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Post Leadership
Posted at 10:56 AM ET, 10/10/2011

In Netflix reversal, Reed Hastings misses the mark — again


After backlash from customers, Netflix reversed the corporate decision to separate its DVD and online streaming services. (Jin Lee - BLOOMBERG)

Qwikster, we hardly knew you. Netflix CEO Reed Hastings announced Monday morning via a blog post that he would not, after all, be splitting its DVD and streaming services into two websites and rebranding the DVD-by-mail service “Qwikster.” After the move was sharply criticized by the company’s customers and investors(not to mention that it had become fodder for late-night comedians), dumping the unfortunately named brand is not really all that surprising in the end.

What did surprise me, however, was how Hastings delivered the message. His blog post could not have used more straightforward language, and there was barely a hint of apology within it. “It is clear that for many of our members two web sites would make things more difficult,” Hastings wrote. “So we are going to keep Netflix as one place to go for streaming and DVDs.”

That’s it. No “we messed up.” No “we’re sorry for any confusion this may have caused.” No “thanks for sticking with us while we sort this out.” While Hastings ended the brief post by saying “we value our members, and we are committed to making Netflix the best place to get movies & TV shows,” and a simple “thank you,” the post still managed to come off a little cold.

What’s especially baffling about this approach is that Hastings took an entirely different tone in his last post—the one that was supposed to be an apology, but only seemed to make things worse with customers. The Sept 18 blog post that first announced Qwikster, the two web sites, and the greater explanation about the July price changes could not have been more different than the one that later reversed it. Hastings opened by saying, “I messed up. I owe everyone an explanation.” He was introspective, talking about his greatest fears, the “key thing I got wrong,” and the admission that he “slid into arrogance.” The content may have made people mad, and the message may have frustrated many, but his tone was at least warm, candid and reflective.

Monday’s post should have been the one that read that way. Even if he didn’t apologize, Hastings might have tried to point out that all companies and leaders make mistakes. He could have been more revealing about what he learned from listening to his customers, rather than just saying “it is clear that for many of our members” the two sites would make things harder. He would have gotten some mileage from saying that it’s only through trial and error that the most innovative companies continue to thrive.

That’s not to say Hastings doesn’t deserve some credit for making the move. To so quickly reverse his decision to split Netflix into two businesses couldn’t have been easy, and while he’s sure to be accused of flip-flopping, he did listen to his customers. That’s not something every leader who makes an ill-advised decision can claim.

Still, it’s another lost opportunity for Hastings to reconnect with the company’s loyal fans. The company’s press release, which unlike the blog post mentioned the “respect” Netflix has for its customers and admitted that it “moved too fast” does a little better. But it still doesn’t do enough to empathetically respond to what has so frustrated the company’s customers. Everyone can relate to the emotions that come from swallowing your pride, reversing a decision and admitting others who’ve been criticizing you were right all along. So why not acknowledge them?

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By  |  10:56 AM ET, 10/10/2011

 
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