For your final project you are helping prepare Sharon Slade, the chief human resources officer of Netflix, for a serious performance discussion with Alice Jones, who may be at risk of being terminated. One key component of your preparation is evaluating the organizational culture at Netflix and assisting Sharon Slade in demonstrating the skills that will help get the negotiation process off to a good start. She can accomplish this by taking into account the hygiene factors and intrinsic motivators as discussed in the Herzberg video clips (located in the Module Three Readings and Resources folder).One description of the espoused Netflix organizational culture is stated in Slide 6 of the slide deck Netflix Culture: Freedom and Responsibility that you viewed in Module One. Slide 6 states: “The actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go.”For this discussion post, craft a response which addresses the following question:Consider the seven aspects of the Netflix culture, which are listed below:Values are what we value [Judgment, Communication, Impact, Curiosity, Innovation, Courage, Passion, Honesty, & Selflessness]High PerformanceFreedom & ResponsibilityContext, not ControlHighly Aligned, Loosely CoupledPay Top of MarketPromotions & DevelopmentIndicate whether or not you agree with the seven values, explaining why or why not. Add two intrinsic values that you believe would improve the organizational culture at Netflix. Provide reasons that justify your choice.CultureThis is an archive of prior version New version is at: jobs.netflix.com/culture 1Netflix Culture: Freedom & Responsibility 2We Seek Excellence Our culture focuses on helping us achieve excellence 3Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 4Many companies have nice sounding value statements displayed in the lobby, such as: 5 Integrity Communication Respect ExcellenceEnron, whose leaders went to jail, and which went bankrupt from fraud, had these values displayed in their lobby: Integrity Communication Respect Excellence 6 (These values were not, however, what was really valued at Enron)The actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go 7Actual company values are the behaviors and skills that are valued in fellow employees 8At Netflix, we particularly value the following nine behaviors and skills in our colleagues meaning we hire and promote people who demonstrate these nine 9You make wise decisions (people, technical, business, and creative) despite ambiguity You identify root causes, and get beyond treating symptoms You think strategically, and can articulate what you are, and are not, trying to do You smartly separate what must be done well now, and what can be improved later 10 Judgment11 Communication You listen well, instead of reacting fast, so you can better understand You are concise and articulate in speech and writing You treat people with respect independent of their status or disagreement with you You maintain calm poise in stressful situations12 Impact You accomplish amazing amounts of important work You demonstrate consistently strong performance so colleagues can rely upon you You focus on great results rather than on process You exhibit bias-to-action, and avoid analysis-paralysis13 Curiosity You learn rapidly and eagerly You seek to understand our strategy, market, customers, and suppliers You are broadly knowledgeable about business, technology and entertainment You contribute effectively outside of your specialty14 Innovation You re-conceptualize issues to discover practical solutions to hard problems You challenge prevailing assumptions when warranted, and suggest better approaches You create new ideas that prove useful You keep us nimble by minimizing complexity and finding time to simplify15 Courage You say what you think even if it is controversial You make tough decisions without agonizing You take smart risks You question actions inconsistent with our values16 Passion You inspire others with your thirst for excellence You care intensely about Netflixs success You celebrate wins You are tenacious17 Honesty You are known for candor and directness You are non-political when you disagree with others You only say things about fellow employees you will say to their face You are quick to admit mistakes18 Selflessness You seek what is best for Netflix, rather than best for yourself or your group You are ego-less when searching for the best ideas You make time to help colleagues You share information openly and proactivelySeven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 19Imagine if every person at Netflix is someone you respect and learn from 20Great Workplace is Stunning Colleagues Great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices We do some of these things, but only if they are efficient at attracting and retaining stunning colleagues 21Like every company, we try to hire well 22Unlike many companies, we practice: adequate performance gets a generous severance package 23Were a team, not a family Were like a pro sports team, not a kids recreational team Netflix leaders hire, develop and cut smartly, so we have stars in every position 24The Keeper Test Managers Use: 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? 