Dvds in the United States competing with blockbuster. That was a full decade really that were competing with video stores just in the u. S. Thats 2007 when we started streaming. Roughly the same time that youtube did. Host erin meyer, how did you get involved in this book project . Guest i study cultural differences in the workplace. Im a professor, and i first came across the netflix culture when i read what many people have, the netflix culture hacks. Definitely put on the inrnet with again and it was que shocking when i read it. It said things like adequate performance gets a generous severance. That really shocked me because in my department at my Business School i teach at we were at theime focusing on Psychological Safety in the workplace to create come to promote innovation. Re i had a company though stop focusing on psycholical safety that on getting rid of ople who didnt perform adequately. The fact they had no cation policy, travel policy, things that got me thinking about how culture like that could work in an organizatn. Started working and doing research and thatshen i saw there was Something Interesting for the world to learn from this company. Host your book the culture map is one of the connected you correct . Guest absolutely. I was fortunate enough to be recommended the culture map by a friend and i read her first book and its an exploration, a different culture. It spoke to many of the challenges that we had internally at netflix. Its a fantastic insight. I looked her up and asked her to be a speaker at various internal conferences that we had at netflix, and then realized she would be the perfect one as a chronicler observer, an astute observer of culture to write the book. The point of having a coauthor is, like many people ive read a lot of ceo pontification books and every time i read them i wonder what its really like in the middle of the company. I thought okay, we get erin in and she has her own reputation, shes a Business School professor and i will give open access. She interviewed Network Managers that the world and letter write honestly about the reality. Some of the readability of the book comes from that tension between me doing the theory and erin talking about the reality as employees experience it. Host erin meyer you were pretty aghast when Reed Hastings sent out an unfinished draft of a chapter, were you not, to employees . Guest yes. Im sure reed is happy to hear about that again. Well, one of his leadership tenants imports been transparent with your employees. I learned at my time during interviews that level of transparency is way beyond what you might that is spearheaded by reed. One of the experiences i had was i worked at length on this chapter but it was nowhere near finished. I sent it to reed to start working on it. A couple weeks later i was doing some interviews at the netflix Amsterdam Office and one of the netflix employee said to me during the interview, when i was reading the chapter that you wrote. And i was like, what . He said, yeah, reed sent that chapter out to the managers at netflix. I was like, all of the managers . When i found out was when they talk about transparency, he needs rlly helping everybody see whas goi on even before it is finished. Host you are quoted in the book essay i love the netflix culture for its honesty and loathed it for its content try to that was my first reaction before i started doing the intervws and really derstanding netflix. Thats one of the reasons reed was interested in have me get involved with the book was it provided this kind of tension of my reaction to some of these very controversial priiples and then his belief as to why that kind of Corporate Culture was really a success. I mentioned feeling shockedhe adequate performance. There was another part whichs about candor. What it says, 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 workalking about people. I just couldnt imagine how that could play out in a work environment. Then i got to netflix and i got to seet in action. And the advantageshat come with it. Host what are some of those advantages . Guest i guess i will give a personal example. So one ofhe first things i did give a presentation athe leadership conference. We we in cuba at the time and i was giving this keote. All of the Vice President and directs in the company were there. I thought its going well, i was nervous because of working in new content but they seemed reallyngaged. Th it was time for me to give them a ltle activity and i got down from the stagend started walking around. One of the women who was having a discussion was talking with great hand gestures. When she saw me she beckoned me over. She said to me in front of her group, right, she said to me in fron of a group, erin, i was just saying here that when youreresenting this information is really undermining your point because when you ask for questions, its only the american to raise their has and, therefore, were not getting diversity. Then s said i dont think we can take this to heart given the poor delivery you are giving. Oh,y gosh, someone is giving me feedback right in front of this keynote. But tn i had about three minutes to think about how to reorganize the structure of the discussion and when i got back on stage i did it differently as i think that candor, isaved the presentation. Thatshat we see with this kindf candor at netflix is that somimes it hurts sometimes it feels inapopriate, but it always helps to improve performance and thats fantastic. Host Reed Hastings,hat caht me about that part of the book was why were you holding a conference in cuba . Guest because were expanding globally and for us it was a symbol of we want to entertain people everywhere including cuba. Hos do you have a real presence in cuba guest uortunately, in the last four years, this was about five years ago at the cuba conference, the hopes of opening up the internet in cuba have diminied. We were on our way to a great presence tre which we have a very strong presence in brazil 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 just comes from the simple insight that to accomplish something hard you would rather have ten amazing people who work well together than 20 not so good people who dont work well together. That you can combine people who are very talented and have good team skills, then in many cases a small number can be very effective. That is talent density. Host erin meyer, isnt it first of all when you hear the wordsorporate culture what do y think about . Guest so my first book the culture map w about National Culture differences and ive never been interested in Corporate Culture talk him across this company. Almost every company i look at the corporate culre is a list of like aspirational dreams as what weould le this company to be like. We believe in integrity or we believe in respect. It just seemed like you didnt have a life in the company. What i saw with netflix is his way of explaining the culture with