Real Velona

Netflix is so much more than a streaming service – it’s a cultural phenomenon. More than anything, the company owes its success to its own culture.

Founded more than two decades ago, Netflix is by far the most popular streaming service in not just the United States but the world over. Big competitors have cropped up here and there, but none of them has yet to secure Netflix’s success.

Is it because Netflix’s releases are better than those of the competition? Maybe or not may not. That’s not the point.

What stands behind Netflix’s success is the document that Sheryl Sandberg dubbed ‘the most important document ever to come out of the Valley’.

‘Netflix Culture: Freedom & Responsibility’(link at end of article) is a 124-page presentation about the company’s culture. It’s available on Slideshare and has accumulated over 19 million views.

Patty McCord, Netflix’s HR veteran, spent 14 years working with the company to create a culture that would set Netflix apart from the crowd. You know how it turned out.

Netflix built its culture around innovation in all the important aspects. This is at the very core of its immense popularity, yet unreached by any other streaming services.

You might be wondering what about Netflix’s culture that’s so unique. Here are some of the highlights.

1. They Don’t Have a Shiny Object Issue

Many entrepreneurs suffer from shiny object syndrome. They start one thing and jump ship as soon as a new opportunity presents itself. As you can imagine, this creates a lot of noise without following through on any task to completion.

Reed Hastings, Netflix’s CEO and co-founder was a veteran of this syndrome. During the company’s tangle with Blockbuster in the mid-2000s, he pulled out all the stops in an attempt to beat the competitor.

‘We added online ads, banner ads, on the Netflix website. We sold used DVDs like eBay. We bought some films at Sundance, and put them on DVDs’, Hastings says.

However, none of this brought the desired results. It wasn’t until Netflix started focusing on its core product that they emerged victoriously. By delivering an exceptional user experience with their mail-order DVD rental. Netflix pushed Blockbuster out of the way.

This shows that it only takes one thing to rise above the crowd. Work on finding yours and then all you have to do is to put all your focus on it and see it through.

2. They Value Freedom

As the document’s title suggests, freedom is one of the cornerstones of Netflix’s success. With a flexible schedule, the employees get to manage their time and put in the work at their most productive time of the day. In fact, Hastings leads by example and encourages people to take as many vacations as possible.

Netflix doesn’t believe in the rigid 9-5 (or is it 9-6?) work schedule that most companies adhere to. People are free to come and go as they want. The employees would get the idea and work to their best ability when they do.

However, it’s important to understand that this doesn’t mean your people can just do what they want. That’s where the responsibility part comes in. As McCord explains:

‘We realized that if we used just the word ‘freedom’, it implied the freedom to do anything. We didn’t really mean to give people the freedom to do anything. We coupled freedom with responsibility.’

This means that Netflix holds people accountable for their actions. Believe or not, most employees, or at least the ones that you’ll want to keep, will know to give something in return for the freedom.

While it works for Netflix, McCord is quick to point out that it’s not for everyone. You need to create and implement this policy very carefully or you risk creating chaos.

3. They Return Power to the People

Netflix doesn’t impose its culture on its employees. Instead, the people get to actively participate in its evolution. Instead of enforcing all kinds of policies, Netflix puts trust in its employees to support and improve the culture.

Doing the opposite can make people believe that they’re stuck in their job. They feel powerless as they get good at taking orders from the management.

In contrast, Netflix reminds its people of their power and gives them the opportunity to exercise it. It’s a great way to make people feel that the work they’re doing has true meaning. It helps them look beyond their position and performs to the benefit of the company as a whole.

Everyone gets a chance to add value to the company through their decisions. Instead of conforming to a culture, they see it as their own.

This results in a constantly evolving culture. It’s a living, breathing practice with the agility to survive and succeed in today’s world.

4. They Challenge Everything

One of the most important things that McCord did in building Netflix’s culture was to challenge every decision she made. In addition, the company encouraged everyone to do the same.

As McCord explains:

‘Most of the innovation around the culture at Netflix wasn’t to do anything radical and new but to stop doing stuff that didn’t matter anymore’.

A perfect example is the old vacation policy. By getting rid of it, McCord introduced a new system that turned out to be highly successful.

The key takeaway here is that it‘s going to take some experimenting. To build a unique culture, you need to get out to those uncharted waters. More often than not, this can result in a swing and a miss.

But, this is what Netflix subscribes to in its every decision. You try something new, make a mistake, start again, and keep trying until you see results.

5. They Don’t Compromise on Hires

One of the main innovations that set Netflix apart from the competition is its recruitment process. While many companies fail to look beyond the resume, Netflix digs much deeper.

As McCord puts it, ‘Making great hires is about making great matches. One company’s A player may be a B player for another firm and vice versa’.

Netflix always makes sure that the person’s personality and skillset fit the company’s demands.

As a result, they end up with high-performers who have the motivation to push through even the toughest of challenges. The company has a pipeline full of top talent ready to go all in and contribute.

What Makes a Strong Culture?

As you can see, Netflix’s out-of-the-box thinking is behind the creation of such a powerful culture. After years of experimenting, the company made sure to create an atmosphere where everyone can thrive.

What’s more, the culture is always evolving to match the needs of both the market and the company’s employees.

Does this mean that any business that wants to be as successful as Netflix should just copy its ways? Absolutely not.

There isn’t a formula for creating a good company culture. You need to understand your business and explore the practices that will work best. This takes time and effort, but get it right and it will pay off many times over.

It boils down to trying different things and seeing how they affect your business’ ability to scale. You’ll never find out what works if you’re unwilling to shake things up every once in a while.