In order to encourage our employees like Kari and their managers like Jack to shift their mind-set in the direction of experimentation, we use the image of placing bets. This motivates employees to think of themselves as entrepreneurs—who typically don’t succeed without some failures. The examples of Kari and (from a few pages back) Paolo reflect everyday life at Netflix. We want all employees taking bets they believe in and trying new things, even when the boss or others think the ideas are dumb. When some of those bets don’t pay off, we just fix the problems that arise as quickly as possible and discuss what we’ve learned. In our creative business, rapid recovery is the best model.

Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.

WARNING: If talking with customers and employees routinely is so powerful, why do leaders stop doing it? It’s because they continue to hear the same recurring issues or praise over and over — and have to take time from their busy schedules to listen to stories that seem to have zero relevance to their businesses. However, it takes only one or two key ideas to fuel a business model. So hang in there, embrace the human aspects of these conversations, and relish the moment the light bulb goes on - it will!!

Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.

There is, by the way, no better way for a leader to figure out why an idea isn’t working—or how it can work better—than to walk a mile in the shoes of the people you’ve charged with implementing that idea. In general, this is good practice. If you’re the CEO of a hotel chain, work the front desk at one of your hotels a couple of times a year; if you run an airline, take a shift at the ticket desk, or serve drinks and pretzels in economy. Not ceremonially, either—do the job. I bet you’ll be surprised by what you learn; I always was.