Last week the roller coaster ride that Netflix has been on did another loop-de-loop when earlier in the week CEO Reed Hastings announced that they will no longer spin-off the DVD-by-mail business. Apparently in hindsight they realized that was a convenience the users really liked. (Shocker!) At least they didn’t make another crappy video to announce it.
Despite the fact that this is good news, there were still a lot of negative comments thrown towards Reed. It seems like they’re making a lot of hasty decisions. They should have read the excellent post by guest blogger Andy Bondurant about haste. Andy’s decisions only cost him $100k. Reed’s & Co. have cost over $10 billion in lost stock value. Even though this is a step in the right direction, there were still over 700 comments on that blog post, most of which lambasting Reed and telling him how obvious this blunder was.
But before we all go off casting stones, let’s stop and take inventory of our own businesses. Lots of people are calling for Reed to step down or be ousted. But I wonder if some of us (including me) shouldn’t be cast out like Thor from Asgard.
A Tale of Two Andy’s
I started thinking about all of this last week after seeing a clip from this year’s Catalyst Conference (an annual leadership conference targeted primarily to church leaders that has had such prominent speakers on stage as Dave Ramsey, John Maxwell, Malcolm Gladwell and Seth Godin). The clip I saw had Catalyst co-founder Andy Stanley (an amazing leader and speaker in his own right) giving a talk inspired by Andy Grove’s book Only The Paranoid Survive. Who’s Andy Grove you ask? Oh, only one of the co-founders, visionary leaders and past CEO of a little company called Intel. The excerpt from Andy Grove’s book that inspired Andy Stanley’s talk was a section where Grove asked the question:
If we got kicked out, and the board brought in a new CEO, what would he do? Why shouldn’t we walk out the door, come back in, and do it ourselves?
To put it another way, if your business had a board of directors that decided you needed to be replaced, what changes do you think a new person would bring to your organization to make it better? Once you identity what those are, ask yourselves, why don’t we change them now!
- What kind of decisions would a CEO not emotionally connected to your art decide on how to market and sell it?
- What would a CEO not stuck on an current way of running the business do to shake things up?
One comment Andy makes in that video clip is that churches rarely make a change unless the money starts to run out. Do you find yourself only making necessary changes and improvements in your business only after you’re hit with financial hardship? He may be talking about churches, but I think it’s equally applicable to our businesses.
There are two key questions he’s started posing to his organization that it’s worth asking of ourselves.
- Where is the org in decline and where do we have to “manufacture energy”? In other words, where are we making up stuff to compensate for poor business practices.
- What are our “underlying assumptions” and are they still true? Underlying assumptions are things that drive your decisions, but you don’t even know what those things are anymore. For instance, one underlying assumption that could drive your prices is that clients don’t appreciate video. Is that really true? If you’ve priced yourself based on that underlying assumption, you could be hurting your business.
The bottom line take-away from all of this: acknowledge what’s not working and own up to why you’re unwilling to do anything about it.
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Another important point to ponder for those of us business to be viable and thrive. Thank you Ron. Question if I may what do you think about doing cold calls and the best approach to it? (this would make a good blog topic).
That’s a tough one Andrew. Admittedly, I’m torn on the subject. On one hand, depending on your brand and the kind of clients you’re going after, cold calling could be the biggest turn off and detriment. On the other hand, lots of successful business people say it’s a hard but important part about making sales. I guess it depends on a lot of other things (your script, your delivery, the leads you’re calling, etc.). But, I could see a new CEO of my company saying we need to give cold calling a try. As Planet 5D Mitch said in that “Flip Side” video this week, the worst they could do is say no. But I agree, it would make a good blog post. I’ll need to do more research on it before I could write about it.
great post Ron!