Charismatic and visionary leadership: Reel Hastings - Research Paper Example

? Lecturer: Charismatic and visionary leadership: Reel Hastings Introduction A leader in his effectiveness is someone who is ableto take a team from the ordinary to extraordinary levels. In the leader, there is construction of consensus through participation and ideas are developed for the future. Invention of new ideas that are grasped and beneficial to the whole company stakeholder community is very vital and in the spirit of sound leadership skills, there is an absolute compliance (Iqbal 2). Reed Hastings is the founder and CEO of Netflix company. The characteristic leader in Hastings allowed him to check into the market and identify opportunities that other companies were not able to identify. Leadership is defined by given characteristics, values, vision and effectiveness. This paper looks to verify effective leadership by reference to Reed Hastings, the CEO and founder of Netflix Company. This will be based on the thesis statement “charismatic leaders are visionary and effective” In view of this, the paper will analytically review the recent media information about the success of the company. An analysis of the articles will be done in line with effective management values in Reed Hastings (Sandvine 5). Summary of the Articles Article 1: Why Reed Hastings should be applauded for Netflix Split In this article, Mark Suster (2011) brings to picture the real idea of entrepreneurial characteristics that were openly noticed in this entrepreneur. In normal business, there are some characteristics that differentiate real entrepreneurs from the other people who try the same thing in the market. Netflix divided its business into two groups as an expansionary strategy. One is to be the Digital Streaming business and the other Qwikster. He takes this as a strategic step that would see his businesses improve from its past to a visionary future. The article goes ahead to give a series of reasons as to why, according to Reed the business needs to expand by division into these two groups. One of the characteristics discussed is innovation. It is brought out in the essence of there being an ‘innovator’s dilemma’. However, by innovation of these two ideas in the development of the company, there is a direct control over the dilemma by Reed. The second issue is focus. In this development, Qwikster team has its own point of focus as opposed to the digital streaming team. In this case, the article expresses ability for each team to meet its objectives and focus as opposed to when there is a centralized management team to manage the two sectors of the company. Now that there was a notion that the DVD business was being overtaken by the new technology, Qwikster was to keep the business in that sector going and streamlining was to introduce a new technology into the business (Suster 3). The third issue was based on charging the right prices for the services that were equally right. Although the mailer (Qwikster) was logically a force that would increase prices, this would happen in future and would be for the benefit of the consumers. This too is an initiative that was initiated by REED as the company Chief Executive. Reed also had consideration for the investors in which he considered that transparency would make the company attract a lot of trust. As stated, he initiated this in the business by the independence he gave to the operation of the two branches of the company. This was necessary since there would be accountability that would make the business successful hence more confidence in more investors coming into the company. The last point in the article is on effectiveness. The article indicates that there is positioning for the sake of the future is the norm in the business, an issue initiated by Reed Hastings. All the steps are taken to indicate that there is a big focus on the future which indicates that the company will be kept in business through to the real future given the strength of the management (Suster 2). Article 2: Global Internet Phenomena Spotlight, Netflix Rising This is an article that seeks to bring to mind the idea of major expansionary activities as initiated by the chief executive. There are issues that are clearly highlighted in the executive summary of the paper. They are mostly about the major plans that were put into practice so that there is continuity in the development of the company. This is under the reality leadership of Reed Hangings. With the streaming business at its peak, the company is now realizing an increase in the performance in which case there is an increase of 6.7 million subscribers to its services. With the high increase in the USA and Canada, he is quoted as saying; “We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet.” This visionary approach has seen the CEO Hastings increase the Canadian broadband networks making it to become the top application. He had suggestions to further expand the business to Europe, Asia and Latin America. Lastly on the expansion program, the company has taken over streaming programs on large companies such as Apple Inc. The second part of the article takes into account the market penetration. The 2011 quarterly filing indicated that the company had a total subscription of 23.6 million. The USA penetration rate showed a continuous increase over the successive months in the year. This is the visionary trait exhibited by Hastings in his charismatic leadership. In fact the Netflix network is very concentrated of late and there are always high prospects of more expansion in the targeted markets of Latin America, Europe and Asia (Sandvine 4). Article 3: The Wall Street Journal: Netflix CEO Says ‘He's Sorry, Sort of’ Pros and cons do appear in management. This is an article about a con appearing at the company. At the start, there is a situation in which the customers get incensed by the fact that the company increased the subscription fees without formally informing them. At the introductory stage, there is an apology that is therefore offered to the customers. As a human being who understands the need to keep the faith of the customers high, he went on to write to the company blog; "In hindsight, I slid into arrogance based upon past success." The article in this case therefore states that it takes more