No Rules Rules

No Rules Rules discusses the origin of Netflix’s radical organisational culture of freedom and responsibility and the steps for its implementation. From novel concepts like increasing talent density and radical candor, to bold moves like removing vacation policy and paying top of the market, that Netflix’s organisation culture worked out so well is nothing short of a miracle. And yet when written out, it all makes so much sense.

The journey towards building a culture of freedom and responsibility is as follows:

1. Increase talent density. Hire talented people. Fire those that don’t make the cut. What results is a smaller team of amazingly talented people.

2. Require feedback and candor. One of the responsibilities of a Netflix employee is to provide feedback. Feedback should be given swiftly and appropriately, but most importantly, with absolute honesty.

3. Get rid of vacation, travel and expense policies. Perhaps the most unthinkable step. But it works. No tracking of leaves, no complex criteria for claiming

4. Pay top of the market. Netflix pays its employees based on the market. No raises, no bonuses. Just what the market dictates for each role (e.g. software engineer, production manager) and then some.

5. Open the books. Literally all of them. Employees should know how the company is doing, and how their efforts have contributed to the company’s success.

6. No approvals needed. Approvals slow things down, and they also leave the decision to someone who doesn’t understand the problem and solutions as well.

7. The keeper test. “If I told you I was leaving the company to work for a competitor, how hard would you fight to keep me and try and convince me to change my mind?”

8. A circle of feedback. Establish ways to encourage employees to give feedback, like through dedicated annual sessions. Leaders can volunteer to receive feedback first.

9. Lead with context, not control. The role of a leader is to provide context to help in decision making, not to make decisions for those reporting to them.

10. Adapting to new cultures. When going international, adaptations must be made for differences in local culture. Japanese might be too afraid to give feedback against their bosses, while Dutch might be a little too blunt.

My most useful takeaway from this book would be the 4A feedback guidelines, which describe how to give and receive feedback. Aim to assist when giving feedback instead of just firing blindly, which might render the feedback ineffective. Give actionable feedback, so that the receiving party is most able to act on it swiftly. Appreciate feedback given to you, since effort has been made by the other party to help improve you. Choose to accept or discard it, since not all feedback might be correct or given with the right context. The 4A guidelines are a simple and pragmatic way of looking at feedback, which I’ll most certainly apply to my daily life.

No Rules Rules was an easy, digestable read. It was also rather unique, having been written by two separate authors (Reed Hastings and Erin Meyer) giving the book two distinct perspectives. The introduction of each principle was always accompanied by relevant stories from Netflix employees. This made the book much more relatable and engaging.

The culture at Netflix has grown to be an inspiration to those wanting to start their own company in the future, and a great resource for those facing growing pains in their own organisations.

I guess the lesson here is that collaboration will always be a complicated, chaotic mess, especially for organisations that grow to the size of Netflix. But through channelling creativity and innovation, and making bold decisions along the way, you can create something magical.