Job one for leaders – find and keep stunning colleagues & part ways with everyone else (review of Reed Hastings No Rules Rules)

Because it’s been a terrible, horrible, no good and very bad year, imagine if your entire team announces they’re jumping ship.

Who do you persuade to stay? And who do you help pack up and send on their way?

At Netflix, managers call this the keeper test.

You’re a keeper if you’re exceptionally creative, do loads of great work, love your job and play well with others. In exchange, you’re well-paid and treated like a grown-up.

If you’re a jerk, slacker or a sweet person who’s a non-stellar employee, you get a generous severance package. Your departure frees up a spot for a new hire who’ll add to Netflix’s talent density. 

“Your number one goal as a leader is to develop a work environment consisting exclusively of stunning colleagues,” says Netflix CEO and No Rules Rules: Netflix and the Culture of Reinvention co-author Reed Hastings.

“For top performers, a great workplace isn’t about a lavish office, a beautiful gym or a free sushi lunch. It’s about the joy of being surrounded by people who are both talented and collaborative. People who can help you be better. When every member is excellent, performance spirals upward as employees learn from and motivate one another.”

Combining top talent with a commitment to candor and honesty always lets you rip most of the pages out of your creativity-killing and initiative-stifling employee handbook. The thinner the book, the better your chances of unleashing your team’s entrepreneurial spirit and ability to move fast.

“If you build an organization made up of high performers, you can eliminate most controls,” says Hastings. “The denser the talent, the greater the freedom you can offer. At most companies, policies and control processes are put in place to deal with employees who exhibit sloppy, unprofessional or irresponsible behavior. But if you avoid or move out these people, you don’t need the rules.”

It’s been a winning formula for Netflix.

Hastings and his business partner once tried to sell Netflix to Blockbuster for $50 million. At the time, Blockbuster was a $9 billion company.

“Blockbuster held all the aces,” says Hastings. “They had the brand, the power, the resources, and the vision. Blockbuster had us beat hands down. It was not obvious at the time, even to me, but we had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls. Our culture has allowed us to continually grow and change as the world, and our members’ needs, have likewise morphed around us.”

Blockbuster declared bankruptcy in 2010 and shuttered more than 9,000 stores (the last remaining store is in Bend, Oregon which you can book through Airbnb for all-night, back to the 90s slumber parties). Today, Netflix has just shy of 170 million subscribers in 190 countries. A stock price that started at $1 hit $350 in 2019. The company runs its own studio and streams award-winning original content. Netflix ranks as America’s most highly regarded company and it’s where tech workers say they’d most like a job.

“Netflix is different,” says Hastings. “We have a culture where ‘no rules’ rules. Once you start developing this type of culture, a virtuous cycle kicks in. Removing controls creates a culture of freedom and responsibility which attracts top talent and makes possible even fewer controls. All this takes you to a level of speed and innovation that most companies can’t match.”

Hastings asked Erin Meyer, an INSEAD business school professor and author of The Culture Map, to take an impartial look at Netflix’s culture, interview hundreds of current and former employees and help write No Rules Rules. “In most organizations, people join the dots the same way that everyone else does and always has done,” says Meyer. “This preserves the status quo. But one day someone comes along and connects the dots in a different way, which leads to an entirely different understanding of the world. That’s what happened at Netflix.”

So while binge-watching Netflix over the weekend, think about who on your team you’d fight hard to keep. Assembling a team of stunning colleagues is your first dot.

Jay Robb serves as communications manager with McMaster University’s Faculty of Science, lives in Hamilton and has reviewed business books for the Hamilton Spectator since 1999.

COVID-19’s stripping workplace culture back to its essence: strong leadership

cultureI used to think it was about the Canada Day celebration, family Christmas party, team-building retreat in cottage country and the millions of dollars donated each year to local groups and causes

But I now believe the secret sauce for this company’s standout culture was the senior executive team. Over the course of my career with five organizations, I’ve yet to see a more cohesive senior team in action.

There were no cliques, secret alliances or team of rivals. There was no backstabbing, grandstanding or gamesmanship. Not once in any one-on-one conversation did a senior executive ever gripe to me about a colleague.

Cohesion inspired confidence. Employees were confident in where the company was headed because we knew there were adults in the boardroom who weren’t acting like frat house bros or middle school tweens. The executive team took the company’s core value of respect and turned it into a personal virtue. How they treated one another set the standard for all the rest of us.

What you do and value most as a leader drives your organization’s culture, says Ben Horowitz, cofounder of a venture capital firm and tech start-up and author of What You Do is Who You Are: How To Create Your Business Culture.

“Who you are is not the values you list on the wall. It’s not what you say at an all-hands. It’s not your marketing campaign. It’s not even what you believe. It’s what you do. What you do is who you are.”

Leaders doing stupid, selfish and short-sighted things will turn your culture toxic.  Horowitz says there are a few telltale signs that your culture’s broken. The wrong people are quitting too often. You’re consistently failing at your top priorities. And an employee does something that’s truly shocking. “If someone behaves in a way you can’t believe, remember that your culture somehow made that acceptable.”

Horowitz also warns against tolerating four culture breakers: fault-finding heretics who are forever building and making the case that your organization’s run by morons; totally unreliable flakes; self-righteous prophets of rage and smart-bad jerks. “Consistently asinine behavior from an executive can cripple a company,” says Horowitz. “If one of your big dogs destroys communication on your staff, you need to send him to the pound.”

It’s tempting to tolerate culture breakers for their moments of brilliance and outsized contributions.  But again, what you do is who you are as an organization. Ignore misbehaviour and disloyalty at the top and it’ll run through your organization like a virus.

A great culture won’t automatically make your organization great. Culture won’t save a lousy or unwanted product or service. Horowitz says culture is like nutrition and training that gives an edge to already talented athletes.

“In the end, people who work for you won’t remember the press releases or the awards. They’ll lose track of the quarterly ups and downs. They may even grow hazy about the products. But they will never forget how it felt to work there, or he kind of people they became as a result.

“The company’s character and ethos will be the one thing they carry with them. It will be the glue that holds them together when things go wrong. It will be their guide to the tiny, daily decisions they make that add up to a sense of genuine purpose.”

The pandemic’s stripping workplace culture down to its essence, especially for organizations with remote teams. We’re reminded that it was never actually about dress down days, ice cream socials, barbecue lunches, pancake breakfasts and branded swag. It’s all about what your leaders do in public and behind closed doors.

This review first ran in the May 30 edition of The Hamilton Spectator. Jay Robb serves as communications manager in McMaster University’s Faculty of Science, lives in Hamilton and has reviewed business books for the Hamilton Spectator since 1999.