Context Not Control

What does Net­flix have in com­mon with a nuclear sub­ma­rine? Although at first glance they could­n’t be more dif­fer­ent, their excep­tion­al lead­er­ship cul­ture is very sim­i­lar. Reed Hast­ings, CEO of Net­flix, prides him­self on mak­ing as few deci­sions as pos­si­ble and prefer­ably none at all for an entire quar­ter. And Cap­tain David Mar­quet decid­ed to stop giv­ing orders on the nuclear sub­ma­rine USS San­ta Fe. Both rely on con­text instead of con­trol and are very suc­cess­ful with it.

Taking Command

For over a year David Mar­quet pre­pared him­self for his new task as cap­tain of the USS Olympia. He learned every detail about this nuclear sub­ma­rine. Every­thing went as planned until he had to take com­mand of the USS San­ta Fe at short notice. These two sub­marines both belong to the same class of nuclear-pow­ered fast attack sub­marines (Los-Ange­les class), but since the USS San­ta Fe was a much new­er type, David Mar­quet knew lit­tle about this sub­ma­rine when he took com­mand of it.

So David Mar­quet did what he had to do and act­ed as he had been taught. He went to work and gave com­mands. After all the USS San­ta Fe was at that time the sub­ma­rine with the worst per­for­mance and morale in the whole Navy and there­fore the sit­u­a­tion demand­ed a strong leader. Did­n’t it?

Dur­ing a drill in the first month of his com­mand, David Mar­quet real­ized the dan­ger of a team trained in obe­di­ence and a boss with lim­it­ed knowl­edge. The drill sim­u­lat­ed the fail­ure of the main reac­tor and, accord­ing­ly, the USS San­ta Fe had to run on a bat­tery-pow­ered elec­tric propul­sion motor (EPM) for the dura­tion of the reac­tor repair. To chal­lenge the crew a lit­tle bit and increase the pres­sure, David Mar­quet final­ly gave his offi­cer of the deck the order “Two thirds ahead! The offi­cer imme­di­ate­ly passed the order on to the helms­man and … noth­ing happened!

When David Mar­quet asked the helms­man why he had not exe­cut­ed the order, he was told that – unlike on his pre­vi­ous sub­marines – on the USS San­ta Fe there was no “two-thirds ahead”. Every­one on the ship knew this except David Mar­quet. Espe­cial­ly the offi­cer of the deck knew this, but he nev­er­the­less passed the order on to the helms­man because he was trained to obey. This was the moment when David Mar­quet real­ized that with his lim­it­ed knowl­edge and expe­ri­ence he was a dan­ger­ous bot­tle­neck in the orga­ni­za­tion and at the same time he real­ized the poten­tial hid­den in the col­lec­tive expe­ri­ence, intel­li­gence and cre­ativ­i­ty of his crew. And that poten­tial he want­ed to unleash.

Giving Control

If you want peo­ple to think, give them intent, not instruction.

David Mar­quet

So he decid­ed not to give any more orders. Except for the use of nuclear mis­siles, David Mar­quet let his crew decide. In order to make these deci­sions he gave them the inten­tion and the goal, gave them the full con­text and then helped them as a coach to make their own deci­sions. When he was asked for per­mis­sion to sub­merge the ship, for exam­ple, he did not give the order, but made the offi­cer think about whether it was safe on the one hand and on the oth­er hand whether it now was the right thing to do in terms of the over­all mis­sion. Grad­u­al­ly less and less offi­cers asked for per­mis­sion, but began to think like David Mar­quet and took respon­si­bil­i­ty for their deci­sions and the deci­sions of their teams. Where pre­vi­ous­ly only more or less inco­her­ent orders were exe­cut­ed, lat­er even in the engine room the crew was aware of the cur­rent sit­u­a­tion and the mis­sion of the ship and that led to bet­ter deci­sions, for exam­ple by avoid­ing noise while an ene­my ship was nearby.

With this remark­able lead­er­ship cul­ture David Mar­quet suc­ceed­ed in turn­ing the ship around in the lit­er­al sense of the word (which is why his cor­re­spond­ing and very rec­om­mend­able book is enti­tled “Turn Around the Ship! A True Sto­ry of Turn­ing Fol­low­ers Into Lead­ers”). The USS San­ta Fe went from worst to best in the US Navy and remained so even after David Mar­quet retired in 2009. In addi­tion, the USS San­ta Fe became de fac­to a train­ing facil­i­ty for new offi­cers up to ten cap­tains of nuclear sub­marines who had learned their pro­fes­sion under David Mar­quet. Much bet­ter and more enter­tain­ing, David Mar­quet tells this in this TEDx talk (see also the full sto­ry of David Mar­quet).

Context Not Control

Despite this stun­ning evi­dence of the impact of this “leader-leader” par­a­digm (instead of the far more com­mon “leader-fol­low­er” par­a­digm), exam­ples of this lead­er­ship cul­ture in large hier­ar­chi­cal orga­ni­za­tions are still dif­fi­cult to find. How­ev­er, at Net­flix, after all the sev­enth largest Inter­net com­pa­ny in the world, you will quick­ly find this imme­di­ate­ly in their leg­endary Cul­ture State­ment, which Pat­ty McCord pub­lished as for­mer Chief Tal­ent (sic!) Offi­cer in 2009. The 125(!) slides on cul­ture at Net­flix have since been viewed an incred­i­ble 18 mil­lion times and have been described by Face­book’s COO Sheryl Sand­berg as the most impor­tant doc­u­ment from the Val­ley. In the mean­while revised ver­sion on the Net­flix web­site it becomes unmis­tak­ably clear who decides at Net­flix and what the task of lead­er­ship is:

We want employ­ees to be great inde­pen­dent deci­sion mak­ers, and to only con­sult their man­ag­er when they are unsure of the right deci­sion. The leader’s job at every lev­el is to set clear con­text so that oth­ers have the right infor­ma­tion to make gen­er­al­ly great decisions.

Net­flix Cul­ture Statement

The most impor­tant lead­er­ship task is there­fore not to decide by your­self, but to cre­ate a frame­work in which employ­ees can make their own deci­sions. That’s why Reed Hast­ings makes as few deci­sions as pos­si­ble at Net­flix and that’s why David Mar­quet no longer gave orders on the USS San­ta Fe. And that’s why the Man­i­festo for Human(e) Lead­er­ship says, “Grow­ing Lead­ers over Lead­ing Fol­low­ers,” because we real­ly need more of this lead­er­ship cul­ture, espe­cial­ly as times get more uncer­tain and com­plex.

We tell peo­ple not to seek to please their boss. Instead, seek to serve the business.

Net­flix Cul­ture Statement

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By Marcus Raitner

Hi, I'm Marcus. I'm convinced that elephants can dance. Therefore, I accompany organizations on their way towards a more agile way of working. Since 2010 I regularly write about leadership, digitization, new work, agility, and much more in this blog. More about me.


Great arti­cle, thanks for sharing!
Just a heads up the col­umn start­ing with “Dur­ing a drill in the first month of his com­mand…” seems to be dupli­cat­ed. Just a minor hick­up, but thought I would point it out to you.

Thanks a lot, Chris­t­ian. For your feed­back as well for point­ing out the dupli­cate para­graph. I cor­rect­ed it!

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