How ‘farming for dissent’ grew Netflix consumer base x56 in 20 years.

There are many well-known case studies of when an absence of psychological safety ends disastrously; the tragic 1977 Tenerife airport disaster where co-pilot Klaas Meurs did not feel safe to challenge KLM pilot Jacob Veldhuyzen; the 2003 Columbia space shuttle tragedy where senior management suppressed Chief Engineer Roney Rocha’s concern insulation foam decamped from the vehicle at take-off; and Research-in-Motion CEO Mike Lazaridis sitting on 40% market share in 2007, being complacent about Steve Jobs iphone not having a keyboard with a battery he felt would drain…resulting in 20% market share in 2009 and 2% in 2016.

At a recent Wavelength Leadership event I met Todd Yellin who was at Netflix for 17 years, Head of Product for seven of those. When he started in 2006, it was the year Zinedine Zidane got sent off in the World Cup Final for headbutting an opponent; we were listening to music on iPods not iPhones; Tony Blair was the UK's Prime Minster and it’s best not to mention what Donald Trump was allegedly doing.

Another business in the US was commanding 40% market share. Blockbuster. Its share was eroding due to an online DVD rental service called Netflix. The game changing moment came in 2007 when Yellin described the launch of what Netflix called ‘Internet TV’, what we all today call ‘streaming’. But the bigger question is what was going on behind the scenes that made that and the next 18 years of innovation happen at Netflix.

To have psychological safety, the environment must be one where the team feels safe to openly discuss ideas and concerns without fear of reprisal. This how it worked at Netflix. 

Yellin credits Reed Hastings, co-founder of Netflix with the concept of ‘farming for dissent’. This is a leader’s obligation to actively seek out opposing viewpoints to improve decision-making and innovation. "You're creating an environment where colleagues can thoroughly evaluate, test and contribute to your ideas" explained Yellin. But this is just the beginning of the process. You also have to listen. And this does not mean simply downloading and hearing the arguments and data that prove your point, but being open, flexible, curious and have the humility to hear the things that break your idea. Why? To improve it.

And Yellin combines critical leadership skills that too many leaders make a binary choice. He says farming for dissent means crashing together IQ and EQ; curiosity and consequence; and finally disagreement and then commitment. The culture being built was one of ‘debate, decide, then deliver’. The team at Netflix also understood there is no such thing as the CEO or Head of Product who knows it all. Their approach to empowerment meant they appointed ‘informed captains’, an expert who would make the final decision. To be clear, this was rarely the CEO. And the phrase ‘informed captains’ is one where both words have equal weight. Captain meaning you are empowered, accountable and make the final call. Informed, meaning you engage and hear several perspectives, you fulfil your obligation to ‘farm for dissent’.

Here’s two examples of how this played out.

In 2013, the Chief Content Officer at the time Ted Sarandos (Co-CEO today), was the ‘informed captain’. He gathered together leaders from Content, Product, Legal, Marketing and Public Relations to discuss if it really was in the best interests of Netflix and the consumer to launch all 13 episodes in one go of their $100m investment, House of Cards, on February 1st 2013. At the time, the convention was build intrigue and suspense, keep viewers waiting, feed them an episode a week. Yellin was in the meeting and describes what was a "hearty debate, and a healthy farming for dissent". Sarandos, as the ‘Informed Captain’, decided it was the right decision to hand consumers control over their consumption, the opportunity to binge a series in one sitting if they chose to. Even those who had disagreed with the decision in the room, aligned and committed to its implementation.

A similar thing happened with Yellin as the ‘informed captain’, pulling together various teams when Netflix were looking into launching interactive content. They debated whether it was worth investing additional money in giving viewers the experience of defining how the story played out. This led to the decision to release Bandersnatch, in 2018, where you choose the series outcomes and can even go back and see how things would have played out differently. This then led to an even bigger decision of Netflix going into video games…after they had ‘farmed for dissent’.

Netflix had 6.3 million subscribers in 2006 paying $4.99 per month. Today they have 340 million, with subscription plans across three price points…with Ads $7.99 per month, standard at $17.99 and Premium at $24.99.

Whether it was a big decision – should Netflix go into sports, allow advertising, or ‘smaller’ decisions like the user interface, customisation of our lists - this was and is today decided by Informed Captains who have farmed for dissent.

So I guess psychological safety pays. How are you farming for dissent?