No rules
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Description
Book Introduction
“Controls and regulations are only necessary for incompetent employees!” Netflix CEO Reed Hastings' Debut Book When it was founded in 1997, Netflix was just a company that rented DVDs by mail. However, as of 2020, it has become a global company that brings joy to people around the world in over 190 countries, including Korea, and generates trillions of won in annual revenue. Netflix has continuously innovated to keep pace with the times, transitioning from a DVD rental service to an internet streaming service and even entering the production of dramas, starting with [House of Cards] in 2013. What's interesting is that, unlike companies like Kodak, Nokia, and Blockbuster that were once thriving and fell behind when their industrial ecosystems changed, Netflix has been able to adapt flexibly to changes in the turbulent business environment. Reed Hastings, who has been called the "post-Jobs" for causing a seismic shift in the entertainment industry, cites Netflix's "culture of freedom and responsibility" as the secret to their success. Netflix has no set work hours or working hours. There are no regulations regarding vacation and expenses, nor are there any approval procedures for payment. Even low-level employees are free to make decisions and sign contracts worth billions of won. The rule is that there are no rules. But Netflix's culture deck, which can sometimes seem lax, is considered one of the most important documents in Silicon Valley. This book is the first written by Netflix's current CEO, and it is conducted in the form of a conversation with INSEAD business professor Erin Meyer about Netflix's management style and corporate culture. How did Netflix become the world's most valuable company through such a groundbreaking move that defied common sense? The story is revealed in detail in "No Rules Rules," which has been sold to 20 countries worldwide, including the US, UK, Italy, and Japan! The Korean edition will be released simultaneously with the original book. |
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Preview
index
introduction
Part 1: The First Steps to a Culture of Freedom and Responsibility
First, build talent density.
Chapter 1: Extraordinary Colleagues Make a Great Workplace
Next, introduce a culture of honesty.
Chapter 2: Speak your mind (with positive intent)
Now start removing the controls.
Chapter 3-1 Eliminate vacation rules
Continue to remove controls.
Chapter 3-2 Eliminate travel and expense approvals
Part 2: The Next Steps to a Culture of Freedom and Responsibility
Strengthen talent density.
Chapter 4 Treat Your Customers with Industry-Leading Excellence
Strengthen a culture of honesty.
Chapter 5: Reveal Everything
Remove more controls.
Chapter 6 No decision requires approval.
Part 3: How to Strengthen a Culture of Freedom and Responsibility
Maximize talent density.
Chapter 7 Keeper Test
Maximize honesty.
Chapter 8 Feedback Circles
Remove most controls.
Chapter 9: Lead with Context, Not Control
Part 4: Set in the World
Chapter 10 Now to the world!
conclusion
Acknowledgements
References
Part 1: The First Steps to a Culture of Freedom and Responsibility
First, build talent density.
Chapter 1: Extraordinary Colleagues Make a Great Workplace
Next, introduce a culture of honesty.
Chapter 2: Speak your mind (with positive intent)
Now start removing the controls.
Chapter 3-1 Eliminate vacation rules
Continue to remove controls.
Chapter 3-2 Eliminate travel and expense approvals
Part 2: The Next Steps to a Culture of Freedom and Responsibility
Strengthen talent density.
Chapter 4 Treat Your Customers with Industry-Leading Excellence
Strengthen a culture of honesty.
Chapter 5: Reveal Everything
Remove more controls.
Chapter 6 No decision requires approval.
Part 3: How to Strengthen a Culture of Freedom and Responsibility
Maximize talent density.
Chapter 7 Keeper Test
Maximize honesty.
Chapter 8 Feedback Circles
Remove most controls.
Chapter 9: Lead with Context, Not Control
Part 4: Set in the World
Chapter 10 Now to the world!
conclusion
Acknowledgements
References
Detailed image
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Into the book
We had one thing that blockbusters didn't have.
It was a culture that valued people over procedures, emphasized innovation over efficiency, and avoided control as much as possible.
