5/5

It’s a book on Netflix culture. I like this book because of two reasons: 1. It is written by both the CEO and an outsider 2. It talks about the pros and cons of having a specific culture. 

There is no perfect culture that applies to all companies. This book inspires me to think more about my workplace culture. I was quite passive about the topic — thinking that it has nothing to do with me and it was already formed when I join. But this book changed my mind.

There are tons of great takeaways, some on a high level, but most others are practical. It’s like a guidebook of: we tried to promote this type of culture. Here’s how it works well and here’s where it may fall apart. I would recommend reading this book.

Highlights:

• At Netflix, it is tantamount to being disloyal to the company if you fail to speak up when you disagree with a colleague or have feedback that could be helpful. After all, you could help the business— but you are choosing not to.
• In the absence of written policy, every manager must spend time speaking to the team about what behaviors fall within the realm of the acceptable and appropriate. The accounting director should have sat down with the team and explained which months were okay to take vacation— and that January was off limits for all accountants.
• So we changed the spending and travel guideline to something even simpler. Today the entirety of the travel and expense policy still consists of these five simple words: ACT IN NETFLIX’S BEST INTEREST
• We managed to pull off Stranger Things because each member of the team was wildly competent.
• “If you knew what I was worth, why didn’t you offer it to me?” Then as I grew up, I realized: Why would he? It’s my own responsibility to know what I’m worth and ask for it!
• When the market heats up and recruiters are calling, employees get curious. No matter what I say, some of them are going to have those talks and go to those interviews. If I don’t give them permission, they’ll sneak around and then leave without giving me a chance to retain them.
• Do not punish the majority for the poor behavior of a few.
• But when someone is let go, everyone wants to understand why. What happened will eventually come out. But if you explain plainly and honestly why you’ve fired someone, gossip ceases and trust increases.
• Afterward, the students said they liked the smart candidate even more after he embarrassed himself. But the opposite was true of the mediocre candidate. The students said they liked him even less after seeing him in a vulnerable situation.
• a leader who has demonstrated competence and is liked by her team will build trust and prompt risk- taking when she widely sunshines her own mistakes. Her company benefits. The one exception is for a leader considered unproven or untrusted. In these cases you’ll want to build trust in your competency before shouting your mistakes.
• Our mantra is that employees don’t need the boss’s approval to move forward (but they should let the boss know what’s going on). If Sheila comes to you with a proposal you think is going to fail, you need to remind yourself why Sheila is working for you and why you paid top of the market to get her. Ask yourself these four questions: Is Sheila a stunning employee? Do you believe she has good judgment? Do you think she has the ability to make a positive impact? Is she good enough to be on your team?
• Farm for dissent. Socialize the idea. Test it out. This sounds a lot like consensus building, but it’s not. With consensus building the group decides; at Netflix a person will reach out to relevant colleagues, but does not need to get anyone’s agreement before moving forward.
• Ask what learning came from the project. Don’t make a big deal about it. Ask her to “sunshine” the failure.
• If you’re serious about talent density, you have to get in the habit of doing something a lot harder: firing a good employee when you think you can get a great one.
• One of the reasons this is so difficult in many companies is because business leaders are continually telling their employees, “We are a family.” But a high- talent- density work environment is not a family.
• But if Netflix wasn’t a family, what were we? A group of individuals looking out for ourselves? That definitely wasn’t what we were going for. After a lot of discussion Patty suggested that we think of Netflix as a professional sports team.
• IF A PERSON ON YOUR TEAM WERE TO QUIT TOMORROW, WOULD YOU TRY TO CHANGE THEIR MIND? OR WOULD YOU ACCEPT THEIR RESIGNATION, PERHAPS WITH A LITTLE RELIEF? IF THE LATTER, YOU SHOULD GIVE THEM A SEVERANCE PACKAGE NOW, AND LOOK FOR A STAR, SOMEONE YOU WOULD FIGHT TO KEEP.
• PIPs were invented for two reasons. The first is to protect employees from losing their job without getting constructive feedback and the opportunity to improve. But with our culture of candor at Netflix, people get loads of feedback every day. Before any employee is let go, he should have heard clearly and regularly what he needs to do in order to improve.
• Accidentally inciting internal competition is a real concern for organizations like ours that seek to increase their talent density. Many have implemented processes and rules to encourage their managers to get rid of mediocre employees and have fallen into systems that accidentally stoke internal competition.
