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Netflix boss Reed Hastings who scored a deal with Prince Harry and Meghan Markle shares his secrets

Netflix co-founder Reed Hastings shares his tips for building a successful business in a new book. 

The billionaire chairman and co-CEO, 59, whose California-based company signed an nine-figure deal with the Duke and Duchess of Sussex, offers up advice to would-be moguls in No Rules Rules: Netflix and the Culture of Reinvention, co-authored by Erin Meyer.

Tips include paying over-the-odds for top talent and championing ‘unlimited vacation’ in a bid to attract the very best Gen-Z and millennial employees, who ‘resist punching clocks’, according to an extract published by The Times

Reed Hastings, 59, whose California-based company signed an nine-figure deal with the Duke and Duchess of Sussex, offers up advice to would-be moguls in No Rules Rules: Netflix and the Culture of Reinvention, co-authored by Erin Meyer. Pictured, Hastings in 2018

Reed Hastings, 59, whose California-based company signed an nine-figure deal with the Duke and Duchess of Sussex, offers up advice to would-be moguls in No Rules Rules: Netflix and the Culture of Reinvention, co-authored by Erin Meyer. Pictured, Hastings in 2018

Business tips from Netflix’s billionaire CEO

Allow unlimited holiday: To attract Gen-Zers and millennials who dislike ‘punching clocks’. 

He writes: ‘Removing the policy [of allocated vacation] also reduces bureaucracy and the administrative costs of keeping track of who is out and when. 

Most important, the freedom signals to employees that we trust them to do the right thing, which in turn encourages them to behave responsibly.’ 

Be ready to fire anyone: Hastings champions a so-called ‘keeper test’ whereby executives must continually question whether they would fight to retain members of their staff. 

He encourages managers to let go any member of staff they are not willing to fight for.  

Pay ‘tremendously’: Entice top talent with salaries that are hard to resist. 

Explaining the strategy, he writes: ‘It costs a lot more to lose people and to recruit replacements than to overpay a little in the first place.’

Hastings suggests giving raises before they are asked for in order to keep employees in their roles.  

Allow unlimited travel and expenses: But ask employees to think about the company when spending.

He notes: ‘It is not in Netflix’s best interest that the entire content team fly business from LA to Mexico. But if you have to take the redeye from LA to New York and give a presentation the next morning it would likely be in Netflix’s best interest that you fly business, so you don’t have bags under your eyes and slurred speech when the big moment arises.’ 

There is also more than a touch of ruthlessness to Hastings’ approach, which is perhaps unsurprising for a man who has earned the nickname ‘The Animal’ for his abrasive managerial style and take-no-prisoners business behaviour. 

The technology giant has earned a reputation as a ruthless place to work, even by the sharp-elbowed standards of Silicon Valley. 

BE READY TO FIRE ANYONE 

Hastings champions a so-called ‘keeper test’ whereby executives must continually question whether they would fight to retain members of their staff. 

Outlining ‘the test’, he writes: ‘If a person on your team were to quit tomorrow, would you try to change their mind? Or would you accept their resignation, perhaps with a little relief? If the latter, you should give them a severance package now, and look for a star, someone you would fight to keep.’ 

PAY OVER-THE-ODDS FOR TOP TALENT (BUT NO BONUSES)  

In a bid to attract these ‘stars’, Hastings believes in paying ‘exceptional-performing employees’ a ‘tremendous’ amount.

He explains: ‘It is best to have salaries a little higher than necessary, to give a raise before an employee asks for it, to bump up a salary before that employee starts looking for another job, in order to attract and retain the best talent on the market year after year. It costs a lot more to lose people and to recruit replacements than to overpay a little in the first place.’

However he disagrees with bonuses, saying they create uncertainty that can inhibit productivity. 

GIVE EVERYONE UNLIMITED HOLIDAY 

Outlining the benefits of ‘unlimited vacation’, Hastings adds: ‘Unlimited vacation helps attract and retain top talent, especially Gen Z-ers and millennials, who resist punching clocks. 

‘Removing the policy also reduces bureaucracy and the administrative costs of keeping track of who is out and when. Most important, the freedom signals to employees that we trust them to do the right thing, which in turn encourages them to behave responsibly.’

Hastings’ business practices have certainly produced incredible results. 

This week Netflix announced that it had added the Duke and Duchess of Sussex to a growing stable of talent. Pictured, Prince Harry and Meghan Markle in March this year

This week Netflix announced that it had added the Duke and Duchess of Sussex to a growing stable of talent. Pictured, Prince Harry and Meghan Markle in March this year

PROOF IS IN THE PUDDING 

Netflix is now worth some $187 billion and — with 193 million subscribers in 190 countries — is one of the most valuable entertainment companies in the world.

It no longer just distributes films and TV, it makes them. Its portfolio of hits include The Crown, House Of Cards, 13 Reasons Why, Sex Education, Stranger Things and Tiger King, while Netflix movies earned ten nominations at the Oscars last year.

It also pays others to make programmes and this week announced that it had added the Duke and Duchess of Sussex to a growing stable of talent — or, if you prefer, celebrity — which also stretches to Barack and Michelle Obama. 

Other recent signings include Game Of Thrones creators, David Benioff and DB Weiss in an agreement worth $200 million.

In a deal rumoured to be worth $150 million — a drop in the ocean given Netflix will spend more than $17 billion this year making and buying shows and films — the Sussexes gush that they will be ‘creating content that informs but also gives hope’ and provide ‘powerful storytelling through a truthful and relatable lens’.

No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings and Erin Meyer, published Sept 8 by Virgin, £20.

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