Netflix and mr. Hastings what is netflix and what do you do . Guest thats netflix is the worlds leading Entertainment Service and we reproduce and distribute amazing Television Series and movies and weve been around 20 years and have about 200 million families around the world who are our members. Host is there a connection to the 1998 company where you had 900 movie titles in 30 employees . Guest there is a little connection to that. We started 22 years ago and we deliver dvds in the United States competing with blockbuster and that was a full decade really that we were competing with video stores just in the u. S. And that is 2007 when we started streaming. Roughly the same time youtube did. Host erin meyer how did you get involved in this book project . I study cultural differences and in workplace and im a School Professor of first came across the netflix culture when i reed many people of the netflix culture at the desk that reed put out on the internet and was quite shocking when i reed it. It said things like adequate performance gets a generous severance. That shocked me because in my department at Business School i teach at we were at that time focusing on the psychological [inaudible] in the workplace to promote innovation so here at a company that was not focusing on psychological but focusing on getting rid of people who performed adequately. Other things in the deck that they had no vacation policy, no travel policy and things that got me thinking about how culture like that could work in our organization. Id been working with reed and did research and thats when i saw Something Interesting for the world to learn from this company. Host your book the culture map is one that connected you to, correct . Guest absolutely. I was fortunate enough to be recommended to the culture map by a friend and i reed aarons first book and its an exploration of the Different National cultures of the corporate situation so the french and the mexicans and the americans and it spoke to many of the challenges that we had internally at netflix. Its a fantastic insight. So then i looked erin up and asked her to be a speaker for an internal conference that we had a netflix and then i realized she would be the perfect one as a chronicler observer and astute observer of culture to write the book and the point of having a coauthor is, you know, like many people i met ceos pontification books and every time i reed them i wonder what its really like in the middle of the company and i thought okay, we send erin in and she has her own reputation and a professor and ill give her open access to interview over 100 netflix throughout the world and you know let her right about the reality and some of the readability of the book comes from a tension between doing the theory and erin talking about the reality as employees experience it. Host erin meyer, you are pretty aghast when Reed Hastings sent out an unfinished draft of a chapter, were new to employees . Yes, reed is sure happy to hear about that again. [laughter] one of leads leadership tenants of the importance of being in spirit with your employees and i learned that my time there that transparency is way beyond and that is spearheaded by reed. What does one of the experiences i had is that i worked on length on this chapter but was nowhere near finished and i sent it to reed to start working on in a couple weeks later i was doing interviews at the netflix Amsterdam Office and one of the employees said to me during the interview when i was reading the chapter that you wrote and i was like what . He said oh yeah, reed said that chapter out to the managers at netflix and i was like all of the managers . What i found out was that when they talked about transparency he means really helping every one to see what is going on even before its finished. Host you are quoted in the book is saying i love the netflix culture for his honesty and loathed it for its content. Yeah, that was my first reaction before i started doing the interviews and understanding netflix. I think that is one of the reasons reed was interested in having me get involved with the book was that it provided this intention my reactions to these very controversial principles and then his belief as to why that Corporate Culture would lead to success. I mentioned feeling shocked about the adequate performance gets the generous severance but a member there was another part of that deck which is about candor and what it says which some find what it says is dont say about somebody what you wouldnt say to their face and of course you know most of us spend a lot of time at work talking about people so i just couldnt imagine how that could play out in a Work Environment and then i got to netflix and saw it in action. Host what are some of those advantages . Ill give a personal example for it one thing i did with reed and his team was give up a presentation at the Leadership Conferences and i was giving a keynote and all the Vice President and directors in the company were there and i thought it was going well and they seemed engaged and then it was time for me to give activity so they were working and i got down from the stage and walked around in one of the women who was having a discussion and was talking with great hand gestures and when she saw me she beckoned me over and said to me in front of her group she said you know, i was just saying to my colleagues here is the way youre presenting this information its undermining your point because when you ask the group for questions its only the americans who raise their hands and therefore were not getting diversity. Then she said i dont think that we can take this to heart even the poor delivery you are given. You know, i was like oh my god, someone is giving me feedback in front of this keynote