• We encourage our managers to apply the Keeper Test regularly. But we are very careful to not have any firing quotas or ranking system. Rank- and- yank or “you must let go of X percent of your people” is just the type of rule- based process that we try to avoid. More important, these methods get managers to let go of mediocre employees, but they kill teamwork at the same time. I want our high- performing employees to compete against Netflix’s competitors, not one another. With rank- and- yank what you gain in talent density you lose in reduced collaboration.
• called my own boss in California and told her that, if it ever crosses her mind that she might need to let me go, I wanted her to tell me plainly. I made her promise that if she ever has to let me go, I won’t be surprised at all.
• There is one Netflix guideline that, if practiced religiously, would force everyone to be either radically candid or radically quiet: “Only say about someone what you will say to their face.”
• with this much money on the table, the senior guy would get involved and control the negotiations. But that’s not what leadership looks like at Netflix. As Adam explained: “Ted wasn’t about to make that decision for me, but he set broad context to help align my thinking with the company’s strategy. That context he set laid the foundation for my decision.”
• Organizations are constructed a bit like computer programs. When a company is tightly coupled, big decisions get made by the big boss and pushed down to the departments, often creating interdependencies between the various areas of the business. If a problem occurs at the departmental level, it has to go back to the boss who oversees all of the departments. Meanwhile, in a loosely coupled company, an individual manager or employee is free to make decisions or solve problems, safe in the knowledge that the consequences will not ricochet through other departments.
• If you are already part of a tightly coupled system, you may have to work with the top leaders in the company in order to change the entire organizational approach before trying to lead with context at a lower level. Even with high talent density, and innovation as your goal, if you don’t sort this out, leading with context may be impossible.
• All this said, tight coupling does have at least one important organizational benefit. In a tightly coupled system, strategic change is easily aligned throughout the organization.
• As your team purchases and creates content around the world, we need to be laser- focused on learning. We should be ready to take bigger risks in high- growth- potential countries like India or Brazil so that we learn more about those markets.
• We had a lot of debates on my team about whether this strategy would work. Would children want to watch characters that were so dramatically different than they were? We didn’t know.
• Cartoon Peppa Pig speaks Spanish like a Spaniard, Turkish like a Turk, and absolutely perfect Japanese. Animation provides an opportunity for international programming that live- action can’t. When actress Bella Ramsey’s Worst Witch is shown in a new country, the viewer has to watch it dubbed or subtitled. Kids hate subtitles and Bella looks funny speaking Portuguese or German. The voices don’t match the image and that impacts the quality of the viewing experience. But cartoon Peppa, like all animated characters, always speaks the language of the viewers. The Korean child and the Dutch child feel equally connected to Peppa.
• Reed made it clear that international expansion is our future and India is a key growth market. Mighty Little Bheem is a great show from a key Netflix growth market. Ted made it clear that when it comes to countries like India, we have so much to learn that we should take big risks, as long as the learning potential is evident. With Mighty Little Bheem what we would learn from the bet was very clear. The context Ted had set was enough for me to say, “Okay, even if this show crashes and burns, I’m trying three different things, all of which are going to provide Netflix with really good information.” Melissa made it clear that we wanted children’s shows from around the world that were deeply local in topic and texture to make up our programming slate.
• I considered another company, which was already international and had taken a clear approach. Like us, Google was proud of having a strong corporate culture, but instead of adapting its culture to the countries it moved into, it focused on hiring for fit. It sought to hire employees throughout the world who were “Googlers”: people with a personality that matched the corporate culture no matter what country they lived in or came from.
• What we learned from this experience, and later found to be true not just in Japan but in most cultures where direct negative feedback is less comfortable and less common, was that asking employees to give ad hoc feedback to peers and superiors at informal moments doesn’t usually work well. But if you run more formal events, putting feedback on the agenda, providing preparation instructions, and giving a clear structure to follow, you can get all the useful feedback out there just as effectively.