Thanks to our corporate culture, which focuses on achieving peak performance based on "talent density" and guiding employees through context rather than control, we have been able to continuously grow and adapt to the pace of change in the world.
Accordingly, our members' needs have also evolved along with ours.
Netflix is different.
In our culture, the rule is that there are no rules.
--- p.8, from the "Preface"
We trained managers to fire employees who exhibit undesirable behavior or fail to perform well.
I've been committed to filling Netflix with the best performers in their fields, from lobby receptionists to senior executives, and with exceptional teamwork.
This is the most important point that forms the basis of the Netflix story.
Fast-paced, innovative workplaces are made up of so-called "exceptional colleagues."
Our extraordinary colleagues, who come from diverse backgrounds and perspectives, are highly talented, creative, and adept at handling important tasks while working closely with others.
If this first point is not firmly established, the other principles will not function properly.
--- p.45, from “Chapter 1: Extraordinary Colleagues Make a Great Workplace”
If I told my employees to take whatever vacation they wanted, I thought the sky would fall.
But nothing changed.
The only exceptions are that people's satisfaction seems to have gone up a bit, and some employees are enjoying some unusual freedom, like visiting the Yanomani tribe in the Brazilian Amazon after working 80 hours for three straight weeks.
We've discovered one way to empower high-performing employees to take control of their own lives.
And we've also seen that such control actually makes everyone more free.
Because we had a high talent density, our employees were already acting with a sense of conscience and responsibility.
Because a culture of honesty was established, if someone took advantage of the system or abused the freedom given, those around them would point it out and correct the situation.
--- p.113-114, from “Chapter 3-1 Eliminate Vacation Regulations”
The fact that one top player outperformed other programmers caused a stir throughout the software industry.
Managers wanted to know how much more valuable top-tier programmers were than their average peers.
There were two ways to do this: hire 10 to 25 engineers with average skills for a reasonable salary, or pay a large sum to bring in one "rock star."
After the selection, I was able to confirm the true value of a rock star through several cases.
The value of a top programmer was not ten times that of a programmer with average skills.
They were worth more than 100 times.
When I took on the board of directors at Microsoft and had the opportunity to work with Bill Gates, Bill said it was more than enough.
There is an often quoted passage from one of his stories.
“A great latheman gets paid several times more than an ordinary latheman.
But a great software programmer is worth ten thousand times more than an average programmer.”
--- p.154, from “Chapter 4 Treating People at the Best Level in the Industry”
Typically, a company's supervisors exist to approve or reject the decisions of their employees.
This is the surest way to stifle innovation and slow growth.
At Netflix, managers push employees to implement ideas they believe are right, even if they don't like the idea.
We don't want managers to overlook good ideas from their subordinates or anyone else.
So Netflix says this:
Don't try to please your boss.
"Do what's best for the company." There's a common misconception: the myth that CEOs and senior executives who are deeply involved in the details of a business's operations will improve their products or services.
People think that Apple's iPhone was successful because Steve Jobs meticulously ...
This is also a story that is misunderstood.
--- p.
237-238, from “Chapter 6: No Decision Needs Approval”
We also encourage all managers to always think about their subordinates and empower them to be the best they can be in their respective positions.
The 'Keeper Test' was designed to help managers make wise decisions.
If one of your team members told you they were quitting tomorrow, would you try to persuade them to reconsider, or would you accept their resignation with a sigh of relief? If the latter, give them a severance package right now and find a star player.
'Someone who must be protected at all costs.' Netflix is trying to apply the keeper test to everyone.
We ourselves are no exception.
Would the company do better if someone else did the work I was assigned? The reason I do this is so I don't feel embarrassed when I have to let someone go.
Consider a hockey team competing in the Olympics.
While it's unfortunate to see a player leave a team, fans and others will likely praise it as a decision only someone with the guts and ability to make a team stronger could make.
It was a culture that valued people over procedures, emphasized innovation over efficiency, and avoided control as much as possible.
