How Netflix’s culture can help us get better at Scrum
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After watching this interview with Erin Meyer, I decided to read her new book, ‘No Rules Rules’ — written with Reed Hastings, Netflix CEO. The book examines the culture at Netflix, and how it could be achieved from scratch. Whilst the book was not about Scrum directly, it was striking how closely Netflix had the same culture that Scrum seeks to develop.
In Scrum, the core of the framework is the principles of transparency, inspection and adaptation. This book provided an insight into the practical ways these principles are enacted within a high performing company like Netflix. The entertainment giant pushes these principles to the absolute limit, often rethinking standard business such as vacation policy, annual reviews and decision-making practices to maximise these values. It offers an extreme version of the culture Scrum seeks to create, and there are some interesting differences between the two we’ll review in the rest of this blog.
Talent Density
The first focus for implementing Netflix’s culture is increasing the talent density. This means having a small number of highly talented people is more effective than bigger teams of mediocre people. They do this through the ‘Keeper test’ — asking if they would fight for a person if they decided to leave. If they would not fight for them, they should immediately make them redundant, give them a generous severance, and find a replacement.
This has interesting implications for Scrum. Scrum and Netflix favour smaller teams in order to be more flexible and reduce communication challenges. However, there is no discussion of the quality of the team members and ensuring they are high performing in Scrum. Instead, Scrum takes the approach of improving them through continuous improvement practices. Whilst Netflix strongly encourages feedback, it also enacts this brutal ‘Keeper Test’ approach of removing people who aren’t good enough. Is there a similar consideration needed in Scrum to enable high performing teams?
Radical Candor
The second key principle of the Netflix culture is radical candor. Netflix is genuiely radical in providing feedback, anywhere, anytime. They prioritise giving it over it being the right time, providing comments regardless of the setting. They also have a strong 360 focus. In its most extreme format, Netflix hold 360 feedback dinners where the whole group share feedback publicly with each other about their performance. This advice is intended to be constructive, and must be taken gracefully by the employee receiving it — even if they don’t decide to follow it.
Whilst Scrum values inspection and adaptation, it focuses mainly on the team as a whole. The scrum events focus on inspecting the product and adapting the plan, or inspecting the team and adapting the processes. Netflix however, focusses its feedback specifically on the actions people have taken and offering suggestions for improvement. This is more personal and definitely harder to do, but I think can also be deeply rewarding if its actionable and well meaning. I think this is something interesting for scrum practitioners to think about — how to incorporate personal feedback into the Scrum model.
Remove decision making approvals
Third, Netflix removes as many rules as possible — including most notably around decision making. They have the concept of the informed captain — the person closest to the information is the decision maker, not any of their bosses. For example, the director in charge of children’s TV for Brazil can purchase programs without approval from the Brazil director, LATAM director or global children’s TV director. This concept shows real trust in their employees, and obviously greatly speeds up decision making.
Scrum has the same approach — trying to build autonomous teams that can operate independently of any approval process. However, many enterprises still have these in place. It’s a great exercise to think what approvals your scrum team needs in their current process, and how you might work with leadership to remove them.
Open the books
However, this decision making power needs sufficient context to be effective. Netflix solve this problem by opening up the books and giving everyone all the information about the current strategy and situation at the company. Rather than protecting the team from external influence, Netflix tries to directly inform everyone about what is happening within the company so they can make effective decisions at all levels. This is opposed to Scrum, where the team are often protected from external influence to focus on their work. I prefer the Netflix approach of providing the context for decision making and trusting your employees.
Conclusion
Netflix provide the most detailed example I have seen of an extreme Scrum-like culture working for a company achieving huge success. By pushing our transparency, inspection and adaptation in the same way they have done, we can help our teams move to the next level.
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