No Rules Rules: Netflix and the Culture of Reinvention

Written by Reed Hastings and Erin Meyer

Narrated by Jason Culp and Allyson Ryan

Netflix cofounder Reed Hastings reveals for the first time the unorthodox culture behind one of the world's most innovative, imaginative, and successful companies

There has never before been a company like Netflix. It has led nothing short of a revolution in the entertainment industries, generating billions of dollars in annual revenue while capturing the imaginations of hundreds of millions of people in over 190 countries. But to reach these great heights, Netflix, which launched in 1998 as an online DVD rental service, has had to reinvent itself over and over again. This type of unprecedented flexibility would have been impossible without the counterintuitive and radical management principles that cofounder Reed Hastings established from the very beginning. Hastings rejected the conventional wisdom under which other companies operate and defied tradition to instead build a culture focused on freedom and responsibility, one that has allowed Netflix to adapt and innovate as the needs of its members and the world have simultaneously transformed.

Hastings set new standards, valuing people over process, emphasizing innovation over efficiency, and giving employees context, not controls. At Netflix, there are no vacation or expense policies. At Netflix, adequate performance gets a generous severance, and hard work is irrel­evant. At Netflix, you don’t try to please your boss, you give candid feedback instead. At Netflix, employees don’t need approval, and the company pays top of market. When Hastings and his team first devised these unorthodox principles, the implications were unknown and untested. But in just a short period, their methods led to unparalleled speed and boldness, as Netflix quickly became one of the most loved brands in the world.

Here for the first time, Hastings and Erin Meyer, bestselling author of The Culture Map and one of the world’s most influential business thinkers, dive deep into the controversial ideologies at the heart of the Netflix psyche, which have generated results that are the envy of the business world. Drawing on hundreds of interviews with current and past Netflix employees from around the globe and never-before-told stories of trial and error from Hastings’s own career, No Rules Rules is the fascinating and untold account of the philosophy behind one of the world’s most innovative, imaginative, and successful companies.

*Includes a PDF containing examples of Netflix Culture Maps from the book.

• Language: English
• Publisher: Penguin Audio
• Release date: Sep 8, 2020
• ISBN: 9781984891174

Reviews for No Rules Rules

[sonyvegas-226478 · Rating: 2 out of 5 stars]

While reading this book I came to the conclusion that it is at times informative but needlessly long and quite uninspiring. To formulate it in slightly exaggerated terms, after reading you almost feel like a small part of your soul left your body because it couldn't bear another sentence of a "high performing" corporate propagandist.

[bookanonjeff · Rating: 5 out of 5 stars]

Interesting Look At Business Practices Less Common Than Many Claim. Let me be clear here: I am a 14 year professional software developer in my "day job". I've worked for very small companies with barely 100 people and owned by a single person all the way to one of the largest companies on the planet (Fortune 50). And because I've had a 14 year career in this field as of 2021, that means this has all been done since NetFlix has been doing its thing.

And yet while I've heard that the Valley works a bit differently than the East Coast / Southern companies I've worked for, I'd never heard of several of the policies Hastings and Meyer discuss in this text. For this developer, most of them sound *phenomenal*, and I would *love* to work in environments that had them. Though there are others - "Adequate performance is given a generous severance" in particular - that would exacerbate issues I've already had at times in my career. Here, Hastings explains the reasons he adopted these policies at NetFlix and how they have grown over the company's existence. Meyer provides a degree of "outsider feedback" going around interviewing people at all levels from Hastings to the janitors and examining the claims Hastings makes.

Overall, this is a solid business book explaining these policies, why NetFlix chose them, why other businesses should - or should not, in certain situations - and how they can begin to be implemented in any company. More for Executives than heads down coders or low level team leads, though there are some interesting points even at those levels. It is absolutely something business leaders should read and ponder, and it is a good primer for those who may want to push for similar changes in their own companies. Very much recommended.

[willszal-1 · Rating: 3 out of 5 stars]

Before reading this book, you should read Carol Sanford's "No More Feedback."

Before getting into the book review, I'll ask a question on epistemology: how do we choose a management theory? Just like dieting, there are books that well tell us just about anything about management theory: give lots of feedback; don't give any feedback; pay your employees well; pay your employees cheaply.

You might respond: "I'll do what works. Show me the data." But this is a cop out—different approaches have different micro results based on their contexts. On the other hand, practices eventually influence the noosphere, and shift the cosmology of an industry or domain. In other words, whatever management theory you implement will influence your domain—not just through its results, but also through the assumptions it makes about human nature.

Now to move into the book review:

The book is structured in a four-tiered spiral. Each cycle moves through these steps: increase talent density, increase candor, remove controls.

