No Rules Rules: Netflix and the Culture of Reinvention

I thoroughly enjoyed reading the book. Netflix is renowned for its exceptional company culture, and this book provides firsthand insights into Netflix from Reed Hastings, the legendary founder of one of the FAANG companies. In this captivating narrative, the author delves into the growth of Netflix, as well as Hastings’s initial failed venture. One particularly intriguing chapter explores the concept of “talent density.” While I have only skimmed the book thus far, I am thoroughly impressed by the content. Upon completing the book, I will provide an updated review.

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 control These 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.

Summary: Reed Hastings, co-founder and CEO of Netflix, talks the leadership philosophy that underpins the culture at Netflix: Creating people talent density, an environment of candor, and empowering employees through decentralized decision making versus restrictive controls. Is it insightful? 5 Stars Great insight on how to attract and retain the best people and compensate them based on market value versus internal controls, i.e. salary bands, trust them to make decisions on how to do their job, hold them accountable for great performance, and openly learn from failure and share the lessons learned with the rest of the organization. Is it creative? 4 Stars At end of each chapter there is a summary of key points to underscore the most important take-aways. Each chapter builds upon the prior chapter to demonstrate how each of the nine “dots” connect to create the empowered culture. Is the well written? 4 Stars Each chapter contains an explanation of what happens at Netflix by Hastings then some leadership philosophy by Meyer. Book uses numerous references where someone other than Hastings or Meyer was speaking. I found it confusing at times where I thought Hastings was speaking then discovered it was someone else. Would have helped if quotes from others were in italics or quotation marks were used. Is it a page turner? 5 Stars Each leadership point logically builds upon prior points made. As example, if you’re going to remove controls you first need a high-performance workforce capable of making decisions in the best interest of the company. What also struck me from the philosophy is the importance of the person at the top not just supporting it but living and breathing it. If there’s going to be decentralized decision making without governing policies then that needs to be true for an entire organization, not just a department within an organization. A mid-level manager reading the book would not be able to implement many of the concepts in the book on his or her own; it needs to start with the CEO and permeate through the organization.

The back and forth between the two authors works marvelously, with occasional skepticism from Meyer providing balance to Hastings' evolving approach to an innovation culture. The real-world examples are terrific. Anyone building or reinventing a business in a digital or creative industry will benefit, regardless of how far along you may be.

Netflix build culture in a way to encourage innovation with the principle of freedom and responsibility. This book explains why and how this works

Very insightful story about culture in a successful company

Very good book for bringing changes in the organization

La mayoría de los libros habla de sistemas y procesos para escalar compañías. Netflix en cambio entendió desde etapas tempranas que una gran visión y una cultura de empoderamiento individual y en equipo eran la clave. Muy bueno para retar los modelos tradicionales de organizar empresas.

Very fast delivery and the new packaging by AMAZON is very nice!!!! This book is fantastic, have been waiting for it!

It contains a few central ideas explaining why the good old command and control, too-down decision making Schema doesn’t work in the Information Age. Or put differently why ideas and ways of working just replicated from the industrial era do not really work for modern tech companies. I like the mix of Reed and Erin (the latter definitely proving some sort of scientific credible boost, probably as intended) and the humbleness with witch the book comes across. While I had been skeptical at first I really enjoyed the last part about cultural differences and the examples provided to follow the arguments and experiences Netflix has made. All in all a really thought through book that I would recommend anyone interested in culture and how to level it up.

A wonderful story telling about Netflix culture. The book can be viewed not only as Netflix journey but as a recipe on how to implement a Netflix like culture. I strongly recommend this book to everyone.