Netflix Culture and Values

I’m a strong believer that corporate culture is the dominant parameter in the mix of what makes up a great company.  This blog devotes an entire category to posts about corporate culture. But I’ve never seen anything like the Netflix culture and values document, which is posted on their jobs site. The post is very long and you may not feel you have the time to read it all or maybe your culture is “all set.” While I’m going to excerpt it and annotate based on my own experience,  it I do encourage all founders, especially those at the startup stage, to not only read this document but to use it as a catalyst to document your company’s culture and values.

While Netflix doesn’t use the term mission, the first two sentences of the culture document read like a mission to me:

Entertainment, like friendship, is a fundamental human need; it changes how we feel and gives us common ground. Netflix is better entertainment at lower cost and greater scale than the world has ever seen. We want to entertain everyone, and make the world smile.

I find this very clear and concise, but one reason I subscribe to Netflix is for the wealth of documentaries they provide. Yet their mission is totally focused on entertainment; informing people is not part of it.

Mission and culture go hand-in-hand. Your mission is the purpose of your company and is the lodestar for employees and stakeholders.

Netflix sees itself as highly differentiated from other companies as they:

1. encourage independent decision-making by employees
2. share information openly, broadly, and deliberately
3. are extraordinarily candid with each other
4. keep only our highly effective people
5. avoid rules

Before the document spells out the company’s values there’s a real tonesetter paragraph:

Many companies have value statements, but often these written values are vague and ignored. The real values of a firm are shown by who gets rewarded or let go. Below are our real values, the specific behaviors and skills we care about most. The more these values sound like you, and describe people you want to work with, the more likely you will thrive at Netflix.

Thus values are actionable, unlike most companies: people get hired and fired dependent on their congruency with the company’s values. That’s the most powerful method I’ve seen for enforcing values throughout a company. However, the action lacks granularity. Reducing a company’s values to the binary “You keep your job or your fired” doesn’t help much with respect to day to day activities.

Here’s the list of the Netflix values. There’s a lot of them and a lot of text to read. I’m going to simply list them with annotations based on my experience, which ranges from startups to a company doing $7 billion/year in revenue. I do highly recommend you find the time to read this entire document and see how your company’s values stack up. Do you even have a written document delineating your values?

Judgment

As I’ve written elsewhere, startups (and mature companies to a lesser extent) are decision machines. Making great decisions will cause your company to stand or fall. Unlike purely data-driven companies like Google, Netflix see data as only one component in the making of judgments.

Communication

One of my sayings that I convey to my founder mentees is that 90% of problems can be traced backed to poor communications. Of course, I don’t have any data to back this up and I exaggerate to make a point. But it’s obvious that Netflix sees both oral and written communications as mission-critical, as this value is number two in the list.

Curiosity

Curiosity is what drives people to learn. How a company and its staff learn is a sustainable competitive advantage. As a hiring manager I always looked for curious people. In fact I would judge job candidates on the number and quality of their questions to me. And I judge the success of presentations by the number and quality of the audience’s questions.

Courage

This one is interesting, as the article I read yesterday on Flipboard, but unfortunately didn’t save, about Netflix’s culture said that many people live in fear there, fear of losing their jobs, fear of appearing weak if they don’t fire anyone from their team. This may well be an unintended consequence of Netflix’s culture or perhaps Reed Hastings believes that fear is a good and effective motivator. Certainly there are many successful sports coaches who use fear of losing your job to motivate their teams.

Passion

I always looked for self-motivated people when I hired. And the trait I looked for was enthusiasm, enthusiasm for our company, enthusiasm for our products, enthusiasm for their work. Without passion or enthusiasm no one will be self-motivated.

Selflessness

This is the secret formula for winning sports teams, exemplified by the team I’ve rooted for since their inception: The New England Patriots pro football team. Players only care about one thing: winning. Unlike most other athletes they could care less about their individual statistics, wins vs. losses is the only statistic that matters. As Coach Bill Belichick says, “Statistics are for losers.”

Innovation

While I find this word to be one of the most over-used in the English language, Netflix does a great job of spelling out what innovation means to them and how they judge it in their employees.

Inclusion

I’ve always looked for great collaborators, perhaps because I lack any individual skills or expertise and enjoy working with others.  But again Netflix spells out what inclusion means to them in six concise bullet points.

Integrity

While this value is often assumed, it’s clear that Netflix makes few assumptions and spells out what they mean by integrity.

Impact

Last but surely not least (and worthiness imputed by position is one severe problem with lists such as this one).  The key point is focusing on results over process. That’s how to keep bureaucracy – the brewer of processes – at bay in every company.

The Netflix culture document goes on for many pages, touching on what makes a “Dream Team.” I would worry that every candidate and every hire actually reads and retains all this information. The values are single words, amplified by five or six short bullet points. But the Dream Team section is highly wordy, pure text unrelieved by any images or diagrams. And in my experience, people just don’t read. But I do encourage you to read this document. It is truly extraordinary.

I’ll end this annotation of the values and culture of Netflix with their excerpt from The Little Prince by Antoine Saint-Exupery, a book I read in French class but surely did not understand at the time:

If you want to build a ship,

don’t drum up the people

to gather wood, divide the

work, and give orders.

Instead, teach them to yearn

for the vast and endless sea.