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Netflix and the Culture of Reinvention

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Netflix and the Culture of Reinvention with Erin Meyer

Erin Meyer, Chase Jarvis

Netflix and the Culture of Reinvention

Erin Meyer, Chase Jarvis

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1. Netflix and the Culture of Reinvention with Erin Meyer

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Netflix and the Culture of Reinvention with Erin Meyer

Harry. What's up? It's Chase. Welcome to another episode of the Chase Travis Live show here on Creative Live. Amazing guests. You know, this is a show where I bring guests on to unpack their brain with a goal of helping you live your dreams. Today's guest is Erin Meyer. I first got to know Erin's work when she wrote an amazing book called The Culture Map. And she's got a new book out where she looks at high performance, high performance culture inside of companies, and you can apply this to your very own life. Her work has appeared in Harvard BUSINESS REVIEW, New York Times Again. That book, The Culture map is so impactful for me and helping connect a bunch of dots. She was selected as the thinkers 51 of the 50 most influential business thinkers in the world. She is a professor at INSEE. Odd, so smart, thoughtful and this idea of getting inside, for example, where she goes deep into Netflix culture, which, if any company has set a new paradigm, invented itself and reinvented itself. Uh...

, Netflix defines it. So I'm going to get out of the way and introduce you here to Erin Meyer. Let's get into the show. Mhm. Yeah, Yes. Yeah. So, Erin, thank you so much for joining us. Welcome to the show. So nice to be here with you, Chase. Well, I will confess I have followed your work for some time. I read a book that you authored some time ago about culture, and I had just come out of living in Paris, France, where I think you're broadcasting from right now. I lived in Paris for a number of years and I was running a had historically been an independent creator myself. Creative live now was expanding. We were taking on investment and and a global community. And I was really interested in how to start thinking about working with other cultures. So your book around culture and business was super important to me. And that made me as soon as your most recent book, which we're here to talk about today and all the concepts in their, uh, around Netflix and work culture. I was on it immediately, and I want to say a amazing job and be the opening question here is why in the heck did you choose to write a book about the culture of this amazing company. Yeah, well, so you're right. I study. I'm joining with you from Paris, just as you said. And I'm a professor at INSEE. Odd, which is this is business school outside of Paris. And my whole life work has been around national cultural differences, which is now, I guess, how we got to know each other. Um, but I've always been kind of, um let's say, uninterested in corporate cultures. I always found, but companies said about their corporate culture is to be kind of boring and not really very truthful. And then I came several years ago across this this infamous or famous a Netflix culture deck, which some of your some of your readers, I was seeing right, And it's been downloaded, like 20 million times. And when I saw that I was, I was shocked. So I had two reactions. One was that I really loved the honesty in those slides, like here was a company who told the truth, right? But the other reaction I had was just confusion and maybe a little bit feeling a little startled so as your listeners might remember, one of the slides says at Netflix adequate performance gets a generous severance. And, um, I just didn't understand how that could work in a successful company, because at at inside we've been focused on studying all about psychological safety in the workplace. Right? And here was a company that didn't say, Look, focus on making your employees feel safe. But if they don't perform, kick them out right. And then you might remember there are other things in that deck like, um, our vacation policy at Netflix is take some right and our expense policy is behave in Netflix's best interest. And I thought that sounded interesting, but I didn't really understand how, like, in a real company, those things could actually work. So when I had the opportunity to start working with with Reed Hastings, I was very interested to try to figure out what was actually going on in the ground. Well, one of the things that I also took away from the book and what I have admired about Netflix for a long time and is super relevant to not just creative live in the company that I'm building, but specifically to the because admittedly, this podcast is partly selfish, right? I'm having you on here to learn from you, but also the people who are listening and watching. This concept of invention and reinvention, especially for for creators and entrepreneurs, is so critical. So this idea of corporate culture and you know, whether you're, uh, an employer or solo procure, I think the idea of what culture and what things, what your values are as a huge and valuable lens through which you look at all your work. And then specifically, this idea of reinvention and what Netflix has done at scale and what solar preneurs entrepreneurs creators have to do on an ongoing basis help me understand how those two things are related. Culture and values and the ability to be nimble and continue to reinvent and and and innovate and stay out in front in your industry. Yeah, so that's the other reason that I was so interested in Netflix is okay. Obviously there are very innovative company, but there are other very innovative companies. But what was interesting about Netflix is that they have their one company that has managed to, like, totally reinvent themselves in just less than a couple of decades. Right? So your reader, your listeners remember it wasn't very long ago. The Netflix was a DVD by mail company, right? You remember, right? Envelopes, right. So but imagine what kind of company that is like you have these warehouses with thousands and thousands of DVDs and you're like organizing them and putting them in the post office. And then, of course, the environment shifted right, and Netflix reinvented themselves as a streaming company. Right now they're streaming. They were streaming old TV shows like reruns right and all right, exactly. An old movies, right? And then, of course, the environment shifted. And Netflix reinvented themselves, this time as a media company competing with Disney to create your favorite shows, right? And that, of course, that kind of flexibility, like being able to reinvent yourself again and again, is extremely unusual. And what's very interesting is that Read, who founded that company, believes that that's because of their corporate culture. So that's what I was. That's what I wanted to offer with this book. No rules, rules. Is this kind of like How can we do that right? How can we also learn from what this company did to be more flexible and innovative as we grow? Yeah, this idea of no rules rules is I mean, obviously the title of the book, which, if you haven't read it, if you're one of the handful of people who is listening or watching you haven't this is super. It's I would call it a critical and important read if you want to have a values driven life and or business yourself and have the benefits of that. And