Introduction
Communication is essential in managing an organization’s operations efficiently for the success of a business. Organizations undergo various changes to modify their policies, culture, structure, and infrastructure to enhance performance and achieve objectives. For an organizational change to succeed, the management must employ an effective communication strategy.
A good strategy enables the employees to understand and adopt the changes within the target time for a timely transition without affecting the business’s normal operations. Netflix is one of the biggest and most successful subscription streaming services and a production company. The company has recently undergone a successful transformation that has positively impacted its position in the movie production industry (Hidayati, 2022). This paper aims to investigate how an effective communication strategy influenced the success of Netflix’s organizational change.
Netflix Organizational Change
Netflix has rapidly grown into a giant movie-producing and online streaming platform offering stiff competition to other companies in the movie industry such as Walt Disney Pictures, Warner Bros, and Universal Pictures, who have been in the market for a significant period. The company enjoys a market cap of about $166.80 billion.
A considerable amount of the company’s revenue is generated from its online streaming services. However, the company has experienced several challenges that forced it to undergo several changes to find the most appropriate model that would enable it to break through the market that was already competitive. Netflix’s significant change was to improve its workforce performance (Morgan, 2018). Netflix CEO Reeds Hastings aimed to improve employee performance through motivation by changing various policies to increase the employees’ freedom.
For instance, Hastings introduced a new leave policy that would allow employees to take leave for an unlimited time provided they acted in the company’s best interest. The philosophy governing this approach is common sense, where Netflix expects its employees to use common sense rather than govern the workforce by a series of rules (Hidayati, 2022). Freedom was also introduced in the policy of compensation.
The employees were free to choose to be paid their compensation in either stock form or directly into their accounts. The management also scrapped employee performance-based reviews (Hidayati, 2022). Instead, the company introduced the 360 degrees review model where the employees are reviewed based on the feedback from third parties who had had contact with the workers.
Netflix’s changes lacked clear procedures and were unpopular in the industry. However, a good communication strategy played a significant role in successfully implementing the changes. Within a short period, the changes had already proved successful. For instance, it was reported that the freedom of the workforce significantly reduced stress and created self-management, and increased flexibility. As a result, the company reported increased innovation, which impacted the film’s quality (Morgan, 2018). Netflix considers keeping underperforming employees within the workforce as a liability that is likely to interfere with the morale of the other workers.
Netflix Communication Strategy
Hastings’ communication strategy was based on open discussion between the management and the employees, clear instructions, and practical communication tools. Firstly, open discussion was essential in engaging the employees to decide the policies to govern them (Abrashi, 2018). Secondly, clear instructions made it easier for the message to be understood and reduced the rate of misinterpretations. Thirdly, practical communication tools played a significant role in delivering the information to the concerned parties on time with clarity and authenticity (Abrashi, 2018).
The communication tools used included emails, websites, and formal letters. The coordination of these strategies made it easier to adopt the changes without interrupting the company’s service delivery to its customers. The strategy employed preserved the authenticity of the information and increased transparency within the organization because the channels used to deliver the message were easily accessible to everyone. As a result, teamwork and collaboration were developed, facilitating creativity and innovation within the workforce.
Netflix Communication Channels
The strategy was based on various communication channels ideal for implementing the changes. These channels were developed to deliver specific information to specific groups, including directors, heads of departments, and ordinary employees. The major channels used included face-to-face, written communication, and electronic media (Morgan, 2018). These channels were used strategically based on the hierarchy or management.
At the top of the hierarchy, the CEO passed the information to the department heads and other senior officials. The department heads would then communicate that information using the above channels to their juniors until it reached the entire workforce. The following illustrates how the channels were used to pass information from one managerial level to another.
Firstly, Reed Hastings used a face-to-face communication channel when communicating changes with Netflix’s top officials, including the directors and heads of various departments (Hidayati, 2022). His face-to-face communication model aimed to create a fluid relationship within the management that would be reflected throughout the entire workforce.
This communication channel was also vital in discussing how the various departments would implement the changes. It was an inclusive discussion that included the concerned parties’ suggestions and ideas to make the changes better and more realistic (Morgan, 2018). Face-to-face commutation was essential for instant clarifications and corrections to the changes that would make it easier for the rest of the employees to understand.
