The Netflix Innovation Cycle

How does Netflix innovate? Just like any organization that has a track record of innovation, you have to start with it’s culture. Luckily, you can learn about Netflix’s culture from the CEO himself. In his book, No Rules Rules: Netflix and the Culture of Reinvention, Reed Hastings describes 4 steps which all employees follow within Netflix to pursue an idea they’re passionate about.

The Nextflix Innovation Cycle goes like this:

“Farm for dissent”, or “socialize” the idea

Everyone at Netflix must voice their opinion about proposed ideas. It is disloyal to Netflix when you disagree with an idea and do not express that disagreement. By withholding your opinion, you are implicitly choosing not to help the company.

In other words: differences of opinion are welcome and expected from everyone, it’s part of the culture, because leaders can’t make the best decisions unless they have input from a lot of people. It’s why they actively seek out different perspectives before making any major decision.

Socializing is a type of farming for dissent with less emphasis on the dissent and more on farming.

For a big idea, test it out

There is no innovation without experimentation. The difference at Netflix is that tests take place even when those in charge are dead set against the initiative.

As the informed captain, make your bet

The previous steps are not about consensus building, rather the Netflix innovation Cycle is individual decision making with input. For every decision there is an informed captain, that person has full decision making freedom. This person collects opinions and chooses for herself, and is solely responsible for the outcome.

At Netflix you don’t need management to sign off for anything. If you’re the informed captain, take ownership and sign the document yourself.

If it succeeds, celebrate. If it fails, sunshine it

This last point is key, mainly because of how leaders react when an idea fails. At most companies, failure is a cause for termination. Not at Netflix. Instead, it’s about learning from mistakes and killing a bad idea as fast as possible.

Innovation is as much about attitude and perspective as it is about process. As you can see, Netflix doesn’t have this extremelly complex innovation process. They put more emphasis on nurturing and celebrating people’s attitudes, and encouraging them to seek out different perspectives than on some prescriptive model for innovation.

Does this mean any organization can take these ideas and apply them to their own business? Yes and no. As I said before, the above doesn’t happen if their culture was not about innovation. Their organization truly follows the principles that drive a culture of innovation, where people are challenged, are given freedom and ownership, are celebrated for taking being bold and taking action.

Next Article

Bet On Brains, Not Experience