in being able, as Aaron just said to invent and reinvent so personal plug for the book, check it. It's in the It's in the background there, behind uh, Aaron. If you are watching and if you're listening, it's as red as the Netflix envelope. It's unmissable, um, so give us a little bit of insight, if you would. Let's go back to the beginning when you started studying them specifically, you know, presumably it was like an onion, right? You started peeling back. And what I know about the book you started peeling back the layers and walk us through, you know, I guess a little bit, maybe sequentially. Some of the things that you learned in that process and with the specific goal of helping people understand that and being able to apply it to their lives. Yeah, And before we get started with kind of a step by step, I think I'll just start by saying what my kind of like overall learning during the process was. So my biggest learning was that most companies today and most of what we teach at business schools, are kind of like these hangovers from the industrial era. And what I mean by that is that, of course, during the industrial era, we were obsessed with error, prevention, consistency and replica bility, which, of course, we need if we are like manufacturing automobiles, right. But in today's world, there is, of course, a growing number of teams and organizations. Where are our main goal is no longer error prevention. Our main goal is now innovation or flexibility, and if we're going to be, those are the opposite, right? So if we're going to be focusing on innovation instead of error prevention, we need an entirely different set of paradigms. And so that's you know, that's kind of what got me into this. What I learned from the whole thing was, you have to think about it all differently. Aaron, you have to start over well again before you dive into the sort of the the some of the step by step. It's important to comment there because this idea I have written about it in my book. And there's an idea that as creators, so many, for example, writers look at the blank page or, um, founders of start ups. You know, they need to put something out there and learn in a lightweight, um, lightweight incremental way so that they can drive innovation and test and learn and repeat. And it's like making mistakes is so critical to the creative process. Like the blank. There's nothing worse than a blank page. Anything. If you ask a writer like, Where do you struggle? Oh, I don't like the work that I do well, show me your worst work then they often have nothing to show, and and so this idea of I like to talk about it in terms of not not era avoidance but mistake recovery be in the in the business of testing and learning quickly. So whether you're an independent artist and you're looking at the blank page or you know haven't built the product that you've dreamed of. Or, as in the case of Netflix, you are doing this at scale and a company. It's it's I think it's a baseline requirement that we understand how important and novel that is also away from the factory, right. If we want to have a creative, innovative culture that we need to learn in a creative and innovative environment, we need to be able to apply that without sort of fear of retribution and all of those things that that historically have been a part of no mistake culture. So that being said I think was really important and smart of you to say that upfront that that was this key sort of take away. But now we'll go back to the beginning. They start to peel the onion for us. Yeah, so I think I'll start by telling you a story that Reid told me the first time I interviewed him. So I conducted 200 interviews at Netflix before read, and I wrote this book together, and the first time I interviewed him, he talked with me about his first company, which was his organization called Pure Software. And when he opened Pierre Soft It was just a small group of entrepreneurs, right, who were operating fast and loose so they had no rules or process. They were just doing the best they could for the good of the company. But then that organization group to hundreds of people and finally thousands of people and as a gross, some people took advantage of the freedom that was allotted to them, right? So, like, there was this guy who used to fly every week from San Francisco to L. A. And because there was no travel policy, he started flying first class, right? Why not? There was a woman named Charlotte who used to bring her dog to work every day because there were no rules against it, and the dog chewed a big hole in the carpet and read an HR. They responded to this Let's say bad behavior by putting in place like rules and process, telling people what they could and couldn't do right. But then something else happened, Which is that the really kind of mavericky creative employees. They left the company because they wanted to work in places that were more entrepreneurial right that they could like run free and the company stopped innovating. And then the people who are really good at following the rules and process they were. They were promoted into senior management roles. Then the environment shifted from C plus plus to Java. But those people at the top were not the most flexible, and the company was unable to adapt and read had to sell the company. So when he opened up Netflix, he had these kind of big lessons, which was no freedom employee. Freedom breeds innovation, right? And a process kills flexibility. And those were those were the two kind of, like, big ideas that that were underpinning the culture that he developed at Netflix. So keep going. This is okay. Yeah. No. And honestly, this is like it's so easy that the folks that are sitting home watching and listening right now this idea of just there needs to be enough guidance to get everyone going in the right direction. But rigid processes often undermine the the end goal. Just hold that in mind as Aaron keeps going down this path of what you learned. Yeah, and let me also say when I when I talk about rules and process, I'm not just talking about, like, travel policies or what you can and can't do, but also things like kpi s or management by objectives. I mean, those are all things that we do in order to control our employees things that they don't do at Netflix. Right? Um so rethought. Okay, as with Netflix, um, he would try to create a really like free environment. But he also recognized that as the company grew, it was likely to descend into chaos if he didn't put in place process. So then he thought, Well, at most companies, the really good employees, they don't need rules. Write the rules, are there to deal with the ones who are kind of mediocre. So what if I tried to create an organization that was made up like entirely of top performers? Then I could have a company that had a lot more freedom, but I might still have some of those people who try to take advantage of the freedom. So what if I tried then to create a corporate culture of feedback where we were all giving one another a lot of feedback? And then if you know, someone might say, Hey, Jim, it's not okay to fly first class. That's not good for the company. Right? And we would become accountable to one another, right? So if I had these two things, what they call talent density at Netflix, which means less employees, more talent, right? Uh, candor. Then we could have lots of freedom, very little rules and process, even as the company grew. So that's kind of like the foundation of, let's