What It Takes—Building Your Dream Team: Lessons from Reed Hastings on Hiring, Culture, and Unconventional Management

Reed Hastings, co-founder of Netflix and current executive chairman, has become synonymous with innovation and disruption. But beyond revolutionizing entertainment streaming, Hastings has built a company admired for its unique culture and relentless pursuit of excellence.

At the heart of this success lies a core philosophy that challenges traditional thinking: attracting and retaining incredible people and fostering a high-performing team environment – not a familial one.

Hastings elaborated on his hiring, retention, and employee development philosophies in a recent interview with the author and podcaster Tim Ferris. Click here for a link to the podcast.

 

The “Keeper Test” and Hiring Beyond the Resume

Hastings prioritizes raw talent over blind loyalty. He advocates for looking beyond resumes and using unconventional methods like cold calling references to understand a candidate’s true capabilities and cultural fit. His famous “keeper test” asks managers a critical question: if an employee is considering leaving, would you fight to retain them? If the answer is no, it might be time to find someone who inspires greater passion and commitment to the team’s mission.

 

Finding the Best: Unveiling the Hidden Gems

So how do you identify these “incredible people” for your own business? Traditional resumes offer a starting point, but Hastings suggests digging deeper. Here are some strategies inspired by his approach:

  • Cold Calling References: Don’t just rely on the references listed by the candidate. Reach out to former colleagues, managers, and anyone who can offer an unbiased perspective on the candidate’s work ethic and problem-solving skills.
  • Behavioral Interviewing: Focus less on past accomplishments and more on how the candidate would tackle specific situations. Ask questions like “Tell me about a time you overcame a significant obstacle” or “Describe a situation where you had to make a difficult decision.” These reveal problem-solving abilities and thought processes.
  • Skills Assessments: Consider using standardized tests or simulations relevant to the role. These can provide objective data to complement your qualitative assessments.
  • Hire for Cultural Fit: Technical skills are important, but ensuring the candidate aligns with your company’s values and work style is crucial. Look for individuals who share your vision and are excited to contribute to a team dynamic that thrives on continuous improvement.

 

Building a Culture of Radical Candor (Without the Family Drama)

Hastings champions “radical candor,” a concept that encourages open and honest feedback, even when it’s critical. This creates a safe space for honest conversations that identify weaknesses and propel improvement. Here’s the key difference from a family dynamic:

  • Focus on Performance, Not Loyalty: Feedback is about helping individuals reach their full potential, not protecting them from criticism.

Here are some ways to implement radical candor in your own business:

  • Psychological Safety: Create an environment where employees feel comfortable offering feedback without fear of retribution. This allows for constructive criticism and open discussion of ideas.
  • Focus on Intent: When giving feedback, focus on the other person’s intent rather than attacking their character. Emphasize how feedback can help them grow and improve.
  • Actively Listen: Encourage active listening during feedback sessions. This shows the recipient that their voice is valued and promotes open communication.
  • Normalize Disagreement: Disagreements are not personal attacks. Encourage healthy debate and respect for different viewpoints. This allows for better decision-making based on multiple perspectives.

 

Empowering Teams, Not Micromanaging (Because You Hired Champions)

Hastings believes in empowering employees by setting clear goals and expectations. Micromanagement is discouraged. He uses his recent venture in the hospitality sector, Powder Mountain, as an example, where the focus is on creating a space for wonder rather than dictating every detail of the guest experience. He trusts his team to deliver exceptional results.

 

Empowerment in Action: Building Champions, Not Children

Here are some ways to empower your team and avoid micromanaging:

  • Clearly Defined Goals: Set clear, measurable goals for your team. This allows them to take ownership of their work and track progress.
  • Provide Resources: Equip your team with the resources they need to be successful. This includes training, tools, and budget approval where appropriate.
  • Trust and Autonomy: Have faith in your team’s abilities and give them the autonomy to make decisions within their area of expertise.
  • Focus on Outcomes: Hold employees accountable for achieving results, not micromanaging every step along the way.
  • Open Communication: Maintain open communication channels and encourage regular feedback loops to ensure everyone is aligned on priorities and progress.

 

Building a Culture of Learning and Growth: Champions Never Stop Training

Hastings emphasizes ongoing learning and development for employees. Encourage participation in conferences, workshops, and online courses relevant to their skills and professional goals. Additionally, create a culture where continuous learning is encouraged and celebrated. Finally, allocate resources for employee development and training. This demonstrates a commitment to their growth and can improve retention.

 

Conclusion

Reed Hastings’ approach to building a team isn’t about fostering a cozy family atmosphere, but rather a high-octane environment for champions. By prioritizing talent, fostering radical candor, and empowering your team, you create a space where exceptional individuals can thrive. Don’t just assemble a team; curate a force of driven, self-motivated individuals who share your vision for excellence. This, combined with a commitment to continuous learning, is the formula for building a dream team that will propel your business to the forefront of its industry. Embrace the unconventional, empower your champions, and watch your dream become reality.

About Christian Stegmaier
Senior Shareholder

Christian Stegmaier is a shareholder and chair of the Retail & Hospitality Practice Group at Collins & Lacy in Columbia. He is also active in the firm’s professional liability and appellate practices. Stegmaier welcomes your questions at (803) 255-0454 or cstegmaier@collinsandlacy.com.