{"id":159106,"date":"2024-06-25T14:00:55","date_gmt":"2024-06-25T13:00:55","guid":{"rendered":"https:\/\/startups.co.uk\/?p=159106"},"modified":"2024-06-25T14:00:55","modified_gmt":"2024-06-25T13:00:55","slug":"netflix-culture-memo","status":"publish","type":"post","link":"https:\/\/startups.co.uk\/news\/netflix-culture-memo\/","title":{"rendered":"Netflix Culture Memo: what can we learn from the update?"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]Global streaming giant, Netflix has rolled out an update. Like many new tech releases, the change has caused a stir. But this is not a new platform feature or bug fix. It&rsquo;s a reboot of Netflix&rsquo;s famous <strong>culture memo<\/strong>; the set of principles used to shape its <a href=\"https:\/\/startups.co.uk\/strategy\/organisational-culture\/\">company culture<\/a>.<\/p>\n<p>When Netflix&rsquo;s first culture memo came in 2009, it set the precedent for HR teams in Silicon Valley. The startup hub has <a href=\"https:\/\/startups.co.uk\/news\/silicon-valley-startup-culture\/\">struggled to mature<\/a> its people policies, but Netflix paved the way with rules on pay (top-rate), employee performance (top-level), and decisions (top-down).<\/p>\n<p>15 years later, though, the company now employs an 11,000-strong workforce across the globe. There are things it wants to do differently. Netflix co-founder and former CEO Reed Hastings wrote on LinkedIn that this version is &ldquo;the draft I wish we had 15 years ago.&rdquo;<\/p>\n<p>So what is in the new guidelines, and how has it evolved since 2009? At over 2,000 words, the article is hardly a light read. Below, we&rsquo;ll see past the sales talk to reveal what businesses and HR leaders need to know from Netflix&rsquo;s new culture memo.<\/p>\n<h2>1. Less is more<\/h2>\n<p>Netflix&rsquo;s original culture memo was a bit of a beast. At 129 slides, it would have taken almost a full day to read it over; and a lifetime to memorise the content. As the memo says, &ldquo;we&rsquo;ve shortened it by focusing on what&rsquo;s most important, and what differentiates Netflix.&rdquo;<\/p>\n<p>The <a href=\"https:\/\/jobs.netflix.com\/culture\" target=\"_blank\" rel=\"noopener noreferrer\">new document<\/a> is still over 2,000 words and far from tight. But by doing away with case studies, summaries, and jokes, Netflix has managed to reduce its guidelines down to just four <a href=\"https:\/\/startups.co.uk\/strategy\/company-values\/\">company value<\/a> statements. These are:<\/p>\n<ul>\n<li><strong>The Dream Team:<\/strong> We aim only to have the highest performers at Netflix, modelling ourselves on a professional sports team, not a family.<\/li>\n<li><strong>People over Process: <\/strong>Our goal is to inspire and empower more than manage because employees have more impact when they&rsquo;re free to make decisions about their own work.<\/li>\n<li><strong>Uncomfortably Exciting:<\/strong> Netflix works best if you thrive on change because success in entertainment requires us to think differently, experiment and adapt (often quickly).<\/li>\n<li><strong>Great and Always Better:<\/strong> We often say we suck today by comparison to where we want to be in the future. So we focus on constant improvement, and the resilience needed to get there.<\/li>\n<\/ul>\n<p>These fundamentals are much easier for staff to understand, and for managers to relay. They are also, in many ways, clearer than Netflix&rsquo;s previous memo, which had so many ideas and buzzwords it apparently caused misunderstandings.<\/p>\n<p>&ldquo;We&rsquo;ve had our fair share of failures,&rdquo; the memo acknowledges, &ldquo;and a few people have taken advantage of our culture.&rdquo;<\/p>\n<h2>2. Employees should argue back<\/h2>\n<p>We all love a good Netflix drama. Apparently, so does its HR team. The streaming brand wants its workers to view constructive feedback as part of their everyday routine, arguing that &rdquo;extraordinary candor helps us improve faster as individuals and a company.&rdquo;<\/p>\n<p>There is a phrase that Netflix uses to explain this: &ldquo;farming for dissent&rdquo;. It says it &ldquo;expects informed captains to seek out different opinions and listen to people at every level.