say, the Netflix experiment, which I think a lot of companies can really learn from today. Wow, talent density. Do you believe that the that this environment I know you saw this or read saw it in his first company, but clearly you've looked at a bunch of other companies in your time, in sod. And for those of you who don't know, inside is a renowned international university. As Erin said, She's there. Is it up in Phantom Blue? Yeah, that's right. You got it. Uh, I lived in Paris for a few years. Desolation of papa being francais, just just north of root beer on route Baron just north of Plas. DeVos there. Um, but inside is A is a renowned university, and presumably you've studied all kinds of other of other companies and cultures. Is, Is this idea that freedom plus talent is that the alchemy that provides innovation? Or are there other ingredients besides those two? Well, I actually hadn't come across this this Netflix experiment before, but I do think it's probably the one that we will change. I mean, that idea. I think lots of companies are going to start moving towards it. But I would say I mean this idea of having, like all, let's say, a players and all that that makes people very suspicious, right? But there's actually a lot of research that shows that performance is contagious, right? So there was this great this great piece of research that was conducted by one of my colleagues at another business school, this guy, William Phelps, And he invited for NBA students into his lab at a time. He gave them a 45 minute task, and he he rewarded them financially based on how well they performed. And unbeknownst to them, on 50% of the group's there was an interloper. Uh, so the interloper was this this actor named Nick, and he had been hired to act just like a regular NBA student, but to do some things that were a little bit undesirable, like sometimes he would act a little bored like put his feet up on the desk or text his mom. Uh, sometimes he would act a little jerky like he might say things like, Have you ever even attended a business school class before? Um, and what's really interesting is that you see in, you know, study after study, Phelps proved that the teams that had Nick on them performed at a 45% worse rate, even when the other three NBA students were like top of their class. And more interesting than that is that you can see that during these minutes, the other NBA students, they start to act like Nick does right? So, like when he's acting board, they start acting board. Also, there's one videotape where you can see he's acting kind of bored, and one of the other NBA students puts her heads down on the desk and says, What is this going to be over? Um, and when he acts jerky, they start acting jerky to not just to him, but to one another, right? So Um, I think most managers think an individual performance problem is an individual problem, right? Like that's between him and me, the manager. But actually we know from a lot of research that an individual performance problem is not an individual problem. It's a systemic problem which impacts the entire team and organization. So I think that that's why I mean, of course, they say these edgy, provocative things that Netflix, like adequate performance, gets a generous severance. But when you get rid of all of the Fritz is and you move out all of those, like lovable but ineffective or not so effective people, then you really find that the energy and enthusiasm spirals up. So that's where that talent density really, really gives the this kind of this power punch that we're seeing at Netflix taken both from a company standing out in a marketplace and an individual standing out in their field. Um, this idea of going against the grain is always, you know, the phrase that I use is you can't stand out and fit in at the same time. And I'm curious to what degree this idea of excellence and counterculture or counter counter in two. It'd pretty counterintuitive nous. I don't know. It's very word. Is there? Um, did you see a relationship between those two things? I guess one is probably necessary, but not sufficient. I don't know. But help me relate those two things because you go back to the beginning of our conversation. You said one thing that caught your eye was how different this was relative to their peers. And, you know, I remember when I said I wanted to build creative, Live and have millions of students around the world learning creativity, entrepreneurship, innovation from the world's best. And people thought it was nuts. And there's a little bit of greatness in nuts. So is there a relationship between like, 0.1? Is there a relationship between them? And then I've got a follow up question. Okay, so, um, what I What I believe is that most companies, when they think about their corporate culture, they focus on absolute positives like we value integrity or we value respect, right? That idea of saying you value respect, I think that's hysterical, because what do they do? Did they get together as top leaders and say, Should we value respect or disrespect. And then they decided, Oh, well, value respect, right? I mean, those words. There is no good, credible option to those words. So when we say that those are our values, it doesn't really help our employees make the tough decisions on the ground. But when you look at the at the dilemmas that the tensions that our employees are facing every day, like you know, I've got this guy on my team and he works really hard and people really like him. But he's not an amazing performer, and I want to have a top performing team. Should I fire him or not? Right. That's a real dilemma. And the dilemma there is between high performance and security, right? Do you want a culture of high performance or a culture of family of security? Right. So I think that that's where things get quite quite meaty, with cultures that we really start thinking about. What are those dilemmas? And then we dare to tell our employees you know what? Here we value high performance over security, right, and that's when people actually start taking taking your instructions right well again. Just apply that to the individual or to any solo preneurs or artists out there like do you value security and ultimately, that tends to drag into mediocrity over risk taking. You know, You know, when you put this book out, you know, ostensibly you're taking a risk. Because presumably it was very different than everything that your colleagues I didn't see that we're writing about. And this again, this concept of standing out and taking risks, what is it on the other side of comfort and security is where all the best stuff is in life is the Do you feel like these are This is this is a universal or is this isolated to Netflix in the culture you discovered, or can people apply this to their own life? Am I making a a unfair leap? No, I think you're right. I think that, um of course, um, the things that were that that we're talking about today, they are very challenging. But sometimes it's the more challenging things to do that are even against human nature, that will actually bring the rewards. And I think that actually firing employees that you like, I mean, that you have, like, an affection for and we do have affection for our employees, right? Even the ones who are not top performers. We love them, right? But we have to. We have to be clear about our corporate culture to get people to do things that they wouldn't do otherwise. So I think actually, that's quite interesting, because