Netflix’s updated guide to culture – an analysis & commentary

In 2009 Netflix released a slidedeck outlining their  company culture and I summarized its core themes with commentary in a popular post. This week Netflix released the first major update and here’s the rundown.

What changed in 8 years?

The most striking change is that it’s no longer a slidedeck, but an actual document of corporate philosophy. Part of the thrill of their original release was that the format, which was an internal presentation, gave the sense we were seeing something not designed for public consumption and was therefore more authentic.

That allure is gone: they removed the mocking references to Enron’s corporate values or high priced employee sushi lunches. Also gone is the cheesy yin/yang symbol and the generic Arial font (It’s Gotham now). The interesting charts have also been removed. This is now as much a reflection of a mature organization’s wish for how to be perceived as it a tool for attracting talent they think will fit their ideals.

The Good:

Most of the major points I identified from the original are still here.

  • “Our core philosophy is people over process.” They emphasize in many places how little they care for bureaucracy or the status quo. Tied to this is a demanding philosophy of performance and high expectations.
  • “The real values of a firm are shown by who gets rewarded or let go.” It’s rare for an organization to talk explicitly about the central value of firing people (See Innovation by firing people). They wisely identify how empty most corporate value statements are, especially when people are allowed to remain in the organization who violate them. (A problem I called out in my critique of Airbnb’s culture document).
  • Their list of core values is good, but commonplace. As they point out, it’s easy to make lists of values but far harder to find leaders willing to uphold them (“It’s easy to write admirable values; it’s harder to live them”). Their list includes: Judgement, Communication, Curiosity, Innovation, Courage, Passion, Selflessness, Inclusion, Integrity, Impact. A fine list but similiar to ones many companies have.
  • We are a Team, not a Family. This new clarification was compelling. “A family is about unconditional love, despite your siblings’ unusual behavior. A dream team is about pushing yourself to be the best teammate you can be… and knowing that you may not be on the team forever.” A team is a better metaphor for workplaces in many ways than families are, and too often when executives try to explain their ideas of culture, they use family models (permanent, based on respect, unique) rather than team ones (flexible, based on performance, many can exist). One misstep is Netflix’s odd use of  ‘unconditional love’ and ‘sibling’s unusual behavior’.  It makes it sound like they have a negative view of families more than it clarifies how they want teams to function. I think they were trying to say that respect on a team is conditional and based on behavior, which they could have said without bringing weird siblings or asides about familial love into it. I’m sure some of their employees have odd habits, as weird as some siblings, and the presumption is they want coworkers to be accepting and supportive.
  • The No Asshole Rule. They refer to this as “no brilliant jerks” but it’s clearly in line with Bob Sutton’s The No Asshole Rule philosophy. Their justification is simple: ‘on a dream team, there are no brilliant jerks The cost to teamwork is just too high. Our view is that brilliant people are also capable of decent human interactions, and we insist upon that.’
  • Trust, not rules. It’s always refreshing to read about a place that wants to treat employees as adults.Our policy for travel, entertainment, gifts, and other expenses is 5 words long: “Act in Netflix’s Best Interest.” We also don’t have a clothing policy, but no one has come to work naked; you don’t need policies for everything’.

The Questionable:

In the original I called out several problematic ideas. Most of them are still here, but refined and recast in this new edition.

  • What is Integrity? Their answer is curiously narrow. ‘In describing integrity we say, “You only say things about fellow employees you say to their face.’” This is more about transparency, where you are forthcoming and don’t hide useful information from people, than about integrity. Integrity is, perhaps, based on practicing what you preach and honoring shared commitments. They do list other attributes for integrity  (admit mistakes, treat people with respect) but the emphasis on who you say things to struck me as strange. It could be implied that if you don’t have the moxy to confront someone directly, perhaps about their offensive behavior in meetings, then you then shouldn’t tell your boss, HR, or anyone about it. I don’t think this is what they meant, but their odd emphasis makes it hard to know. They do a better job at completing the idea of integrity in how they describe courage: “You question actions inconsistent with our values.” But even questioning isn’t enough – one assumes they want people who act on their values and insist others do too.
  • Is the Keeper test a good one? Their philosophy for firing people is based on this question: “if someone on your team was thinking of leaving for another firm, would you try hard to keep them from leaving? Those that do not pass the keeper test are promptly and respectfully given a generous severance package.” But what if the reasons here are the managers fault? Or if they don’t like the employee for personal reasons? Or there is a breakdown in performance feedback? I admire the clarity of this test, but it can’t work on its own. You need a “Manager sanity test” that asks: “why do I feel this way about this employee? Have I told them I feel this way, discussed it and created a plan for improving the situation, before deciding not to keep them? Is there something I’m missing?”
  • Misunderstanding of great teams. “If you think of a professional soccer team, it is up to the coach to ensure that every player on the field is amazing at their position.” This is a shallow understanding of great teams. A great team has talent, but just as important is that the players work well together. The notion of a dream team fits the all-star fallacy: that simply having the most talented person at every position is enough to make a great team. Many all-star teams are terrible – playing at levels worse than mediocre teams in the same sport. The reason is all-star teams often have little chemistry and too much ego. A wise coach builds a team that is a mixture of both a) the best talent at each position, but also b) with a sense for how the players styles will work together, what roles they can play, and how their strengths and weaknesses balance. Great teams often have role players that are not the best at their position in the world, but fit better with the rest of the team, and the style the coach chooses for how the team will play, than a star would. And since the nature of projects in a fast paced organization like Netflix change often, it’s likely that on some projects an employee will be the star, and on others they’ll play a more supporting role. Both are important roles. It’s a reflection of a strong team culture to acknowledge these forces as healthy, that playing different kinds of roles creates opportunities to learn, rather than simply believing great talent alone makes for great teams.

What do you think of Netflix’s philosophy? What, if anything, would you adopt in your workplace if you could?

Read my full notes on the original 2009 Netflix culture document here.

6 Responses to “Netflix’s updated guide to culture – an analysis & commentary”

  1. Sean Crawford

    Hey, I came up with a comment! By roster I mean who was placed where.

    Speaking of teams and players in roles, I’ve never forgotten a soccer game one afternoon at army cadet summer camp in Canada. Our team was losing, which is a big deal at that age. Finally our team captain, a fellow cadet who was the best at soccer, changed our roster.

    The others scored again. Changed roster. They scored. Changed. They scored… I forget how long this sad state of affairs went on. Then we started scoring, kept our roster, caught up and won the game. Wow. Such a lesson in the importance of team placement, and of respecting your captain, too.

    Reply
  2. William

    Nice post! I must say that I find Netflix very interesting as a subject due to their business model and how they work. I’m glad I found this. Great breakfast reading. :)

    Reply

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