than a human and professional perspective for a manager to apologize. This was termed as a rare occurrence since many other CEOs had failed to apologize. The company later gives the issue that Sony Inc. also faced a similar situation and the CEO took the blame directly in which there are so many others that had failed to apologize after getting in the wrong hands with the customers (Lisa Richwine 4). The last part of the article cites an example of a CEO who was too insensitive to apologize to the customers after a mess occurred at the company. He is the CEO of Massey Energy Company, Don Blankenship. A mine explosion occurred at the company killing 28 people. Instead of apologizing, he said that the explosion was just a naturally occurring phenomenon and was beyond the control of the company (Silverman and Matiolli 2). Article 4: How I Did It: Reed Hastings, Netflix This is an article that was written by Patrick J. Sauer. He cites that he is able to visualize millions of mails carrying DVDs circulating in the USA. Hastings is quoted as saying that the company has become almost four times bigger that the blockbuster. He has the qualifications of a software engineer and quotes this as one of his points of strengths in discharging his duties. The article also indicates that he had management as his greatest challenge in life. When the dotcom bubble came, it affected his leadership abilities but his professional knowledge saved his situation at that time. The article also quotes Hastings as having identified three types of customers for the company at the expenditure level; the first group loves the convenience of having the DVDs delivered at home. The second group, otherwise called the movie buffs wants a very wide selection of the movies. The third group is the one that would like ten or more movies for a total of $18 per month. He moves from the issue of blockbuster and concentrates on the new issue of market buster. Three operating models were created and were believed to be very essential in overseeing market development of the company creativity. One of the creativity methods is that of increasing the market popularity of DVDs. In 1998, Netflix was formed and so many people did not have DVD players in their homes. However, with the introduction of the mailed DVDs to people’s homes, they found put that they could access them easily, the ownership shot up very sharply. The article connotes of the situation in which he delayed with a blockbuster and had to pay $40 as charge for lateness. This experience alone gave him an idea which he implemented through his method of payment. Lastly, he is indicated in the article to introduce a lot of convenience to the market. The DVDs were able to be mailed and people would have them at the convenience of their houses instead of making long queues to have blockbusters (Shaer 1). Article analysis From the four articles that have been summarized, there are several thematic leadership virtues and abilities that come out openly. Reed Hastings is seen to take the company to the next level of operation, management and culture. In the first article; “Why Reed Hastings should be applauded for Netflix Split”, several positive characteristics come out in view of the manager. The first is the visionary leadership in him. The author articulates the activities as carried out by Hastings to the effect that he divided the business line bringing in Qwikster and Streaming. The other blockbuster companies such as Hollywood were stuck on customers hiring DVDs and then returning them within a specified time, lack of which was to attract fines. In his visionary approach, he saw that there would be much convenience if a mail service was to be introduced. This was a total relief to the consumers and the company had a high revenue margin generated after this discovery. The same complements of vision are shared by the second article in which shows that the vision leads him to charismatically enter the markets in Asia, Europe and Latin America (Lisa Richwine 6). His approach was effective. He invented ideas with a purpose. In the third article, the visionary approach is endeared towards ethical issues. When the company increases the rates due to increased expenses, his management did not take the opportunity to inform the customers prior to this. This sparked a widespread criticism on the management. In his view of seeing a high stake future of attracting and retaining the customers, he took the earliest opportunity to apologize to them. This created a lot of trust by the customers to the company. The fourth article, just like it was in the first one indicates an experience that he went through which opened up his visions. After paying $40 for a fine at another blockbuster company, his vision was born. He visualized millions of other people who experience the same and in this difficulty he saw an opportunity. With his critical skills in computer science, he could see a bright future if he took the risk of offering better services. There are leadership styles that are evident in Hastings as indicated in these articles. They show a situation of both management and leadership control. They are democratic and decentralized. They also develop the leader in the employees. When he formed the two sectors of the company, he did not take it upon himself to lead the two by himself by virtue of being the author of the idea. The first article indicates that he gave the autonomy to other top managers to take care of the two sectors. Therefore, the idea of participation and delegation are seen here. This is a high level leadership style that gives the low line employment chance to exploit their potential. One of the effective reasons that come out in the articles for verification of democracy in Hastings is the keeping of communication very open (Sandvine 3). The success has been possible because he allowed people to put their ideas on the table and the best ideas were screened to create the best services for the customers. The fourth article indicates that he identified three types of groups that liked borrowing movies for watching. It is democratization through communication that allows this to be expressed. It is after identifying these groups of people and getting to k now their needs that he sets out identifying the best ways of managing