2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale
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The New York Times bestseller

Shortlisted for the 2020 Financial Times & McKinsey Business Book of the Year


Netflix cofounder Reed Hastings reveals for the first time the unorthodox culture behind one of the world''s most innovative, imaginative, and successful companies


There has never before been a company like Netflix. It has led nothing short of a revolution in the entertainment industries, generating billions of dollars in annual revenue while capturing the imaginations of hundreds of millions of people in over 190 countries. But to reach these great heights, Netflix, which launched in 1998 as an online DVD rental service, has had to reinvent itself over and over again. This type of unprecedented flexibility would have been impossible without the counterintuitive and radical management principles that cofounder Reed Hastings established from the very beginning. Hastings rejected the conventional wisdom under which other companies operate and defied tradition to instead build a culture focused on freedom and responsibility, one that has allowed Netflix to adapt and innovate as the needs of its members and the world have simultaneously transformed.

Hastings set new standards, valuing people over process, emphasizing innovation over efficiency, and giving employees context, not controls. At Netflix, there are no vacation or expense policies. At Netflix, adequate performance gets a generous severance, and hard work is irrel­evant. At Netflix, you don’t try to please your boss, you give candid feedback instead. At Netflix, employees don’t need approval, and the company pays top of market. When Hastings and his team first devised these unorthodox principles, the implications were unknown and untested. But in just a short period, their methods led to unparalleled speed and boldness, as Netflix quickly became one of the most loved brands in the world.

Here for the first time, Hastings and Erin Meyer, bestselling author of The Culture Map and one of the world’s most influential business thinkers, dive deep into the controversial ideologies at the heart of the Netflix psyche, which have generated results that are the envy of the business world. Drawing on hundreds of interviews with current and past Netflix employees from around the globe and never-before-told stories of trial and error from Hastings’s own career, No Rules Rules is the fascinating and untold account of the philosophy behind one of the world’s most innovative, imaginative, and successful companies.

Review

“Given the current hostility to the technology sector, the rejection of established H.R. wisdom and intensity of the organizational upheaval promoted by No Rules Rules may generate controversy. Mr. Hastings could have remained under the radar during the Silicon Valley’s cultural maelstrom. Instead, he has entered the fray with an important contribution that provides the beginnings of a road map for the sector to regain trust. . .  No Rules Rules demonstrates that it is not only possible to pursue both freedom and responsibility at the same time, but that for Silicon Valley and the rest of us to thrive together, it is essential.”  —The New York Times 

“Hastings, CEO and cofounder of Netflix, and Meyer, a business professor at INSEAD, team up to explore the organizational cultures, successes, and lessons learned within Netflix. . .  taking turns throughout the book to explain a situation or practice. This format feels conversational, and makes the book very easy to follow. . . Informative, thought provoking, and down-to-earth.”  Booklist

"In alternating sections with Meyer, who provides elaboration based on more than 200 Netflix interviews, Hastings details the making of the Netflix way, from hiring the best creative talent at high pay to increasing candor through frequent feedback and gradually removing controls that stifle innovation. . . Fascinating story of a counterintuitive approach that apparently works." — Kirkus Reviews

"A fascinating analysis of Netflix. . . Highly recommended for leaders eager to build innovative, fast, and flexible teams." — Library Journal, starred review
 
"Aspiring tech moguls should flock to Hastings and Meyer’s energetic and fascinating account." — Publishers Weekly

“I had the privilege of learning from Reed personally and studying the Netflix culture. The insights in this book are invaluable to anyone trying to create and sustain organizational culture.” — Satya Nadella, CEO of Microsoft
 
“As the information age shrinks product cycles and compresses time frames, the most important business question of our era is, How do we keep innovating? In this breakthrough book, Reed Hastings and Erin Meyer provide the answer. They lay out a proven, systematic methodology for building, maintaining, and enhancing a highly innovative global culture. It is an amazing piece of work. Bravo!”— Ben Horowitz, cofounder of Andreessen Horowitz
 
“Reed Hastings learned early what it takes to build an enduring great company. Here in No Rules Rules, he and Erin Meyer teach the culture that propelled Netflix into one of the most distinctive and impactful companies on the planet. Packed with vivid specifics, they illustrate how Hastings melded a spicy concoction into a framework of freedom and responsibility. Well-written and fast-paced, timeless and timely, inspired and practical, smart and wise—read it and learn the Netflix secret sauce from the master himself!” —Jim Collins, author of Good to Great, co-author of Built to Last and Beyond Entrepreneurship
 
“Forget reinventing television; Reed Hastings'' real achievement is reinventing corporate culture, and in No Rules Rules, Reed reveals all the tactics and processes that he’s used to make Netflix one of the 21st century’s most innovative companies. Clear, compelling, fascinating, and (for a book about Netflix), appropriately binge-worthy, No Rules Rules is the book I wish I had read when I was starting out, and it’s the book I’ll be giving to every CEO I work with. It’s simply a must-have for any business leader.” —Marc Randolph, Netflix co-founder and author of That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

 “Netflix’s unique culture of freedom and responsibility and its flexibility to adapt are fueling its remarkable rise around the world. In No Rules Rules, Reed Hastings and Erin Meyer reveal the fascinating story of Netflix success, while providing actionable lessons for leaders on how to attract top talent and unleash their creative energies to drive excellence.” —Susan E. Rice, former U.S. national security adviser and permanent representative to the United Nations

About the Author

Reed Hastings is an entrepreneur who has revolutionized entertainment since cofounding Netflix in 1997, serving as its chairman and CEO since 1999. His first company, Pure Software, was launched in 1991 and was acquired just before Netflix launched. Hastings served on the California State Board of Education from 2000 to 2004 and is an active educational philanthropist. He has sat on the board of several educational organizations including Dreambox Learning, the KIPP Foundation, and the Pahara Institute. He received a BA from Bowdoin College in 1983 and an MSCS in artificial intelligence from Stanford University in 1988. Between Bowdoin and Stanford, Reed served in the Peace Corps as a volunteer teacher in southern Africa.


