It was not obvious at the time, even to me, but we had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls. Our culture, which focused on achieving top performance with talent density and leading employees with context not control, has allowed us to continually grow and change as the world, and our members’ needs, have likewise morphed around us. Netflix is different. We have a culture where No Rules Rules.

As Netflix grows there are an increasing number of pockets where Reed’s modeling and Patty’s initial instructions don’t seem to have trickled down. On these Netflix teams, the “no vacation policy” does feel a bit like a “no vacation” policy. But many leaders at Netflix are consciously following Reed’s modeling, taking big vacations and making sure everyone is watching. And when they do, employees use the freedom Netflix provides in many surprising and beneficial ways.

At most companies, the boss is there to approve or block the decisions of employees. This is a surefire way to limit innovation and slow down growth. At Netflix, we emphasize that it’s fine to disagree with your manager and to implement an idea she dislikes. We don’t want people putting aside a great idea because the manager doesn’t see how great it is. That’s why we say at Netflix: DON’T SEEK TO PLEASE YOUR BOSS. SEEK TO DO WHAT IS

But with our culture of candor at Netflix, people get loads of feedback every day. Before any employee is let go, he should have heard clearly and regularly what he needs to do in order to improve.

The rules-and-process approach has been the primary way of coordinating group behavior for centuries. But it isn’t the only way, and it isn’t only Netflix using a different method.