4 Moves That Say Netflix Is Really Sorry

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- Netflix(NFLX) CEO Reed Hastings has issued a lame mea culpa for a strategic decision following weeks of customer blowback over Netflix's price increases and a two-pronged product platform.

I write "lame," because IF indeed the price increase, which encourages a forced migration from DVD to streaming video, is a bad idea, immediately rescind it.

IF, however, it is a good idea, don't apologize.

And IF the only thing you're doing is admitting a communications flaw, don't float a so-called apology without repercussions for the decision maker and/or remuneration for the offended/harmed/inconvenienced party (ies).

I don't know of any technology company that has ever apologized for forcing customers to upgrade in order to increase revenues and profits. Business is about doing what's in the best interest of the bottom line -- just not at the expense of customers' well-being.

When making any strategic move, executive decision, or policy change: First, do no harm to those relationships critical to your success. That would certainly include customers.

Leaders benefit from apologizing for flawed moves IF:

1. They admit their fault and announce the fix within two to 24 hours of the incident.

2. They make some gesture to heal/compensate for the fractured relationships.

3. They incur repercussions for their flawed judgment.

4. They learn from the incident and don't repeat it.

Without doing these things, a CEO apology comes off as an "oops, I got caught and better put some kind of spin out there to try to save my butt, my bonus, and my business."

Relax, Mr. Hastings, you did what you did. It's done. You'll suffer the consequences or reap the rewards, and life goes on. The market will dictate your and Netflix's success.

But Mr. Hastings, IF there is a next time (and to any of your fellow CEOs reading this), ensure that any/every growth strategy has clarity of purpose; a core of integrity; and a well thought out communications component and timeline.

A strategic move without an awareness of its impact on internal and external relationships is the greatest risk a CEO can't afford to take.

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