but then i had about three minutes to think about how to reorganize the structure of the discussion and when i got brought out on stage i did differently and think of that candor and it saves the presentation. That is what we see with this candor at netflix is that sometimes it hurts and sometimes it feels kind of inappropriate but it almost always helps improve performance. That is fantastic. Host Reed Hastings with tommy about that part of the book was why you were holding a conference in cuba. [laughter] guest because we were expanding globally and that was a symbol of we want to entertain people as we included cuba. Host do you have a real presence in cuba . Guest unfortunately in the last four years and this was five years ago was the cuba conference the hopes of opening up the internet in cuba has diminished but we were on our way to a great presence there which we have a very strong presence in brazil, mexico and many other latin countries but not yet cuba. Host in the book no rules rules talent density is referred to often print what is that . Guest it just comes from that simple insight that to accomplish something hard you would rather have ten amazing people who work well together then 20 not so good people who dont work well together. If you can combine people who are very talented and have good team skills then in many cases a small number can be very effective. That is talent density. Host erin meyer, isnt this normal corporate or first of all, when you hear the words Corporate Culture what you think about . My first book the culture map was about National Cultural differences and i never been interested in researching Corporate Culture until i came across this company because what ive seen is that in all most every company i looked at the Corporate Culture is a list of aspirational dreams as to what we would like this company to be like. We believe an integrity or we believe in respect and it just seemed like we didnt have a really life in the company and what i saw with netflix was reeds way of explaining the culture with it instead he was helping employees to make decisions, tough decisions during the day and looking at these tensions like potentially between how density and feeling secure at work. It was only when you help people deal with these tensions that the Corporate Culture would come alive in the organization and that is what i saw with netflix is one of the first times ever i see a company where what they say is there Corporate Culture is really living. Host could this culture be taken to an order a ford or gm and implement in their . Guest great point. Weve had 200 years of factories providing Enormous Economic gains to our cultures and in the factory is very topdown system you have those boss and the workers who are supposed to never make a mistake and assemble a perfect car or a perfect pharmaceutical or hopefully a perfect airplane and so the manufacturing paradigm is very strong because it is very valuable and that topdown culture is wellsuited to a factory. Then it got another type of work, Creative Work. It used to be very small and now it has grown to be of substantial part of the economy and we are over influenced by the factory paradigm. With Creative Work you want to increase variation, not decrease it like in a factory. In Creative Work you want to experiment and learn and you got to try many things and its fluid. Think of it as fertile is the goal in our culture and sterile is the goal of a factory. We want clinical, perfect, repeatable stuff in a factory and in the creative environment your on the edge of chaos to get the best ideas. Again, as the Creative Sector has risen we havent figured out what are the right paradigms for Creative Work. The netflix culture is one example of that where it is really incredible and employees need them where there is no rules. That is hard to manage because youre managing on the edge of chaos and have all these compensating systems about a culture and context that are very helpful. Think of it as a set of paradigms wellsuited to Creative Work and in our culture it is not suitable for safety critical work or manufacturing work and its beginning of new paradigms for Creative Work. Host writing a book is using an old medium to put your ideas down, isnt it . Guest we first publish these ideas online on slide share and there have been over 20 million views of that. But we wanted and were very much in that format but we wanted to do a sequence where we took the time to edit and you know right out the stories and re edit and have a highly polished well thought through version of the story. Those who have reed the culture memo with the much fuller explanation of why it works. Host erin meyer, after your indepth study of netflix where are your criticisms still . Before i move there let me build on what reed was saying a moment ago because you asked whether theres a place for this culture for example in this traditional Manufacturing Company and what really struck me as i was doing this research at netflix was that any area of any company that is seeking to be more innovative or more flexible or trying to figure out how to reinvent themselves more quickly can benefit from the principles that reed is using an netflix so you might be working and i was working this morning with michelin tyrus. Safety critical manufacturing environments but there are areas of that company that are focused mainly on innovation. I do think any organization and team leader and ceo and anyone who wants to get more innovation can learn from this creating this fertile environment that reed was talking about. You asked about criticisms and of course one of the things about doing something as you, there are always some difficulties that go with that. One of the big things that comes out is of course