Now to come back to a contrast with Sanford's work—the fundamental question in both books is whether or not humans can develop, and how?

To oversimplify:

Hastings and Meyer assume a behavioral approach—people are a product of the expectations placed on them, and there's only so much we can do to work with an individual's potential. Most people aren't exceptional, so we need to put in place gated strategies that weed out the bottom nine tenths of the bell curve.

Sanford assumes a regenerative paradigm: each person, and each company, have an essence, and the capacity of both in manifesting the potential of that essence is limitless. Her basic framework aims to further internal agency, external considering, and an internal locus of control.

Hastings and Meyer's title heralds a work culture of freedom and responsibility. And yet are you really free if you're part of a team where you get fired for one improper expense, or one innovative quarter? On control spectrum, Hastings and Meyer seem to be claiming that they've moved away from control, but they've simply traded hard control (traditional hierarchies) for soft control (be creative—but if we don't like your work, we can fire you at any time). Sanford's approach, on the other hand, moves beyond both hard and soft control into something entirely different.

Is Netflix's approach comprehensible and something that can be implemented without a lot of creativity? Yes. Is it revolutionary? No.

[Enrique · Rating: 4 out of 5 stars]

No vacation policy
Netflix is a pioneering company in the streaming industry. In recent years, it has seen a considerable uptick in subscriber growth, strengthened by the lockdowns caused by the pandemic. It is an unstoppable machine... Currently, it operates in 190 countries and has over 158 million subscribers.
In the book "No Rules Rules: Netflix and the Culture of Reinvention," written by Reed Hastings, a computer engineer from Stanford University with a graduate degree in artificial intelligence, who founded his first company, Pure Software, in 1991 and is now the chairman and CEO of Netflix, one of the most creative and successful companies in Silicon Valley, and by writer Erin Meyer, author of the book "The Culture Map: Breaking Through the Invisible Boundaries of Global Business," we are introduced to the story of Netflix, its failures and successes over the past 20 years.
One of the important aspects considered at Netflix to maintain its position as a market leader is to hire the best talent for its various positions and pay them a salary that is above the market rate. Additionally, the elimination of the vacation policy has led to staff becoming more proactive and working harder, as they feel that if employees can occasionally invest more time than stipulated, they can also take time off to rest when they deem it necessary without needing to ask for approval.
As a disruptive company, Netflix has not only eliminated the vacation policy but also the travel and expense approval policy and most administrative controls; these factors have greatly contributed to positioning Netflix as the best company in audiovisual content. (Translated from Spanish)

[Carol Blanquez · Rating: 4 out of 5 stars]

"Blockbuster is a thousand times bigger than us," I whispered to Marc Randolph... Sometimes, just the first sentence of a book gives you the exact key to what you will find in the following pages, and in this case, from that very first sentence, this book was making me smile. Did you know that Netflix started out as a company that rented DVDs by mail? Did you know they offered themselves to Blockbuster for $50 million and were turned down? How is life, right?! Nowadays, Blockbuster only exists in the memory of those of us who are old enough to remember renting DVDs, or even VHS tapes, and belongs to that universe that has already extinguished, which the new generations do not quite understand, like how a Walkman works, a rotary phone, or that wonderful encyclopedia in 1,000 volumes that challenged the wrists of anyone wanting to delve into its secrets. Nowadays you can find a million books that will tell you what happened to these giants that, like Blockbuster, Nokia, or Kodak, failed to see where the market was heading, and when the evidence appeared, they lacked the necessary maneuverability and innovation to avoid disaster. But this book takes us a step further. Reed Hastings is fully aware of this phenomenon, and what he offers us is the recipe applied at Netflix to avoid becoming a Titanic. Those of you who know the book "Navigating Icebergs: Lessons from the Titanic Applied to Leadership" by Juan M. Serrano will understand what I mean, and for those who don't... just imagine the majestic Titanic, full of confidence because they had the best technical equipment, the latest technologies, and the best human team that the history of navigation had ever known, and yet... something happened that did not allow them to see the iceberg that would lead them to shipwreck in time, and when they saw it... they could no longer maneuver to avoid it. It is clear then that a company's capacity for adaptation and innovation is the key factor in not becoming a Titanic, but... how to maintain those capabilities at the highest level when we talk about companies with thousands of employees worldwide, and the need for large processes of control of people, validations, authorizations, etc.? Netflix proposes its winning formula: a corporate culture that considers people more important than processes, prioritizes innovation over efficiency, and imposes very few controls. And how is this concretized? The recipe is based on three basic ingredients: generating talent density, fostering honesty, and eliminating controls. (Translated from Spanish)