it. Instead he was helping employees to make decisions, tough decisions during the day by looking at these tensions, like the tensions between talent density and feeling secure at work, for example. And that it was really when you help people deal with these tensions that the Corporate Culture would come alive in the organization. Thats what i saw with netflix. I saw him one of the first times ever i see a company where what they say is their Corporate Culture is really in the company. Host could this culture be taken to a ford or gm and implemented there . Gst its a great point. Weve had 200 years of factories providing Enormous Economic gains to our cultures. In a factory, ita very topdown system. You have some senior boss and then all the workers were supposed to never make a mistake and a simple perfect car or a perfect pharmaceutical or hopefully a perfect airplane. So the manufacturing paradigm is very strong because its very valuable, and that topdown culture is where all suited to faory wellsuited. Then you have another type work Creative Work. It it used to be very small and now its grown to be substantial rt of the economy. And we are over influenced by the factory paradigm. Really with creative wk you want to increase vartion, not decrease i like an a factory. An in Creative Work you want to experiment andearn and jeff to try new things. Its fluid. Think of it as fertile is the goal in our culture, and still is a goal in a factory. You want clean clinical perfect repeatable stuff in a factory. And in a creative factory youre managing onhe edge of chaos to get the best ideas. So again as the Creative Sector has risen, we havent figured out what are the right paradigms for Creative Work. And the netflix culture is one example of that where its really incredible employee freedom wre theres no rules. Thats a hard way to mana because youre managing the edge of chaos so you all of these complicated systems about culture, about ctext that are very helpful. T think of it as a set of paradigms wellsuit to Creative Work. Our culture is not suitable for safety critical work or manufacturing work. Its the begning of new paradigms for creative rk. Host so wring a book thats using a rather old medium to put your ideas down, isnt it . Guest we First Published these ideas online on slide share and there have been over 20 million views of that. We are veryuch into the new format but we wanted to do book length treatment where we took the time to edit,o ride out the stories and reedit d sort of a highly polisd well thought through version of the ory. Those who have read the culture memo will see a much fuller explanation of why and where it works. Host erin meyer, after your indepth study of netflix wherere your criticisms still . Guest let me build on what reed was saying a moment ago because you are asking but whether theres a place for this kind of culture in, for example a ford or more traditional manufacturing company. What really struck me as i was doing this research at netflix was that any area of any company that is seeking to be more innovative or more flexible or trying to figure out how to reinvent themselves more quickly can benefit from these principles that reed is using at netflix. You might you working, i was working this morning with michelin tires, 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, any team leader any ceo, anyone who wants to get more innovation can really learn from this creating this fertile environment that reed was talking about. You asked about criticisms. Of course one of the things about doing something kind of edgy like this is that are always some difficulties that come with that. One of the big things that comes up is of course if we only have a talent come if we focus on talent density, then some people are nervous about whether they will lose their jobs. Theres thinking about that, at netflix about 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. Guest thats right. Reed is better to talk about that, but whereas most Companies Think about their organizations as families, like we have longterm security, we put up with one another even when havead behavior. An olympic team isore what reed is goingor at netflix which is we try to get the best at any moment and that may be channg year over year or month by month based on who is best at at time. Host m hastings. Guest i totally agree with what erin said. Every time you hear an organization w are a family makes people cynical. Because they intuitively know that aamily will stick together. A family that we admire, a good family will stick together no matter what. Its 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. He was choosing how many dvds to buy for certain films. I said, i dont think thats going to be very popular film and he ordered less than he would have, and we ran out and the customers were unhappy. When i said why did you order so few . You said, you said it wasnt going to be very popular. Thats what i said, ted, you have to do what you think is right to help the customers and the company. You cant be trying to please your boss, me. You are not allowed to let me drive the bus off the cliff. You have to fight for the benefit of the company. And in general we say dont seek to please your boss. Seek to please the customers and to grow the company. We want people to actively think independently, not just to implement their bosses wishes. They should never hide anything from bosses and they should tell them but the idea is to get everybody in the company thinking about how do we best greet the companies and grow the company. If we do you gethe tremendous results weve had over the last 20 years. Host you are the found of the company, largest stockholder, ceo. You say dont hav an office at netfli but at the same time ther some inherent qualities that make people d what you want. Guest sure. I mean, i lead by direction and exple. I talk about whats important like cusmers and how they want to relax after a hard days work other times they want to ally be pushed in terms of the content that they watch. I will try to bring the Customer Experience home to our employees to talk about culture. Its not that dont want some things. Its that we want everyonelse to also want things, and then in those conflicts or disagreements, a lot of good things come out of that. Host erin meyer, is it tough for ceo to in a sense let go of that control . Guest i think its an intesting process that reed has committed becausen one hand reed is very strong opinions as i gss everybody is running a company does. On thether hand, he has strongly made it clear througho the company he wants people to be clear with him when they disagree with them or when they have candi feedback for it. I have this whole thing, all about you are disloyal to the company if you feel this agreement for what the organization is doing or your boss isoing and dont express that this agreement. Youre asking reed early about whether people really dared