A close read of a news story describing Netflix’s move into producing original movies could be a script for a training video to sharpen association strategy.
Most people will see only one lesson—the need for disruptive innovation. The new business mantra, “disrupt yourself or die” strikes fear into the hearts of association executives who operate under greater governance constraints than their for-profit counterparts.
I prefer to take a less alarming stance: “the world is changing, so must your association”. Associations that don’t do environmental scanning to identify changes affecting their mission and strategy deserve to become less relevant. It’s irresponsible to act as if the world isn’t changing.
But let’s not miss the other valuable strategy lessons in this script. First, Netflix obviously operates with a clear vision and sense of its identity. Even notable stumbles like the abrupt shift in its subscriber model to steer customers into streaming have not deterred Netflix’s forward progress.
What’s instructive about Netflix’s move into original movies is what strikes me as a “both/and” strategy. Netflix is simultaneously offering these original movies in both theaters and streaming format. Netflix is offering great content through multiple channels without fearing the consequences that one platform will weaken or cannibalize the other.
Note the explanation a Netflix officer offered: “We need to compete for consumer attention with the experience and the quality of the film, not the preciousness of access. The experience has to come first.”
You could hold a day-long association executive seminar on content and membership strategies on that statement alone.
The other notable strategy lesson is that Netflix is spending real but smart money on its innovative movie strategy. It is not backing blockbusters to compete in theaters. The company is betting on really good films to serve a discerning audience. If you really understand the audience you want to win over, like any effective association should, you can use smart money to achieve your strategic initiative.
However, I do have some empathy for the rebuttal the National Association of Theater Owners offered: “Theater owners get frustrated when for [public relations] purposes, Netflix makes these grand pronouncements about changing the industry. You can’t revolutionize the theater industry without bringing the theater industry along.”
That’s a second day-long association executive seminar on change in associations. Associations are often slow to react to obvious opportunities because they worry excessively about the need to bring key member segments along. That’s the gift associations give their competitive disruptors every day. To keep peace in the membership family, association boards go slow and miss opportunities even they understand and want to pursue.
Perhaps Netflix will decide to get into producing strategy training videos. The company is helping write the script for a video association executives need to watch.