Employees . There is a connection to that. 22 years ago we competed with locke buster. That was a decade that we were competing with video stores just in the u. S. And thats 2007 when we started streaming. Host erin meyer how did you get involved in this book project . I study cultural differences in the workplace and i first came across the netflix culture and many people have the netflix culture and we put it on the internet at the beginning and it was quite shocking when i read it. Adequate performance and that really shocked me because in my department at my Business School we were at that time focusing on Psychological Safety in the workplace as a way to promote innovation. Focusing on getting rid of people who didnt perform adequately. The fact that they had no travel policy in things that got me thinking about how a culture like that could work in our organization. Ive done a lot of research and thats what i thought it would be interesting. Host your book the culture map is the one that Court Connected you too, correct . Absolutely. I was origin is enough to be recommended to culture map by a friend and i read erins look and its an exploration of Different National the cranes and a friend to the mexican and American Senate spoke to many of the challenge that we had internally but the netflix so its fantastic insight. Then i looked and asked her to be a speaker at those internal conferences that we have that netflix and then i realized she would be the perfect one is a chronicle observer an astute observer of culture to write the book. The point of having a coauthor like many people ive read a lot of ceo classification books and every time i read them i wonder what its really like in the middle of the company. I thought okay erin has her own reputation and shes in her pastor with open access to interviews and over 100 netflix around the world. There are a few books that come from that tension between the theory and erin was talking about the reality of the employee experience. Host erin meyer you are proaghast when Reed Hastings been asked sent out an unfinished draft where you . Guest oh yes. We talked about the importance of being transparent with your employee and i learned that level of transparency radiates and that is spearheaded by reed put one of the experiences i had, it was the chapter and it was nowhere near finished and i send it to reed and a couple of weeks later is doing an interview and one of the netflix employees said oh when i was reading the chapter and i was like what . And he said the oh yeah reed sets that checked out to the managers is that and i said all of the managers . And when they talked about transparency he means really help things everyone see whats going on even before youre finished. Host you said i love the netflix culture for its relationship towards contents. Guest that was my first reaction before i started doing interviews and really understanding netflix but thats one of the reasons we were interested in having me get involved with the book. Provided the tension in my reaction to these controversial principles and his belief as to why that Corporate Culture would lead to success. I mentioned feeling shocked about the performance and there was another which is about candor and what it says is dont say about somebody what you wouldnt say to their face. Of course most of us spend a lot of time at work talking about people. I couldnt imagine how that could play out in a Work Environment and then i went to netflix and i got to see it in action. Host what are some of those advantages . Guest i will give a personal example. In one of the first things i did was give a presentation at the time and all that the Vice President s in the company i was working with new content that they seemed really engaged and then it was time for me to give them an activity. I started Walking Around the one of the women who was having a discussion was talking with great hand gestures and when she saw me she beckoned me over and she said to me in front of her group, she said to me in front of her group you know erin i was saying to my colleagues the way you are presenting this summation is undermining your point. When you ask people a question its the only the americans that raise their hand so we are not getting the diversity and that she said you know i dont think we can take this to heart with the poor delivery you are giving. I was like oh my gosh somebody is saying that right in front of his keynote that i had three minutes to think about how to reorganize the structure of the discussion and when i got back on stage id gave that candor to save the presentation. The kind of candor at netflix sometimes it hurts and sometimes it feels in a pro. But it always helps improve performance. Host book caught me about that part of the book is why were you doing a conference in cuba . Guest we were expanding globally and it was a symbol of we want to entertain people and include cuba. Host do you have a real presence in cuba . Guest this was about four years ago and we have hopes of opening up the internet in cuba. We are on our way to a great presence there and we have a strong presence in mexico and a lot of other countries. Host in the book no rules, rules talent density, what is that . Guest it comes from the insight to accomplish something hard youd rather have 10 amazing people working together than 20 knots of good people who dont work well together. You can combine people who are very talented and in many cases a small number can be very effective. Host erin meyer first of all when you hear the word Corporate Culture what do you think about . Guest my first book the culture map was about National Culture differences and ive never been interested in this until i came across this company. What ive seen as almost every company that i looked at the Corporate Culture is a list of the aspirational dreams