Now streaming on Netflix: 3 steps to resolve the Adaptability Paradox

Adapt2Market Adapt2Tech Uncategorized

Lets face it. Leaders already know that their organizations need to adapt. Continually & at a faster pace than before. And that is just to survive the unrelenting changes the markets bring in everyday.

So their challenge has not been why but how? More specifically, how to transform for future, yet keep performing day to day for their business operations. Many such organizations, with their setup of operations steeped in process centric, efficiency oriented systems now struggle with apparently wild-wild-west world of experience driven economy.

This creates the adaptability paradox: Keeping their currently running processes on legacy systems, while adapting for the future. Cloud promises exciting avenues for new modes of engagement, customer service and scaling to new geographies without breaking the bank but their legacy systems still need to grapple with the operational realities of today. Its not very attractive to hear about 5-year transformation roadmap to cloud, when reality is that some of their domains need to change now, especially when it comes to going head to head with their digital native competitors.

Our research, combined with experience working with leaders in this provides interesting insights for this journey. Working for Microsoft at a mostly traditional brick & mortar retailer with 20,000+ stores globally, a simple yet effective approach for adapting to the new while protecting the core operations has been well reviewed. This forms one of the key tenets for Adaptable Technology Platform: Simultaneous provisioning for tight coupling for the business customer domain, while decoupling the digital future with the traditional IT platforms in the technology domain. A good case study is how Netflix transformed itself (yes, in 2008 they also had challenges of ~ a decade old traditional processes while getting themselves ready for the digital consumption). There are very valuable lessons to be learnt for every organization facing disruption in their marketplace and working to tide over the challenges.

But before we jump to how, lets reaffirm why adaptable technology platform matters:

More closely, note the shift in the growth curve around year 2009, when they initiated journey for a more adaptable organization which is simultaneously closer to the consumer, while gaining the scalable reliability of cloud.[ It’s a story in itself that they decided to use a competitor’s cloud infra (AWS has a competing offering for video streaming) for the same. ]

So, how is such a transformational growth achieved? Here is what our learning highlights as the key tenets:

  1. Couple your business very tightly with the customer mission: Why is this the first and most important step? Amongst all the changes & disruptions, its crucial for organizations to have this a their North Star which stays constant and continually guides the team towards their goal. Change is seldom painless or unambiguous, but having the mission clarity will empower these changes, even the risky ones. For example, Netflix in 2008 faced the challenges due to database corruption / outages issues. Having a clear cut mission of providing consumers with reliable & low cost streaming service helped them to make the decision to move to cloud, which lead to 1000x growth in streaming traffic in 7 years period. But moving to cloud is only part of the story. Other staggering part is the tight coupling they did for consumers of their service. Unlike most other providers, they decided to focus on providing the most positive experience to their users. This lead to provisioning any media asset in ~1200 different formats, which are dynamically chosen based on users speed & devices. At anytime, they support 2000+ consumer devices (desktop, phone, tablets, TV, set-tops, streaming media like Roku etc). This tight, native coupling with users is needed to provide the experience which makes a difference. Result is 200m+ customers:

  2. Leverage the technology to fuel the operational processes on a scalable and reliable platform (coming up in episode #2 of the series)
  3. Unleash the fast changing digital space from the reliability centric but slower changing legacy processes, using an approach called technology decoupling (that’s episode #3 of the series)
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