Monday, October 3, 2011

The Giant Hairball of Complexity

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If you're like me, you're fascinated by all the coverage Netflix is getting lately. Normally when there's a kerfuffle at one of the anointed tech companies, I have a hard time paying attention. Latest iPhone prototype "accidently" left in a bar somewhere? Publicity stunt. Facebook changing everything again? Good. Maybe now it will start making sense to me.

But with Netflix it's different. I use Netflix. I love Netflix. I suppose Netflix is to me what Apple is to so many iPad and iTunes users, except with Netflix I've never felt like I was surreptitiousness playing with the cool kids' toys while they weren't looking. My Netflix Queue is mine, and through it I can be whatever I want to be.

So when Netflix raised its prices 60% and then decided to split its DVD delivery service off from its video streaming service, you would've thought I would have had a strong negative reaction. Like so many others. But I have to be honest. My reaction in both cases was: What? Oh, okay. I can handle that. I mean, I was way more upset when they took away the ability to manage multiple queues. Remember that?

What fascinates me about the latest Netflix controversy is not the rebellion it has created among Netflix users, or the company's efforts to better communicate with and placate its customers. What fascinates me is what it might be saying about vision and leadership.

I've read a lot of opinion pieces on the situation. But here's the best one so far, written by Adam Richardson of frog design. In it, he credits Netflix for quite obviously looking at an endgame 5-10 years into the future. He quotes Netflix CEO Reed Hastings as saying:

"For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something — like AOL dial-up or Borders bookstores — do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly."

And to illustrate the point, Richardson includes a graphic he drew five years ago, a tongue-in-cheek "timeline" of pivot points for a frog design client in the TV business:

Richardson says:

Half-jokingly it made the point that there is a giant hairball of complexity, consolidation and confusion that the industry is going to have to go through, but if you can survive that, the obvious end state will be that any piece of media will be available whenever an individual wants, wherever they are, on any device they like.

Which leads me to my own thought-provoking questions about the organization I lead and the challenges I'm facing on a daily basis. How much of what I'm doing, I wonder, is focused on my own giant hairball of complexity, and how much is focused on the endgame that will inevitably present itself when all those kinks are worked out?

Pick your industry or profession. There are trends obvious for all to see. Generational change, social networking, for-profit competition--these are some of the changes that are impacting every association. There are others, and some are unique to individual environments, but whatever they are, right now they seem all tangled up into a giant hairball and, as a result, some of us are busy trying to pick that hairball apart and straighten out all the threads in a way that makes sense for our own organization.

Stop. Rather, keep your eyes on the far end of Richardson's chart--the endgame that is obvious to any intelligent person that looks at the situation. For Netflix, that endgame is "any video content in history available anytime, on any device," and that's what Reed Hastings is playing for. He needs to keep current subscribers happy, yes, but not at the expense of not being positioned for the subscribers of that future end state.

How is your organization any different?


Joe Rominiecki said...

Thanks for this, Eric. That hairball metaphor applies in at least both industries I consider myself a part of: associations and publications. In the case of Netflix, though, I think one advantage they have is that they have a clearly identified endgame, at least for the next 5-10 years. In associations and publications, I sure can recognize the hairball we're in now, but I'm not sure if there's a clear endgame on the other side. If there is, either it's not as obvious as streaming is for Netflix or I'm just not creative or visionary enough. For associations in particular, envisioning the endgame on the other side of the hairball may be doubly complex: do we focus on a common endgame for associations as a common profession, or is the endgame unique to each association, dependent upon each one's specific industry? I don't know the answer, but I suppose recognizing the hairball and the need to look beyond it is the first step in any case, so again, thanks for sharing.

Eric Lanke said...

Good questions, Joe. I personally think of the endgame in the context of my own single association, and even then it is more of a series of endgames, one for each of the major strategic initiatives we're working on. That's one of the great things about the hairball metaphor. We often get tangled up in the day-to-day, responding to the crisis of the moment. The discipline of defining an endgame (even if it isn't the "right" one) can lend a kind of strategic foresight to the day-to-day decisions that must continue to be made.

Also, please be sure to start following me on the new blog: Starting January 1, I'm no longer going to be posting here.

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