Netflix Shares Internal Presentation on Company Culture

Netflix posted a 128 page internal presentation on the company culture: Reference Guide on our Freedom & Responsibility Culture. This deck is an interesting look at how Netflix hires, fires, motivates and manages employees. The slides are short, and reading the entire presentation doesn't take long.

Culture

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Some tidbits include:

• Great workplace is not day-care, espresso, health benefits, sushi lunches, nice offices, or big compensation, and we only do those that are efficient at attracting stunning colleagues.
• ...Unlike many companies we practice "adequate performance gets a generous severance package."
• Brilliant Jerks: For us, the cost to teamwork is too high. 
• Netflix Vacation Policy and Tracking: "there is no policy or tracking." "There is also no clothing policy at Netflix, but no one has come to work naked lately." - Patty McCord 2004
• Netflix's policies for Expensing, Entertainment, Gifts and Travel: "Act in Netflix's Best Interests."
• When top of market comp done right... Nearly all ex-employees will take a step down in comp for their next job.

I was surprised that Netflix posted this document and wondered if it was leaked, but Netflix's Bill Scott confirmed that they posted this presentation.  

Thanks to Marc for sending this in.

Comments

[Kevin]

I think companies such as Netflix, Apple, Google, 37signals, etc. are fast becoming the new model.

[Shevonne]

Someone needs to forward this to my company's decisionmakers email box.

[Scott]

Funny how those quoted "tidbits" make positive points sound negative. As the slideshow itself points out (in a different context), context is crucial!

Though one of the quotes actually is wrong: The slide talking about brilliant jerks says that the cost TO teamwork is too high, not the cost OF teamwork.

[yuppiescum]

Funny how if you just let a bunch of good people do whatever they want, they will do good things.

The only thing that set off my corporate bullshit meter me was the statement "values are what we value."

[jyothiprakash]

Thanks for sharing this. Sounds like an awesome place to work!! More companies should start following this model.
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[BigDuke6]

This looks like it was aimed at the people in the California headquarters.To the full or part time drone in one of the distribution centers that had to sit through this it's mostly B.S.

[nancy brown]

Wow -- a cutting edge approach to building the workplace of the future. I am impressed with what Netflix has done and will look to model some of it in my own organizaton
Nancy Brown - CEO American Heart Asosication

[dAVe]

Noted for future personal reference: Don't go to work for Netflix - reason, horrible corporate philosophy/culture and probably a mega-HR-lawsuit away from ruin.

I wonder what the line graph of today's "Stunning Colleagues" turning into "adequate performers" due to growth of "Complexity" looks like. Oh, yea, that's right, it's shown on slide #46 - a downward trend.

Bumper sticker philosophies and generalities will eventually have a negative impact.

[Max]

Two things struck me as notably inadequately addressed.

The first is the criticism that the technique doesn't scale. I still don't see any evidence that it does scale beyond 150 people per autonomous organization. After all, the "coaches" are "players," too, unless they're suggesting a flat hierarchy. Google tried both versions, without success: their moneymaker is still the product that was developed when they were small.

The second is limiting "market" to purely the traditional employment market. If one superstar does 10x the work but only costs 2x that of an adequate performer, it makes far more economic sense for that star to extract that huge markup for himself (cf. Paul Graham's essays on founding startups). Even being a regular employee at an early startup has a huge upside compared with that of working for Netflix, where the upside is, apparently, keeping ones job.

[Anthony]

Saying your a great place to work doesn't make you a great place to work ;)

Companies that are great have a third parties say there are. That's when it's time to yell from the rafters how great your company is.

[Employee Beware!]

What if it's all a lie from an executive team that suffers from A+ level Narcissism?

[me]

@ Employee Beware..... BINGO! You are right on the mark. ; )

[haha]

One only needs to look at the glassdoor reviews to see what this actually translates into.

[you betcha]

Salaries being tied to the market, and paying "top of market", sounds great... except for one itty bitty little thing - it completely demotivates anybody from staying loyal to the company. The reason why people get "locked in" to their jobs is because the company, over time, gives raises that promote one's salary "well above" the top of market. Only paying top of market is a great way to keep people for a couple years, but who will have no qualms about leaving since they're not being extraordinarily compensated.