&rdquo;<\/p>\n<p>Still, good <a href=\"https:\/\/startups.co.uk\/blog\/communicate-better-with-team\/\">team communication<\/a> requires businesses to provide a space for employees to give feedback. Leaders must also be prepared to hear ideas or opinions they disagree with; as other large employers, such as Manchester United, were not.<\/p>\n<p>When remote staff disagreed with its <a href=\"https:\/\/startups.co.uk\/news\/return-to-office\/\">return to office (RTO) mandate<\/a> last month, the football club <a href=\"https:\/\/startups.co.uk\/news\/manchester-united-return-to-office\/\">offered them condolences<\/a> in the form of a &lsquo;voluntary&rsquo; redundancy package.<\/p>\n<h2>3. Laissez-faire leadership<\/h2>\n<p>Throughout the new memo, Netflix consistently demonstrates a &lsquo;laissez-faire&rsquo; <a href=\"https:\/\/startups.co.uk\/people\/management\/leadership-styles\/\">style of leadership<\/a>. Also known as &lsquo;delegative leadership&rsquo;, this form of management is all about stepping back and letting your employees make their own decisions.<\/p>\n<p>&ldquo;We avoid decision-making by committee, which tends to slow companies down and undermine accountability&rdquo; the memo states. &ldquo;This highly aligned and loosely coupled approach gives teams the freedom to move quickly and operate independently.&rdquo;<\/p>\n<p>Netflix has applied the anti-management ethos to its <a href=\"https:\/\/startups.co.uk\/people\/management\/employee-benefits-perks-retention\/\">employee benefit<\/a> package. It offers unlimited vacation time to employees, and even has a <a href=\"https:\/\/startups.co.uk\/news\/netflix-no-work-hours\/#:~:text=Netflix%20is%20unique%20in%20the,have%20to%20ask%20managerial%20permission.\">&lsquo;no work hours&rsquo; policy<\/a> designed to give workers complete control over their working schedule and time off.<\/p>\n<p>Taking the hands off the wheel is an attractive notion for organisations, who want to believe their staff will rise to the occasion. Netflix certainly thinks its &lsquo;dream team&rsquo; hiring strategy is sound enough, stating &ldquo;we aim only to have high performers at Netflix.&rdquo;<\/p>\n<p>Still, business owners must be aware that they must <a href=\"https:\/\/startups.co.uk\/recruiting\/hiring-right\">hire right<\/a> for the policy to work, and for them to source individuals who thrive independently.<\/p>\n<h2>4. Freedom has rules<\/h2>\n<p>Netflix has balanced its desire to give staff more control by coupling &ldquo;freedom and responsibility&rdquo;. This phrase was the title of its original culture memo. But Netflix co-CEO Greg Peters told <a href=\"https:\/\/www.theverge.com\/24182520\/netflix-co-ceo-memo-ads-subscription-price-decoder-podcast-interview\" target=\"_blank\" rel=\"noopener noreferrer\">The Verge<\/a> that staff only readily embraced the former concept.<\/p>\n<p>&ldquo;What people ended up hearing was, &ldquo;Oh, I can join Netflix and essentially all the decisions that I make are mine, and I don&rsquo;t have to worry about that overarching responsibility to our collective corporate goals,&rdquo; said Peters.<\/p>\n<p>The new memo caveats that while employees are &ldquo;free to make decisions about their own work&rdquo;, this &ldquo;should not be confused with hands-off management&rdquo;.<\/p>\n<p>&ldquo;Managers need to be involved in the work being done around them, and actively coach their teams&rdquo;, the memo adds. &ldquo;They may also have to step in when someone is about to make a decision that is unethical or could materially harm Netflix.&rdquo;<\/p>\n<p>Manage, but don&rsquo;t be managed. It&rsquo;s a difficult balance to strike, and may not avoid the past misunderstandings Peters alludes to in the context of a laissez-faire leader approach.<\/p>\n<h2>5. The &lsquo;keeper test&rsquo; will stay<\/h2>\n<p>HR teams will likely already be familiar with Netflix&rsquo;s &lsquo;keeper test&rsquo;. The instructions are simple.&nbsp; Managers should ask themselves: &lsquo;if X wanted to leave, would I fight to keep them?&rsquo;. If the answer is &lsquo;no&rsquo;, the worker is let go.<\/p>\n<p>Commenters often use this policy to exemplify how cutthroat the tech industry is in <a href=\"https:\/\/startups.co.uk\/project-management-software\/performance-management\/\">performance reviews<\/a>. Perhaps spotting a PR problem, Netflix has softened its language.