Tuesday, April 30, 2013

Reed Hastings and Netflix bounce back

We've followed the Netflix/Qwikster mistake story since it broke in 2011. Here's our earlier chronology:

September 19, 2011. Netflix's Reed Hastings: "I messed up" in communicating price increases
October 10. Netflix backs off - a little - from their radical restructuring
October 20. Opposing Views: Netflix restructure - bold embrace of the future or customer debacle?
October 23. Reed Hastings reflects on Qwikster & pricing controversies
April 10, 2012. "Strategy + Business" magazine says "Netflix wasn't all wrong" in its strategic changes (See the tide of opinion beginning to turn?)

If you need a quick recap, here goes. That summer, to capitalize on the growth of streaming media (and, possibly, to hasten the customer transition from the legacy DVD-by-mail business to streaming), the company announced separate pricing for DVD rental and streaming. The total price for customers signed up for one DVD & streaming would rise to $16 per month a 60% increase. Then, in October, Netflix announced that it was splitting its business into two parts - DVD-by-mail (to be renamed Qwikster) and streaming (keeping the Netflix name). Customers would soon have two separate accounts to manage, in addition to paying more.

Fallout was widespread and intense.

Within a week, CEO Reed Hastings said he "messed up" and apologized to customers. Two weeks later, Hastings pulled back on separating out the DVD-by-mail service and ditched the Qwikster name. The price increase, however, stayed.

Last week, eighteen months after Qwikstergate, Netflix announced stellar quarterly growth numbers, basked in rave reviews of its original series "House of Cards" and enjoyed a stock price that was the largest riser among the S&P 500 this year (of course, the stock is still below where it was before Qwikstergate broke).

So, while the crisis did not end up being what the New York Times' James Stewart called a "near death spiral," there is plenty to look back on now. What did Hastings learn from the experience? Here's what he told Stewart:

Mr. Hastings said he realized that the company’s attempt to both raise prices and separate into two companies, one the legacy DVD-by-mail business and the other the up-and-coming broadband streaming business, was trying to do too much too fast....

“[To bounce back from the crisis,] there was amazing pressure to come up with the shiny object that would make everything better,” he said. “But the phrase I used was, ‘There are no shortcuts.’ We weren’t going to find an idea or gesture that would make people love us again overnight. We had to earn their trust by being very steady and disciplined. And we had to be careful because we were on probation. We had to stick to what we do well and not lose confidence. I couldn’t say for sure we’d recover. But I was confident that our best odds were to be very steady and focus on improving the service.”...

With this week’s developments and the stock over $200, “in one sense I can say this is behind us,” Mr. Hastings said. “But it’s like a partially healed bone. It’s still quite fragile. Were we to make a similar mistake, we’d be right back in the penalty box. So we’re not really out of the woods. We’re growing and we’re making good progress, but we’re still not fully back to where we were.”

I am struck by Hastings' combination of humility and confidence. When things were difficult, and people urged him to find a "shiny object" to make everything better, he had confidence that his general strategic direction was correct and kept his patience. Now that growth is returning, he is not bragging - instead, he realizes that "it's still quite fragile."

Friday, April 26, 2013

Meta Friday - a discussion of a MBank post spurs thoughts on revealing mistakes

A discussion started yesterday over at Regretsy Forums, a site where people share gripes with Etsy products, vendors, life in general, and, sometimes, about issues they have with Etsy, the online crafts marketplace. The subject of the discussion ("I know why Etsy screws up so much" - free registration required) was a Mistake Bank post entitled "Etsy CEO on the Three-Armed Sweater Award for Spectacular Mistakes." One of the Chad Dickerson quotes featured from tabby, who started the discussion was this: "We have 100 engineers, and any single engineer can deploy code to the live site at any time. It happens about 30 times a day."