Erin Meyer is the author of The Culture Map: Breaking Through the Invisible Boundaries of Global Business and a professor at INSEAD, one of the world’s leading international business schools. Her work has appeared in Harvard Business Review, The New York Times, and Forbes.com. In 2019, Meyer was selected by the Thinkers50 as one of the fifty most influential business thinkers in the world. She received an MBA from INSEAD in 2004, and she currently lives in Paris, France. In 1994 and 1995 Meyer also served in the Peace Corps as a volunteer teacher in southern Africa. Visit erinmeyer.com for more information.

Excerpt. © Reprinted by permission. All rights reserved.

1

 

A Great Workplace Is Stunning Colleagues

 

In the 1990s, I liked to rent VHS videos from the Blockbuster down the street from our house. I''d take two or three at a time and return them quickly to avoid late fees. Then one day I moved a pile of papers on the dining room table and saw a cassette that I''d watched weeks ago and forgotten to return. When I took the movie back to the store, the woman told me the fee: $40! I felt so stupid.

 

Later, that got me thinking. Blockbuster made most of its margin from late fees. If your business model depends on inducing feelings of stupidity in your customer base, you can hardly expect to build much loyalty. Was there another model to provide the pleasure of watching movies in your own living room without inflicting the pain of paying a lot when you forgot to return them?

 

In early 1997, when Pure Software was acquired, Marc Randolph and I started thinking about opening a movies-by-mail business. Amazon was having good luck with books. Why not films? Customers would rent VHS cassettes from our website and be able to return them via the mail. Then we learned it would cost $4 to mail the VHS cassette each way. There wasn''t going to be a big market. It was too expensive.

 

But a friend told me about a new invention called DVDs, which would be coming that fall. "They''re like CDs but hold a movie," he explained. I raced to the post office and mailed myself several CDs (I couldn''t find an actual DVD for my test). Each cost thirty-two cents to mail. Then I went back to my place in Santa Cruz and waited anxiously for them to arrive. Two days later they dropped through the mail slot, unharmed.

 

In May 1998, we launched Netflix, the world''s first online DVD rental store. We had thirty employees and 925 movie titles, which was almost the entire catalog of DVDs available at the time. Marc was the CEO until 1999, when I took over and he became one of our executives.

 

By early 2001, we''d grown to 400,000 subscribers and 120 employees. I tried to avoid the leadership fumbles of my Pure Software days, and although we avoided implementing excessive rules and controls this time, I also couldn''t characterize Netflix as a particularly great place to work. But we were growing, business was good, and work for our employees was OK.

 

Lessons from a Crisis

 

Then, in the spring of 2001, crisis struck. The first internet bubble burst, and scores of dot-coms failed and vanished. All venture capital funding stopped, and we were suddenly unable to raise the additional funds we needed to run the business, which was far from profitable. Morale in the office was low, and it was about to get lower. We had to lay off a third of our workforce.

 

I sat down with Marc and Patty McCord-Patty had come with me from Pure Software and was head of Human Resources-and we studied the contribution of each employee. We didn''t have any obviously poor performers. So we divided the staff into two piles: the eighty highest performers who we would keep and forty less amazing ones we would let go. Those who were exceptionally creative, did great work, and collaborated well with others went immediately into the "keepers" pile. The difficulty was that there were many borderline cases. Some were great colleagues and friends but did adequate rather than great work. Others worked like crazy but showed uneven judgment and needed a lot of hand-holding. A few were exceptionally gifted and high performing but also complainers or pessimists. Most of them would have to go. It wasn''t going to be easy.

 

In the days before the layoffs, my wife remarked how on edge I was, and she was right. I worried that motivation in the office would plummet. I was convinced that, after I''d let go of their friends and colleagues, those who stayed would think that the company wasn''t loyal to employees. It was bound to make everyone angry. Even worse, the "keepers" would have to shoulder the work of those let go, which seemed certain to lead to bitterness. We were already short on cash. Could we bear a further collapse in morale?

 

The day of the layoffs arrived, and it was awful, as expected. Those who we laid off cried, slammed doors, and shouted in frustration. By noon it was finished, and I waited for the second half of the storm: the backlash from the remaining employees. . . . But, despite some tears and visible sorrow, all was calm. Then, within a few weeks, for a reason I couldn''t initially understand, the atmosphere improved dramatically. We were in cost-cutting mode, and we''d just let go of a third of the workforce, yet the office was suddenly buzzing with passion, energy, and ideas.

 

A few months later the holidays arrived. DVD players were popular that Christmas, and by early 2002, our DVD-by-mail subscription business was growing rapidly again. Suddenly, we were doing far more work-with 30 percent fewer employees. To my amazement, those same eighty people were getting everything done with a passion that seemed higher than ever. They were working longer hours, but spirits were sky-high. It wasn''t just our employees who were happier. I''d wake up in the morning and couldn''t wait to get to the office. In those days, I drove Patty McCord to work every day and when I swung up to her house in Santa Cruz, she would practically leap into the car with this big grin: "Reed, what''s going on here? Is this like being in love? Are these just some wacky chemicals and this thrill is going to wear off?"

 

Patty had put her finger on it. The entire office felt like it was filled with people who were madly in love with their work.

 

I''m not advocating for layoffs, and fortunately we haven''t had to do anything like that at Netflix since. But in the days and months following those 2001 layoffs, I discovered something that completely changed the way that I understand both employee motivation and leadership responsibility. This was my road to Damascus experience, a turning point in my understanding of the role of talent density in organizations. The lessons we learned became the foundation of much that has led to Netflix''s success.

 

But before we go on to describe those lessons, I should give Patty a proper introduction because she played a critical role in the development of Netflix for over a decade, and her protŽgŽ, Jessica Neal, runs HR for Netflix today. I first met Patty McCord while at Pure Software. In 1994 she called the office out of the blue and asked to speak to the CEO. My younger sister was answering the phones in those days, and she put Patty right through. Patty was raised in Texas, which I could hear faintly in the way she spoke. She said she was currently working for Sun Microsystems in the HR department, but she''d like to come to Pure Software and run HR for us. I invited her in for a cup of coffee.

