Book Review by Taylor Berrett
You would be hard-pressed to find a more famously successful company than Netflix over the last decade. Not only did they revolutionize the movie and series rental industry, essentially invent the concept of a streaming service, and single handedly took down the massive Blockbuster empire, they then went on to transform the moviemaking and television production business itself by creating and funding their own content through their platform.
Now, CEO and Netflix founder Reed Hastings has partnered with business expert and professor Erin Meyer to share how they did it— less from the perspective of their business decisions, instead focusing on their company culture and the environment Hastings feels has helped lead to their success.
At its core, No Rules Rules is an expanded look at Netflix’s foundational culture document— which Hastings already published for the public way back in 2009, before they’d become the unstoppable phenomenon they are now.
Insights on Corporate Culture from Surprising Sources
One of the hallmarks of Hastings’ approach to executive management— and how he shares that approach with the world— has been his willingness to draw inspiration from and lay bare his own personal life.
For example, in one section of the book Hastings details how the Netflix policy of frank, unfiltered feedback was inspired by marriage counseling he and his wife received that encouraged them to ‘say exactly what they really thought, but with positive intent.”
Hastings is also quick to acknowledge many of his own mistakes— including the decision to separate Netflix streaming and DVD mailing businesses into two separate entities, a total disaster that lasted less than a month. Hastings also acknowledges that the approach of encouraging freedom and personal responsibility isn’t necessarily adopted throughout the company. For example, he states that there are many areas, such as employee safety and sexual harassment policy, where ‘error prevention is clearly more important than innovation.’
The Costs of Doing Things the Netflix Way
The warts-and-all style that Hastings and Meyer write with can sometimes leave the reader questioning whether some of the advice in the book is sound. For example, the book details how the company’s policy of not requiring employees to receive pre-approval for expenses and many decisions led to one employee being reimbursed for $100,000 in personal holidays, vacations, and luxuries before a manager caught on after an audit of that employee’s receipts.
However, the unconventional approach appears in other, more flattering ways as well. One anecdote outlines how employees are encouraged to get salary estimates from any recruiters who reach out to them and then communicate those estimates to their bosses. This is designed to empower bosses to match these offers in order to retain great employees— a practice that Hastings says costs much less than losing people and having to replace them.
Is Netflix any more revolutionary in its company culture than many other tech companies making waves in the modern market? Not necessarily. But Hastings and Meyer do as good a job at communicating that culture in a repeatable way as any book on the topic so far. That makes No Rules Rules a great place to start for anyone looking to establish a unique, empowering and successful culture at their own start-up or established company.
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Taylor Berrett is a freelance writer, editor, and host of the podcast Alone in a Room. His other book reviews can be found here.