NETFLIX AND THE CHANGE CURVE

Every few years we get the privilege and learning experience of observing corporate decision making first hand, in situ.  And now with social media so pervasive we are all "Players" in that process.

Netflix decided to change the way they do business.  For very real and sound reasons they need to change.  The world is changing and they need to adapt or die.  No one knows that better then Neflix.  A few years ago they profoundly altered the whole concept of acquiring home entertainment; burying a few rather large corporations in the process.  Netflix does not want to become a dinosaur.

As Netflix analyses it's future, it realizes that it's future is in streaming.  With lower costs and wider distribution (Think Mobile!) the choice is a "No Brainer".

How do you do that?  How do you continue to change without destroying yourself?  As Reed Hastings found out, easier said then done.  Now I commend Reed on his apology, although I am more amazed and thrilled by the responses of his once and future customers.  On two fronts,  first the transparency that social media has created in the corporate world and secondly the passion of the discourse.

And as Reed may or may not know, we are center stage viewers of that iconic play called "The Change Curve".  And that play, that fundamental process of every innovative company is not a linear progression upward.  Things get dicey.  They get touchy.  People get upset.  Things get worse before they get better.  It is how you manage that dip, that negative reaction to change, that matters most.

Reed's apology was good.  I would have come out with a more matter of fact explanation, talking about cost of production and skyrocketing content acquisition expenses.  "The Truth will set you free!"  The real beauty was in the feedback Reed got.  Yes they were pissed, but 8000 people cared enough about Netflix to say something.  More importantly to offer suggestions about what THEY want as subscribers!

I am a Netflix streaming customer and I do NOT want to get DVD's in the mail.  The new system doesn't appear to effect me that much.  It does effect A LOT of Netflix customers and they do not like the new "Qwikster" idea.  Isn't that great that Reed got that feedback in real time!

Whether Netflix/Qwikster will lose subscriptions and content and ultimately fail, I don't know.  To quote a movie "It'll be fun to watch!"