Lessons From Netflix—Drift’s David Cancel on Building a Strong Company Culture
Want to get ahead? Sit on your butt and do nothing all day.
That advice comes from two extremely successful people, Charlie Munger and Warren Buffet. They of course don’t mean you should literally do nothing—the idea is that instead of spending all day in meetings and email, innovators should invest their time reading everything they can get their hands on. Shifting from a constant state of busyness to a more fluid state of exploration helps unlock productivity and ultimately enables better decisions.
David Cancel, CEO and founder of Drift, is someone who understands and embraces this philosophy. He may not be able to do nothing all day, but he typically reads 50–65 books each year. He takes a freeform approach to this mission, often reading multiple books simultaneously and in a variety of formats—hardback, digital, and audio.
David wants to create more opportunities to synthesize. This is crucial today, he says, because the goal is no longer to be the most productive person, it’s to be the person who has the biggest impact. More often than not, that means connecting the dots between ideas.
In a recent Inc. article, David shared five of his favorite books, one of which is No Rules Rules—Netflix and the Culture of Reinvention by Reed Hastings and Erin Meyer. David followed the article by joining OpenView Partner Blake Bartlett on the OV BUILD podcast for a deep dive into No Rules Rules and the key principles for creating a strong and resilient company culture.
Listen to the episode below, or scroll down to read the rest of this story.
Talent density: Success breeds success
One reason David picked up No Rules Rules was to reflect on Drift’s culture—what it was, how it had changed from the early days, what might be missing, and what might need to change as the company continues to grow. The concept of talent density, which is basically about surrounding yourself with the most exceptional people you can find, provided some relevant insights.
One of the stories in the book tells how, during the initial dot-com bubble burst, Netflix was forced to lay off a third of its employees. As a result, they made an unexpected discovery: Netflix became a happier and more productive place after the layoffs.
Turns out that while the layoffs had left them with fewer people, those people—who were kept on because they were the best of the best—were more productive and able to deliver better overall results.
This story inspired David to revisit Drift’s hiring policies. “In the early days, my co-founder Elias Torres and I interviewed every single candidate and were super selective about who we hired,” he said. “But that’s changed over time. We’re more than 400 people now, and we’ve gotten closer to what most companies do, which is to focus on hiring at scale.”
The tradeoff to filling more roles quickly is that you aren’t always able to take the same care with the process. But when you realize that you can potentially be more productive and successful with fewer, higher-quality people, it allows you to realign on the concept of talent density.
At Drift, the hiring leaders are refocusing on ensuring that everyone can be involved in the hiring process so they can hire only the best and maintain their culture of excellence.
Removing controls: Autonomy requires accountability
“The gist of the ‘removing controls’ principle is that we’re all adults here, so we shouldn’t need too many processes or policies to be successful,” explained David. That said, while the concept is sound, it can be a challenge to implement it in the real world.
In No Rules Rules, Hastings and Meyer talk about removing controls in terms of freedom and responsibility. David prefers the terms autonomy and accountability. It’s all about focusing on the absolutely non-negotiable need to balance these two if you want the whole system to work.
“There has to be almost perfect balance,” he said. “People will often forget about the responsibility or accountability piece, but it’s like a see-saw. You have to have both. Autonomy without accountability is just anarchy.”
“Autonomy without accountability is just anarchy.”
Case in point: Before they fully understood the inner workings of how to successfully remove controls, Drift implemented an unlimited vacation policy, modeled on Netflix’s version, which allowed employees to forego tracking days off and take as many vacation days as they wanted.
Unfortunately, without the proper guardrails in place, the result was that a third of Drift’s staff took more than 60 vacation days per year.
“Ultimately, it was a management issue,” said David. “No one knew when people were gone, projects were stalled—it just wasn’t working. We hadn’t realized that for this to work, you need to implement a whole bunch of cascading policies and protocols to help train and manage everyone at the team level.”
Having learned the lesson the hard way, David’s team is returning to an unlimited vacation policy in 2021; but they now have the right checks and balances in place to ensure that the greater level of autonomy is offset by the right amount of accountability.
Radical candor: Speaking truth with respect and trust
The concept of radical candor is one of the trickier ones to get right because it’s often misinterpreted as a free pass to vent grievances or be overly aggressive. It’s neither of these things. In truth, radical candor is only possible within a culture that is open, supportive, and which encourages respect and breeds trust.
In No Rules Rules, radical candor is described as a combination of transparency and always assuming the best intent. Both of these ideas were already an important part of Drift’s culture. “We’ve always insisted that people show their work, because no one should be working in a silo,” said David. “We believe this allows for quick and efficient feedback.”
David is quick to point out, however, that another core principle at Drift is that you should seek feedback, but not consensus. “We ask for feedback, we receive it, and we always assume this idea of best intent,” he explained. “But, ultimately, you can’t have four hundred plus people directing your actions. You need to be able to internalize the feedback and make your decisions accordingly.”
