No Rules Rules

Notes

• Certain points are too capitalistic even to my liking.
• For most companies many of the learnings are out of reach, for example paying top of the market and hiring rock star employees.
• Candor is the most important part that can be applied even if you can’t pay top of the market.
• Removing controls (in decision making and expenses) leads to innovative and faster-moving organization.

Giving feedback

• Aim to Assist: feedback must be given with positive intent
• Actionable: feedback must be actionable and focus on what the recipient can do differently
• Appreciate: when receiving negative feedback avoid the natural instinct to be protective and show appreciation instead
• Accept or Discard: the decision to react is entirely up to the recipient

Step one

• Built talent density
  • Talented people make one another more effective.
  • Averagely performing people can drag the performance of high performing team members down.
  • Inversely, performance is contagious.
• Increase candor
  • Say what you really think with positive intent.
  • Teach all employees to give and receive feedback well.
  • Build feedback into your regular meetings.
• Begin removing controls
  • Remove vacation policy, but the leaders have to set example by taking time off themselves.
    • The boss should provide a context for the team of when and how to take the vacation.
  • Remove travel and expense approvals, but ensure that employees follow spend company money as if it were your own.
    • The finance department should audit portion of receipts annually>
    • Speak about abusing the system openly so others understand the ramifications of behaving irresponsibly.
    • Some expenses might increase but not nearly as much as the gains from the freedom that they provide.
    • Fewer resources waster on administrative cost.

Step two

• Fortify talent density
  • Divide workforce into creative and operational employees, pay creative employees top of the market salary.
  • Don’t pay performance based bonuses, put the resources into salary instead. Measures for performance based bonuses are often wrong and don’t reflect long-term incentives of the company.
• Pump up candor
  • Instigate culture of transparency, get rid of closed offices.
  • Open up the books to your employees and share sensitive financial and strategic information with everyone.
  • When doing layoffs or other decisions that will impact employees’ well-being be up front to build trust (might cause anxiety and distraction).
  • As long as you’ve already shown yourself to be competent speaking about mistakes will increase trust, goodwill, and innovation.
• Remove more controls
  • Don’t seek to please your boss. Seek to do what is best for the company.
  • In fast and innovative company, ownership of critical decisions should be dispersed across the workforce at all levels.
  • Teach employees to take risks but if they fail, to sunshine it openly

Step three

• Max up talent density
  • The Keeper Test

    If a person on your team were to quit tomorrow, would you try to change their mind? Or would you accept their resignation, perhaps with a little relief? If the latter, you should give them a severance package now, and look for a star, someone you would fight to keep.

  • Skip PIP (Performance Improvement Plan), rather take all the money and give it to the employee in a form of severance payment.
  • Encourage employees to use the Keeper Test Prompt with their managers.
  • When employee is let go, speak openly about what happened.
• Max up candor
  • Don’t link 360 feedback to raises or promotions and avoid anonymity.
  • Open comments to anyone who is ready to give them.
  • Start, Stop, Continue method with 25 percent positive, 75 percent developmental - all actionable and no fluff.
• Eliminate most control
  • Lead with context, no control. Your goal needs to be innovation (not error prevention) and you need to be operating in a loosely coupled system.
  • Don’t tell people what to do, get in lockstep alignment by providing and debating all the context that will allow them to make good decisions.
  • When something doesn’t work out, ask yourself what context you failed to set.
  • Loosely coupled organization should be a tree, not a pyramid. The boss is the root, holding up trunks - senior managers who support the outer branches where decisions are made.
  • If team is moving in the desired direction using the information they’ve received from you and others around you know that you’re successfully leading with context.

Info

Title: No Rules Rules: Netflix and the Culture of Reinvention
Author: Reed Hastings, Erin Meyer
ISBN10: 0593152387
ISBN13: 9780593152386