No Rules Rules

No Rules RulesHas Netflix’s staggering rise been because of the way the company is run or was the world ripe for streaming TV and movies and it just happened to be forefront of the collective mind?

According to this book about its corporate culture by CEO Hastings and business author/academic Meyer, it’s entirely because of the radical approach the company takes to rules (or, as the entire approach has it, not having rules).

It’s a very interesting glimpse into the inner workings of a famously secretive company that’s never even made viewer numbers public, especially with the radical internal transparency they extol, telling any employee who cares to know about anybody’s salary, the share price (before they make it public, risking serious insider trading) and more.

A good example is its annual leave policy. There isn’t one, everybody encouraged to take as much time off as they need whenever they need them. Ripe for abuse, you might think?

Netflix agrees, but says the positives that emerge from a policy of staffing positions with the highest of high achievers and paying them above-market rates outweighs any negatives.

More than once Hastings and Meyer talk about the need to treat people like adults rather tham micromanaging them, which sounds like heaven after the jobs most of us have had. Everyone is encouraged to make large bets, fail often and improve from the experience – playing it constantly safe is the sackable offence.

But while it all sounds like Shangri-La, there are counter-arguments to all the Kool-aid drinking going on here. First, it must be asked whether Netflix is so successful because it has these extreme practices or because it’s making so much money it can all be run like an out-of-control train with little negative effects.

More than once Hastings and Meyer talk about adopting the metaphor of the company being a high-performance sports team rather than a family – where you can be fired at a minute’s notice if you’re not the extreme high performer they thought or business conditions change and render your skillset useless.

It reminds you of the 2018 story ‘Netflix’s culture of fear’ from online publication The Week, which talks about the constant atmosphere of terror most people have for their jobs.

It’s the ultimate expression of corporate ruthlessness, of mere people being fodder for the profit motive, and when (to its credit) the book mentions the article, Hastings’ answer is classic doublespeak, bringing up an empty metaphor about kayaking and ultimately saying nothing.

But it might well be his way of shrugging and saying ‘so what?’ – he goes on to stress he’s as subject to arbitrary termination if he doesn’t perform as anyone, but with the share price skyrocketing and subscribers signing on in their millions, he knows he’s sure not going anywhere.

It’s illuminating and full of radical (maybe ‘great’, maybe not) ideas about how to run a global corporation but it’s very American, full of buzzwords (talking about mistakes and failures is called ‘sunshining’).

But the biggest irony is that while purporting to be about not having rules, it seeks to make an algorithm out of every aspect of corporate life, from giving feedback to colleagues both up and down the chain to entering a new market and managing the cultural differences.

In fact at one point Hastings makes a reveal he might not have intended, talking about how chief lieutenant Ted Sarandos is the creative guy and how Hastings himself came from a software and systems background.

With all their maps and meetings and formalised structures to tell people what they’re doing wrong and rewarding them for trying, he’s trying to systematise everything – even human relations.

You’ll roll your eyes at a lot of it, but who are we to judge a company whose share price has gone from less than US$50 to $550 in ten years?