 

During the first half of the meeting, I couldn''t understand anything Patty was saying. I asked her to tell me her HR philosophy, and she said: "I believe that every individual should be able to draw a line between their contribution to the corporation and their individual aspirations. As the head of human capital management, I would work with you, the CEO, to increase the emotional intelligence quotient of our leadership and improve employee engagement." My head started to spin. I was young and unpolished and after she stopped, I said: "Is that how all HR people speak? I couldn''t understand a word. If we are going to work together you are going to have to stop talking like that."

 

Patty was insulted, and she told me so straight to my face. When she got home that evening and her husband asked her how the interview had gone, she told him, "Bad. I got in a fight with the CEO." But I loved the way she told me exactly what she thought of me. So I gave her the job, and since then we have had a frank, long-lasting friendship, which has persisted even after her departure from Netflix. It may be partly because we''re so different: I''m a math wonk and a software engineer, she''s an expert in human behavior and a storyteller. When I look at a team, I see numbers and algorithms that connect the people and discussions. When Patty looks at a team, she sees emotions and subtle interpersonal responses that are invisible to me. Patty worked for me at Pure Software until we sold it in 1997, and she joined us early at Netflix.

 

Patty and I spent dozens of car rides following the 2001 layoffs trying to figure out why the work environment had taken a sharp turn for the better and how we could maintain this positive energy. We came to understand that what Patty referred to as our dramatic increase in "talent density" was behind the improvements.

 

Talent Density: Talented People Make

One Another More Effective

 

Every employee has some talent. When we''d been 120 people, we had some employees who were extremely talented and others who were mildly talented. Overall we had a fair amount of talent dispersed across the workforce. After the layoffs, with only the most talented eighty people, we had a smaller amount of talent overall, but the amount of talent per employee was greater. Our talent "density" had increased.

 

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.

 

Our employees were learning more from one another and teams were accomplishing more-faster. This was increasing individual motivation and satisfaction and leading the entire company to get more done. We found that being surrounded by the best catapulted already good work to a whole new level.

 

Most important, working with really talented colleagues was exciting, inspiring, and a lot of fun-something that remains as true today with the company at seven thousand employees as it was back then at eighty.

 

In hindsight, I understood that a team with one or two merely adequate performers brings down the performance of everyone on the team. 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.

 

For top performers, a great workplace isn''t about a lavish office, a beautiful gym, or a free sushi lunch. It''s about the joy of being surrounded by people who are both talented and collaborative. People who can help you be better. When every member is excellent, performance spirals upward as employees learn from and motivate one another.

 

Performance Is Contagious

 

From the 2001 layoffs, Reed learned that performance-both good and bad-is infectious. If you have adequate performers, it leads many who could be excellent to also perform adequately. And if you have a team consisting entirely of high performers, each pushes the others to achieve more.

 

Professor Will Felps, of the University of New South Wales in Australia, conducted a fascinating study demonstrating contagious behavior in the work environment. He created several teams of four college students and asked each team to complete a management task in forty-five minutes. The teams who did the best work would receive a financial reward of one hundred dollars.

 

Unbeknownst to the students, some teams included an actor, who played one of several roles: a "Slacker" who would disengage, put his feet up on the table, and send text messages; a "Jerk" who would speak sarcastically and say things like, "Are you kidding me?" and "Clearly, you''ve never taken a business class before"; or a "Depressive Pessimist" who would look like his cat had just died, complain the task was impossible, express doubt that the team could succeed, and sometimes put his head on the desk. The actor did so without tipping off the rest of the team that he was anything other than a regular student.

 

Felps first found that, even when other team members were exceptionally talented and intelligent, one individual''s bad behavior brought down the effectiveness of the entire team. In dozens of trials, conducted over month-long periods, groups with one underperformer did worse than other teams by a whopping 30 to 40 percent.

 

These findings flew in the face of research going back decades, which suggested that individual team members conform to group values and norms. The behavior of the one individual quickly spread to the other group members, even though the groups were together for only forty-five minutes. As Felps explains, "Eerily surprising was how the others on the team would start to take on his characteristics." When the impostor was a slacker, the rest of the group lost interest in the project. Eventually someone else would announce that the task just wasn''t important. If the actor was a jerk, others in the group also started being jerks: insulting one another, speaking abrasively. When the actor was a depressed pessimist, the results were the starkest. Says Felps: "I remember watching this video of one of the groups. You start out all the members are sitting up straight, energized, and excited to take on this potentially challenging task. By the end they have their heads actually on the desk, sprawled out."

 

Felps demonstrated what Patty and I had already learned in 2001. If you have a group with a few merely adequate performers, that performance is likely to spread, bringing down the performance of the entire organization.

 

Most of us can remember moments in our own lives when we have seen this principle of infectious behavior play out firsthand, as I did when I was twelve years old.

 

I was born in 1960 in Massachusetts. I was a pretty average kid with no particular talent or standout ability. When I was in third grade, we moved to Washington, DC. Things would have been OK there, and I had a big group of friends, but on the sixth and seventh grade playground, there was one boy, Calvin, who began to organize fistfights. It wasn''t that he picked on or bullied any of us. But this one kid, otherwise unremarkable, created a pattern of behavior that impacted the way the rest of us behaved and responded to one another. I didn''t want to join in, but the shame of not fighting would have been worse than taking part. And it really mattered for the whole day who won or lost their fight. Without Calvin, our way of responding to one another and playing together would have been dramatically improved. When my father told us we were moving back to Massachusetts, I couldn''t wait to leave.

