Behind The Scenes
People love to be entertained, and I think most of us would agree that no one does this better than Netflix. In the third quarter of 2021, Netflix added 4.4 million new subscribers, much thanks to the acclaimed Squid Game, bringing the company to a grand total of 214 million paid subscribers in over 190 countries.
This quarter, I read up on the behind-the-scenes culture that drives Netflix’s success in That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea by cofounder and the company’s original CEO, Marc Randolph, and No Rules Rules: Netflix and the Culture of Reinvention by cofounder and current Netflix CEO, Reed Hastings, and INSEAD Business School professor and culture expert, Erin Meyer. This issue, I want to share some of the company’s cultural secrets to success with you.
The Netflix Story
Marc Randolph and Reed Hastings cofounded Netflix on August 29, 1997, with the intention to create “the Amazon.com of something.” They knew they were on the path to success when Amazon’s Jeff Bezos offered to purchase Netflix just one year later for $14–$16 million. Hastings and Randolph, however, declined Bezos’s offer.
In early 2000, the company moved from a per-rental model to a monthly subscription model before introducing its famed video-on-demand streaming service in 2007. Netflix began developing original programming in 2013, an idea that was quickly adopted by competing streaming services like Amazon Prime Video. In 2018, the company started producing international content to attract a broader global audience.
Over the years, Netflix has faced its share of challenges, but the team behind the scenes still has yet to encounter an obstacle they cannot overcome. In 2021, Netflix continues to be the leading video-on-demand streaming service.
Marc Randolph recognized that “culture is not what you say, it’s what you do.” In everything they do, Netflix employees today embody the company’s nine core values: judgement, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness.
Judgement is the ability to make wise decisions despite being faced with ambiguity. This applies to the business, technical aspects, relationships, and contextual creativity of Netflix. Employees are empowered to examine problems, to identify the root causes, and to develop holistic solutions. Everyone on the team is encouraged to think strategically and to articulate both what they are and what they are not trying to do in their work. They are also entrusted with creating an order of priorities to determine what must be done well now and what can be improved later for maximum impact.
Netflix employees exhibit strong communication skills. This means that instead of reacting quickly, they listen carefully and always strive to fully understand what is being communicated by customers and colleagues before forming a response. In speech and in writing, the team is concise and articulate and treats everyone with respect regardless of their status and whether or not the team agrees with what is being said. In stressful situations, a Netflix employee knows to maintain calm and remain poised.
To achieve maximum impact, Netflix employees must first understand the importance of their work. They are results driven and demonstrate consistently strong performance. When faced with important decisions, a Netflix employee will always choose action over inaction.
Netflix employees are curious and eager to learn all aspects of the business. As a result, they understand the company strategy, market, subscribers, and suppliers and are broadly knowledgeable about technology, entertainment, and the industry as a whole. Each member of the Netflix team consistently contributes new ideas toward the betterment of the company.
Innovation at Netflix is the ability to reconceptualize issues and to develop practical solutions for difficult problems. Innovation is also applied by simplifying complex ideas so they can be executed quickly. When warranted, Netflix employees challenge prevailing assumptions and suggest a better approach.
Netflix employees have the courage to say what they think even if it’s controversial. They take risks and make tough decisions without agonizing. If an action is inconsistent with company values, they immediately know to bring it to the team for review.
Netflix team members inspire one another with their passion, tenacity, and thirst for excellence. Each team member cares intensely about Netflix’s success and wholeheartedly celebrates company victories.
Honesty, candor, and directness are a must for every Netflix employee. Disagreements are nonpolitical and everyone is expected to only say things of one another that they would be comfortable saying to one another. If a team member makes a mistake, they are quick to admit to it.
Netflix employees are selfless in their pursuit of what is best for Netflix, even if it may not be in their own best interest. Information is proactively and openly shared, and everyone makes time to help each other in the pursuit of company growth.
Freedom and Responsibility
Knowing that everyone on the team is aligned with its core values, Netflix encourages its employees to take big risks. Freedom and responsibility for every team member are important drivers in the company’s success, imbuing its culture with a level of trust that is unparalleled by most organizations. Netflix trusts that every employee will make the right decisions and decisions that are in Netflix’s best interest, which works to strengthen self-discipline, fosters good judgement, and promotes accountability.
For many employees, the freedom and responsibility provided in their roles are a gateway to creativity. With little restriction on creative output, Netflix empowers its team to apply innovative techniques, unpopular opinions, and real-life experience to their work.
Freedom and responsibility are also inherent in the company’s unlimited vacation policy. Rather than implementing a formal system, employees are simply asked to act in Netflix’s best interest when making travel plans and to treat the company’s money as if it were their own.
Apply Netflix Strategies in Your Company
Applying Netflix strategies in your own company starts with team empowerment and hiring employees who embody your company’s core values inside the workplace and out. At Tulip Media Group, we, like Netflix, are advocates for autonomy in every role and have experienced immense growth as a result of this approach.
If you are interested in transforming your company culture, we invite you to talk to us about it at your next strategy meeting. Our team can provide guidance in the process and help you achieve real results for your team.