I F----d Up!

Word was out at my Atlanta college that a company was looking for weekend temps for a cushy job that paid $6/hour cash (minimum wage was $3.35/hour at the time). The best part was that the work would be indoors -- with air conditioning. Understand that I had spent my entire young adult life working outdoors, in the hot, humid, south. Working in an air conditioned building was as good as it gets. As it turns out, all I had to do was to put on a pair of khaki pants, and a [free] tee-shirt, and stand in the entrance at the local Piggly Wiggly. With a pleasant smile, I would greet customers as they walked in, and say, “Excuse me ma’am/sir, would you like to try the new taste of Coke, and save?”, while handing out coupons for unlimited 2-liter Coca-Cola products. OK, it was really a Kroger, but this is a story set in the Deep South, and what could be more southern than Piggly Wiggly?

Now, I never really cared for the taste of Coke old, or new, but that was not something you said out loud in Atlanta - the heart of Coca Cola country - at least not in 1985; but I digress. It was Saturday morning, and I was up early. Off I went in my smart khakis and shirt, ready to make some easy money. Well, I thought it would be easy. A mere five minutes into the gig, an angry man got six inches away, put his finger in my face, and said, “Croak is Sh_t!” Understand that before college, I spent 3 years on the oil rigs, working on live gas wells, 200 feet in the air, under blowout conditions. I thought I knew the meaning of hazardous work. But man, pushing "New Coke" in Atlanta! That was some kind of crazy dangerous! But, hey! I was getting paid $6/hour. In college speak, that's 36 packages of Ramen Noodles for each hour worked. So grasping my coupons tightly, I stood my ground and faced the angry mob. It's true that there were a few customers that were happy to get two, 2-liter bottles of any soda made by the Coca-Cola company for just a dollar, but most were visibly and vocally angry … or sad. One man got up close, and put his arm on me. “I’ve been drinking Coke my entire life,'' he said with teary eyes. “I don’t like the taste of New Coke! What am I supposed to do?”  

Fast forward about 26 years later, and I’m sitting in the theater at Netflix with my co-workers listening to Reed tell us about his plan to split the company into DVD and streaming. He was so excited because it was going to be a huge win for us. I was struggling to see how this would benefit our customers, but I was quite junior as a leader, and I did not dare speak up. As we walked through the plan, I thought to myself, “I hope this is not another New Coke!” But alas, Qwikster was a disaster, and the assessment was exactly as I feared, Qwikster == New Coke.

After the loss of a significant number of customers, and a few very funny SNL skits, Reed made the decision to reverse course. There we were, once again sitting in the theater. This time, the mood was very somber, as many of us wondered if Netflix could survive. Reed walked us through a set of steps we were going to take to upright the ship. Mostly, it required us all to ignore the noise around us and get busy being great again. By the end of the meeting, I think that we all were resolved to do the hard work to move forward. But the primary reason for that was not because Reed had outlined some brilliant, 10-point plan, or that he gave some hugely inspiring speech. IMO, the main reason was that he opened the meeting with a very candid and critical analysis of what happened, starting with the blunt self-assessment, “I f----d up!”(1) From there, he expressed concern that no one pushed to stop him from this mistake, or even spoke up. But he also confessed that he probably would not have listened to them, and said that was his problem. He then talked about needing to have a culture with much more rigorous debate, and the need to hear dissenting voices. In short, aligning Netflix’s reality with the Netflix culture memo. With humility and sincerity, he was asking us to help him move Netflix forward. I felt he was demonstrating real leadership.  

We all know how the Netflix story ends. In 2011, Reed was listed among the “Worst CEOs of 2011”. Today, he stands among the all-time great business executives and visionary leaders. It is true that I had the misfortune of playing a small role in two of history’s biggest business blunders, but that is not the point of this story. The real story is that I was fortunate to play a small part in one of the greatest business turnarounds ever, and I didn't even have to wear khakis!

I learned much about leadership during my years at Netflix. Primarily, by observing Reed and my leadership team closely as they navigated Netflix through many opportunities and challenges while we grew the company. Everyone knows that great leadership requires vision, strategy, and execution. Few understand that from time to time, great leadership also requires the #Candor, #Courage, and #Humility to say, “I f-----d up!”  

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(1) At that meeting, I remember Reed saying, “We f----d up! But as Neil [Hunt] would say, ‘No Reed, You f----d up’!”