Secondly, Netflix written communication was employed on various occasions, such as scripted speeches, press releases, fact sheets, and media statements explaining the changes to the concerned parties. For instance, Hasting mainly used written communication to coordinate the changes within the departments. The original copy of the new policies was shared across the heads of the departments to implement the changes in their respective jurisdictions (Morgan, 2018).
Written communication is essential in articulating the details of the message precisely and clearly, making it easier for the subjects to understand. Thirdly, Netflix has been using electronic media, such as sending emails to communicate the change to its employees since its inception (Hidayati, 2022). In his strategy, Hastings used emails to communicate the new policies through a PowerPoint attachment during the organizational changes.
Emails are essential in sending brief messages targeting a larger group of people within a short period. Some Netflix employees work remotely as part of the company’s policy on employee freedom (Hidayati, 2022). There was, therefore, the need for a communication channel that the organization could employ to transmit information to such workers within the set time frame. Electronic media has proved to be a reliable form of communication that Netflix uses when addressing its remote employees. The organization is digital-oriented, thus making it easier to implement electronic forms of communication.
The advancement of technology and accessibility to an internet connection has been vital for implementing the electronic media at Netflix. The company requires employees to submit their emails to make communication easier. When communicating a change that affects every worker, the company only writes one email that is then shared with all the employees through email.
Netflix also has a website where all the information meant for the employees can be accessed. The company often publishes information on its website, where all the employees and concerned parties can easily access it (Hidayati, 2022). However, for the website to be effective, the company must inform its employees through other forms of communication such as internal memos and emails that new information is published on the website.
Information published on the company’s website is often detailed and maybe general such that it applies to everyone who can access it. Unlike internal memos, website use as a form of communication is not often internal. Most of the information published on the website may also be affecting consumers and the general public. For instance, the company introduced free streaming of movies for consumers with mobile phones. This change reached the targeted audience through the company’s website, which is easily accessible to the public.
Role of the Communication Channels in Implementing Changes
Communication channels employed by Reed Hastings have played a significant role in determining the success of the changes introduced in the organization. Firstly, the company received a quick response from its workforce and addressed the changes’ concerns (Abrashi, 2018). Secondly, the used channels delivered the changes timely and gave the affected parties ample time to go through and understand the new policies. It also improved employee engagement with the management, creating a friendly environment for the employees to ask for clarification and further instructions from the administration.
Employees who were also not satisfied had the chance to make suggestions to address their concerns (Morgan, 2018). The channels were ideal and flexible for the employees to read the new changes and process them at their own pace.
Thirdly, the channels made it easier for information to flow from one department to another. Effective communication between departments is essential in coordinating operations for the company’s success. Coordination among the employees and department develops the spirit of teamwork, enabling workers to collaborate toward achieving a common goal. Netflix’s communication strategy has significantly improved the collaboration of the departments toward implementing the changes (Abrashi, 2018).
Lastly, the communication channels used played a vital role in improving transparency within the organization. The company used general and easily accessible media by all the employees. Transparency creates a sense of trust among the employees and increases the integrity and accountability of the leaders. This makes it easier for the employees to adopt changes issued by the management and efficiently implement the decisions made.
Conclusion
In conclusion, effective communication is a vital element in implementing organizational change. Communication channels used to deliver the transition to the employees and the affected parties often determine the success of the changes. Leaders must ensure that they use clear, general, and fast channels to make it easier to implement the changes. The communication strategy used by Netflix to communicate changes effectively created trust, teamwork, and a friendly environment within the workforce to achieve the organization’s goals.
References
Abrashi, G. (2018). Organizational Communication-the Importance of Communication Strategy in Times of Crisis for the Organization. European Journal of Social Sciences, 1(2), 21-25.
Hidayati, N. (2022). Human Resources Management Review on Netflix. In International Conference on Economics, Management and Accounting (ICEMAC 2021) (pp. 391-397). Atlantis Press.
Morgan, J. (2018). Netflix: Reed Hastings.Media Company Leader Presentations, 12.