Blog: Learning how to fail – like Netflix


It’s very fashionable nowadays for businesses to cite the great internet giants as their inspiration.  I’ve been in many a meeting in recent years where clients have told me “we look to Google and Facebook” or “we want to be just like LinkedIn or Netflix”.  Now, this is commendable…to an extent.  These businesses are successful, popular, globally recognised and clearly very different from the traditional utility business.

And in these crazy times when utilities themselves don’t want to look like traditional utility businesses any more, who wouldn’t want to turn to the darlings of the digital world for some tips?  Right?

Digitising a hole in the ground?

However, digging further into how such businesses can genuinely be a guiding light for a century-old industry based on heavy assets, government funding and natural monopolies is not always so easy.1  These wholly digital, often global business models don’t always translate directly to the needs of a team planning the movement of an HV transformer along a country lane; an asset manager worried about how best to scrape waste off the filters in a fleet of 60 year old water treatment plants; or a direct labour force, skilled in digging holes in the ground in major conurbations.

“Of course they don’t David!” I hear you cry.  “We’re not trying to digitise excavations!”  And I appreciate that.  I really do.  I understand fully that there are many opportunities to digitise; to emulate the customer-service ideals of the internet giants; to introduce flexibility and…gasp…innovation.

Safety first

But my examples about transformers and water treatment plants and labourers are not flippant ones.  They’re examples of the fundamental tasks that define an industry.  And of the unshakeable safety-first principles underpinning everything that is done in an industry that can all too easily blow up buildings, electrocute individuals or even poison whole populations.  These things don’t happen too often.  But they do happen.

Now, into such a safety-conscious, tried-and-trusted environment comes a new and enthusiastic Chief Digital Officer, citing the benefits of digital disruption and of new – possibly unproven – ways of doing things.  Tough gig, huh?

It’s that culture thing again

As you may be working out by now, I’m talking about cultural issues.  Again.  I’ve written before on this site about CDOs and their role in culture change, but let’s take a particular example today and go into a little more detail.

One of Teradata’s mantras is “fail fast”.  We’re a data & analytics company, so we’re taking about analytics, of course.  The kind of analytics where business users – not the IT Department – have the tools, the environment and the opportunity to combine data sets and apply analytics quickly and easily.  And see the results just a quickly.   Some of those analytical journeys will lead to new insights that could save the company time or money, or even improve safety.  But some will prove…nothing.  And you know what?  That’s OK.  It’s part of the deal.  And it’s not just us preaching such an approach.  A culture of discovery and “fail fast” is a key part of all the inspirational organisations that your peers cite.  Yes, all of them.

Failing like Netflix

Consider Netflix.  They’re well known for building shows based on analytics.  Netflix understand the kinds of plots, actors and direction that their customers like and create new combinations of them in their next original show.  It means their hit rates are high.  So far, so good.  Something to emulate in customer interaction perhaps?

But wait.  We’re not finished here.  If that new show doesn’t perform as expected, it’s dropped.  They fail fast.  Even so, Reed Hastings, CEO of Netflix, recently discussed how they still “…have to take more risk; you have to try more crazy things. Because we should have a higher cancel rate overall. [By taking risks] you get some winners that are just unbelievable winners”. 

Take another look at that quote.  Where it says “we should have a higher cancel rate”. Netflix’s CEO wants to see failure.  Because in experimentation, there is the opportunity to discover new, valuable things.  And the reality is that some experiments fail.  Others though…others create billionaires, or change the world.  Or both.

Fail fast, or fail altogether?

Aye, there’s the rub2.  How many of your employers, your colleagues, or your staff are ready for experimentation and failure?  Not many, I’d guess.  And that’s not unreasonable.  A TV show that goes live, but fails to capture the attention of a critical mass of viewers is not the same as, say…a combination of chemicals that’s released into a treatment plant but fails to make their water safe to drink.  It just isn’t.  Is it any wonder that utilities people are often uncomfortable with experimentation and failure?

But digitisation really is coming.  Disruption is already here, from every angle.  Citing Tesla and Apple as your new competitors is already getting old, because it’s no longer a threat.  Its real.  Today.  We all know the industry must transform or die.

In such circumstances, even utilities need to experiment.  And learn that failure can be OK.  Not on live networks, experimenting with people’s health or their energy supply.  Of course not.  But with new combinations of asset, workforce and supplier data; with new ways to communicate and engage customers; with crazy ideas about weather and demographics and home solar-plus-storage takeup combined with opportunities to invest in grey water recycling startups.

Or just with adding ERP data to Historian data in an analytical environment, to try a few new ways of applying analytics to asset health monitoring or phase imbalance in MV networks.

It’s time to get over those cultural barriers and embrace the right kind of failure.  The fast failure of discovery analytics.  Because if you don’t, pretty soon failure is going to embrace you.  And it’s a death grip.  Coming soon.


1 No matter what your favourite Management Consultancy might tell you.

2 It’s from Hamlet.  The famous “to be or not to be” soliloquy in fact.


About the author:

David Socha is Teradata’s Practice Partner for the Industrial Internet of Things (IoT).  He began his career as a hands-on electrical distribution engineer, keeping the lights on in Central Scotland, before becoming a part of ScottishPower’s electricity retail deregulation programme in the late 1990s. After a period in IT Management and Consulting roles, David joined Teradata to found their International Utilities practice, later also taking on responsibilities in Smart Cities and the wider Industrial IoT sector.


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