I’ve been following Netflix since 2005, when I first visited its headquarters in Silicon Valley and interviewed Reed Hastings, its founder and CEO. I don’t think I’ve learned more about strategy, technology, and culture from any other company I’ve studied. It’s a stretch to claim that everything I know about business I learned from watching Netflix, but there’s no doubt that many leaders can see glimpses of the future of competition and innovation by looking at how the company does business.
To See the Future of Competition, Look at Netflix
If there were an Academy Awards show for business performance, Netflix would sweep this year’s categories — the corporate equivalent of “Titanic” or “Lord of the Rings.” Wealth creation? The company, which is barely 20 years old, has a stock-market value of $170 billion. Cultural sway? Netflix recently got 112 Emmy nominations. Management cred? Its reputation is so strong that a simple PowerPoint slideshow about its culture and HR policies has been viewed more than 18 million times. There’s no doubt that many leaders can see glimpses of the future of competition and innovation by looking at how the company does business.
For one, Netflix has shown that big data is powerful, but big data plus big ideas is transformational. Technology matters most when it is in the service of a compelling strategy. Netflix has also shown that if you aim to disrupt an industry, you must be willing to disrupt yourself. And finally, the company has made culture its strategy. When it comes to who it hires and what it promises them, how it makes decisions and shares information, even what it does about vacations, Netflix has invented (and reinvented) a range of practices that are designed explicitly to connect what the company aims to achieve in the marketplace to how it organizes the workplace.