No Rules Rules

Hastings, Netflix's co-founder, writes alternating chapters with Erin Meyer, a business school professor who interviewed employees and adds outside perspective and cross-cultural analysis. The structure is a sequence in which each step becomes possible only after the previous ones are in place.

The sequence begins with talent density, achieved by paying top of market and by removing adequate performers, which Hastings argues is the precondition for everything else. It proceeds to candour, implemented through explicit feedback norms including live feedback in meetings and written 360 reviews. Only after both are established does he introduce the removal of controls: no vacation policy, no expense approval, no spending limits, replaced by the instruction to act in Netflix's best interest.

The most discussed practice is the keeper test, in which managers ask whether they would fight to retain each person and remove those they would not, with a substantial severance payment. Hastings defends this directly and Meyer reports the effect on employees, including the fear it produces, which Hastings acknowledges as a cost.

Other practices include context rather than control, meaning that leaders provide the information for decisions rather than making them; the dispersed decision-making model in which no approval is required and the person closest to the information decides; sunshining, meaning that failed decisions are shared publicly by the person who made them; and paying personal top of market rather than using salary bands. The model works at a company with extraordinary margins and the ability to select from an enormous applicant pool. Meyer's chapters note that several practices transfer badly to other national cultures. The book is written by an interested party and the employees who were removed are not interviewed.