The digital disruption of business models and the automation of work place a dramatic change on leaders. The upcoming way is uncertain and their new task is to find the answer.
Netflix had to fight against several disruptions year after year and without their CEO Reed Hastings they wouldn’t be able to do so. Let’s take a short look at Netflix history: 1997 the company was known as a video rental shop. The first crisis occurred when costs of sending the videos exceeded the costs of downloading. Hastings encouraged his employees to change Netflix’s business model. The company changed successfully from a video rental shop into an online downloading platform. The next disruption followed shortly: downloading vs. streaming. Also, this time Netflix managed to change from the leading downloading platform into the leading streaming platform. When costs for movies and series started to rise, Netflix started to produce their own series such as ‘House of Cards’ and ‘Orange Is The New Black’.
Three turnarounds in only 20 years and all successfully mastered by means of an appropriate management culture. How does the CEO Reed Hastings do so?
Netflix’s employees do not work from the office and since 2004 the company does not count holidays. One might think that people will not take any holidays in order not to attract negative attention but Hastings takes countermeasures: he posts pictures from his vacation to motivate his employees to act as he does and to return to work with innovative and new ideas. The CEO believes that his employees are responsible for managing their own time. Further, money is not spent on HR policies and everyone acts in the best interest of Netflix.
Leaders are not in the foreground anymore, they take a seat back. They do not give instructions but ask questions, supervise their teams and give valuable input when appropriate. They do not enact any rules but concentrate on shaping their own culture. They distribute impulses in all directions and not from top to bottom. They are not self-complacent but constantly question themselves and their business model.
The principles of leadership must change radically in the next few years to be able to keep up with digital disruptions. Teams must get more important and leaders have to stop leading and start enabling. Power and control have to be exchanged through flexibility and freedom. So far, there might only be a few companies that changed the leadership style as Hastings did.
What are your experiences?
Sources:
Keese, C. (2017): How we can manage the digital transformation
Click to access gartner-symposium-south-africa-digital-disruption-ebook-2018.pdf
https://www.ft.com/content/801774be-43e9-11e8-803a-295c97e6fd0b