as to what we like this company to be like. We believe in integrity and we believe in respect. We didnt really have a life in the company but what i found with netflix is reed next landing the culture and he was helping explain to decisions during the day by looking at tensions and between talent density for example. It helps people deal with the tension that comes with the cold war Corporate Culture that would come alive and thats what i thought with netflix. One of the first times every see a company for what they say is their Corporate Culture is really. Host could this culture be taken to the gm and implemented there . Guest its a great point. We have had 200 years of factories providing Enormous Economic gains to our culture and its a topdown system. You have all the workers who never make a mistake and assemble and a perfect car or perfect pharmaceutical or hopefully a perfect airplane. The paradigm is very strong because its very valuable and that topdown culture is wellsuited to a factory. Theres another type of Creative Work that he used to be very small and now its grown to be an essential part of economy and influenced by the factory paradigm. Really what you want to do is increase variation like in the factory and you want to experiment and learn and youve got to try many things. Think of it as fertile as the goal in our culture and as the goal in the factory. In a creative environment you want to get the best ideas. As the private sector is the reason we havent figured out what are the right paradigms for Creative Work and its one example of that where its really creating employee freedom where there are no rules. You are managing so you have all these compensating systems about a culture and about context that are very helpful. Think of it as a set of paradigms wellsuited to Creative Work and our culture is not suitable for critical work or manufacturing work and its the beginning of new paradigms for Creative Work. Host writing a book is using a rather old medium to put ideas together is an it . Guest i did i is fun slides here and there have been over 20 million views of that. We are very much into the new format that we wanted to do a treatment where we really took the time to edit and write out the stories in a highly polished well thought through version of the story. Those who have read the culture memo will see a much fuller explanation of why it works. Host erin meyer after indepth study of netflix where are your criticisms still . Guest that may build on what you were saying a moment ago because you are asking if theres a place for this kind of culture for example at the more traditional manufacturing company. What struck me as i was doing this research at netflix was any area of any company that is seeking to be more innovative or more flexible or trying to figure out how to reinvent themselves Mark Ridley Thomas benefit from the principles. You might. Working with michelin tires. A safety critical product in a manufacturing environment and certainly their areas of that company that are focused on innovation could i do think any organization and a the team leader in ceo and anyone who wants to get more innovation can really learn from this creating this fertile environment. You asked about criticism. Of course one of the things about doing something edgy like this is there are always difficulties that go with that. One of the things that comes up is of course if we only are focused on talent density some people are nervous about whether they will lose their job and thinking about netflix about how to reduce that sort of while taking advantage of the. Host you have a story in the book comparing the family as compared to netflix being a team. Guess who i think reed is better to talk about that is most people think their organizations , they think of them as family. We have longterm security and we put up with one another even when we have bad behavior. A team is what reed is going for it netflix. It might change month by month. Host mr. Hastings . Guest i totally agree. Every time you hear an organization or family it makes people intuitively know that a family will stick together and it family that we admire will stick together no matter what. Its not just the way corporations work. In your book no rules, rules you write employees are not allowed to what does that mean . Guest bess truman early quote from my coworker was choosing how many dvds to buy for certain films and he set out thats going to be very popular. We ran out and the customers were unhappy and i said why did you want so few and he said he said it wasnt going to be very popular. You have to do what you think is right to help the customers and the company. You cant be trying to please your boss. You are not allowed to let you drive the bus off a cliff. You have to fight for the benefit of the company and in general dont seek to please your boss. Seek to please the customers and to grill the company so we want people to add independently and not just to implement their wishes. They need to get everybody in the company thinking about how to best serve the customers and how we best grow the company and if you do you get the tremendous results we have had over the last 20 years. Host mr. Hastings you are the founder of the company a stockholder in a ceo would you say you dont have an office at netflix but at the same time there are some inherent qualities that are going to make people do it you want. Guest assurer. They lead wide direction and example and i talk about whats important like customers and how we want to relax after hard days work and just laugh sometimes and other times they want to really be pushed in terms of the content that they watch. I will try to bring the Customer Experience home to our culture and its not that i dont want something, its that i want everyone else to also want things and in those conflicts or