<\/p>\n<p>The new version clarifies that &ldquo;we encourage everyone to speak to their managers about what&rsquo;s going well and what&rsquo;s not on a regular basis. This helps avoid surprises.&rdquo;<\/p>\n<p>Employees who make mistakes also may not be fired if they were pushing for innovation. &ldquo;You need people who challenge the status quo [so] we stick with employees through short-term bumps&rdquo;, says the memo. Whether this will qualm nervous new hires is debatable.<\/p>\n<p>Budget is also a factor. Last year, a Netflix spokesperson said the company had made <a href=\"https:\/\/variety.com\/2022\/tv\/news\/netflix-layoffs-fired-jobs-lost-1235301553\/\" target=\"_blank\" rel=\"noopener noreferrer\">hundreds of layoffs<\/a> &ldquo;so that our costs are growing in line with our slower revenue growth.&rdquo;<\/p>\n<h2>6. No to meaningful work<\/h2>\n<p>The new memo reaffirms Netflix&rsquo;s belief that staff should &ldquo;support the artistic expression of the creators we choose to work with [even] if some stories run counter to personal values.&rdquo;<\/p>\n<p>Netflix first introduced this value in 2022, one year after the company <a href=\"https:\/\/www.gq-magazine.co.uk\/article\/hannah-gadsby-gender-agenda-interview-2024\" target=\"_blank\" rel=\"noopener noreferrer\">came under fire<\/a> for airing what many saw as transphobic jokes from the comedian, Dave Chapelle. As a result of the controversy, two Netflix employees <a href=\"https:\/\/www.theguardian.com\/media\/2021\/nov\/23\/netflix-dave-chappelle-special-labor-complaint\" target=\"_blank\" rel=\"noopener noreferrer\">resigned from the company<\/a> in protest.<\/p>\n<p>With its latest version, Netflix has cemented its stance against <a href=\"https:\/\/startups.co.uk\/strategy\/meaningful-work-what-is-it-and-what-are-the-benefits\/\">meaningful work<\/a>, a post-pandemic trend where individuals seek out jobs that align with their personal beliefs.<\/p>\n<p>&ldquo;We understand that, depending on our roles, we may need to work on TV shows, films or games we perceive to be harmful,&rdquo; the memo declares. &ldquo;If you&rsquo;d find it hard to support the breadth of our slate, Netflix is probably not the best place for you.<\/p>\n<p>Whether that will affect Netflix&rsquo; <a href=\"https:\/\/startups.co.uk\/people\/recruiting\/recruitment-process\/\">recruitment<\/a> efforts is debatable. In a survey by Qualtrics, 56% of employees said they wouldn&rsquo;t work for a company that has values they disagree with.<\/p>\n<h2>Culture &ldquo;key to success&rdquo; for Netflix<\/h2>\n<p>That Netflix has updated its culture memo is a reassuring statement for small business owners who care about shaping a positive, inclusive workplace.<\/p>\n<p>In an era when many CEOs are <a href=\"https:\/\/startups.co.uk\/news\/ceos-war-against-dei\/\">deprioritising HR spending<\/a>, Netflix has reaffirmed its commitment to these types of people-based values.<\/p>\n<p>Sergio Ezama, Head of Talent at Netflix, said: &ldquo;I&rsquo;m often asked, why do we place so much emphasis on the culture memo? We believe that our culture is key to our success.<\/p>\n<p>&ldquo;We want to ensure that anyone applying for a job here knows what motivates Netflix &ndash; and all employees are working from a shared understanding of what we value most.&rdquo;[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text]Global streaming giant, Netflix has rolled out an update. Like many new tech releases, the change has caused a stir. But this is not a new platform feature or bug fix. It&rsquo;s a reboot of Netflix&rsquo;s famous culture memo; the set of principles used to shape its company culture. When Netflix&rsquo;s first culture memo came [&hellip;]<\/p>\n","protected":false},"author":91483,"featured_media":159107,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3008],"tags":[4369],"acf":[],"yoast_head":"\n<title>6 Takeaways From The New Netflix Culture Memo - Startups.co.uk<\/title>\n<meta name=\"description\" content=\"Netflix\u2019s 2009 memo was called \u2018the most important document to ever come out of Silicon Valley\u2019. 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