Netflix’s No Rules Rules — Part 2
Every good plan changes when it meets reality, and my plan here is no different. While this was intended to be part 3 of the series, I decided to cover it now and leave the specific Netflix practices for later.
Chapter 10 of No Rules Rules discusses the work that Netflix has done to adapt its unique culture to its multi-national footprint. Since Netflix started off in the US, many aspects of its culture aligned relatively well with general US culture. In places where intentional differences were introduced, the degree of difference was small enough that behavior change and convergence could be driven through standard means: role modeling, training, education, and processes/incentive systems. However, as Netflix expanded internationally, some aspects of its culture were at more extreme odds with local cultures. For example, its high candor culture, which celebrates direct negative feedback, was at odds with Japanese culture, which favors a much more indirect approach to negative feedback.
The need to more deliberately explore and reconcile those cultural differences led to the initial collaboration between Reed Hastings and Erin Meyer, the book’s co-authors. Meyer is a leading researcher in the field of cultural differences, and her capstone research is covered in detail in her 2014 book The Culture Map. A more digestible summary of it is available in an HBR article titled:
Meyer’s research “stands on the shoulders of giants,” synthesizing and integrating previous work by leading researchers such as Edward Hall, Geert Hofstede, Robert House, Mansour Javidan, Roy Chua, Michael Morris, and Richard Nisbett.
Meyer created a framework for analyzing and comparing cultures across 8 scales:
- Communicating (low context <> high context)
- Evaluating (direct negative feedback <> indirect negative feedback)
- Leading (egalitarian <> hierarchical)
- Deciding (consensual <> top-down)
- Trusting (task-based <> relationship-based)
- Disagreeing (confrontational <> avoids confrontation)
- Scheduling (linear time <> flexible time)
- Persuading (principles first <> application first)
Communicating — This scale measures the degree to which cultures are high- or low-context. In low-context cultures, good communication is precise, simple, explicit, and clear. Messages are expressed and understood at face value. Repetition and putting messages in writing are appreciated to clarify communication. In high-context cultures, communication is sophisticated, nuanced, and layered. Messages are both spoken and read between the lines. Less is put in writing, and more is left for verbal interpretation.
Evaluating — All cultures believe that criticism should be given constructively, but the definition of “constructive” varies greatly. This scale measures a preference for frank versus diplomatic criticism. While often confused with communicating, many countries have different positions on the two scales.
Leading — This scale measures the degree of respect and deference shown to authority figures, placing people on a spectrum between the egalitarian and the hierarchical.
Deciding — This scale explores the differences between building group agreement and relying on an individual(usually the boss) to make decisions. We tend to assume that it’ll be strongly correlated with the “leading” scale, but this is not the case in all cultures.
Trusting — Cognitive trust (from the head) can be contrasted with affective trust (from the heart). In task-based cultures, trust is built cognitively through work. If we collaborate well, prove ourselves reliable, and respect one another’s contributions, we come to feel mutual trust. In a relationship-based society, trust is a result of weaving a strong affective connection. If we spend time laughing and relaxing together, getting to know one another on a personal level, and feeling a mutual liking, we establish trust.
Disagreeing — This scale measures how cultures view open disagreement — whether they feel it is likely to improve group dynamics or negatively impact team relationships. Some counties view the public airing of disagreement very dimly, while others are quite comfortable having spirited, confrontational meetings.
Scheduling — This scale measures how much value cultures place on being structured versus reactive. In some cultures, people treat the schedule as a suggestion, while others stick to the agenda.
Persuading — This scale measures a preference for inductive versus deductive arguments. Some cultures tend to find deductive reasoning more persuasive, whereas other cultures typically prefer an inductive style.
Netflix used Meyer’s research to identify the countries where the Netflix culture is most at odds with local cultures to:
- Support team members in those countries better, knowing that they’ll likely take a little longer to adapt.
- Look at elements of its own culture that are most at odds and mitigate some of those tensions, such as increasing formal feedback in cultures that are less direct on the “evaluating” scale.
On Meyer’s website, individuals and groups can take Meyer’s 24-question assessment, see where they fall on each of the eight scales, and compare their culture to the cultures of the countries in which they’re doing business.
In my mind, the intra-cultural comparisons are more interesting than the inter-cultural ones. As my assessment suggests, while on some scales, my disposition was a blend of the two cultures of the countries I’ve spent the most time in (US and Israel), on others, I was more extreme than both in one direction or the others. Suggesting, perhaps obviously, that country culture is not the only contributing factor to my culture, and the two can differ quite significantly.
Therefore, I see the tool’s key value as a fascinating diagnostic for organizations in codifying their organizational cultures across the eight scales, by aggregating all team members’ individual results. And it’s not just the medians that matter; it’s also the variabilities. Understanding on which scales there’s strong cultural coherence (low variability) and on which scales there’s weak cultural coherence (high variability) can help an organization focus its efforts on the latter if it wants to create a more coherent culture.