Episode transcript The transcript is generated automatically by Podscribe, Sonix, Otter and other electronic transcription services.
Hello everyone, welcome to the Five Minutes Podcast. This podcast is special because I'm going back to talk about Netflix. If you recall previous episodes, I spoke many times about the book No Rules, Rules about the management culture of Netflix. But recently we all faced something that was, I would say for me, at least as a normal citizen, quite unpredictable. Right. One of the really top, most innovative, and most dynamic organizations is now facing probably one of the biggest challenges of the past five, six years of existence of Netflix. And if you saw the report that they published in late April 2022, they lost 200,000 subscribers. Of course, this number is nothing. It's something like 0.1% of their subscriber base. However, this year, their market capitalization dropped from 300 billion to 88 billion. And if I do that, please, I don't want to be dishonest here by saying that this was just because this 200,000. But just to give you the dimension, if we attribute this loss to these 200,000 subscribers, each of them represented the loss of $1.1 million to Netflix. Of course, this is very naive, but what I want is just to show you how complex and I need to tell you I love Netflix. And Netflix is not an incumbent slow pace. You know this is like an elephant organization that is struggling to move. No, no. We are talking about one of the companies that people admire most, and it's an example of management. So what can we learn from that? What can we learn? Because when I saw all this news last year, when I saw COVID and this, I saw bingo.
Netflix will become absolutely dominant in entertainment for people. So what happened? I know that they said, oh, many subscribers are in different homes and they are using the same account. Okay, I understood all of that. But this is such a big shift that we really need to understand and this is a perfect example of the world we are living in and what we can learn from that. So the topic of this podcast is what are the three takeaways of this evolving story? Because we don't know exactly. Maybe I'm recording this podcast today and maybe in a week from now, things would be completely different. We need to see. But the first learning for me is that we must pay attention to inflection points. One of the best books to help you to understand this is the book of my dear friend Rita McGrath called Seen Around Corners. It shows how we must develop an ability to have really early signs that there is an inflection point that is changing. And this is the same inflection point that I used many times, because I use Netflix many times in my talks, and I use Netflix Journey compared with Blockbuster Journey. And I said, look, how was hard for Blockbuster to see that the inflection point of streaming would really be dominant at that time. And we are talking about 15 years ago. But after that slide where I talk about that, there is another slide where I put the logos and the images of Apple TV Plus, HBO Max, Disney Plus and I raise the question is will Netflix be a blockbuster position in the years to come? So when I saw that my dear friend Tahirou that worked with me at the UN and also at Bright Light, sent me a note and say, Ricardo, did you see Netflix? And I said, Wow, this is incredible because we said that.
But we didn't say that because we don't like Netflix. I love Netflix, but we said that because this was the example we wanted to paint the world of unpredictability, the world of volatility. And when we talk about these inflection points, we need to understand that these inflection points, do not happen only for these giant slow organizations. They can happen to anyone, including one of the most innovative companies like Netflix. The second learning is that projects or initiatives you need to understand that is much more like a roller coaster. That is the title of this episode a highway. On a highway, you have this predictability and death on the roller coaster. Things take turns shifts and if you are sitting on the roller coaster and most of the time it's unpredictable for you. Every turn is a surprise. Something happens and you need just to adapt to live with that kind of adrenaline to get to where you need to be. So forget this concept of this stable and stability. And this is why this concept of agility is becoming absolutely mainstream because we need to adapt. We need to react. We need to understand volatility, complexity, and system thinking, because things are more complex, they are more volatile, and they change very fast. This is why, for example, on the new PMBOK 7th, we saw very clearly the principles, of all agile methods.
We talk about that all the time because there is the only possible way for you to survive the shakes of the roller coaster. And last but not least, my third key learning is something that I use as a model in my own life. Every time I think when I think things are good on my project or on my side or on my life professionally, I always put this in mind. I should never believe that past success is a proxy for future success. You know every single day is a new day. Maybe your project was perfect up today something happens and you need to understand the roller coaster. Netflix, for me, Reed Hastings is one of the most brilliant and competent temperatures of our time. But challenges happen. You know, things can take turns that you need to reinvent your business. I will be watching to see what will happen, hoping for the best for the consumers, for Netflix. But there was, I would say, a very big shift. And we are seeing this in an extremely, absolutely, extremely successful company. We are not talking about a company that is fading or being attacked by absolutely disruptive technology. They were the disruptors. So this is the kind of changing environment we are living in. And we need to reinvent and be prepared every day to play a different role and to play by different rules.
I hope you enjoy this podcast and see you next week with another Five Minutes Podcast.
