Why Netflix Has the Best Work Culture—and How Your Company Can Too
We’ve often seen and written about Netflix’s outstanding office culture. From extended maternity and paternity leave to unlimited vacation, the Netflix rulebook seems to promote freedom, lots of time off, and autonomy. So how has it inspired one of the most lauded work cultures and a fleet of loyal employees? By reinventing HR. Former Netflix employee and human resources expert Patty McCord rewrote the book on office culture and performance motivation in an HR presentation for Netflix, and it has since been shared more than five million times. Sheryl Sandberg says McCord’s HR presentation “may well be the most important document ever to come out of the Valley.” Scroll through to learn about the guidelines that make Netflix’s work culture so attractive.
Rather than chastise an employee for doing something wrong, value your employee enough to think about how you may have misguided him or her. In the Netflix culture guide, McCord writes the following: “Managers: When one of your talented people does something dumb, don’t blame them. Instead, ask yourself what context you failed to set. High-performance people will do better if they understand the context.” So, for example, if you are adding to or adjusting someone’s workflow, explain why and what the end goal is. That way expectations and desired outcome are effectively communicated.
McCord acknowledges that many companies, such as the once-disgraced Enron, have “nice-sounding value statements displayed in the lobby.” These may include values like integrity, communication, respect, and excellence. But, she concludes, “the actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go.” It’s the age-old wisdom of show, don’t tell. If you preach communication but foster an office environment where everyone sits in silence with their headphones on, you may want to realign your values.
Netflix hires “outstanding” employees only. There is no room for adequate at Reed Hasting’s video streaming company. “Those hires often lead to generous severance packages,” says the CEO of Netflix. McCord provides evidence that creativity is the most important asset in an employee. “In procedural work, the best are 2x better than the average. In creative/inventive work, the best are 10x [more creative],” she writes in the deck.
Netflix advocates for the golden rule. “Treat people with respect independent of their status or disagreement with you,” McCord writes in the PowerPoint. Even in the most stressful situations, always maintain your composure. Make sure not to take your anxiety or anger out on a team member, especially publically. Compose yourself and calmly articulate your concerns.
If you want the best talent, you have to pay the best. It’s that simple. You should never regret being generous with valuable talent. It will make your employees work harder, feel more valued, and, ultimately, be more committed to your company’s bottom line. Money is one of the ways to show how much you value your team. This is not a time to be greedy. Remember this: “One outstanding employee gets more done and costs less than two adequate employees.” Netflix endeavors to have only outstanding employees.
Last year Netflix announced that it began sponsoring unlimited paid maternity and paternity leave for all full-time employees. If you are a new mom or dad while working at Netflix, you now have the option of taking off “however long you feel you need to” during your newborn’s first year of life. Netflix recognizes that in order to keep the most talented individuals in their field at its company, its has to offer the best environment. The company also states, “Experience shows people perform better at work when they’re not worrying about home.”
“Over the years,” writes McCord in Harvard Business Review, “we learned that if we asked people to rely on logic and common sense instead of on formal policies, most of the time we would get better results, and at a lower cost.” McCord believes that it is all about hiring the right people. “If you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing.” If 97% of your workforce does the right thing (i.e., what’s best for your company) without you having to spend endless money and time writing and enforcing HR policies, then you are being efficient with your resources, and your employees will undoubtedly be happier without all of the red tape.
To view McCord's full Netflix culture PowerPoint, visit Business Insider.
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