Job of a CEO
Reed Hastings, CEO of NetFlix, already committed multiple mistakes by making unplanned and abrupt changes to the pricing structure for its DVD and streaming based movie rental services. Consumers and investors don’t like uncertainty; and showing the path to future in the midst of uncertainty is almost the epitomic aspect of a good CEO. Reed then did the big blunder (in my view) by publicly apologizing for the drama and he even acknowledged that he doubted the future of streaming business. By doing this, he just told the market he has been pre-meditating a plan B for a long time. And then he announced Qwikster, a DVD-only-based company and that NetFlix in its new Avatar will only have streaming. Much to people’s dissatisfaction, he said Qwikster and NetFlix will remain disconnected — the logins, the queues, the reviews, the works. He then said he is “done with the changes”. Stocks plummeted to less than 50% of its price. And today, he announces there will be no Qwikster and its business-as-usual (DVD and streaming to both continue to be NetFlix) and that he is “done with changes”. Being a CEO is a tough job, being a tough CEO is a tougher job but being an uncharacteristic CEO is — well, let’s just learn from Reed.