Netflix runs on a ruthless, demoralizing and dysfunctional culture. People are shamed publically for their failings, forced to discuss mistakes in a humiliating open forum and bluntly fired when they don’t perform. Or that’s what the Wall Street Journal would have you believe. Whilst their facts may be accurate I think their conclusions are very wrong.
Last Thursday, Shalini Ramachandran and Joe Flint, in the WSJ, published a damming expose on the Netflix corporate culture. Citing interviews with more than 70 current and former employees for the article, it was a significant piece of work and was widely publicised.
The report focused on how Netflix is not a normal corporate employer
Under the headline “At Netflix, Radical Transparency and Blunt Firings Unsettle the Ranks“, the two reporters examined the differences between life at Netflix and what they expected in a corporate job. They highlighted acute transparency, accountability and honesty as key issues that workers struggled with and claimed that “buzzwords and anxiety fill the hallways as Hollywood giant tries to maintain a winning culture amid breakneck growth“
Examples given of acute transparency in practice
- An executive apologising in public to the whole company for his bad judgement in use of the “N-word” word when attempting to make a point during a meeting about offensive words in comedy programming. (The executive was later fired)
- CEO Reed Hastings apologising in public to the company for his slow response to that same “N-word” scandal.
- Employees are trusted and given personal discretion on expenses and are asked only to “act in the company’s interests”
- Employees at Director level and above can see the salaries of every employee
- Managers are asked to constantly use the “keeper test”. If an employee said they were leaving, would they fight to keep them? If the answer is no, maybe that employee should be leaving.
- CEO Reed Hastings fired his close friend and longtime colleague Neil Hunt, the chief product officer who had helped create Netflix’s famed algorithm that curates programming for viewers. The reason was that a lot had changed in the role and as Netflix expanded in Hollywood and overseas someone else in his team was now more suited for the job.
- They explained that when someone is fired from Netflix, the company explains openly and honestly why, rather than covering up or adopting a wall of silence which most employers do (this was described by Joe Nocera at Bloomberg as “creepy“, suggesting he would prefer the standard corporate practice of being lied to and having the truth covered up).
At times the reporters clutched at straws looking for evidence of trouble – “Virtually every employee can access sensitive information,” such as viewer numbers for Netflix’s shows” – Whilst it might be unusual, how is this a bad thing? Who doesn’t want more transparency and visibility at work? Being kept in the dark is commonly the number 1 bugbear of disengaged employees everywhere.
But the WSJ team did find people that found the culture deeply disconcerting. An example quoted is Andrew Parker, who has a doctorate in computer science. He said he was “filled with anxiety” when he started at Netflix with a group of others a couple of years ago, frightened by the performance culture and the idea that his job wouldn’t be safe if he didn’t perform.
Whether you like the idea of the Netflix culture is not the point
But whether you personally want to work in a culture of openness and transparency, is not the point of my post. Neither is whether the Netflix culture is a business success – although it is worth pointing out that the company generates higher revenue per employee than even Apple.
Instead, what I want to highlight is that no-one should be working for Netflix without knowing what they are getting in to.
The Netflix culture has been well documented publicly for over a decade. It is legendary in Silicon Valley and it’s a constant case study used by those of us who work discussing and evaluating company cultures.
The culture was first documented in detail nearly a decade ago in the “Netflix Culture: Freedom & Responsibility” slide deck. Everything in the WSJ article is clearly described in that
In that book, every aspect of the culture, including all of the details “exposed” by the WSJ, are discussed in detail with them and the reasons and rationale explained in full.
There’s also a detailed careers website that pulls no punches explaining the unique culture and management framework and even a whole series of videos showing employees discussing the Netflix culture and “Debunking Netflix Culture Myths”.
The Netflix corporate culture is
arguablythe most openly communicated and deliberate culture in the world.
So in the context of such a wealth of information explaining exactly what it is like to work at Netflix, isn’t it an act of willful blindness on behalf of people to take a job at Netflix and then be surprised at what it’s like to work there?
Thinking back to the example quoted in the article of Andrew Parker who joined the company but was then “filled with anxiety” on the requirement to deliver – so why did he join
Was it because they offered a salary that no one else could match and exciting projects to work on?
It is exactly the culture of high performance that allows Netflix to consistently pay more than their peers. Their theory is that smaller teams of the highest performing people will out-compete larger-sized teams of only “good” people. That’s what is behind the need for the “keeper” test – so teams only include the star performers still essential to the business.
It feels to me kind of disingenuous on the part of the employee to want the spoils of the high-performance culture without the accountability to perform yourself.
No one corporate culture can possibly suit everyone
As human beings we are hugely diverse in our thinking, our approach to life attitude to risk. Many of us want very different things from a career, an employer and a manager.
It’s unreasonable to imagine that one company culture could possibly suit all people. What is reasonable, and what we should demand and strive for, is that a company’s culture should be deliberate and considered, consistent over time and across geography and function, and communicated clearly, openly and transparently.
That’s the highest standard we should expect from organisations.
Then the highest standard we should deliver in return is to look at that culture and decide with honesty and integrity if that is what we actually want.
Taking a job because of a good salary, progression or cherry picking features of it whilst knowing the underlying way of working of that company is not for
When researching my book, Build
- How Netflix Reinvented HR – Harvard Business Review, January 2014
- Netflix is on a path to dominate the world, but will its culture survive? – Caroline Fairchild, Managing News Editor at LinkedIn, June 2016
- Learning from Netflix: How to Build a Culture of Freedom and Responsibility – Knowledge @ Wharton, May 2018
- How Big a Problem Is Netflix’s ‘Culture of Fear’? – Todd Spangler in Variety Magazine, October 26th 2018
Alternative and opposing viewpoints
As I’m researching an article, I often find opposing viewpoints. It seems wrong to hide them so here they are and you can make your own mind up.
- The Culture Of Fear Is So Ingrained In Netflix – Pascal-Emmanuel Gobry in Business Insider, December 22nd, 2010
- All the ways Netflix culture sounds like your worst work nightmare – Lila MacLellan in Quartz at Work, October 26th 2018
I own shares in Netflix and I’ve also been a Netflix customer for several years. I interviewed former Netflix Chief Talent Officer Patty McCord for my book, she is one of the endorsers on the back cover and we’ve met and talked several times. I have not been paid or compensated by Netflix or anyone else for this post.
I don’t monetise this blog in any way through affiliate links or advertising, and I don’t have any connections with any of the companies listed unless I’ve disclosed them clearly here.
Glenn Elliott is a technology entrepreneur, investor and advisor, MBA drop-out and recovering CEO with 20 years of experience. His bestselling book Build it: The Rebel Playbook for Employee Engagement is published by Wiley. He writes about people, culture, leadership, technology and the future of work weekly at www.glennelliott.me.
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