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Tuesday, December 30, 2008

More on "A new Corporate Organization Model"

Thanks for your feedback re the "A new Corporate Organization Model" post. Please find below 7 great reasons to work at Netflix taken from This post provides greater details behind the new model than my last post did on the subject.

  1. Netflix Delights People
  2. It is satisfying to work at a company that people love. When you wear Netflix clothing, strangers regale you with tales of how much they enjoy your company's service. We're ranked number one in customer satisfaction across the entire e-commerce universe, narrowly besting such great companies as Apple and Amazon. Our commitment to doing the right thing by our customers is partially to protect our reputation as a company, and partially because it is a reflection of us as individuals. Every day we stretch to be a little bit better.

    Our success is from creative use of the Internet to help people discover and watch movies they will love. Each human has very unique tastes, and we offer over one hundred thousand films spanning decades of filmmaking, so helping people find movies for their particular taste is both a huge opportunity and a huge challenge.

    Our passion for film enjoyment is not completely altruistic. When people love the movies they watch, they become more engaged with movies, and that helps grow our business. As we grow, we get better at movie discovery, and help people get even more enjoyment from film. As a Netflix employee, you power this virtuous cycle.

  3. Large Impact
  4. We hire people who are great at what they do and we give them the freedom to practice their craft without endless buy-in meetings. We forge agreement on strategy, not on tactics. We try to manage by providing context, not by controlling people. The result is that you can get things done quickly and are able to see the impact of your work. Netflix is small enough that you can make a difference, yet big enough to change the way tens of millions of people enjoy film.

    Our culture is centered on the concepts of freedom and responsibility - treating employees as talented people who want to make a difference and should be trusted to do so.

  5. Consistently Outstanding People
  6. We're a high-performance team, not a family.

    A strong family is together forever - no matter what. A strong company, on the other hand, is more like a pro sports team: it is built to win. Management at every level has the responsibility that professional coaches have - to recruit the players and forge the teamwork that makes great performance possible.

    To accomplish this, we seek to fill every position in our company with exceptional performers. In many companies, adequate performance gets a modest raise. At Netflix, adequate performance gets a generous severance package.

    For us, the cost of having adequate in any position is simply too large, when we could have extraordinary. Extraordinary performance means excellence in the nine values described below. Plentiful extraordinary talent makes for a high-functioning company.

    The benefit of a high-performance culture is you experience the exhilaration of working with consistently outstanding colleagues. You do your best work, you learn the most, and you achieve the highest professional satisfaction, when you're surrounded by excellence.

    A great workplace is not how many perks are offered; it is how stunning are the colleagues.

  7. Big Pay
  8. We believe that one outstanding employee does more and costs less than two adequate performers. Thus we try to pay at the top of the market, and to have only outstanding employees. Our compensation is guided by market rates and performance, rather than seniority or resume.

    We focus on large salaries, rather than on bonuses and benefits, to provide employees maximum flexibility. Everyone we would hire would earn their full bonus, so we just add it into base salary. Additionally, we offer several investment opportunities including fully-vested stock options, an employee stock purchase program with discounted shares, and a company-matched 401(k) program, all to enable employees to make individual decisions to suit their particular financial objectives and risk profile.

  9. Rules Annoy Us
  10. Rules creep into most companies as they try to prevent errors by less-than-stellar employees. But rules also inhibit creativity and entrepreneurship, leading to a lack of innovation. Over time this drives a company to being less fun and less successful.

    Instead of adding rules as we grow, our solution is to increase talent density faster than we increase business complexity. Great people make great judgment calls and few errors, despite ambiguity.

    We believe in freedom and responsibility, not rules.

    For example, our vacation policy for salaried employees is "take some". There is no limit on vacation because all we care about is what you accomplish - not how. Similarly, our travel expense policy is "travel as you would on your own nickel." That's it. No soul-sapping policy manuals for us. In our first five years as public company, growing from $100m to over $1 billion in revenue, our commitment to freedom and responsibility has only grown.

    We have found that by avoiding rules we can better attract the creative mavericks that drive innovation, and our business is all about innovation. We are mitigating the big risk technology companies face (obsolescence), by taking on small risks (running without rules).

    Our one absolute rule, however, is integrity.

  11. Clear Values
  12. Lots of organizations have lofty value statements; but sometimes they are not reflective of what the organization actually values. To understand the real values of a company, watch how people interact with one another, who gets promoted, and who is let go.

    At Netflix we value - and reward - the following nine behaviors. The more these sound like you, the more likely you are to thrive at Netflix. Feedback on how employees can improve in these nine dimensions is frequent via online 360 reviews. We do our best to push each other to embody these values fully.

    • Judgment
      • You 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
    • 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 simplify
    • 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-paralysis
    • Curiosity
      • You learn rapidly and eagerly
      • You seek to understand our strategy, market, subscribers, and suppliers
      • You are broadly knowledgeable about business, technology and entertainment
      • You contribute effectively outside of your specialty
    • 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 situations
    • Courage
      • You say what you think even if it is controversial
      • You make tough decisions without excessive agonizing
      • You take smart risks
      • You question actions inconsistent with our values
    • 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 mistakes
    • 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 proactively
    • Passion
      • You inspire others with your thirst for excellence
      • You care intensely about Netflix' success
      • You celebrate wins
      • You are tenacious

  13. Amazing Future
  14. Broadband connectivity and capacity will grow continuously around the globe for the next several decades, creating amazing opportunities for internet-centric firms to delight customers.

    We dream of a world where movie content is open, global, and instantly deliverable to any screen from cell-phone to laptop to living-room TV. We dream of a world where unknown filmmakers with a vision get discovered and nurtured, so they can make their second film. We dream of a world where consumers can easily find films they will love, and their enjoyment of movies grows.

    We want Netflix to be the company that realizes all these dreams.

    We have much work to do: our Web software, which creates a custom Web site for each member, is still in its infancy; we are constantly improving our logistics system which handles millions of shipments to and from customers daily; we invest about $200 million each year to creatively market the Netflix brand; we're still only a domestic USA company, and our streaming to laptops and TVs has improved greatly but is just beginning. In short, we have so much to create that we need more incredible talent.


    Isn't this refreshing? Without having any knowledge of Netflix's future plans and assuming that they do what they say, I am willing to bet that this company will be successful.