Remove Policies, Not People
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The most famous line from Netflix's culture document is: 'Netflix vacation policy: we have no vacation policy.' This was not a marketing stunt. It was the logical consequence of the talent density principle. Hastings argues that most corporate policies are designed to prevent the bad behaviour of the worst employees from damaging the organisation. When you have high talent density, most of those bad behaviours do not exist. The policy, designed for the minority who might abuse the system, constrains the majority who would not. Unlimited vacation did not produce people taking three months off. It produced people taking similar or slightly more time than they had under the old system, because high performers are internally motivated and take the time they need to perform well, not the maximum they can claim. The same logic applies to expense policies. Netflix's expense guideline is: 'Act in Netflix's best interest.' This removes the game of finding approved ways to spend the maximum amount and replaces it with a genuine judgement call that high performers make well. Hastings is clear that this only works in a high-talent-density organisation with a strong feedback culture. Removing controls from a low-talent-density organisation produces chaos. The controls exist because the people require them. High-talent-density organisations require different controls: clear context, high expectations, and honest feedback when the judgement is poor.