The memoirs and random ruminations of corporate leaders rarely find their way into the public conversation, but rules change when Netflix is involved. Tuesday marked the publication day of Reed Hastings’ book in which the co-CEO warned that no company employee at any level should assume job security. A day later, Cindy Holland, the long-term leader of original content strategy, was shown the door.
Hastings is arguably the most important and least known corporate chieftain in Hollywood memory, so his new book carries an intriguing subtext: The education of a hard-core techie mind on the realities of show business. The book sets forth an array of Silicon Valley rules about corporate management, replete with a distinct techie lexicon. But it concludes with this admission: “I’ve had to learn how to operate a little closer to the edge of chaos.” Chaos, it seems, wasn’t part of the plan, as outlined in the book, titled No Rules Rules: Netflix and the Culture of Reinvention.
Hastings “education” is of interest because the background and profile of the patrician, Boston-born executive represents the mirror opposite of Hollywood’s founders and even of its present creative leaders. A studio pioneer like Samuel Goldwyn would have voted him off the island years ago.
As the book suggests, decision makers at the streaming giant, once famously close-mouthed, are now sharing their business strategies with the media. Hastings is speaking out about not only his disciplined management philosophy, but also his anti-Trump politics and even, a bit, about his personal life.
In promoting the new book, Hastings admits that he still does his Zoom interviews from his son’s former bedroom because he stubbornly declines to build a proper study at his home in Santa Cruz. He believes that would be a concession to the pandemic.
So why the change in attitude? Part of it is pragmatism: “We’re too big to pretend to be invisible,” confides one senior executive. Further, having implemented the mandates of diversity, Netflix wants to give its executives appropriate exposure.
But then there’s the bigger mystery: Hastings’ ego. A cerebral techie who covets his privacy, Hastings seems eager to proselytize his idiosyncratic management theories – ideas that reflect Silicon Valley more than Hollywood. If anything, the book will further exacerbate Hollywood’s culture shock over the commanding status that Netflix has now achieved in the entertainment universe.
To be sure, Hastings’ edgy relationship to Hollywood has lately been softened by his appointment of Ted Sarandos as his co-CEO. A convivial cineaste, Sarandos has diligently built personal bridges to the creative community through friendships and board memberships (both the AFI and the Cinematheque), while still pursuing Netflix’s aggressive game plan. Indeed, before being shut down by COVID-19, Netflix’s sprawling reception area in Hollywood was becoming a sort of techie cathedral to which Hollywood brought its humble offerings.
In receiving these pitches, the Netflix functionaries must deal with their own protocols, as articulated in Hastings’ book (Erin Meyer is listed as co-writer). Prospective Netflix employees are interviewed multiple times in an effort to detect their “High Talent Density” – Netflix argot for smarts.
Once hired, they are afforded a high level of decision-making authority, provided they frequently consult their “Keeper Test Prompts,” which register how bosses judge their performance levels. They also engage in an ongoing “Circle of Feedback” to assess the views of those above and below them.
The message: Enjoy the high-paying work environment but don’t anticipate a lifelong position. With blunt candor, Hastings writes: “Everyone at Netflix is happier and more successful when there is a star in every position, but for people who value security over winning championships, Netflix is not the right choice.”
A tough message? ”There is a conflict between the head and the heart,” he acknowledges.
While holding to his techie management rules, Hastings nonetheless acknowledges that Netflix dwells in a volatile creative environment and that he has learned how “to operate a little closer to the edge of chaos.”
“Chaos,” he implies, may be the enemy of normal businesses, but could also be an unruly ally of Hollywood. That’s because “rules,” it seems, may not rule after all. Which may justify his baffling title, No Rules Rule.