No Rules Rules

No Rules Rules by Reed Hastings and Erin Meyer explores the work culture at Netflix. It explains the culture through three mechanisms: talent, candor (feedback), freedom (remove controls). The three mechanisms are explained at three levels (three feedback loops of more and more talent, candor, and freedom).

The principles do not apply to my current business and will probably not directly impact my work substantially. But, as with similar books, like Rework, I think I can incorporate parts of the lessons in my own work and working together with others on projects.

Here is a quick summary, based on the chapters of the book. Do note that the steps are sequential. And although this is no exact science, I do think that you need the earlier steps to make the latter possible.

  1. First build up talent density – workforce of high performers
    • in creative jobs (Netflix), stunning employees vastly outperform mediocre ones
    • bad employees (jerks, slackers, etc) bring down performance of the rest (let them go quickly)
  2. Then increase candor – encouraging loads of feedback
    • we hate getting it, but love having gotten it
    • giving feedback: aim to assist, actionable
    • receiving feedback: appreciate, accept or discard
    • feedback loop enables high performers to improve
  3. Now begin removing controls – vacation, travel, expense policies
    • no vacation policy = same time taken, more flexible, more satisfied
    • expense: spend money as if it were your own, act in Netflix’s best interest (do audit stuff randomly)
  4. Fortify talent density – paying top of market
    • for creative roles (not operational roles), but most jobs at Netflix are creative
    • bonus system sucks, we can’t predict performance
    • so pay based on the market (and then above)
  5. Pump up candor – organizational transparency
    • share numbers (and other ‘confidential’ data) with employees
  6. Now release more controls – decision-making approvals (out)
    • “don’t seek to please your boss, seek to do what is best for the company”
    • take the boss out of the equation, let the person in the know make the decision
    • for ideas (innovation cycle), 1) farm for dissent/socialize idea, 2) test out (if big idea), 3) make your bet, 4) celebrate or ‘sunshine’ (why it went wrong)
  7. Max up the talent density – Keeper Test
    • We’re a team, not a family”
    • If someone wants to leave, do you fight to keep them (Keeper Test)
    • Be open about why someone is let go (don’t make culture of fear, turnover at Netflix isn’t sky high)
  8. Max up candor – circles of feedback
    • 360 feedback but with names, no ratings, and not connected to pay
    • live 360 dinners
  9. And eliminate most controls – leading with context, not control
    • works only if the company is ‘loosely coupled’ (few interdependencies, e.g. opposite is building airplane)
    • Highly aligned, loosely coupled”
    • The alignment can be seen as a tree (not pyramid), everyone working on smaller and smaller branches of same trunk/goal/north star