Netflix Agility

Yesterday Netflix announced a reversal: they are not going to split off a separate service named Qwickster.  Some might view this as a flip-flop and a failure, but looking a bit deeper we see a quality that keeps Netflix at the top of their market: Agility.

It is rare, public situations such as this, that gives us clear proof of how Netflix is a modern agile organization.  Sure, it might be embarrassing to announce a new product on Sept 18, only to retract it on Oct 10.  But look at it this way: this is proof that they are listening to and reactive to the customers.  More importantly, we know for sure that on Sept 18, the executives had no idea that they would be retracting the service on Oct 10. 

This is a clear example of the kind of unpredictability that business owners face every day.

Some might look at this and say “They should not have announced it in the first place.”   Assuming 20/20 hindsight those people would be looking for who to blame and who to fire.  That is not the way that a real business operates.  Nobody has perfect knowledge of how things are going to play out. That ideal of predetermining the perfect plan before starting simply does not exist in cutting edge corporations.

A “pull” organization tries things, and builds on success, and reverses on failure.  The point is not to entirely eliminate failure, but to learn quickly from it, recognize what is working, and use that as an information resource to keep you ahead of the competition.

This is precisely the job of a knowledge worker:  figure out what to do.  One can not simply have blind confidence that the process is optimized so just follow the path.  Instead, the knowledge worker must always be continually evaluating their situation, and assessing if things need to change or not.  If you evaluate, you might find you need to change directions.  This is how the winners win — but it is not usually as public as this.  Time will tell whether this ultimately damages their reputation. Either way, it remains a dramatic example of how knowledge workers need systems that can deal with unpredictability.

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Tomorrow, I will be giving a seminar on “So You Think It`s Easy to Launch a SaaS Offering? Four Barriers to Success, & How to Overcome Them.”  Some techniques Fujitsu has to get your software on the cloud pronto.  Maybe see you there?

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