Almost any professional can list the standard corporate workplace norms, from a 9 to 5 workday (even if your own hours are more intense) to filling out copious expense reports anytime you buy so much as a cup of coffee on the road. Individual companies’ policies vary, but they generally cluster around an average.
But what if you blew up those norms entirely?
That’s what Netflix tried — and it seems to have worked.
The radical corporate culture at Netflix — and its wild success — have long mystified the business world. But in their newest book, No Rules Rules, Professor Erin Meyer of INSEAD and Netflix CEO Reed Hastings have joined forces to pull back the curtain on Netflix’s unorthodox approach.
I recently interviewed Meyer, a fellow Thinkers50 member, on my weekly Newsweek interview show “Better”. In our conversation, we talked about how companies and leaders can learn from Netflix regarding talent management and development. Here are three top insights.
Hire (and Keep) Top Performers
Netflix’s extraordinary culture only succeeds because of its extraordinary performers, Meyer says. This is something Netflix refers to as “talent density,” or the idea that high performers want to work with fellow high performers, and in turn cause overall performance to increase. Meyer reveals that one way Netflix gathers star employees is by following the “Rockstar Principle,” a belief that it’s “better to have one employee and pay them like a rockstar than to have 10 to 25 employees and pay them less,” she explains. And if you’re wondering whether someone on your team is a rockstar? Meyer recommends using the “Keeper Test” to ask yourself: If this employee told me they were planning on leaving, would I fight to keep them?
Meyer considers candor to be a Netflix superpower. Company culture mandates that managers and employees be honest with each other always, and give feedback often. “If you want to get this kind of candor going right in your organization,” she says, “then you can set up systems where you have feedback on the agenda in every one-on-one meeting.” To take it a few steps further, you can establish live 360 assessments where colleagues give individual feedback publicly, making the team privy to each other’s strengths and weaknesses.
Lead Like a Tree
“At most companies on most teams, we have decision-making that’s like a pyramid,” says Meyer. “But at Netflix, the leadership is like a tree.” In this model, leadership doesn’t sit at the top of the pyramid. Instead, they are “down in the roots of the dirt of the tree, setting the context,” she explains. That allows lower-level employees to be more autonomous and make more decisions themselves, because they understand the overall goals and intentions of the company and can act accordingly.
Meyer acknowledges that embracing this new way of working requires a fundamental paradigm shift, but it may be long overdue. “The industrial era powered our economies for 300 years, so it’s no surprise that we are still obsessed with things like error reduction and maximizing efficiency, focusing on consistency and replicability,” she explains.
“But in a growing number of organizations today,” she says, “the main goal is no longer error prevention and replicability. The goal now is: How can we innovate faster and be more flexible? And if you want those things, you have to totally change the way that you’re thinking about culture in your workplace and management paradigms.” Those are insights we all can learn from.
Dorie Clark teaches executive education for Duke University’s Fuqua School of Business and Columbia Business School, and was named to the Thinkers50 list in 2019. She is the author of The Long Game, Entrepreneurial You, Reinventing You, and Stand Out, which was named the #1 leadership book of the year by Inc. magazine. You can download her free The Long Game strategic thinking self-assessment at dorieclark.com/thelonggame.