In Oct 2013, Forbes ran an article "Netflix's Reed Hastings Is The Master Of Adaptation". Hastings is indeed has an adaptable leadership style which has allowed the company to win across waves of online video streaming technology that would have sunk lesser rivals. For example, in 2009, Hastings separated Netflix's DVD mail-order business from the streaming business. He made changes to the way the company charged it customers, which effectively led to a rate increase of about 60%. Both customers and the stock market reacted very badly. Hastings was then quick to recognize that he should not have been so quick to conclude that the traditional DVD mail-order business would somehow be viewed by the market as outdated, and that his timing for the price hike was terrible. Hastings has since adapted and grew …show more content…
This might lead to mistakes in judgment, e.g. in 2011, Hastings announced Netflix would split its struggling DVD mail-delivery business from its online streaming business, and raised prices. Customers got confused and Netflix's stock price plummeted. Fortunately, Hastings apologized to customers and reversed the plan subsequently. Strategic Design Perspective In terms of its talent pool and how it selects the best employees, Netflix implements what is known as a "Keeper Test". The person implementing the test asks his or herself: “Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at Netflix?” The company does away with the unproductive measures which as hours worked at their desk, but rather by how much, how quickly and how well they get work done. Evaluating employees in this manner (instead of using a traditional yearly performance review) does appear intimidating. However, the model has been shown to work, with Netflix continuing to attract "stunning employees" who can work at very high