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Friday, October 14, 2011

More Evidence of Corporate Myopia: Netflix

There have been scores of articles and posts regarding the PR disaster that was Netflix’s recent decision to raise prices in what has generally been seen as a brand reputation-damaging move by CEO Reed Hastings. Largely, we agree.


In one such article in particular in ChiefExecutive.net we believe author Lincoln Murphy hit the larger issue head on the head: “…Netflix forgot that Pricing is a function of Marketing.”


To us at CommCore this appears to be another and all-too-common example of what we call “Leadership Myopia.” We get it; leaders are facing rising costs and a variety of other challenges that require tough decisions. But too often, the basis from which they form their decisions is too narrow and the implications they consider are too few. They look at their P&L and ignore other equally critical considerations. In other words, they are being incredibly short sighted.


The result is a predictable cascade: The action is executed poorly. The “supporting” communication is disconnected from the customer who then gets angry. The CEO responds with surprise. Instead of showing understanding, he or she fails to clarify the rationale for the decision in terms that matter to the consumer, and digs him or herself in deeper.


We recommend one solution to such narrow decision -making. A “reputation lens” can be affixed to a CEO through coaching. There are no (or few) lost-causes even when drastic choices have to be made. The only thing that stands in the way is the CEO’s own willingness to broaden his or her field of vision beyond a spread sheet or parochial focus.


(By the way - there are plenty more CEO trait deficiencies. Check out this recent article that our CEO, Andy Gilman contributed to).


What do you think? What other current examples are there out there? Is this “myopia” rampant? Is it usually a personal flaw with a CEO, or a corporate culture problem, or both? Is it generally fixable?

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