Netflix's founder discusses importance of company culture and leadership amid the pandemic

Summary

Netflix has seen significant growth during the pandemic, adding over 10 million subscribers globally in the second quarter and generating $6 billion in revenue. Reed Hastings, Netflix’s co-CEO, discusses his new book 'No Rules Rules' about Netflix's unconventional company culture, emphasizing employee freedom and decision-making. He explains how the company operates without rigid rules, using transparency and a 'keeper test' to ensure excellence in staffing. Hastings also addresses the company's diversity efforts and how they are continuing production with safety measures during the pandemic. The book is now available for purchase.

Takeaways

• 😀 Netflix saw substantial growth during the pandemic, adding over 10 million subscribers globally in the second quarter.
• 📈 The company generated more than $6 billion in revenue during this period.
• 📚 Netflix's co-CEO, Reed Hastings, has a new book called *No Rules Rules*, which focuses on Netflix's unorthodox company culture.
• 💡 Netflix emphasizes employee freedom, allowing staff to make decisions without multiple levels of approval.
• 🗣️ Transparency and communication are key elements of Netflix's internal culture, providing employees with context for decision-making.
• ⚽ The 'Keeper Test' ensures managers retain only top-performing employees, likening the approach to having stars in every position of a professional sports team.
• 📺 Despite the pandemic halting production, Netflix is able to resume work in various regions like Canada, Europe, and Asia to maintain its content lineup.
• 🧪 Extensive safety protocols, including regular testing, are being implemented on production sets during COVID-19.
• 🎓 Reed Hastings and his wife made a $120 million contribution to scholarships at historically Black colleges and universities.
• 🌍 Netflix's leadership diversity has improved, with 25% being leaders of color and 50% of executives being women.

Q & A

What was the key driver of Netflix's growth during the pandemic?

Netflix saw significant growth during the pandemic as more people sought home entertainment. In the second quarter, Netflix added more than 10 million subscribers globally.

How much revenue did Netflix make in the second quarter during the pandemic?

Netflix made more than $6 billion in revenue during the second quarter of the pandemic.

What is the central theme of Reed Hastings' book 'No Rules Rules'?

The book 'No Rules Rules' focuses on Netflix's unorthodox company culture, which emphasizes employee freedom, transparency, and decision-making to drive success.

Why does Netflix's company culture encourage freedom, according to Reed Hastings?

Netflix encourages freedom to allow employees to make decisions independently without needing multiple levels of approval. This freedom enables them to be more innovative and responsive.

How does Netflix ensure transparency in decision-making?

Netflix promotes transparency by providing employees with a lot of information, which they call 'context.' This helps employees make informed decisions.

What is the 'keeper test' that Reed Hastings mentions in his book?

The 'keeper test' is a concept where managers are asked if they would fight to keep an employee if that person were to leave for another company. It's used to ensure that Netflix has top talent in every position.

Does the 'keeper test' create a culture of fear among employees?

While some might perceive it as breeding fear, Reed Hastings compares it to professional sports, where athletes focus on excellence, competition, and winning rather than fear of being replaced.

How did Netflix manage production during the COVID-19 pandemic?

Netflix resumed production gradually, with some work continuing in the U.S. and more active production in countries like Canada, Europe, and Asia. They implemented extensive safety protocols, including testing, to keep people safe.

What was the impact of Netflix's $120 million contribution to historically Black colleges and universities (HBCUs)?

Reed Hastings and his wife Patty made a $120 million donation to support scholarships at HBCUs, which was seen as an extraordinary contribution.

How does Netflix approach diversity within its leadership ranks?

Netflix has made progress in increasing diversity, with 25% of its senior executives being people of color and an even gender split of 50% men and 50% women. However, Reed Hastings notes that the company is still working to improve compared to where they were three years ago.