Summary: No Rules Rules: Netflix and the Culture of Reinvention by Erin Meyer and Reed Hastings
Summary: No Rules Rules: Netflix and the Culture of Reinvention by Erin Meyer and Reed Hastings

Summary: No Rules Rules: Netflix and the Culture of Reinvention by Erin Meyer and Reed Hastings

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Start with stunning colleagues

As a leader, your first priority should be to build a workplace of stunning colleagues. Stunning colleagues accomplish are not only exceptionally creative and passionate, they are extremely productive and accomplish significant amounts of important work. At the other end of the spectrum are jerks, slackers and sweet people with mediocre performance. Don’t let any of them bring down the overall performance of your team.

Once you have high talent density in the workplace and have eliminated less-than-great performers, you’re ready to introduce a culture of candor.


Give honest feedback

Give radical candor to turn your high performers into stellar performers. Candid feedback, especially when given frequently, can exponentially accelerate the speed and effectiveness of your workforce. Introduce feedback sessions into your regular meetings to show that you encourage the culture of candor. Coach your employees to give and take feedback effectively, following the 4A guidelines.

#1 Aim to Assist (when giving feedback)

Give feedback with positive intent. Giving feedback to get frustration off your chest or intentionally hurt other people is out of the question. Clearly explain how a specific action or behavior is affecting the individual or the company. Instead of saying “The way you pick your teeth in meetings is irritating.”, try to say “If you stop picking your teeth in meetings, the partners are more likely to see you as professional and we’re more likely to build a strong relationship.

#2 Actionable (when giving feedback)

Give feedback in a way the receiving end can act upon. Instead of saying “Your presentation is undermining its own messages”, try to say “The way you ask the audience for input is resulting in only Americans participating.”

#3 Appreciate (when receiving feedback)

Humans are naturally inclined to come up with an excuse when receiving a criticism. When you find yourself in this situation, you need to relax and ask yourself “How can I show appreciation for this feedback by listening carefully?”

#4 Accept or Discard (when receiving feedback)

You’ll receive feedbacks, both constructive and non-constructive, throughout your life. But you’re not required to follow through all of them. Say thank you with sincerity but it’s you who make the decision to react to act upon that feedback.


Remove travel and expense approvals

Design your vacation policy in a way that there’s no need for prior and that neither the travelling employee nor their managers are supposed to keep track of their days on the vacation. As such, it’s all up to the employee if he or she’s feeling like taking a few days or even a month off work.

Remember what you practice as a leader will be critical to guide the employees to the appropriate behavior. An office with no vacation restrictions but a boss who never takes a single vacation is essentially meaningless.

When removing travel and expense policies, set the context about how to spend money up front and check employee claims at the backend. If people end up overspending, set more context. Encourage your finance department to audit a portion of receipts regularly. Yes, you might find some abuses with the system. If you do so, consider firing them and speaking about the abuse openly – even if they’re your star performers. This context is necessary for others to understand the results of irresponsible behavior.

Expect your expenses to increase with no expense policy. But the increase in overspending are not nearly as high as the gains the freedom provides. Employees are not only empowered to make quick decisions in a way that help the business, also you’ll waste fewer resources associated with purchase orders and procurement processes. In the words of Reed, “Many employees will respond to their new freedom by spending less than they would in a system with rules. When you tell people you trust them, they’ll show you how trustworthy they are.”


Pay good money and encourage interviews

Most companies follow the traditional compensation methods to attract a talented workforce. This rarely works. In order to hire and retain a high-talent-density workforce, pay them top of market. Instead of hiring ten average operational staff, look for one exceptional individual.

Consider relocating performance-based bonuses into basic salary. Teach employees to develop their networks and gauge the value of their teams and their own on an ongoing basis. Encourage them to take calls from recruiters or even go to interviews. Listen to them and make adjustments accordingly.



Be transparent about your financials

Get rid of boundaries, closed offices and assistants who act as guards. To develop a culture of transparency, you need to champion it yourself every day.

Open up your books to the employees. Teach them how to read P&L statements. Don’t be afraid to share important financial knowhow with everyone in the company.

Sometimes you’ll find transparency in tension with an individual’s privacy. When you do so, choose transparency if the information is about something that happened at work. But choose individual’s privacy if it’s about an employee’s personal life, by telling them it’s not your place to share and that they can ask the person concerned directly if they choose.

Show yourself to be competent. Be willing to talk openly about your mistakes. Encourage all your leaders to do the same. This will increase the trust, goodwill and innovation throughout the organization.


Do your best to keep the keepers

Encourage your leaders to hold their teams to the highest standards. To be tough on performance, ask yourself “Which of my people, if they told me they were leaving for a similar job at another company, would I fight hard to keep?”

For a high-performance culture, a professional sports team is a better metaphor than a family. Coach your leaders to build strong commitment and cohesion among the team, while continually making tough decisions to ensure the best player is manning each post.

When you need to let someone go, instead of putting them on some type of PIP, which is humiliating and organizationally costly, use all the money and give it to the employee in the form of a generous severance payment. Finally, when someone is let go, speak openly about what happened and answer their questions candidly. This will diminish the fear of being next and increase their trust in the company.


Encourage open feedback culture

Even if you encourage everyone to be candid, some won’t do it. And those who do might miss a few uncomfortable spots. A dedicated session every six to twelve months ensures maximum feedback. Performance reviews are not the best way to be candid, as they usually go one way and come from the top.

A 360-degree approach works better in most cases. But avoid anonymity and numeric ratings. Don’t link the outcomes to raises or promotions. Open up comments to anyone who’s ready to give them.


Lead with ‘context’ instead of ‘control

Everyone has done something dumb at some point in their lives. When one of your people do so, instead of blaming, ask yourself whether you failed to set the context. Are you articulating enough to express your thoughts? Have you clearly explained all the assumptions and risks to help your team make good decisions?

A loosely coupled organization resembles a tree rather than a pyramid. You, as a leader of the organization, are at the roots, holding up the trunk of senior managers who support the branches where things get done and decisions get made.


Bring your candor to the world

When planning a geographic expansion, compare your corporate culture with the culture of the country you’re expanding into. In less direct countries, implement more formal feedback methods more frequently, as informal exchanges happen less often. In more direct regions, talk about the cultural differences openly so the feedback is understood as intended. Be adaptable and find ways for both sides to bring candor to life.