All people worldwide watch TV, but not everyone enjoys watching regular TV with channels that offer programs at specific time on non-portable screens with old fashioned remote controls. Nowadays Internet TV, which is personalized and available at any time of the day, is replacing regular TV experience. The new era of Internet TV looks very perspective, flexible and big around the world.
People's tastes are broad and the Internet provides a wide variety of interests today and is even able to meet everybody’s needs based upon individual users' tastes. Today being one of the leading firms of the Internet TV era, Netflix is a global Internet TV network provider with about 81 million members and offices in 190 countries, streaming films and TV series, “reported over 81 million subscribers worldwide, including more than 46 million in the U.S.” (Netflix, 2016). Netflix started as “an American DVD-by-mail service in 1998, and began streaming in 2007” (The New York Times). Mainly Netflix is situated in the USA and has around 2450 employees with a net worth of 25.5 billion dollars. Nowadays customers are able to enjoy more than 110 million hours of movies and TV shows per day, including series, documentaries, feature films and etc. Everything is commercial free and with unlimited viewing on any screen which is connected to the internet for an affordable fee, which is paid per month. Members are able to watch movies as much as they desire, anytime and anywhere; play, pause and resume while watching series, and everything is without commercials and comments. As well Netflix doesn’t practice pay-per-view, this company is greatly flexible, but straightforward. The Giant offers programming on-demand through apps that can be downloaded on phones and installed on smart TVs, all those apps as we know promote more viewing and thereby Netflix becomes more valuable.
Nowadays the entertainment market is very rich and broad and because of that multiple companies can be successful. When it comes to acting a series or a film, Netflix has a great advantage in comparison to its competitors. The company promotes its original content by personalizing the right content’s promotion to the right client. The success of the corporation is mainly due to the creative and powerful team and great on-demand platform. Every company in this sphere competes for a share of members' attention and time and the main competitors of Netflix are other networks, pay-per-view content companies, Internet networks, DVD films, web browsers, video games, magazines and many more. Netflix has a great strategy to expand worldwide, internationally and to organize this capture as fast as possible while staying slightly profitable. Today the company has already entered such international markets as Canada, Latin America, Ireland, the UK, the Nordic countries and the Netherlands, and the expansion on this markets is growing quickly. We may say that nowadays Netflix is available virtually everywhere except for China, in this region the giant is still exploring options and possible investments. While growing internationally, the company is growing an approach to learn, listen, improve rapidly to delight members.
Netflix is well known not only for its successful services, but also for its famous employees’ treatment and innovative and talented HR management in the company.
There are several major principles that are integrated in Netflix’s management philosophy: the first of them is a practice to hire only so called A-players, high qualified workers; the second element of the approach is letting go of workers, who do not fit into the company anymore due to the fact that their skills no longer correspond and that is no matter how valuable contribution of those worker is.
CEOs are responsible for creating great teams - managers should always be thinking in advance, develop and look forward into the future, never agree just with what they already have. CEOs should be aimed at constant results, ideal outcomes and needed skills set to obtain gain. Building a great team for managers is the most important task, according to Netflix they are not looking for excellent coaches or mentors, they are searching for team builders.
Managers are to create company’s culture - if a leader is never prepared and uses only his already gained knowledge and improvisation, workers do not perform correctly as well. Employees copy the example seen every day at desk. It is a waste of time and profit for a company, when managers do not put an effort into creating great ideas, behavior and culture. Even though Netflix hires people with experience, managers need to clearly explain company’s strategy, how the giant makes money and what behavior is success. As well managers should not forget that besides leaders in the company there is a subculture, which requires different management.
5. Managers are innovators first -some talent management ideas were brought up at Netflix:
- workers get unlimited vacation – they are allowed to take whatever vacation time they want and feel was appropriate. While bosses and regular workers work it out together. And everything has to be acted in Netflix’s best interest;
- members of the company can leave and come back when they want;
- employees do not have yearly performance reviews
When a company gives a greater freedom and responsibility, when it trust and empower people without any rules and policies, to gain a success is possible. When “developments occur, the organizations that adapt quickest create a competitive advantage for themselves, while the companies that refuse to change get left behind” (Skelsey, 2013).