25The Keeper Test Managers Use: 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? 26 The other people should get a generous severance now, so we can open a slot to try to find a star for that roleHonesty Always As a leader, no one in your group should be materially surprised of your views 27Honesty Always Candor is not just a leaders responsibility, and you should periodically ask your manager: If I told you I were leaving, how hard would you work to change my mind? 28All of Us are Responsible for Ensuring We Live our Values You question actions inconsistent with our values is part of the Courage value Akin to the honor code pledge: I will not lie, nor cheat, nor steal, nor tolerate those who do 29Pro Sports Team Metaphor is Good, but Imperfect Athletic teams have a fixed number of positions, so team members are always competing with each other for one of the precious slots 30Corporate Team The more talent we have, the more we can accomplish, so our people assist each other all the time Internal cutthroat or sink or swim behavior is rare and not tolerated 31We Help Each Other To Be Great 32Isnt Loyalty Good? What about Hard Workers? What about Brilliant Jerks? 33Loyalty is Good Loyalty is good as a stabilizer People who have been stars for us, and hit a bad patch, get a near term pass because we think they are likely to become stars for us again We want the same: if Netflix hits a temporary bad patch, we want people to stick with us But unlimited loyalty to a shrinking firm, or to an ineffective employee, is not what we are about 34Hard Work Not Relevant We dont measure people by how many hours they work or how much they are in the office We do care about accomplishing great work Sustained B-level performance, despite A for effort, generates a generous severance package, with respect Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay 35Brilliant Jerks Some companies tolerate them For us, cost to effective teamwork is too high Diverse styles are fine as long as person embodies the 9 values 36Why are we so insistent on high performance? In procedural work, the best are 2x better than the average. In creative/inventive work, the best are 10x better than the average, so huge premium on creating effective teams of the best 37Why are we so insistent on high performance? Great Workplace is Stunning Colleagues 38Our High Performance Culture Not Right for Everyone Many people love our culture, and stay a long time They thrive on excellence and candor and change They would be disappointed if given a severance package, but lots of mutual warmth and respect Some people, however, value job security and stability over performance, and dont like our culture They feel fearful at Netflix They are sometimes bitter if let go, and feel that we are political place to work Were getting better at attracting only the former, and helping the latter realize we are not right for them 39Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 40The Rare Responsible Person Self motivating Self aware Self disciplined Self improving Acts like a leader Doesnt wait to be told what to do Picks up the trash lying on the floor 41Responsible People Thrive on Freedom, and are Worthy of Freedom 42Our model is to increase employee freedom as we grow, rather than limit it, to continue to attract and nourish innovative people, so we have better chance of sustained success 43Most Companies Curtail Freedom as they get Bigger Bigger Employee Freedom 44Why Do Most Companies Curtail Freedom and Become Bureaucratic as they Grow? 45Desire for Bigger Positive Impact Creates Growth Growth 46Growth Increases Complexity Complexity 47Growth Also Often Shrinks Talent Density % High Performance Employees Complexity 48Chaos Emerges % High Performance Employees Chaos and errors spike here business has become too complex to run informally with this talent level Complexity 49Process Emerges to Stop the Chaos Procedures No one loves process, but feels good compared to the pain of chaos Time to grow up becomes the professional managements mantra 50Process-focus Drives More Talent Out % High Performance Employees 51Process Brings Seductively Strong Near-Term Outcome A highly-successful process-driven company With leading share in its market Minimal thinking required Few mistakes made very efficient Few curious innovator-mavericks remain Very optimized processes for its existing market Efficiency has trumped flexibility 52Then the Market Shifts Market shifts due to new technology or competitors or business models Company is unable to adapt quickly because the employees are extremely good at following the existing processes, and process adherence is the value system Company generally grinds painfully into irrelevance 53Seems Like Three Bad Options 1. Stay creative by staying small, but therefore have less impact 2. Avoid rules as you grow, and suffer chaos 3. Use process as you grow to drive efficient execution of current model, but cripple creativity, flexibility, and ability to thrive when your market eventually changes 54A Fourth Option Avoid Chaos as you grow with Ever More High Performance People not with Rules Then you can continue to mostly run informally with