Calashock Book Club: No Rules Rules

This month’s book club book was recommended by Lance Owide, General Manager of B2B at BigCommerce, on the BIG, commerce podcast. Written together by Reed Hastings, co-founder and executive chairman of Netflix, and Erin Meyer, author and professor at INSEAD Business School. No Rules Rules explores the unique corporate culture at Netflix both from an internal and external perspective and how this culture has led to the company’s adaptability and success.

Reed illustrates each element of Netflix’s culture and gives some background as to how is was developed. While Erin, an expert in corporate culture and business strategy gives and external, often sceptical perspective. She also interviews many present and past Netflix employees to get a better understanding of how the culture really works from the inside, not just the upper management’s opinion. It is a fascinating deep dive with a lot of food for thought for anyone who manages a team or owns a business.

In the ever-evolving ecommerce industry, where adaptability and innovation are so important, business leaders and professionals always need to be on the lookout for new insights to inform their strategies. While the strategies and culture described in No Rules Rules are definitely not going to work for every business, the concepts around freedom, responsibility, creativity and innovation are definitely an insightful read for everyone working in ecommerce.

Embracing Disruption

One of the central themes of No Rules Rules is Netflix’s emphasis on embracing disruption. Ecommerce, like the streaming industry, is constantly evolving and shifting with new technologies and changing customer preferences. The ability to swiftly adapt to new market dynamics and trends is vital to be remaining relevant and competitive. The book underscores the importance of innovation and flexibility, using Nteflix’s own pivots from a DVD rental company to a streaming company, to an award-winning producer of original film and TV. This ability to reinvent themselves to meet consumer’s expectations is certainly an inspiration to ecommerce professionals to challenge conventional practices and embrace change.

Freedom and Responsibility

Netflix’s culture champions “freedom and responsibility”, granting employees significant autonomy and expecting them to take ownership of their decisions. Most managerial approval protocols have been removed. From personal expenses to signing off major contracts, employees are trusted to make the choice that is best for the company. While this requires a great deal of trust, it also enables agility within the business which is extremely important in constantly evolving digital industries such as streaming or ecommerce.

In ecommerce, where cross-functional collaboration and timely decision-making are pivotal, this approach can empower teams to respond more efficiently to market demands. It’s not an easy atmosphere to cultivate as it requires a great deal of trust in employees. As well as the financial stability to absorb potential losses if an employee takes advantage of expenses (the book does share a few horror stories) or makes an error in judgment on a business decision. However, building an environment where individuals feel trusted and responsible can lead to enhanced customer experiences, streamlined operations and ultimately, more sales.

Feedback and Continuous Improvement

Reed Hastings promotes candid feedback and open discussions. This is another tactic that can have great results for team growth, however, if not implemented with extremely clear intent and context, it could easily lead to rude or unhelpful comments, or even bullying in the workplace.

Applying this principle in ecommerce can build a culture of continuous improvement. Constructive feedback loops can lead to better customer service, optimized website experiences, and more effective marketing strategies. Ecommerce businesses could benefit from fostering an atmosphere where candid, constructive feedback is welcomed and used to iterate on processes.

Talent Density

Netflix’s emphasis on high performance and “talent density” likely feels familiar to many ecommerce business owners in their pursuit of excellence. However, it can also feel extremely cut-throat. As Erin found in her interviews with a number of Netflix staff. The policy of “an adequate performance receives a generous severance package” leaves many team members in constant fear of losing their jobs. This may motivate people to work harder than ever before but is it sustainable to keep employees in that high-anxiety state of mind? That is a question for each individual business owner to decide for themselves.

As the ecommerce industry becomes more saturated, maintaining a competitive edge becomes ever more difficult and ever more important. By cultivating a culture of excellence and high talent density, ecommerce managers can motivate their teams to consistently deliver outstanding results and drive innovation to stay ahead in the market.

Integrating the Netflix Culture?

While “No Rules Rules” presents several compelling principles, it’s important to note that not all aspects of Netflix’s culture might be directly transferable to ecommerce merchants. Ecommerce businesses operate within a diverse range of contexts, sizes, verticals etc., and the “Netflix way” may not seamlessly integrate into every company’s structure. The book should be approached with a critical lens, taking inspiration from the innovation but evaluating which elements align with an ecommerce organization’s values and goals.

In conclusion, “No Rules Rules” offers valuable insights for ecommerce professionals looking to navigate the rapidly changing landscape of online commerce. The book’s emphasis on disruption, empowerment, feedback, and excellence can inspire fresh strategies and innovative thinking.

However, ecommerce professionals should approach the book with discernment, recognizing that adaptation is key and that each organization’s unique circumstances will dictate the extent to which Netflix’s culture can or should be implemented. By critically analyzing the book’s principles and adapting them judiciously, ecommerce managers can harness its wisdom to drive their businesses forward in an increasingly competitive digital marketplace.

What did you think of No Rules Rules? What was your biggest takeaway from the book? Join the conversation on LinkedIn and join us here again next month for the next Calashock Book Club – Thinking, Fast and Slow by Daniel Kahneman