Netflix co-CEO Ted Sarandos on the lesson he learnt from founder and former CEO Reed Hastings: Pick the best people, and get out of …

Netflix co-CEO Ted Sarandos has revealed a key lesson that he has learnt from the streaming giant’s founder and former CEO, Reed Hastings. Sarandos noted that his management philosophy comes from Hastings. Sarandos, who joined the streaming giant in 2000 as head of content operations, emphasised that his leadership style focuses on empowering top talent and embracing uncertainty. “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,” he said in CNBC’s “Leaders Playbook” interview.In the interview, Sarandos also revealed that he once made a significant decision without seeking Hastings's approval. Sarandos said he once authorised a $100 million investment in the series House of Cards without consulting Hastings. He clarified that the decision to commit to two seasons was a calculated financial risk meant to change the course of the business. When Hastings later questioned the decision, Sarandos recalled talking about the show's high cost and explained it as a simple comparison of possible gains and losses. In hindsight, that decision played a key role in Netflix’s shift from a mail-order DVD service to a significant force in original streaming content.Sarandos 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.’”Sarandos also noted that he doesn’t usually turn to management books. Instead, he prefers fiction to learn about leadership. His favourite management read is Typhoon, a 1902 novella by Joseph Conrad that follows a steamship captain and his crew as they battle a mighty storm 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. I read it over and over again because I find ... I get something different in the book every time I read it,” Sarandos said.He recalled that when he first read the book around 20 years ago, he viewed the captain as a reckless “hot dog” who put himself and others at risk. Rereading it years later, he drew a more profound lesson about leading amid uncertainty and conflict.“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?” Sarandos said.