Thus we can make a conclusion that Netflix’s aim policy is the expectation of high performance. Just by doing regular job or, for example, working overtime, employees should expect salary raises or praise. Therefore the company does not pay attention to how hard employees work, as long as their work is done. All that ends up in the following scene: people who do a lot of work for the company have regular records, and those who do not do much may end up rewarded with raises and promotions. All people in the company are taught at once what high performance means. Netflix’s philosophy – they want only A-players and easily let go of people whose skills are less valuable or no longer fit. Netflix knows that high-performance is not for everyone: workers are expected to work at a high level or they will be quickly shown the door. Managers of the company believe that they should have honest talks about letting some team workers find a place where their skills will fit better, this will help them regroup and find a more perspective career path. In fact they will leave with a very generous severance package. Leaving the wrong place will help. And this, I believe, is a very uneasy matter to be changed, as every employee deserves to be praised for the struggle, as this is a negligence what we see.
This practice may as well create a believe that those with high result will get all the benefits, and it also creates a sense of lack of job insurance, because many team workers do not receive the full amount of work’s pay and that the company will ask them to one day. This is all due to company’s HR behavior to get the best employees. Consequently the change is needed not only in departments, but also in overall activities. The need for a change can clearly be seen by use of diagnostic tools –besides company’s progress they also show company’s readiness for changes.
It is widely accepted that more effective change management enhances organizational effectiveness, so this topic is rather important. For many organizations the importance of implementing the change and the pace has greatly increased. Those changes, which are usually continuous rather than just a movement from one state to another (Pettigrew, 2001), are aimed at improving the effectiveness and the value, and hope to cope with a challenging environment. Because the majority of changes are unsuccessful and fail to improve the organization, in order to enhance the possibility of change success there are many theories that explain the processes of change including the following two tools of analysis – the PEST and the SWOT analyses. The cause for these two analyses is that they give an absolute overview of all company’s aspects, its achievements and or improvements, its failures and unachieved goals. PEST Analysis is a very simple and a widely used tool, it helps to analyze the Political, Economic, Social and Technological changes in the company. The analysis makes you understand the whole possible picture of change and from this the advantages of the opportunities that it present. SWOT analysis helps you to reveal all opportunities and strengths, and understanding the weaknesses and threats. The SWOT analysis “is necessary to provide direction to the next stages of the change process” (Birkenmaier, 2001) .By comparing the company and the competitors using the SWOT analysis, a strategy can be created to successfully compete on the market. Also “strong interaction between weaknesses and threats could be analyzed as potential warning and advise for using defensive strategy” (Osita, 2016).We are to have a look at Netflix SWOT analysis.
At first, Netflix’s strengths are to be discussed:
Brand Recognition- the brand is well known and popular not only in USA but internationally;
International Expansion - the company is growing internationally and has been launched almost everywhere besides China;
Accessibility - Apps has let the users utilize media on all internet enabled devices;
Original Content;
DVD margins;
Original In-House Programming –when home devices get connected to the internet, an opening for internet TV and Netflix’s in-house on-demand program appears;
Ecosystem in practice - Netflix has developed an ecosystem usage on different Internet-connected devices.
However, there are some weaknesses that face Netflix:
International Business – company’s business is not yet profitable internationally, on markets outside USA they operate at a loss;
Cost of Content - cost of licensing and in-house packages undertakes Netflix a lot of money;
DVD Subscribers –the number of Blu-ray and DVD subscribers has declined;
Subscription Prices - for Netflix it is difficult to raise subscription prices due to the upset subscribers;
Next, the opportunities of the company should be named:
International Expansion - Netflix is planned to expand internationally yearly, original content will enhance international growth;
Constant investing – investments go into successful content, high-value licensed content and marketing;
Platform – the giant has a great delivery system and that keeps customers loyal to the service;
Word-of-Mouth Campaigns – due to the word-of-mouth campaigns marketing expenses decrease;
Finally in the analysis threats are going to be discussed:
Black market - it is becoming a potential threat for Netflix by downloading for free from the black market;
ISPs - around 30% of internet traffic per day is accounted by Netflix;
Competition - competition from other media giants;
In conclusion, it is evident that the company is the one that needs change. Netflix readiness for change can be seen due to the fact that it has been drawing in a change for the couple past years.
