In 2000, Netflix was a DVD-rental-by-mail service that had gained a strong customer base in its short tenure of existence. That year, its founders Reed Hastings and Marc Randolph were able to secure a meeting with the big blue ticket itself – Blockbuster – and pitched a potential partnership.
Arguably one of the most iconic brands in the video rental space, Blockbuster had been going strong since its founding in 1985, and at its peak had over 9,000 stores across the globe. According to Randolph, Netflix’ pitch to join forces with the movie rental giant was initially met with interest, but when they proposed a sale price of $50 million it was clear the executives were trying to hold back laughter. John Antioco, Blockbuster’s CEO at the time, has said that he rejected the deal because he believed Netflix was a “very small niche business.”
In 2007, Netflix launched its video streaming service, and by the end of 2022 it had over 230 million subscribers and a market cap of $149 billion. Meanwhile, Blockbuster had failed to keep up with the transition to online video and rentals, and when streaming took off it was again unable to pivot fast enough, filing for bankruptcy in 2010.
Reed Hastings has gone on to say that “companies rarely die from moving too fast, and they frequently die from moving too slowly.” The story of Netflix and Blockbuster has now become a fable of sorts in the business world, with the moral being what happens when a company fails to innovate.
John Goullet, an executive in the IT staffing industry with almost 30 years of leadership experience, says that whether an organization be in tech, retail or any other industry under the sun, longevity is impossible without innovation.
Goullet has led and grown a number of IT staffing companies while navigating the technological advancements and rapid industry shifts that have taken place over the past three decades. He was the founder and CEO of his company Info Technologies for fifteen years, and when it merged with Diversant to become Diversant LLC he took on the role of chairman of the board, a position he held for over a decade. Both Info Technologies, Inc. and Diversant LLC have been named to Inc. Magazine’s list of fastest growing companies in the country, and Diversant LLC is among the United States’ top 25 largest IT staffing firms.
According to Goullet, his companies were born out of innovation and continued to operate with it as a core tenant. He founded Info Technologies in 1994 after observing the growing demand for companies to build out IT infrastructures in response to the increasing prevalence of computers within the workplace. Recognizing that Fortune 500 companies in particular would require highly-skilled IT professionals who could handle their complex needs, Info Technologies matched such workers with large businesses in need of their services.
Defining and identifying innovation
Goullet points out that business leaders must remember that although an idea or method may have worked in the past, that doesn’t mean that it will continue to do so in the future. In order to continue to grow, a business and its strategies must continue to be creative and experimental, driving innovation within the field rather than looking to what competitors are doing.
In order to cultivate innovation as a culture within a business, leaders must ensure that there is a clear message throughout the company that stagnation is the enemy. Innovative businesses are competitive with higher efficiency and lower costs. Working in an innovative environment provides exciting challenges for those working in it, and as teamwork and problem-solving are fostered, staff retention often improves significantly.
Goullet says that by remaining innovative a company becomes proactive rather than reactive in its approach to business. Its model will be continually evolving to match its growing needs as it enters new markets. He also notes that it is important for leaders to understand that innovation does not necessarily mean invention. Netflix did not invent streaming, just as Tesla did not invent the electric car, and Apple did not invent the smartphone or tablet.
Being an innovative business does not mean that you must invest heavily in research and development, or that you must be the first person to attempt something. Indeed, often those who are first to market are in fact too early. Instead, innovation is about mastering execution: the areas of a product or service that are invisible to its customer. It is the “boring” areas such as supply chain management, back-end redundancies, and regulatory compliance processes where innovation can have the greatest impact, finding new ways to take something many competitors are also offering and making your business the best option.
How to foster innovation
Goullet says that one of the most important aspects of an innovative workplace is a strong employee base. This means that they are both aware of the high expectations in terms of creative thinking and problem-solving and do not feel so overwhelmed with their own to-do list that they lack the flexibility to think outside the box. Innovation is a combination of real-time creative ideas along with breakthrough ideas, but often workers are so focused on getting daily work done that they do not think or even consider looking for a more creative solution to how they approach their jobs.
An innovative environment can’t be created if employees feel weighed down by their daily tasks or that they need to put in long hours in order to get their jobs done. It is near impossible to come up with creative solutions when you already feel overwhelmed in your position, and Goullet says tackling inefficiencies as a leader is an easy way to improve employee satisfaction and innovation as a result.
Similarly, Goullet says it is vital to empower employees and make them feel as if their insights will be heard. A leader’s vantage point from the top will often be quite different from those that are more directly involved in the day-to-day of the business, and that perspective should not be neglected in the decision-making process. Creating programs that allow employees to bring up ideas about solving previously identified problems is a great way to encourage innovation.
There should be a concerted effort to reward innovation whenever it occurs, says Goullet. When people who show creativity are celebrated, other employees take notice and are encouraged to repeat or emulate their behavior. It is important to publicly recognize people in an organization who demonstrate innovation and help make the company more competitive.
Perhaps most importantly, says John Goullet, leaders set the tone of the organizations they lead, and must therefore show their own proclivity for innovation in every action they take. A workforce that sees their leader looking at the business proactively, searching for better ways to solve problems, and listening to new ideas will follow suit and approach their own individual positions with a more innovative outlook.
Continued growth is impossible without innovation, and fostering a culture of innovation can ensure that a business won’t fall prey to the failures of Blockbuster, falling behind as the world moves ahead.