A Case Study of Netflix’s High-Performance Culture

A year ago I attended Certified Agile Leadership (CAL I) training. As preparation for the course, we were to prepare a case study of a few suggested companies, such as Netflix, which has a high-performance culture. The facilitator of CAL1 focused on company culture, stressing this idea throughout the leadership training.

I was fascinated to learn that Netflix has a strong focus on its culture. It describes itself as being in a creative-inventive market. No one can doubt their success. So I was quite curious to research the company and see what I could learn.

In universal terms, Netflix prides itself on having a culture that embraces the two pillars of freedom and responsibility. It lists nine qualities and behaviours that it values:

1. Judgement – make wise decisions, treat root problems, prioritize work

2. Communication – be concise and articulate, listen well, be respectful and calm under stress

3. Impact – accomplish great amounts of important work, reliable, focus on great results rather than process, avoid analysis-paralysis

4. Curiosity – learn rapidly and eagerly, seek to understand, broadly knowledgeable, and contribute beyond own specialty

5. Innovation – find practical solutions to hard problems, challenge prevailing assumptions, create useful ideas, minimize complexity

6. Courage – say what you think even if controversial, make tough decisions without agonizing, take smart risks, question actions inconsistent with values

7. Passion – inspire others to excellence, care about company’s success, celebrate wins, tenacious

8. Honesty – candor and directness, non-political, no backbiting, admit mistakes

9. Selflessness – seek what’s best for company, ego-less regarding best ideas, help colleagues, share information proactively

(Of course, as I reflect on the above values, I do a simultaneous self-evaluation.)

Managers at Netflix use a unique employee evaluation tool called “The Keeper Test.”

 It goes like this: “Which of my people, if they told me they were leaving for a similar job at a peer company, would I fight hard to keep?”

To understand this better, the idea of hard work is not relevant to the Netflix culture. Sustained B-level performance, despite one’s efforts, will win a generous severance package. To counter that, a sustained A-level performance, despite minimal effort, gets more responsibility and great pay. This high-performance culture is made for those who thrive on excellence, candour and change. They value those who are self-motivating, self-aware, self-disciplined, self-improving, and (this I especially love!) those who act like a leader but who will pick up trash from the floor.

One surprising idea in Netflix’s culture is that they believe that optimizing processes is a negative. Instead, they pursue flexibility over safer efficiency. Their option to growth and chaos is to “avoid chaos as you grow with ever-more high-performance people – not with rules.” This allows them to leverage self-discipline and attract creativity.

They use a quote from Antoine de Saint-Exupery, author of The Little Prince, which speaks volumes about their culture:

“If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.”

I believe that that quote almost encapsulates the Agile way.

Here’s more about the culture of Netflix.

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