to give them feedback given his level of power in the company. I would say its remarkable how frequently people do give feedback, probably because he celebrates that whenever it happens. Host so mr. Hastings, how do you define your job today and how much time to get to just think . Guest i get a lot of me to think nights and weekends. An the traditional work hours i tend to be in meetings and talking with people trying to understand what they are working on, talki through various situations in certain countries, you know, how are wevolving getting the content right. I want to be highly informe i want to know whats going on l throughout the company. But then i dont region it safe lets cast this person stead of that person. If i detect in general will detect we are casting too ma i would say its probably not limited to one area, and i would try to abstract tt and go to the principles of it which is theres a broad range of the storytellers and we should have a broad range of storytelling and get to the underlying lesson in it rather than fix the tacti im always trying toe a teacher essentially an abstract what i see. But too that i need to be highly involved and know whats going on throughout theompany. Thats the recipe essentially. Im always ting to build organizational muscle rather than fix particular problems. Host a question for both of you. Is that geographical area of Silicon Valley important indispensable to what you do . Guest its one of many indispenble areas, and certainly the culture and i come out of the Silicon Valley culture. But at thi point its a fracti, well less than half of our employees are Silicon Valley. Its important to what we do but about tthirds of spending is on content. We have majority of u. S. Emoyees in hollywood. So we really are an entertainment cpany that, of course like all modern companies are th powered. Some ways disney is coming at it on the other sandwiches they have been super eertainment and theyre ptty good at tech. They haveixar and now they have disney plus. I think we all all the Entertainment Companies are getting tech infused. Ost erin meyer . Guest i think ill add to that. When i srted working with netflix they were just getting ready for this enormous International Expansion which is quite interesting for me since i study and write about National Cultural differences. In 2016 were moving it all or the world. One of the things we write about in the book that i was very interested in researching was how this provocative and surprising Corporate Culture that was leaning to this enormous innovation and flexibility could be implemented in countries around the world like in japan, singapore and brazil. We really tal in the book about how to tak your Corporate Culture, which may beery usul to you in your headquarters, and figure out how to me that work even when it is in direct conast with some of the National Cultures that you may be moving into. Thats really interesting part ofhe national story. Host Reed Hastings,heryl sandberg, sta, bill gates come up in the book. Whats the level of collaboration or you know, frienhip among ceos in Silicon Valley . Guest its quite variable isure. Those pticular three people that you mention ive had longstanding relationships with. But i would say Silicon Valley is a very competitive place, you know. Nelix doesnt compete with that. We competeith other other Entertainment Company like disney and hbo. Those tech leadersou mention its all very friendly because its not too competitive whers again with the entertainment compaes it can be a more challengi relationship. Host well, we can finish this without talking aut my favorite person in the book, and thats patty, did you have a chance to talk to patty mccord . Guest i talked about a lot. Patty is a great storyteller and has got an incredible memory. Often i was like whats more important . Whenever that happens i was called patty and always had a story for me. Shes an important character in the book. Host who is she . Guest patty mccord was our founding head of h. R. , was with us over a decade, really pioneered a lot of these ideas gave us permission and pushed us that wean be great for employees witut rules. If we focus on givg them a fertile environment that stretche them and that became the way we oriented everything. Host and one of those no rules is vacation time. Guest thats a funny thing, we dont count how many hours someone works in the day. We dont know if some is working eight hours, ten, 12 hours in a day. And yet in the old days we used to count vacation with someone was working 46 weeks a year, 38 weeks a year, 50 weeks a year. We realize why do we care if 46 48, 50 for not measuring eight ten, 12 and a day . Its this industrial hangover that i talked about, from the factory mindset. Lets let everybody take what they want, and its worked out great. I try to set a good example of taking a lot of vacation and being visible about that. Thats been very positive. Its not that we beat 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 we are fine for me things such as its good to Wear Clothing in the office, and vacations are good part of your life, but work is important, too. Host Reed Hastings, when youre in evenings andn the weekends have time to think what do y think youve hieved in the last 22 years . Guest i never think about that. Im always thinking about what we have to achieve ahead and how hard it is. The key is relentless diatisfaction. Look at our success to date as a good sta, and what we want to do is bui a company that really entertains the world connects people and people learn so much through entertaient of other peoples lives. It could be other countri, of the cultures ce other racial groups, other genders, allinds of things that you reallyearn through entertainment and exposure. And when you think of how big the internet is around the wor over 6 billion active mobile phones, we have a tremendous opportunity to continue to grow and were just getting started. Host our big threat in 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. You are watching cspan2, your unfiltered view of government. We are by americas cabletelevision companies as a Public Service and brought you today by your television provider. Heres our live coverage on cspan today. Now remarks by former Homeland Security secretary jeh johnson on National Security threats against america and what policies president elect biden might enact to address them. He was joined by former Principal Deputy director of National Intelligence sue gordon at this event held by the center for a new american security. Hour. N gd afternoon, everyone. I am richardontaine, ceo of the cter for new american securi. I would like to welcome everyone to the discuion today of Law Enforcement come heland security and intelligence in the coming biden administratn. This sessionulls together several critical isss all of which are moving targets in the trump admistrations final weeks and as we head into this