Business Transformation

Netflix's Lesson in Culture Expectation Settings

Netflix became famous for disrupting the pay-TV landscape with its over-the-top streaming model, but also for shaking up the status quo internally eight years ago with an 120-page PowerPoint presentation outlining its out-of-the-box company culture.

Now the company is condensing that famous document -- viewed more than 16 million times -- down to just ten pages based on employee feedback and questions about the original document.

The ultimate goal, Netflix Inc. (Nasdaq: NFLX) says, is to emphasize "global thinking and inclusiveness" and maintain "our joy of working with stunning colleagues." The full cultural manifesto can be found here.

"Many companies have value statements, but often these written values are vague and ignored," Netflix says in its write-up. "The real values of a firm are shown by who gets rewarded or let go." Netflix outlines its "real values" as a way to show who would be a good "cultural fit," those often abused words, for its hiring process and to explain why those who get shown the door don't get asked back.

Those values include judgment, curiosity, communication, innovation, courage, passion, selflessness, inclusion, integrity and impact.

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Netflix is updating its cultural manifesto at a time when the tech industry is under increased scrutiny for its treatment of women and underrepresented minorities, as well as for poor company cultures in general. Uber, of course, epitomizes this as you can see from our recent coverage. (See Kalanick Steps Down as Uber CEO to start.)

In a lot of ways, Netflix is aiming to be the anti-Uber, a company that practices what it preaches, has progressive policies like its unlimited vacation days and a year of parental leave, and -- most importantly -- has the culture to support it all. At the same time, it's also looking to be transparent about what it is to employees, both current and potential. It is hard-driving; it doesn't reward loyalty or face time, but rather is results-driven; and it is not afraid to let employees go when they aren't performing. (See Netflix Ups the Ante on Parental Leave .)

Netflix stresses that it has no bell curves, rankings or quotas but recognizes that not every employee will measure up to participating on its "dream team." It offers four months of full pay for those employees it doesn’t want to fight to keep and encourages managers to keep employees apprised of how they are doing. Its model is best for employees "who highly value consistent excellence in their colleagues," rather than those who crave stability and job security, Netflix says, which is not uncommon for growth-oriented, disruptive tech companies.

Most notably, to me, is that it treats its employees like grownups, which doesn't seem common in tech startups today. It empowers them and respects them, but also expects a hell of a lot out of them.  

In a nod to the Silicon Valley stereotypes, Netflix also says it doesn't employ "brilliant jerks" and that: "Our version of the great workplace is not comprised of sushi lunches, great gyms, big offices, or frequent parties. Our version of the great workplace is a dream team in pursuit of ambitious common goals, for which we spend heavily."

Netflix's full culture run-down is well worth the read. It shows a company acknowledging its focus on aggressive growth and excellence, but it does so in a way that reads honest, transparent and inclusive; free of gendered language; the all-too-common sports and war metaphors that might turn women off from the company; and from the typical startup selling points. It's hard to say what's going on behind closed doors -- Netflix has a positive reputation in the industry, but its culture deck certainly didn't appeal to everyone -- but articulating its culture in an open and transparent way, empowering and trusting its employees and setting clear expectations of them is refreshing. It seems like a business plan that Uber and others can learn a lot from. (See Netflix Nears Big Milestones.)

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Director, Women in Comms

mendyk 6/22/2017 | 11:32:14 AM
Re: Would you work at Netflix? Yes, the grass is always greener in the spot where you aren't. Poor us.
Sarah Thomas 6/22/2017 | 11:21:37 AM
Re: Would you work at Netflix? If it's not for you, you should work for a company with more stablity that only offers five weeks maternity leave, makes you meticulously record every expense and get approval for any vacation day and your 8 alloted sick days. I know a few...
mendyk 6/22/2017 | 11:10:50 AM
Re: Would you work at Netflix? "The real values of a firm are shown by who gets rewarded or let go." It's not too difficult to infer from this statement that herd-culling is part of the management agenda.
Sarah Thomas 6/22/2017 | 11:04:58 AM
Re: Would you work at Netflix? At least they are up front about it. I'd rather work somewhere that values performance over face time. They aren't cutting employees for the sake of doing so or at any regular interval, as far as I know. 
mendyk 6/22/2017 | 10:47:01 AM
Re: Would you work at Netflix? According to a couple of sources, Netflix's annual employee turnover rate is in the 12% to 15% range -- which is no better or worse than other "tech" businesses. The idea that companies routinely cull the herd should be troubling to anyone who is in the herd. I don't think that viewership of a document is proof of anything, really. The three best-selling writers of all time are Agatha Christie, William Shakespeare, and Barbara Cartland, with Danielle Steele running a close fourth.
Sarah Thomas 6/22/2017 | 10:19:29 AM
Re: Would you work at Netflix? I don't think that is what this is... Or, if it is, it's working. It's been viewed 16 million times and is widely cited (although not really implemented) across companies looking to improve their cultures.
mendyk 6/21/2017 | 4:27:33 PM
Re: Would you work at Netflix? Someone needs to create a MadLibs boilerplate for overblown, grandiose, self-congratulatory corporate statements. Or maybe someone already has.
Sarah Thomas 6/21/2017 | 4:03:18 PM
Would you work at Netflix? I think this cultural manifesto might turn off a lot of people, but that's not necessarily a bad thing. It doesn't isolate one gender or ethnic group. It just sets realistic expectations. If it doesn't sound like an environment you'd thrive in, then it's not the job for you, and at least you'd know that before you get there. 
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