Netflix’s Culture and Succes

By Seth Ansell

This case study looks at Netflix’s unique corporate culture and highlights specific aspects and philosophies that Netflix deems important. The case study will describe and analyze the seven aspects of Netflix culture and add my input. My own experience within other organizations will be used to compare and contrast my experiences against Netflix’s unique culture.

The first aspect of Netflix’s culture is their values which they claim is shown through the behavior of their colleagues. These values are looked for in characteristics of candidates that apply at Netflix. The nine behaviors include: judgement, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness. Netflix goes into further details in why they want each characteristic. They want employees to make wise decisions “despite ambiguity,” and be able to think strategically. They want employees who can communicate well with other colleagues and treat others with respect regardless of who they are. They want their employees to not be another cog in the machine, but instead make an impact. Netflix’s key values it looks for in employees may seem like what most companies would want, it becomes more clear with their other aspects of culture in specifically what they want from their employees (Hastings, 2009).

Image result for netflix office
Work space inside Netflix’s offices. Photo credit: glassdoor.com

The second aspect of their culture is “high performance.” Netflix compares themselves to a pro sports team, “Netflix leaders hire, develop and cut smartly, so we have stars in every position” (Hastings, 2009).The managers at Netflix think “who of my employees would I fight hard to keep if they were leaving?” If a manager wouldn’t fight hard to keep an employee, then Netflix gives them a generous severance package so that role can be filled in by a superstar. This shows how Netflix actually highly values their employees. Even when they drop an employee they offer them a severance. The company wants the best of the best so that all of the large talent can pool together and assist each other in achieving the company’s goals. The company values loyalty and will give a pass to their highest achieving employees in hopes that they will perform highly again. Netflix expects the same. If the company hits a low, they want employees to stick around (Hastings, 2009).

The third trait of Netflix’s culture is freedom and responsibility. Netflix wants employees to be responsible and self-motivated but also wants to grant them large amounts of freedom. As companies grow, their employee freedom usually decreases. This results in complexity increasing while quality employees decrease which results in chaos. Companies then streamline work processes to avoid this conflict which results in difficulty in adapting to future issues and market switches. Netflix aims to do the opposite; they want to promote freedom to attract innovative employees. They are attempting to increase the percentage of high performing employees faster than the growth of complexity. This allows the company to stay innovative and able to quickly adapt to change. An example of the freedom an employee has at Netflix is their ambiguous vacation policy. Employees are able to take as long as vacation as they want, as long as they are still performing their job (Hastings, 2009).

Netflix’s fourth aspect of culture is “Context, not Control.” This coincides well with the last aspect of freedom and responsibility. This aspect is how Netflix wants its managers to behave. They do not want managers to micromanage their employees every move, but rather show them clear objectives and goals. The aspect looks to avoid things such as top-down decision making and requiring management approval. They want their managers to show clearly the goals of the employees and trust with the freedom given to the employees that they will have the responsibility to finish the task, rather than using control to force finish the task (Hastings, 2009).

The fifth aspect is “Highly Aligned, Loosely Coupled.” Netflix claims that in traditional companies there are two common models of teamwork, tightly coupled monoliths and independent silos. The first method consists of management reviewing all work and tactics, highly coordinated through centralization which causes slowness within office, and workers get exhausted trying to innovate and constantly please management. The independent silos model is the opposite were each department works on their own, little office coordination, “suspicion” between departments, and teamwork suffers. Netflix’s model combined the strengths of each model to eliminate the cons. Their model includes clear goals that are broadly understood, large amounts of team interaction, trust within departments and teams so that they don’t need to review each other, and leaders are pro-active with creating ad-hoc groups and coordination when needed (Hastings, 2009).

The sixth aspect of Netflix’s culture is to pay their employees top of the market. Netflix aims to pay top of the market for that employee as they expect top quality work. Not all employees with the same job description are worth the same, but Netflix aims to pay the highest market value on individual worth. This eliminates the 4% raise each year that many companies use, but results in raises when the individual’s worth increases (Hastings, 2009).

Netflix’s final aspect to their culture is promotions and development. Netflix aims to grow and keep their best talent. Sometimes there is no room for an employee to advance because there is no open position. Netflix recognizes this and celebrates an employee leaving for a better job if Netflix didn’t have one available for them. They truly care about the development and advancement of their employees, even if it results in them leaving (Hastings, 2009).

These aspects of the company seem to be showing good results. In 2013, Netflix had tripled its stock value. The business has won 3 Emmy awards, and has United States subscriber base of about 29 million. The seven cultural traits and aspects created a company that has succeeded through the use of creating a mutual respect/trust between employees and the company, honestly telling employees about their performance, managers creating highly-efficient teams, and leaders continuing the development of the company’s unique culture (McCord, 2016).

I have experienced some of the components to Netflix’s culture in organizations I am involved in. While I do not have very much work experience, I have seen on a small scale how managers who do not micro-manage may be more effective than those who do. In my fraternity Tau Kappa Epsilon, members are expected to work together with efficient communication among each other, but we respect each other and do not micromanage or try to control others. We expect others to do their work and others expect me to do mine. This is very similar to Netflix’s ideology on freedom and responsibility. Freedom to get the work done how and when you want but the responsibility to complete high quality work. TKE shares some of the same values of high performance, rewarding strongly, respect and freedom, and development that Netflix does. Our slogan as a fraternity is “Better Men for a Better World.” This fits strongly with Netflix’s values on employee development.

I feel I may have the tools to succeed at Netflix, but I would be cautious. I feel I could succeed because I place a strong emphasis on communication and teamwork, as does Netflix. I would be cautious because I highly value job security and Netflix stated themselves that these are not the people they are looking for. They are looking for employees who are always trying to excel. I believe I am one of those types of employees but my fear of possibly being let go would cause me to be nervous and anxious on the job. Being nervous would not allow me to relax and really get into the work I am doing as I would be too busy worrying.

References

Hastings, R. (2009, August 01). Netflix Culture: Freedom and Responsibility. Retrieved October

07, 2016.

McCord, P. (2016, January/February). How Netflix Reinvented HR. Retrieved October 07, 2016.

 

 

 

 

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