How to Netflix your team: ‘No rules’ approach to develop and keep talent in European business.

It seems like a lot of fun: Who wouldn’t like to work with highly motivated and talented people who need no direction or control and still realize your vision? It might be just the kind of environment that helps you win the war for talent and hire that talented developer, salesperson, or AI specialist you desperately need.

But how could you use these ideas in practice? How do you apply the ‘No Rules’ approach in your own organization without having to move to Silicon Valley?

‘No Rules Rule’

‘No Rules Rule’ by Erin Meyer and Reed Hastings explains the organizational approach of Netflix and how Netflix uses concepts of talent density and context management to compete. Many of their ideas are not new and are well-established in lean manufacturing, but ‘No Rules’ gives it an additional octane level and explains how it works in a more creative industry.

The book describes three building block that reinforce each other:

1. Create a team of highly capable and motivated people
2. Create an atmosphere of transparency
3. Reduce unnecessary control mechanisms and replace it with context.

The book runs through these three aspects in three iterations, each increasingly ‘radical’.

Clearly, Netflix has been able to attract exceptional talent with this approach and create success even when faced with much larger rivals.

Is firing average people the solution to win the war for talent?

In the current war for talent, it would be valuable to copy this success formula. At Netflix, a key aspect of creating a top team is to fire anyone who is doing a decent job and only keep those that do a stellar job.  Whilst this might be standard practice in a National Football team, in normal business this would be very problematic, because of the friction in firing and hiring team members, the battle for talent as well as the impact this has on team morale. Also, not every company is a creative media company and not every company is playing at the top level, which allows you to hire the very best in a field.

More European approach

Here are six steps to put these ideas in practice in a more European pragmatic context.

1. Manage context: Define vision and desired behaviour.
2. Shadow of the leader: Change through behaviour not words.
3. Lead through context: Meet frequently but nor regularly.
4. Talent growth: Create new functions often.
5. Dismiss: Dismissal process is designed for the ones that stay.
6. Team growth: Team growth is the essential fuel, also if the business shrinks.

 

Manage Context

To tie in with ‘European’ business practices, I suggest to start at the end of the process described in ‘No rules’: Create context.  In the book it is the pinnacle of the approach, maybe because it is more foreign to American business culture. 

As a leader in any organisation, improving context could be an obvious way to start reaping some of the ‘No Rules’ benefits. No team has ever performed worst by creating more context, which includes alignment on shared vision and clear expectations on what is seen as good or bad behaviour.

Context is part of the vision and should be aligned on a company-wide level. But there is no reason for any leader in an organization not to create context for their own team, as long as it aligns with the company’s vision. Creating context is not a free-for-all inspirational brainstorm. It is a summary of those behaviours that are already clearly visible in some places in your company and fit with your company’s destination. It can relate to behaviours, business objectives, product, or market priorities.

 

Shadow of the leader

If you are not the top dog, the context and behaviour of the people above your team is a given. In most cases you will find sufficient overlap in values, objectives and expected behaviours to create your team’s context. If you can’t, you should ask yourself if you are working in the right place.

When creating context, beware of the ‘shadow of the leader’ effect. It is the behaviour of the leader that sets an example and determines the message that lands with the teams, not what is said. This applies to you as a leader in your organisation, but specifically to the top dog.

 

Leading through context

Once context is defined, share it. Then share it again, mention it, show it and talk about it. It should be part of normal conversation. Giving context on the job or task at hand is much more insightful than generic context (Imagine how powerful we could discuss these ideas  with your specific organisation in mind, rather than this generic summary!)

When context starts to land with the teams, you will see team members that pick this up naturally and start using to operate more empowered. Those team members that have many unpredictable situations will especially benefit, for instance those that have direct interaction with customers or are developing and innovating. Less issues need to be delegated up and if they do, they need less time. You find you get more time yourself.

The free up of time allows you to make your interaction more effective. Less issues means you need less regularly planned meetings to work through a list with your team member. The interaction on issues and content shift to more situation based. Make sure you meet people frequently but not regularly. Conversation shifts from the ‘what’ to the ‘how’ and ‘why’, as any conversation is an opportunity to reinforce the context. Many conversations will become more similar to feedback discussions. If you have a yearly evaluation cycle, you will find that these talks are now just a formal summary of what you talked about during the whole year.

You shift your focus from being efficient to being effective with people. The bottleneck of organisational growth should not be your time, but the speed of development of your team. If you work more project based with scrum or slack or TQM you will find the sessions get shorter and more effective.

Inherently you are increasing talent density without making any changes in the team. But inevitably, as your team accelerates, you will start to hit roadblocks. Some team members will accelerate their growth and start to get bored. Some team members will struggle to keep up.  ‘No rules’ is very clear about both aspects: Increase the salary of the first and fire the second.

Talent growth

You cannot sustainably keep someone attracted to a company if you cannot pay a decent salary that is aligned with their role and capabilities. Hoping that team member will stay put out of habit is not a strategy. Many salary systems do not allow for such performance adjustments.  They way to solve this is to increase frequency of promotion, creating new task, often much more productive and valuable for the company.

If a team member has experienced a period of substantial growth in their time at the company, and despite your efforts, they find they need to leave to further their career, it should fill you with pride. It is part of the normal market-based world that we live in.

The other side of the equation is people that do not keep up with the growth. For a good team you need attackers and defenders.  Do not underestimate the value of someone who does a repetitive task diligently and motivated, even without growing. Limiting the scope of someone’s task could be a great way to make sure a trajectory toward performance is found back.

Dismissal

If you do decide to let someone go, do it decently. ‘No Rules’ says: Do not say anything about someone that you would not share if you crossed them in the corridor. Decency should be a strong enough motivator. If not, remember, the process of dismissal is not designed for the one that is dismissed; it is designed for the ones that stay. An arbitrary and unpredictable dismissal will send a strong message to all other team members. It can destroy much of the context that you worked so hard to build.

A well-managed, explainable dismissal of someone can send the reverse message: one of reliability and consistency. And also a message that a low level of control does not mean that there is no accountability.

The method in ‘No Rules’ was not devised in a time of company growth. The ideas sparked in the middle of a reorganization. If push comes to shove and a major change is required, it would be easy to drop this approach. Because of time, some aspects might need to be dropped. But again, as with dismissal, a reorganization is not about the people that go but the people that stay. There is no better opportunity than a crisis to show what your organization’s true vision and culture are. It will not increase enthusiasm when jobs are on the line, but it will create a tremendous difference once the dust is settled and the company needs to find the path to growth again.

Team growth

Whether you have people leaving or let go, or not. In all cases growth should be an important aspect of making a team perform well. No sports team ever got motivated through degradation. Growth does not always mean more people, but if it does, your team’s capability should deliver output that warrants this growth. This can be through more sales, less waste, lower purchase cost, more loyal customers, etc. If you grow a team without growing the output, you are just creating overhead and increase the inevitability of future reorganisations.

New people hiring. Always hire for talent and value set, not for skills. Skill is the easy way forward, ‘Hire for skill. Fire for attitude’.  If you have the growth in your team to accommodate talent, few hires will be overqualified.

Your drive as a leader

 ‘No Rules’ requires an open, vulnerable explainable leadership style, fully practicing what you preach or be open for criticism. This is hard, we are all human. But if you are striving to perform as part of a team, nothing is more rewarding, nothing is more effective as can be seen form the Netflix example. Not doing this means you limit yourself and your team to play the top league.

This blog post was edited with the assistance of Le Chat by Mistral, an European AI language model