Financial Reporting Innovation: Are You a Netflix or Blockbuster?
An unwillingness to innovate and relying on the status quo can put an organization at risk of failure, no matter how successful their previous track record. From genius ideas in the boardroom to retooling a mass production line, continuous innovation is what keeps market leaders from becoming market memories.
The corporate landscape contains countless cautionary tales of massive brands that failed due to the lack of innovation. In 2018 alone, dozens of well-known brands filed for bankruptcy—despite strong consumer spending in the U.S. economy. From athletic shoes to mattresses, these brands cross-sampled the consumer landscape.
Despite the industry, there's one particular lesson from the last decade that should strike fear into anyone who thinks maintaining the status quo is a safe strategy.
Lackluster strategy = Blockbuster demise
Blockbuster Video started out with a beautifully simple and timely business model customers loved: offer the right movie, in the right store, at the right time. This strategy allowed them to dominate the video rental marketplace for decades, overtaking many of the smaller video stores all across the country. But when media options changed—and more importantly, when consumer consumption changed—Blockbuster didn’t focus on innovating how they delivered content.
Netflix® arrived on the scene and offered essentially the same product as Blockbuster—but with more value and more convenience, as a result of—yes, you guessed it—more innovation. Instead of providing a physical store where you picked up the video, they sent DVDs directly to your mailbox. Netflix offered you the same titles, but saved you the drive. The market shifted and the "right place" was now "home."
At the height of its investment in real estate, Blockbuster owned something that Netflix did not: 9,000 brick-and-mortar locations. That cost burden—which had once been their market advantage—started to weigh the company down. When profitability and market share began to decrease, the chain started closing locations to save on costs, but it just wasn’t happening fast enough.
While Blockbuster spent calories on their store transformation and reduction, another game changer happened. Netflix started offering digital streaming content in 2010. Suddenly, consumers had another reason to switch to Netflix: instant gratification.
It is rumored that Reed Hastings of Netflix actually approached former Blockbuster CEO John Antioco, offering to sell Netflix for a paltry asking price of $50 million—and Blockbuster declined. Antioco said that Netflix felt like a "very small niche business," which is why he passed on the acquisition. Today, Netflix is worth nearly $3.5 billion.
The final innovation uppercut came from the birth of video-capable mobile devices and downloadable media with iPhones® and iPads® as well as Android™ tablets. Streaming services were now everywhere, and Blockbuster become history in 2013. Netflix innovated to shift the way the market consumes content and changed the "right movies, right place, and right time," to "stream Netflix content right now."
Applying innovation to your reporting
Today's business reporting and decision-making processes are making a similar shift from static reports to delivering the right data to the right people and the right time.
Various industry studies show that, on average, less than 50% of an organization’s structured data is actively used in making decisions. That means that half of what is available and already workable is left unused. Unstructured data, which is admittedly a bit harder to consume and determine its value, has a usage rate in the single digits—with some estimates reported at less than 1% being used.
Another frightening statistic, especially in a world ripe with hackers, is that more than 70% of employees in organizations have access to data that they should not. This is likely the result of access to core systems being limited—so when users do get the data, it gets exported and ends up in the hands of the wrong people. Rogue datasets generated through these well-meaning exports often lead to data breaches that are almost immeasurable, as there isn’t any control once the data leaves the core system.
When you think about your data-driven reporting and business intelligence strategy, keep Netflix in mind—connecting the right people with the right data at the right time.
The market moves fast, and you need a reporting technology that moves with it. Workiva puts your data in the hands of those who need it while keeping it protected from those who shouldn’t have access to it.
Questions to gauge the innovation in your reporting process
Moving beyond the status quo takes momentum. The first push toward building momentum can be hard. Here are some questions to ask that will help you start to take the Netflix approach to your reporting and analytics, and stay ahead of the market:
- Timelines: How and where does your team consume reports? Is timely access a challenge?
- Ease of use: Can your users get to the report they need on a platform that makes the data easy to consume?
- Manipulating data: Do they have to export to Excel® to manipulate the data? Do they have direct connections to the source of the data?
- Building and collaborating: Is there a way for them to easily pick up where they left off? Do your reporting tools allow for the continuation of a report build if the user steps away and someone else needs to jump in?
- Accessibility: Is there a way to manage and track changes and foster strong user control? Is the data accessible to the people who are supposed to have it? Are people who aren’t supposed to see the data still able to get into it?
If you find yourself unsure or unhappy with any of the answers to the questions above, it's probably time to introduce reporting innovation within your current process—and existing systems.
Get a personalized demonstration of the Workiva connected platform to see how you can get real-time access to data without giving up an ounce of control.
Netflix is a registered trademark of Netflix Inc. iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. Android is a trademark of Google LLC. Excel is a registered trademark of Microsoft Inc. in the United States and/or other countries.
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About the Author
Chuck joined Workiva in late 2019 as a Senior Technical Engineer, where he focuses on developing and bringing new concepts to life using an approach that helps customers to solve their intelligence challenges with the entire Workiva platform. His current mission is to demonstrate how the office of the CIO, and various other departments that often lay outside of Finance and Accounting arena, can leverage Wdata to solve their toughest problems.