self-discipline, and avoid chaos The run informally part is what enables and attracts creativity 55The Key: Increase Talent Density faster than Complexity Grows 56Increase Talent Density Top of market compensation Attract high-value people through freedom to make big impact Be demanding about high performance culture 57Minimize Complexity Growth Few big products vs many small ones Eliminate distracting complexity (barnacles) Be wary of efficiency optimizations that increase complexity and rigidity 58 Note: sometimes long-term simplicity is achieved only through bursts of complexity to rework current systemsWith the Right People, Instead of a Culture of Process Adherence, We have a Culture of Creativity and Self-Discipline, Freedom and Responsibility 59Is Freedom Absolute? Are all rules & processes bad? 60Freedom is not absolute Like free speech there are some limited exceptions to freedom at work 61Two Types of Necessary Rules 1. Prevent irrevocable disaster Financials produced are wrong Hackers steal our customers credit card info 2. Moral, ethical, legal issues Dishonesty, harassment are intolerable 62Mostly, though, Rapid Recovery is the Right Model Just fix problems quickly High performers make very few errors Were in a creative-inventive market, not a safety-critical market like medicine or nuclear power You may have heard preventing error is cheaper than fixing it Yes, in manufacturing or medicine, but Not so in creative environments 63Good versus Bad Process Good process helps talented people get more done Letting others know when you are updating code Spend within budget each quarter so dont have to coordinate every spending decision across departments Regularly scheduled strategy and context meetings Bad process tries to prevent recoverable mistakes Get pre-approvals for $5k spending 3 people to sign off on banner ad creative Permission needed to hang a poster on a wall Multi-level approval process for projects Get 10 people to interview each candidate 64Rule Creep Bad processes tend to creep in Preventing errors just sounds so good We try to get rid of rules when we can, to reinforce the point 65Example: Netflix Vacation Policy and Tracking Until 2004 we had the standard model of N days per year 66Meanwhile Were all working online some nights and weekends, responding to emails at odd hours, spending some afternoons on personal time, and taking good vacations 67An employee pointed out We dont track hours worked per day or per week, so why are we tracking days of vacation per year? 68We realized We should focus on what people get done, not on how many days worked Just as we dont have an 9am-5pm workday policy, we dont need a vacation policy 69Netflix Vacation Policy and Tracking there is no policy or tracking 70Netflix Vacation Policy and Tracking there is no policy or tracking There is also no clothing policy at Netflix, but no one comes to work naked Lesson: you dont need policies for everything 71No Vacation Policy Doesnt Mean No Vacation Netflix leaders set good examples by taking big vacations and coming back inspired to find big ideas 72Another Example of Freedom and Responsibility 73Most companies have complex policies around what you can expense, how you travel, what gifts you can accept, etc. Plus they have whole departments to verify compliance with these policies 74Netflix Policies for Expensing, Entertainment, Gifts & Travel: Act in Netflixs Best Interest (5 words long) 75Act in Netflixs Best Interest Generally Means 1. Expense only what you would otherwise not spend, and is worthwhile for work 2. Travel as you would if it were your own money 3. Disclose non-trivial vendor gifts 4. Take from Netflix only when it is inefficient to not take, and inconsequential taking means, for example, printing personal documents at work or making personal calls on work phone: inconsequential and inefficient to avoid 76Freedom and Responsibility Many people say one cant do it at scale But since going public in 2002, which is traditionally the end of freedom, weve substantially increased talent density and employee freedom 77Summary of Freedom & Responsibility: As We Grow, Minimize Rules Inhibit Chaos with Ever More High Performance People Flexibility is More Important than Efficiency in the Long Term 78Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 79If 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. -Antoine De Saint-Exupery, Author of The Little Prince 80The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people 81Context, not Control Context (embrace) Strategy Metrics Assumptions Objectives Clearly-defined roles Knowledge of the stakes Transparency around decision-making Control (avoid) Top-down decision-making Management approval Committees Planning and process valued more than results Provide the insight and understanding to enable sound decisions 82Good Context Link to company/functional goals Relative priority (how important/how time sensitive) Critical (needs to happen now), or Nice to have (when you can get to it) Level of precision & refinement No errors (credit cards handling, etc ), or Pretty good / can correct errors (website), or Rough (experimental) Key stakeholders Key metrics / definition of success 83Managers: When one of your talented people does something dumb, dont blame them Instead, ask yourself what context you failed to set 84Managers: When you are tempted to control your people, ask yourself what context you could set instead Are you articulate and inspiring enough about goals and strategies? 