Netflix, the poster boy of company execution, is bleeding. Does this mean that extreme ownership doesn’t work?

Recently, Netflix announced that it is downsizing its animation department, bringing the total number of layoffs close to 500 employees.

This step seems like an obvious reaction after the streaming giant lost more than 1 million subscribers over the past several months.

Skeptics are starting to surface all around, criticizing Netflix’s radical empowerment culture. Its contrarian approach always brought critics out of the woodworks, but its unprecedented success proved them wrong for many years.

Detractors claim that Netflix struck gold when it realized that the world was shifting to subscription-based content-streaming and enjoyed years of operating without any real competition.

Is it luck or execution?

There is no such thing as luck when running a complicated business. A business is made out of millions of small decisions that move the ship. That’s why there are many companies that made correct strategical decisions, and were first to their market, but never became the market leaders.

Can execution save Netflix when the whole industry is changing?

Absolutely. Netflix’s superpower is not its good product and talent; it’s the ability to innovate and adapt, over and over again.

No industry is static, and being excellent at what you do today might not be relevant tomorrow.

The only chance companies have to survive for many years is to build a firm that can adapt faster than the competition.