Thanks to our corporate culture, which focuses on achieving peak performance based on "talent density" and guiding employees through context rather than control, we have been able to continuously grow and adapt to the pace of change in the world.
Accordingly, our members' needs have also evolved along with ours.
Netflix is different.
In our culture, the rule is that there are no rules.
--- p.8, from the "Preface"
We trained managers to fire employees who exhibit undesirable behavior or fail to perform well.
I've been committed to filling Netflix with the best performers in their fields, from lobby receptionists to senior executives, and with exceptional teamwork.
This is the most important point that forms the basis of the Netflix story.
Fast-paced, innovative workplaces are made up of so-called "exceptional colleagues."
Our extraordinary colleagues, who come from diverse backgrounds and perspectives, are highly talented, creative, and adept at handling important tasks while working closely with others.
If this first point is not firmly established, the other principles will not function properly.
--- p.45, from “Chapter 1: Extraordinary Colleagues Make a Great Workplace”
If I told my employees to take whatever vacation they wanted, I thought the sky would fall.
But nothing changed.
The only exceptions are that people's satisfaction seems to have gone up a bit, and some employees are enjoying some unusual freedom, like visiting the Yanomani tribe in the Brazilian Amazon after working 80 hours for three straight weeks.
We've discovered one way to empower high-performing employees to take control of their own lives.
And we've also seen that such control actually makes everyone more free.
Because we had a high talent density, our employees were already acting with a sense of conscience and responsibility.
Because a culture of honesty was established, if someone took advantage of the system or abused the freedom given, those around them would point it out and correct the situation.
--- p.113-114, from “Chapter 3-1 Eliminate Vacation Regulations”
The fact that one top player outperformed other programmers caused a stir throughout the software industry.
Managers wanted to know how much more valuable top-tier programmers were than their average peers.
There were two ways to do this: hire 10 to 25 engineers with average skills for a reasonable salary, or pay a large sum to bring in one "rock star."
After the selection, I was able to confirm the true value of a rock star through several cases.
The value of a top programmer was not ten times that of a programmer with average skills.
They were worth more than 100 times.
When I took on the board of directors at Microsoft and had the opportunity to work with Bill Gates, Bill said it was more than enough.
There is an often quoted passage from one of his stories.
“A great latheman gets paid several times more than an ordinary latheman.
But a great software programmer is worth ten thousand times more than an average programmer.”
--- p.154, from “Chapter 4 Treating People at the Best Level in the Industry”
Typically, a company's supervisors exist to approve or reject the decisions of their employees.
This is the surest way to stifle innovation and slow growth.
At Netflix, managers push employees to implement ideas they believe are right, even if they don't like the idea.
We don't want managers to overlook good ideas from their subordinates or anyone else.
So Netflix says this:
Don't try to please your boss.
"Do what's best for the company." There's a common misconception: the myth that CEOs and senior executives who are deeply involved in the details of a business's operations will improve their products or services.
People think that Apple's iPhone was successful because Steve Jobs meticulously ...
This is also a story that is misunderstood.
--- p.
237-238, from “Chapter 6: No Decision Needs Approval”
We also encourage all managers to always think about their subordinates and empower them to be the best they can be in their respective positions.
The 'Keeper Test' was designed to help managers make wise decisions.
If one of your team members told you they were quitting tomorrow, would you try to persuade them to reconsider, or would you accept their resignation with a sigh of relief? If the latter, give them a severance package right now and find a star player.
'Someone who must be protected at all costs.' Netflix is trying to apply the keeper test to everyone.
We ourselves are no exception.
Would the company do better if someone else did the work I was assigned? The reason I do this is so I don't feel embarrassed when I have to let someone go.
Consider a hockey team competing in the Olympics.
While it's unfortunate to see a player leave a team, fans and others will likely praise it as a decision only someone with the guts and ability to make a team stronger could make.
--- p.305, from “Chapter 7 Keeper Test”
Publisher's Review
Constant innovation, faster speeds, and the best talent…
“Our competition is human ‘sleep time’!”