This prompted 26 replies and counter-replies, many of which echoed this theme from whiskeyish:

That's been discussed pretty heavily here before. I sound like a broken record when I say "the ship-it mentality is killing even the established companies, because they run it like a broken-ass startup with no consequences to the end users."

It's a fascinating conversation that to me illuminates two important points:

1) Etsy, assuming they still deploy live code to the site, may want to consider if they've grown too big for this kind of "broken-ass startup" approach to change management (or as Dickerson himself puts it: "embody(ing) the hacker spirit"). A fair number of their users seem to think so.

2) Discussing mistakes openly will subject you to derision. You need fortitude, self-confidence, and the ability to tune out the chatter - without losing important lessons you need to hear, even if unpleasant (see item #1).

Good stuff to think about on a Friday.

Thursday, April 25, 2013

Nirmalya Kumar and Nader Tavassoli of London Business School: "Product Failure Is a Moment Of Truth"

This post was written by Nirmalya Kumar and Nader Tavassoli, professors at the London Business School, and originally published on the LBS Business Strategy Review website. Kumar is the co-author of "Private Label Strategy: How to Meet the Store Brand Challenge," among other books. Tavassoli and Kumar wrote this on the day that Toyota announced a recall of 3.4 million cars due to issues with airbags.

Today’s news is compounded by the fact that globally, Honda is recalling 1.13 million cars, Nissan almost 500,000 and Mazda 45,000. The internet has added a new layer of visibility, speed and culpability to mass product failures and ensuing product recalls. You could say that social media can make or break a company in crisis.

Companies need to realise that such crises are about more than simply minimising legal liabilities. The challenge is not to allow a product recall to threaten the entire brand or company. Research indicates that negative news is devastating; on average, the media impact of negative news has quadruple weight when compared with positive news. Intel’s 1994 Pentium microprocessor recall allegedly cost $500m alone. Coca-Cola posted a 21 per cent drop in income linked to its European contamination scare and recall of 17m cases of Coca-Cola from five countries in 1999. Firestone’s Ford-related tyre recall is estimated since 2001 to have wiped out more than half its parent Bridgestone’s profits and dragged down the share prices of both companies. But product recalls need not turn into a brand crisis. They can even be an opportunity to build the brand, provided they are handled appropriately.

A mishandled public response can cause more damage than the problem it addresses in the first place. Remember, Bill Clinton or Three Mile Island? On the other hand, a well-managed corporate response, such as Tylenol’s handling of the terrorist capsule poisoning incident in the early 1980s, can leave the brand even stronger. Similarly, Lexus’s handling of a recall immediately after the launch of the brand in the USA generated tremendous customer goodwill and positive press for the new brand. Our research has identified “four Cs” of product recall management that should guide companies in troubled times: be candid, contrite, compassionate and committed.

Being candid implies addressing the problem openly and head on. Unfortunately, hope often trumps reality. Many companies wish their problems would stay under the radar screen, they stonewall the public, or even worse, issue outright denials. Exxon famously responded with “no comment” in wake of the Valdez oil spill. Merck went as far as instruct its sales force not to disclose information over the Vioxx crisis. Understandably, companies may feel threatened by a deluge of press inquiries, but speed and clarity of response is essential. The media may be converted into an ally, and internally, it is vital to maintain staff morale.

Being contrite starts with assuming responsibility. Johnson & Johnson immediately took responsibility over the tampering with Tylenol, even though it was hardly to blame. In contrast, Exxon confused the issue of taking responsibility with taking blame. The level of contrition expected by the public varies with whether the recall is an outcome of a malicious attack, accident, or an internal quality failure. Of course, culture matters here. After the Japan Airlines crash that claimed 520 lives in 1985, JAL’s chief executive publicly apologised and tendered his resignation. While, ultimately, it is important to ascertain where responsibility for the failure lies, the burning need of the moment is that the company is seen to take responsibility.

