Netflix Company Adopting Six Sigma

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Introduction

Six Sigma is one of the business disciplines that seek to improve operations in businesses and organizations; it improves business operations by reducing or eliminating defects, improving the quality of products and services delivered, and streamlining the business operations (Selvi and Rana Majumdar, p. 17). Through the improvement of the business operations, the business gets to achieve its goals and objectives of proper customer satisfaction and the making of profit. Six Sigma is factual and data-based, methodical, customer-oriented, and teamwork-focused on quality management (Selvi and Rana Majumdar, p. 18). Some of its objectives have been to improve business processes, eliminate or reduce defect rates within the business, cycle time improvement, reduction of cost at all levels, and ensure customer satisfaction. Six Sigma achieves its objectives of improving the business process by employing DMAIC, which is an abbreviation for Define, Measure, Analyze, Improve, and Control (Cronemyr, p. 94).

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Improving a process starts with problem definition, but defining a problem can be majorly achieved by learning about customers’ problems and complaints. Similarly, it proposes that an improvement can as well be achieved by listening to employees’ proposals since they are the parties dealing with the customers at a face-to-face level. The measure is the second letter that emphasizes measuring the problem, challenge, or complaint and where it was generated. Analyze refers to the tracing of the complaint or a challenge to find what caused it to find a pathological solution to it. After finding the root cause of the problem then the next thing is now to improve the process by solving the root cause to prevent future occurrence of the same incidence or compliance. Control refers to the maintenance of the solution to prevent future complaints on the same issue (Cronemyr, p. 206).

DMADV is another methodology standing for Define, Measure, Analyze, Design, and Verify. Define refers to finding customers’ complaints or the problem to be solved. The measure is taking into account and determines customers’ needs and specifications (Cronemyr, p. 206). Analyze focuses on conducting analysis of the customers’ complaints to ensure the customers’ needs are met. Design is about coming up with a process that will help in solving customers’ needs and complaints to ensure that quality services are offered to the customers. Verification is the approval that the designed system or process is helpful in solving the customers’ complaints (Cronemyr, p. 98).

Six Sigma to Jack Welch

Six Sigma’s main goal is to eliminate or reduce defects; this is only possible if there is communication between various departments within an organization. Welch considers Six Sigma as a tool to promote teamwork to enable free communication among the employees. Openness and clarity are needed since for continuous improvement to be achieved, the customer service team should report to the management concerning the types of services needed by customers so that the management can improve on the same. Welch adds that in a work environment without candor, there is a slow development pace. Likewise, in a bureaucratic environment, the employees are afraid of communicating their complaints or proposal but not until these complaints are solved growth is realized within the organization. Openness also refers to clarity in assigning roles to employees to avoid confusion; openness and transparency also create trust, thus creating friendship at the workplace rather than in an autocratic environment (Welch, 00:09:22). He advised that one way to embrace candor is by rewarding the candor. The company achieves success only candor is put into practice in all sorts of activities such as employees’ appraisal by ranking the employees in the team (Welch, 00:04:40). Ranking helps the employees identify and improve their weaknesses; such improvement adds value to the company’s products and services. Lack of candor in the appraisal system demotivates employees since they will never bother improving themselves due to a lack of appreciation for the great performers.

An organization willing to improve must motivate its employees, which can be done by classifying the top, medium, and low performers as 20:70:10 (Welch, 00:04:40). After this classification, the top performance should be appreciated; medium performers need to be inspired to move to top performers, similar to low performers. When all these employees improve on their performance, continuous improvement is as well attained, which is the Six Sigma Concept’s main aim. Winning companies create opportunities and job security for their employees but do not guarantee flexibility since it is something handed to anyone. One surest way of earning flexibility from employees is by recognizing and rewarding them and appreciating them by holding celebrations for any small victory (Welch, 00:40:07). Training employees is another way of ensuring their performance boost to achieve continuous improvement and added value in services offered (Welch, 00:40:27).

Continuous Improvement Issues

Netflix company being one of America’s brand companies that do not wish to fall into average companies, chose to adopt the Six Sigma Concept to help them improve to better standards; they, therefore, borrowed a lot from Six Sigma to improve their operation and standards by focusing more on producing customer-oriented services such as movie shows and TV shows (Welch, 00:00:14). Seeking improvement meant the reduction of errors and defects in meeting the customers’ needs and expectations (Welch, 00:01:14). After adopting the Six Sigma system, Netflix gained a lot of profit. Netflix company CEO applied Six Sigma for these benefits to be attained. Organizing mentorship, leadership, implementation focus, and training programs are some of the ways through which the organization can improve its performance concepts to achieve its organizational goals and objectives (Welch, 00:40:30). Under the leadership of Netflix’s CEO, all the employees can be given a two-week break from work so that they attend a hundred-hour training program organized for training employees on the issues of customer service and polished communication skills to ensure better customer service (Welch, 00:40:29). After the training, all the employees were expected to put into practice and draft results on the skills taught in the training programs.