Netflix was voted the #1 "Most Desirable Company to Work For" by tech workers in 2018, #2 "Company with the Happiest Employees," and #1 "Most Rated Company" in the U.S. in 2019.
While Netflix has recently been reported as a company that has benefited from its business model, which is well-suited to a contactless society, recording the highest growth rate during the pandemic, Netflix has long been synonymous with disruptive innovation. Beginning as a DVD rental business and launching an internet streaming service, Netflix has acquired the rights to a wide range of TV shows and movies, making them available to consumers worldwide. Furthermore, it has grown into a major producer of high-quality video content, establishing itself as a full-fledged entertainment company.
And in 2019, they said:
“Our competition is human ‘sleep time’!”
What's the secret to Netflix's ability to adapt so effortlessly and so quickly to changing market conditions? Netflix co-founder and current CEO Reed Hastings promotes their unique corporate culture of "Freedom and Responsibility (F&R)," a culture that requires no rules.
There are literally no rules at Netflix! That means no complicated procedures or regulations that hinder work efficiency and drive progress.
He emphasizes that in today's information age, what companies and teams need is not error prevention or exact replication, but creativity, speed of innovation, and agility.
What is the greatest threat to the survival of businesses in this era? Reed asserts.
Failing to attract top talent, failing to launch new products, and failing to quickly pivot when the environment changes.
Professor Erin Meyer, one of the world's most influential business thinkers by Thinkers50 in 2019 and co-author of this book, also agrees that Netflix's extraordinary success is due to its "somewhat strange" corporate culture.
They maintain a high 'talent density' by recruiting the best players with industry-leading compensation and then increasing their salaries to match market value.
Since then, we have introduced a culture of honest feedback and removed various regulations and controls so that employees can make the best decisions without worrying about what others think.
This type of operating method has enabled faster innovation than anyone else.
Professor Meyer interviewed over 200 current and former Netflix employees over a period of two years to analyze their culture.
The truth behind Netflix's success, which countless companies and media outlets have never been able to understand while studying and delving into their culture outside of Netflix, is revealed in "No Rules."
“Don’t lock an eagle in a cage!”
Netflix's unique and incredibly flexible ecosystem
Creativity and innovation.
This is a word that appears without fail in the 'success factors' of both companies and individuals in this day and age.
The problem is that even though many organizations are staffed with exceptionally creative and efficient individuals, they still counteract their employees' strengths by imposing industrial-age controls and regulations.
It's like locking an eagle in a cage as it tries to soar into the sky.
Reed Hastings learned from the failure of his first company, Pure Software, and decided to run Netflix completely differently.
The goal was to eliminate the bureaucratic controls and procedures that had been tightly wrapping the wings of talented individuals.
There are over 10 rules and procedures that most companies have, but Netflix doesn't.
For example, things like this.
Vacation Policy | Expense Policy | Approval Procedure | Travel Policy | Contract Approval | Pay Grade
Decision Approval | Performance Improvement Plan | Raise Pool | Key Performance Indicators | Management by Objectives
Decision-making by committee | Salary bands | Performance-based bonuses
Netflix doesn't have a set vacation period.
There is no need to wait for approval from your superiors to proceed with planned items or sign contracts with companies.
There are also no regulations regarding how much you can spend on business trips or how much you can purchase from the company without paying.
There is no standard salary based on rank, but one thing is certain: it is the highest in the industry.
Of course, there are no performance-based bonuses.
Because they already give a salary that exceeds the bonus.
It is believed that humans develop their best ideas and creativity when they are first guaranteed a clear reward.
There is concern that without rules and procedures, the system may become overly lax and employees may take advantage of it.
Sure, costs increased by about 10% compared to when a standard payment system was in place, but as Reed Hastings puts it, this is nothing compared to the benefits of not having regulations.
Thanks to them, Netflix has become a company that star players want to work for, and through them, it has become an innovative company that moves incredibly quickly and with incredible flexibility!
