The Management Lesson Of Reed Hastings

There are not many companies that have revolutionized their industry as much as Netflix has.

Founded in 1997 to compete against Blockbuster’s 9,000 rental video stores, Netflix began by sending DVDs to its customers via the United States Postal Service. It now provides on-demand Internet video streaming. While Blockbuster filed for bankruptcy in 2010, Netflix is worth $23 billion and produces some of the most original video content available across all screens.

Netflix co-founder and CEO Reed Hastings revealed one of his management secrets upon receiving the 2014 ENCORE award from Stanford’s Graduate School of Business.

“I take pride in making as few decisions as possible,” he explained. “It’s creating a sense [in your employees] that ‘If I want to make a difference, I can make a difference’.”

In Netflix’s culture, empowerment goes hand in hand with accountability and high performance. “Adequate performance gets a generous severance package,” said Hastings.

This philosophy fits perfectly with one of my management values: Micromanagement hampers managers. The best way for a manager to grow is to help their direct reports grow.

Incidentally, rejecting micromanagement means managing by objectives and results, instead of by observation. It is very good for both the manager and the employee.