85Why Managing Through Context? High performance people will do better work if they understand the context 86Investing in Context This is why we do new employee college, frequent department meetings, and why we are so open internally about strategies and results 87Exceptions to Context, not Control Control can be important in emergency No time to take long-term capacity-building view Control can be important when someone is still learning their area Takes time to pick up the necessary context Control can be important when you have the wrong person in a role Temporarily, no doubt 88Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 89Three Models of Corporate Teamwork 1. Tightly Coupled Monolith 2. Independent Silos 3. Highly Aligned, Loosely Coupled 90Tightly Coupled Monolith Senior management reviews nearly all tactics e.g., CEO reviews all job offers or advertising Lots of x-departmental buy-in meetings Keeping other internal groups happy has equal precedence with pleasing customers Mavericks get exhausted trying to innovate Highly coordinated through centralization, but very slow, and slowness increases with size 91Independent Silos Each group executes on their objectives with little coordination Everyone does their own thing Work that requires coordination suffers Alienation and suspicion between departments Only works well when areas are independent e.g., aircraft engines and blenders for GE 92#3 is the Netflix Choice 1. Tightly Coupled Monolith 2. Independent Silos 3. Highly Aligned, Loosely Coupled 93Highly Aligned, Loosely Coupled Highly Aligned Strategy and goals are clear, specific, broadly understood Team interactions focused on strategy and goals, rather than tactics Requires large investment in management time to be transparent and articulate and perceptive Loosely Coupled Minimal cross-functional meetings except to get aligned on goals and strategy Trust between groups on tactics without previewing/approving each one so groups can move fast Leaders reaching out proactively for ad-hoc coordination and perspective as appropriate Occasional post-mortems on tactics necessary to increase alignment 94Highly Aligned, Loosely Coupled teamwork effectiveness depends on high performance people and good context Goal is to be Big and Fast and Flexible 95Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 96Pay Top of Market is Core to High Performance Culture One outstanding employee gets more done and costs less than two adequate employees We endeavor to have only outstanding employees 97Three Tests for Top of Market for a Person 1. What could person get elsewhere? 2. What would we pay for replacement? 3. What would we pay to keep that person? If they had a bigger offer elsewhere 98ConfidentialTakes Great Judgment Goal is to keep each employee at top of market for that person Pay them more than anyone else likely would Pay them as much as a replacement would cost Pay them as much as we would pay to keep them if they had higher offer from elsewhere 99Titles Not Very Helpful Lots of people have the title Major League Pitcher but they are not all equally effective Similarly, all people with the title Senior Marketing Manager or Director of Engineering are not equally effective So the art of compensation is answering the Three Tests for each employee 100Annual Comp Review At many firms, when employees are hired, market compensation applies But at comp review time, it no longer applies! At Netflix, market comp always applies: Essentially, top of market comp is re-established each year for high performing employees At annual comp review, manager has to answer the Three Tests for the personal market for each of their employees 101ConfidentialNo Fixed Budgets There are no centrally administered raise pools each year Instead, each manager aligns their people to top of market each year the market will be different in different areas 102Compensation Over Time Some people will move up in comp very quickly because their value in the marketplace is moving up quickly, driven by increasing skills and/or great demand for their area Some people will stay flat because their value in the marketplace has done that Depends in part on inflation and economy Always top of market, though, for that person 103Compensation Not Dependent on Netflix Success Whether Netflix is prospering or floundering, we pay at the top of the market Sports teams with losing records still pay talent the market rate, to get back to winning 104Bad Comp Practices Manager sets pay at Nth percentile of title- linked compensation data The Major League Pitcher problem Manager cares about internal parity instead of external market value Fairness in comp is being true to the market Manager gives everyone a 4% raise Very unlikely to reflect the market 105When Top of Market Comp Done Right… We will rarely counter with higher comp when someone is voluntarily leaving because we