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What Netflix should have done first

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in Leaders & Managers,Leadership Skills

Much has been written about Netflix’s embarrassing flip-flop earlier this year. The kerfuffle was over CEO Reed Hastings’ unfortunate decision to split the DVD-by-mail and streaming business into two businesses—then quickly reversing the decision when his cus­­tomers protested loudly.

In the process, Hastings forgot to do one key thing: offer an apology.

He delivered his re­­versed decision via a blog post, and he’s to be commended for being straightforward and responsive to customers’ feedback.

“It is clear that for many of our members two websites would make things more difficult,” Hastings wrote. “So we are going to keep Netflix as one place to go for streaming and DVDs.”

But, as one business columnist for The Washington Post noted, there was no “we messed up” or “sorry for any confusion this may have caused” or “thanks for sticking with us while we sort this out.”

And that surely represents a missed opportunity to connect with Netflix’s loyal fans, deepen the bonds of trust with them, or simply keep them from jumping ship and going to a Netflix competitor such as Amazon or Redbox.

Even if he didn’t apologize, he could have pointed to the fact that companies and leaders sometimes make missteps. He could have been more revealing about what he’d learned from customers, or even talked about how trial-and-error is what drives innovative companies.

And that’s the sort of blunder a leader should avoid in the age of transparency.

— Adapted from “In Netflix reversal, Reed Hastings misses the mark—again,” Jena McGregor, The Washington Post.

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