Prioritising Innovation: The Netflix Principles
How three principles at the heart of Netflix have helped to revolutionise the entertainment and tech industries.
In traditional organisations companies may adopt an accelerated innovation pipeline, or host ideation competitions. These models tend to have varying success and short-lived results. Without values and principles such as those at the heart of the Netflix business model, ones which are exemplified by a transformational leadership team, real innovation will not be a staple of an organisation.
“In loosely coupled organisations, where talent density is high and innovation is the primary goal, a traditional control-oriented approach is not the most effective choice. Instead of seeking to minimise error through oversight or process, focus on setting clear context, building alignment of the North Stars between boss and team, and giving the informed captain the freedom to design.”
Reed Hastings, ‘No Rules Rules: Netflix & the Culture of Reinvention’
The founders of Netflix have developed core principles which are simple but powerful, easy to communicate and people-centric, with trust at their core to engender empowerment.
These principles aren’t ‘rocket science’, and for anyone who works in an agile role, business or company, they are recognisable as being reflective of the core principles of the Agile Manifesto.
Mapping the Netflix values and principles against the values of the agile manifesto and the characteristics of business agility.
Here are the Netflix principles in summary:
1. Valuing People over Process:
This principle emphasises prioritising the well-being, skills, and contributions of individuals within the organisation over rigid adherence to standardised processes or procedures.
In a business environment, this principle might manifest in practices such as fostering a culture of collaboration and open communication, empowering employees to make decisions autonomously, and recognizing and rewarding individual and team achievements.
It acknowledges that people are the driving force behind innovation, productivity, and success in any organisation, and therefore, their needs and capabilities should be central to decision-making processes.
2. Innovation over Efficiency:
This principle advocates for a focus on creativity, experimentation, and continuous improvement, rather than solely prioritising optimisation and cost-cutting measures for the sake of efficiency.
In a business context, this principle might involve encouraging risk-taking, supporting research and development initiatives, and creating space for unconventional ideas and approaches.
While efficiency is important for maximising resources and achieving short-term goals, prioritising innovation recognises the long-term benefits of adapting to changing market conditions, anticipating future trends, and staying ahead of competitors.
3. Context not Controls:
This principle underscores the importance of understanding and adapting to the unique circumstances, needs, and dynamics of specific situations or contexts, rather than relying on rigid control mechanisms or one-size-fits-all solutions.
In a business setting, this principle might mean tailoring strategies, policies, and processes to suit the particular requirements of different departments, teams, or projects, rather than imposing uniform standards.
It acknowledges the complexity and variability of real-world scenarios and emphasises the value of flexibility, agility, and responsiveness in decision-making and problem-solving processes.
With these principles at the heart of their business operations, Netflix has not only revolutionised the entertainment and technology industries but has become ubiquitous. Transcending beyond that of other global organisations, Netflix is part of the vernacular, embedded into everyday slang. What makes their success sustainable is their commitment to these principles and the values that underpin them.