you can say you value high performance. But if you don't kind of push your manager is to take the touch, the tough decisions, then you're not gonna find it's actually taking place. So at Netflix, they have this mechanism that they call the keeper test, which sounds quite ominous. Um, but I actually believe that it's it's irresponsible for a manager not to do this. So the keeper test is basically that every 6 to 12 months that you know you as a manager or leader in your organization, you just sit down by yourself. It's great for covid. You sit down and you ask yourself the question. You know, if if Patty came to me or Jonathan came to me today and he told me that he was leaving the organization, how would I feel right if he said, Boss, look, I quit, right? Would I be devastated? Would I say, Oh, no, Jonathan, don't leave right? Would I? Would I do everything I could to keep him in the organization? If so, then I know he's the right person for that job. But what I feel a little bit relieved when I think Oh, good, no, I don't have to deal with that issue anymore. Or would I feel a little bit excited just thinking about who's out on the market that I could get for that job. And if so, then that is a clear signal that either you have to give feedback if you haven't given it yet, and if you have given the feedback and Jonathan hasn't been able to perform at the level level you would fight for, then you need to move him on. So you know, however you feel about the adequate performance gets a generous severance. I think that's something we should all be doing thinking about it at least when these hard truths gets. But that's real value. That's part of the the people. Often, um, there are personality types and whether your culture like you, talk about the difference between French culture and U. S culture and work that I experienced directly living there. There's so many differences. But when you think about what you like, those are the most important conversations to have. Sometimes even with ourselves right, we can have them as managers or bosses. But that's the talk that we often, uh, need for ourselves. So black. There's a couple of places, a couple of ways. I want to take this. Now, Um, I'll just I'll throw a dart and pick the one that I'm that I'm most interested in. There's another line which in the book, which is is I think says a lot, which is hard work is irrelevant. And you know how that is. Obviously another one of those zingers that we find in in, you know, helping this this concept to be. As you mentioned, the deck was downloaded 20 something million times because that's not how corporate talk. And certainly there's a what I call hustle porn all over the Internet about how hard we have to work is entrepreneurs to be at the best week and all that is true. But tell us what you mean by that and what Netflix means in a culture that values excellence. Yeah, well, I mean, that's just exactly the keeper test point, which is that you might feel like you shouldn't fire someone because she's working so hard. Uh, and you might feel like, you know, how can I How can I fire her? But I think that's when it really comes to this. This image and one thing I think is very helpful at at Netflix, which I think is helpful for many like new, newer, let's say, non industrial era companies is that a company is not a family, like If you want to be like an innovative, flexible company, then don't think about your organization as a family. Think about your organization is a professional sports team, right? And if you're like if you're running, I don't know, like a professional football team, right? Larry is such a nice wide receiver, said no one ever, or he works really hard. So even though he's not out there getting the scores that are doing the work we need having the results we need them to. We're just going to keep him on the team, right? No, of course not, Of course not. And that doesn't mean that we're cruel. It doesn't mean that we're not trying to create an environment of collaboration and camaraderie. Of course we are. But we also know that our job as the leader is to make sure that we always have the right person in every spot. And that's what we do not for ourselves but for the team. Right, because everyone on that team only wants to play with the best, right? So it's just a little bit of a paradigm shift. Yeah, no, it's but it's so true. And then there's a little I don't know if irony is the right word, but, um, it's curious that, as I think of the highest performing teams within our company culture that I've played on or like this, people end up bonding and connecting around high performance as that is a shared, um, mutual respect that those are shared values. Um, and I think of where there's you've got a really nice person who's maybe there working their butts off, but it's not cutting the mustard and others know it, and then that's sort of like an a player sitting next to a C player. As you said in the in the experiment with Nick, like starts to go. Well, maybe, you know, I'm gonna, you know, take a nap under my desk or something. So I've personally observed that, and I think for anyone who's ever you know, I think we all have. Probably at this point, if you're listening to this, been a part of some team and I encourage you to ask yourself, Is this true? And this this keeps coming back to me as a leader in our organization and someone who is fascinated by by these concepts that you've written very, very eloquently about. So these are there any other singers that I mean, we've talked about the one you know, adequate performance, gets a nice severance and hard work is irrelevant. Are there any other singers that you feel like always get people's attention? And again, I like these because they are counterintuitive. And those tend to be things that have helped me the most in my journey. Well, I think we should move on now to talking about candor. I mean, a lot of a lot of organizations are kind of, uh, newly newly obsessed with candor. That seems to be the new trend that we're all talking about. feedback. Um, And at Netflix, I would say it's really their superpower, right? So we can talk more about that, but, oh, my gosh. When you were there, like you think you're no candor, Okay, Netflix, they're really they really use feedback. Then you really use feedback as their as their strength. And they say things like, You know, if you have feedback that could help somebody in the organization and you don't give it, then you are being disloyal to the organization. And they also say, Don't say about somebody something that you wouldn't say to their face, which is actually quite radical, right? Because most companies, we spend a lot of time talking about people behind their backs. Right? Um, so at Netflix, they they're doing some, I think, very concrete and interesting things in order to get get this feedback, this culture of feedback, this culture of candor out there, the first one is not very not very provocative, but very useful, which is that they frequently put candor on the agenda. Right? So I might come into the office. It's 10 AM I opened up my calendar and it says, you know, 10 30 feedback with Jane, right? So I know when Jane put that on my calendar, she's coming to give me some feedback and to ask her for some feedback. Right? So that becomes a very that's just very common. But then they also do other things that Netflix that I thought were quite shocking. So one of them is something that they call these 36 live 3, 60 dinners. Um, so