It is well known that a successful change appears when there is commitment, openness, a sense of urgency, engagement of stakeholders, clear communication and strong relationship with a plan. It shall be admitted that technology improvements, initiatives, competition drive ongoing changes in the company. Another hint of a proper change model was introduced by John Kotter as an 8-step model of transformational change. The first three steps are entirely about creating an atmosphere for a change. Next - on enabling the company. And the last, are about implementing change. Very often it is may be seen that organizational change starts with detailed analysis, but unfortunately, this energy is usually just wasted. It should be admitted that live competition and aspired workers in Netflix has become a great reason to focus on the company goals. If taking into consideration of Kotter’s 8 step of a change model, we will receive a following picture:
Firstly, Netflix needs to create a sense of urgency around the need for change, as this will help to motivate the workers and create a spark in the work towards the given goals. The company needs to show as an example of any poor sales statistics and results, talk about increased competition and describe the situation on the market, identify threats and discuss potential crises or opportunities. To do so, an open, honest dialogue is needed to get people thinking. A research team as well should be built to understand and learn the business, competition, the market what is to change and what are the goals. Consequently, diagnostic and research tools must be used, SWOT analysis utilized, planning and surveys by managers. The company needs to work very hard on the first step and spend some time creating urgency and moving for next steps.
Secondly, a powerful coalition by convinced workers that change is necessary must be formed. Netflix should find effective change leaders, influential and well-motivated people in the company to lead the change effort. When the coalition is formed all the workers must act as a team and develop strategies. Managers must check team’s weak are as and make ensure that this is a great mix of people. Netflix need also to create a policy for job security of the workers, as it is believed to be essential that there is an insurance of jobs for those who work beyond their expectations. Every employee of the company will be given a target, so that everyone will get a fair share of raises and promotions, but at the same time it should be marked that the target cannot be failed.
Next, a company needs to create a vision and strategy in the group for a change with many different ideas and solutions. Created clear vision will help workers understand why such goals have been imposed, defined values of the change will help to develop strategies for achieving the aim. Without focusing and discipline there is a chance to fail, indeed, Netflix will involve employees in the decision making processes, responsibilities will be taken so that the workers will not let the company down. To be able ”solve problems, seize opportunities, and achieve objectives, questions need to be asked by managers” (Terry, 2008).
Fourthly, there is the communicating the vision. Managers should use every channel and all to make new vision and strategies known by the workforce. Special meetings within the company should take place, managers should talk about the goals every chance they get to make decisions and solve problems. Emotional foundation is to be built, it make people believe into what managers say and do, it will make them know that the company takes care of them, is concerned.
Fifthly, there is empowering others to act. All core workers are to act every strategy and decision immediately, they need to think like business people and adapt to their surroundings. People should be encouraged to take risk, non-traditional ideas and actions. Managers of the company are to check the process, the results and barriers if any. When obstacles are removed, that empowers people and helps to move forward the change. To build strong trust in the company higher hierarchy should interact with the bottom, workers should be recognized and rewarded, and people resisting the change should be removed from the group.
Further, short-term wins should be created in Netflix, as everyone knows that nothing motivates more than the win. People are to be given an early taste of victory by planning performance improvement, rewarding of employees, who help to meet the targets. There are always negative thinkers that may hurt the result. When there is a taste of success, people are motivated to get better and they obtain the proof that everything is possible if they try.
Real change runs deep, so the next step is producing more change. Quick wins are only the beginning, so constantly hiring, promoting, and developing employees, changing systems, structures and policies, the aim will be reached. After every result the manager is to analyze what is right and what needs improvement. In Netflix there are no high performance bonuses and that teaches workers that their work is not seen. Even small results should be notices, but great successes must be rewarded at once.
The last step is installing new approaches in corporate culture and creating a bond between new behavior and successes. So that the change will stay within the company, it should become its part and part of its culture. The change must be seenin every aspect of Netflix’s life, while the leaders continuously support the change and the strategy. New ideals should also be included when hiring and training new staff.
Every single organization has to work hard to change an organization successfully. Netflix main steps are to carefully plan and build the foundation, carefully but fast implement the change. There is no place for impatience and too many results should not be expected soon. A proper connection has to be built between the success, new behavior and continuous efforts.
