Name: Cassandra Tang's review of No Rules Rules by Reed Hastings
Item: No Rules Rules
Rating: 4
Author: Cassandra Tang

Reed Hastings

Netflix cofounder, Chairman, and CEO, Reed Hastings reveals for the first time the elite culture of one of the most unorthodox, creative, and successful tech companies in Silicon Valley history There's never before been a company like Netflix. Not just because it leads the media, technology, and entertainment industries alike; or because it generates billions of dollars of annual revenue, from 137 million users in 190 countries. Netflix is a revolutionary company because of a counterintuitive and radical management culture, which defies tradition and expectation. When Reed Hastings founded Netflix, he developed a corporate philosophy and a set of management principles, which would make Netflix the most innovative company in the world. This meant rejecting the conventional wisdom under which other companies operate. At Netflix, adequate performance gets a generous severance and hard work is irrelevant. At Netflix, you don't try to please your boss, you practice radical candor instead. At Netflix, employees never need approval, and the company always pay top of market. When Hastings first devised them, the implications of these principals were unknown, but over time they have inculcated flexibility, speed, and boldness throughout an outrageously successful organization. Drawing on hundreds of interviews with current Netflix employees and never-before-told stories from his own career, Hastings elaborates on these controversial principles at the heart of the Netflix psyche, which have generated results that are the envy of the business world. Just the last month, Netflix announced it had added seven million new users last quarter, and would invest a further three billion dollars in original programming, bringing the total for 2018 to thirteen billion. This is the full, fascinating, and untold story of a unique company taking over the world.

Netflix and the Culture of Reinvention

No Rules Rules

Cassandra Tang

A symphony isn’t what you’re going for. Leave the conductor and the sheet music behind. Build a jazz band instead. Jazz emphasizes individual spontaneity. The musicians know the overall structure of the song but have the freedom to improvise, riffing off one another other, creating incredible music.

If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.

Time off provides mental bandwidth that allows you to think creatively and see your work in a different light. If you are working all the time, you don’t have the perspective to see your problem with fresh eyes.

The point is to encourage people to question how the dots are connected. In most organizations, people join the dots the same way that everyone else does and always has done. This preserves the status quo. But one day someone comes along and connects the dots in a different way, which leads to an entirely different understanding of the world.

Bu Kinoshita

Then two things occurred. The first is that we failed to innovate quickly. We had become increasingly efficient and decreasingly creative. In order to grow we had to purchase other companies that did have innovative products. That led to more business complexity, which in turn led to more rules and process.

The Fearless Organization, she explains that if you want to encourage innovation, you should develop an environment where people feel safe to dream, speak up, and take risks. The safer the atmosphere, the more innovation you will have. Apparently, no one at Netflix read that book. Seek to hire the very best and then inject fear into your talented employees by telling them they'll be thrown back out onto the "generous severance" scrap heap if they don't ex- cel? This sounded like a surefire way to kill any hope of innovation.

Aske Dørge

WHEN ONE OF YOUR PEOPLE DOES SOMETHING DUMB DON'T BLAME THEM. INSTEAD ASK YOURSELF WHAT CONTEXT YOU FAILED TO SET. ARE YOU ARTICULATE AND INSPIRING ENOUGH IN EXPRESSING YOUR GOALS AND STRATEGY? HAVE YOU CLEARLY EXPLAINED ALL THE ASSUMPTIONS AND RISKS THAT WILL HELP YOUR TEAM TO MAKE GO0D DECISIONS? ARE YOU AND YOUR EMPLOYEES HIGHLY ALIGNED ON VISION AND 0BJECTIVES?

 Patty said, "When I'm in meetings with people who more reserved, like Neil, I compensate for that person's quietness by talking more. When I'm with other talkative people, like Leslie, I don't have that problem. On my own team I have many quieter people who don't speak at all in our meetings. I'm going to start leaving the last ten minutes ofevery thirty- minute meeting for others to speak. If no one speaks well sit in silence."

 If you're serious about talent density, you have to get in the habit of doing something a lot harder: firing a good employee when you think you can get a great one. One of the reasons this is so difficult in 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.

On management not sharing what’s going on

I resented bitterly that they didn't trust me enough to tell me what was going on, despite the fact that I was working hard and committed to the company's success. They had some big secret that they were keeping from the entire workforce.

WVhen a bet fails, the manager must be careful to express interest in the takeaways but no condemnation.

When you succeed, speak about it softly or let others mention it for you. But when you make a mistake say it clearly and loudly, so that everyone can learn and profit from your errors. In other words, "Whisper wins and shout mistakes."

Generally, I believed that if the dilemma is linked to an incident at work, everyone should be informed. But if the dilemma is linked to an employee's personal situation, it's up to that person to share details if he chooses.