for a live 3 60 dinner, they get you get together over several hours, like over a meal, right? And, um, I'm up first. So if I'm up first, we go around the table and everybody at the table tells me what they feel I could do in order to improve my performance. Right. And then we move on to the next person. When I first heard about that, I just thought I thought, What's the point? Right? Like, why do you need to drag my weaknesses across the entire team? Can't you tell me that in private? But I came to see it was such an interesting mechanism. Because actually, if one person gives you feedback, you never really know. Is it about hammer about me, Right? But when you're going around a group like that, you see? Oh, well, this person thinks I you know, I speak too loud, but the next person disagrees with her. Where is there something else that everyone thinks that I should be doing? And I often heard I had one quote from an unemployed that I loved where he said, You know, when you go to these 3 60 dinners, you feel uncomfortable. You feel nervous about what's going to happen, But when you get started, you see it's gonna be okay because everyone is trying to help you out. And it's actually the greatest developmental moment of your life. So I started doing those with my own team in C I and I can tell you now. Now I think they're great. So I think everyone should consider the live 3 60 dinner. Wow. Can you go one level deeper there and say, How do you start something like that? Okay. You like? Okay, the appetizer, the You know, the, uh, endive salad has been served. And Jane, I need to say something to you. I mean, what would it mean? Get me into it. I need one level more detail here. Yeah, So I mean, they have a whole lot of instructions about how how you may or may not do these. They're not rules, right? But But they always say that Netflix, that when you give feedback the four A's. So number one, your feedback should aim to assist. So I can't just give you feedback to, like, get frustration off my chest. I have to be. My goal has to be to help you write. It needs to be actionable. So you have to see exactly what you could do with my feedback. Then when you get the feedback, you need to show appreciation, right to say thank you. That's the third a right, and then the fourth is that you don't have to follow it, so you can either accept or deny right not deny it publicly. But either you can accept or decline, right? Um, so So that you know, that kind of method, that kind of method is followed throughout. But I do think I mean, we were talking about about dilemmas earlier, right? And a lot of companies are saying to me these days, Oh, yeah, well, we're really trying to get our employees to be more candid to give more feedback and get all of that kind of productivity boost that comes from it. But we just we can't get people to do it right. And that's because we've got a big dilemma when it comes to candor. And the dilemma is between candor and comfort, right? And we actually have a dilemma in our brain, which is between the frontal cortex and the amygdala. So, uh, so the frontal cortex, that's the logical part of your brain. That part of your brain loves feedback. It wants it wants. You know, you could give me some right now in front of everybody. And I would think, Oh, good. Now that will help me. But the amygdala, that's your fear center, the most primitive part of your brain. The amygdala hates criticism because it feels a worry that you will be rejected from the group, right? So if you give me negative feedback, then my especially in front of others, my amygdala starts sending off an alarm, right? You're in danger. And that's why we all worry about giving feedback. You know, I don't want to give you feedback, chase, because if I tell you something that I think you didn't do. Well, Well, you're amygdala might start screaming, and then you're going to go into fight or flight, right? You're going to deny it or you're not gonna want to talk to me anymore. Uh, so we really have to get these mechanisms going and not just talk about Canada, but really show people how to do it. It's Would you Would you liken it to a muscle? Like the more you use it, the stronger you get, the more resilient Is that how you think about it, or is there a different way? Well, I think that's true. And I think that also, once you get the culture of it going, people start to just get used to it. I mean, I had these things that happened to me when I was there, and I'm not even an employee. I mean, there was a welcome to the party. Sit down and punch in the neck for a little while. I mean, there's this example from the first time was way before I started working on the on the book. The first time I worked with him, I gave a presentation about national cultural differences in Cuba for their for their leadership team. And, um, I was in this stage in front of I don't know, five or 600 people, and I'm always kind of in this, like, like, nervous mode when I'm giving when I'm giving big keynote. So my heart's kind of pounding. I'm kind of excited. And I came down from the stage when I gave the small groups in the audience something to talk about. And as I was walking around, there was one woman in the group who was speaking really animatedly and she saw me and she beckoned me over and she said, Aaron, you know, I want to tell you, um, the way you're facilitating the discussion from stage, it's really undermining your point because you're talking about cultural diversity. But then you're taking volunteers and only the Americans are volunteering. I'm really concerned that this is going to ruin your presentation if you don't find a way to do it differently, right? Never before had someone given me critical feedback right in the middle of a keynote, right in front of other participants, right? So, you know, my amygdala started screaming, right? And then I my my frontal cortex said She is right, Erin, you have three minutes find another method, and I did. And when I came back on stage, I facilitated differently, and it saved my presentation. So I just think it's such a great example of the things we don't do in most organizations. But if we do do them and the culture encourages it, it really helps everybody a lot apply this to, Well, I'll share that. Um, one of my favorite business books is a book by Ben Horowitz, who I see blurbed your book and it's called The Hard Thing about hard things. And as I, um, came back to lead the company after some time away, it was, you know, a lot of rebuilding and wanted to shift a few things. And you know what? You don't see the stuff you hear that are is in most business books, and I will say this is also an extremely refreshing aspect in your book. This these counter intuitive things is books say if you start out with the perfect thing A and then you go to perfect thing B and C and D, then you're gonna have You're not going to have any problems. This is how to do it. This is the road map and what your book and book like Ben's The hard thing about hard things is, you know, chapters of the book were titled How To Fire Your Best Friend. What Happens if You're You Run Out of Money. How do you talk to an investor that doesn't like you? What happens if you're you know, like all of these things? And so I use this example as it's where the hardest stuff is that all the best or most valuable work can be done. And my my question, if that's a statement that you either you can either adopt it or shoot it down. But if we assume that just