A Review of NO RULES RULES: Adapting the Netflix Culture

A few things struck me during my first week at Villvay:

1. The power of a curated set of core values and company culture in helping steer even strategic decisions on many levels.
2. Despite being a hybrid work setup, the company culture is very strong and is more than just a shallow pizza party or beer pong tournament every 2 years.

Bonus point: The company heads have a mindset of continuous learning and improvement, which is often driven by reading up on, and observing proven methods by business leaders.

And this is why I was handed the book ‘No Rules Rules’ by our CEO to help me better understand the mere idea of company culture, and the path Villvay is on in terms of talent density and candor. Talent density was a fairly new concept for me, having never worked in a role that required a deep understanding of People Operations. Candor, on the other hand, felt more familiar to me, though the book did take this beyond your boss telling you their door is always open, when in fact it is literally closed, guarded by a secretary and is as far as it could be from the main working area.

So, what is ‘No Rules Rules’?

Other than a linguist’s lingering source of annoyance, very simply, ‘No Rules Rules’ is a book on company culture, and my first foray into the management genre.

While reading this book, I found myself a bit enthralled by it all: The freedoms that the Netflix employees have felt a bit unreal to this South Asian writer. I recall being brought back to reality when I read about how, on visiting Netflix’s Singapore offices, Reed Hastings had asked that the locks be removed from the employee lockers due to the culture of trust that is a part of Netflix.As someone who has had personal items stolen at previous offices, I’d have liked to know what the employees thought on hearing this news.

Of course, many factors come into play for this entire culture to work, not just removing the locks off lockers(it’s literally in the name though?). However, I am not about to summarize this book for you—I would much rather you read it yourself and make your own assumptions.

One thing that made the book a fast read was the banter between Reed Hastings and Erin Meyer: Reed would casually mention a particular policy, and Erin would be appalled and then ‘see the light’. In an attempt to keep up with this energy, I decided to express my understanding of certain concepts from ‘No Rules Rules’ in this manner by discussing some of the book’s reviews online.

The "best of the best"

Following my post-movie-watching rituals, after reading No Rules Rules, I looked it up on the imdb(or should I say Letterboxd?)of books: Goodreads. And wow, were the reviews mixed! There were people who thought the book’s concepts made for a toxic workplace, and others who raved about the genius of it all. There were also the people who respected the book’s opinions but acknowledged that the Netflix culture was likely not for them. In particular, many people criticized the book for ideas such as:

“Adequate performance gets a generous severance package” – Netflix Culture Deck

And ‘The Keeper Test’, where the first part reads:

“Which of my people, if they told me they were leaving for a similar job at a peer company, would I fight hard to keep at Netflix?” – Netflix Culture Deck

This is a fair enough question with which to assess your employees, and of course, this ties in with increasing the talent density in the company – find out who is performing well and figure out what makes them successful. And then try to hire your new talent accordingly.

However, the issues tend to arise when you go to the next part of this thought in the Netflix culture deck:

“The other people should get a generous severance now, so we can open a slot to try to find a star for that role” – Netflix Culture Deck

People in general say this is quite a harsh view towards the employee, and some specifically say that if you are looking to only hire the ‘best of the best’, only 2-3 companies in the world would actually be able to do it.

BUT what I think people fail to realize, is that ‘best of the best’ means different things to different companies. Especially if you are in the marketing/strategic planning teams of your company, you may be aware of things like brand goals and company goals (2 very different things, mind you), and these things significantly influence the type of employees you need. Consider Villvay, for example, being a company that is on a growth trajectory, specializing in B2B e-commerce, and is looking to build their own products: their ‘best of the best’ would be very different to what a company like WSO2, a larger, more established company, would consider their best of the best’.

TL;DR: ‘Best of the best’ is a very subjective title.

The people factor of this idea though, of course will always have its downsides. Getting fired—regardless of the reason—is demoralizing at the very least, to some extent. And sometimes, for reasons previously mentioned, a subjectively good employee who is otherwise happy at their company may end up resigning for the simple reason that there was no more room to grow any further: this affects both them and the company, leading to a mutual understanding of either parting ways, or the employee in question choosing to upskill in other areas. What really matters here, is how the company approaches situations like this. Netflix hasn’t mentioned much other than ‘generous severance package’, but this is understandable because this is a book on culture, not how to run a business.

