If It Were Easy, Everyone Would Be Doing It!

In their most recent book, No Rules Rules:  Netflix and the Culture of Reinvention, Reed Hastings and Erin Meyer offer their insights into the decidedly unorthodox culture that has helped make Netflix an outstanding success story. As I read this (as a follow on to the extensive power point deck Hastings shared some years ago) I was intrigued not only by some of the non-traditional procedures, policies, and practices at Netflix but by the thought of executives who may be tempted to replicate some of these ideas into their own business. A note of caution.

What Netflix has created was years in the making. Their operating culture emerged from the implementation of well thought out strategies and non-negotiable work-related behaviors that are in synch with their values.

A core operating principal is to hire for the highest level of talent and character. Only then can policies like unlimited vacation time, no expense reports required and an adherence to open, honest, respectful, and continuous feedback have any chance for acceptance and success.

Imaging trying to implement an “unlimited vacation time” policy with people who may be inclined to take advantage of it. Or a “no expense reports needed” procedure with those who may be given to less than honest behavior.

Giving and receiving open, honest feedback is not for those with limited levels of emotional intelligence. And in an increasingly competitive, rapidly changing environment, businesses would be hard pressed to survive with only marginal talent in their lineup.

The takeaway here is that Netflix’s culture isn’t simply about interesting, innovative and creative ways to operate. Many of these tactics would likely fail unless they were part of a comprehensive operating system based on shared values and core beliefs. And it is the people who build and maintain the culture.

Some years ago, I came across a useful saying: “copy the strategy, not the tactic.” While many of us are enamored of a good idea and are anxious to try it out in our shops, we often find it just doesn’t work out as smoothly as the example we first saw. Why is this? It could be that the structural and cultural norms vary greatly among organizations and a tactic that works well in one setting might not quite fit in another.

While the Netflix way of doing things is certainly interesting, even uncommon, the reason it works is that it’s part of a systematic whole. So, what can we learn from “the Netflix way”? Probably what we have known all along.

Hire for talent and character. Build a strong operating culture with high standards of performance and behaviors that reflect organizational and individual values. Innovate and drive decision making as deep and as close to the customer experience as possible. Balance the unique and sometimes conflicting requirements of all stakeholders and hold everyone accountable.

For more information on how you can measure and improve your organization’s culture, contact me at joe@ajstrategy.com.