Being compassionate requires being personal. Press releases simply will not do. Johnson & Johnson managers were seen weeping on television cameras as they attended victims’ funerals. In contrast, Lawrence Rawl, Exxon’s chairman, waited two weeks after the oil spill to fly to Alaska. Sadly, all too often the only personal attention the affected receive is being ambushed by company lawyers and photographers.

Being committed requires a cross-functional response team with top management and should not be a public relations exercise. This team’s priority should be immediately to assess the source and potential impact of the crisis. Who was hurt? Does it require free servicing, partial recall or total recall? Once the program is announced, how will the company wholly commit itself to making the process as customer friendly and effective as possible? Obviously, preparation helps. A well prepared company goes beyond buying crisis insurance. It has mechanisms, people and policies to help avoid and manage crises. The brand also needs to consider how to get back on its feet. J&J introduced triple tamper-proof seals on its packaging, coupons and deep price cuts to win back the market, and seminars by its sales force to doctors. Goodwill still has to be converted into sales.

The product failure is a moment of truth. A poorly-managed response can unmask a brand promise as a hollow boast. But a well-managed product recall converts the crisis into a chance to demonstrate a company’s regard for its customers. Business as usual rarely offers such opportunities.

It’ll be interesting to see whether these Japanese car firms will seize the opportunity or crack under pressure.

Reposted by permission of the author.

Tuesday, April 23, 2013

"Celebrate the mistakes that don't happen" - yes, in certain circumstances

We celebrate mistakes in this space, for all sorts of good reasons - to promote learning, empathy, and experimentation. But Heidi Grant Halvorson has a helpful reminder on Harvard Business Review Blog Network that not all mistakes are smart ones ("Celebrate the Mistakes that Don't Happen").

When an organization (or an individual) makes a big, expensive and embarrassing mistake, it attracts loads of attention. But do you know what almost never attracts the attention it deserves? When things go the way they are supposed to. And because of this, roughly half of us — people we call prevention-focused — rarely get the credit we are due.

As I've written about before, prevention-focused people see their goals in terms of what they might lose if they don't succeed. They want to stay safe — to hold on to what they've already got. As a result, they are diligent, accurate, analytical, and go out of their way to avoid mistakes that might derail their success. They excel when it comes to keeping things running smoothly.

Promotion-focused people, on the other hand, see their goals in terms of what they might gain if they succeed — how they might advance or obtain rewards. Their strengths, relative to the prevention-focused, are creativity, innovation, speed, and seizing opportunities — exactly the kinds of qualities that the business community (and our culture as a whole) tends to admire and praise.

But what the story of the Mars Climate Orbiter so compellingly illustrates is that there isn't (or at least wasn't) nearly enough prevention-thinking going on in the NASA labs. It's not really surprising — these people, after all, are rocket scientists. They devote their lives to exploring space — if there is something more promotion-focused than that, I don't know what it is. These folks pretty much own the phrase "going where no one has gone before."

Now, as we know, context is vitally important when determining when a behavior is helpful or harmful. In environments of instability, disruption, or uncertainty, a "prevention focus" can be dangerous - and can have the counterintuitive effect of increasing mistakes, by inhibiting sharing and reporting. But, in environments where precision, standardization and repeatability is paramount, prevention-focused employees are the key.

Thursday, April 18, 2013

Physics professor learns the standard way of teaching didn't work - "My teaching caused my students to fail!"

Garr Reynolds, on his Presentation Zen blog, discusses Harvard physics professor Eric Mazur's evolution from straight-up college lecturer to accomplished teacher and authority on student peer learning. Garr's post goes into many facets of Mazur's story, but I want to focus here on just one part - Mazur's taking accountability for his students' failure to learn:

"I thought I was a good teacher until I discovered my students were just memorizing information rather than learning to understand the material," says Mazur. "Who was to blame? The students? The material?" In this presentation below from 2009 entitled "Confessions of a Converted Lecturer," Mazur explains how he came to the conclusion that "It was my teaching that caused students to fail!" If you have the time I recommend that you watch the entire presentation(over one hour in length). However, there is a rough edit of the same presentation that is still fairly good at getting Mazur's key points across in just 18 minutes.Watch the abridged version here on Youtube.

