No Rules Rules – Netflix and the culture of Re-invention

Author: Reed Hastings (Founder-CEO of Netflix), Erin Meyer (Professor of INSEAD business school)

Genre: Management, Biography

Netflix is one of the world’s most successful start-ups. In just about 20 years, it has catapulted to USD25 billion sales, USD200bn+ market capitalization (more than the entire Indian pharma sector), 200mn+ paid users globally, one of the top 10 most trusted international brands and so on. Its stock is famed to be THE top performing in S&P500 giving almost 4000% return in the last decade! Its Founder and CEO, Reed (himself worth $5bn. Sold his first startup for $700mn) credits his success largely to the “people culture” he has been able to establish in Netflix. Over the years much has been written about this culture (including in HBR) and top silicon valley veterans say that this is the most important document coming out of silicon valley. The book talks of this culture. I was intrigued by their philosophy of hiring the aboslute best and paying them top 1% of the market. My colleague Ashish Musaddi, Head of HR for Cipla International Markets, prepared and circulated a summary within the team.

Reproduced here with Ashish’s permission.


While we all speak about valuing people over process, emphasizing innovation over efficiency and having fewer controls, Netflix went one step further: they created a culture of “No Rules Rules” to promote flexibility, employee freedom and innovation instead of error prevention and rule adherence. Reed believed that if you give employees more freedom instead of developing processes to prevent them from exercising their own judgement, they will make better decisions and it is easier to make them accountable.

The 3 stages of creating an organization which attracts better talent, values accountability and stays nimble.