Creative Reaction

Last week I posted my transcription (with some editing) of Netflix’s HR Reference Guide, which was quite a project. Today I’d like to explain what I love and what I’d love to see. Maybe we’ll see some of the slides get updated one of these days.

(To follow along, you may want to open my transcription in another browser window)

I love that Netflix starts off by stating the importance of culture, something that most folks don’t even think about. Netflix stakes its future on it!

“Culture gives Netflix the best chance of continuous success for many generations of technology and people.”

This is completely true. A business’ strategy, goals, or mission will not last very long unless everybody in the company, from the leadership down, espouses them. However, the presentation doesn’t actually define culture. Creating and Sustaining a Winning Culture at Harvard Business Publishing offers this definition:

“Culture (is)… the values, mindsets, and behaviors that constitute an environment conducive to success. (It is) what holds an organization together and motivates the people within it to do the right thing rather than the easy thing.”

This definition ties in well with other elements of the presentation, though they may need to reframe things in terms of “mindsets” and “behaviors”.

To me, the most thought-provoking concept in the reference guide had to do with growth, rules, creativity, performance, freedom, and responsibility, where they took concepts that tend to be antithetical and rearranged them in a way that work together in a system of checks and balances. It goes something like this:

Most companies – Great Idea>Great Culture>Success!>Growth>Mistakes>Knee-jerk Reaction>Rules & Procedures>Beaurocracy>Brain Drain>Mediocrity>Crappy Culture>Murky Vision>Slow Death

Netflix – Great Idea>Great Culture>Success!>Growth>Mistakes>Recovery>Post Mortem>Fewer Rules>Flexibility>Better Talent>Better Company>More Great Ideas>More Success!

It’s brilliant!

I love their stress on personal responsibility as well. Responsible people deserve more freedom. They shouldn’t be punished (with Rules and Procedures) when someone acts irresponsibly. Responsible people own up to their mistakes, then have an opportunity to wow a customer by making things right.

Another awesome idea – basing compensation on market value. Wow. You want a raise? Don’t work harder; make yourself more valuable. You want to keep your head down and not be noticed? Here’s a nice severance plan for you. Buh-bye! There’s no tolerance for dead wood. And if you salary goes down a bit, it’s because the market as a whole went down. So learn a new skill. That is so refreshing.

A few things I’d like to see?

• Some mention of the importance of good physical health (diet & exercise), which boosts performance. (See Brain Rules and The Power of Full Engagement)
• Some mention of the importance of proper rest and vacations, which boosts performance.(See The Power of Full Engagement)
• Some mention of the importance of workplace friendships, which boosts performance. (See Vital Friends)
• Some mention of the importance of  healthy family life, which boosts performance. (See Brain Rules)

Bravo, Netflix! Let me know if you’d like to compare notes.

Let’s see some other companies step up to the plate!