No Rules Rules: Netflix and the Culture of Reinvention

by Reed Hastings

“say what’s on your mind, to hell with the cost.”

They have documents explaining what effective feedback looks like. They have sections of training programs where people learn how and practice giving and receiving it.

Clearly explain how a specific behavior change will help the individual or the company, not how it will help you.

Natural human inclination is to provide a defense or excuse when receiving criticism;

we all reflexively seek to protect our egos and reputation.

instead ask yourself, “How can I show appreciation for this feedback by listening carefully, considering the message with an open mind, and...

But both you and the provider must understand that the decision to react to the feedback is entirely up to the recipient.

Many have been deeply conditioned to wait for the right moment and the right conditions before telling the truth, so that the usefulness of the feedback often all but fades away.

But if you manage to inculcate an effective culture of candor, all involved would recognize that this feedback from Bianca was a gift.

But with a lot of brilliant people running around, you run a risk. Sometimes really talented people have heard for so long how great they are, they begin to feel they really are better than everybody else. They might smirk at ideas they find unintelligent, roll their eyes when people are inarticulate, and insult those they feel are less gifted than they are. In other words, these people are jerks.

you have to get rid of the jerks.

And their favorite way to do that is often by stabbing their colleagues in the front and then offering, “I was just being candid.”

This requires reflection and sometimes preparation before you give feedback, as well as monitoring and coaching from those in charge.

it put the onus on me to think about the answer and triggered a moment of self-reflection.

“Never give criticism when you’re still angry”

“Use a calm voice when giving corrective feedback”

entire community speaks openly about which individual behaviors advance the company, and which don’t, the boss doesn’t have to get so involved in overseeing an employee’s work.

Well before Netflix, I believed that the value of creative work should not be measured by time.

“Let’s give Sherry a promotion because she’s making a huge impact,” not because she’s chained to her desk.

What if Sherry’s accomplishing amazing things working a twenty-five-hour week from a hammock in Hawaii? Well, let’s give her a big raise! She’s extremely valuable.

Neil had dreamed up a new mathematical algorithm to improve the way we select the movies to offer our customers.

Unlimited vacation helps attract and retain top talent, especially Gen Z-ers and millennials, who resist punching clocks.

Most important, the freedom signals to employees that we trust them to do the right thing, which in turn encourages them to behave responsibly.

Which is why, if you want to remove your vacation policy, start by getting all leaders to take significant amounts of vacation and talk a lot about it.

She told us that she wanted to see our postcards from Indonesia or Lake Tahoe posted all over the office, and that when Ted Sarandos got back from his July holiday to Southern Spain, she expected everyone to sit through his 7,000-photo slideshow.

If the CEO doesn’t model this, the method can’t work.

“The Netflix culture has great ideals but sometimes the gap between the ideals and practice is big, and what should bridge that gap is leadership. When leaders don’t set a good example … I guess I’m what happens.”

“What we say as leaders is only half the equation,” Greg explains. “Our employees are also looking at what we do. If I say, ‘I want you to find a sustainable and healthy work-life balance,’ but I’m in the office twelve hours a day, people will imitate my actions, not follow my words.”

“Not that you can take more or less days off, but that you can organize your life in any crazy way you like—and as long as you do great work nobody bats an eyelid.”

Greg, an American, managed to get an entire office of Japanese people to work and vacation like Europeans.

“Thanks to your brilliant idea to remove the vacation policy, we’re going to close the books late this year.”

A member of this director’s team, tired of always having to work the first two weeks of January—the annual crunch period for accountants—had claimed her right to take those two weeks off, throwing the department into chaos.

In the absence of written policy, every manager must spend time speaking to the team about what behaviors fall within the realm of the acceptable and appropriate.

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 culture of candor, if anyone abused the system or took advantage of the freedom allotted, others would call them out directly and explain the undesirable impact of their actions.

“When I saw how senior management spends their time, I lost confidence in the company,” he

didn’t want our talented employees to feel that dumb rules were preventing them from using their brains to do what was

We had proved that with the right employees, clear modeling from management, and enough context setting, we could get along perfectly fine without a bunch of rules.

The only situation we could agree on was that if an employee steals from the company he should lose his job.

Real life is so much more nuanced than any policy could ever address.

wasn’t born with a silver spoon in my mouth and I don’t require luxury. When Reed said to travel like I would with my own money, for me that meant flying economy and staying in modest hotels. I’m a finance guy and that just seemed fiscally responsible.

That’s when I saw the entire Netflix content team sitting in first class,

They weren’t embarrassed to be sitting in first class. They were embarrassed for me—that a key executive at the company would be sitting back in economy!

Of course, some people are honest and frugal, but the vast majority are looking for a way to maximize personal gain.

Studies show that well over half the population will readily cheat the system to get more for themselves if they think they won’t be caught.

That’s because of the context set on the front end and the checks made at the back end.

But if you’d feel a little uncomfortable explaining your choice, skip the purchase, check in with your boss, or buy something cheaper.

At Netflix you don’t have to complete a purchase order and wait for approval to buy something.

But that doesn’t mean no one pays attention to what you spend. The

Usually after just one or two conversations clarifying context your employees will get the hang of how to spend the company’s money wisely and that will pretty much take care of