Catch-up is a losing game
3 things credit unions can learn from Netflix
In the business limelight of late is Netflix, which really seems to be shaking things up in the entertainment industry. Netflix wants to be HBO, its executives are saying1, but here’s the kicker: they want to be doing what HBO does before HBO can do what Netflix does. By reaching for that, they’re actually aiming to be more than HBO.
Netflix leaders seem to have in mind something we’ve been talking about here at First West: catching up is a losing game. Shooting for par with others in innovation, membership growth, product development, sales practices, branch design and so on is just a recipe for future pain. It’s settling for good enough.
So how can your credit union move into a leading position? There are no silver bullets, but here are three big things I think we can learn from Netflix to help avoid getting stuck in the rut of simply tying the game up.
Get competitive advantage by changing the game (a.k.a disruption and innovation)
It’s getting easier to watch the more popular shows online when you want to—but often it’s limited to two or three of the most recent episodes. But Netflix is raising the on-demand stakes by releasing complete new seasons of their in-house produced TV shows online all at once, without commercials. That’s a bold move in an industry whose bread-and-butter has kept viewers locked into seasons, timeslots and targeted marketing for more than 70 years. True, Netflix tends to keep their subscription numbers close to their chest, but there’s no questioning their disruptive spirit, which some studio execs are saying is afoul of the traditional Hollywood ways.2 In a word, they’re innovating.
Get a splatter factor—embrace failure
In our excellence-pursuing business cultures, embracing failure sounds counter-intuitive, but consider this. At a recent speaking engagement, Netflix founder and CEO Reed Hastings said that if their foray into original programming didn’t produce “some splatters,” they weren’t “being aggressive enough.”3 The message here echoes what leadership and management pundits have been saying for a while now: don’t fear failure. Fear of failure often leads down a long and winding road to paralysis, especially with innovation efforts. And the fact that Hastings correlates splatters and aggression is significant. His point: risk, reward and failure are closely knit, so a company that hasn’t produced some significant flops probably isn’t taking risks that have the potential to pay off significantly.
Commit to quality
Some critics were skeptical of Netflix-produced original shows—and justifiably so. What could one expect of the first run from a producer that’s a TV studio wannabe? Good stuff may well be the answer, if their first batch is any indication. Though “Hemlock Grove” has not fared well under critical review, their first released series “House of Cards” and the revival of “Arrested Development” for a fourth season have done well. Early reviews of their fourth and upcoming series “Orange is the New Black” are promising. From an average Joe perspective, Netflix originals have every bit the look-and-feel of the heavy hitters’ productions. Pretty good for a first stab at it and not so surprising maybe, considering Hastings said recently that his company “spent a lot of time getting the content right.”
At that core of these notions is a spirit of seeing the business from a different perspective and thinking differently about it, in a way that seeks maximum value, rather than a quest to keep up with the Joneses. By taking approaches that are unconventional in their industry, they’re changing the game instead of thinking catch up—and their competitors, large and small, are paying attention. After all, if Netflix’s moves pay off, it could change their industry and consumer demands permanently. Then it’s everyone else’s turn to wrestle with catching up.
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