Mazur's sense of agency is notable, especially in education, where failures are easily blamed on students, parents or adminstrators, but the single area that can make all the difference is the approach and methods of a skilled, committed teacher.

Tuesday, April 16, 2013

Scottish public service organization publishes a template for an effective public apology

Iain Nesbit has pointed out a great template for an effective apology from the Scottish Public Service Ombudsman. Page one (of two) is pictured above. The document is available here in PDF form.

In the Mistake Bank book, we refer to a study showing that acknowledging and apologizing for health-care mistakes significantly reduces lawsuits and hospital legal costs. Of course, that's not the point of an apology, but it is a very valuable side effect - people who believe they are being treated fairly and transparently are more likely to resolve a dispute and less likely to escalate.

And when you need to apologize, use this template. It's excellent.

Monday, April 15, 2013

Entrepreneurs discuss a common side effect of a failing business - "chasing losses"

In a recent New York Times op-ed piece, Kai Ryssdahl, host of NPR's "Marketplace," and Megan Larson, the show's producer, profile several entrepreneurs whose early attempts ended in failure ("Following Your Bliss, Right Off the Cliff"). [Note that the web URL hints at an earlier, more interesting title: "The Painful But Liberating Lessons of a Career Failure."]

One theme of the piece is that failures are often made worse by our tendency to "chase losses" - meaning to stick with a failing proposition for too long and therefore lose more than was necessary. This concept is covered nicely in Tim Harford's book "Adapt: Why Success Always Starts with Failure." Here are a few observations from Ryssdahl and Larson on chasing losses:

But even when the future looked grim, [boutique owner Michelle] Tyree hung on. In fact, she dug in. She bought more inventory for the racks and threw celebrity-fueled parties at the store to generate buzz.

"Your gut says this could be a problem, but your head overrides it because you have just put in this huge investment," she said. "You are hanging on to not just the dream, but you are hanging on to the sweat equity and what you put into it financially."

Human beings, by nature, don't like to turn their backs on what are called "sunk costs," said Craig Fox, who teaches decision-making at the University of California, Los Angeles. When a lot of money is put into something - the dream of a small business, stocks or even an education - and it can't be recovered or is otherwise "sunk," few of us can just walk away....

Back in the '90s, when [Michael Dearing] was fresh out of Harvard Business School, he, too, sank a lot of money into his dream of owning his own store.

The Industrial Shoe Warehouse had five outlets in Los Angeles that sold work boots (think back to the Dr. Martens craze). "It had a vibe of, like, Urban Outfitters - concrete floor, high beam ceilings, all the stock was on the floor," said Mr. Dearing. "We had a really good business for awhile."

But, in the end, he said, "It was what you would call a splat-against-the-wall failure."

Mr. Dearing said the economics of running a shoe store were tougher than expected. Plus, the business grew too fast. Then Mr. Dearing's business partner wanted out.

He struggled to keep the business afloat because, he said, it felt dishonorable to let it go. "I personalized the outcome to a degree that it was unhealthy," he said. "I thought failure was total and permanent - and success stamped me as a worthwhile business person."

I discuss a way of managing the urge to chase losses - the concept of "affordable loss" - in Chapter 5 of the Mistake Bank book. If you're going to put your heart and soul into a project, you would do well to establish and manage to an affordable loss, so that your commitment and ego don't cost you in the event of a failure.

Friday, April 12, 2013

Mistake Bank Bookshelf: "Mistakes That Worked"

This week's selection for the Mistake Bank bookshelf is "Mistakes That Worked," by Charlotte Foltz Jones with illustrations by the New Yorker artist John O'Brien.

