As Netflix, Inc. climbed the success ladder, CEO Reed Hastings grew more confident and effective. In a CEO workshop earlier this month Hastings revealed one of his secret recipes for the firm’s success.
Reference checks made Netflix great
At the workshop, Hastings was asked on how he hires at Netflix to which he replied that his hiring managers rely more on the reference checks. While discussing the success journey, he said reference checks are a very vital element of the hiring process, but is very much underutilized. The comments were reported by Business Insider.
“I’m amazed when I know of people,” who hire someone and “didn’t even try to make a call. I think that the reference checking thing is not as thorough as you would think,” Netflix CEO said at the workshop.
Hastings said managers must realize that there are lots of people who can make themselves sound more impressive than they actually are, if managers spend enough time with them in an interview. Netflix, Inc. CEO suggests that interviews should be used as a narrowing round to shortlist candidates. After that managers should get down to the crucial task of checking references.
Hastings stressed the importance of checking the references listed on the candidates’ resume, but believes blind references are more vital than anything else. Blind references are the ones that a manager needs to dig up on his own. Hastings said that he pushes for a Skype interview because he has observed that people are likely to be more honest when a manager looks at them.
Netflix credits Internet for its success
Netflix has grown from just 85 cents a share to over $100 in only 13 years. This is truly remarkable, and Hastings gives all credit to Internet for this impressive growth.
“It’s really the Internet. The Internet is transforming so many sectors of our economy, and we are Internet TV; and that sector has grown from very small 15 years ago to starting to be significant now,” the CEO told CNBC’s Jim Cramer recently.
The fact that Netflix, Inc. stock is still the best performer in the S&P 500 index and has gained more than 100% this year is more impressive. On whether or not the recent drop is a buying opportunity, Cramer says, “When you get this kind of retreat in the stock, historically—as I always tell you, through thick and thin—it’s been a terrific buying opportunity.”
In the worst case, if there is a further decline in the stock price, investors get an opportunity to buy shares at even a lesser price before they rebound, Cramer said.