Netflix has been well-known for its “Keeper Test”, which is a performance evaluation method to maintain a high-performing workforce. Introduced by Netflix’s Chief Talent Officer, Patty McCord, the test revolves around a simple yet powerful question that managers must ask themselves: “If a member of your team were to leave for a similar position at another company, how hard would you fight to keep them?” If the answer is “not hard,” it signals that the employee may not be a good fit for the team, and the company may consider letting them go.
The latest update sports a slight addition: “If knowing everything I know today, would I hire X again?” If the answer is “no”, Netflix believes that it’s fairer to let the employee go with a generous severance package and recruit someone else.
While this all seems like Netflix expects their employees to live up to impossible standards, its corporate culture expects nothing less of their management, in order to create an environment that such high-performing employees would thrive and enjoy working in. Here are 4 corporate culture practices at Netflix which are worth learning from.
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#1 Coach Rather Than Control
While it seems common for managers at most companies to manage the work process, and some may even over-manage (or micromanage), managers at Netflix are expected to practice ‘context not control’. This means giving their teams context and clarity, alongside autonomy to make decisions, rather than try to control everything.
While some may misunderstand this to mean hands-off management, this is far from it – Netflix envisages their managers to function more like high performance sports coaches rather than overlords, as part of a broader vision which envisages Netflix more as a professional sports team rather than a family.
While it seems like Netflix gives a lot of freedom to its employees, at the same time they acknowledge that it takes an unusually responsible person to thrive with such freedom, someone who takes the responsibility to do things without being told. Hence, aside from the fact that Netflix gives this level of autonomy to its employees, it also acknowledges that it is important to also hire people who are responsible and have initiative.
#2 Be Honest
Improvement, whether for employees or managers, requires feedback, and this can often be difficult to give or receive, since it requires people to be humble and vulnerable to listen, accept, and act upon the feedback to improve themselves.
Netflix practices ‘extraordinary candor’, which treats giving or seeking constructive feedback like any other everyday work task. This allows individuals and teams to receive the feedback that they need and become better versions of themselves. This comes with a caveat, that the candor must be voiced in a way that treats colleagues with decency and respect.
This is also meant to be a two-way conversation. Aside from the purpose of giving feedback for work performance improvement, extraordinary candor is also meant to encourage employees to have candid conversations with their managers to bring up and address workplace-related issues on a regular basis.
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#3 Listen To The Ground
One key concept in Netflix’s corporate culture is called ‘farming for dissent’. This acknowledges the fact that the best ideas can come from anywhere, and Netflix makes it a point to seek out different opinions and listen to people at every level. This takes effort, since managers at various levels need to seek out and listen to these opinions. While it is impractical for a large organisation such as Netflix to listen to the opinions of all its 10,000 or so employees, effort is still taken to ensure the opinions of relevant staff are heard before making a decision.
After a decision is made, it is inevitable that there will be dissidents, who probably disagree, and also previously advocated against this approach, or for a different approach. The expectation is then for these dissidents to ‘disagree then commit’, meaning that they can continue to hold on to their opinions, but they are expected to support the decision that has been currently made.
There are two things which are important about this. The first is the fact that each employee is empowered to be part of the organisation’s vision, and if they have a good idea or argument, it is given the chance to air ‘farming for dissent’. This integrates that employee into the decision-making process, even if only in some small part.
The second is the fact that the employee was given a chance to be heard. While the decision made may not be along the same lines of what the employee may have argued for, they had a chance to be heard, and the decision was made in spite of the fact that they were heard, which may hopefully help them accept the decision that was made, and also help them choose to support it nevertheless.
#4 Encourage Experimentation
Netflix calls this ‘uncomfortably exciting’. Success requires companies to be bold and ambitious, to think differently, to experiment, and often to adapt quickly too. Sometimes this comes at risk of failure and failure is always uncomfortable.
However, not taking risks also means losing out on potential gains that could be made or adapting slower than your competitors. Some kind of balance needs to be struck, and there needs to be a way to ensure that failed experiments do not cause the whole company to go under.
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An Environment Fit For A Dream Team
As Netflix’s company culture memo seems to acknowledge at various points, it’s not enough to be able to pay top dollar for the best performing employees, there needs to be a work environment that taps on their strengths and gives them the autonomy to shine, but more importantly, to encourage these disparate individuals to band together and work together as one cohesive company unit.
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