No Rules Rules: Netflix and the Culture of Reinvention by Erin Meyer and Reed Hastings

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BINOD’S RATING: 7/10

I watch Netflix and I’ve invested in Netflix stock. Plus it’s a remarkable story.

A company that started as a small DVD by mail business in 1997 that now has 207 mln paid streaming subscribers globally with a market cap of $ 230 bln (today), revenue of $ 25 bln (2020), nearly 10,000 employees & has bagged 15 awards ( from 80 nominations) including Oscars, Grammys and Golden Globes. Its still led by its co-founder.

So naturally I got curious about what makes it tick.

My top 20 takeaways (direct quotes from the book):

1.     Jerks, slackers, sweet people or pessimists on the team will bring down the performance of everyone.

2.     Say what you really think (with positive intent).

3.     The Netflix ethos is that one superstar is better than two average people.

4.     With the right employees, clear modeling from management and enough context setting we could get along perfectly fine without a bunch of rules.

5.     If your people choose to abuse the freedom you give them, you need to fire them and fire them loudly, so others understand the ramifications.

6.     A small percentage will cheat the system. When this happens, don’t overreact and create more rules. Just deal with the individual situation and move forward.

7.     Do not punish the majority for the poor behavior of the few.

8.     Even if your employees spend a little more when you give them freedom., the cost is still less than having a workplace where they can’t fly.

9.     If you are hiring someone for an operational position, the best employee may deliver double the value of the average. But in creative roles, the best (employee) is easily ten times better than average.

10.I have found that having a lean workforce has side advantages. Managing people well is hard. Managing mediocre performing employees is harder.

11.Contingent pay works for routine tasks but actually decreases performance for creative work.

12.Our big threat in the long run is not making a mistake, its lack of innovation.

13.Complexity kills consumer engagement.

14.A high talent density work environment is not family.

15.A job should be something you do for the magical period of time when you are the best person for the job and that job is the best position for you. Once you stop learning or stop excelling that’s the moment for you to pass that spot onto someone who’s better fitted for it and to move on to a better role for you.

16.Performance Improvement Plans rarely help employees improve and they delay the firing by many weeks.

17. At Netflix we always pay more for the option that gives us flexibility, knowing that we can’t try to foresee what our business will look like.

18.Policies are all ways of controlling people rather than inspiring them.

19.Spinning the truth is one of the most common ways leaders erode trust. Your people aren’t stupid. When you try to spin, they see it and makes you look like a fraud.

20. If you pick the very best people and they pick the very best people (and so on down the line), great things will happen.

Health warning- Netflix may be for everyone but its wacky culture (Unbelievable trust & freedom at work but also frightening amounts of candor & responsibility) is definitely NOT for every culture or employee. No company or leader should try and blindly copy Netflix unless they are able and willing to tick certain boxes.

Good read. 😊