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Photographer: Jason Alden / Bloomberg
Netflix is under fire for its pressure cooker culture. A recent the Wall Street newspaper sliced article the company is ready to reveal a culture that drives extreme openness, uncomfortable feedback loops and a questionable dismissal process. Working there is certainly not easy. Maybe that's the point.
Extreme openness and "radical transparency"
The philosophy of "radical transparency" bleeds through the Netflix organization. The level of openness that it promotes takes many forms. "Sunshining," for example, is a Netflix term used to describe a business practice that encourages employees to post an error that they could have committed to colleagues in the name of transparency.
Salaries are another. Most organizations, especially those without a structured salary scale, choose to keep private wages. This can lead to grievances not only between the functions and the teams at the point of use of the resources, but also between the employees. At Netflix, administrators and senior administrators have direct visibility into the salaries of all employees. This represents about 500 people, as indicated in the the Wall Street newspaper.
Evaluations are also public. Employees are evaluated annually using a 360 tool, a fairly common procedure in many organizations. Much less common is that these ratings are accessible to the entire company, from directors to CEOs.
Netflix's CEO, Reed Hastings, has implemented these practices to "get everyone involved in the Netflix journey, from price hikes to Chinese strategy to Netflix's logo," as indicated in the report. the Wall Street newspaper. Employee feedback is welcome, a policy that applies equally to every employee.
A culture of constant feedback And the "guardian's test"
the "360" is a small part of the employee evaluation process. Its continuous feedback loop is much larger. Culture encourages constant comments. "Employees are encouraged to give each other a direct feedback," it was reported. For some, especially those who are new to this type of culture, continuous feedback may seem abrasive. But its goal is to provide employees with constant opportunities for improvement, rather than a single, isolated annual review.
The "guardian test" is another cultural feature used by managers to evaluate an employee's performance. Managers are begging to ask themselves: Do you want to fight for this employee? The goalkeeper's test," according to the article, is not always a source of comfort. "Many employees say they view the guardian's test as a pretext for regular workplace politics, while some executives say they feel they have to fire employees or run the risk of being soft."
The culture of Netflix, it seems, is one where the idea of getting fired is never far from your mind.
Reed Hastings, CEO of Netflix (AP Photo / Manu Fernandez, File)
The firing process
Gunshots can often be abrupt and seem heartless. One of these examples is the end of the term of Neil Hunt, Product Manager, who had been involved in the development of the Netflix curation algorithm. Not only was he one of the first employees, but he was also a friend of Hastings.
The shift in custody, it was reported, has been attributed to the need for different skills while Netflix is positioning itself for increased growth in the Hollywood and international markets. Hunt was told that he would eventually be replaced by one of his reports, whose qualifications would be better suited to the job's needs.
The episode of Hunt was not particularly unusual. At Netflix, it is customary to systematically evaluate and re-evaluate employee suitability, not relying on yesterday's market challenges, but only those of today and tomorrow.
It is a classic example of an ascending culture. For the uninitiated, the culture may seem overly competitive. But few cultural approaches are more effective at ensuring high performance.
Solve the problem of attrition
In the light of the stories of the Amazonian culture and now Netflix, it can also be easy to assume that these types of cultures are new. But many of these practices predate both companies, including long-time consulting firms.
- Constant comments: In consultation, feedback is integrated at each stage of the process. It is unusual for a week to pass without receiving feedback on technical skills, presentation skills, teamwork, customer interactions, or even the style of dress. To be reprimanded publicly is not unknown either.
- Up-Or-Out: Promotions are also debated in committee. If you do not follow the planned pace of promotion, you are abandoned. The worst performers are systematically eliminated. And the possibility of getting fired is never far from your mind.
Although not particularly pleasant, this management style is extremely efficient and gives rise to an extremely high level of performance. From my own experience, I have seen consultants work at two or three times the pace of an average company. This level of efficiency is rarely replicated without similar railings.
