147. No Rules 🏴☠️
Highlights from the Netflix book No Rules Rules
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Hi there 👋
It’s Thanksgiving week here in the U.S., and I just got the good news that my favorite ski hill is opening on Friday! ⛷ I’ll be taking the week off to spend time with family and read a lot of books and maybe even ski. Speaking of books, this week’s newsletter has highlights from one I finished recently all about Netflix’s workplace culture, which sounds dynamic, challenging, inspiring, fraught, and … well … I’ll let you judge for yourself below. :)
Wishing you a great week,
Kevan
~ Mary Anne Radmacher
These are 3 cool things I read this week
1 - Is Customer-Led Growth the new Product-Led Growth?
2 - The Long and Short of It — Balancing long-term and short-term marketing strategies [an entire book in a PDF]
3 - The impact of Charli D’Amelio on Dunkin’s influencer marketing
Netflix: No Rules Rules
Inside the workplace culture at Netflix
Netflix CEO Reed Hastings wrote a new book, No Rules Rules.
Well, he wrote half a book — the other half was written by Erin Meyer, an author and business school professor. Together, Reed and Erin wrote about the unique aspects of Netflix’s workplace culture, to which they attribute much of Netflix’s success over the years.
My rating of the book: 4 sweat-smiles out of 5. 😅😅😅😅▫️(because some of the concepts in this book made me sweat.)
My highlights are below.
The foundation of the book:
We had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls.
~ Reed Hastings
Firs steps toward a culture of freedom and responsibility
First build up talent density . . .
1 ▶ A Great Workplace Is Stunning Colleagues
Then increase candor . . .
2 ▶ Say What You Really Think (with Positive Intent)
Now begin removing controls . . .
3a ▶ Remove Vacation Policy
3b ▶ Remove Travel and Expense Approvals
—
Talent density = Talented people make one another more effective
If you have a team of five stunning employees and two adequate ones, the adequate ones will sap managers’ energy, so they have less time for the top performers, reduce the quality of group discussions, lowering the team’s overall IQ, force others to develop ways to work around them, reducing efficiency, drive staff who seek excellence to quit, and show the team you accept mediocrity, thus multiplying the problem.
If you have a group with a few merely adequate performers, their performance is likely to spread, bringing down the performance of the entire organization.
–
A fast and innovative workplace is made up of what we call “stunning colleagues”—highly talented people, of diverse backgrounds and perspectives, who are exceptionally creative, accomplish significant amounts of important work, and collaborate effectively. What’s more, none of the other principles can work unless you have ensured this first dot is in place.
Your number one goal as a leader is to develop a work environment consisting exclusively of stunning colleagues.
Stunning colleagues accomplish significant amounts of important work and are exceptionally creative and passionate.
Jerks, slackers, sweet people with nonstellar performance, or pessimists left on the team will bring down the performance of everyone.
Counterpoint (from Erin Meyer):
Quite apart from the question of whether it is ethical to fire hardworking employees who don’t manage to do extraordinary work, these slides struck me as pure bad management. They violate the principle that Harvard Business School professor Amy Edmondson calls “psychological safety.” In her 2018 book, 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 excel? This sounded like a surefire way to kill any hope of innovation.
At Netflix, it is tantamount to being disloyal to the company if you fail to speak up when you disagree with a colleague or have feedback that could be helpful. After all, you could help the business—but you are choosing not to.
—
Counterpoint:
“Honesty sometimes” we can all get behind. But a blanket policy of “honesty always” sounds like a great way to break relationships, crush motivation, and create an unpleasant work environment. Overall, the Netflix Culture Deck struck me as hypermasculine, excessively confrontational, and downright aggressive—perhaps a reflection of the kind of company you might expect to be constructed by an engineer with a somewhat mechanistic, rationalist view of human nature.
—
Somebody asked me one time what I’d fire you for, and I’m like, “Good question.” They asked me in the interview, and I’m like, “Sexual harassment, breaching confidentiality, punching me in the nose ... Oh, I know what I’d fire you for: I would fire you if we were in a meeting talking about something that went wrong and you said, ‘I knew that but nobody asked me.’” I’m like, “I’d have run you over in the parking lot.”
~ Patty McCord on Recode podcast
😅
—
There is one Netflix guideline that, if practiced religiously, would force everyone to be either radically candid or radically quiet: “Only say about someone what you will say to their face.”
With candor, high performers become outstanding performers.
Frequent candid feedback exponentially magnifies the speed and effectiveness of your team or workforce.
Set the stage for candor by building feedback moments into your regular meetings.
Coach your employees to give and receive feedback effectively, following the 4A guidelines.
As the leader, solicit feedback frequently and respond with belonging cues when you receive it.
Get rid of jerks as you instill a culture of candor.
–
Your behavior while you’re getting the feedback is a critical factor. You must show the employee that it’s safe to give feedback by responding to all criticism with gratitude and, above all, by providing “belonging cues.” As Daniel Coyle, author of The Culture Code, describes them, such cues are gestures that indicate “your feedback makes you a more important member of this tribe” or “you were candid with me and that in no way puts your job or our relationship in danger; you belong here.”
–
Giving Feedback
AIM TO ASSIST: Feedback must be given with positive intent. Giving feedback in order to get frustration off your chest, intentionally hurting the other person, or furthering your political agenda is not tolerated. Clearly explain how a specific behavior change will help the individual or the company, not how it will help you. “The way you pick your teeth in meetings with external partners is irritating” is wrong feedback. Right feedback would be, “If you stop picking your teeth in external partner meetings, the partners are more likely to see you as professional, and we’re more likely to build a strong relationship.”
ACTIONABLE: Your feedback must focus on what the recipient can do differently. Wrong feedback to me in Cuba would have been to stop at the comment, “Your presentation is undermining its own messages.” Right feedback was, “The way you ask the audience for input is resulting in only Americans participating.” Even better would have been: “If you can find a way to solicit contributions from other nationalities in the room your presentation will be more powerful.”
–
Receiving Feedback
APPRECIATE: Natural human inclination is to provide a defense or excuse when receiving criticism; we all reflexively seek to protect our egos and reputation. When you receive feedback, you need to fight this natural reaction and instead ask yourself, “How can I show appreciation for this feedback by listening carefully, considering the message with an open mind, and becoming neither defensive nor angry?”
ACCEPT OR DISCARD: You will receive lots of feedback from lots of people while at Netflix. You are required to listen and consider all feedback provided. You are not required to follow it. Say “thank you” with sincerity. But both you and the provider must understand that the decision to react to the feedback is entirely up to the recipient.
—
Steve Jobs said:
“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
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.
Thanks so much for reading. Have a great week!
— Kevan
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