All the President's Men

Reed Hastings' leading staff members at Netflix are a loyal bunch

Among his many business strategies, Reed Hastings has one when it comes to hiring his employees: Pick the best people, pay them well and don't second-guess them. It's a method that has paid off well -- by 2000, all five of his top "reports" were in place -- and have never left.

For Leslie Kilgore, it began with a phone call nine years ago when she was living in Seattle as director of marketing for Amazon. "In my initial meeting over the phone, I sensed there was something special about this guy," Kilgore says. "He is a really great strategist and a great communicator."

Kilgore spent the first seven years of her career at Proctor & Gamble, where she helped sell Pantene and Head & Shoulders shampoo. Two weeks after Hastings' call, she was at her new desk in Los Gatos figuring out how to market movies to those consumers.

Kilgore attributes Hastings' success to the environment he creates: "The tone is set at the top on whether this is an information-rich, open, sharing culture or not. And Reed has been extremely effective in articulating that we should share information openly and liberally so everyone can make decisions that everyone in the organization inherently understands."

Patty McCord, chief talent officer (human resources), first worked with Hastings at Pure Software and remains one of his closest advisers. She says the mandate at Netflix is to create a culture that is transparent and personal, even as it becomes a big company.

One way, she says, is that "Reed and I meet with our salaried work force in groups of five to seven after they've been here a month or so. We just get together in a room. One purpose is that, while I know a lot of people, Reed doesn't. He wants to be able to see them when he goes to get coffee and recognizes their face and know what they do."

Two other key members of the team joined in 1999: CFO Barry McCarthy and chief product officer Neil Hunt. McCarthy had been CFO of Music Choice, which delivered music over satellite and cable TV; and before that at Credit Suisse First Boston.

Hunt, who has a doctorate from the University of Aberdeen in Scotland, first worked with Hastings at Pure Software, where he developed software systems and after Rational Software acquired Pure, was director of engineering. At Netflix he has overseen development of the Web site and constant improvements since, creating proprietary algorithmically driven software to improve service.

Ted Sarandos, chief content officer, is the only one of the top executive team not based in Los Gatos. He heads a satellite office in Beverly Hills, which maintains relationships with studios and other suppliers. He recalls in his first conversation with Hastings "we connected on his love of movies and the idea of how to really improve distribution."

He has been most impressed by the way Hastings handles each new obstacle. "In his soul he's an engineer," Sarandos says, "and these are all just big hard problems to solve."

"Reed really is a very rare person," Kilgore says, "who is so gifted with technology but also so gifted in understanding people and how to create an amazing environment for them."
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