CASE SCENARIO: BUILDING AN INNOVATIVE CULTURE AT NETFLIX It was February 1, 2018, as Reed Hastings, co-founder and CEO of Netflix, sat at his desk and contemplated his next move. Having read a recent report published by the Wall Street Journal on an investigation conducted, the journal interviewed 70 current and former Netflix employees about the company's culture. The culture at Netflix was described at times as ruthless and transparent "to the point of dysfunction." Some employees said people of color did not feel as empowered as white colleagues in providing frank feedback. Some felt so much pressure, they quit before they could get fired. The Culture at Netflix Hastings counters that people of all backgrounds have ways to rise in the company. He notes that, at that time, of Netflix's top 20 leaders, half are women, and a quarter are people of color, even as he concedes that the Netflix way is not for everyone. "Those who feel fear tend to check out because it's an unpleasant feeling. And really, it's best-suited for people who can acknowledge intellectually the risks, but in fact they are so joyful about playing with great teammates," Hastings said. "People who get promoted and rewarded are iconoclastic and are curious but often disagree with things." Netflix understands that talent density improves performance and Netflix coaches their managers to have the courage to get rid of any employee who is not performing at an exemplary level. "Jerks, slackers, sweet people with nonstellar performance, or pessimists left on the team will bring down the performance of everyone" according to Hastings. Engaging "stunning" colleagues is the foundation of any successful workplace, and the goal of any leader is to develop a work environment consisting exclusively of exceptional people. Hastings admitted that the culture can be tough, even on him. Hastings' leadership style was once described as being "unencumbered by emotion," an observation some of his colleagues have told him point-blank. A Netflix vice president once told him that he is not a good listener and tends to be unempathetic. Further, Hastings often uses the keeper test. According to Netflix, with the keeper test, "If one of the members of the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving." If an employee doesn't pass the keeper test, they're "promptly and respectfully given a generous severance package so we can find someone for that position that makes us an even better dream team". Talent Density fueling Innovation Trying to reinvent their business, Netflix founders decided to lay off a third of their employees who were unable to work hard, were inflexible and had a negative attitude. After this massive layoff, the business continued to operate, and the remaining employees started to work better because the internal climate had remarkably improved. By making this hard decision, Netflix started to create its "talent density," the cornerstone of its corporate culture. About Netflix Netflix, in full Netflix, Inc., is a media-streaming and video-rental company founded in 1997 by American entrepreneurs Reed Hastings and Marc Randolph. It is also involved in the creation of original programming. Corporate headquarters are in Los Gatos, California. In 1999 Netflix began offering an online subscription service through the internet. By 2016 its streaming service was available in more than 190 countries and territories.

Question: Based on the information provided in the case, critically evaluate Hastings' role as a leader in promoting diversity and innovation within their organization. (18 marks; at least one thousand words)