I stumbled onto this kids' book as I was thinking about what might be the next book project. "Mistakes That Worked" covers 40 inventions, building projects, place names, and even food products that were shaped by mistakes. It's humorous, yet has powerful lessons for kids who are asked to conform to undifferentiated standards of performance and assessed constantly against them. The lessons apply to their parents and teachers as well.

Thursday, April 11, 2013

If your idea doesn't work on a small scale, it won't work on a big scale

Another interesting excerpt from the Adam Bryant interview with Francesca Zambello, producer of the Glimmerglass Festival:

I worked for a French director for a number of years as an associate. The most important thing he ever taught me was that if you don’t make sure the show is right in a small room, it will never be right in a big space, on a big stage.

This little quote contains a lot of things we've covered in this space: the importance of out-of-town tryouts, "small wins," creating safe spaces for failure, etc.

Wednesday, April 10, 2013

Arts executive's key lesson: How to fail

From the New York Times interview of Francesca Zambello, director of the Glimmerglass Festival. The interview was conducted by Adam Bryant.

Q. Other broad insights you’ve gained over the course of your career?

A. You have to learn how to fail. You have to understand that in any position where you’re at the top, you will fail, and if you don’t fail, you’re probably not that good. So you have to learn how to cope with that. The more you get knocked down, the more you learn how to pick yourself up. It’s like a boxer. In your 20s, you’ll feel devastated when somebody fires you. I’ve been fired a number of times in my life and then rehired by a better company or given a better job. In a way, one of the things I respect the most about businesses is that when they fire somebody, they’re gone the next day. One of the problems you sometimes see in the arts is that they fire leaders but it drags on.

Tuesday, April 9, 2013

British Power Company apologizes for misselling to consumers

We're in the habit of collecting and sharing corporate apologies here, and last week, there was a big one. After being fined £10.5m by regulator Ofgem, natural gas and electricity supplier SSE posted an apology on the front page of its website (image above) and a longer letter from Ian Marchant, its CEO, on the company blog.

Ofgem described SSE's issues this way:

Customers contacted by SSE were exposed to misleading statements, inaccurate and misleading information on SSE’s charges and misleading comparisons between SSE’s charges and the costs with other suppliers. These failures meant that many customers were unable to make well-informed decisions about whether to switch to SSE and about comparing products in a competitive market, and they were exposed to the risk of choosing a more expensive energy deal. Customers were also told that they could save more money on switching to SSE than was possible.

The SSE apology reads, in part:

The breaches of licence conditions on which the fine is based should never have happened and it is simply not acceptable that they did. Our failings have context – the obligations on energy suppliers were changed significantly and we had a lot to do to change our practices – but there is no excuse; we should have done better.

Today’s announcement is also a clear message for energy companies. Ofgem has been saying for some time that energy suppliers need to transform the way they deal with customers. We agree and we believe that through our Building Trust programme we have led the industry in translating words like fairness, simplicity and transparency into action. We’ve reduced the number of tariffs we offer, we’ve simplified bills, we check that customers are on the best deal for them and we’ve stopped doorstep sales. We've strengthened the compliance processes in our retail business.

The reality is, however, that while SSE has taken a lead on this, Building Trust only started in October 2011 and took a while to implement. However, in many ways it was two years too late. In October 2009, Ofgem introduced new obligations on energy suppliers to make sure sales are conducted in a fair and transparent manner and, frankly, we should have complied with the letter and the spirit of the rules.

We didn’t respond quickly enough to those new obligations and, in particular, we were too slow to recognise that the sales methods sometimes used on doorsteps of potential customers were unacceptable. While SSE was first out of the blocks on this issue, stopping doorstep sales in July 2011, before any other major supplier, we were still much too slow.

This apology has a lot to like, although Marchant leaves the impression that the "Building Trust" program was a proactive step the company took. In fact the Ofgen investigation started in 2010 and Building Trust would certainly have been a response to that investigation. If Building Trust had been launched before the investigation, I would have given SSE much more credit.