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Customer reviews

4.6 out of 54.6 out of 5
3,982 global ratings

Top reviews from the United States

Chris Miller
2.0 out of 5 starsVerified Purchase
Boring
Reviewed in the United States on September 12, 2020
Netflix, lost all respect for them. What an embarrassment. Shame on Netflix and Reed Hastings. Check out Cuties on Netflix, you''ll understand why.
43 people found this helpful
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Lonnie Pacelli, Author
4.0 out of 5 starsVerified Purchase
Insightfulness: 5 Stars | Creativity: 4 Stars | Well Written: 4 Stars | Page Turner: 5 Stars
Reviewed in the United States on September 15, 2020
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... See more
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.
32 people found this helpful
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RWI
1.0 out of 5 starsVerified Purchase
Terrible
Reviewed in the United States on September 14, 2020
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... See more
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.
31 people found this helpful
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Michael F. Pitsch
1.0 out of 5 starsVerified Purchase
This is not a story, this is a business book
Reviewed in the United States on September 9, 2020
Disappointed as I was expecting a story of the creation of a company not a business process book.
30 people found this helpful
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Mark P. McDonald
5.0 out of 5 starsVerified Purchase
No Rules Rules, NETFLIX and the Culture of Reinvention – a book review
Reviewed in the United States on September 30, 2020
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... See more
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.
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Amir Moini
5.0 out of 5 starsVerified Purchase
Insider look into Netflix''s work culture
Reviewed in the United States on September 8, 2020
Enjoyed all of the anecdotal stories and was really inspired! Great read.
24 people found this helpful
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CharlieTop Contributor: Philosophy
5.0 out of 5 starsVerified Purchase
Freedom & Responsibility
Reviewed in the United States on November 18, 2020
This book is unique in that it offers first-hand insight into one of the most successful tech companies from the current founder and CEO, Reed Hastings. It is a collaboration with Erin Meyers but Hastings provides a lot of the material. The book explores the differences... See more
This book is unique in that it offers first-hand insight into one of the most successful tech companies from the current founder and CEO, Reed Hastings. It is a collaboration with Erin Meyers but Hastings provides a lot of the material. The book explores the differences between ''freedom and responsibility'' vs ''process and rules'' cultures. The latter is the more traditional style and Hastings points out that in many industries it is still the superior method, particularly where high levels of repeatability are required or mishaps cannot be tolerated. But Hastings specializes in the freedom and responsibility culture and highlights why it is significant and how to develop it. This is based on personal experience and indisputable success. 

He sets the context in relation to Steve Jobs''s famous commencement speech that describes important dots in life and how they connect. Hastings begins by stating the importance of high talent density and how this really is the precondition for the rest. This is an important point because it is likely that close to 100% of startups try to emulate the freedom and responsibility approach, yet most fail. Once you get high talent, then you can start increasing the candor and removing some controls. He also discusses how to get and keep the top people, and covers the negative side of having poor performers or various detractors and those styles can spread across entire sections. He constantly reiterates the importance of transparency and candor and how a lot of places pay lip service to these concepts, but he provides methods to check if your organization truly values these. He covers in detail the importance of feedback and the best ways to give and receive it, and emphasizes the importance of not spinning things. 

This book is very clearly written with the concepts explained in detail and supported by numerous examples. It is a must-read for anyone working in almost any sort of organization. There are tons of valuable pieces of advice and concrete suggestions on how to improve in different areas. It is easy to see why Netflix has so many high-talent individuals and has had so much success after reading about the culture it strives to maintain. Hastings and Meyer demonstrate why for companies striving for innovation and creativity, the freedom and responsibility approach, although difficult to attain, is the optimal way to go. It''s also fascinating to hear the story of the rise of Netflix from the person who started and continues to run it today.
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David Kopec
4.0 out of 5 starsVerified Purchase
The Benefits of Netflix''s Corporate Culture with One Big Blindspot
Reviewed in the United States on December 16, 2020
No Rules Rules is not a history of Netflix. It’s an extended account of the corporate values that have resulted in Netflix’s success as told by its cofounder/CEO Reed Hastings and accomplished business writer & academic Erin Meyer. This well written and clearly explained... See more
No Rules Rules is not a history of Netflix. It’s an extended account of the corporate values that have resulted in Netflix’s success as told by its cofounder/CEO Reed Hastings and accomplished business writer & academic Erin Meyer. This well written and clearly explained book offers insight into managing a creative company using non-traditional management techniques that give employees greater freedom and responsibility. However, the techniques are likely not as widely applicable as the authors imply.

No Rules Rules follows a unique format, in which each author’s voice is clearly pointed out in their sections of each chapter, leading to a kind of dialogue between the two. This format creates balance. Each point is discussed from the insider/pragmatic perspective of Hastings and the more academic perspective of Meyer. Meyer will sometimes backup Hastings’s assertions with research outside of Netflix, or gently pushback against some of his more absolutist tendencies. Meyer appears to have had significant access to employees throughout Netflix while doing her research. However, there’s no section in which she completely disagrees with Hastings, and throughout most of the book the reader is simply getting the same point from multiple perspectives.

The book revolves around the benefits of a corporate culture that empowers individual contributors to make decisions without bureaucratic tape and draconian oversight. This is meant to increase efficiency, improve flexibility, and help employees feel more satisfied with their roles. A couple specific examples are employees deciding for themselves the appropriate amount of vacation to take each year (no vacation policy) and signing contracts without getting approval from their managers. To get to this place of what the book calls “freedom and responsibility” there are certain prerequisites defined by the authors. These include a culture of candid feedback and achieving a high “talent density.”

These corporate values have obviously served Netflix well, but they may not quite be the panacea they seem from reading the book. Unfortunately, despite Meyer’s involvement, the values are somewhat myopically presented within the confines of Netflix. Probably the most controversial point in the book is its assertion that “adequate” employees (sometimes interchangeably referred to as “good” employees) should be let go to make room for hiring “great” employees. This is presented rather uncritically, without the obvious introspection that it is easy for an industry leading organization like Netflix to have its pick of “great” employees waiting at the gates to get an opportunity to work for it when they let go of the “good” employees.

