The Netflix culture has several aspects that are different from the culture at other organisations. CEO Reed Hastings, together with Erin Meyer, describes the culture at Netflix along with copious examples, in their book No Rules Rules

  • Hire the best talent – So that every person working is extremely good, people build off of each other’s talents, people are inspired by one another, and the collective output is of the highest quality.
  • Practice Candor – Usually, you can’t speak your minds in organizations out of fear of ruffling feathers. Netflix has built and maintained a culture of candor. So much so that not speaking your mind is considered an act of disloyalty. Ray Dalio covers this in his book Principles; Dalio calls this the idea meritocracy, where ideas matter more than who is saying it. 

    The idea behind candor is to help each other succeed, even if it means that feelings occasionally get hurt. Netflix has what they call a a 4A Feedback Guidelines:

    – Aim to assist. The feedback should have positive intent.
    – Actionable. The feedback should focus on what the recipient can do differently.
    – Appreciate. The recipient must ask themselves how they can appreciate the feedback with an open mind without becoming defensive.
    – Accept or discard – The recipient has the choice on whether or not to accept the feedback.

  • Remove Controls – Empower employees to make decisions that benefit the company, as against having fine-grained policies.
  • Pay Top of Market Salary – Netflix finds out what the highest market salary for a position is, and pays that to their employees

    When recruiters from other companies approach Netflix employees, they are encouraged to take that call to find out what they are worth in the market.

  • The Team Metaphor – Netflix does not use the metaphor of a family to describe themselves. Instead, they compare themselves to a professional sports team. In the family metaphor, letting an employee go can be seen as a betrayal. By contrast, a sports team must have the best performers at any given time, which is the case at Netflix as well.
  • The Keeper Test – If an employee were to quit tomorrow, would you try to change their mind, or would you breathe a sigh of relief? If the latter is the case, you should let them go now with a generous severance package, and look for a star who you would fight to keep in their place.

    Staff are encouraged to ask their supervisors, “If I am approached by another company, will you fight to keep me?” If the answer is yes, they know that their position is secure. If not, they can take appropriate corrective action so that the answer becomes Yes.

  • Adequate Performance gets a generous severance. Superstar performance is the order of the day.

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Prahalad Rajkumar

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