Return To Sender: A Letter To Netflix's Reed Hastings

Dear Reed,

It was so nice to finally hear from you this morning, as I would have expected you would have written right after you increased my bill by nearly 60 percent. I guess you were busy figuring out ways you were going to spend your newfound wealth.

That being said, I read your letter with interest, as it appeared to be a heartfelt apology. Something one doesn’t usually get from the CEO of a company. Imagine my disappointment (and from the looks of your Facebook page, I’m not alone in this department) when you followed your brief apology with a sales pitch for me to dole out more cash for your new DVD by mail service, which you are calling Qwikster.

Now don’t get me wrong. You are entitled to do whatever you darn well please, but let’s get one thing straight. You haven’t made amends for your "mess up." In today’s letter, I didn’t see any mention of regrets regarding the dramatic increase in fees for the people who made your company what it is today. That would be your loyal customers. If you had reached out to me before this whole mess started, I would have advised you to hold the pricing (or increase it by a small percentage) for your loyal customer base and use the new pricing model for new customers.

I believe there are some important lessons about how to lead a company—or how not to lead it—that we can learn from you. They include the following:

Effective leaders take responsibility for their actions. They aren’t afraid to admit when they make mistakes. You did this, but you waited way too long to do so.  For those watching these events unfold, I suggest you come clean as soon as you see the errors of your ways.

Strong leaders ask those closest to the situation for their input prior to taking action. I can’t imagine you’ve done this, or you would have given more consideration to your pricing strategy before going full speed ahead. In case you’ve been too busy watching movies to read the headlines, we are in the midst of one of the worst recessions this country has ever experienced. Thanking loyal customers for their business with significant price increases isn’t a strategy that most would follow. Surely you had people at the table advising you to resist this tempting move. Perhaps you should have listened.

Timing is everything. Asking people to try your new service while you are apologizing is poor timing. I would equate this to the CEO of Bank of America asking those, who will soon be losing their jobs, to open up a savings account with the bank. Simply put, this is bad form.

Actions speak louder than words. You mention this in your letter and this is about the only point you and I seem to agree on. Just keep in mind that it’s our behaviors that matter and not our intentions.

You wrote a lovely letter today, but I'm not buying the fact that you've learned your lesson. And when I say buying, I do mean buying, as my family has chosen to vote with our wallet and from the sounds of it, others have done so as well. I’m afraid you are going to have to do better if you plan on ever winning back my business and gaining the respect and confidence of your shareholders and your team.

Respectfully yours,

Roberta Matuson

© 2011 Human Resource Solutions. All rights reserved.

Roberta Chinsky Matuson is the President of Human Resource Solutions (www.yourhrexperts.com) and author of the highly acclaimed book Suddenly in Charge: Managing Up, Managing Down, Succeeding All Around, a Washington Post Top-5 Leadership pick. Sign up to receive a complimentary subscription to Roberta's monthly newsletter, HR Matters.

[Image: Flickr user HackingNetflix]

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1 Comments

  • Linda

    Great article, Roberta!!  You've said, so eloquently, what so many of us have been thinking!  We just got into the groove of working the queue (my son had his own queue so one out of the three movies that came was a 'family' movie).  Fortunately for us, there is a video rental store about a mile and a half away, so when we get the urge to see a movie, we can walk to the video store and pick one out.  For streaming, Hulu Plus has been awesome!  Comparable in price for the streaming portion.  I sincerely hope this letter makes it where it is supposed to go.  And I sincerely hope he takes to heart what you have said.  Good job!!