Wow! I can’t tell you how impressed I was about this amazing statement from Reed Hastings, CEO of Netflix, in response to the debacle that occurred last year after raising prices and splitting DVD from streaming.
It takes a lot of guts to not just wax over or ignore mistakes – but even more amazing, he hit the nail on the head when it comes to why big companies make mistakes … they assume market share is permanent and instead it is fleeting (an example of none digital assumption).
I talk a lot about this in my new product economy deck. Matter of fact the number one rule/guideline is “Be Paranoid – Expect Constant Change.”
Though too late for Reed and Netflix (but he’s on his own path back to the top and I doubt he’ll make the same mistake twice), here are the bullet points to help frame what a company can do:
1) Specifically, don’t assume long-term dominance or market share.
2) Intel’s Andy Grove had it right: “only the paranoid survive”. This has to be top down paranoia that requires constant evaluation of customer needs, market opportunities, and emerging trends. Make your Chief Strategic Officer a Chief Paranoid Officer (seriously!)
3) Foster open communication and on-going ideation. Take in data from all levels; create a system to share the findings.
4) Don’t assume your competition is in your category or industry (which is something HBO should be worried about now that Netflix has original programming!)