have already moved comp to our max for that person Employees will feel they are getting paid well relative to their other options in the market 106Versus Traditional Model Traditional model is good prior year earns a raise, independent of market Problem is employees can get materially under- or over-paid relative to the market, over time When materially under-paid, employees switch firms to take advantage of market-based pay on hiring When materially over-paid, employees are trapped in current firm Consistent market-based pay is better model 107Employee Success Its pretty ingrained in our society that the size of ones raise is the indicator of how well one did the prior year but for us the other factor is the outside market Employee success is still a big factor in comp because it influences market value In particular, how much we would pay to keep the person 108Good For Each Employee to Understand Their Market Value Its a healthy idea, not a traitorous one, to understand what other firms would pay you, by interviewing and talking to peers at other companies Talk with your manager about what you find in terms of comp Stay mindful of company confidential information 109Efficiency Big salary is the most efficient form of comp Most motivating for any given expense level No bonuses Instead, put all that expense into big salaries, and give people freedom to spend their salaries as they think best Employees can decide how much Netflix stock they want, versus cash 110No Vesting or Deferred Comp We dont want managers to own their people with vesting all comp is fully vested We want managers to be responsible for creating a great place to work, and paying at the top of market Employees are free to leave us anytime, without penalty, but nearly everyone stays Employees stay because they are passionate about their work, and well paid, not because of a deferred compensation system 111No Ranking Against Other Employees We avoid top 30% and bottom 10% rankings amongst employees We dont want employees to feel competitive with each other We want all of our employees to be top 10% relative to the pool of global candidates We want employees to help each other, and they do 112Seven Aspects of our Culture High Performance Values are what we Value Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 113In some time periods, in some groups, there will be lots of opportunity and growth at Netflix Some people, through both luck and talent, will have extraordinary career growth 114Baseball Analogy: Minors to Majors Very talented people usually get to move up, but only true for the very talented Some luck in terms of what positions open up and what the competition is Some people move to other teams to get the opportunity they want Great teams keep their best talent Some minor league players keep playing even though they dont move up because they love the game 115Netflix Doesnt Have to Be for Life In some times, in some groups, there may not be enough growth opportunity for everyone In which case we should celebrate someone leaving Netflix for a bigger job that we didnt have available to offer them If that is what the person prefers 116Three Necessary Conditions for Promotion 1. Job has to be big enough We might have an incredible manager of something, but we dont need a director of it because job isnt big enough If the incredible manager left, we would replace with a manager, not with a director 2. Person has to be a superstar in current role Could get the next level job here if applying from outside and we knew their talents well Could get the next level job at peer firm that knew their talents well 3. Person is an extraordinary role model of our culture and values 117Timing If a manager would promote to prevent an employee from leaving, the manager should promote now instead of waiting Three tests still have to be passed 1. Job big enough 2. Superstar in current role 3. Person is an extraordinary role model of our culture and values 118Development We develop people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them big challenges to work on Mediocre colleagues or unchallenging work is what kills progress of a persons skills 119Career Planning Not for Us Formalized development is rarely effective, and we dont try to do it e.g., Mentor assignment, rotation around a firm, multi-year career paths, etc. 120We Support Self-Improvement High performance people are generally self- improving through experience, observation, introspection, reading, and discussion As long as they have stunning colleagues and big challenges to work on We all try to help each other grow We are very honest with each other 121We want people to manage their own career growth, and not rely on a corporation for planning their careers 122Your Economic Security is based on your Skills and Reputation We try hard to consistently provide opportunity to grow both by surrounding you with great talent 123Seven Aspects of our Culture Values are what we Value High Performance Freedom & Responsibility Context, not Control Highly Aligned, Loosely Coupled Pay Top of Market Promotions & Development 124We keep improving our culture as we grow We try to get better at seeking excellence 125
WhatsApp us