I finished a nice book on organization culture. Its called No Rules Rules. I would most definitely add this one to my previous list of memorable books in 2020. This book is about Netflix's organization culture and how it helps them innovate. Some of my close friends may know that I sometimes enjoy reading, of all the things to read, profit and loss statements, balance sheets and cash flow statements of public companies. No, I don't do it for my work, I genuinely enjoy reading those statements without any context. Public companies release statements every 3 months and even juicer ones at the end of the year. These are like photographs of a person. Looking at a photo, you could say how happy, healthy the person is or what that person is doing at that point in time. Looking at statements is similar. When I looked at Netflix's statements way back in 2002, 03, 04, I could not understand what they did and how they could sustain anything in future. Of course, I was not alone and I am definitely aware that I am not as smart to understand these things. My point is that this book is the tell-all tale for those questions I had.
I must say that the content speaks directly to owners and managers of any size of a team. I think that Reed Hastings (the founder and CEO of Netflix) and Erin Meyer (Prof at Insead) did a great job of melding reality (Hastings) with science and academia (Meyer). They took turns with Hastings explaining how he sees Netflix and Meyer explaining and backing it up with the science. Hastings opens with describing his prior exit at Pure Software and what he learns from it. Then, he introduces the culture of "Freedom and Responsibility" - F&R (Spiderman anyone?). The first few chapters clearly lays out the unique mechanisms and results of this F&R culture. There are a few examples of how F&R failed in other organizations - I felt like those failures were just inserted in there simply to show what F&R is and isn't. The point of noting those failures is not to say that Netflix alone can do F&R but, that "anyone can do it, as long as..." they also do a few other things that Netflix does. I am guessing that a lot of readers will simply lose the book in this introduction to F&R. It simply is too bold and it glosses over many real challenges that F&R bring to any organizations. Fear not, because soon, the book explains that one key element of F&R is that Netflix hires only rockstars and meticulously unhires those who are not rockstars. It explains that the age old, top down, command and control structure is not compatible with Netflix and it recommends that when you want to drive innovation (as opposed to safety and error prevention), you must hire rockstars and give them all the F&R they can handle.
The remaining book (after the introduction in chapter 1) peels the layers on the Netflix culture. If you just see the chapter names in that book, you can see these "layers". At the end of the book is chapter 10 which the reader must read in order to understand limitations of the Netflix culture and how they are solving for it. I really liked that the authors admit that when going global and multi-cultural, their experience is not "one size fits all". Somewhere in the book Hastings says that he was researching global cultures when he read Meyer's first book "Culture Map".
Towards the end, Hastings and Meyer clarify reality that Netflix really operates at the "edge of chaos". That there are reasons why other companies would not want to do this. An example would be airline companies - they must not operate as Netflix does, not should Exxon Mobil. Hastings clarifies that the Netflix culture is good for "Innovation" not good for "Error Prevention".
Overall, I feel that this is a great book for any owner, manager, entrepreneur or student of business. For many readers, this will look idealistic, utopian and "Netflix-only". To me, this is the secret sauce of why companies such as Netflix are able to churn out quarter after quarter of monopolistic growth while others struggle. At this point, I must mention Bob Eiger's business autobiography in which he has dedicated a chapter on how he set the foundations for pivoting Disney into a tech company. It is clear to me that many other CEOs and Shareholders are going to want to pivot themselves to be tech companies. This book may be a great introduction to the "how".
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