if we only have a talent and refocusing on talent density and some people are nervous about whether they will lose their jobs and then theres thinking about that and netflix and how to reduce that worry while taking advantage of this talent density. Host you have a story in the book comparing npr being a family to netflix being a team. Reed is better to talk about that but whereas Many Companies think about organizations as they seek to think of their innovations like families while we have longterm security we put up with one another even when we have bad behavior and an olympic team is more what reed is going for an netflix which is that we try to get the best person in a spot at any moment and that might change month by month at who is best at the time. Host mr. Hastings. Guest i agree with what erin said. Every time you hear an organization we are a family and makes people cynical because they intuitively know that a family that we had meyer, a good family, will stick together no matter what and that is not the way corporations work. Host in your book no rules rules you write that employees are not allowed to let me drive this company off the cliff. What does that mean . Guest it comes from an early quote with my [inaudible] who was choosing how many dvds to buy for certain film and i said i dont think that will be a popular film and he ordered less than he would have and we ran out and customers were unhappy and when i said why did you order so if you he said you said it wasnt going to be popular and thats when i said you have to do what you think is right to help the customers and the company and you cant be trying to feed your boss and you are not allowed to let me drive the bus off the cliff. You have to, you know, fight for the benefit of the company and in general dont seek to please the boss but seek to please customers and grow the company and we want people to act independently, not just to implement their bosses wishes. They should never hide anything from their boss and certainly they should tell them but the idea is to get everyone to the company thinking about how do you best reach the customers and how do we best grow the company and if they do you get the tremendous results that weve had over the last 20 years. Host mr. Hastings, your founder of the company and stockholder and ceo and you say you dont have an office in netflix but at the same time there is some inherent qualities there that will make people do what you want. Guest sure. We buy our lead by direction an example and i talk about what is important like customers and how they want to relax after a hard days work and other times they want to be pushed in terms of the content they watch. I will to bring the Customer Experience home to our employees and talk about culture and it is not that i dont want some things but we want everyone else to want things and then in those conflicts or disagreements a lot of good things come out of that. Host erin meyer, is this tough for a ceo to, in a sense, let go of that control . I think its a really interesting process that reed has implemented because on one hand reed has very strong opinions like Anyone Running a company does. On the other hand he has strongly made it clear throughout the company that he wants people to be clear with him when they disagree with him or when they have a candid feedback for him. Farming for dissent which is all about you are disloyal to the company if you feel this agreement for what the organization is doing or your boss is doing and dont express that disagreement. We were asking reed earlier about whether people dare to give feedback giving his level of power in the company and i knew you would say it was remarkable on how frequently reed does get feedback because he celebrates it when it happe happens. Host mr. Hastings, how do you define your job today and how much time do you get to just think . Guest i get a lot of time to think nights and weekends and the traditional work hours tend to be in meetings and talk with people and try to understand what they are working on, talking through, you know, various situations in certain countries how we are involving the content mix right and i think of it as i want to be hiring in form and want to know whats going on although the company and then i reach in and say lets cast this person instead of that person and if i detect casting too many men i would say its probably not limited to one area and i would try to abstract that a little bit and go to the principles of it which is, you know, theres a broader interest in storytellers and should have a broad range of storytelling and you know get to the underlying lesson rather than fix that tactic. Im always trying to be a teacher essentially an abstract what i see but to do that i need to be highly involved in know what is going on throughout the company. That would the recipe essentially buried him always try to pull the muscle rather than fix particular problems. Question for both of you is the geographical Silicon Valley important, indispensable to what you do its one of many indispensable and the culture and come out of the Silicon Valley culture but at this point its a fraction while less than half the employees its super important what we do but about two thirds are spending in content and having a majority of the employees in hollywood so its really an Entertainment Company that are tech powered and in some ways disney is coming at it from the other side which is Super Entertainment and they have pixar and animation and now they have disney plus so because all the Entertainment Companies are getting tech infused. Host erin meyer. I think i will add to that. When i started working with netflix they were just getting ready for this enormous International Expansion which is interesting