‘If it ain’t broke consider breaking it’: are you a Netflix or a Blockbuster?

Netflix Blockbuster

By Jacqueline Benjamin

I read an inspiring article the other day by author and motivational speaker Rasmus Ankerson. Titled ‘if it ain’t broken, consider breaking it’ the piece looks at the issue of complacency amongst businesses – particularly successful ones – and it struck me that there were some very interesting parallels that could be drawn with how companies approach their employee engagement and employee benefits.

Rasmus provides some examples of people and organisations that have either hugely benefited, or massively lost out, as a result of their willingness or unwillingness to analyse and be sceptical of their performance, even in the face of major success.

He starts by talking about Tiger Woods’ infamous decision to completely reinvent his stroke having just won his first masters aged twenty. Much to the dismay of the golfing world, Woods spent 18 months relearning his entire technique, only to come back and dominate the golfing world for the next decade.

On the opposite side of this coin, says Ankerson, is Blockbuster and the decisions that ultimately led to its bankruptcy. The business had grown used to profiting largely from collecting penalties for the late return of move rentals (collecting more than $800m in the late 90s) yet refused to change its business model when newcomer Netflix came along and “created a business model that allowed customers to pay a flat monthly fee and rent as many movies as they wanted – with no late fees”. Another very similar example to this, of course, is Nokia, who went from having a global market share of 50%, to one of 3%, in less than five years after Apple’s iPhone took centre stage of the mobile phone market.

Complacency is one of Ankerson’s big bugbears and he makes a compelling argument as to this being the reason that many successful companies ultimately fail when a more nimble and innovative competitor comes along.

So how can this be applied to the world of employee engagement and employee benefits? Well, if Ankerson is to be believed, one of the biggest challenges is for businesses to motivate their employees, even in times of company success and, in his own works, “have a culture where you treat success with the same skepticism as failure”. In practical terms that means not being afraid to rip up the rulebook and take a fresh look at the accepted norms.

Netflix is an excellent case in point. The company has generated headlines with some of its forward thinking employee initiatives. When it comes to leave, for example, Netflix offers one year of paid time off for new mothers and fathers, as well as unlimited time off for vacation and sick days. In a nod to the increasingly blurred lines between work-life balance, mental and physical well-being and workplace engagement, Chief Talent Officer Tawni Cranz has commented: “we want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances”.

But Netflix’s approach to talent and culture goes above and beyond these types of employee initiatives. Back in 2014 a Power Point deck, detailing how the business shaped culture and performance, went viral and was subsequently described by Sheryl Sandberg as one of the most important documents ever to come out of Silicon Valley.  It’s an eye-opening read and provides some insightful context about a company whose expense policy is simply “act in Netflix’s best interests”. They also famously took the decision to eliminate formal performance reviews, opting instead to talk simply and honestly with employees about their performance on a regular basis. According to Patty McCord, who was Chief Talent Officer at the time the document was drafted, underlying these initiatives are two key philosophies. “Be honest and treat people like adults” and the idea that “the best thing you can do for employees—a perk better than foosball or free sushi—is hire only “A” players to work alongside them. Excellent colleagues trump everything else.” This meant that the business was not afraid to let go of people as the company grew and evolved (albeit with fair and generous severance packages for those who had played a value part in the business’ success), as well as shunning things like performance-related bonuses and many of the Silicon Valley clichés. It’s worth noting that all of this was occurring at a time when Netflix was growing rapidly.

For me the message from all of this is loud and clear: workplace culture is crucial to the success of your business and, even in times of success, it pays to consistently evaluate how you can influence this to foster a highly motivated, engaged and high-performing workforce.

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