Responsibility Over Freedom: How Netflix’s Culture Has Changed

🌈 Abstract

The article discusses how Netflix's corporate culture has evolved over the years, shifting from a focus on "freedom and responsibility" to emphasizing "people over process." The latest internal memo on Netflix's culture highlights changes in the company's approach, such as the acknowledgment that not all opinions are equal as the organization has grown, and the need to balance freedom with responsibility to maintain excellence.

🙋 Q&A

[01] Responsibility Over Freedom

1. What are the key changes in Netflix's corporate culture as outlined in the latest internal memo?

• The memo highlights a shift from "freedom and responsibility" to "people over process" as the company's core philosophy.
• It acknowledges that as Netflix has grown to over 13,000 employees, it is no longer feasible for everyone to weigh in on every decision.
• The "keeper test" (whether the company would fight to keep an employee) now includes a disclaimer that it can sound "scary" and encourages regular feedback between employees and managers.
• The memo states that "not all opinions are created equal" as the organization has scaled.

2. How has the concept of "freedom and responsibility" been interpreted and applied by some employees?

• Some employees have used the "freedom and responsibility" principle as justification to do whatever they want, without regard for the company's best interests.
• For example, one year an assistant expensed $30,000 because there was no rule prohibiting it.
• Netflix's co-founder Reed Hastings acknowledges that "leading with freedom was attractive" but that in hindsight, the company should have emphasized that "freedom generates excellence, not for its own sake."

3. What is the rationale behind the changes in Netflix's culture as described in the article?

• As Netflix has grown, the company has had to balance the principles of freedom and responsibility to maintain excellence and prevent the culture from being "weaponized" by some employees.
• The latest memo aims to clarify that freedom is not an end in itself, but rather a means to generate long-term excellence for the company.

[02] Employee Experience at Netflix

1. How do some employees describe the impact of Netflix's cultural tenets on their lives?

• Some employees, like the CTO Elizabeth Stone, have adopted the language and practices of the Netflix culture in their personal lives, such as regularly asking for feedback from their spouse.
• Other employees, particularly those coming from outside Silicon Valley, have found the direct feedback culture jarring at first, but have come to appreciate it as a way to drive improvement.

2. What is the typical employee tenure at Netflix, and how does the company view employee turnover?

• Netflix does not have employment contracts, and employees can be let go at any time, regardless of rank.
• Voluntary resignation ranges from 2.1% to 3.1% annually, while about 9% of employees are asked to leave each year.
• Many employees consider staying at Netflix for 5 years to be a significant achievement, as the pace and pressure are described as "all-consuming" and "uncomfortably exciting."

3. How do some employees view the benefits of Netflix's culture, despite the challenges?

• Some employees, like the VP of nonfiction and sports Brandon Riegg, find the culture to be a "life preserver" that allows them to make a greater impact than they would at a traditional studio.
• The culture encourages employees to take risks and try new approaches, even if they go against past practices, as long as they have "farmed for dissent" and gathered feedback.