[Thanks to Iain Nisbet from www.absolvitor.com (Absolvitor: Scots Law Online) and facebook.com/absolvitor for sharing this story.]

Sunday, April 7, 2013

Movies with live soundtracks and narration - leavening film with serendipity and accident

The New York Times writer Dennis Lim wrote about an emerging arts phenomenon, movies with live narration and soundtrack music. Here's a description of how one director, Sam Green, stumbled upon the format:

The San Francisco filmmaker Sam Green introduced what he called the “live documentary” with “Utopia in Four Movements” (2010). In what amounted to a lavishly illustrated lecture-performance Mr. Green, a director of the Oscar-nominated documentary “The Weather Underground” (2003), stood before the audience, narrating and cuing images and clips while a band played live. The format proved such a success — he booked about 50 shows over two years — that he is repeating it for a second project, “The Love Song of R. Buckminster Fuller,” which will be performed at the Kitchen in Chelsea four times this week with a live score by Yo La Tengo.

As Mr. Green tells it, he discovered the form by accident. He was making a documentary on the concept of utopia and wanted to avoid a talking-head approach. He shot a few vignettes — a history of the universal language Esperanto, a portrait of an American exile in Havana — that each said something about idealism in an anti-utopian age.

“The connections were too oblique,” Mr. Green said in a recent interview. “I begrudgingly realized I had to explain more.” A friend suggested fine-tuning the material by showing it to an audience while narrating. What he considered a work in progress resonated so strongly with early viewers that it became the thing itself.

Again, as with live music, one of the appeals of this art form is the possibility for mistakes, accidents and serendipity:

Each performance of Mr. Green’s live documentaries — which he does not plan to adapt for conventional screenings or home viewing — is a singular experience, and a collective one, with the potential for human connection and human error. He said there have been occasional flubs but no major blunders, although one viewer was apparently so soothed by Mr. Green’s congenial tone that he interrupted the performance to ask a question.

Related posts:
Great music is perfected imperfection
When something goes wrong in music, the mistake is "not reacting to the opportunity"

Thursday, April 4, 2013

When your strategy is "pray that nothing happens" and something happens

This story is from a piece in Fast Company called, "How To Bounce Back Stronger After You Blow It At Work," by Deborah Grayson Riegel:

Eight years ago, when I was just starting my coaching practice, I was thrilled to win a large, lucrative contract with an international advertising agency. Several days a month, I would train and coach staff from all levels of the company on presentation skills, management skills, and professional presence--a dream assignment. Business chugged along successfully for three more years, until my biggest and best client merged with another agency, and that agency had preferred vendors of its own. And I wasn’t one of them.

I suddenly went from a professional high to deep disappointment. In addition to losing a significant chunk of my income, I had lost my plans for the future with this client, the “luxury” of postponing business development, and yes, some of my pride. And while my business has more than bounced back since then, the sting of this disappointment is still a part of my consciousness.
Now, in retrospect, that blow to my ego and my bottom line wasn’t the worst thing in the world. It was the kick in the butt I needed to develop a thicker skin, more personal and professional resilience, and yes, a more strategic business plan than “pray that nothing changes, ever.”

The remainder of the article is how to handle these kinds of setbacks. As such, it would fit on a virtual library shelf with Chapter 1 of the Mistake Bank book ("Bouncing Back"). So check out Deborah's piece!

Wednesday, April 3, 2013

From Steve Blank: A story of "Failure and Redemption"

From Steve's great blog. Original post here. Reposted by permission.
Failure and Redemption

“What’s gone and what’s past help
Should be past grief.”
William Shakespeare - The Winter’s Tale

We give abundant advice to founders about how to make startups succeed yet we offer few models about dealing with failure.
So here’s mine.
In my experience, living through failure has 6 stages:
  • Stage 1: Shock and Surprise
  • Stage 2: Denial
  • Stage 3: Anger and Blame
  • Stage 4: Depression
  • Stage 5: Acceptance
  • Stage 6: Insight and Change
While I had been part of a few failed startups, none of them had fallen squarely on my shoulders until Rocket Science Games where my business card said CEO. It was there that I lived through all 6 stages and came out the other side a changed man.