The authors only caveat is that safety or process oriented companies (think nuclear reactor or industrial manufacturing) cannot risk freedom and responsibility. Yet, there are many other creative types of companies that cannot fulfill the prerequisites outlined by No Rules Rules. For example, there are creative companies that due to the limited profits in their industry cannot pay top-dollar and cannot risk letting go of “good” employees because there will be no “great” employees waiting to take their place.

No Rules Rules is a good book for learning more about Netflix, how its corporate culture works, and how it has helped to make it successful. It’s sprinkled with enough interesting anecdotes and good writing to keep your attention. The unique format adds value and the non-traditional management techniques are interesting and surely have some merit. Yet, the book’s failure to acknowledge the unique circumstances of Netflix that make its unique culture possible, stop it from being a “great” book. It’s just a “good” book.
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Top reviews from other countries

Garrett McQuaid
2.0 out of 5 starsVerified Purchase
Its a pretty boring book.
Reviewed in the United Kingdom on October 26, 2020
I thought the book was really really boring maybe it was because I read it straight after reading Lights Out a fascinating read and well written business book on GE. The book starts with a netflix slide Unlike many companies we practice, "Adequate performance gets a...See more
I thought the book was really really boring maybe it was because I read it straight after reading Lights Out a fascinating read and well written business book on GE. The book starts with a netflix slide Unlike many companies we practice, "Adequate performance gets a generous severance package" It turns out generous to them is 4 months paid. and thats for getting kicked out for doing a fair days work. I worked in France, Holland and Ireland you would do well to get rid of somebody who didn''t merit a sacking with 2 YEARS pay and after that they would come back with a case of constructive dismissal and look for another 2 years pay. Good luck to Netflix in Europe if there other 127 slides are like that. In truth the book is a yawn its sounds like more like a story about a big ego CEO than anything else and the book actually put me off ever signing up for the company product......cheers
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Jonathan
3.0 out of 5 starsVerified Purchase
A boring read.
Reviewed in the United Kingdom on September 17, 2020
It is definitely for professionals but the book was so lengthy and exhaustive. I thought it would have more details on how Netflix grew to be so big and all the technical obstacles they had to over come. It just turned out to be a slow read. I read three fourths and had to...See more
It is definitely for professionals but the book was so lengthy and exhaustive. I thought it would have more details on how Netflix grew to be so big and all the technical obstacles they had to over come. It just turned out to be a slow read. I read three fourths and had to just give up. Not a fun read at all.
15 people found this helpful
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TheAxe
3.0 out of 5 starsVerified Purchase
I didn’t learn much.
Reviewed in the United Kingdom on December 27, 2020
A bit of a snooze and not enough content for a book. If you Google for the Netflix Culture deck you’ll get pretty much the same content. Also, Patty McCord’s book covers the same ground. I guess I was hoping for ‘The Story of Netflix’ but this is very much a management...See more
A bit of a snooze and not enough content for a book. If you Google for the Netflix Culture deck you’ll get pretty much the same content. Also, Patty McCord’s book covers the same ground. I guess I was hoping for ‘The Story of Netflix’ but this is very much a management book. Not bad but if you know the culture already then you won’t learn much.
9 people found this helpful
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Alok Kejriwal
5.0 out of 5 starsVerified Purchase
A masterpiece & MUST read
Reviewed in India on December 27, 2020
A masterpiece & MUST read. Netflix is a UNIQUE company with a unique business model & philosophy. It''s obvious that its overpowering leader Reed Hastings runs & scales his business HIS way. Read this book to learn: - How a business book should be written :) The co-author...See more
A masterpiece & MUST read. Netflix is a UNIQUE company with a unique business model & philosophy. It''s obvious that its overpowering leader Reed Hastings runs & scales his business HIS way. Read this book to learn: - How a business book should be written :) The co-author Erin Meyer adds so much value to the entire narrative. - Insights on how ''no rules policies'' (take vacations, spend company money etc) though so hard to swallow seems to work so well for Netflix. (I say ‘seems’ coz I still can''t digest it). - The real-life examples of staffing & empowering super-sized leaders is amazing. If entrepreneurs can set aside their egos & get 100''s of ''better themselves'', they will have a Netflix. - The salary benchmarking & course correction insights are powerful & relevant. - Lessons in transparency: "In 800 BC, Greek merchants whose businesses had failed were forced to sit in the marketplace with a basket over their heads." - AMAZING lessons in Global business management challenges - dealing with the mannerisms & behaviour of countries. - The "Keeper Test"! Simple yet profound! - The AMAZING lesson that the self-regulating traffic around L’Etoile off the Arc de Triomphe teaches us! 20/10
22 people found this helpful
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Tom Ryan
5.0 out of 5 starsVerified Purchase
Heresy in Business Management
Reviewed in the United Kingdom on January 24, 2021
This is a management book, not a history of Netflix. It outlines steps to create an organisation that delivers outstanding innovation and performance. As the authors acknowledge it applies in a limited number of business contexts – creative industries where safety is not an...See more
This is a management book, not a history of Netflix. It outlines steps to create an organisation that delivers outstanding innovation and performance. As the authors acknowledge it applies in a limited number of business contexts – creative industries where safety is not an issue. The approach has a number of key components. The first is approaching the organisation as a high performance sports team rather than a family. This implies hiring only the best and firing those who deliver performance that is less than outstanding. It also implies getting rid of people who put themselves ahead of the team. There are parallels with Sir Alex Ferguson’s approach at Manchester United. This contradicts much of what is currently published on leadership which suggests that everyone must be made to feel valued and bad behaviour is not tackled. Another key component of the approach is taking a ‘real options’ perspective on decisions – which is an increasingly recommended response to uncertainty. The book can be read in a number of ways. It could be read purely for interest: what has Netflix done to achieve its success. It could also be read as a ‘how to’ guide for creative organisations that meet the authors criteria. Perhaps more widely, it could be used to encourage the reader to challenge the assumptions on which their organisation operates in relation to its people and ask how some of these lessons could be used to improve the performance of their organisation. This a very readable book which is also potentially actionable.
4 people found this helpful
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Description