The Netflix management arranged with the Black and Green Belt teams to hold Six Sigma mentorship to their organization, after which several Six Sigma projects were carried out at Netflix. The CEO knew that the employees and the executives could forget the Six Sigma components taught after a short while, and therefore, arranged for leadership training for the company to remain committed to their goals until they are achieved. Later, Green Belt certificates were introduced, which were linked to promotion and bonuses, so that employees without Green Belt could not get bonuses and promotions since it was presumed that they were never trained on Six Sigma (improve performance). The leadership session included all the employees within the organization, including Netflix’s Chief Executive Officer and the President, to ensure uniformity within the company. Focused implementation was put in place to better business processes that helped in cutting costs and embracing teamwork within the company.

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Six Sigma philosophy has one main strength, which is helping the company in raising its profit margin. Six Sigma does this by focusing on serving the clients in an organization and nothing more. By being customer-oriented, the company finds it easier to attract many clients since customers share their wonderful experiences with other people. One weakness of this philosophy is that it is initially too expensive to initiate; for example, organizing training, mentorship, and leadership programs are always expensive and can lead to financial constraints in the organization if not looked at critically.

Continuous improvement is one way of retaining clients in an organization since it provides a platform through which an organization can adjust to solve contemporary clients’ complaints. Chief Executive Officer should address the fear of change because this is the greatest element preventing the company from implementing a good strategy. The fear includes financial fear and customers’ loss fear. Financial fear is when the company feels threatened with implementing helpful strategies such as training, mentorship, and leadership programs; this is because such good programs are expensive and may leave the company bankrupt. Loss of customers is due to the fact that customers’ needs and expectations vary, and fulfilling one customer base’s need may scare away other customer bases, making the company lose its clients.

Netflix Chief Executive Officer’s Strategic Intention

Netflix Chief Executive Officer’s ambition target is to be the best company in customer service in the whole world. The ambition originated from the fact that the greater the customer service, the happier the clients, and the happier the clients, the more the sales and profit levels within the organization. Providing customer-oriented services starts by finding the right employee, who will be there for the interest of the customers, that is conducting research on the most-watched movies and TV shows then avail such services to customers to win customers loyalty.

Strategy Implementation Components

Key important components of strategy implementation include resources, culture, people, structures, and systems. People refer to having a competent human resource to help the company accomplish its vision. Apart from recruiting to find the right employee, training and mentoring are other ways of finding the right people. Department heads and managers will be responsible for supervising and giving recommendations concerning the work performance, then communicating with the human resource manager in finding the right people. Resources refer to funds needed for the purchase of equipment, and machines and also paying the employees doing the implementation; this is the greatest component of strategy implantation. Resources can also mean the company’s assets, such as employees.

The financial manager is always expected to give recommendations concerning the company’s financial status and how to raise the funds needed for strategy implementation. The human resource manager is responsible is recommending the right employees that can perfectly implement strategies. The communication manager, on the other hand, will ensure the communication structures are put in place to embrace clear and timely communication to ensure proper strategies implementation. For the genuine and neutral strategic recommendation to be achieved, a unanimous commenting system should be put in place to ensure that the company does not get to know the recommender because this can lead to hatred within the organization, especially among the negatively affected parties.

Preferred Organizational Structure

A team-based organizational structure will work best in Netflix company. The team-based organizational structure will positively represent Netflix company’s image to its customers through teamwork, and the employees will share ideas and creativity to come up with new ideas. Again, through teamwork, junior employees will be learning customer service from senior employees, thereby representing the company positively to our customers. A team-based organizational structure will also enable the marketing department to share with management product focus information for them to know which product to focus on to increase Netflix’s company profit. It will also encourage knowledge sharing among the team members, such as technology learning, thus enabling the Netflix company to automate its business processes. Team-based organizational structure also promotes friendliness and free communication among the company members; thus, the marketers and financiers will be free to advise the management on where to spend the funds to reap more profit and the technological gadgets to be used in the company’s services promotion.

A team-based organizational structure will work the best since this kind of organizational structure promotes learning through teamwork; it also reduces competition while embracing contribution since the failure of one individual represents the group’s failure. Employees improve their performance capacity by learning from their fellow employees in the team, thus promoting love, productivity, and performance among the employees. The team-based organization also encourages friendship which helps in developing better communication flow which also helps in eliminating confusion and a friendly work environment.

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Netflix BSC Model

Under customer, Netflix company’s objective is to employ the right employees. The company has been putting the right measures to ensure this is achieved by employing people with full qualifications and also asking the right questions to the applicants during the interviews while also taking into account applicants’ communication skills and intelligence if able to help an organization achieve its visions of excellent customer service. Having customers treated well, employing friendly employees, providing high-quality services to customers, and maintaining of customer-oriented culture can only be adhered to when the company has the right employees. Having the right employees portrays the organization’s positive image to the customers. Under learning and growth, my company’s objective is to have the most efficient and effective policies and processes. For change and improvement to be attained, the organization is forced to have the right employees; having the right employee can also mean training and mentoring the already existing employees. Information capital is another important factor when a company needs to change and improve.

