So you messed up. Big. How do you explain your company’s misstep to the public?

Back in july 2011, Netflix raised its rates by 60 percent for customers who subscribe to its DVD and streaming video services.

Customers were outraged. Hundreds of thousands of people canceled their subscription, and Wall Street responded by punishing the company’s stock, which is down more than 60 percent.

Despite the outrage, Netflix CEO Reed Hastings declined to apologize to his customers for two months, arrogantly adopting a crisis communications approach toward his customers that can best be described as: “Deal with it.”

Two month later when Netflix CEO Reed Hastings hit “send” on his now infamous “I messed up” blog post and summarily announced the formation of the “Qwikster” business to run Netflix’s DVD network, a new chapter in botched crisis communications was written.

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Why can some companies take advantage of any change the market brings, while others struggle with the even the smallest internal or market-necessitated modification?

The reasons why will differ for each organization, but the question is definitely worth asking – especially in light of the fact that the pace of change is accelerating at the fastest rate in recorded history.

Kodak was an iconic industry leader. For decades, it was synonymous with photography. But it got stuck in its core competence of traditional film products and missed the rise of digital photography and printing. To survive, it has stopped selling film cameras, focusing on the digital ones that dominate the market. But it arrived late. (more…)

We live in an era of profound and accelerating disruption. In just a few decades we have witnessed the transition from an industrial, nation based, resource-orientated economy to a global, networked, knowledge-intensive economy.

Many organizations will shrink or disappear in the long term – only a third of excellent companies remain excellent for decades, and when organizations try to transform themselves, even fewer succeed.

But as economic, political, social, and technological change continue to accelerate, and competitive pressure grows more intense, leaders can’t afford those odds. A way to overcome them is to address the underlying problem:

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The focus of any organization, no matter how big or small, must be the customer. Unfortunately in today’s business climate there is a lot of lip service paid to focusing on the customer, but very little actually being done about it.

Companies actually fool themselves into thinking they are driven by the customer. But the right way to look at this is that it creates a great opportunity for you to differentiate yourself from your competition by really focusing on the customer.

In other words, by moving your culture to being customer-driven rather than internally-driven you can potentially gain some degree of competitive advantage. But what does it mean to be customer-driven? How is the customer driven organisation different from other organisations? What makes the different?

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