Product Description

The New York Times bestseller

Shortlisted for the 2020 Financial Times & McKinsey Business Book of the Year


Netflix cofounder Reed Hastings reveals for the first time the unorthodox culture behind one of the world''s most innovative, imaginative, and successful companies


There has never before been a company like Netflix. It has led nothing short of a revolution in the entertainment industries, generating billions of dollars in annual revenue while capturing the imaginations of hundreds of millions of people in over 190 countries. But to reach these great heights, Netflix, which launched in 1998 as an online DVD rental service, has had to reinvent itself over and over again. This type of unprecedented flexibility would have been impossible without the counterintuitive and radical management principles that cofounder Reed Hastings established from the very beginning. Hastings rejected the conventional wisdom under which other companies operate and defied tradition to instead build a culture focused on freedom and responsibility, one that has allowed Netflix to adapt and innovate as the needs of its members and the world have simultaneously transformed.

Hastings set new standards, valuing people over process, emphasizing innovation over efficiency, and giving employees context, not controls. At Netflix, there are no vacation or expense policies. At Netflix, adequate performance gets a generous severance, and hard work is irrel­evant. At Netflix, you don’t try to please your boss, you give candid feedback instead. At Netflix, employees don’t need approval, and the company pays top of market. When Hastings and his team first devised these unorthodox principles, the implications were unknown and untested. But in just a short period, their methods led to unparalleled speed and boldness, as Netflix quickly became one of the most loved brands in the world.

Here for the first time, Hastings and Erin Meyer, bestselling author of The Culture Map and one of the world’s most influential business thinkers, dive deep into the controversial ideologies at the heart of the Netflix psyche, which have generated results that are the envy of the business world. Drawing on hundreds of interviews with current and past Netflix employees from around the globe and never-before-told stories of trial and error from Hastings’s own career, No Rules Rules is the fascinating and untold account of the philosophy behind one of the world’s most innovative, imaginative, and successful companies.

Review

“Given the current hostility to the technology sector, the rejection of established H.R. wisdom and intensity of the organizational upheaval promoted by No Rules Rules may generate controversy. Mr. Hastings could have remained under the radar during the Silicon Valley’s cultural maelstrom. Instead, he has entered the fray with an important contribution that provides the beginnings of a road map for the sector to regain trust. . .  No Rules Rules demonstrates that it is not only possible to pursue both freedom and responsibility at the same time, but that for Silicon Valley and the rest of us to thrive together, it is essential.”  —The New York Times 

“Hastings, CEO and cofounder of Netflix, and Meyer, a business professor at INSEAD, team up to explore the organizational cultures, successes, and lessons learned within Netflix. . .  taking turns throughout the book to explain a situation or practice. This format feels conversational, and makes the book very easy to follow. . . Informative, thought provoking, and down-to-earth.”  Booklist

"In alternating sections with Meyer, who provides elaboration based on more than 200 Netflix interviews, Hastings details the making of the Netflix way, from hiring the best creative talent at high pay to increasing candor through frequent feedback and gradually removing controls that stifle innovation. . . Fascinating story of a counterintuitive approach that apparently works." — Kirkus Reviews

"A fascinating analysis of Netflix. . . Highly recommended for leaders eager to build innovative, fast, and flexible teams." — Library Journal, starred review
 
"Aspiring tech moguls should flock to Hastings and Meyer’s energetic and fascinating account." — Publishers Weekly

“I had the privilege of learning from Reed personally and studying the Netflix culture. The insights in this book are invaluable to anyone trying to create and sustain organizational culture.” — Satya Nadella, CEO of Microsoft
 
“As the information age shrinks product cycles and compresses time frames, the most important business question of our era is, How do we keep innovating? In this breakthrough book, Reed Hastings and Erin Meyer provide the answer. They lay out a proven, systematic methodology for building, maintaining, and enhancing a highly innovative global culture. It is an amazing piece of work. Bravo!”— Ben Horowitz, cofounder of Andreessen Horowitz
 
“Reed Hastings learned early what it takes to build an enduring great company. Here in No Rules Rules, he and Erin Meyer teach the culture that propelled Netflix into one of the most distinctive and impactful companies on the planet. Packed with vivid specifics, they illustrate how Hastings melded a spicy concoction into a framework of freedom and responsibility. Well-written and fast-paced, timeless and timely, inspired and practical, smart and wise—read it and learn the Netflix secret sauce from the master himself!” —Jim Collins, author of Good to Great, co-author of Built to Last and Beyond Entrepreneurship
 
“Forget reinventing television; Reed Hastings'' real achievement is reinventing corporate culture, and in No Rules Rules, Reed reveals all the tactics and processes that he’s used to make Netflix one of the 21st century’s most innovative companies. Clear, compelling, fascinating, and (for a book about Netflix), appropriately binge-worthy, No Rules Rules is the book I wish I had read when I was starting out, and it’s the book I’ll be giving to every CEO I work with. It’s simply a must-have for any business leader.” —Marc Randolph, Netflix co-founder and author of That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

 “Netflix’s unique culture of freedom and responsibility and its flexibility to adapt are fueling its remarkable rise around the world. In No Rules Rules, Reed Hastings and Erin Meyer reveal the fascinating story of Netflix success, while providing actionable lessons for leaders on how to attract top talent and unleash their creative energies to drive excellence.” —Susan E. Rice, former U.S. national security adviser and permanent representative to the United Nations

About the Author

Reed Hastings is an entrepreneur who has revolutionized entertainment since cofounding Netflix in 1997, serving as its chairman and CEO since 1999. His first company, Pure Software, was launched in 1991 and was acquired just before Netflix launched. Hastings served on the California State Board of Education from 2000 to 2004 and is an active educational philanthropist. He has sat on the board of several educational organizations including Dreambox Learning, the KIPP Foundation, and the Pahara Institute. He received a BA from Bowdoin College in 1983 and an MSCS in artificial intelligence from Stanford University in 1988. Between Bowdoin and Stanford, Reed served in the Peace Corps as a volunteer teacher in southern Africa.


