflix was a great place to work — empowering and rational," the story says. "There are no performance reviews, no limits on vacation time or maternity leave in the first year and a one-sentence expense policy: Do what is in the company’s best interest. But those who could not adapt found that their tenure at Netflix was stressful and short-lived. There was pressure on newcomers to show that they had what it took to make it at Netflix; those who didn’t were let go."
In fact, one of the company's earliest hires, Patty McCord, served as Netflix's chief talent officer. In that role, she challenged founder Reed Hastings to "ask himself a few times a year whether he would hire the same person in the same job if it opened up that day. If the answer was no," the story says, Netflix should just write the person a large severance check and move on. It was a sometimes painful way to do business, but McCord - and eventually Hastings - saw it as a critical step in making sure Netflix always had the right people to take it into the future, as opposed to just the people who had been successful in the past.
And then, one day, Hastings looked at McCord and decided that if the chief talent officer job opened up, he wouldn't hire her to do it. And so he let her go.
You can - and should - read all about it here. It is a great piece of journalism about a company that has quite literally helped to change its corner of the world, while having an enormous impact on consumer behavior ... and still realizes that the folks there have to work twice as hard to make sure that it is positioned to do it again.
One of the things most interesting about the story is the way in which Netflix has continued to evolve, shape-shifting when necessary - and sometimes even when not - to adapt to what its senior management sees as a changing landscape in both the entertainment and technology worlds. In some ways, as much as Netflix has captured the popular imagination - not to mention many consumer dollars - its greater challenges lay before it as the competition on many fronts rises up to change the way they do business.
But there's also another cultural phenomenon at Netflix that grabbed my attention:
"For those who fit in, Netflix was a great place to work — empowering and rational," the story says. "There are no performance reviews, no limits on vacation time or maternity leave in the first year and a one-sentence expense policy: Do what is in the company’s best interest. But those who could not adapt found that their tenure at Netflix was stressful and short-lived. There was pressure on newcomers to show that they had what it took to make it at Netflix; those who didn’t were let go."
In fact, one of the company's earliest hires, Patty McCord, served as Netflix's chief talent officer. In that role, she challenged founder Reed Hastings to "ask himself a few times a year whether he would hire the same person in the same job if it opened up that day. If the answer was no," the story says, Netflix should just write the person a large severance check and move on. It was a sometimes painful way to do business, but McCord - and eventually Hastings - saw it as a critical step in making sure Netflix always had the right people to take it into the future, as opposed to just the people who had been successful in the past.
And then, one day, Hastings looked at McCord and decided that if the chief talent officer job opened up, he wouldn't hire her to do it. And so he let her go.
You can - and should - read all about it here. It is a great piece of journalism about a company that has quite literally helped to change its corner of the world, while having an enormous impact on consumer behavior ... and still realizes that the folks there have to work twice as hard to make sure that it is positioned to do it again.
- KC's View:
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It also is worth noting, if you are in the retail business, the extent to which Netflix's business strategy has evolved from an understanding that if it only is in the business of renting stuff that customers could get elsewhere, that ultimately would be an unsustainable model that would leave it open to competitive threats. Which is why it spends so much money and time these days focusing on original content - which is something that retailers call "private label."
It is, in fact, the differences - not the similarities - that define whether or not a company is going to be successful. And the faster retailers come to that realization, the better chance they have of surviving the very real threats to their continued existence.