On the other hand, when you share a secret, it floods the receiver with feelings of confidence and loyalty. IfI tell you some huge mistake I made or share information that could sabotage my success, you think, Well, if she'd tell me that, she'd tell me anything. Your trust in me skyrockets. There is no better way to build trust quickly than to shine a light directly on a would-be secret.

the last thing we want is our employ ees rewarded in December for attaining some goal fixed the previous January. The risk is that employees will focus on a target instead of spot what's best for the company in the present moment.

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

Ritik Sahni

Insightful read on productivity, autonomy, and the role of rules in building empowered teams

A decent, insightful look into the counter cultural methods at one of the bigger success stories in the consumer tech world.

Netflix are highly focused on talent density and prioritised less but more talented and empowered employees.

As someone who’s a part of an early stage startup it was another reminder to keep the bar high, even more so in the early days.

Fred Rivett

A decent, insightful look into the counter cultural methods at one of the bigger success stories in the consumer tech world.

Netflix are highly focused on talent density and prioritised less but more talented and empowered employees.

As someone who’s a part of an early stage startup it was another reminder to keep the bar high, even more so in the early days.

Heiki Riesenkampf

One of the best culture books I have read so far. Not all of the aspects fit a startup environment, but a nice way how to manage differently from the norm. Made me question more the typical big tech corporate cultures.

matej yangwao

Fair take on company culture. All jobs are temporary. Takeaway is, give freedom to your workers, but put accountability systems in the place to make them responsible. Bonuses and KPIs are quite demotivating. Seek for rockstars with 10x output :)

Second time a book inspired me to do something in People space

Evan Gusev

Amazing book on management within a high performing creative organization. Packed with real situations and testimonies from employees. Much of it will not apply in most mediocre orgs, but there are definitely some good approaches that any place could benefit from. Candor/feedback is very thoughtfully described in a multi cultural setting.

Alex bell

Fantastic insight as to what makes Netflix one of the leaders of the industry.

Interesting read and a good look at the thought process behind designing the empire that is Netflix.  There are some gems in here for anyone interested in startup culture.

Benjamin Harrison

Omar

Key takeaways for me: 
1. One average performer has a significant (negative) performance on an otherwise excellent team. 
2. If you build up your talent density (concentration of great performers) you can give them more flexibility and get rid of processes that slow everyone down. 
3. Process is important in areas where safety is key, Netflix has a ton of processes around specific types of work. But, where creativity is much more valuable than avoiding mistakes, lead with context and give freedom and responsibility.
4. Pay top of market and encourage people to go out and interview/talk to recruiters to find out their market value. Avoid bonus payment schemes for creative workers, instead just pay a large base salary. Data and Netflix experience show that bonuses for creative work aren't helpful. 
5. To help employees grow and do their best work, build a culture of candor, where everyone gets helpful feedback often. Get rid of jerks, and train everyone else to give and receive candid feedback well and use it to improve.
6. Keeper test: as a manager, how hard would you fight to keep this person if they told you they were planning to leave the company? Ask yourself that question periodically for each of your direct reports. If the answer is "wouldn't fight much", manage that person out of your team (fire or move then to another role)


Miscellaneous notes I took: 
Build up talent density
Introduce Candor
Remove controls

Pay top of market and keep increasing talent density
Eliminate more rules

Lead with context

One person's performance spreads very infectiously, thus the criticality of ensuring the talent density is high is critical.

Stunning colleagues: creative, accomplish a lot of work, collaborative.

Develop a culture of Candor. Get employees to give feedback to their leaders. "tell the emperor when he has no clothes"

Make sure you display belonging cues when receiving feedback. Make sure they understand that you are grateful for the feedback. Do this often. 

Teach people how to give feedback effectively. 4 As framework:

* Aim to assist. Explain how it will help the company. 
* Actionable. 
* Appreciate: when receiving feedback. Listen carefully and don't become defensive. 
* Accept it and decide how or whether to adopt it. 

Leaders need to model the values -- take vacations if removing a vacation policy.

Values updates? 
* If you disagree, say it. It is disloyal to the company to not contribute your dissenting opinions. 
* We strive to remove processes that slow down people.

Techniques to reinforce culture
1. Build talent density
2. Max out feedback/candor
3. Remove control, increase freedom and responsibility

Build up talent density
1. Hire well
2. Fire good, but not great, employees

Keeper test
1. If this employee told me they are going to quit, how hard would I fight to keep them? 
2. Flip side, ask your boss, how hard would they fight to keep me? Do this regularly to learn more of why. 

Candor with firing
1. Make sure people know the reasons someone was let go. 
2. Make it clear that people get feedback before being let go. 