Erin Meyer is the author of The Culture Map: Breaking Through the Invisible Boundaries of Global Business and a professor at INSEAD, one of the world’s leading international business schools. Her work has appeared in Harvard Business Review, The New York Times, and Forbes.com. In 2019, Meyer was selected by the Thinkers50 as one of the fifty most influential business thinkers in the world. She received an MBA from INSEAD in 2004, and she currently lives in Paris, France. In 1994 and 1995 Meyer also served in the Peace Corps as a volunteer teacher in southern Africa. Visit erinmeyer.com for more information.

Excerpt. © Reprinted by permission. All rights reserved.

1

 

A Great Workplace Is Stunning Colleagues

 

In the 1990s, I liked to rent VHS videos from the Blockbuster down the street from our house. I''d take two or three at a time and return them quickly to avoid late fees. Then one day I moved a pile of papers on the dining room table and saw a cassette that I''d watched weeks ago and forgotten to return. When I took the movie back to the store, the woman told me the fee: $40! I felt so stupid.

 

Later, that got me thinking. Blockbuster made most of its margin from late fees. If your business model depends on inducing feelings of stupidity in your customer base, you can hardly expect to build much loyalty. Was there another model to provide the pleasure of watching movies in your own living room without inflicting the pain of paying a lot when you forgot to return them?

 

In early 1997, when Pure Software was acquired, Marc Randolph and I started thinking about opening a movies-by-mail business. Amazon was having good luck with books. Why not films? Customers would rent VHS cassettes from our website and be able to return them via the mail. Then we learned it would cost $4 to mail the VHS cassette each way. There wasn''t going to be a big market. It was too expensive.

 

But a friend told me about a new invention called DVDs, which would be coming that fall. "They''re like CDs but hold a movie," he explained. I raced to the post office and mailed myself several CDs (I couldn''t find an actual DVD for my test). Each cost thirty-two cents to mail. Then I went back to my place in Santa Cruz and waited anxiously for them to arrive. Two days later they dropped through the mail slot, unharmed.

 

In May 1998, we launched Netflix, the world''s first online DVD rental store. We had thirty employees and 925 movie titles, which was almost the entire catalog of DVDs available at the time. Marc was the CEO until 1999, when I took over and he became one of our executives.

 

By early 2001, we''d grown to 400,000 subscribers and 120 employees. I tried to avoid the leadership fumbles of my Pure Software days, and although we avoided implementing excessive rules and controls this time, I also couldn''t characterize Netflix as a particularly great place to work. But we were growing, business was good, and work for our employees was OK.

 

Lessons from a Crisis

 

Then, in the spring of 2001, crisis struck. The first internet bubble burst, and scores of dot-coms failed and vanished. All venture capital funding stopped, and we were suddenly unable to raise the additional funds we needed to run the business, which was far from profitable. Morale in the office was low, and it was about to get lower. We had to lay off a third of our workforce.

 

I sat down with Marc and Patty McCord-Patty had come with me from Pure Software and was head of Human Resources-and we studied the contribution of each employee. We didn''t have any obviously poor performers. So we divided the staff into two piles: the eighty highest performers who we would keep and forty less amazing ones we would let go. Those who were exceptionally creative, did great work, and collaborated well with others went immediately into the "keepers" pile. The difficulty was that there were many borderline cases. Some were great colleagues and friends but did adequate rather than great work. Others worked like crazy but showed uneven judgment and needed a lot of hand-holding. A few were exceptionally gifted and high performing but also complainers or pessimists. Most of them would have to go. It wasn''t going to be easy.

 

In the days before the layoffs, my wife remarked how on edge I was, and she was right. I worried that motivation in the office would plummet. I was convinced that, after I''d let go of their friends and colleagues, those who stayed would think that the company wasn''t loyal to employees. It was bound to make everyone angry. Even worse, the "keepers" would have to shoulder the work of those let go, which seemed certain to lead to bitterness. We were already short on cash. Could we bear a further collapse in morale?

 

The day of the layoffs arrived, and it was awful, as expected. Those who we laid off cried, slammed doors, and shouted in frustration. By noon it was finished, and I waited for the second half of the storm: the backlash from the remaining employees. . . . But, despite some tears and visible sorrow, all was calm. Then, within a few weeks, for a reason I couldn''t initially understand, the atmosphere improved dramatically. We were in cost-cutting mode, and we''d just let go of a third of the workforce, yet the office was suddenly buzzing with passion, energy, and ideas.

 

A few months later the holidays arrived. DVD players were popular that Christmas, and by early 2002, our DVD-by-mail subscription business was growing rapidly again. Suddenly, we were doing far more work-with 30 percent fewer employees. To my amazement, those same eighty people were getting everything done with a passion that seemed higher than ever. They were working longer hours, but spirits were sky-high. It wasn''t just our employees who were happier. I''d wake up in the morning and couldn''t wait to get to the office. In those days, I drove Patty McCord to work every day and when I swung up to her house in Santa Cruz, she would practically leap into the car with this big grin: "Reed, what''s going on here? Is this like being in love? Are these just some wacky chemicals and this thrill is going to wear off?"

 

Patty had put her finger on it. The entire office felt like it was filled with people who were madly in love with their work.

 

I''m not advocating for layoffs, and fortunately we haven''t had to do anything like that at Netflix since. But in the days and months following those 2001 layoffs, I discovered something that completely changed the way that I understand both employee motivation and leadership responsibility. This was my road to Damascus experience, a turning point in my understanding of the role of talent density in organizations. The lessons we learned became the foundation of much that has led to Netflix''s success.

