The secrets of Reed Hastings and Netflix culture

Recent share price swings aside, Netflix is among the most innovative companies of the last 2 decades.

They’re also incredibly transparent, to our benefit.

I first read this presentation 4 years ago. I remember thinking, “holy shit”, and immediately forwarding to the shopkick team.

I’ve re-read it 3 or 4 times. Still not enough.

It’s now part of 1-Read-A-Day.

Here are my takeaways

I bias towards the unusual (since we all know the old yarns of “A players attract other A players”, “employees are your #1 asset”, blah yada etc)

1. A company’s REAL values are shown by who’s rewarded, who’s promoted, and who’s fired (slide 6)

2. “Adequate performance gets a generous severance package” (slide 22, reminds me a little of Zappos’ $1K to quit) []

3. The Keeper Test: “Which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?” (slide 25)

4. “Brilliant jerks” are avoided – hurts effective teamwork (slide 35)

5. Growth –> More complexity –> More processes –> Less talent –> Long-term irrelevance (slide 52)

6. Netflix’s solution to above? Increase talent density to offset rising complexity. Do this by hiring only “high performance people” and giving them more freedom (slide 54)

7. Example: no vacation policy; take what you want (now a startup-world standard) (slide 69)

8. Departments are “highly aligned” (agree on goals), and “loosely coupled” (freedom in implementation) (slide 93)

9. Pay top of market, because Netflix only wants top people – top of market is re-defined with each hire, each performance review (slide 96)

10. Comp is salary-focused. Employees can choose to trade salary for stock options (109)

11. Everyone gets $10K in benefits, from receptionist to CEO (slide 109) – this was published in 2009

12. All options are fully vested – employees stay for the right reasons

13. For promotion, new job must be “big enough”, and you must be a superstar in your current role

That’s it, folks!

Click here to read about the daily habits that I track and why.