If the company wants to improve its sales volume, then it can adopt the new technology that uses social media in advertising products to customers. Policies change are also crucial when a company seeks to change and improve; policies such as inventory maintenance can help the organization in increasing the quality and reliability of its products. When a company keeps buffer stock, its production process will remain uninterrupted, and it will also not suffer the cost of lost sales. And in this manner, the company will be reliable to the customer, and this will attract more customers to the organization, thereby improving the company’s profit volume. Adoption of modern machines improves the company’s efficiency, effectiveness, and accuracy, thus improving its performance thus attracting more clients. Adopting machines also increases the company’s flexibility level, thus improving its performance rate and level.

Under the internal business process, my company’s objective is to reduce supply chain costs to increase our profit ratio to motivate our stakeholders. From the last year’s financial analysis, it was found that supply chain activities form a bigger percentage of the company’s expenses. Several initiatives have been put in place to ensure that supply chain costs are reduced, such as conducting consolidated transport to ensure proper capacity utilization, and in this manner, the company will reduce its costs by reducing transport costs. Inventory management is another initiative that will ensure that the company does not run out of stock, thus preventing cases of lost sales. Keeping inventory also means buying in bulk, thus enjoying economies of scale benefits which include huge discount rates and free transportation, which helps reduce the company’s production cost. Reduced production cost helps the company gain a competitive advantage by gaining cost leadership. Inventory management also reduces regular or frequent movement when buying in small quantities. Under financial, my company’s objective is to reduce costs to increase the profit margin. Shareholders always get inspired when the company makes a profit. One way of making a profit is by reducing the costs. Another initiative is expanding the income base by organizing or requesting fundraising sessions from well-wishers to support the business.

For the purpose of better appearance before our customers, it is eminent to have trusted and disciplined business partners who will defend the name of the organization. Ensuring excellent customer service is another attribute that the organization has been working towards; the company has been training and mentoring the employees to meet higher levels of customer satisfaction. In some cases, the organization recruits a fresh if the trained employees do not meet the required customer satisfaction standards. The company also introduces new products to prove to our clients that we develop creativity every time to meet their needs and expectation. In learning and growth, the company put the employees into training and mentorship programs to help them learn better ways of handling things, tasks, and customers at the workplace. For greater learning and growth purposes, the company has remained focused on hiring talented employees who can perform better and also teach poorly performing employees. The company has also been doing its best in aligning employees’ personal goals with the company goals to avoid conflicts between the employees and the company. From an internal business perspective, the company has adhered to the adoption of the technology to ensure automation of several activities, which will help in cost reduction since machines will replace human labor and errors. From a financial perspective, we seek to prosper by having a greater market share by engaging in increasing the sale through product promotion.

Netflix Company Bsc Customized Balanced Scorecard Model

(Customer Perspective) How Do Customers See Us?

Objective Measure Target Initiative
Introduction of new products Employing new talented individuals and training already existing employees Keep satisfying the changing customers’ needs and wants Providing the most demanded products

(Learning and Growth) What Can We Do to Continue Creating Value and Improve?

Objective Measure Target Initiative
Product focus Picking the products registering high sales volume Meeting customers changing demands Providing rear products that are not provided by the competitors

(Internal Business Perspective) What Do We Need to Succeed At?

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Objective Measure Target Initiative
Automate business processes Adoption of modern industry and office machines Meeting and satisfying customers’ demand Replacing humans with machines

(Financial Perspective) What Do We Look to Shareholders?

Objective Measure Target Initiative
Succeed Venturing in product promotion and advertisements Increase the company’s income level Using television, radios, and social media platforms to create product awareness

Strategy Importance

As learned from the class notes, strategy refers to a step or action taken by managers to achieve a given goal—strategy matters due to several reasons. The strategy provides a clear direction for the organization. Once the management has decided on the strategy to be adopted, it is communicated to the rest of the employees, thus avoiding cases of confusion and redundancy within the company. Strategies help an organization effectively deal with its weaknesses and losses. If an organization makes losses, it can revise its strategies and fix the problem. The strategy also helps an organization to plan ahead, thereby enabling it to make more profit or run efficiently and effectively. For example, if the company experiences an interrupted production schedule, it can opt to use an inventory management strategy to ensure that its production activities remain uninterrupted. Similarly, if the interruption is due to a shortage of human resources, then the company can opt to use a job rotation strategy, which focuses on training employees on the organization’s jobs to ensure that in case of the absence of one employee, then another employee can replace him or her. Strategy greatly aids in resource allocation; with strategy, the company can know where to invest more funds to get more profit or which product to be promoted the most to make more profit. Strategies also help the company in remaining more competitive as compared to its competitors by adopting better strategies, thus enabling it to make great profits.

Work Cited

Cronemyr, Peter. “DMAIC and DMADV-differences, similarities and synergies.” International Journal of Six Sigma and Competitive Advantage 3.3 (2007): 193-209.

Selvi, K., and Rana Majumdar. “Six sigma-overview of DMAIC and DMADV.” International Journal of Innovative Science and Modern Engineering 2.5 (2014): 16-19.

Welch, Jack. Create Candor In The Workplace. 2009, Web.

Welch, Jack. Six Sigma Interview. 2007, Web.

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