Netflix – Enterprise 1.0 or 2.0? ~ Management 2.0 developing social capital

Monday 21 September 2009

Netflix – Enterprise 1.0 or 2.0?

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Netflix’s culture of freedom and responsibility has been addressed on quite a few blogs, including Strategic HCM, and on other social networking sites, including the Moon Shots ning.

But it’s comments on the company’s open culture and predisposition to the use of social media – and particularly whether this makes it an example of Enterprise 2.0, that I want to address here (for examples of these comments see Fast Forward and Bertrand Duperrin’s Notepad).

And I just don’t see it. A great company – absolutely. Enterprise 2.0 – no.

To me, this is an example of the ever growing and largely unhelpful use of the ‘2.0’ tag that I’ve just posted on.

Enterprise 2.0 isn’t just about using web 2.0, but it’s not just about anything new, innovative and exciting either. It’s about creating an environment where the value of social capital: the connections, relationships and conversations in a business, is taken seriously. And I don’t see any of this at Netflix. So:

“Few organizations are more able to access the power of the collective than Netflix”? – I just don’t see it, sorry.

The presentation suggests the company does work as a team – but stresses that this is a pro-sports team, not a kid’s recreation team. And definitely not a family. To me, even though they want to avoid brilliant jerks (recognising that the cost to teamwork being too high), it doesn’t even sound like a real pro-sports team. This impression is strengthened by the description of their ‘loosely coupled’ approach. It sounds like a group of highly talented individuals (“stars in every position”). Perhaps the business equivalent of the Madrid Galacticos?

There’s also the issue about the impact of not investing in recruiting and therefore having to fire people, that I touch on at Strategic HCM.

The presentation notes that high performance people and effective teamwork can be in tension as these people have strong opinions. This supports Boris Groysberg’s conclusions that a focus on recruiting stars can be bad for business. But I’m not at all sure that Netflix has has revolved this dilemma sufficiently.