Guest netflix is the worlds leading Entertainment Service bid we reduce and amazing Television Series and movies. We bent up around about 20 years and serve millions of families around the world who are membe members. Host is there a connection to the 1998 company where you had 900 movie titles and 30 employees . Guest there was a little connection to that. We started 22 years ago and mainly mailing dvds in the United States competing with blockbuster. That was a whole decade really that we were competing with video stores in the u. S. That was 2007 when we started streaming. Roughly the same time youtube did. Host erin meyer, how did you get involved in this book project . I study cultural differences in the workplace and ive been a school professor. I came across the netflix culture when i read what many people have the netflix culture and it was way at the beginning and it was quite shocking when i read it. It said things like adequate performance gets a generous severance. That shocked me because in my department at my division of school i teach at we were at that time focusing a lot on the Psychological Safety in the workplace to promote innovation. Here i had a company that focusing on Psychological Safety but focusing on getting ready people who do not perform adequately. There were other things in that deck like the fact that they had no vacation policy, no travel policy and things that really got me thinking about how a culture like that could work for an organization. I had been working with reed and did research and thats when i so thought there was Something Interesting for the world to learn from this company. Host your book, the culture map, is one that connected you to, correct . Guest absolutely. I was fortunate enough to be recommended to culture map by a friend and i read aarons first book and it is an exploration of a Different NationalCorporate Cultures so the french and the mexican and american and it spoke to many of the challenges that we had internally at netflix but its a fantastic insight and so then i looked erin up and asked her to be a speaker at the internal conferences that we had at netflix and then i realized she would be the perfect one as a chronicler observer and astute observer of culture to write the book. The point of having a coauthor is, like many people ive met a lot of ceo pontification books. Every time i read them i wonder what it is really like in the middle of the company. I thought okay, we could send erin and she has her own reputation, Business School professor and i will give her open access to interview over 100 netflix managers throughout the world and let her write honestly about the reality. Some of the feasibility of the book comes from that tension between read doing the theory and erin talking about the reality as employees experience it. Host erin meyer, you are pretty aghast when Reed Hastings sent out an unfinished draft of a chapter. Werent you . Yes, im sure reed is happy to hear about that again. [laughter] one of reeds leadership tenants as being transparent with your employees and i learned at my time that we interview their that level of transparency is way beyond what you find at most companies and that is spearheaded by reed. What is the experience as i have is that i worked at length on this chapter but it was nowhere near finished and i sent it to reed to start working on it and a couple weeks later i was doing interviews at the netflix Amsterdam Office and one of the netflix employees said to me during the interview, when i was reading the chapter that you wrote and i was like what . And he said oh yeah reed send that chapter out to the managers at netflix. I was like all the managers and what i found out was that when they talked about transparency he means really helping everybody see what is going on even before it is finished. Host you are quoted in the book as saying, i love the netflix culture for his honesty and [inaudible] for its content. That was my first reaction before i started doing the interviews and understanding netflix and that is one of the reasons of reed was interested in having me get involved with the book was that it provided the tension of my reaction to these controversial principles and then his belief as to why that Corporate Culture not success. I mentioned feeling shocked about the gender severance but remember there was another part of that which is candor and what it says which some, what it says is dont say about someone what you would not say to their face. Of course, most of us spend a lot of time and work talking about people so i just cannot imagine how that could play out in a Work Environment and then i got to netflix and started to see it in action. Host what are some of those advantages . I think i will give a personal example appeared one of the first things i did with reed and his teams give a presentation at one of their Leadership Conferences in cuba at the time and i was giving the keynote and all of the Vice President and directors were there and i was nervous because i was working on new content but they seemed engaged and then it was time for me to get more activity so they were working and i got down from and started Walking Around and one of the women had a discussion in one of the employees with great hand gestures and when she saw me she beckoned me over and said to me in front of her group, right, she said to me in front of a group you know, erin i was just saying to my colleagues here that the way you are presenting this information is undermining your point because when you ask the questions it is only the americans who raise their hands and therefore we are not getting diversity. Then she said i