No Rules Rules

Netflix, lost all respect for them. What an embarrassment. Shame on Netflix and Reed Hastings. Check out Cuties on Netflix, you’ll understand why.

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 youre 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 theres 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.

Disappointed as I was expecting a story of the creation of a company not a business process book.

This book outlines the terrible management philosophy of Reed Hastings. This book offers a good guideline on how to create a business culture that treats your employees like trash. His philosophy of using people and spitting them out when they no longer are useful to him really speaks to his character as a person. His idea of “generous severance” is also a joke compared to many other companies.

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 NETFLIXs 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 CHROs 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.

Wed 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 wont 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.

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