Wired 2.11 CoverStage 1: Shock and Surprise   We raised $35 million and after 18 months made the cover of Wired magazine. The press called Rocket Science one of the hottest companies in Silicon Valley and predicted that our games would be great because the storyboards and trailers were spectacular. 90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. This can’t be happening to me.

Stage 2: Deny any of it was your fault   In my mind, I had done everything the investors asked me to do. I raised a ton of money and got a ton of press. We hired everyone according to our plan. It was everyone else who screwed up. I did everything right.

Stage 3: Get angry and blame everyone else   This was the fault of my cofounder since he was in charge of game development, it was the engineers who bailed on me, it was the sales and marketing people who didn’t tell me how bad the games were, it was the VC’s who refused to put any more money in the company, it was Sega’s fault for making a bad gaming platform…
State 4: Get depressed   When the inevitability and magnitude of the failure sunk in, I slept in a lot. There were days I’d get up late and go to bed again at 5 pm. I lost interest in anything associated with my past industry. (To this day I still can’t play a video game.)


Step 5: Gradually accept your role in the failure   A few weeks after leaving, I began to think about what I should have done, could have done and pondered why I didn’t do it. (I didn’t listen, I didn’t act, I didn’t own my role as CEO, I wasn’t prepared to do what was right or leave.) This was hard and didn’t happen overnight. My wife was a great partner here. I often reverted to Stages 2 and 3, but over time I took ownership of my primary role in the debacle.

Stage 6: Gain insight and change your behavior   This was the hardest part. While I stopped blaming others, understanding what I could change in my behavior took long months. It would have been much easier to just move on, but I was looking for the lessons that would make my next startup successful. I looked at the patterns of behavior, not just at my last company but also across my entire career. I learned how to dial back the hubris, get other smart people to work with me – rather than just for me, listen better, and act and do what was right – regardless of what others thought I should do.

Epilogue   For my next startup I parked the behaviors that drove Rocket Science off the cliff. We established a team of founders who worked collaboratively. When my co-founders and I got the company scalable and repeatable, we hired an operating executive as the CEO and returned a billion dollars to each of our two lead investors.
Now when I listen to entrepreneurs who’ve cratered a company, I listen for their stories of failure and redemption.

Lessons Learned
  • Six stages of failure and redemption
  • Don’t get stuck in Stages 2, 3 or 4 - move forward
  • Don’t skip acceptance of your role
  • Get to insight so you can change your behavior—then commit to the challenge of doing it differently the next time

Tuesday, April 2, 2013

Metropolitan Opera boss Peter Gelb: I need to "think about the consequences of my actions"

The New York Times Magazine published a lengthy profile of Peter Gelb, director of the Metropolitan Opera. One story related in the piece regards a Gelb's reaction to a negative column in Opera News, a publication that is published by the Metropolitan Opera Guild, an organization affiliated with the Met. (You can read more about the Opera News piece here.) Among other things, the writer, Brian Kellow, asserted that "The public is becoming more dispirited each season by the pretentious and woefully misguided, misdirected productions foisted on them."

After reading the column, Gelb suggested publicly that Opera News perhaps shouldn't be publishing reviews of Met productions, given that it is connected to the Met. Which of course subjected Gelb to more criticism about his thin skin and defensiveness. Soon, he retracted his suggestion and said "I think I made a mistake."

What did he learn from this experience? He told the Times:

“What I learned is that even if I feel sure and right about something, I should take a deep breath and think about the consequences of my actions,” he said. “It’s easy in a state of righteous indignation to act too quickly.”