By Theerada Moonsiri
Can you still imagine life without Netflix?
Netflix has totally changed the way we consume content. Today, many of us spend a ridiculous amount of time scrolling through the menu trying to find something *new* to watch, yet end up watching a random episode of Friends that we already watched at least a hundred and sixty-two times. Netflix has also changed business and management.
In 2020, Hired’s survey found Netflix was the #1 company that people in tech want to work.
Besides Netflix’s famous unlimited vacation policy, here is how the big red N sets a new benchmark in terms of leading the way in HR and creating a culture that attracts people.
Vero talks to our very own HR, Culture & Engagement Manager Yaya–Supreeyaporn Sihawong (SS) and HR Business Partner Wan–Sirikhun Tantiyanont (ST) and CEO Brian Griffin (BG), who did their homework on cracking Netflix’s success code thanks to the book No Rules Rules: Netflix and the Culture of Reinvention.
For those who shelve the title on their TBR list (to be reading) since, ahem, forever, here are the deets. It all started when Reed Hastings, the CEO of Netflix, asked Erin Meyer, an author most known for her The Culture Map: Breaking Through the Invisible Boundaries of Global Business, to observe Netflix’s company culture with the intention of building the brand.
The book explores how Netflix invents the culture of freedom and responsibility and encourages its people to give candid and constructive feedback. Once Netflix’s feedback system works, it enables the manifesto dubbed ‘No Rules Rules,’ providing Netflixers with unlimited holidays and no pre-approvals needed for expenses or strategic decisions—just to name a few.
What is your general opinion of the No Rules Rules system?
SS: Actually, I really like the book – it’s a fascinating story about culture. Not everyone can do what Netflix does and maintains to do so on a global scale. To me, it is definitely worth a try. Still, to build such a culture and keep it from falling apart, the bones must be good; this means a solid feedback system and transparency at work.
BG: One of the things I really like about No Rules Rules is that it helps to articulate some of the philosophies we have had in place, but did not describe anywhere near as clearly. In my opinion, No Rules Rules is the ideal way to manage a creative business so that people can focus on what they do best without unnecessary barriers to working with freedom, responsibility, speed, quality, and an entrepreneurial mindset. People working in creative industries should read this book.
Our priority is to attract and hire people with good judgment, and as long as we do this, then I think No Rules Rules is a great system. It is also important to note that No Rules Rules does not imply that anything goes. In fact, it is the opposite—and despite no rules, there are a lot of guidelines described in the book. These guidelines are critical, but also can be simple, such as the Netflix policy in the case of expenses, which is basically: spend money in the best interests of the company. And as long as people use this context there is no problem. And when people make mistakes regarding this context, it is openly and transparently shared as a learning experience.
Do you think it is possible to have a No Rules Rules agency?
SS: I believe it is. Creativity that agency people channel and express is what keeps the wheels of agencies rolling. I find Netflix’s unlimited vacation policy intriguing because creative thoughts spark when the mind is relaxed, at rest, and without pressure. When people relax and find balance, they will be back with fresh, ingenious ideas. This really might work for agencies.
BG: Yes, I agree with Yaya. It is possible. Among the best parts of No Rules Rules is that it encourages speed. People can move fast because they do not need to seek numerous approvals for decisions. People can sign contracts, negotiate deals and make purchases without seeking formal approvals. Does that mean that people make big decisions without consulting their teams? Of course not. Consultation and discussion is critical. In fact, the No Rules Rules process requires that people seek out dissent and different points of views in an open and transparent manner, usually via a google doc on which people are invited to make comments. Ultimately, there are many parts of No Rules Rules that we can apply to Vero, and in some cases already do. We can do this because we trust people to make good decisions.
If an agency were to implement a No Rules Rules mindset, where would it start?
ST: It starts with leaders. Before we were to implement anything at all, leaders must buy into the idea and lead by example to actually make it work. Effective leaders engender trust. In their team lead absence, any team members should be comfortable enough to lead the team, liaise with clients and stakeholders, and act in the company’s best interest.
SS: Let’s put it this way. Netflix only hires high-performance individuals and pays top of the market. The book says that one of Reed Hastings earlier companies once faced a crisis where they had to let go of most employees—and the people left were outrageously talented. And this team remaining was extremely productive because they had a high level of talent density.
Hence, the best place to work for a high-performance or talented workforce is not just beautiful office space but also where they are surrounded by those who can encourage and give you constructive feedback.
BG: The reality is that we are already light on rules and regulations. So part of the way to start is to examine the few rules we do have, and determine ways we can streamline or eliminate these rules. And then we also need to caution against adding new rules. It is also important we are all aligned on our business goals and communicate our position clearly. As a small business, when we were all able to be together often and sync up easily, it was easy to do this. But now, as we have grown, we need new ways—and we also want to ensure that we are not adding policies and rules that will slow people down and make it more challenging to do great work.
How do you think the No Rules Rules system would work in Southeast Asia?
SS: I am certain it is possible but it sure takes time. Netflix is American; giving feedback is by their nature. However, to implement the said policy to our people, we need to at the least take a long hard look if it is even possible and appropriate for someone to criticize, with the best of intentions, their co-worker of making mistakes. And that is the only beginning.
ST: Even though I like the sound of it, I am still concerned about the nature of people. For example, Americans, especially those working for big companies, tend to adopt a similar mindset in which they strive for companies’ best interest as a whole, and as a consequence, the implementation of new policies can be breezy. However, it is challenging here in SEA to build a solid foundation for the development of such. For instance, in Southeast Asia, people do not take their leave seriously, and there might be a tendency to work while on leave or ask colleagues to work on leave. This is not healthy.