their needs. The third article shows democratization of ideas. The company allows the customers to express their ideas in what is called communication democracy. He then takes a personal responsibility in apologizing and making them understand the need to increase the process. As stated in the same third article, the accident that occurred at the Massey Company attracted public outrage about the safety of the workers. With the CEO refusing the customers a democratic right to express their views, the company suffered a high level of democratic shock in which there was a need to mend their public relations (Shaer 2). Therefore, it is through these democratic ideas that the company is able to create a very positive show in the market as opposed to the other already existing companies and their base on DVD supply. Power does not come by staying put to retrogressive issues in the company. Being the CEO and founder of the company, Hastings develops power and using this power, he creates a culture at the company. This culture is based on satisfaction of the stakeholders that make the company a success. One of the cultures he develops is that of innovation. Innovation was created by himself and Qwikster was the result in which he creates a mailer to the customers in which there is a delivery of mails to the customers instead of the customers coming to physically pick them at the store. This became the norm that created the difference. Innovation is the core of the success of the business and is expressed in all the four articles. The second cultural issue at the company as created by Hastings is ‘focus’ (Suster 3). The company is so focused as expressed in the same first article that all the developments are geared towards satisfaction of the clientele. The focus in Qwikster and that in streaming are different and develop satisfaction to different sections. However, the level of concentration as planned by management is so high that there is a high probability that all the customers will be able to highly understand the running of the company issues. When the division is made, there is a high concentration and the managers are given the chance to focus on their areas of specializations (Gitman and McDaniel 4). This ensures that there is a high quality production by the company as a whole. The third cultural issue by virtue of his power is concentration on the investors to the company. Having realized that there is a high level of contribution of the investors to the wellbeing of the company, he goes ahead to give them all a chance to make a difference in the company. The difference is that there is a high stake in their contribution to the development of the company given their diversity. In this article, the investors are the people who have a share in the company in one way or the other and makes sure that there is a good level Effectiveness is that last source of power and culture that is reserved at the company. There is a need to redden the company and make it stable enough to focus on the future. The creations of the mind of the company are that there is a high level of plans to make it maintain its stake in the market and equally maintain its dominion (Lisa Richwine 4). The aspect of a motivated manager is seen in the four articles. In the first article, there is a high sense of charisma geared towards positive growth that there is a total belief that all the two invented methods of market reach will remain the best forever. After seeing that the two are working, the motivation to create more inventions are so high that there is a high level of ability to venture into new markets to make customers have the services in their homes. The level of motivation is seen in the second article when after launching a successful market; he states that there is a basically new invention to take care of TV streaming over the internet. This was a strong statement that was endeared towards reaching out top to the whole television universe. The behavior is that of motivation (Silverman and Matiolli 2). On motivation, the fourth article gives the motivation behind the developments that were realized at the company. One of the motivations was the $40 he paid after delaying with a DVD. The second motivation comes in the wake of his professional knowledge and skills that make him become so mush averse with computer literacy that he comes up with inventions in the same field. The same motivation is expressed in the idea of CEO comes on to motivate his workers to continue working hard, effectively and creatively (Sandvine 2). Conclusion There is a high level of relationship between the company and the effective management realized (Williams 5). The thematic statement has therefore been proved in all aspects. The accompanying evidence has been supported by the fact that there is a high level support of the same. Right from Hastings’ own speeches as expressed in the fourth article; “How I Did It: Reed Hastings, Netflix”. He is a charismatic leader who is very effective and visionary in which case he explores very risky ventures and ends up a very successful person (Suster 2). This paper has therefore evolved a proof for charisma and democracy for Hastings at Netflix by identification, summary and analysis of articles related to him. References Gitman, Lawrence J. and Carl D. McDaniel. The Future of Business: The Essentials. Boston: Cengage Learning, 2008. Iqbal, Talha. The Impact of Leadership Styles on Organizational Effectiveness: Analytical Study of Selected Organizations in IT Sector in Karachi. New York: GRIN Verlag, 2011 . Lisa Richwine. "Netflix increases prices, risks losing customers to Redbox." 13 7 2011. The Wall Street Journal. 11 5 2013 . Sandvine. "Global Internet Phenomena Spotlight, Netflix Rising." 17 5 2012. Sandvine Intellkigence Networks Limited . 11 5 2013 . Shaer, Matthew. "Netflix, riding success of 'House of Cards,' welcomes 2 million new users." 24 4 2013. The Christian Sciennce Monitor. 11 5 2013 . Silverman, RACHEL EMMA and DANA Matiolli. "Netflix CEO Says He's Sorry, Sort of." 9 11 2011. The Wall Street Journal. 11 5 2013 . Suster, Mark. "Why Reed Hastings Should be Applauded for Netflix Split." 19 9 2011. Entrepreneur turned VC. 11 5 2013 . Williams, Chuck. Effective Management: A Multimedia Approach. Boston: Cengage Learning, 2011. Read More