dont think we can take this to heart, given the poor delivery you are giving. I was like oh my gosh, someone is giving me feedback in front of this keynote but then i had about three minutes to think about how to reorganize the structure of the discussions and when i walked out on the stage and i did it differently. That candor saved the presentation. That is what we see with the candor at netflix that sometimes it hurts and sometimes it feels inappropriate but it almost always helps improve performance and that is worth it. Host Reed Hastings what commie a part of that book was why were you holding a conference in cuba . [laughter] guest because we were expanding globally and that for us was a symbol that we want to entertain people, including cu cuba. Host do you have a real presence in cuba . Guest unfortunately, and the last four years this was about five years ago when they did the conference the host of opening up the internet and cuba had not been finished. We were on our way to a great presence there which we have a very strong presence in brazil and mexico and many other latin countries but not yet cuba. Host in the book no rules rules talent density is referred to often. What is that . Guest it comes from the simple insight that to accomplish something hard you would rather have ten amazing people work well together then 20 not so good people who dont work well together but if you can combine people who are very talented and that have good team skills than in many cases a small number can be very effective and that is talent density. Host erin meyer, is it normal cultural first of all, when you hear the word Corporate Culture what do you think about . So my first book the culture map was about natural cultural witnesses and ive never been [inaudible] until i came across this company because what i see is almost every country ive looked at the Corporate Culture is a list of aspirational dreams as to what we like this company to be like. We believe in integrity. Or we believe in respect. It just seemed like we did not have a license but what i saw with netflix was reeds way of explaining the culture was instead he was helping employees to make decisions, tough decisions by looking at the tensions like the tension between talent density and feeling secure at work, for example. It was only when you help people deal with these tensions that the Corporate Culture would come alive in the organization and that is what i saw with netflix and what i saw here was one of the first times ever wear at a company were what they say is a corporal culture is living it out. Host could this culture be taken to a fourdoor agm and implemented their . Guest thats a great point. We had 200 years of factories providing Enormous Economic gains to our culture and in the factory is a very topdown system you have seen your boss and then you have all the workers who are supposed to never make a mistake and assemble a perfect car or a perfect pharmaceutical and ultimately a perfect airplane. The manufacturing paradigm is very strong because it is valuable and that topdown culture is wellsuited to a factory. Then you have another type of work, Creative Work. It used to be very small and now it is grown to be of substantial part of the economy and we are over influenced by the factory paradigm. Really with Creative Work you want to increase variations, not decrease like in a factory and an Creative Work you want to experiment and learn and youve got to try new things and its fluid and think of it as fertile is the goal in our culture and sterile is the goal in a factory. You want to clean clinical perfect repeatable stop in a factory and in a creative environment you are on the edge of chaos to get the best ideas. Again, as the Creative Center has risen we have not figured out what is the right paradigms for Creative Work and the netflix culture is one example of that where it is incredible employee freedom where there is no rule and that is a hard way to manage because youre managing on the edge of chaos and you have all these compensating systems about a culture and context that are very helpful. Give it as a set of paradigms wellsuited to Creative Work and our culture is not suitable for safety critical work where manufacturing work. It is the beginning of new paradigms for Creative Work. Host so, writing a book is using a rather old medium to put the ideas in, isnt it . Guest we first publish the ideas online on slide share and there have been over 20 million views of that. But we are very much into the new format but we wanted to do a book treatment where we took the time to edit and write out the stories and re edit and sort of a highly polished well thought through version of the story. Those who have read the culture memo will see a much more explanation of why it works. Host erin meyer, after your indepth study of netflix where are your criticisms . Before i moved let me build on to what reed was saying a moment ago because you asked whether there was a place for this culture in, for example, ford or a more traditional manufacturing company. What really struck me as i was doing this research on netflix was that any area of any company that is seeking to be more innovative or more flat bucks a bowl or trying out how to reinvent themselves more quickly can benefit from these principles that reed is using at netflix. You might be working this morning with michelin, michelin tyrus. Safety critical Product Manufacturing environment but certainly there are areas of that company that are focused mainly on innovation. I do think that any organization and team leader and ceo and anyone who wants to get more innovation can learn from this creating