The atmosphere often attracts great talent but suffers from an equally high attrition rate. An essential characteristic of these types of crops – usually, in any case – is their unsustainability. In consultation, the attrition rate can reach 50%.
In comparison, Netflix has maintained a voluntary attrition rate of 3-4% over the past two years. Even the involuntary leaving rate is 8%, which is comparable to the US average of 6%.
Netflix has not only been able to build a high performance culture, but also retain the best talent. Most companies only succeed in one or the other. Rarely both. This is the true cultural feat of Netflix.
Netflix Headquarters (photo by FG / Bauer-Griffin / GC Images)
Successful cultures
To run a successful business, you do not need a high-performance culture. There are today many companies that are doing very well with a mix of talents. But to run an innovative business, it's essential to create a high-performance, talent-driven culture.
High-performance crops are high-pressure places. It takes a certain type of person to choose to compete in this competitive environment. It would be much easier to accept a more comfortable trajectory as a featured performer in a company with a different talent pool.
Netflix has not hesitated to create a culture of competition truly true to itself, a culture that attracts the kind of talent it needs for the ambitions it has. Netflix, according to the the Wall Street newspaper, attributes its success partly to this unique culture. "Many employees, past and present, attribute this responsibility to building successful companies that can make decisions quickly. This, they say, provides agility that has helped to disrupt the global television and film industries. "
All happy families are all alike – I've read every unfortunate family is unhappy in its own way. You hope to land in a happy family, a family that does not send you back. You hope to find comfort in your family. Netflix, however, is not your family.
The most innovative cultures are rarely comfortable. Comfort is in complacency. Pushing boundaries creates discomfort. This may surprise detractors that some people choose voluntarily to sign up for such a bumpy ride.
But Netflix has never promised comfort, it only guarantees adventure.
FFollow Stephanie Denning on Twitter: @stephdenning
And also read:
Incubation culture: how Netflix wins the talent war
Ray Dalio questions the wisdom of a conventional career
Finding success after failure: lessons from Ray Dalio
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Photographer: Jason Alden / Bloomberg
Netflix is under fire for its pressure cooker culture. A recent the Wall Street newspaper sliced article the company is ready to reveal a culture that drives extreme openness, uncomfortable feedback loops and a questionable dismissal process. Working there is certainly not easy. Maybe that's the point.
Extreme openness and "radical transparency"
The philosophy of "radical transparency" bleeds through the Netflix organization. The level of openness that it promotes takes many forms. "Sunshining," for example, is a Netflix term used to describe a business practice that encourages employees to post an error that they could have committed to colleagues in the name of transparency.
Salaries are another. Most organizations, especially those without a structured salary scale, choose to keep private wages. This can lead to grievances not only between the functions and the teams at the point of use of the resources, but also between the employees. At Netflix, administrators and senior administrators have direct visibility into the salaries of all employees. This represents about 500 people, as indicated in the the Wall Street newspaper.
Evaluations are also public. Employees are evaluated annually using a 360 tool, a fairly common procedure in many organizations. Much less common is that these ratings are accessible to the entire company, from directors to CEOs.
Netflix's CEO, Reed Hastings, has implemented these practices to "get everyone involved in the Netflix journey, from price hikes to Chinese strategy to Netflix's logo," as indicated in the report. the Wall Street newspaper. Employee feedback is welcome, a policy that applies equally to every employee.
A culture of constant feedback And the "guardian's test"
the "360" is a small part of the employee evaluation process. Its continuous feedback loop is much larger. Culture encourages constant comments. "Employees are encouraged to give each other a direct feedback," it was reported. For some, especially those who are new to this type of culture, continuous feedback may seem abrasive. But its goal is to provide employees with constant opportunities for improvement, rather than a single, isolated annual review.
The "guardian test" is another cultural feature used by managers to evaluate an employee's performance. Managers are begging to ask themselves: Do you want to fight for this employee? The goalkeeper's test," according to the article, is not always a source of comfort. "Many employees say they view the guardian's test as a pretext for regular workplace politics, while some executives say they feel they have to fire employees or run the risk of being soft."