Related read: How to Give and Receive Effective Feedback
Netflix illustrates this idea with a pair of principles: being appreciative and accepting or discarding. Start by appreciating the courage it took someone to give feedback (meaning don’t respond negatively, reactively, or defensively—just receive it), and then decide if you will accept or discard the feedback based on your own context and knowledge.
Finally, there’s the issue of protecting your culture against jerks. As Blake pointed out during the interview, too many people took the wrong lesson away from Walter Isaacson’s book, Steve Jobs. Reading Jobs’ story, people assumed that the path to success involved being a complete hard ass. Drift combats this by being very intentional about creating a culture of respect and trust that enables radical candor.
“Radical candor isn’t just about being able to discard feedback,” David said. “It’s also about feeling comfortable enough to say that you didn’t like how someone gave feedback.”
To support this kind of environment takes a willingness to understand different personality types and communication styles so that attempts at transparency don’t turn into major miscommunications.
Global implications of culture: We’re all different
Speaking of miscommunications, the final principle David highlighted from No Rules Rules is the idea of proactively and thoughtfully addressing the global implications of culture.
As your company expands to a global scale, your company culture needs to adapt to the different expectations and norms of countries around the world. This isn’t rocket science, but it does require paying attention to the little things.
For example, No Rules Rules includes an example about a company giving a talk somewhere outside their home territory and assuming that it would be helpful to wrap up with a standard Q&A. However, the audience to whom the presenter was speaking was not at all comfortable with what their culture saw as a free-for-all. The fear was that since only certain people would be comfortable asking questions, others would be left out.
“As your company expands to a global scale, your company culture needs to adapt to the different expectations and norms of countries around the world.”
There are countless other examples of the nuanced differences between different cultural norms and expectations. For instance, as Drift expands into the UK market, they’re adjusting to the differences between British and American humor. Or, imagine trying to implement radical candor in a culture that is not at all comfortable with that level of honesty and directness.
“The global implication of culture is understanding where people are coming from on a macro scale,” said David. “You have to carefully consider the personalities of people within each culture and their preferred methods of communication.”
Culture during and beyond Covid: Disruption creates opportunity
While David is committed to maintaining his reading habit and taking full advantage of all the wisdom and knowledge available via the written word, he also has a whole lot of real-world experience that helps him create success. This has been crucially important during the COVID-19 pandemic, which has affected company culture in so many ways. Despite all the trials and tribulations, David sees a silver lining of new opportunities.
Over the years, David has had in-office, remote, and hybrid companies. With Drift, he made the decision to create an in-office culture. “With hybrid companies it’s very difficult to create an equitable environment,” he said. “No matter how diligent you are, remote people always feel less than second class because they’re always missing context and feel left out from a cultural standpoint.” So, David and his Drift team created a culture around offices, and then COVID-19 happened.
“At the moment, we’re going to stay remote until June 2021,” David said. What happens after that is up in the air. He continued, “We’ve learned a lot from going to a fully remote environment. We learned that things we thought were impossible to do remotely weren’t actually impossible at all.”
For example, while David had doubts about the possibility of hiring for senior roles without ever meeting candidates face to face, Drift did just that in April of 2020 when they hired their new CRO, Todd Barnett. Barnett has since made four additional remote hires for VPs who report to him.
Related read: Hiring a Remote Employee? Use This Onboarding Checklist
Another of the books on the list David put together for Inc. is Post Corona—From Crisis to Opportunity by Scott Galloway. David agrees with Galloway’s central thesis that the world has suffered a massive collective trauma, which will take a long time to unwind. He also likens this experience to walking through what Jeff Bezos calls a one-way door. There is no going back.
And, even if there were a way to go back, David believes that most people wouldn’t. “Think about other crises we’ve been through in America, like the Great Depression,” he said. “Even after coming out of that and having access to money and food, that generation was never the same.”
The silver lining on this situation is that with trauma and change comes a wealth of opportunity for innovation. “The pandemic hasn’t only changed how we work,” David said. “It has changed every aspect of our life, from work to friendships to dating.”
“Where there is disruption, there is opportunity.”
More to the point, the pandemic has changed people’s behavior, which David said is something that’s impossible to do without some kind of external driver.
As we look beyond the pandemic, there’s a lot more to consider than when and whether individual companies or whole sectors go back to working in offices. This is an important chance to reimagine things—create new products, re-segment markets, and discover previously non-existent opportunities.
At Drift, they’ve seen the adoption curve for their enterprise segment fast-forward 10 years practically overnight. Large organizations that didn’t believe they could market or sell without in-person experiences have had to accept a new reality and learn how to do things they assumed were impossible. They’re adapting and realizing what’s possible.
Where there is disruption, there is opportunity. And companies that invest time and effort in building up strong, resilient cultures will be well positioned to take full advantage of those opportunities.
Never miss an episode of the OV BUILD podcast
The most productive founders do these five things on a daily basis.
OpenView’s Steve Melia shares how to widen your talent pool, identify sneaky red flags founders commonly overlook, and foster a more diverse C-suite.
For our BUILDing To Boss podcast, we sat down with board director Anne DelSanto to get her take on building deeper employee engagement.