There is a famous Peter Drucker quote which goes, "Culture eats strategy for breakfast". I was younger and more naive when I came across the said quote years ago, and found it quite memorable and quotable. But I couldn't really understand how culture could make a meal out of strategy. Nowadays, with a little more maturity and leadership responsibilities, I think about culture - for breakfast, lunch and dinner, and sometimes in my dreams. I should make it clear that the "Culture" I am referring to is not the one endemic to nations, religious or ethno-linguistic groups, but to Corporate groups. I am talking about the Culture at work. I have been reading about cultures at world class organizations, so when Reed Hastings, along with Erin Meyer, decided to pen down the culture he created at Netflix, the timing couldn't have been better.
No rules rules is a part-biographical and a part how-to-guide of how Mr. Hastings went about creating the culture that seems to be one of the factors for the great success Netflix has enjoyed. Netflix, which is turning 23, is a company that is coming from the era of cassette-tape video rentals, and has survived four major transitions.
● From mailing DVDs to users, to allowing letting them stream content over internet
● From streaming old content, to creating its own content produced by external studios
● From using external studios to creating content using its in-house studio
● From a US only company to a global one, and this transition practically happened overnight
Mind boggling, isn't it? Vertical integration in the Entertainment industry, at its best. I am sure that while culture alone couldn't explain all the success, it must account for some part of it. It is worth noting that Mr. Hastings didn't get it right the first time. His approach to creating the culture in his prior venture, Pure Software, was quite traditional. Neither did the thought of creating a ground-breaking culture strike him when he started Netflix.
It was only when Netflix had survived the first few years, that included the dot-com-boom and a round of retrenchment, and attained some stability that Mr. Hastings consciously set about creating a culture that would eventually become a competitive advantage. My own takeaway from this is that in the early stages of a startup, where each day is a quest for survival, attempting a Netflix might be impractical, if not impossible. But I suppose, the earlier you start, the better off you might be.
Eleven years before the release of this book, in 2009, Netflix shared its culture in the form of a 125 slide long presentation to the world. Even if you don't have the time, patience or inclination to plough through this book, it would be a worthwhile investment to flip through the slides at least once, and let your eyes rest at the eye-popping bits, such as:
● Adequate performance gets a generous severance package
● The keeper test managers use: Which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?
● The no vacation policy, where vacation days are not assigned or tracked, and employees are free to take as many leaves as they want
● The absence of a travel and expense policy, in a similar vein to the "no vacation policy"
The aforementioned policies are a part of the radical culture at Netflix. I especially like the analogy of Netflix being a corporate team, and its employees being the players. This makes so much more sense than the use of the "we-are-a-family" analogy. If your daughter or your uncle are not meeting their "KPI's", can you fire them from your "family"? Business is a team sport, and the idea of companies akin to Corporate teams makes so much sense.
Another great thing about the Netflix culture is the emphasis on leading with context and not with control. Whether or not you have the stomach to implement "no vacation policy" policy, the idea of leading with context is a sound one that can and should be implemented from Day one. It is much easier said than done, but, if you are able to achieve even moderate success in leading with context, the people you lead would be so empowered.
The approach to writing this book is quite interesting as well. It was written by Reed Hastings, one of the founders and CEO of Netflix, and Erin Meyers, a professor at INSEAD whose specialty is how to navigate cultural differences in a global environment (I also recommend Erin Meyer's "The Culture Map" if you want to go down the culture rabbit hole). This ensured that the book is much more balanced, and you also get to hear the story from somebody who is not heavily invested in Netflix. The book is replete with examples of how this culture came to be and how various employees have learned to imbibe through trials and tribulations, both successfully and unsuccessfully.
I highly recommend this book for leaders at any level, and in any company throughout the world. You might say that what works for Netflix, a technology company birthed in one of the most advanced Western industrialized nations, will most probably not work anywhere else. Obviously not. Cultural practices cannot be imported from one organization to the other, that goes without a saying. But the ideas in the book and the motivation behind those ideas are very well worth ruminating over. At the end of the day, we all have to come up with our own version of the rules that would work and the culture that we want at our workplaces. All Reed Hastings and Erin Meyer have done is to show us the possibilities.
An amazing article by one of the winners of our Asproutling Writers, our very own Kislay, the Vice President of Product for Sprout!
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