No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings & Erin Meyer

(New York: Penguin, 2020), 320

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First Steps to a Culture of Freedom and Responsibility

Chapter 1: First Build Up Talent Density

Summary: A great workplace is stunning colleagues

  • Your #1 goal is to develop a work environment with only stunning colleagues
  • Sunning colleagues accomplish significantly more than average ones
  • Jerks, slackers, sweet people with nonstellar performance, or pessimists left on the team will bring down the performance of everyone

Chapter 2: Then Increase Candor

Summary: Say what you really think (with positive intent)

  • With candor, high performers become outstanding performers. Frequent candid feedback magnifies the speed and effectiveness of your team.
  • Build feedback into regular meetings
  • Give feedback using the 4A guidelines:
    • Assist: feedback must be given with positive intent
    • Actionable: focus on what the recipient can do differently
    • Appreciate: how can I show appreciation for this feedback rather than being defensive?
    • Accept or Discard: the decision to react to the feedback is up to the recipient
  • As the leader solicit frequent feedback and respond with belonging cues
  • Get rid of jerks as you instill a culture of candor

Chapter 3: Now Begin Removing Controls

Summary: Remove vacation policy and travel and expense approvals

  • Vacation policy
    • Employees have full discretion on taking a few hours, a day, a week, or a month off work
    • The leader must provide example of how the policy is implemented and be loud about the vacation she takes
  • Travel policy
    • Managers must set context on appropriate uses of company money
    • Finance audits a percentage of expenses annually
    • When people abuse the system, fire them and speak about the abuse openly
    • With expense freedom employees will be able to make quick decisions to spend money in ways that helps the business

Next Steps to a Culture of Freedom and Responsibility

Chapter 4: Fortify Talent Density

Summary: Pay top of personal market

  • Pay creative (vs operational) employees top of market (which may mean hiring one exceptional individual rather than ten adequate people)
  • Don't pay performance-based bonuses, but put those resources into salary
  • Take calls from recruiters to get to know your own and your team's market value

Chapter 5: Pump up Candor

Summary: Open the books

  • Encourage transparency by getting rid of closed offices, locked spaces, etc.
  • Share sensitive financial and strategic information with all employees
  • Notify employees about possible changes early even if they cause anxiety and distraction
  • If information is about something that happened at work, share it. If information is personal say it's not your place to share but refer to the person
  • As long as you have already shown yourself to be competent talking openly about your own mistakes will increase trust an goodwill

Chapter 6: Release More Controls

Summary: No decision-making approvals needed

  • Ownership of decisions should be dispersed across the team at all levels
  • For this to work: "don't seek to please your boss"
  • Think in bets: some will succeed and some will fail, and you are judged on the collective outcome rather than a single bet
  • When a bet fails, sunshine it openly

Techniques to Reinforce a Culture of Freedom and Responsibility

Chapter 7: Max up Talent Density

Summary: The Keeper Test

  • The Keeper Test: "Which of my people, if they told me they were leaving for a similar job at another company, would I fight hard to keep?"
  • Avoid stack-ranking systems which create competition and discourage collaboration
  • A sports team is a better metaphor than a family: keep the best player in each position
  • When an employee is underperforming, take the money that would have gone into a PIP and instead put it toward a generous severance package
  • To reduce fear among employees, encourage them to use the Keeper Test with their managers
  • When an employee is let go, speak openly about what happened and answer questions

Chapter 8: Max up Candor

Summary: A circle of feedback

  • A thorough session every 6-12 months ensures clear feedback
  • Performance reviews are not the best mechanism for candid feedback since they only go one way and involve one person
  • A 360 written report is a good mechanism for annual feedback but make sure it is not anonymous
  • Live 360 dinners are effective for feedback in a Start, Stop, Continue format

Chapter 9: Eliminate Most Controls

Summary: Lead with context, not control

  • Leading with context is best when you goal is innovation (not error prevention), and requires a loosely coupled system
  • Instead of telling people what to do, get into alignment by providing and debating all the context that will allow them to make good decisions
  • When someone on your team fails, ask yourself what context you forgot to set
  • A loosely coupled organization should resemble a tree rather than a pyramid: the boss is at the roots, holding the trunk of senior mangers who supports the branches where decisions are made

Going Global

Chapter 10: Bring It to the World


  • Map your corporate culture and compare it to the cultures of the countries you are expanding to
  • In less direct countries, implement more formal feedback mechanisms
  • With more direct cultures, talk about the cultural difference openly so the feedback is understood as intended
  • Add "adaptability" to your candor model

Topic: Management


Created: 2021-11-08
Updated: 2023-06-21-Wed