for a moment would you say that that is a cornerstone to your work, Is it central to your work? Or is it something that is a nice to have, but it's not a main point. Oh, I think it's just absolutely critical, and I love that book. I love Ben Horowitz's book, also because it's really about. It's really practically how to get through these tough moments, and I think it's a great thing to bring up right now, because now we talked about a couple of the hard things, right? We talked about talent, density. So about how to fire your best friend, if you like how to use the keeper test to make sure that you've got the best people on your team. So that's hard. We talked about developing a culture of candor where people really give a lot of candid feedback to one another. Okay, that's hard. Right? Um but now the thing is, once you get the talent density and you get the candor now you can move on to the best part, which is to give your employees lots of freedom, right? I mean, if you've got the best, the best employees and a lot of candor going on now, you can lead with context, not control. So that's what they do at Netflix. And they've got this this great image, which is that at most companies, decision making is like a pyramid, right? So with a pyramid, of course, you've got the CEO at the top. He's the chief decision maker and the lower level people at the bottom and the lower level people can make inexpensive, unimportant decisions. But for anything important, it has to get pushed up the pyramid, right? But the the the image at Netflix is that leadership is like a tree, and with the tree you've got. The CEO who's down there in the dirt of the CEO is down there at the roots of the tree, and she's setting the context for the organization. This is our North Star. This is the direction we're running. These are the things we need to keep in mind as we're as we're moving forward. And then you've got the senior leaders who are at the lowest trunk trunks who are setting more context for their their departments. But the real decision makers are the lower level employee managers, lower level managers who are kind of out there at the small branches and the leaves of the trees. And those are the people who are making multi million dollar decisions, taking into account everything that's been all the context that's been set for them. So I really believe that that's kind of like the image of leadership for the future, because, of course, with a pyramid, we can only grow so fast right, because we've got that that CEO is the bottleneck. But with a tree, we can see what Netflix has done right, which is like, grow at this crazy speed because the decision makers are dispersed. I love it. This makes me when you talk to talking about, like, the process inside of Netflix. And if you map that onto what I think creativity is and what we teach in our company internally and what I think the platform stands for is this idea of constant innovation. Lightweight. I'm wondering if we can take a second away from Macro and Netflix and talk about your personal work. The process that you go through as a writer, as a as a researcher, as a professor, gathering information, obviously all kinds of information distribute talking about interviewing 200 people. What was your creative process in creating this book? Yeah, well, this book was a lot harder to write than my first book, The Culture Map, because my the culture map book, I've been teaching that information for decades, and I already had, like, all of my examples when I sat down to write, so that was still challenging. But it was my first book. I was trying to figure out how to do it, but this book was more challenging because I was trying to kind of put together the structure as I was going through the interviews. So what was helpful was that people were really candid with me. You know, we saw the candor come out right. I mean, I did these 200 interviews and people told me everything. But then I tried to I had to kind of figure out what's the culture and what's the individual. And yeah, I would say, Let's just say it was a mess. It took three years. It took three years of kind of trying to figure out how to how to put it all together, all together in a package. I can't give you any advice. Oh, my gosh. Luckily, it worked out in the end was Are you a daily writer? Was this fits and starts? Was it on the weekend? Was it continuous for that three years after you had done a lot of the research? Give us one level deeper. I can't write when I when I have other things on my mind, so I would need to block off weeks, and what I would try to do is block off two weeks where I would write. I only write in the mornings because in the afternoon my brain isn't isn't good enough. So in the mornings I would, you know? Yeah, I send my kids off to school. They leave at 8. 30. I would write from 8 30 to 12 30 then in the afternoon I would try to kind of go back and do research or or read what I'd written. Um, and then I do it again the next day, right? And I do that for two weeks, and then I get kind of something messy, and then I come back and do it again later on. Well, let's apply your creative process then, because you are your own boss, This freedom, you know, this idea of of talent, density of candor and then the freedom to do things that are in service of the things that you want and need to do it again. I keep making this drawing these parallels between the organization and there are lots of folks who listen to this show or watch the show that our leaders and other organizations or in their small. There's a smaller version in their own organizations. But there's also a lot of solo preneurs and this idea. It's almost like, um, you know what? What is it that you value? And if you can say you value these things, can you can you can be you know, what are you saying to yourself? Like, What are the most important words in the world we say are the ones to ourselves, like, Are you honest with yourself? And I think that that's a, uh, you know, a critical deal. And then how you apply that this is what you know in your writing or the application of this in the form of freedom to make decisions that support the trunk of the tree. It's critical to me. What I think is you talk about in the book, but we haven't talked about here is, um truth. Honestly, these are your honest feedback is a thing. But in a world where two people could see things differently, or where you have the devil on one shoulder and the angel and the other, how do we reconcile? You mentioned the idea of being able to accept or reject the the feedback. But how do we reconcile the concept of objective truth when so much of what we're talking about is subjective? Talk to me about sort of truth within this system. Yeah, well, let me just go back to something that I said at the beginning, which is that when I first saw that slide, adequate performance gets a generous severance, I couldn't figure out how that jelled with the idea of psychological safety in an organization. And what I've come to believe now is that it's important in a company that people feel safe to voice their opinions and their insights, and they have to know that they can be candid, right, and the candor that candor is going to help move their career forward, not like block their career. But I don't think that psychological safety means that everyone has to feel comfy in their job. Um, so I mean, you were asking me about my own process, and I did find that as I was writing this book, it was kind