Reed Hastings New Book & Why He Fired His CFO

Before he co-founded Netflix, Reed Hastings ran a debugging-tool company, Pure Software. And he’s convinced the morass of red tape he put in place at Pure led to the company’s eventual irrelevance and sale to a rival.

With Netflix, Hastings has focused on building a culture of employee empowerment — which he documents in a new business book, “No Rules Rules: Netflix and the Culture of Reinvention,” co-authored by business professor Erin Meyer. (Read our five key takeaways from the book.)

“The key is embracing managing on the edge of chaos,” Hastings says. “That’s the message of the book.” It’s hard to find fault with that approach: Netflix had 193 million streaming customers as of the end of June, nearly tripling the base in the past five years.

Why did you want to write this book?

Hastings: I’ve benefited so much over the last 20 years from reading other people’s books that I wanted to do the pay-it-forward thing and help the next generation of young organizations try to figure out new paradigms that are a little more post-industrial. We’ve got this industrial-factory-military-church, very top-down hierarchy model, and that’s all our societies have known for the most part. And there are other ways of operating, and we wanted to make the case that it’s good business to run without rules — which is a surprising statement.

I’ve read many CEO pontification books, and I always wonder what it’s really like in the middle of that organization. I’m always skeptical. That’s why we hired Erin Meyer, who was a business school professor first, [to co-write the book] and come in and interview hundreds of Netflix employees confidentially and then do the point/counterpoint — me pontificating, and then her doing the reality check.

It doesn’t make Netflix out to be perfect. There’s still plenty of issues. But it’s very real in that way. Our big media competitors are not going to be able to take advantage of [the lessons in the book] because they’re too well established… It’s not like some great trade secret and then they’re all going to adapt to it. It’s the younger firms that will.

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