Often change is stressful and resistance is a normal reaction to a change, as it usually means going from the known to the unknown. Many corporate changes fail and usually it is directly because of the employee resistance. Managing resistance to change in the company is a very important part of a success change effort. To deal with resistant Netflix will depend mostly on timely recognition of the causes of resistance to change. It is often can be seen that managers, while in the process of changing, pay attention to the technical aspects of the question. However, it is very important to balance both human and technical needs of the company, as usually human resources are the main reason for the change not to happen or to happen - one of the greatest problems that executives face is employee resistance. Resistance occurs from many different sources and they are personal and emotional, economic, and social, technical and organizational. There are many fears that workers face: they fear that the change will impact their rights and authorities, social relationships and their responsibilities. Many more reasons there are for potential resistance in companies and in Netflix as well: workers fear lack of competence to change or that they will be uninformed, they are unsure about new ideas and their efficacy, they are afraid of poor communication, their interest, feeling excluded, or lack of trust.
Lack of communication is the key factor that spoil the change plan, as usually poor communication results in uncertainty, rumors, job insecurity and talks about negative aspects of change. Responsibility of communication is supervisors’ and managers’ responsibility. Proper communication in Netflix will create a strong community, inform workers about new tasks, ideas and policies. On the other hand, proper communication enhances commitment, trust, positive mood and affects greatly the readiness of change. Lack of communication is critical, as it results in the lack of information, and not giving workers proper information increases their apprehensions and lessens readiness for change. Managers need to always provide detailed, continuous, concrete and accurate information to employees, and focus on answering employees' questions. There are different types of communication strategies and the most popular of them are: Verbal communication: written and oral; Non-verbal communication: body language, facial expressions; Visual communication: Signs, illustrations, and Webpages. Target of any communication strategy is to fasten employees' readiness.
New technologies and media are constantly changing and developing nowadays, which means that communication in the organization is also changing, and these changes are usually shown as people are having little face-to-face interaction. The focus is on “building relationships with customers, instead of focusing on making and selling products” (Lovins, 2006). The communication is “influenced by the relationship between the sender and the receiver, such as status differences, a staff-line relationship”, or a learner-teacher relationship (Virginia, 1967). I believe that during the change process verbal communication is the most effective out of all. Internal verbal communication holds a company together, without it an organization is a gathering of disconnected individuals, who are working separately. Good verbal communications makes employees feel connected to each other, trusted and at the same time increases productivity. Verbal communication skills for professional managers means speaking with the workers using words to express a message clearly .Subordinates must make use of verbal communication when suggestions and guidance are needed. Verbal communication helps managers to make observations of worker’s behavior, their skills and performance, misunderstandings can be cleared, various issues are easily discussed. Clarity of speech, being polite, calm and focused are main advantages of verbal communication. Managers must be physically available to support employees' concerns by in-person communication, listen, suggest. Communication plays a great role for communication strategies to be implemented and for worker to take part in the change.
Why does the change not last? Change fundamentally fails because nowadays it is more an outside-in process than the other way - an inside-out process - which is aim at change of individuals within the company. For business change and organizational improvement to last, the system must change. It is also clear that bringing forward new strategy is a continuous process, not a periodic event. Various methods have been used in the past “to effect change and deal with the inevitable impacts of change” (Gelfand, 2008). Sustainability values “ form the basis of the strategic management, process the costs of the firm’s operations” (Stead, 1992) .There are following systems and actions that greatly impact the possibility to sustain organizational improvement:
Performance Management – its includes the continuous discussions between managers and workers, where the employees receive feedback, new ideas and directions and information about employee’s impacts on the goals. During these discussions change can be reinforced and new ideal and goals communicated;
Metrics and Tracking – Netflix needs to adopt new pricing strategy to maximize costs and margins, while constantly measuring sales;
Rewards – a successful behavior when workers get rewarded and recognized by the managers and the company; CEOs should make it personal;
Grab Attention – managers are competing for employee's attention, which is hard nowadays, as CEOs usually have little time to impress and connect with the workers;
Make use of emotions - difference between emotions and reasons is critical today, as emotions lead to action and reasons lead to summaries;
Generate Respect – managers should think ahead to interest the workers and provide them with actual and relevant information;
Promote the Passion - a strategic goal for managers to be passionate and promote it;
Keep it Fresh – for the change to be sustained it has to develop over time and include new information, refreshed, invested and protected.
A model for sustainable change can also clearly describe action to be taken to sustain the change: A model for sustainable change (Harrington, 2014)
In conclusion, it is to say that organizational change management is an effective framework for managing new business, ideas and changes in enterprise. Change management is discipline that ensures smoothly change. Change management is profitable when all managers throughout an organization learn new behavior and skills, and managers set expectations, use tools to improve communication and reduce mistakes and disinformation, remain commitment. Patience and tolerance are required to help people.
References
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