of mimicking the types of experiences that Netflix employees have, which is that I had this huge opportunity to do to do something. Something great, right? An opportunity I would never have again. And that's how Netflix employees feel. They're given huge amounts of freedom to make big decisions without needing to get approval from anybody. Right. Um and how does that make me feel? Well, I feel exhilarated. I feel adrenaline. Do I feel comfortable? Well, not really. Uh, and often I would like, wake up in the middle of the night and think, Oh, gosh, I have to go write that down. Right, Because I was so kind of driven by an adrenaline and maybe you could even say like fear. And that was one thing that came up a lot. Was like, Do Netflix employees feel afraid? Well, I think whenever we're given huge opportunities to do big things, there is an element of feeling Afraid that you're not going to be able to do it for yourself. Right? Um but, you know, I think that's okay, right? Like sometimes we're scared. And that's okay, right? That's part of the truth. Yeah, the other. Yeah, that goes back to this idea. That that's where all the best stuff in life is. If you're if you can get through the discomfort enough to look under the hood or under the bed or where under the wherever you might have tucked the things that are scariest. If you can look into your amygdala, um, that you know that that's where all of the best stuff in life is, Um, again, I want to give a personal plug, and then the book is extraordinary. Congratulations again. And if you were, if you didn't catch the first couple of times I mentioned it. It's called No Rules rules. Netflix, in the Culture of Reinvention, co authored with Reed Hastings, the co founder of Of the Company. Is there anything that we feel like you feel like we haven't talked about? I feel like I understand the Ark because I've studied your work in this book and this as a as a leadership idea. But I want to make sure that people who have been watching and listening make sure that they walk away with everything that you wanted to share them share with them today. Yeah, so I think I'll just spend one more moment on talking about freedom, right? Because I think we may be a little bit theoretical there, but like most. I'm just going to give you a list of the kinds of processes and rules that they have at most companies. They don't have a Netflix, and I actually think we can consider Do we really need those things? Right? So at Netflix, there's There's, as we said, no vacation policy. Uh, no travel policy, no expense policy. So low level employees decide for themselves their their maternity and paternity policy is act in or do what's best for you and your baby. Okay, Now, those are symbols of freedom. They're not. I mean, those are the important ones. Those are just okay. We show our employees with symbols that we trust them to behave like adults. And in return, they behave like adults. Right? So we give them freedom, and then they behave responsibly, right? The seat, the cycle of freedom and responsibility. Uh, in addition at Netflix, As I started to say earlier, they have no kpi s no management by objective and no annual bonuses. So these are all methods that we use at most companies to give our employees a little bit of freedom, but also kind of keep our hands firmly on their shoulder, right? But if we really have the best employees, maybe we can let go of their shoulder and we can let give them the freedom. You know, like like run in the direction they think is best. And then, of course, there is no decision approvals, and that's really the big one, right? That's where we come back to the Pyramid and the tree, where the lower level managers are making all the big decisions. And I'm just going to end with one last example. So, um, there was one of my favorite examples while I was doing the interviews was from this guy named Adam DelDebbio, who does the documentary. He's the documentary guy, and he talked about watching this, um, this documentary, Icarus at Sundance and he bid, Um, I think it was three million for it, but he found out he was going to have to get a lot more to get it. And apparently documentaries didn't go for more than that at the time, so he didn't know what he should do. He ran into Ted Sarandos, who is now the co CEO of Netflix, the top of content, and, um, he said to Ted you know, here's the deal I spent, ibid. Three million. What do you think I should do? Right. And Ted said to him, Well, you know, he said, um, is it the one and, uh, you know, Adam was like, Well, I don't I don't know. I don't know. I mean, is it your one Ted? Right. And Ted said, Well, look, I'm not going to make that decision for you. You're the doc guy. I pay you to make those decisions. But the question that you need to ask yourself is is it the one, right? Is this going to be a super size me type of documentary? Is this gonna be like an Oscar winner? If so, you should bid whatever you need in order to get the movie. But if it's not the one don't pay more than three million, right? And then he left. And I just thought that was such a great example of leading with context, not control. Adam is the decision maker, not Ted, But Ted is there to set the context so his employees make decisions for the benefit of the company. And of course, as you may know, Icarus then won best documentary at the Oscars. So great, great, satisfactory and this idea of context. If that's the story that you you wanted to rap with, I want to wrap my questions with you with this idea of context. To me, it's everything like helping people know. What we talk about is it's not just Here's the decision from your boss or your manager or your peer. It's the why why? I think this is the right decision. And did you find that in the research was critical to this culture and if not, you know, what was more important? If so, like expand on how why it is so critical. Yeah, so at Netflix, they say. But here's your last singer. They say, Don't seek to please your boss seek to do what's best for the company. And that means that even if your boss is totally against an idea, if you really thought it through and you've done your homework, you farmed for descent and you socialize the idea. Then you make the decision, even if your boss and your boss's boss doesn't think it's a good idea, and I think that's where we can really see the power of ideas throughout the organization leading to this kind of immense and and and speed of innovation at an organization like like Netflix, but also maybe in your listeners organizations. So yeah, so we'll we'll end with that. And, um, I wish everybody the best. I'm thinking about context and not control in the future. Amazing. Thank you so much for being on the show, sharing your experiences. Uh, I hope you all are safe over there in mentally. And, uh, I really appreciate you being on the show. At last. Is there any other any coordinates where you'd steer people? We've mentioned the book a few times, but where would you send people to know a little bit more about you and your work? Yeah. So please join me on LinkedIn or go to my website at erin meyer dot com. Uh, and I look forward to hopefully seen your listeners face to face next time. Amazing. Thanks so much for being on the show. Signing off from here in Seattle, Rainy Seattle and, uh, after dark Paris. We bid you at you until next time. Thanks so much again, Erin, for being on the show. And we did everyone a good day. Thanks, Chase. Thank you. Yeah. Mhm. Yeah,

