Netflix’s Lost Year

[CNet has a fantastic history of “Netflix’s lost year”][cnet] in which they pair all the external happenings that all of us could observe with internal events. If the article seems too long to read: the conclusion is Netflix over-reached in its transition. Streaming video is the future, but there was no reason to cannibalize the company by spinning off the DVDs when that end of the business could simply have slowly been sunsetted. Why did Netflix over-reach? CEO Reed Hastings let success go to his head.

It never ceases to amaze me how executives and managers of successful companies begin to believe their own hype. The fact is few organizations, if any, succeed because of one individual alone. One person may give the driving vision, but there’s a whole lot more to be done on the execution end of things.

And then there’s luck. Few successful people realize how much luck, just the raw randomness of the universe, made their success possible. A large percentage see their own hard work, and no doubt hard work is important, but they don’t see all the other folks working equally hard, perhaps even harder, who did not succeed.

The result of this weird blindness, perhaps a function of our own American tendency to tell “rags to riches” stories that tend to focus on the individual and not the organization, is that smart folks too often think they are the only ones who know better.