The culture of Netflix, it seems, is one where the idea of getting fired is never far from your mind.
Reed Hastings, CEO of Netflix (AP Photo / Manu Fernandez, File)
The firing process
Gunshots can often be abrupt and seem heartless. One of these examples is the end of the term of Neil Hunt, Product Manager, who had been involved in the development of the Netflix curation algorithm. Not only was he one of the first employees, but he was also a friend of Hastings.
The shift in custody, it was reported, has been attributed to the need for different skills while Netflix is positioning itself for increased growth in the Hollywood and international markets. Hunt was told that he would eventually be replaced by one of his reports, whose qualifications would be better suited to the job's needs.
The episode of Hunt was not particularly unusual. At Netflix, it is customary to systematically evaluate and re-evaluate employee suitability, not relying on yesterday's market challenges, but only those of today and tomorrow.
It is a classic example of an ascending culture. For the uninitiated, the culture may seem overly competitive. But few cultural approaches are more effective at ensuring high performance.
Solve the problem of attrition
In the light of the stories of the Amazonian culture and now Netflix, it can also be easy to assume that these types of cultures are new. But many of these practices predate both companies, including long-time consulting firms.
- Constant comments: In consultation, feedback is integrated at each stage of the process. It is unusual for a week to pass without receiving feedback on technical skills, presentation skills, teamwork, customer interactions, or even the style of dress. To be reprimanded publicly is not unknown either.
- Up-Or-Out: Promotions are also debated in committee. If you do not follow the planned pace of promotion, you are abandoned. The worst performers are systematically eliminated. And the possibility of getting fired is never far from your mind.
Although not particularly pleasant, this management style is extremely efficient and gives rise to an extremely high level of performance. From my own experience, I have seen consultants work at two or three times the pace of an average company. This level of efficiency is rarely replicated without similar railings.
The atmosphere often attracts great talent but suffers from an equally high attrition rate. An essential characteristic of these types of crops – usually, in any case – is their unsustainability. In consultation, the attrition rate can reach 50%.
In comparison, Netflix has maintained a voluntary attrition rate of 3-4% over the past two years. Even the involuntary leaving rate is 8%, which is comparable to the US average of 6%.
Netflix has not only been able to build a high performance culture, but also retain the best talent. Most companies only succeed in one or the other. Rarely both. This is the true cultural feat of Netflix.
Netflix Headquarters (photo by FG / Bauer-Griffin / GC Images)
Successful cultures
To run a successful business, you do not need a high-performance culture. There are today many companies that are doing very well with a mix of talents. But to run an innovative business, it's essential to create a high-performance, talent-driven culture.
High-performance crops are high-pressure places. It takes a certain type of person to choose to compete in this competitive environment. It would be much easier to accept a more comfortable trajectory as a featured performer in a company with a different talent pool.
Netflix has not hesitated to create a competitive culture truly true to itself, a culture that attracts the kind of talent it needs for the ambitions it has. Netflix, according to the the Wall Street newspaper, attributes its success partly to this unique culture. "Many employees, past and present, attribute this responsibility to building successful companies that can make decisions quickly. This, they say, provides agility that has helped to disrupt the global television and film industries. "
All happy families are all alike – I've read every unfortunate family is unhappy in its own way. You hope to land in a happy family, a family that does not send you back. You hope to find comfort in your family. Netflix, however, is not your family.
The most innovative cultures are rarely comfortable. Comfort is in complacency. Pushing boundaries creates discomfort. This may surprise detractors that some people choose voluntarily to sign up for such a bumpy ride.
But Netflix has never promised comfort, it only guarantees adventure.
FFollow Stephanie Denning on Twitter: @stephdenning
And also read:
Incubation culture: how Netflix wins the talent war
Ray Dalio questions the wisdom of a conventional career
Finding success after failure: lessons from Ray Dalio
