Marc Randolph is the co-founder and founding CEO of Netflix, where he also served on the board until 2003. Aside from Netflix, Marc has founded or co-founded six other successful startups and is the author of the best-selling book, That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea.
Marc believes that culture isn’t just what you say, what you put on posters around the office or the catchphrases you say in meetings.
He says…
“Culture is how you act. It’s how you are and the things you do. And even more importantly, culture springs from how the founders and the early employees act with each other, with their employees, and with their customers. Huge amounts of the Netflix culture arose organically from the way that Reed (Hastings) and I behaved, the way I treat people, and the way I worked with people before.”
When Netflix first started, the staff was only about 20 people, most of whom had worked together before in other companies. Those relationships made it easier to maintain a culture from the beginning. Marc says he knew he could ask an employee to take ownership of a project due in two weeks and that in two weeks they would show up with the results no matter what. The small team worked well together and had a culture of mutual respect, trust, and ownership.
“When you get bigger, something happens where someone shows up late, or they show up but don’t have everything done. And a lot of managers would say, ‘Oh, this isn’t good. Okay, we can’t have that happen. Everybody, I want status reports. I need to know if there’s going to be a problem in advance.’ So everyone needs to send status reports. But then someone else shows up and they’re there on time with it all done, but they spent too much. And many managers will go, ‘Oh, I can’t let that happen. Okay, I need to pre-approve things over $100 to make sure you don’t make a spending mistake. I need everyone to send expense reports.’ And it just keeps growing and changing.”
As Marc shares, as you build the company in a way that protects you from people with bad judgement, along the way with the added rules, steps, and processes are driving the people with good judgement crazy. And that’s how you lose good employees.
I was recently reminded of this story as I learned about the message that GM (client) gave to their employees. There used to be a 10-page handbook employees would receive on how to dress which their CEO Mary Barra replaced with two words “dress appropriately. Recently, as we saw the shifts in work and leadership, this philosophy extended to “work appropriately.” I love this approach as it’s flexible, treats employees like adults, and allows everyone to focus on their own situation with their leaders and team.
Getting back to Netflix…
The team at Netflix decided early on that they would build a company just for people with good judgement. People they knew they could count on, who weren’t afraid to work hard and take ownership of things, and in exchange the leadership team could give employees freedom to make their own decisions. And while Marc admits there was a time when they almost lost the culture as they grew, ultimately they have been able to keep it with intentionality, even now with almost 9,000 employees.
Over the last 15 years, I’ve had the privilege of speaking and working with some of the world’s top leaders. Here are 15 of the best leadership lessons that I learned from the CEOs of organizations like Netflix, Honeywell, Volvo, Best Buy, The Home Depot, and others. I hope they inspire you and give you things you can try in your work and life. Get the PDF here.
Comments