No Rules Rules: Netflix and the Culture of Reinvention

How should a modern company run? We are told that a modern company needs to be customer centric, employee empowering, deliver broad stakeholder returns and with agility to move from one opportunity to the next. This book provides a provocative answer to these questions direct from the CEO.Reed Hastings and Erin Meyer have actually written two books in one. One book is “NO RULES” and the other is Netflix and the culture of reinvention. The combination is powerful as Reed shares experiences and stories and Erin puts them in a broader context. This keeps the book from becoming preachy.This book is recommended, but not for the reasons one might think.Read this book as a leader, because it is possible to create a level of these results within the scope of your team. This is a book for leaders who want to understand how they can attract and create high performance by adopting these ideas where possible.Reading this book from an organizational transformation point of view, frankly, is futile and hopeless for one simple reason. Your company is not a high talent density company. That is the essential, foundational and core reason for NETFLIX’s success – they have, hire, keep and constantly upgrade their talent. Becoming a high talent dense company requires living the following actions that are the foundation of the book:• You build up talent tensity by creating a workforce of high performers• You introduce candor by encouraging loads of feedback• You remove controls such as vacation, travel and expense policies• You strengthen talent density by paying top of the market, always• You increase candor by emphasizing organizational transparency• You release more controls such as decision-making approvals• You max-up talent density by implementing the Keeper Test• Max-up Candor by creating circles of feedback• Eliminate most controls by leading with context and note controlThese seem like normal empowerment related topics. Beware the book talks about how NETFIX embodies them to a degree that makes them all but impossible for the vast majority of companies – like 98%. Many will read this book and pay lip service to these principles, some CHRO’s will stand up and say that they are a talent dense company, but these are aspirational at best and insincere at the other end of spectrum.High-density talent is the core of NETFLIX and its ability to execute these strategies effectively. They are good, not because they have good people, they are NETFLIX because they work hard to always have the BEST PEOPLE. There is no average at NETFLIX, all are way above average when they are there and when they fall back to average – “adequate performance gets a generous severance package.”The selected quotes from the book demonstrate the centrality of high talent density to the company and anyone seeking to adopt these ideas.“We learned that a company with really dense talent is a company everyone wants to work for. High performers especially thrive in environments where the overall talent density is high.” Page 7.“We’d found a way to give our high performers a little more control over their lives, and that control made everybody feel a little freer: because of our high-talent density, our employees were already conscientious and responsible.” Page 54.“Once you have a workforce made up of nearly exclusively of high performers, you can count on people to behave responsibly.” Page 69.“Dispersed decision-making can only work with high talent density and unusual amounts of organizational transparency. Without these elements, the entire premise backfires.” P. 131.“One of the reasons this (high density) is so difficult is many companies is because business leaders are continually telling their employees, ‘we are a family.’ But a high-talent-density work environment is not a family.” Page 166.“At Netflix, I want each manager to run her department like the best professional teams, working to create strong feelings of commitment, cohesion and camaraderie, while continually making tough decision to ensure the best player is manning each post.” Page 169.“Leading with context won’t work unless you have the right conditions in place. And the first prerequisite is high talent density.” Page 201.Overall the book is well worth your time. Its entertaining, eminently readable and enlightening. It contains a number of ideas that will become organizational and leadership buzzwords in the future.Just read it with the caveat that very few companies have the capacity or true desire to put these ideas into practice at the organizational level.

A compelling tale on the innovation and management culture at Netflix; written by its chairman together with a renowned business professor expert on multicultural corporate environments. It has contra intuitive ideas, and well no rules! - difficult to see the Freedom & Responsibility culture deployed in legacy firms at the depth that is described in the book... anyway worth the read if you dig innovation and culture.

This book is an excellent primer for anyone who aspires to senior leadership, emphasis on “leader.” Not actionable in total in lots of small companies but conceptually valid for all.