this fertile environment that reed was talking about. You asked about criticism. Of course, one of the things about doing something edgy like this is there is always difficulties that go with that and in light of the big things of course with we have a talent focused on talent density then some people are nervous about whether they will lose their jobs. They will be thinking about that and that netflix and how to reduce that sort of worry while taking advantage of this talent density. Host you have a story in the book comparing npr being a family to netflix being a team. Thats right. Reed would better talk about that but for most Companies Think about organizations and the organizations as families like we have longterm security and we put up with each other when we have bad behavior and [inaudible] we tried to get the best spot at any moment and that might change year by year or month by month. Host mr. Hastings. Guest every time you hear an organization we are a family and makes people cynical. They intuitively know that now a family will stick together in a family that we admire, a good family will stick together no matter what. Thats just not the way corporations work. Host in your book no rules rules you write that employees are not allowed to let me drive this company off a cliff what does that mean. Guest comes from an early quote with my coceo who was choosing how many dvds to buy for a certain film and i dont think that will be a popular film and he ordered less than he wouldve we ran out and customers were unhappy and i said why did you order so if you and he said you said it wasnt going to be very popular and thats when i said ted you have to do what you think is right to help the customers in the company and you cant be trying to please your boss and you are not allowed to let me drive the bus off the cliff. You have to fight for the benefit of the country and in general we say dont seek to please your boss, seek to please the customers and to grow the company so we want people to actively think independently, not just to implement their bosses wishes. They should never hide anything from the boss and certainly they should tell them what the idea is to get everybody through the company thinking about how to best reach the customers and how to be best grow the company and if we do you get the trend is that we have had over the last 20 years. Host mr. Hasting, founder of the company, stockholder, ceo and you say you dont have an office at netflix but at the same time there is some inherent qualities there that will make people do what you want. Guest sure, i lead by direction and example and you know, i talked about what is important like customers and how they want to relax after a hard days work and just relax and other times they want to be pushed into the content that they watch. I will try to bring the Customer Experience home and to our employees we talk about culture and its not that i dont want some things but that we always want everyone else to also want things and then in those conflicts or disagreements we have good things come out of that. Host erin meyer, is it tough for a ceo to, and a sense, let go of that control . I think its an interesting, interesting process that reed has implemented. On one hand he has very strong opinions like Anyone Running a company does and on the other hand he has strongly made it clear throughout the company that he wants people to be clear with him when they disagree with him or have a [inaudible] for him. They have farming for defense which is all about you are disloyal to the company if you feel disagreement or what the organization is doing or your boss is doing and you dont express that disagreement. We were asking reed earlier whether people dare to give him feedback given his level of power in the company and i would say it is remarkable how frequently people do get that probably because he celebrates that whenever it happens. Host mr. Hastings, how do you define your job today and how much time to you get to just think . Guest well, ive got a lot of time to think nights and weekends. And the traditional work hours i tend to be in meetings and talk with people and trying to understand what they are working on and talking through various situations in certain countries and how we are evolving content based rights and so i think of it as we want to be higher in form and i want to know what is going on although the company but then i dont reach in and say lets have this person instead of that person and if i detect the general casting will take too many men and i would say its probably not limited to one area and i would try that abstract a little bit over the principles which is you know, there is a broad range of storytellers and we should have a broad range of storytelling and get to the underlying lesson rather than fix the tactic so im always trying to be a teacher essentially an abstract what i see but to do that i need to be highly involved and know what is going on throughout the company. The recipe, essentially. Im always trying to fill the organizational muscle rather than fix particular problems. Host question for both of you, the geographical area of Silicon Valley important, indispensable to what you do . Guest it is one of many indispensable areas and certainly the culture and i, we come out of the Silicon Valley culture but at this point you know, it is a fraction while less than half of our employees are Silicon Valley so it is super important to what we do but about two thirds of our spending is on content and we have a majority of u. S. Employees in hollywood so we are an Entertainment Company that of course like all modern companies are attack power