Instead of a PIP, give a generous severance package and get the employee to agree not to sue

Max out candor
1. Only say about someone what you'd say to their face. 
2. Set up formal processes for feedback in all directions
3. Set a value about feedback, not providing feedback is "disloyal".

Lance Willett

I loved reading this interview-style recap of already well-known Netflix cultural values and virtues.

Favorite passage was Reed Hastings answering the question, "How do you avoid a culture of fear?" In regards to the Netflix tactic of letting average/low performers go quickly, with generous severance an no hard feelings. "Wouldn't that lead to a culture of fear?"

In white water kayaking they teach you to look at the clear, safe water next to the dangerous hole you want to avoid. Experts have found that if you stare at what you desperately want to avoid, you are actually more likely to paddle into it. Similarly, at Netflix, we tell all employees it is best to focus on learning, teamwork, and accomplishment. If a person gets obsessed by their risk of being let go (or an athlete becomes obsessed with the risk of being injured) they can't play light and confident, and this can bring about the very troubles they were trying to prevent.

Erin Meyer

Hard work is irrelevant. Be radically honest. Adequate performance gets a generous severance. And never, ever try to please your boss. These are some of the ground rules if you work at Netflix. They are part of a unique cultural experiment that explains how the company has transformed itself at lightning speed from a DVD mail order service into a streaming superpower - with 125 million fervent subscribers and a market capitalisation bigger than Disney. Finally Reed Hastings, Netflix Chairman and CEO, is sharing the secrets that have revolutionised the entertainment and tech industries. With INSEAD business school professor Erin Meyer, he will explore his leadership philosophy - which begins by rejecting the accepted beliefs under which most companies operate - and how it plays out in practice at Netflix. From unlimited holidays to abolishing financial approvals, Netflix offers a fundamentally different way to run any organisation, one far more in tune with a fast-paced world. For anyone interested in creativity, productivity and innovation, the Netflix culture is something close to a holy grail. This book will make it, and its creator, fully accessible for the first time.

Daniel Bower

The essence of Netflix’s workplace culture is what they call Freedom and Responsibility (F&R). Give your staff the space necessary to be creative and the autonomy to make important decisions on their own, and you’ll build a dynamic and innovative company. This is a fairly well trodden notion and so the important ideas of the book come from the criteria necessary to achieve an F&R culture: only employing top performing talent; paying top of market for new hires; and paying under-performers handsomely in order to leave, for example. It is book that starts you at the end and details all the prerequisites necessary to get there. It’s useful stuff and well written.

However, I couldn’t help but think that the most significant prerequisite of all was missing. Namely that, in order to follow the Netflix model you require either a highly profitable or incredibly well funded company. If you are bootstrapping, or offering up equity in place of big salaries, you may run into trouble.

This is not to say that the book isn’t useful for these types of companies. For example, their approach to feedback is useful for a company of any size. However, I finished the book wondering, how do you get to a point of F&R on a shoestring? Surely that’s possible too?

Christian Beck

I’ve read and skimmed a lot of books on building companies and this one resonated most with the non-hierarchical, creative, free-flowing concept I’ve had in my mind. It felt like the first blueprint I’ve read for a creative economy-era company. They acknowledge mistakes that led to their current structure, while also writing about things I’ll probably never face (global cultural challenges), and that all added credibility and evidence on how to make this work for smaller, scaling companies.

Peter Hagen

Fascinating insights into the open culture at Netflix, which Reed Hastings attributes their success to. It's very practical, getting people to do unintuitive things like giving radical feedback or doing the "keeper test" step by step.

For similar ideas from a different perspective, I recommend "Principes" by Ray Dalio.

*** Longlisted for the 2020 Financial Times & McKinsey Business Book of the Year *** It's time to do things differently. Trust your team. Be radically honest. And never, ever try to please your boss. These are some of the ground rules if you work at Netflix. They are part of a unique cultural experiment that explains how the company has transformed itself at lightning speed from a DVD mail order service into a streaming superpower - with 190 million fervent subscribers and a market capitalisation that rivals the likes of Disney. Finally Reed Hastings, Netflix Chairman and CEO, is sharing the secrets that have revolutionised the entertainment and tech industries. With INSEAD business school professor Erin Meyer, he will explore his leadership philosophy - which begins by rejecting the accepted beliefs under which most companies operate - and how it plays out in practice at Netflix. From unlimited holidays to abolishing approvals, Netflix offers a fundamentally different way to run any organisation, one far more in tune with an ever-changing fast-paced world. For anyone interested in creativity, productivity and innovation, the Netflix culture is something close to a holy grail. This book will make it, and its creator, fully accessible for the first time.

Jose Quaresma

An insider’s look at the culture of Netflix. A culture of Freedom & Responsibility. A lot of good takeaways!

Ritik Sahni &
No Rules Rules by Reed Hastings

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No Rules Rules by Reed Hastings