In 1997, Reed Hastings and Marc Randolph had a business idea: DVDs by mail. They started the business as a subscription service. Anyone who signed up could receive unlimited DVDs. By 2006, they had 5 million members. In 2007, seeing a promising future in streaming TV and movies, the company pivoted to focus on streaming to the masses. By 2013, they were producing their own original shows. In 2017, membership hit 100 million.
Today, Netflix is America’s No.1 streaming service. Its original series and movies have won Emmy Awards, Golden Globes and Academy Awards.
Reed Hastings is still involved with the company and served as its CEO from 1997-2020. He led Netflix through what is known as the “Netflix correction”—pivoting from DVDs to streaming.
Netflix could have easily been another sad story. A defunct DVD company that had its moment in the sun until it couldn’t keep up with new technology. With leadership like Reed Hastings provided, however, instead of resisting technology and the future, Netflix embraced it, making a crucial switch that made it a pioneer in the streaming industry.
As a CEO, you know the importance of business reinvention. If you don’t keep up, grow and change, you will be left in the dust. The past two years have probably brought more change to your business than you cared to experience at one time. Shut-downs, remote work, growth in some industries, decline in others, a new dependence on technology, the continued rise of artificial intelligence (AI)—change is a constant in business, and leading during times like this can be challenging, but it can also be exciting.
You can choose to be the Reed Hastings of the world or the type of CEO whose business is now defunct and irrelevant. Businesses aren’t simply invented one time. They must continue to reinvent themselves.
When Netflix first began streaming in 2007, Hastings is known to say that his only competition was sleep. Today, that is no longer the case, and Netflix is needing to pivot once again.
Netflix’s competition now includes streaming services like Apple TV, Hulu and Disney+ as well as social platforms like TikTok and games like Fortnight. To keep up, Netflix recently announced they will no longer allow password sharing in the coming months, and for the notoriously ad-free platform, they are now instituting tiers of membership, the cheapest of which will include ads. They also plan to add games in the future.
Netflix is reinventing yet again.
It has no choice.
6 Ways CEOs Can Lead in Reinvention in 2023
Most business publications and consultants site technology as the primary route to reinventing your company in today’s business landscape. With AI, virtual reality (VR) and the metaverse, it seems that any company, no matter your industry, should be incorporating some form of the latest digital technology that can improve systems and increase sales and customer satisfaction.
In addition to tech, sources also recommend focusing on sustainability practices and talent retention as a way to keep up with the changing landscape.
According to experts, here are six ways you can reinvent and grow your business in 2023.
With the release of OpenAI’s latest iteration of ChatGBT, it seems the public is finally realizing the full power and potential of AI technology. The chatbot can code, write school essays or even write personal statements for job applications. And this is just the beginning. Gartner consultants named adaptive AI as one of the top ten technology trends for business in 2023. Adaptive AI can learn from feedback in real-time to get more accurate results. Whatever AI you’ve incorporated into your business so far, from smart products to assistant chatbots to product recommendations, incorporating AI that is always getting smarter and more efficient will allow you to advance these areas of your business.
Accenture’s “Business Futures 2021: Signals of Change” report listed sustainability as a growing priority for businesses that want to remain relevant with consumers and maintain business. Accenture found that “Companies with high ESG [environmental, social, and governance] performance have operating margins on average 3.7 times higher than those with lower ratings, as well as annual returns 2.6 times higher.”
Buying eco-friendly and environmentally conscious products is a trend that has risen significantly since Covid. According to this survey, 58% of Millennials say they’ve become more eco-friendly since Covid began, likely due to having more time to think about their purchases when stores were closed due to shut-down.
If you’re not already focused on this, make 2023 the year you and your team get serious about how to make your overhead, operations, products and services more sustainable with less impact on the environment.
Accenture also found that using VR by integrating it with the physical world—something they call real virtualities—is a way companies are looking to grow and get ahead. This integration will allow businesses to buy and sell virtual goods and services— something that’s already prominent in the gaming industry.
Operating on the edge
Instead of the top-down operations model, Accenture’s report suggests that companies that are getting ahead have shifted to an “edge” operations model, where teams have more autonomy to decide how to best handle their operations rather than being dictated to from the C-suite. With the shift to remote work, teams and operations can be much more efficient this way and are growing more accustomed to independent work and being free to find creative solutions—something the pandemic instilled in all of us.
Addressing workforce issues
According to Gartner, 31% of CEOs said workforce issues were one of their top ten priorities for 2023, specifically retaining top talent. This can be difficult to do, especially if you’re a leader in tech, but is increasingly more important in the face of an upcoming recession.
Diversity, equity and inclusion were also noted as significant priorities this year. Employees are looking for diverse workplaces where their voices can be heard, not companies where everyone looks and thinks alike. Maintaining a dynamic and diverse workforce also allows your company to be more creative and innovative, allowing people of different backgrounds and experience to merge ideas and reach a broader audience with your product or service.
Learn from the future
As Accenture explains, “Rapid shifts in operating environments and human behavior mean that the historical correlations some analytical models rely on have been challenged.” Instead of learning from the past, look to the future. AI can help your business predict outcomes and obstacles you couldn’t foresee. As the technology improves and becomes more trustworthy, you will be able to base decisions on these future outcomes rather than relying on dated data.
Legal Support for Business Reinvention
Whenever you introduce a new technology, system or practice in your company, you will inevitably need legal advice and counsel. New contracts need to be made, new relationships negotiated, new compliance and regulatory requirements met. We’ve been supporting our business and CEO clients for over 20 years, often during times of change and transition. While you may not need full-time, in-house legal counsel, whenever you’re making a change, having general counsel available is crucial.
We structured our General Counsel services so that our clients only work with the expert or experts they need who provide only the specific services they need. No extra fees or unnecessary hours.
Our General Counsel services include:
Netflix employs a team of more than 650 legal professionals. You probably don’t need a team of this size, but you do need a team that can make your business reinvention goals happen smoothly and successfully. The last thing you want is for a contract, negotiation or legal problem or obstacle to prevent you from taking your business where you know it can go. With Phillips Kaiser, you can have the support and expertise you need to help you see what’s ahead, to reinvent your business, increase growth and set your business up to evolve with the changing times and technology.