R&P or F&R, which one is your choice?
Their management style is as fun as Netflix.
The two authors of "No Rules" exchange insightful perspectives and lucid writing, drawing on a wealth of case studies from current and former Netflix employees to support their arguments.
Part 1 guides you through the first steps toward a culture of freedom and responsibility, starting with building talent density by attracting capable employees, then introducing a culture of honest feedback where people can speak their minds, and finally removing controls by eliminating vacation policies and travel and expense approvals.
Part 2 is the next step toward a culture of freedom and responsibility, focusing on strengthening talent density through industry-leading compensation, fostering a culture of candor through transparent management with full disclosure, and removing further controls by eliminating the need for approval for any decision.
Part 3 explores how to strengthen a culture of freedom and responsibility, including maximizing talent density through keeper testing, maximizing honesty through feedback circles, and eliminating most control by providing context rather than control.
In the final part 4, we introduce the culture map as a cultural awareness that global companies that are developing overseas markets on the world stage must have.
During the industrial age, which created wealth for the past 300 years, a culture of 'rules and processes (R&P)' that controlled the movements of employees was effective.
This is the way we all know it, and it's how most businesses around the world operate today.
But after reading this book, you will find that you can do the same thing the F&R way.
The choice is ours.
What is certain is that in an environment where intellectual property and creative services are the foundation of growth, the share of the economy that relies on fostering creativity and innovation has grown significantly, and this trend will accelerate further.
Do you want to build and run an exceptional organization? Are you seeking ways to attract top talent? Are you eager to excel in tech? Are you eager to understand what it takes for your current company to innovate and thrive? Are you simply curious about how people work at Netflix, recognized as one of the world's most valuable companies, and what skills are necessary to join a global company? Whatever your question, this book will provide surprising and clear answers.
Above all, a business book of considerable length can be as entertaining as a Netflix original movie!
“Our competition is human ‘sleep time’!”
Netflix was voted the #1 "Most Desirable Company to Work For" by tech workers in 2018, #2 "Company with the Happiest Employees," and #1 "Most Rated Company" in the U.S. in 2019.
While Netflix has recently been reported as a company that has benefited from its business model, which is well-suited to a contactless society, recording the highest growth rate during the pandemic, Netflix has long been synonymous with disruptive innovation. Beginning as a DVD rental business and launching an internet streaming service, Netflix has acquired the rights to a wide range of TV shows and movies, making them available to consumers worldwide. Furthermore, it has grown into a major producer of high-quality video content, establishing itself as a full-fledged entertainment company.
And in 2019, they said:
“Our competition is human ‘sleep time’!”
What's the secret to Netflix's ability to adapt so effortlessly and so quickly to changing market conditions? Netflix co-founder and current CEO Reed Hastings promotes their unique corporate culture of "Freedom and Responsibility (F&R)," a culture that requires no rules.
There are literally no rules at Netflix! That means no complicated procedures or regulations that hinder work efficiency and drive progress.
He emphasizes that in today's information age, what companies and teams need is not error prevention or exact replication, but creativity, speed of innovation, and agility.
What is the greatest threat to the survival of businesses in this era? Reed asserts.
Failing to attract top talent, failing to launch new products, and failing to quickly pivot when the environment changes.
Professor Erin Meyer, one of the world's most influential business thinkers by Thinkers50 in 2019 and co-author of this book, also agrees that Netflix's extraordinary success is due to its "somewhat strange" corporate culture.
They maintain a high 'talent density' by recruiting the best players with industry-leading compensation and then increasing their salaries to match market value.
Since then, we have introduced a culture of honest feedback and removed various regulations and controls so that employees can make the best decisions without worrying about what others think.
This type of operating method has enabled faster innovation than anyone else.
Professor Meyer interviewed over 200 current and former Netflix employees over a period of two years to analyze their culture.
The truth behind Netflix's success, which countless companies and media outlets have never been able to understand while studying and delving into their culture outside of Netflix, is revealed in "No Rules."