Something else to note(for those of you who are not going to read the book), Hastings was actually forced to use ‘The Keeper Method’ when he had to lay off a third of his staff, which he and his HR department were worried would bring down the morale of the remaining workers, with many of them wondering if they’d be next on the chopping block.

But no, that wasn’t the case. To their (and my) surprise, the teams were coping well with their now-increased workloads because these high performers worked well together, riffing off each other in a good, calm work environment. And despite being skeptical about how things would turn out, as I read this section of the book, it immediately felt so logical that this would be the result (assuming you have the right leaders that actually take note of the high performers). Which leads us to…

No one’s trying to reinvent the wheel

Talent density is a simple guiding concept, and what office has not (even emptily) encouraged candor? What Hastings does isshow how Netflix actually employs these tenets in their culture, and even delivers it in 3 levels, allowing companies totweak these ideas to suit their current situations... because one size doesn’t fit all(just like how every company’s definition of ‘best of the best’ is different).

The book is anecdotal – it is not meant to tell youhowto run a business, it tells youhow to treat your employees, which is essentially:

1. Like adults
2. With respect (just in case point 1 didn’t solidify this)

Like Adults

Other than promoting candor (that gets its own section), I’d say this was expressed mainly in Netflix’s spending policies.

“Act in Netflix’s best interests”is their spending policy. It is a simple line that is sufficient direction (in most cases) on whether you should be spending this money or not, and if so, how much of it to use. This clear direction emerged through trial and error; it wasn’t always their spending policy.

Their original policy,“Spend company money as if it were your own”, backfired when some employees abused the direction and treated themselves to drinks and dinners, billing them as ‘team building efforts’. Hastings and his teams knew they needed to revise this policy without turning it into a situation whereeveryexpense goes through an approval process, and they did.

Treating employees like the adults they are has its caveats, but it can certainly be done.And in addition to empowering the employee, this was also a good example of implementing strategies, and refining policies and processes as needed.

With Respect

I greatly admired how employee transparency was approached in the book. Hastings being open (to an understandable extent without affecting the privacy of the employee in question) about why certain people had resigned or been let go was refreshing because of course you want to know what is going on in the company you work at! You want to know if you are perhaps doing the exact thing that led to a colleague being fired, or what policies the company are looking to drive etc. It builds into the trust between an employee and employer, and the fact that you are treated like the adult you are.

This is evident as well, by the fact that while ‘No Rules Rules’ was being written, Erin Meyer was appalled to find out that managers in Netflix’s international offices had read sample chapters of the book before she had even started the process of interviewing employees.

Candor/Feedback culture

Candor, when used properly, is a powerful tool for self-improvement. And to be able to have a sustainable feedback culture, you (the employee) need to be able to:

1. Be an adult (in how youdeliverfeedback, and how youreceiveit)
2. Be respectful

“Clarify and reinforce the difference between being selflessly candid and a brilliant jerk”

Basically: Be nice.

Even critical feedback can always be delivered nicely. Be it by considering the timing of the feedback, or the tone and way it is expressed. Your goal is to assist. Whether they appreciate and accept it, put it into action, or discard this feedback is their prerogative.

It is a simple enough concept, in any scenario, which is why it is unfortunate that some readers boiled it down to:

“ - you have to participate in live feedback about yourself with 10-12 people over dinner.. no thanks.” – Goodreads

Candor, and the promotion of it within the company, is vital for a sustainable company culture; so much so that part of Villvay’s culture fit interview tackles the question of how candidates give and receive feedback, along with their views on promoting candor in the workplace.

In conclusion, the book is a good read if you take it at face value. However, if you’re looking for deeper insights, you might come away with more questions than answers.The best use of this book would be as a springboard for developing your own ideas of company culture and policies – which is how it rightfully markets itself.I have seen firsthand, how Villvay has been doing this, and indeed the lessons learnt along the way have changed the way the company approaches things like People Operations, Talent Acquisition and company culture as a whole.