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A tale of two companies

Once upon a time there was a Blockbuster store in Marple where we live. That's not so unusual; at its peak there were 9000 blockbuster stores; they were everywhere. What was unusual was how the company succeeded - despite itself. If you were a new customer wanting to rent a video you would have to turn up with evidence of who you are with at least two forms of identification such as passport, a bank statement or a utility bill. You could have hired a car from Hertz with less.

As Blockbuster was making its way to become a $3 billion company with 84,000 employees worldwide, and 65 million registered customers, two people in California had a different idea. Reed Hastings and Marc Randolph thought there was an opportunity for people to choose a film (commonly referred to as a “flick”) over the Internet (the “net”). Clever guys, they called the company Netflix. It began renting DVDs, chosen from their website and posted to your door.

Now here's the crucial thing. Blockbuster was a rigid company. It had its rules and employed jobsworths that made sure these rules were carried out. They refused us a Blockbuster card in Marple even though we had a bunch of credit cards in our name and were accompanied by a dog with a tag that announced it as Benji Hague with our home address.

In 2000, Hastings tried to sell Netflix to Blockbuster for $50 million and was turned away by the then CEO John Antioco. As Hastings says, "Thank God they didn't buy us".

At Netflix they have no rules. It isn’t quite the Wild West, everyone takes their job seriously and knows the importance of being innovative and responsive. This flexibility in approach has resulted in Netflix recently overtaking Disney as the largest entertainment company in the world.

It is the subject of rules, or lack of them that interests us. Reed Hastings who has run Netflix over the last two decades has shared his philosophy in a book we should all read called No Rules Rules: Netflix And The Culture Of Reinvention. Eleven years ago he posted a 125 PowerPoint slides which explains all and tells us its company values. It has been viewed 20 million times and is well worth looking at. See https://www.slideshare.net/reed2001/culture-1798664 .

What, you might ask, has this got to do with customer experience? Netflix is all about customer experience. Instead of having to get in the car and visit a Blockbuster video shop, and be turned away by an officious assistant, Netflix lets you indulge in one of the biggest menus of movies and dramas from the comfort of your armchair.

Culture is everything in a company. It determines how the company manages its employees, treats its customers, and meets their needs. A rigid company insists that the world falls in step with it. A flexible company adjusts to market conditions. For those of us involved in customer experience Netflix is a role model we should all study.


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