“Don’t lock an eagle in a cage!”
Netflix's unique and incredibly flexible ecosystem
Creativity and innovation.
This is a word that appears without fail in the 'success factors' of both companies and individuals in this day and age.
The problem is that even though many organizations are staffed with exceptionally creative and efficient individuals, they still counteract their employees' strengths by imposing industrial-age controls and regulations.
It's like locking an eagle in a cage as it tries to soar into the sky.
Reed Hastings learned from the failure of his first company, Pure Software, and decided to run Netflix completely differently.
The goal was to eliminate the bureaucratic controls and procedures that had been tightly wrapping the wings of talented individuals.
There are over 10 rules and procedures that most companies have, but Netflix doesn't.
For example, things like this.
Vacation Policy | Expense Policy | Approval Procedure | Travel Policy | Contract Approval | Pay Grade
Decision Approval | Performance Improvement Plan | Raise Pool | Key Performance Indicators | Management by Objectives
Decision-making by committee | Salary bands | Performance-based bonuses
Netflix doesn't have a set vacation period.
There is no need to wait for approval from your superiors to proceed with planned items or sign contracts with companies.
There are also no regulations regarding how much you can spend on business trips or how much you can purchase from the company without paying.
There is no standard salary based on rank, but one thing is certain: it is the highest in the industry.
Of course, there are no performance-based bonuses.
Because they already give a salary that exceeds the bonus.
It is believed that humans develop their best ideas and creativity when they are first guaranteed a clear reward.
There is concern that without rules and procedures, the system may become overly lax and employees may take advantage of it.
Sure, costs increased by about 10% compared to when a standard payment system was in place, but as Reed Hastings puts it, this is nothing compared to the benefits of not having regulations.
Thanks to them, Netflix has become a company that star players want to work for, and through them, it has become an innovative company that moves incredibly quickly and with incredible flexibility!
R&P or F&R, which one is your choice?
Their management style is as fun as Netflix.
The two authors of "No Rules" exchange insightful perspectives and lucid writing, drawing on a wealth of case studies from current and former Netflix employees to support their arguments.
Part 1 guides you through the first steps toward a culture of freedom and responsibility, starting with building talent density by attracting capable employees, then introducing a culture of honest feedback where people can speak their minds, and finally removing controls by eliminating vacation policies and travel and expense approvals.
Part 2 is the next step toward a culture of freedom and responsibility, focusing on strengthening talent density through industry-leading compensation, fostering a culture of candor through transparent management with full disclosure, and removing further controls by eliminating the need for approval for any decision.
Part 3 explores how to strengthen a culture of freedom and responsibility, including maximizing talent density through keeper testing, maximizing honesty through feedback circles, and eliminating most control by providing context rather than control.
In the final part 4, we introduce the culture map as a cultural awareness that global companies that are developing overseas markets on the world stage must have.
During the industrial age, which created wealth for the past 300 years, a culture of 'rules and processes (R&P)' that controlled the movements of employees was effective.
This is the way we all know it, and it's how most businesses around the world operate today.
But after reading this book, you will find that you can do the same thing the F&R way.
The choice is ours.
What is certain is that in an environment where intellectual property and creative services are the foundation of growth, the share of the economy that relies on fostering creativity and innovation has grown significantly, and this trend will accelerate further.
Do you want to build and run an exceptional organization? Are you seeking ways to attract top talent? Are you eager to excel in tech? Are you eager to understand what it takes for your current company to innovate and thrive? Are you simply curious about how people work at Netflix, recognized as one of the world's most valuable companies, and what skills are necessary to join a global company? Whatever your question, this book will provide surprising and clear answers.
Above all, a business book of considerable length can be as entertaining as a Netflix original movie!
GOODS SPECIFICS
- Date of issue: September 8, 2020
- Page count, weight, size: 468 pages | 734g | 145*215*30mm
- ISBN13: 9788925599632
- ISBN10: 8925599635
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