Business Context Highlight 

“Leadership is not one blanket characteristic that cures all ills” (Rietsema 2015), and no resolution is available to be intact leadership. However, an array of leadership-based theories broadens the substantial value-add benefits to leaders. The media rental service company “Netflix” founded in 1997. Reed Hastings, the CEO of Netflix, is a phenomenal transformational leader, takes the revolution in the leadership of his company’s performance metrics and future trajectory.

Netflix first launches DVD rental that’s quickly surpassed Blockbuster, the market-dominant. However, Hastings had a more excellent vision, and the sensibility of industrial change is the equivalence of technical enhancements. In 2009, Netflix's video rental business shook out, and DVD membership has fallen from 20 mills to 5.3 mills since 2010 (Goncalves 2018). Hastings announced Netflix devised from DVD-by-mail service to the streaming business, keep separated the two-business unit. Hastings had an experience of the software business, without hesitating launched subscription-based streaming service.   Hence, drastically can be observed Hastings's creative intelligence and transformational leadership abilities.

We may presume this transformation by Hastings is feasibly bizarre. Nevertheless, nowadays, the idea of going to a store to rent a video seems crazy. The privilege of the Internet, Netflix’s home entertainment became just a few clicks away. The change is inevitable, and Hastings inspired his team to become the market pioneer. Today, Netflix is the most influential media streaming services in the world, with nearly 150 million subscribers (37% of the world's internet users) by 2019 (Watson 2020).  

 

Reed Hastings, Netflix CEO - Source: Abosch

Contingency Theory / Transformational Leadership Effectiveness 

Leadership is fine art rather than a science. The Great Men theory assumes that the traits of leadership are intrinsic "Leaders Are Born” (Bass 1990). To support that, Hyacinth added the leader is a set of inborn attributes, perfected with education, training, and experience (Hyacinth 2014). However, leadership depends on the variety of substances including maturity, followers, and situations. Despite contemporary leadership embraces many forms of leadership styles, the organization’s culture and goals determine the best-fit leadership style of the firm. Among that leadership, transformational leadership is a convenient method for Hastings, in the above scenario of economic dilemma. 

Transformational leaders offer an objective that excels short-term goals and focuses on high order critical needs. According to Ronald Reagan, ‘The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.’ To support Ronald’s statement, transformational leadership is also enhancing the attributes of team performance. Bass expressed the enhancing team’s decision-making skills through the form of transformational leadership (Bass 1992). Discovered the transformational leaders possess the following four scales which apply to influence employees and fulfill the company goals.

1. Charisma – The visionary/ leader, is the role model with “magnetic” personality 

2. Inspirational Leadership – The motivator/ leader articulates of vision that is inspiring to others

3. Intellectual Stimulation – The challenger/ leader challenges organizational and encourages employees’ creativity and work reinforcement 

4. Individualized Consideration – The mentor/ leader show personal care and concern of followers’ well-being

The Netflix Revolution 

Netflix always invented in streaming video and operated VdoCipher is offers a fantastic glimpse into the company's long-term strategy in two decades. In 2011, Netflix made significant changes in the business model by pushing the traditional television business boundaries to an online platform home-based entertainment system. Hastings clutched the chance of vastly expanded internet connectivity and revolutionized the viewer's complex algorithms used to own original content to meet the subscriber's need. Eventually, it kicked off the company's exponential growth and boosted the revenue. Hastings’s astonished leadership influenced his team, serve Netflix to become the pioneer and crested in the digital streaming business. 

Hastings convey the transformational leadership style that cultivates the positive change in the organization. Goncalves added that Hastings stimulates his workforce and believes in employees who refined enough to manage the autonomous driven working environment and ultimately do it right for Netflix (Goncalves 2018). The leadership stimulates the employees to deliver their best performance. It is merely one of the transformational leader's scales "Intellectual Stimulation" which emphasizes the collective identity of the organization and paying attention to the strengths and weaknesses of the employees. Notably, Netflix promotes its employees to “make wise decisions despite ambiguity” (Forbes 2019). 

