• UNCONVENTIONAL WISDOM:

Sunday, September 25, 2011

LESSON FROM THE BUSINESS WORLD

As I've often pointed out, anyone truly interested in the Business of Racing must pay attention to general business news. An instructive example of that emerged last week.

Reed Hastings, co-founder and CEO of Netflix, used a blog to post an extraordinary apology to his customers. To briefly recap the situation, Netflix announced some weeks ago that it would split its movies-by-DVD and movies-via-streaming video into two separate companies. Some customers were going to be hit with big price increases. Well, the market -- meaning the customers --spoke, pushing back, and Netflix had to pull reverse.

In part, Hastings wrote, it was a failure to communicate:

"In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication. Inside Netflix I say, 'Actions speak louder than words,' and we should just keep improving our service. But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do."

"I want to acknowledge and thank our many members that stuck with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.
(We) will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions."

This wasn't exactly a repeat of the 1985 "New Coke" fiasco. But there's a useful lesson here for motorsports' executives.

Hastings' quote that he "slid into arrogance based upon past success" smacks of what has gone on at the Indianapolis Motor Speedway for decades. And directly led to the steep decline of a great American sporting institution and its open-wheel series. NASCAR started to steer into this ditch a few years ago, attempting to expand the fan base, with unappealing Car of Tomorrow rear wings and vanilla driver code-of-conduct policies that turned-off traditionalists. Of course, my latest favorite example comes from Formula One, and the scheduling of next year's U.S. Grand Prix in Austin, Tex., on the same day NASCAR's Chase ends in Homestead, Fla. To whatever extent Bernie Ecclestone and the F1 Powers-That-Be consider the American public and media their "customers," this is an act of arrogance and stupidity.

Unknowingly, Netflix did the racing industry a service with this reminder. At least, it did for those who bother to pay attention and think about it.


Is Jimmie Johnson's historic run of five consecutive Sprint Cups in danger of ending? You bet. He's 10th after two Chase events, 29 points behind no-wins-in-the-regular-season-but-2-for-2 in the Chase Tony Stewart. Johnson's won six times at Dover, second only to Richard Petty's and Bobby Allison's seven, so this Sunday has all the looks of a "must" for Johnson. As for his Hendrick teammate, Jeff Gordon, this has been a legit "comeback" season but like the Brickyard, Bristol, Richmond and some others, New Hampshire sure seemed like one that got away.


When Tony Stewart said this in New Hampshire's victory lane -- "We got rid of some dead weight earlier this week. So, it made it a lot easier. It’s been a big weight lifted off our shoulders. Just sometimes you have to make adjustments in your life and we did that and it has definitely helped this weekend, for sure" -- why didn't ESPN's Vince Welch ask him to explain? It was an obvious follow-up question and the need to do that is taught in Journalism 101. TV viewers everywhere were left confused and frustrated. Print reporters did ask and Tony refused to answer -- bogus, since he's the one who first brought it up.


FAST LINES: As written here last week, retired Chicago Tribune sportswriter/columnist Bob Markus' new book, I'll Play These, is a MUST read if you love great writing and storytelling from what many consider the Golden Age of sports (including auto racing). In addition to the information I listed, you can also order the book directly from Bob at bobmarkus34@gmail.com . I recommend you do just that . . . The infield road course at Michigan International Speedway is being repaved for the first time -- ever. While the official word is this is for industry testing, I can't help but wonder if a Grand-Am event will find its way onto the MIS calendar. It's going to happen at Kansas Speedway, also owned by ICS. (Yes, I know, it's part of the casino project). Remember, NASCAR's holding company also owns the G-A series . . . Great move by Speed to add Ray Evernham as an analyst. He should have been in the booth right from the start when ESPN regained the NASCAR rights . . . IndyCar CEO Randy Bernard said in Sunday's Indianapolis Star that "It's the hatred that I don't like" regarding criticism of the series. I agree. But this is a problem since one of Bernard's top advisors, Robin Miller, has been saying for years that "hate is good" . . . Congratulations to Kenny Bernstein and John Force, who along with Richard Childress, have been elected to the International Motorsports Hall of Fame in Talladega. I'm a Hall voter. All three were on my list of 20 nominees and final ballot of five.

[ more Blogging the Chase next week . . . ]