 

But before we go on to describe those lessons, I should give Patty a proper introduction because she played a critical role in the development of Netflix for over a decade, and her protŽgŽ, Jessica Neal, runs HR for Netflix today. I first met Patty McCord while at Pure Software. In 1994 she called the office out of the blue and asked to speak to the CEO. My younger sister was answering the phones in those days, and she put Patty right through. Patty was raised in Texas, which I could hear faintly in the way she spoke. She said she was currently working for Sun Microsystems in the HR department, but she''d like to come to Pure Software and run HR for us. I invited her in for a cup of coffee.

 

During the first half of the meeting, I couldn''t understand anything Patty was saying. I asked her to tell me her HR philosophy, and she said: "I believe that every individual should be able to draw a line between their contribution to the corporation and their individual aspirations. As the head of human capital management, I would work with you, the CEO, to increase the emotional intelligence quotient of our leadership and improve employee engagement." My head started to spin. I was young and unpolished and after she stopped, I said: "Is that how all HR people speak? I couldn''t understand a word. If we are going to work together you are going to have to stop talking like that."

 

Patty was insulted, and she told me so straight to my face. When she got home that evening and her husband asked her how the interview had gone, she told him, "Bad. I got in a fight with the CEO." But I loved the way she told me exactly what she thought of me. So I gave her the job, and since then we have had a frank, long-lasting friendship, which has persisted even after her departure from Netflix. It may be partly because we''re so different: I''m a math wonk and a software engineer, she''s an expert in human behavior and a storyteller. When I look at a team, I see numbers and algorithms that connect the people and discussions. When Patty looks at a team, she sees emotions and subtle interpersonal responses that are invisible to me. Patty worked for me at Pure Software until we sold it in 1997, and she joined us early at Netflix.

 

Patty and I spent dozens of car rides following the 2001 layoffs trying to figure out why the work environment had taken a sharp turn for the better and how we could maintain this positive energy. We came to understand that what Patty referred to as our dramatic increase in "talent density" was behind the improvements.

 

Talent Density: Talented People Make

One Another More Effective

 

Every employee has some talent. When we''d been 120 people, we had some employees who were extremely talented and others who were mildly talented. Overall we had a fair amount of talent dispersed across the workforce. After the layoffs, with only the most talented eighty people, we had a smaller amount of talent overall, but the amount of talent per employee was greater. Our talent "density" had increased.

 

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.

 

Our employees were learning more from one another and teams were accomplishing more-faster. This was increasing individual motivation and satisfaction and leading the entire company to get more done. We found that being surrounded by the best catapulted already good work to a whole new level.

 

Most important, working with really talented colleagues was exciting, inspiring, and a lot of fun-something that remains as true today with the company at seven thousand employees as it was back then at eighty.

 

In hindsight, I understood that a team with one or two merely adequate performers brings down the performance of everyone on the team. 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.

 

For top performers, a great workplace isn''t about a lavish office, a beautiful gym, or a free sushi lunch. It''s about the joy of being surrounded by people who are both talented and collaborative. People who can help you be better. When every member is excellent, performance spirals upward as employees learn from and motivate one another.

 

Performance Is Contagious

 

From the 2001 layoffs, Reed learned that performance-both good and bad-is infectious. If you have adequate performers, it leads many who could be excellent to also perform adequately. And if you have a team consisting entirely of high performers, each pushes the others to achieve more.

 

Professor Will Felps, of the University of New South Wales in Australia, conducted a fascinating study demonstrating contagious behavior in the work environment. He created several teams of four college students and asked each team to complete a management task in forty-five minutes. The teams who did the best work would receive a financial reward of one hundred dollars.

 

Unbeknownst to the students, some teams included an actor, who played one of several roles: a "Slacker" who would disengage, put his feet up on the table, and send text messages; a "Jerk" who would speak sarcastically and say things like, "Are you kidding me?" and "Clearly, you''ve never taken a business class before"; or a "Depressive Pessimist" who would look like his cat had just died, complain the task was impossible, express doubt that the team could succeed, and sometimes put his head on the desk. The actor did so without tipping off the rest of the team that he was anything other than a regular student.

 

Felps first found that, even when other team members were exceptionally talented and intelligent, one individual''s bad behavior brought down the effectiveness of the entire team. In dozens of trials, conducted over month-long periods, groups with one underperformer did worse than other teams by a whopping 30 to 40 percent.

 

These findings flew in the face of research going back decades, which suggested that individual team members conform to group values and norms. The behavior of the one individual quickly spread to the other group members, even though the groups were together for only forty-five minutes. As Felps explains, "Eerily surprising was how the others on the team would start to take on his characteristics." When the impostor was a slacker, the rest of the group lost interest in the project. Eventually someone else would announce that the task just wasn''t important. If the actor was a jerk, others in the group also started being jerks: insulting one another, speaking abrasively. When the actor was a depressed pessimist, the results were the starkest. Says Felps: "I remember watching this video of one of the groups. You start out all the members are sitting up straight, energized, and excited to take on this potentially challenging task. By the end they have their heads actually on the desk, sprawled out."

 

Felps demonstrated what Patty and I had already learned in 2001. If you have a group with a few merely adequate performers, that performance is likely to spread, bringing down the performance of the entire organization.

 

Most of us can remember moments in our own lives when we have seen this principle of infectious behavior play out firsthand, as I did when I was twelve years old.

 

I was born in 1960 in Massachusetts. I was a pretty average kid with no particular talent or standout ability. When I was in third grade, we moved to Washington, DC. Things would have been OK there, and I had a big group of friends, but on the sixth and seventh grade playground, there was one boy, Calvin, who began to organize fistfights. It wasn''t that he picked on or bullied any of us. But this one kid, otherwise unremarkable, created a pattern of behavior that impacted the way the rest of us behaved and responded to one another. I didn''t want to join in, but the shame of not fighting would have been worse than taking part. And it really mattered for the whole day who won or lost their fight. Without Calvin, our way of responding to one another and playing together would have been dramatically improved. When my father told us we were moving back to Massachusetts, I couldn''t wait to leave.

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2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale

2021 new arrival No online Rules Rules: Netflix and the Culture of popular Reinvention online sale