Hastings endorses “Inspirational Leadership" by creating a culture of autonomy in the decision-making process. Referring to an interview with TED, Hastings proudly commented: “I pride myself on making as few decisions as possible in a quarter” (Hastings 2018). It is an embodiment of the Netflix culture that the leader articulates the vision and inspire employees to employ sensible judgment in all their actions. Despite this is the right call, we cannot ignore the risk of if the power has fallen into the wrong hand. To contrast, Magee claimed, "People who have given more power in the lab, they see more choice” (Resnick 2013), which means that employee sees beyond at the operation and can explore for more opportunities if they are allowed. It is the way for the hallmark of the great hypocrisy. The author has the thought of Hastings still in believing in transformation leadership or shall be hybrid the leadership based on the situation instead?

Hastings convey his version of HR management, eliminating formal reviews and offer bonus. Also concern “Individualized Consideration” by very much valued people, encouraging employee ownership and development. 

Undeniably, Reed Hastings is the role model of Netflix "Charisma" who crafts Netflix's success story. Upon the above critical analysis and draw from the transformational leadership approach, the author has strongly agreed with Hastings's leadership and management driven Netflix, become today's net worth is $185.6B (Netflix Net Worth 2019).

Regardless of technology advancement and streamlined processes, leadership is crucial to have to achieve individual involvement. Therefore, suggest the leader to have an improvement in setting clear road maps to the vision, working environments centered on clear values, and sound judgment is the root of thriving Netflix success leadership. 

Conclusion 

Netflix’s success compares to just two decades of company age is astonishing. The impressive nine ways of Netflix nurtures employee freedom and encourages responsibility is proofing the concern of employee fairness treatment and tighten on ethical issues (Minds 2019). Hastings assures the success of transformational leaders by throwing out the traditional rules and regulations and naming into growth, innovation, and transformation. Therefore, Netflix conveys decent leadership is undeniable.

Reference

Dionne, S.D. and Yammarino, F.J. (2004) “Transformational Leadership and Team Performance”. Journal of Organizational Change Management 17 (2), 177–189

Goncalves, V.J. (2018) A Leadership Analysis of Netflix CEO, Reed Hastings | PSY 532: Foundations of Leadership (Dobbs) [online] available from <https://sites.psu.edu/leaderfoundationsdobbs/2018/09/21/a-leadership-analysis-of-netflix-ceo-reed-hastings/> [13 April 2020]

Hastings, R. (2018) How Netflix Changed Entertainment -- and Where It’s Headed [online] available from <https://www.ted.com/talks/reed_hastings_how_netflix_changed_entertainment_and_where_it_s_headed/up-next?language=en> [13 April 2020]

Hyacinth, B. (2014) Are Leaders Born or Made? A True Story [online] available from <https://www.linkedin.com/pulse/20141026042807-150905450-are-leaders-born-or-made-a-true-story> [16 April 2020]

Minds, B. (2019) How Company Culture Drives Success — Netflix, HubSpot and UiPath [online] available from <https://medium.com/manager-mint/how-company-culture-drives-success-netflix-hubspot-and-uipath-9fad6a89a9bb> [17 April 2020]

Netflix Net Worth 2006-2019 (2019) available from <https://www.macrotrends.net/stocks/charts/NFLX/netflix/net-worth> [18 April 2020]

Resnick, B. (2013) How Power Corrupts the Mind [online] available from <https://www.theatlantic.com/health/archive/2013/07/how-power-corrupts-the-mind/277638/> [14 April 2020]

Rietsema, D. (2015) Importance of Leadership in Business - HR Payroll Systems [online] available from <https://www.hrpayrollsystems.net/importance-of-leadership-in-business/> [18 April 2020]

Watson, A. (2020) Topic: Netflix [online] available from <https://www.statista.com/topics/842/netflix/> [15 April 2020]