to me since i studied National Cultural differences. With 2016 moving all over the world one of the Things Writing and researching was how this provocative and surprising Corporate Culture that was leading to this enormous innovation and flexibility compliment amended and countries on the world like in japan and singapore in brazil so we really talk in the book about how to take your Corporate Culture which may be very useful to your headquarters and figure out how to make that work even when its in direct contrast with some of the National Cultures that you made your movie into. Its an interesting part of the netflix story. Host Reed Hastings, sheryl sandberg, bill gates, they come up in the book so what is the level of collaboration or ceos in Silicon Valley . Guest im sure its quite variable. Those particular three people that you mentioned have had longstanding relationships with but i would say Silicon Valley is very competitive place in in netflix does not compete but we compete with other Companies Like disney and hbo and those tech leaders he mentioned are family because its not too competitive whereas with the Entertainment Companies it can be more challenging relationsh relationship. Host we cant finish this without talking about my favorite person in the book and that is patty mccord. Erin meyer, did you have a talk chance to talk with patty mcco mccord. I talk with patty a lot. Shes a great storyteller and incredible memories and. [laughter] i often pushed reed for more stories and he said i just cant remember so when that happened i would call patty and she had a story. Shes an important character in the book. Host who is she, mr. Hastings . Guest patty mccord was our founding head of hr and they pioneered a lot of these ideas and give us permission and success that we can be great employees without rules and if we focus on giving them an environment that stretches them and that became the way we oriented everything. Host one of those known rules is vacation time. Guest funny thing, we dont count how many hours someone works in a day but we dont know if someone is working eight hours, ten, 12 hours in a day and yet in the old days we used to count vacation whether someone was working 46 weeks a year, 48 weeks a year, 50 weeks a year and we realized why do we care between 46, 48, 50 for not measuring eight, ten, 12 and a day. Its this industrial hangover i talked about from the factory mindset and so lets not everyone takes what they want and is worked out great and taking a lot of vacation and thats been very positive. It is not that we need blockbuster because we have unlimited vacation and they dont but its a powerful symbol of Employee Trust with almost no risk. As patty mccord use to say we dont have a clothing policy either but no one has come to work naked lately. The lesson is societal norms work fine for many things such as its good to Wear Clothing in the office and vacations are a good part of your life but work is important to. Host Reed Hastings, in the evenings and on the weekends when you have time to think what you think youve achieved in last 22 years . Guest i never think about that but i always think about what we have to achieve ahead and how hard it is. The key of a relentless dissatisfaction. I look at our success to date is a good start and what we want to do is be a comedy that entertains the world, connects people and people learn so much through entertainment of other peoples lives and put the other countries and other cultures and other racial groups and other genders and all kinds of things you really learn through entertainment and exposure and when you think of how big the internet is around the world over 6 billion active mobile phones we have a terminus opportunity to continue to grow and we are just getting started. Host our big threat in the long run is not a can mistake but lack of innovation and no rules rules is the name of the book. Erin meyer and Reed Hastings are the coauthors. Weeknights this month we are featuring book tv programs as a preview of what is available every weekend on cspan2. Tonight we focus on neuroscience and healthcare beginning with David Eagleman and his book live wires. Catherine even in her book bottle of lies and later lisa and the double x brain and that starts at 8 00 p. M. Eastern. Enjoy book tv this week and every weekend on cspan2. Booktv on cspan2 has top nonfiction books and authors every weekend. Saturday at 1 00 p. M. Eastern from the recent virtual southern festival of books authors sarah marsh, Thomas Burton and Wayne Winkler reflect on life in appalachia and walter lloyd and david pilgrim discuss the jim crow era in the south. Then at 7 45 p. M. New yorker staff writer discusses his book, joe biden, the life, the run and what matters now. On sunday at 1 00 p. M. Eastern from the southern festival of books journalist Matthew Weiner talks about his book, deep Delta Justice about a civil rights case which helped to reaffirm the right to a trial by jury in criminal cases and author stephanie and chris offer their thoughts on Investigative Journalism and its role in the democracy. Then at 9 00 p. M. Eastern on after words law professor talks about his book american contagion epidemics in the law from smallpox two covid19. Hes interviewed by Georgetown University law professor. Watch book tv this weekend on cspan2. Mac is great to be back with the fall season in our inaugural speaker as mentioned is ed freeman the olson professor of Business Administration at the Darden School at uva. Today ed will discuss his latest book which is so relevant given the current discourse that is going on in our nation and he calls the word, a nd the most powerful word in our language so lets find out why in the the power of and responsible business without tradeoffs. Ed