The book’s format is EXACTLY the way I love to read these kinds of books. It’s not all about some smart-ass guy who was lucky and successful and won’t stop bragging how he got there. Reed was humble in his writing. He explained a theory and practise. Then it was backed up by science through his co-author using psychology and social psychology. Even with 30 years of experience, I was able to learn new things. But with 30 years of experience, I wasn’t totally convinced.One, I don’t think a lot of what is being done at Netflix is original. Talent density and individual responsibility was discussed years ago in books such as “From Good to Great” and “Reengineering the Organization”. Even the Live 360 reminded me of Synanon’s The Game sessions. But at least he is implementing these practises, and there is no doubt that it is contributing to Netflix’s success. What I really liked was that Reed did admit sometimes there were flaws in their approach, but they are minor enough not to affect the overall success.Another key flaw that the book skipped was teamwork and collaboration. The book focuses more on individuals. I am not convinced that success is based on a single employee working in a vacuum. I think Moneyball makes more sense than talent density. High talent density with the threat of high turnover can easily lead to hoarding information, chasing after glory at every moment, and basic zero-sum game theory where there is constant fighting between employees. There is always someone better out there. That is just plain statistics. Does that mean you spend endless amount of effort looking for them or upgrade the employees as the market shifts? Also, what happens if your company can’t hire the best talent as they may be a start-up or just generates less revenue than the competition. Does that mean this book is worthless?There are a lot of good lessons and takeaways when Netflix went international. They wanted to obtain their business culture but when it clashed with the local country’s culture, they were willing to bend. Last, the book does not explain why Netflix is successful. I am sure HR policies are part of it, but I am not sure that it could even be considered the main reason. Even in the book from Good to Great, many of the mentioned companies that were considered the darlings of their time, are no longer in existence. Another example is the good old Nifty Fifty of the 60s and 70s of whom many of them are now defunct. I claim that Netflix is enjoying success from what they created, and they made the right decisions during key periods (video streaming). Their ability to continue be successful will not be based on their HR practises, but rather decisions made at the top and how the market receives their offering. Yes, nurturing creativity and independence can spark a new and even brilliant idea but there is no guarantee it will be successful. In the late 90s and before the dot.com crash many so-called good ideas blossomed. Many respectable high revenue companies thought the good times would last and implemented every stupid idea in the name of creativity. This led to an overload of great ideas and creativity and ridiculous amount of money chasing them, only to come crashing down. And this is where my last criticism lies. What happens when there are bad times?The book assumes life will be great at Netflix and doesn’t mention what happens when times go bad like during the dot.com or 2008. What happens when the company hits personal hard times unique to their market like a great disruption? Can they still keep their practices? I doubt it.Don’t allow my scepticism to push you away. The book is still a good book and should be read. Enjoy!!!

Working in the corporate world for many years and then reading this new approach to so many things that are commonplace was mind blowing. No Vacation policy at Netflix??? No 20 page expense policy??? How could this possibly work? Read the book... That's all I'm saying. It will open your eyes. I loved it.

This is a well-written account of the long and winding path that led to Netflix. At least in his telling, Meyer, rather than Hastings, did most of the heavy lifting in getting the firm organized. Hastings didn't do much initially other than provide most of the dough. Ultimately, Hastings nudged Meyer aside, which Meyer seems to accept was the right move given Hastings skills and his standing with investors.A fast read and well worth picking up if you have interest in the subject.

Really enlightening to hear how Netflix operates. The stories provide tangible situations that showcase the freedom and responsibility culture. Great book.

Mind blowing … sound like utopia but we’re going to try and apply it in our startupChanged my way to think towards business models and ways to do things

This books is a real thing. Full of good stories and theory behind models for management applied on one of the most successful companies in our modern tech industry.Definitely worth reading!

Ottimo libro in inglese. Lettura piacevole

La primera vez que escuche a Reed Hastings fue hace mucho tiempo, probablemente en el 2005, me llamó la atención, pensé, esta persona sabe de lo que habla, fui a ver a Wikipedia quién era y comprobé entre otras cosas que era consejero de Microsoft, era una garantía. Años más tarde cayeron en mis manos las famosas diapositivas de la cultura de Netflix, me enamoré de las mismas me parecían extraordinarias.Ahora sacan el libro No Rules Rules, donde explican más detalladamente la cultura de Netflix. Una cultura que prioriza la innovación. Es un libro que hay que leer ya que supone una innovación en la cultura de las empresas (Netflix, no utiliza por ejemplo, los KPIs, gestión por objetivos o bonus entre otros).Su cultura es una cultura de Libertad y Responsabilidad, donde tienen unos principios (Maximizar la densidad de talento en la compañia, dar siempre feedback con sinceridad, eliminar controles (liderar por contexto), convertirse en una compañía global)El estilo del libro es bueno pero no es extraordinario, utilizan por ejemplo cuestionarios que Reed contesta, las respuestas son buenas pero las preguntas para mi gusto son demasiado largas (Acabo de leer un libro Gone Girl de Gillian Flynn que utiliza este mismo recurso que es realmente brillante y divertido). De todas formas la cultura de Netflix queda muy clara con el libro, facilitan su entendimiento con numerosos ejemplos y conclusiones al final de cada capítulo.

Overall a good read to understand the culture behind this behemoth and something that basically changed how we view entertainment today.