Those who pay close attention to media (or who simply have a
twitter account) know this story already. On the afternoon of February 11,
episodes of “House of Cards” were made available on Netflix, before the scheduled
release date. Fans delighted, started watching, and sent tweets inviting others.
The joy lasted a few minutes, and then the episodes were made unavailable
again.
Viewers were disappointed. Social media was in a frenzy. Soon they reached the
conclusion that this had been a very clever marketing stunt, designed
to make people talk about the new season just before it would be released. And
wow, did it ever work well, people did talk, and those who caught a view spread
the news of what they had seen to eager fellow fans. And in a way, it is
correct that this was a very successful form of marketing, at least if we take
seriously the idea that social media expresses interest in products (and we should
take that seriously).
But there is one interesting correction. It was great
marketing, but it was not a clever marketing stunt. In fact, it was an error
that the episodes had been made available, and they were made unavailable because Netflix discovered the error and corrected it. But how do we understand errors
like this, errors that turn out to be great in some way, like marketing in this
case?
A good way is to think of organizations as exploiting what
they currently know and exploring to gain new knowledge, an insight that stems
from an article by James G. March (see below). It makes sense to do both, because either
one alone, or as a too small proportion, will leave the organization
vulnerable. But here there is a problem. When seeking high performance and good
coordination among employees and units, organizations end up exploiting a lot,
and exploring very little. That’s a short-term benefit for efficiency, but also
a long-term problem because the organization can become obsolete. So finding
out how to explore enough, or even more than nothing, is a problem in designing
organizations. R&D departments are one solution, but actually they often
end up exploiting a lot of current knowledge too.
Fortunately there are some solutions that happen simply because
of the way organizations work. The “House of Cards” release is a good example
of one. An error is a form of exploration. Netflix did not intend to release
the series early, but after doing so they have learned something new and
valuable about marketing. Will they do it again, on purpose, on a later series?
I would be very surprised if they did not. Exploration gives new knowledge,
which organizations exploit later. And it really does not matter whether the
exploration was deliberate or an error; any useful knowledge can be exploited.
