The Freedom & Responsibility Culture of Netflix….and why you should sit up and take notice!

 

Netflix have created a real buzz around their revolutionising of traditional HR and their powerpoint deck on the Freedom & Responsibility Culture has been viewed on the web more than 5 million times. Now why should we sit up and take note of what they have to say….
well here’s just a couple of reasons:

  • They have been phenomenally successful – In 2013 alone Netflix’s stock more than tripled, they grew their US subscriber base to almost 29 million, and just to top it all off, they won 3 Emmy awards.
  • They began their change as a growing SME – Netflix began to recognise the need for change and shape new philosophies in late 2001 when they had only 120 employees, starting to mould a culture for success to become the company they are today.

So now we have established why we should take a note of Netflix’s culture, here’s a couple of their pillars for success…

1. Hire only fully formed Adults…

Netflix pride themselves on only hiring responsible adults with a passion for high performance and the best interests of their company at heart, do this and they believe that 97% of employees will do the right thing. This adult belief system allows companies to provide flexible benefits and incentives, whilst minimising the risk of people taking advantage, because a fully formed, responsible and high performance driven adult would not do anything that would not be in the best interests of their company.

On this basis Netflix have introduced two non-policies

  • Unlimited vacation – As long as employees take vacation time that does not interfere with work or projects, they can take vacation whenever they want. Virgin have already taken a leaf from Netflix’s book on this and introduced this non-policy into their US and UK operations.
  • A five word expense policy – “Act in Netflix’s best interests.” In an adult culture, employees spend company money as if it were their own, normally frugally. And by working in this way they eliminate the need for job roles policing expenses or complicated policies.

2. Truthful performance…

Netflix operates an open and honest system to performance management, they hold 360 reviews in which people are asked to identify things that a colleague should start, stop and continue. By being very open and truthful there is no need for performance management as it is clear if an employee is performing, or not. By being very open and truthful there is no need for performance management Click To Tweet

3. Managers own team creation…

Team managers at Netflix are encouraged to create winning teams. Unlike many companies, where managers often manage the people they have been given, Netflix requires its managers to envision their goals for their team, then build the right team to execute this goal, therefore recruiting only the right people (not a nearly there fit). As part of their strategy for attracting the best people, Netflix operate a market value salary scheme. They pay a person what they are worth in the market. If they grow their skills and become more valuable then they get a raise in salary, if they stay the same, their salary does too.

4. Leaders create culture…

At DUO we see many businesses where their cultural aspirations and reality don’t quite match up, and often leaders let a culture happen rather than creating the best one. Netflix recognise this and challenge their leaders to consistently create the culture needed for the business to be successful. Employees need to be aware of the culture in order to become part of it, and its the responsibility of leaders to communicate this. There also needs to be an awareness and management of sub cultures within an organisation that should flex and change during growth or company change.

5. Replace traditional HR with business innovation…

Many HR teams focus on traditional HR incentives or models, as opposed to thinking like business people and focussing on questions like “how can we ensure employees know what we mean by high performance?” At Netflix, talent managers are held responsible for driving innovation and business strategy through their HR activities to ensure that all are linked to business needs as opposed to traditional HR models.Don't let culture happen in your company - create it! Click To Tweet

 

By sharing this information with you, hopefully many of you will look at how you can improve your people culture to drive business growth and operational efficiency. Take a look at Netflix’s model a little more at jobs.netflix.com, its definitely worth your time!

 

To find out how we can help you implement the best strategies for talent acquisition and development, drop us a line at info@duoglobalconsulting.com, we would love to hear from you!