Netflix CEO Ted Sarandos doesn’t have management books stashed in his work bag, on his desk or piled on his nightstand.
Sarandos doesn’t really read management books at all, he said in an interview for an episode of CNBC’s “Leaders Playbook,” a series set to premiere on Wednesday. Instead, he reads fiction novels to learn about leadership, he said. His favorite management book: “Typhoon,” a 1902 novella by Joseph Conrad about a steamship captain and crew navigating a severe storm while at sea.
“It doesn’t sound like a management story on the surface, but I think it’s the most powerful leadership story I’ve ever read,” said Sarandos, 61. “I read it over and over again because I find … I get something different in the book every time I read it.”
When Sarandos first read the book roughly 20 years ago, he thought the captain was a reckless “hot dog” who put himself and his family in jeopardy, he said. On more recent reads, he’s come away with a more salient lesson about leading in the face of conflict and uncertainty.
“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,” said Sarandos. “The real leadership test is: How do you manage through that?”
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Sarandos joined Netflix as its head of content operations in 2000, and further learned how to embrace uncertainty while working for Netflix co-founder and former CEO Reed Hastings, he said. “I think the lesson that he’s 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,” said Sarandos.
He recalled a specific instance in which he acted with a lot of autonomy, taking “a big financial swing” with no guaranteed payoff. About a decade into his tenure at the streaming company, Sarandos spent $100 million of Netflix’s money to create the company’s first original television series, “House of Cards” and greenlight it for two seasons — without asking Hastings for permission, he said.
“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,'” said Sarandos.
Sarandos isn’t the only prominent businessperson who draws inspiration from fictional stories.
Amazon founder Jeff Bezos’ leadership style has been partially shaped by Kazuo Ishiguro’s “The Remains of the Day,” according to author Brad Stone’s biography “The Everything Store.” Microsoft co-founder Bill Gates frequently touts the value of reading fiction, noting in a Nov. 25 blog post that some novels can “[pull] back the curtain on how something important really works.”
Anyone can glean real-life takeaways from novels if they practice summarizing the plot, analyzing the motivations of the characters and spend time drawing parallels between the conflict in the book and issues they may face at work, Northwestern University leadership professor Brooke Vuckovic told CNBC Make It in January 2023.
“Our best leaders are looking for ways to develop themselves, and fiction represents an often underused and incredibly powerful, low cost, ongoing, pleasurable way to develop ourselves — if read correctly,” said Vuckovic.
Watch Netflix CEO Ted Sarandos on CNBC’s “Leaders Playbook” premiering Wednesday, Jan. 7 at 10:00 p.m. ET/PT. All new episodes Wednesdays.
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