Class Description

There's a common misconception that artists have a monopoly on creativity...But the very act of making waves - no matter the career - is a creative one. The Chase Jarvis Live Show is an exploration of creativity, self-discovery, entrepreneurship, hard-earned lessons, and so much more. Chase sits down with the world's top creators, entrepreneurs, and thought leaders and unpacks actionable, valuable insights to help you live your dreams in career, hobby, and life.

ABOUT THIS EPISODE:

Back in 2009, Netflix Talent Officer Patty McCord and CEO Reed Hastings published a presentation called the “Netflix Culture Deck.” This 125 page deck, now has over 20 million views and created quite a buzz in the HR and tech world for its radical ideas that countered typical corporate culture such as vacation policy that equated to “take some,” a “do what you think is best for the company” expense policy, and mindset that “adequate performance will get a generous severance.”

And that’s where it started. Erin Meyer, my guest on today’s show, read that deck and found herself startled, confused, and curious. There has never before been a company like Netflix. It has led to nothing short of a revolution in the entertainment industries having to reinvent itself over and over again. How have these counterintuitive and radical management principles made such unprecedented flexibility possible?

Erin is an author and a professor at INSEAD, one of the world’s leading international business schools. I ran into her work several years ago when I read her book, The Culture Map: Breaking Through the Invisible Boundaries of Global Business. Her work has appeared in the Harvard Business Review, The New York Times, and Forbes. She’s been noted as one of the 50 most influential business thinkers in the world by Thinkers50.

Today we’re talking about her latest book, NO RULES RULES: Netflix and the Culture of Reinvention. Drawing on hundreds of interviews with past and current Netflix employees, among others, our conversation explores high performance teams and how we can apply their culture into our own lives.

Some topics we dig into:

  • Hard work is irrelevant. Excellence isn’t just about hard work; if someone is a pain to work with (or be around) it can impact everyone.
  • The benefits of candor and a culture of feedback.
  • Giving others freedom to make the biggest decisions gives them fuel to succeed.
  • And so much more.

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