Lessons from No Rules Rules, Netflix and the Culture of Reinvention — Part 1

Introduction

With it’s name being synonymous to being the platform that everyone thinks of when you talk about streaming-video, it’s rather hard to imagine that the company itself was actually founded way back in 1997 — back when it was renting out DVDs by mail. The main competitor then was Blockbuster, and since then Netflix has kept reinventing itself and redefined the industry on what the norm should be when it comes to media consumption and creation.

This post takes a look at the latest book written by Reed Hastings, the co-founder, chairman, and current co-chief executive officer of Netflix.

Together with Erin Meyer; the book dives into the various ideologies that takes place at the heart of Netflix, uncovering their origin, implications, and how they were fine tuned — as Netflix became one of the world’s most innovative and successful companies in the world.

The following are my notes and comments based on the first few chapters of the book.

A Culture of Freedom and Responsibility

1. A Great Workplace Is Stunning Colleagues

• Netflix came upon this understanding from having to layoff a third of their workforce during their early days. Having to make a decision, they’ve decided to keep only their top performers.
• In a fortuitous turn of events, their remaining employees actually became more driven and performs better as compared to when they had more employees.
• Their discovery — high performers thrive in environments where overall talent density is high.
• Mixing high performers with adequate ones would in general reduce the quality of entire group.
• This could happen due to multiple reasons. Among them (a) forcing high performers to have to work around adequate employees (b) reduce quality of group discussions (c) forcing managers to focus more on improving adequate employees, at the cost of neglecting high performers.
• In his research to study the effect of bad apples in a working environment [2], Professor Will Felps showed that even having one…