disagreements a lot of good things come out of that. Host erin meyer is it tough for a ceo to let go of that control . Guest its a really interesting processes that we have implemented. On the one hand everyone has strong opinions and on the other hand we have strongly made it clear to route the company that he wants people to be clear with him when they disagree with him are when they have a feedback for him. Its all about you are disloyal to the company if you feel disagreement for what the organization is doing or your bosses doing and you dont express that disagreement so you are asking me earlier about people dared to give feedback given his level of power in the company. I would say its her marketable how frequently people do get that because he celebrates it whenever it happens. Host mr. Hastings have you defined your job today and how much time do you take do you take to just think . Guest a lot of times i think nights and weekends and the traditional work hours i tend to be in meetings and talking to people trying to understand what they are working on talking through situations with certain countries and getting the content right. I think of it i wanted to be highly uniform and i want them to know whats going on all front the company. If i detect that we are casting casting its not limited to one area. I would. Thats an go to the principles of that which is you know theres a broad range of storytellers and we should have a broad range of storytelling and gives an underlying lesson. Im always trying to be a teacher and eventually an abstract what i see but you can know whats going on throughout the company. Thats the recipe essentially. Rather than fix particular problems. Host a question for both of you is the geographical area of Silicon Valley important, indispensable to what you do . Guest its one of many and certainly the culture and i come out of the Silicon Valley culture but at this point its a fraction of little less than half of our employees are from Silicon Valley sowed some super important and what we do through twothirds of our spending is on content and we have some employees in hollywood. We are really an Entertainment Company and of course a whole lot of companies are tech and summer coming out on the other side which is entertainment. They are pretty good attack. Now they have disney plus and all the Entertainment Companies are getting tech guest i think it will add to that program started working for netflix they were just getting ready for this enormous International Expansion which was quite interesting to me since i studied National Cultural differences. In 2016 we were moving all of the world to one of the things were right out of bauden the book that i was interested in researching is how the surprising Corporate Culture leading to enormous flexibility could be implemented in countries around the world like japan and singapore and brazil. We talk in the book about how to take your Corporate Culture and something thats useful to you at your headquarters and in direct contrast with some of the natural cultures. Its a really interesting part of the story. Host Reed Hastings erin meyers Steve Ballmer and bill gates come up in the book. What is the level of collaboration or friendship among ceos in Silicon Valley . Guest is quite variable i am sure. Particularly the three people that you mentioned ive had longstanding relationships with but i would say Silicon Valley is a very competitive place and netflix doesnt compete. We compete with other Entertainment Companies like disney and hbo and its all very friendly because its not too competitive whereas again with Entertainment Companies they can be more challenging relationship host we cant finish this without talking about my favorite person in the book and that was patty mccord. Did you have a chance to talk to patty mccord . Guest patty is a great storyteller. She has an incredible memory so reed i say i just cant remember but i wasnt always calling patty. Host who is she mr. Hastings . Guest patty mccord was our founding head of h. R. Who was with us over a decade who haiyan aired a lot of these ideas and pushed us that we could be great for employees if we focus on giving them a vocal inquirer meant vocal requirement vocal environment host of though one of those was vacation. Guest we dont count how many hours someone works in the day. We dont know if someone summer is working eight hours to 12 hours a day. We used account vacations whether someone was working 46 weeks a year a weeks a year and we realized we arent even measuring it. Theres an industrial hangover that i talk about from a factory mindset. Everybody takes what they want and its worked out great. I have a good example of taking a lot of vacation. Thats been very positive. Its not that 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 closing policy either but no one has come to work those alessa societal norms for many things such as its good to Wear Clothing to the office and vacation is a good part of your life. Host Reed Hastings on the weekends when you have time to think what something you have achieved the last 22 years . Guest i never think about that. Im always thinking about but we have too cheap ahead and the roulette was dissatisfaction. I accept that as a good start and what we want is a company that entertains the world and connects people and people learned so much through entertainment of other peoples lives and other countries other cultures other racial groups other genders all kinds of things that you learn through entertainment and exposure. When you think of how big the internet is around the world we have a tremendous opportunity to continue to grow and we are just getting started. Host are big threat in the long run is not taking mistake but lack of innovation. No rules, rules is the name of the book. Erin meyer and Reed Hastings are the coauthors