Combining Munger takes on Governance, Peter Thiel’s insights and Netflix HR presentation was fun to delve into intelligent governance frameworks sourced from an equity investor, a venture capitalist and a company. So, what are them?
- The fundamental principle: good character – when in doubt, there’s no doubt. Do not hire;
- Strive for a trust-based environment;
- Provide context to people (why, why, why?), over-communicate – candor & clarity are musts;
- Inspire responsible behavior through freedom and independence, though reinforce accountability;
- Less formal processes, DOs and DON’Ts: “Act in Netflix’s best interest”. Yes, that’s it. It’s a principle-based approach that works with minimal good sense and intelligence;
- Offer modest fixed salary, roughly equal to fixed costs. Align with equity ownership;
- Control is for beginners: “When we don’t give our people the space to take calculated risks, learn, apply, and iterate, we are really risking our future. While there is a risk to improvising and spontaneity, control brings its own insidious dangers. In our push for perfection, we over-engineer. We add so many bells and whistles that it takes a Ph.D. to use the product. Just because we can doesn’t mean we should. Just because we can practice to perfection doesn’t mean that’s best.” – HBS Article