BG: To a degree, we have already done it—even if we are not calling it no rules. One example: on business decisions, we have enabled team leaders to make their own decisions based on what is good for our teams and what is good for the agency. We are transparent about finances, and working to be even more transparent. My belief is that if people know our business goals and financial goals, they can then make really good decisions. We have also experimented with some rules in the past, and none of the experiments were successful. Our people have good judgment, are professionals, and do not need a lot of policies and procedures to do their work. And when a mistake is made, as will inevitably will happen, we talk about it and share and learn. According to the book, in the netflix culture this is called sun shining. It is about openly discussing mistakes and learning from them. It is the opposite of sweeping problems under the rug.
Can you talk more about the Netflix culture of sun shining? And how do you apply this to Asian society?
SS: Sunshining is about raising awareness of errors and mistakes and making sure everyone knows about the mistake and how to solve the problem. In the book, there was one team leader who did not want their team to try a new idea because he tried before and it did not work. But their team had a reason to try. And he let his team try and it worked. And then they announced the result and the leader announced that he made a mistake in not allowing his team to try a new approach. This is sunshining the problem. They want to make the culture to communicate to everyone that mistakes are normal and OK and it is ok to try and fail and try again. It really has a huge effect on team members. It encourages them to take risks. And this will move the company forward.
This requires leaders to sunshine their own mistakes so that their team members will also feel comfortable to sunshine mistakes.
BG: Sunshining is basically a commitment to not sweeping problems under the rug and instead to make mistakes open, accepted and worthy of discussion so that we can all learn. As an agency, we collectively make millions of small decisions every year—and so it is natural that some of these decisions will be in error. But with a culture of sun shining mistakes, we can improve the ratio of our good decisions and learn from our mistakes.
Can you explain the Netflix idea of farming for dissent?
SS: This is something we want to try and make happen in the agency. People’s nature is to defend once we get a comment that is opposite of what we feel. But if we can create a farming of dissent culture we get a variety of opinions and feedback that help us to grow to another level. And once we get the feedback we can improve ourselves.
To make this work, we need to let our guard down and reduce our ego to get comments that can help us become better professionals.
It can make the culture more open and to make us all good listeners. And this will encourage others around us to grow together to get truthful and constructive feedback and can lead to creativity.
BG: One great tip from the No Rules Rules book is to put “feedback” on every single meeting agenda to ensure that giving feedback becomes the norm and common and happening on a regular basis. I am trying to do this now—and I find that having a time set aside for feedback in every meeting agenda is helpful.
What are your opinions on the Netflix culture of compensation?
SS: From my perspective, Netflix said they keep trying to pay their team top of the market, that others cannot compete with them. One thing that surprises me is that Netflix has no bonus at the end of the year because they already calculate the bonus and include it in the salary. I am amazed by how Netflix encourages and drives people to work hard without looking forward to the bonus throughout the year. Rewards that people gain along the way as they are working for Netflix is the thing that makes an HR like me curious to know and maybe implement the strategy to our agency.
BG: The compensation system described in No Rules Rules is very sensible and entrepreneurial, and I think every agency should consider this approach and that every agency professional should consider the point of view described in the book. Netflix is basically reliant upon the market to determine compensation as opposed to salary bands. Netflix makes this work because of their commitment to talent density. But I also think other creative businesses can also make this work.
What part of No Rules Rules makes you the most worried?
ST: I once interviewed a candidate whose company offers unlimited vacation; she shared that the policy was a wow at first, but junior employees did not ‘dare’ to do so. They were worried that, by taking leaves, their colleagues would end up doing more work of theirs. Thus, of course, it is possible to implement the policy, but it is a whole different story to encourage people to reap the benefit.
SS: In this case, I entirely agree with Wan. Additionally, I find giving negative feedback face to face may possibly cause workplace drama. Thus, at Vero, we enable a feedback system in the forms of a survey where one can write feedback on teammates, team leads, and colleagues across the office.
BG: My worry is that there is misunderstanding about what No Rules Rules really means and this is why we are encouraging people to read the book because this will help people fully understand the thinking behind No Rules Rules. It is definitely not an anything goes mindset. Instead, it is structured, but in a manner that promotes speed, freedom and responsibility. Take for example Unlimited Leave. People might think that this means taking long, unplanned holidays whenever people feel like it. But the fact is that the No Rules Rules system means that people must take their leave with responsibility. That means checking with team members on the scheduling, ensuring the timing is right and ensuring that a proper handover takes place before going on leave. For example, the finance team at Netflix won’t take leave during the time when they are expected to close the books for the year. It would be irresponsible to take leave at this time, so they plan leave for another time of year.
Moreover, Unlimited Leave does not mean that people should take two or three months of holiday every year. That would not be responsible. It also means that people should not skip taking leave. They must take a healthy amount of leave; it is a requirement.
On the topic of Unlimited Leave, it is also important to note that the whole concept is really about the way in which companies count time. People in creative industries tend to work long hours, and sometimes this may be late at night, on weekends or even holidays. And we never count this time. So the question is why do we count holidays so carefully if we do not also count working hours? Netflix found that it was not logical—hence they created Unlimited Leave.
What are Vero’s takes on No Rules Rules? Anything for the Vero Squad to look forward to?
SS: First we are definitely going to implement the feedback session which I think is very crucial. I agree with the book as it says at the end of the day people need feedback; even negative feedback when delivered with good intentions can help improve and enhance their performance. Secondly, if the feedback system works, it will most likely lead to unlimited annual leaves. At Vero, we are constantly experimenting with new ways of working and thriving for the better. The No Rules Rules book has given us a lot to consider.
BG: The big takeaway is that we want people focused on our goals. And by stripping away rules and instead relying on talented people with good judgment and an aligned sense of direction, we can give people a better, more satisfying, entrepreneurial experience.