Straight talk on avoiding Netflix debacles

Flickr image courtesy of Ross Catrow
Flickr image courtesy of Ross Catrow

Most executives understand the importance of the open door policy, but what about an open mind? Would Reed Hastings, CEO of Netflix, have avoided a public relations nightmare if he'd had that?

According to reporting in the New York Times, when Hastings told a friend that he was thinking of splitting the service into two parts, one for DVD delivery and another for streaming video, his friend, and Netflix subscriber, told him the idea was "awful," adding "I don't want to deal with two accounts." Had Hastings listened he might have saved Netflix from losing 800,000 customers.

For a long time, Hastings was a poster boy for great business leadership. Fortune named him CEO of the year for 2010. Yet as this latest debacle shows, Hastings-- like even the greater leaders--is fallible. [To his credit, Hastings admits he was overly sure of this decision and was "moving too quickly."] When everyone is telling you how good you are, it's sometimes hard not to believe it.

That is why senior leaders, be they CEOs or presidents, need to surround themselves with straight talkers. But it's not simply a matter of ensuring that you break out of the bubble; it is a matter of listening--and not just to the people who agree with you. Some suggestions:

Keep an "open mind" policy. Open door, yes, but keeping the door open will not help if your mind is closed. Make a habit of walking the halls, in every worksite location, and get to know people at all levels. Cultivate relationships with those who will give you the straight dope.

Visit customers. These folks are not shy. They are not awed by titles because they patronize your products. You work for them. When they have comments the quality of your products or the standards of your service, it behooves you to listen and listen closely. Not everything they say will be valid but often they are more right than wrong. And get this they want you to succeed because they use your offerings.

Network with peers. It has been said that the only people CEOs really listen to are other CEOs. An exaggeration certainly, but it is important for CEOs to share experiences with their colleagues. A number of CEO networking organizations exist but so too do opportunities for CEOs to serve on boards or public policy initiatives. These have a side benefit of allowing leaders to exchange ideas top to top, without filtering of internal political agendas.

CEOs did not rise to prominence by only listening. They are people who act. They must always hold the right to act alone, or at least make the final call. That is what the job entails. If the CEO is convinced of the efficacy of a strategy, it is her call to push it through. Jeff Immelt CEO of General Electric has said that he sees his job as making a reasonable number of "my way or the highway decisions" annually. If he makes too many, the company he will be a micromanager; if he makes too few he will risk losing control of the helm.

Finding the balance on decision-making really comes down to instincts, and a feel for the business. It can be buttressed by the free flow of information from all quarters, inside and outside the company. A savvy CEO will listen, really consider the alternatives, and then pull the trigger on the decision.