and in some ways coming at it from the other side which is Super Entertainment and pretty good. They have pixar and all kinds of animation and now they have disney plus so i think all the Entertainment Companies are getting tech infused. Host erin meyer. I think i would add to that, when i started working with netflix they were just getting ready for this enormous International Expansion which is quite interesting for me with studying for natural cultural differences and we were at 2016 and moving all over the world so one of the things they write about in the book is that i was very interested in researching was how this provocative and surprising Corporate Culture that was needing to this enormous innovation flexibly complete and demented in countries around the world like in japan and singapore and brazil so we really talk in the book about how to take your Corporate Culture which may be very useful to you at your headquarters and then figure out how to make that work even when its in direct contrast with some of the National Cultures that you made the movie into. Its a really interesting part of the netflix story. Host read hasting, sheryl sandberg, steve ballmer, bill gates come up in the book so what is the level of collaboration or, you know, friendship among ceos and Silicon Valley . Guest is quite variable i am sure. And so those particulates people that you mention had longstanding relationships but i would say Silicon Valley is a very competitive place and in netflix we compete with other Entertainment Companies like disney and hbo. You know those tech leaders that you mentioned are all very friendly because is not too competitive whereas you know again with the Entertainment Companies it can be more challenging relationship. Host we cant finish this without talking about my favorite person in the book and that is erin meyer, did you have a chance with talk with patty mccord. I talked with patty a lot. Shes a great storyteller and has a critical memory. We often were pushing for more stories and he said he cant remember and whenever that happened i always called patty and she always had one. Host who is she mr. Hastings . Guest patty mccord was founding of our hr and with us over for a decade and pioneered a lot of these ideas and give us permission to push us that we could be great for employees without rules and if we focused on giving them a fertile environment that stretches them and that became the weight we oriented everything. Host one of those known rules is vacation time. Guest its a funny thing. We dont count how many hours someone works in a day and we dont know if someone is working eight hours or 12 hours in a day and yet in the old days we used to count the occasion whether someone was working 46 weeks a year or 48 weeks a year, 50 weeks a year and we realized why we care between 46, 48, 50 a for not even measuring eight, ten, 12 and a day. Its this industrial hangover i talked about from the factory mindset. And so lets let everyone take what they want and it has worked out great. I set a good example of taking a lot of occasion and being purposeful about that so that has been very positive. Think of it as it will not be a big blockbuster because we have unlimited vacation and they dont but its a powerful symbol of Employee Trust with almost no risk. As patty mccord used to say we dont have a clothing policy either but no one has come to work naked lately. So the lesson is societal norms work fine for many things and its good to Wear Clothing in the office and vacations are a good part of your life but work is important to. Host Reed Hastings, when you are in the weekends and on the evenings have time to think what you thank you have achieved in last 22 years . Guest i never think about that. Im always thinking about what we have to achieve a head and hard it is. And the key relentless dissatisfaction so i look at our success to date as a good start and what we want to do is build a company that really entertains the world, connects people and people learn so much through entertainment of other peoples lives and they put the other countries and other cultures and other racial groups, other genders and all kinds of things that you really learn through entertainment and exposure. When you think of how big the internet is around the world with 6 billion active mobile phones we have a tremendous opportunity to continue to grow and or just getting started. Host our big threat and the long run is not making a mistake but lack of innovation, no rules rules is the name of the book. Erin meyer and Reed Hastings are the coauthors youre watching cspan2 your unfiltered view of government, created by americas Cable Television company as a Public Service and brought to you today by your television provider. Cspans washington journal everyday we are taking your calls live on the air on the news of the day and we will discuss policy issues that impact you. Coming up Tuesday Morning, biographer and president ial historian Craig Shirley will join us to discuss campaign 2020 and new yorker magazine writer talks about his new pbs frontline documentary releasing the police 2020. Watch cspans washington journal live at 7 00 p. M. Eastern Tuesday Morning to watch the discussion with your phone calls, facebook comments, tax complete. Next, a look at how social media and video recorded greens and other technology is supporting the black lives matter movement. Former fcc commissioner Mignon Clyburn begins this discussion by focusing on how technology has changed over the years with the use of cell phones. Our first look at a wireless medications and that can take you through the history with that phone and the light with the