Also... a high employee co-pay for a "great" medical plan ends up detracting from the "top of market" salary. In fact, reading through all of the benefits, if salary is the only thing Netflix offers, then they're not even close to offering "top of market" comopensation. Most companies will pay a high salary to top employees, AND include all of the perks that Netflix will DEDUCT from your salary. That, to me, is nowhere near a "top of market" compensation.

Smoke and mirrors here... loads of them.

[meatcurtains]

I second haha's comment. As a former employee (who left of his own accord) check out the glassdoor.com reviews (and comments). Horrible place to work.

[Netflix]

Informative post about netflix.

[Shauna Rybolt]

I think people need to look at this philosophy as a whole. In my experience at another company with much the same philosophy, I came in at the bottom and worked my way to the top, all the while learning how to be an effective and motivating leader. Bottom line, it is about hiring the right people first, everything else is icing on the cake after that. It is impossible to fail, especially with the right attitude and tools, and that is exactly what this philosophy demonstrates. I've seen it work before. I have friends who work for Netflix and LOVE it. And I would LOVE to be a part of this team myself.

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[grant]

On the surface netflix sounds like an impressive high performance culture. But it can't be easy to always be trying to be a star? "adequate performance gets a severance package". I realize you want good performers, but is there any balance between work and play? I don't think anyone lives to work. Corporate burnout , start your studies here.

[Phil Simon]

I agree with Grant. This is probably easier to do in theory but a bit harder in practice. I'd love to do a podcast with the head of the company or at least it's VP of HR. Sounds pretty neat.

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In the nineteenth century, humanists such as English poet and essayist Matthew Arnold (1822-1888) used the word "culture" to refer to an ideal of individual human refinement, of "the best that has been thought and said in the world." This concept of culture is comparable to the German concept of bildung: "...culture being a pursuit of our total perfection by means of getting to know, on all the matters which most concern us, the best which has been thought and said in the world

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The benefits of this company are very good, the video shows some very interesting things that can be very useful in our work.

[GreenScreenCinema]

After having worked at the Netflix headquarters in Los Gatos, I can tell you that this culture deck is total BS (and also that lots of Netflix employees read this blog!) To clarify some of the reality here: the above market pay is primarily meant to encourage employees to accept the insane atmosphere at the place. In many ways, direct and indirect, the company tells employees “We are paying you a lot, so we own your ass and we can treat you as we like.”

They also have NO OBJECTIVE PERFORMANCE REVIEW! Employees do not have goals written down, anywhere, and they also have no way to determine if they are accomplishing the goals that they happen to be working on (outside of casual chats with the boss). I ask you, what high performing individual would want to work in that environment? There is nothing to tell the good employees from the bad employees. Nothing! The high performers that accidentally join the company leave rather quickly because of this (or are fired). The ones that stay are enormous ass-kissers that couldn’t get hired anywhere else.

As far as "freedom and responsibility", this concept has been contorted into no freedom and total responsibility. You basically have to do what you're told, but if that turns out to not be the best idea ever you are punished (responsibility!). But there is no freedom. You just have to hope you are pointed in the right direction by management.

And did I mention the astoundingly high termination rate? The high termination rate encourages ass covering on a grand scale. No one sticks their neck out, no one really is looking out for the company. They are simply looking for ways to look better than the next guy.

In my time there, I found that many people were just looking for the next fire, and then ran around once the fire started, showing that they knew how to put it out. I actually got a ton of crap from some fellow employees for trying to solve something for the iPad launch before it became a fire. These employees wanted this issue with iPad content to blow up, so they could help at that point and then clearly look like the good guy. I kept trying to explain, we will miss the iPad launch if we don't fix this now. But all they cared about was looking good and keeping their crummy jobs. You have no idea how close Netflix came to having no content ready for the iPad launch.

You really need to read between the lines when you read this culture deck. Its brainwashing in the more innocent slides, and outright deceptive in the more dubious ones.

Read more on the subject at my blog GreenScreenCinema.com

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[Jen~ jasmine green tea]

Netflix has a cutting edge approach to building the workplace for the coming days. I am very impressed with what their approach. I think companies such as Netflix, Apple, Google, and now Facebook are becoming the new model for other companies.

[Jumbled Mess]

My company strives for this kind of culture and succeeds in some ways and not in others (employee retention is a big one), so I forwarded it to my HR team. Can you say 'goodbye vacation tracking'? ;-)

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