In a rapidly changing world, our biggest challenge is getting our companies, and ourselves, to embrace change rather than resist it. We want to create organisational agility, as agility is the key to success in our rapidly changing business environment, and the only thing holding us back is ourselves. As I’ve written before:
Modern IT provides us with a wealth of opportunities that our current asset centric approach to [IT] prevents us from leveraging. We need to get out of our offices and cubes and embed ourselves where the workers are, where the value is created. If we create an environment where we define ourselves in terms of how we will help the organisation evolve, rather than in terms of the assets we manage [and the sunk cost they represent], then we can convert change from an enemy into an advantage. Our team will wake up every morning eager to get into work, just like the team on the shop floor at Toyota.
Change me, Capgemini CTO Blog
Netflix is no different to the rest of us, trying to look forward to what they could (and should) be doing, rather than being hung up on what they’ve done in the past. However, when confronted with the realisation that what they we’re doing wasn’t working, they adapt.
In short, Reed Hastings [CEO of Netflix] is not a man who gets locked in by sunk costs: he’s willing to kill projects (or, in this case, spin them off) even if he’s got years invested in them. A good example for my students when we discusses costs in a few weeks. And just another example of the strengths of Netflix’s culture.
Netflix avoids the sunk cost fallacy, Donald Marron
In many companies this would have been impossible, as too many people would have their careers resting on the success of the project. Success allows them to move onto ever larger projects where they can carry greater responsibility as they work their way up the career ladder. It would be unthinkable to kill a project that people were relying on for the next step in their career.
Agility is a question of culture and willingness to change, even if this means killing our favourite project. A culture that defines itself in terms of the problems it solves and the outcomes delivered, as the organisation works to achieve its goals, rather than the business processes used to maintain business as usual. Netflix seems to have this in spades.