Netflix set out to create a corporate “culture of reinvention” that would be capable of adjusting on the fly, moving in tune with fast-paced technological change in the marketplace and innovating for the future. Legendary CEO Reed Hastings encourages his employees to be frank in their feedback about his leadership. The results through the years of his stewardship are stunning. Author, venture capitalist and a16z Podcast host Ben Horowitz interviews Hastings to gain his insights into building a global creative culture.
“Culture” is made up of the behavior that a company rewards.
When Netflix CEO Reed Hastings led his first company, Pure Software, his instinct as a software engineer was to view every obstacle as a mechanical problem. When something went wrong, he implemented a process to correct the error. Because of this approach, the company evolved to reward process and efficiency rather than innovation. Over time, this drove away its more creative employees.
When the software market shifted, Pure Software didn’t have the creative firepower to adapt. Hastings tried to stay afloat by buying other companies, but each had its own processes, and this generated increased complexity. An overload of process bogged the company down.
Hastings started Netflix determined to learn from his past and make only new mistakes. Today he embraces “anti-process.” Netflix’s “culture memo,” which describes its corporate values and the behaviors it rewards, is a “Bill of Rights” for employees. It holds executives accountable for living up to their stated principles.
Whether most companies follow their written value statements is another question...