Netflix's Secret to Success? Ted Sarandos Reveals the Shocking Lesson from Reed Hastings That Could Change Your Career!

In a recent interview with CNBC’s “Leaders Playbook,” Netflix co-CEO Ted Sarandos revealed insights into his management philosophy, highlighting the significant influence of the company's founder, Reed Hastings. Sarandos, who joined Netflix in 2000, emphasized the importance of empowering top talent and embracing uncertainty as essential components of effective leadership.

One of the most striking moments from the interview was Sarandos's admission that he once authorized a $100 million investment in the acclaimed series House of Cards without Hastings's prior approval. This decision, made to commit to two seasons of the show, was a calculated risk that ultimately played a pivotal role in transforming Netflix from a mail-order DVD service to a powerhouse in original streaming content. Sarandos explained his rationale during the interview:

“When he asked me, ‘Why would you do that?’ I said, ‘Reed, it’s a simple risk-reward for me. If this show fails, we will have dramatically overpaid for a show. We do that all the time, but if it succeeds, we could completely transform the business as we know it.’”

This kind of bold decision-making aligns with Hastings's management approach, which Sarandos admires deeply. He stated, “I think the lesson that he’s [Hastings] left for me is that you pick the best people, give them the tools to do the best work of their life, and get out of their way.” This philosophy underscores a leadership style that prioritizes autonomy and trust, fostering a culture where creativity can thrive.

Interestingly, Sarandos's approach to leadership isn't solely rooted in traditional business literature. Instead, he draws inspiration from literature, particularly fiction. His favorite management read is the novella Typhoon by Joseph Conrad, which tells the story of a steamship captain facing the challenges of a powerful storm at sea. Sarandos described the novella as a compelling leadership narrative that offers profound lessons on navigating uncertainty and conflict.

Recalling his first encounter with the novella two decades ago, Sarandos reflected on how his perspective evolved over time. Initially viewing the captain as a reckless risk-taker, he now sees deeper meaning in the narrative, recognizing that leadership often involves making tough decisions in unpredictable circumstances. “Now, what I see is that when you go through life and you go through business, you make a lot of decisions that don't turn out the way you thought they would. The real leadership test is: How do you manage through that?” he explained.

This philosophy is particularly relevant in today’s fast-paced business landscape, where companies must navigate rapidly changing environments. Sarandos’s willingness to take calculated risks, as exemplified by the House of Cards investment, reflects a broader trend in the tech and entertainment sectors, where innovation often requires stepping outside of conventional boundaries.

As Netflix continues to reshape the media landscape, Sarandos’s management style, rooted in empowering talent and embracing the unknown, may serve as a model for leaders in various industries. In an age where adaptability and creativity are crucial for success, the lessons drawn from both Hastings’s leadership and Conrad’s literary insights provide valuable guidance for navigating the complexities of modern business.