You make wise decisions (people, technical, business, and creative) despite ambiguity.
You identify root causes, and get beyond treating symptoms. You think strategically, and can articulate what you are, and are not, trying to do. You smartly separate what must be done well now, and what can be improved later.
You listen well, instead of reacting fast, so you can better understand. You are concise and articulate in speech and writing. You treat people with respect independent of their status or disagreement with you. You maintain calm poise in stressful situations.
You accomplish amazing amounts of important work. You demonstrate consistently strong performance so colleagues can rely upon you. You focus on great results rather than on process. You exhibit bias-to-action, and avoid analysis-paralysis.
You learn rapidly and eagerly. You seek to understand our strategy, market, subscribers, and suppliers. You are broadly knowledgeable about business, technology and entertainment. You contribute effectively outside of your speciality.
You re-conceptualize issues to discover practical solutions to hard problems. You challenge prevailing assumptions when warranted, and suggest better approaches. You create new ideas that prove useful. You keep us nimble by minimizing complexity and finding time to simplify.
You say what you think even if it is controversial. You make though decisions without excessive agonizing. You take smart risks. You question actions inconsistent with our values.
You inspire others with your thirst for excellence. You care intensely about Netflix' success. You celebrate wins. You are tenacious.
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
But, unlike many companies, we practice "adequate performance gets a generous severance package."
We're a team, not a family.
We're like a pro sports team, not a kid's recreational team.
Coaches' job at every level of Netflix to hire, develop and cut smartly, so we have starts in every position.
"Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at Netflix?
The other people should get a generous severance now, so we can open a slot to try to find a star for that role.
To avoid surprises, you should periodically ask your manager: "If I told you I were leaving, how hard would you work to change my mind to stay at Netflix?"
Isn't loyalty good?
What about hard workers?
What about brilliant jerks
In procedural work, the best are 2x better than the average.
In creative work, the best are 10x better than the average, so huge premium on creating effective teams of the best.
Great workplace is stunning colleagues.
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
Self motivating
Self aware
Self disciplined
Self improving
Acts like a leader
Doesn't wait to be told what to do
Never feels "that's not my job"
Picks up trash lying on the floor
Behaves like an owner
Our model is to increase employee freedom as we grow, rather than limit it, to continue to attract and nourish innovative people, so we have better chance of long-term continued success.
Most companies curtail freedom as they grow to avoid errors (sounds pretty good to avoid errors).
Growth increases complexity
Growth shrinks talent density in most firms
Chaos emerges
Process emerges to stop the chaos
A highly-successful process-driven company
The key: Increase talent density faster than complexity grows
Increase talent density
Minimize complexity growth
Freedom is not absolute.
Like "free speech" there are limited exceptions to "freedom at work".
1. Prevent irrevocable disaster
- E.g. Financials produced are wrong
- E.g. Hackers steal our customers' credit card info
2. Moral, ethical, legal issues
- E.g. Dishonesty, harassment are intolerable
Until 2004 we had the standard model of N days per year
Meanwhile...
We're all working online some nights and weekends, responding to emails at odd hours, and taking an afternoon now and then for personal time.
An employee pointed out...
We don't track hours worked per day or per week, so why are we tracking days of vacation per year?
We realized...
We should focus on what people get done, not how many hours or days worked. Just as we don't have an 9-5 day policy, we don't need a vacation policy.
"There is no clothing policy at Netflix, but no one has come to work naked lately." - Patty McCord, 2004
Lesson: You don't need detailed policies for everything.
Most companies have complex policies around what you can expense, how you travel, what gifts you can accept, etc.
Plus they have whole departments to verify compliance with these policies.
Netflix policies for expensing, entertainment, gifts & travel:
"Act in Netflix's best interests" (5 words long)
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
"If you want to build a ship, don't drum up the people to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea."
Antoine De Saint-Exupery
Author of The Little Prince
The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people.
Provide the insight and understanding to enable sound decisions
Context | Control |
- Strategy | - Top-down decision-making - Management approval - Committees - Planning and process valued more than results |
Managers: When one of your talented people does something dumb, don't blame them.
Instead, ask yourself what context you failed to set.
Managers: When you are tempted to "control" your people, ask yourself what context you could set instead
Are you articulate and inspiring enough about goals and strategies?
High performance people will do better work if they understand the context
This is why we do new employee collect, and why we are so open internally about strategies and results
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
Tightly-Coupled Monolith
Independent Silos
Highly Aligned, Loosely Coupled
Highly Aligned
Loosely Coupled
Highly-aligned loosely coupled teamwork effectiveness is dependent on
Big and Fast and Flexible
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
One outstanding employee gets more done and costs less than two adequate employees
We endeavor to have only outstanding employees
• We will rarely counter with higher comp when someone is voluntarily leaving because we have already moved comp to our max for that person
• Employees will feel they are getting paid well relative to their other options in the market
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
Some people, through both luck and talent, will have extraordinary career growth
• Very talented people usually get to move up, but only true for the very talented
• Some luck in terms of what posi<ons open up and what the competition is
• Some people move to other teams to get the opportunity they want
• Great teams keep their best talent
• Some minor league players keep playing even though they don't move up because they love the game
Job has to be big enough
Person has to be a superstar in current role
Individuals should manage their own career paths, and not rely on a corporation for planning their careers
Like retirement planning – safer as individual responsibility
Individual's economic security is based upon their skills and reputation
We try hard to consistently provide
• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development
Culture is how a firm operates
What practices give Netflix the best chance of continuous success for many generations of technology and people?
Continuous Success = Continuous growth in revenue, profits & reputation
Need a culture that supports rapid innovation and excellent execution
Both are required for continuous growth
There is tension between these two goals; between creativity and discipline
High performance people and effective teamwork can be in tension also – stars have strong opinions
AirMason can help you bring your employee handbook to the 21st Century. AirMason's employee handbook software makes it easy to create, distribute, track and update digital employee handbooks — anytime, anywhere.
You’re only as good as your people, and culture plays a distinct role in employee satisfaction — starting with onboarding. In fact, great onboarding can improve employee retention by 82%. AirMason’s culture-forward templates utilize features like colour, imagery and keyword search to engage your employees from day one.
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