CNLP 443: Erin Meyer on Netflix’s No Rules Rules: Why Adequate Performance Gets You a Generous Severance Package, Talent Density, and How an Unlimited Vacation Policy Actually Works

Erin Meyer studied Netflix’s culture and shares the principles behind many of Reed Hasting’s radical ideas that have shaped Netflix’s culture: Why adequate performance gets you a generous severance package, talent density and how an unlimited vacation policy actually works.

Welcome to Episode 443 of the podcast. Listen and access the show notes below or search for the Carey Nieuwhof Leadership Podcast on Apple Podcasts or wherever you get your podcasts and listen for free.

Plus, in this episode’s Ask Me Anything About Productivity segment, Carey answers Ian’s question about juggling life, family and work without neglecting God.

Have a question about productivity? Let Carey coach you. Leave your message here!

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Conversation Links

No Rules Rules by Reed Hastings and Erin Meyer

The Culture Map by Erin Meyer

Netflix culture slide deck

Netflix treats its employees like adults, that’s what gets speed and innovation going

At Your Best by Carey Nieuwhof

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Insights From Erin

1. A culture of rules gets you an organization built on obedience

We’re conditioned to believe that an organization runs smoothly when we make sure everyone knows what is and is not allowed through lists of rules. In reality, a focus on error prevention results in a culture that penalizes innovation and rewards obedience.

While rules and processes are non-negotiable for safety-critical industries like construction and pharmaceuticals, in other organizations, innovation and freedom are how you ensure growth. When you stop innovating, you are unable to shift with the changes in the industry environment and eventually lose your top talent and your relevance. Erin quotes Reed Hastings, “If you dummy-proof the system, only dummies want to work there.”

2. A culture built on context breeds an organization of innovation and talent-density

Erin encourages leaders to lead with context, not controls as “the most creative, maverick-y employees… want to work at a place that they could run free.”

When you attract and keep creative and high-performing talent, they attract other high performers, creating an environment of talent density. Performance is contagious in that high performance encourages high performance. The antithesis is also true in that a lower performer will pull down the performance of the entire team.

To hear more about how this works, listen to the full conversation between Carey and Erin.

3. To know if the right people are on your team, conduct a “keeper test”

Ask yourself, “If Greg came to me and said he’s found another job, how hard would I fight to keep him?” If you’d fight hard to keep Greg, you have the right person. If you would feel relieved or even excited to know that Greg is leaving, some changes might need to be made. As an employee, you can also ask this question to your leader to know where you stand as a “keeper.”

Quotes from Episode 443

Employee freedom breeds innovation, and process kills flexibility. @ErinMeyerINSEAD Click To Tweet Lead with context not controls. @ErinMeyerINSEAD Click To Tweet Performance is contagious. @ErinMeyerINSEAD Click To Tweet The vast majority of organizations today are still obsessed with this focus on error prevention and replicability, which is an industrial era hangover. @ErinMeyerINSEAD Click To Tweet In an organization with a lot of rules, those rules really squash out the individual's needs. @ErinMeyerINSEAD Click To Tweet If you dummy-proof the system, only dummies want to work there. @reedhastings Click To Tweet High performance is intention with security. If you are trying to create a work culture where people feel deeply secure, then that's not likely to lead to top performance. @ErinMeyerINSEAD Click To Tweet In a growing number of organizations today, the biggest risk is no longer making a mistake. The biggest risk is not being innovative enough, not being fresh thinking so then we become irrelevant. @ErinMeyerINSEAD Click To Tweet Most leaders think an individual performance problem is an individual problem. But we know from a lot of research that an individual performance problem is a systemic problem that impacts the entire team. @ErinMeyerINSEAD Click To Tweet If you are underpaying your employees, you're making it really hard for them to stay employed or even to stay in the industry. Click To Tweet Don't seek to please your boss, seek to do what's best for the organization. @ErinMeyerINSEAD Click To Tweet When you really empower your team, you give them that culture of freedom, responsibility, autonomy. That's when great things happen. Click To Tweet

Read or Download the Transcript for Episode 443

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Next Episode: Chris McChesney

Chris McChesney, the Global Practice Leader of Execution for Franklin Covey, has helped pioneer the Four Disciplines of Execution that thousands of companies have adopted around the world to help them set and achieve breakthrough goals.

Chris outlines a framework that will help your team engage more deeply and master the execution of your mission and goals.

Subscribe for free now so you won’t miss Episode 444.

CNLP 443: Erin Meyer on Netflix’s No Rules Rules: Why Adequate Performance Gets You a Generous Severance Package, Talent Density, and How an Unlimited Vacation Policy Actually Works

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