Netflix might be known for churning out hits like ‘Stranger Things’ and ‘Orange is the New Black,’ but the company’s unique workplace culture is what’s caught the eye of HR aficionados over the years.
It’s a culture that’s been ingrained in the 21-year-old company’s DNA since its early days, largely thanks to the former chief talent officer Patty McCord, who worked at Netflix for 14 years before leaving in 2012.
McCord helped establish many of the tenets that the brand's culture still thrives on today, like its simple two-word vacation policy: “take vacation.” Similarly, the expense policy simply asks employees to “act in Netflix’s best interest” when spending the company’s money.
Netflix also fosters a high performance culture where employees are expected to be on their A-game at all times. Those operating at an “adequate” level are offered a “generous severance package” - which is generally a minimum of four months of full pay - so that they can be promptly replaced by someone who is a better fit.
Many of these policies were initially outlined in a much talked about Netflix culture deck that was made public in 2009. The PowerPoint presentation, which Facebook chief operating officer Sheryl Sandberg once said “may well be the most important document ever to come out of [Silicon] Valley,” was replaced with a more concise text document last year.
Speaking at C2 Montreal last week, Netflix’s chief talent officer Jessica Neal - who rejoined the company last year after a four-year hiatus - discussed how it manages to evolve its culture while staying true to itself and what it believes in.
Culture of feedback
Feedback and testing are two core aspects of Netflix’s day-to-day operations, both of which Neal said have helped it grow into the powerhouse it is today.
“Usually people are very scared about feedback, but we try to make that part of our everyday way of working,” she explained. Since Netflix isn’t “bogged down with crazy processes and rules,” Neal said it is able to test things and learn from them, even if a project or idea ends up getting scrapped.
“We’re also a testing culture. We’re not afraid to fail; it’s all about learning. If we get down a path that we think is the wrong way, we can easily turn around and change it,” she said. The company encourages its employees to take risks and embrace failure, so much so that its chief executive Reed Hastings will openly talk about his own blunders and shortfalls with Netflix’s staff in an effort to lead by example.
“Reed gets in front of our team and talks about the things he needs to get better at. That creates an environment where people feel safe to make mistakes,” Neal said. “We’re all human.”
Neal said the concept of “sunshining,” which essentially means bringing one’s failures to light and sharing them with others, is also often encouraged at Netflix since it gives people the chance to learn from one another’s mistakes.
Changing with the times
Just as Netflix has evolved over the years from a DVD rental company to a full-fledged streaming service with its own original content, so has its culture. While it tends to stick to the core principles and values that have been at its core for more than 20 years, Neal says it still regularly evaluates its workplace and culture to see what’s working and what isn’t.
For example, she said it was forced to change the way it does meetings when its employee base hit 1,000. Instead of having individuals get up and present PowerPoints, it now enforces a “memo culture” where people are asked to write a memo before a meeting that shares what they plan to discuss.
“Prior to this, we’d go into these meetings and somebody would be up on the screen with a PowerPoint. They’d go through their slides, and by the time they were finished, we all had to move onto the next meeting,” Neal explained. “Nobody got to ask any questions; there wasn’t really a discussion. And then you had to schedule a follow-up meeting, which is wasteful.”
Considering Netflix has offices all over the world to keep up with its expanding international subscriber base, Neal says the “memo culture” has helped foster employee collaboration since memos and documents are widely shared internally.
“These documents and memos are open all the time, so people can go in and comment and raise questions,” Neal said. “When you get together finally, you’re able to have a much more meaningful, meaty conversation.”
In addition to more practical things like meeting logistics, Neal said that Netflix also makes sure to regularly revisit and amend its core values to ensure it is evolving with the times and not remaining static. For example, Neal said that the company recently added “inclusion” to its list of values.
“We’ve had to work hard to evolve the way we work,” she said. “A lot of people talk about ‘maintaining’ a culture, and that’s sort of doesn't make sense if you think about it. In a relationship, you’d never want to maintain - you’d want to be better than you are. What we’re trying to do is be better than we are today.”
With 125 million memberships in over 190 countries, Netflix has established itself as an international player in recent years, opening offices everywhere from Tokyo to Mumbai.
While this expansion is good for business, Neal said keeping the Netflix’s culture in tact across its many global offices is a challenge since it’s forced the company to learn how to “communicate in a global way versus just a domestic way.”
“It’s hard because you have to work harder at communicating,” she said. “You have to work harder at making sure that people have all the information, which is where memos play a big part.”
Even so, Neal joked that Netflix is “not a cult,” explaining that the streaming platform embraces the different cultural and demographic makeups that each office brings to the table.
“Even though we’re all a little different, we’re grounded in the same values systems. Tokyo may get at a problem differently than LA, but we all get there because we’re grounded in values,” said Neal. “That’s how we grow our global IQ as a company.”