Several articles, pretty long ones too, have been written about how Netflix has a great work culture, and how it reinvented HR years ago.
In 2018, Netflix announced a record-breaking $11 billion in revenue, and in 2020, it has 158.3 million worldwide subscribers. They’re clearly doing many things right, and amongst those things is HR.
Not only is it one of the greatest entertainment platforms to have existed, but it also turns out that due to its articulate workplace culture, it is a place where several employees would like to be (here’s where great employer branding comes into play).
Netflix, like any other company, cares to hire only the best and place a lot of value on integrity, excellence, respect, inclusion, and collaboration. However, what makes Netflix’s culture special is how much they:
- encourage independent decision-making by employees
- share information openly, broadly, and deliberately
- are extraordinarily candid with each other
- keep only our highly effective people
- avoid rules
Furthermore, Netflix has seven aspects of its culture, and amongst those aspects are values they actually value and apply at the workplace while also looking for people who embody these nine values:
So, how is Netflix unique in its culture?
Feedback is highly appreciated anytime, anywhere
Management, as well as entry-level employees, share direct, not anonymous, feedback openly about anything related to the workplace. The feedback is random and not formal, where it comes across like a constructive note that enhances the harmony between teams and colleagues. Given Netflix’s culture that values transparency, communication, and ownership, feedback is a very crucial habit. It creates this dream team mentality where it’s easy to communicate and share your thoughts and feelings.
The type of feedback given focuses on behavior rather than certain characterizations of a person, such as “you’re unfocused”. The feedback given to employees about one another should not be sent across as a personal attack, but rather one that includes giving specific examples, and being clear about any expectations and actions going forward. Moreover, it should be about action rather than about the person himself. According to Patty McCord in her book “Powerful: Building a Culture of Freedom and Responsibility”, companies that “fostered honest feedback and hard more open communication” had a 270% better ROI over a 10 year period than those who didn’t.
Decision-making is easy
Netflix created this term, “Informed Captains”, where each employee is responsible for his/her own ship, where the employee makes a judgment call after sharing and digesting others’ views. Rather than having committees take decisions, they have group meetings where a discussion takes place, but in the end, only the “informed caption” makes a decision, no matter what position that employee has.
Employees are given the full responsibility and freedom to make decisions when they are reasonably confident of the right bet for managers to take, where the managers trust their team members and take that bet. Afterward, when the impact of the decision can be measured, they reflect on that decision and see if they can do better in the future.
This heightened sense of responsibility and accountability speeds up the decision-making process, enabling a fast-moving environment based on trust and openness. It’s important to note that each job level is responsible for making their own decisions while keeping in mind that certain strategic decisions that affect the organization’s needs the responsible person to take.
‘Management in context, not control’ environment
Managers provide their employees with all the information they need to make informed decisions. They spend time talking to their team members about what they are trying to achieve and then give people real responsibility to get it done without any interference and lots of flexibility and freedom.
Employees are trusted to make the right decisions especially because they are the expert in what they’re handling. They believe that the job of the manager is to liberate the employee and to remove any barrier that would limit effectiveness, rather than paralyze situations where decisions are not being taken, and actions are needing too much time to be applied.
Freedom and Responsibility
This aspect is a culture of Netflix that’s applied in literally everything they do, whether it’s work, the work schedule or taking vacations. They believe that the employee has the freedom to do whatever he wants, and they bear the responsibility.
It’s similar to entrepreneurship but within a corporate environment as the employee is responsible for their own resources and how they should manage them. This empowers people to find what they want to do and how they want to do it while aiming to be the best version of themselves in their professional role. It’s the manager’s responsibility to empower their team, support them and remove any barriers in order to liberate them.
Flexibility around work schedule and vacation
There is great flexibility provided for the employees, as long as they know they have their work organized and covered. The employee has the freedom to choose when he starts and ends his day or when he takes a vacation depending on their work progress.
According to Netflix employees, if they had a certain time to start and leave, they would not be in the same place of motivation and level of execution. It helps their mindset knowing that they can take a few days off when they need to. It pushes them to get the job done and feel motivated, and then reward themselves with some time off to come back more productive and fresher.
Measuring Job Performance
They don’t do it as most companies do it, and this may not apply to all companies; however, they do not define a certain set of KPIs to measure success, nor do they have a specific process or any performance improvement plans or compensation reviews based on performance. Netflix defines itself as a “high-performance culture”, meaning that every employee is expected to perform not only excellent, but way beyond, and hence why they don’t measure performance.
Employees are rather measured by their teams and cross-functional partners, and most importantly measured by themselves, as Netflix attracts people who want to do the best of their ability. They pick their employees based on their talent and the mindset they carry (making sure they embody Netflix’s values).
Everyone at Netflix is just looking for what brings it forward rather than what makes them as an individual grow. They believe that with KPIs, people will only want to hit the target and they will forget about taking risks, being creative, and thinking outside the box – especially at Netflix, where they have the mentality of testing things where other companies don’t.
For Netflix, culture is not static, as they constantly need to make sure that the culture still fits everyone by always taking feedback from their employees. This adds an element of growth and creates an evolving culture that is not fixated in any way. They believe culture is ever-changing as one learns more about people and teams.
“Our culture is a work in progress. Every year we try to reﬁne our culture further as we learn more”