Netflix has received a good amount of attention on its culture, driven primarily by the incredible viral success of its slide deck on culture, which CEO Reed Hastings published several years ago. I have a chapter devoted to Netflix in my culture ebook, along with a chapter devoted to Zappos, the other dominant culture “cool kid” on the block. But the Netflix chapter doesn’t expound too much on the actual culture at Netflix. The main point of that chapter is to talk about how companies communicate their culture, with one of the lessons being: don’t focus on cool, viral slide decks; just speak the truth frequently and clearly.
So I was glad that Patty McCord, the woman who was Chief Talent Officer at Netflix for 15 years, has an article in HBR this month that goes into a little more detail about the culture and the principles on which it was based. So what do you think of these:
Hire, Reward, And Tolerate Only Fully Formed Adults
They let people take as much vacation as they want, and they don’t approve travel expenses on a regular basis. They simply ask people to “act in Netflix’s best interests.” There are exceptions that will require attention, but that’s easier than creating policies that annoy the 90+ percent who aren’t the exceptions. It’s common sense that is missed in a lot of organizations: “If you create a clear expectation of responsible behavior, most employees will comply.”
Tell the Truth About Performance
One of the cores at Netflix is letting people go who are no longer a fit, so they don’t often waste time with months of “performance improvement plans” when you know that the needs have changed and that employee doesn’t fit. Built into this principle, by the way, is spending MORE money on severance packages.
Managers Own the Job of Creating Great Teams
They don’t give bonuses, and they don’t hold employees hostage with stock options that don’t vest. They want people there to WANT to be there, and that will generate results. They leave it to the managers to figure out how to make that happen.
Leaders own the Job of Creating the Company Culture
Connect what you value to what drives business success, and make sure the behavior is consistent. Also accept that there will be (and should be) multiple cultures. (Consistent with what we do here)
Good Talent Managers Think Like Businesspeople and Innovators First, and like HR People Last
“At Netflix I worked with colleagues who were changing the way people consume filmed entertainment, which is an incredibly innovative pursuit–yet when I started there, the expectation was that I would default to mimicking other companies’ best practices (many of them antiquated), which is how almost everyone seems to approach HR. I rejected those constraints.”
Amen sister.