Friday, April 22, 2022

How Subscriber Declines May Affect the Netflix Culture


Recently, my students read No Rules Rules, the book about the Netflix culture by founder and CEO Reed Hastings and INSEAD Professor Erin Meyer. I asked students to analyze the question: Is the Netflix culture transferable to other organizations? If so, under what conditions? The students did a terrific job debating this question among themselves and with six other faculty I invited to class. Then, the news broke just a few days later about the loss of 200,000 subscribers last quarter, along with the expectation of more churn to come. Netflix faces pressure because of price hikes that may have finally dented demand, as well as intensifying pressure from other streaming services such as HBO Max and Disney+. The recent news sparked a new question for me: How will the new competitive circumstances and performance decline affect the Netflix culture? Will the unique culture be a crucial asset that enables Netflix to bounce back, as it has in the past when faced with challenges? Or, will the culture be tested by these new circumstances?

Let's consider a few attributes of the culture.  Hastings argues that talent density is the crucial foundation for the Netflix culture.  Will the strong talent enable Netflix to find innovative ways to reinvent themselves in the face of competitive pressure?  Or, will the firm find it much harder to attract top talent now that the go-go growth years may be behind them?  Culling the "adequate" employees, while retaining the stars, may become challenging as the firm seeks to cut costs.  Will "adequate" stretch to include some very talented people, and how will that affect the environment within the firm?  

Netflix also prides itself on an environment of radical candor.  However, challenging times can cause psychological safety to suffer.  A culture of candor can become a culture of fear if leaders are not careful about how the "postmortems" are conducted in the wake of recent stumbles.  

Finally, what about the vaunted autonomy that has made Netflix a welcoming place for highly creative individuals who enjoy taking initiative, experimenting, and taking calculated risks?   Will senior leaders find it necessary to curb autonomy as they seek to turn the ship around?   If so, employees accustomed to a great deal of freedom may find it quite frustrating. 

Bottom line:  Cultures are often tested in times of adversity. They can either be the glue that keeps a firm together and helps organizations overcome obstacles, or they can come unglued by decisions that seem to conflict wit the norms and values to which employees have become accustomed.  It will be interesting to watch how the Netflix culture evolves as the firm navigates these much more turbulent competitive times. 

Tuesday, April 19, 2022

Successful Mentor-Mentee Relationships


Kellogg Insight features a very good article this week on how to be a better mentor (and mentee).   I found the tips to be quite useful.   One of the most interesting points made in the story centers on research by Kellogg Professor Brian Uzzi and his co-authors.  Here is the excerpt:

An analysis of the careers of more than 37,000 scientist mentors and mentees confirmed that having a mentor who is at the top of their game improves a mentee’s odds of ultimately becoming a superstar themselves by nearly sixfold.

But here’s something surprising. The study also suggests that the most successful mentees are those who go off to work in a different subject area, charting their own paths.

“When a student gets this ‘special sauce’ and they apply it to being a mini-me of their mentor, they still do well. But if they apply it to an original new topic of their own, they do even better,” Uzzi says.

This special sauce, the researchers argue, goes far beyond specific technical skills or subject-matter expertise, and includes tacit knowledge of how groundbreaking work is ideated and produced. This highlights the importance of mentors and mentees spending time and working through problems together, rather than simply ensuring that discrete skills are mastered.

This research strengthens advice offered later in the article by former IBM Chief Marketing Officer Diana Brink.   She argues that mentees need to own the agenda in these relationships.  They should be focused on how to secure the help and advice needed to achieve their goals, rather than simply trying to pursue the career path that the mentor may have chosen and attained quite successfully.  

Tuesday, April 12, 2022

Rise in Perfectionism Will Damage Our Ability to Innovate

Source: Skill Collective

London School of Economics Professor Thomas Curran and York St. John Univesrity Professor Andrew Hill have published an important new study about perfectionism.  They find that perfectionism is on the rise among young people in the UK, USA, and Canada.  They attribute some of this rise in perfectionims to "anxious, overly involved, and/or overly controlling forms of parenting."  In short, "increases in parental expectations and parental criticism offer the most plausible explanation for rising perfectionism to date."  The scholars stress that they are not blaming parents.  They believe larger systemic and structural forces are creating this pressure. 

The rise in perfectionism creates a host of concerns, including about young people's well-being in the face of such pressures.  However, I'd like to also stress the implications for innovation in our organizations.  Innovation requires the ability to test out new ideas, experiment and prototype, and iterate quickly based on feedback.  Naturally, such experimentation comes with a fair dose of failure.  My concern with the rise in perfectionism is that young people will be afraid to expose their ideas to others and open themselves up to constructive feedback. They will wait to refine their ideas, in hopes of making them perfect, before testing them out with others.  This reticence to put ideas out there before they are "complete" may lead to lost opportunities to improve those ideas, and it may slow down the process of innovation substantially.  We need young people to be willing to share their incomplete, "minimally viable" concepts with others, and then to build upon and improve those concepts based on the input from others...without constant fear of failure.