\n<\/p>\n
Netflix has long been a company known for its secrets: no Nielsen ratings, little feedback on why shows are canceled, no box office numbers for the rare movies that are actually released in theaters.<\/p>\n
Yet for a place defined by its opaque approach to the outside world, the streaming giant has long been aggressively transparent internally. The company\u2019s philosophy was immortalized in 2009 when Reed Hastings, the company\u2019s co-founder and chief executive, first laid out<\/a> the corporate ethos in a 125-slide presentation that introduced new buzzy phrases like \u201cstunning colleagues,\u201d \u201cthe keeper test\u201d and \u201chonesty always.\u201d<\/p>\n The presentation, with its insistence on constant and unfiltered candor, felt both brutal and refreshingly antithetical to Hollywood\u2019s normal way of doing business. To the frustration of former employees and current competitors, it may just be the blueprint that has enabled Netflix to have so much success while its rivals have stumbled.<\/p>\n Three more culture memos have followed over the years. Before being released, they are pored over and analyzed for months by top executives. At the same time, any employee can pop into the Google Doc where the memo is being assembled to leave a thought or a comment.<\/p>\n<\/div>\n<\/div>\n The latest iteration of the document, which was released internally on May 8 and will soon be made public, underwent eight months of vetting and received 1,500 comments from employees, according to Sergio Ezama, Netflix\u2019s chief talent officer. It is five pages long (half the length of Mr. Hastings\u2019s final memo in 2022), and some core tenets have changed, however slightly.<\/p>\n When Mr. Hastings titled his 2009 presentation \u201cNetflix Culture,\u201d he gave it the subhead \u201cFreedom and Responsibility.\u201d The idea was that Netflix trusted its employees to act in the best interest of the company. If you want a vacation, take a vacation. If you have a baby and need to go on leave, go on leave. Documents were shared widely throughout the company without any fear of leaks.<\/p>\n While those principles remain in practice, the new memo highlights Netflix\u2019s philosophy of \u201cPeople Over Process\u201d first: \u201cWe hire unusually responsible people who thrive on this openness and freedom.\u201d<\/p>\n The keeper test \u2014 which is defined as, \u201cif X wanted to leave, would I fight to keep them?\u201d \u2014 now includes this disclaimer: \u201cThe keeper test can sound scary. In reality, we encourage everyone to speak to their managers about what\u2019s going well and what\u2019s not on a regular basis.\u201d<\/p>\n There is a sentence in the latest memo that reads, \u201cNot all opinions are created equal\u201d because as the organization has grown to more than 13,000 employees, it is no longer feasible for everyone to weigh in on every decision. \u201cIt does not scale,\u201d said Elizabeth Stone, the company\u2019s chief technology officer.<\/p>\n<\/div>\n<\/div>\n The company is never one to shy away from reorganizing itself \u2014 a feature that critics say happens too frequently and leaves many employees worrying that they could be fired any day. Mr. Hastings has moved on to the executive chairman role. Ted Sarandos and Greg Peters are the co-chief executives, and change is always afoot. Still, the latest culture memo feels much more about how the streamer expects its employees to behave rather than a treatise for what it wants to become.<\/p>\n<\/div>\n<\/div>\n \u201cThe key about the Netflix culture is we really try to systematically think what generates long-term excellence,\u201d Mr. Hastings said in a video interview from his home in Santa Cruz, Calif. \u201cCertainly a lot of creativity, a lot of freedom, a lot of focus on innovation, and trying to attract and develop people who are self-responsible.\u201d<\/p>\n Talk to the employees who work at Netflix and the sense is that the cultural tenets have infiltrated their lives in ways they weren\u2019t expecting. Many came in skeptical, assuming the memo itself was a public relations effort to make the company stand out. Yet some of those people now describe it as being 80 to 90 percent accurate.<\/p>\n Ms. Stone, who married months after joining Netflix in 2020, said that she and her husband \u201cuse certain language now like, \u2018Do you have any feedback for me?\u2019 He would be the first to say at a cocktail party that he\u2019s very good at receiving feedback, and he\u2019s still working on giving feedback.\u201d<\/p>\n<\/div>\n<\/div>\n The document is made to read as aspirational, and there is always room for improvement.<\/p>\n \u201cAre we always totally direct with each other? No. Are we completely devoid of politics? No,\u201d said Spencer Wang, the vice president of finance and investor relations, who has been with Netflix for nine and a half years. The company is not \u201cperfect across all these dimensions, but I would say it is a remarkably accurate description of what we aspire to be and how we generally operate,\u201d he said.<\/p>\n Reflecting on the initial presentation, Mr. Hastings admitted that \u201cleading with freedom was attractive,\u201d adding, \u201cIt was good bait.\u201d<\/p>\n But as the company grew, the concept of freedom and responsibility, which many reduced to \u201cFNR,\u201d became weaponized by some employees as justification for doing whatever they desired. One year an assistant expensed $30,000, according to a company official, because there was no rule saying that it wasn\u2019t allowed.<\/p>\n \u201cWe care about freedom when it generates excellence, not for its own sake,\u201d Mr. Hastings said. \u201cIn hindsight, this is the draft I wish we had 15 years ago.\u201d<\/p>\n From the beginning, Netflix was never going to be a place where most people stayed for their entire careers. Employment contracts don\u2019t exist, and an employee, no matter the rank, can be let go at any time.<\/p>\n<\/div>\n<\/div>\n While few leave of their own accord (voluntary resignation ranged from 2.1 to 3.1 percent in the last two years), about 9 percent are asked to leave annually. That may be a relief to those who describe the pace as all-consuming and find the company\u2019s key tenet of being \u201cuncomfortably exciting\u201d untenable. The company warns in the memo that the concept may cause \u201cmany people\u201d to choose other places \u201cthat are more stable or take fewer risks.\u201d<\/p>\n While some employees, including the two co-chief executives, have been with Netflix for over 15 years, many consider sticking it out for five to be a significant achievement.<\/p>\n Still, some find the pressure invigorating. Brandon Riegg, the vice president of nonfiction and sports, said he had often felt stifled when working at the traditional entertainment studios. He calls the culture at Netflix \u201ca life preserver\u201d that has allowed him to make an impact that wouldn\u2019t have been possible at a traditional studio. Five years ago, he persuaded his bosses to release episodes of the reality show \u201cRhythm + Flow\u201d in batches for the first time. That practice has been repeated with other reality programs like \u201cLove Is Blind\u201d and scripted programming like \u201cBridgerton\u201d and \u201cStranger Things.\u201d<\/p>\n He said that while the strategy ran counter to what Netflix had done in the past, executives were willing to try it.<\/p>\n<\/div>\n<\/div>\n Their approach, Mr. Riegg said, was that \u201cwe hired you, and if you think this is the best thing, and you\u2019ve farmed for dissent, and you\u2019ve taken in all the feedback, and this is where you landed, let\u2019s give it a shot.\u201d<\/p>\n<\/div>\n<\/div>\n Mr. Hastings looked relaxed during the video interview, and that may be because he\u2019s rid of the jet lag and \u201cinsane\u201d schedule that used to wear him down as chief executive. (His new life of philanthropy and owning a ski mountain<\/a> may also be helping.)<\/p>\n Or maybe it\u2019s because he\u2019s no longer subject to the constant feedback the company is known for \u2014 something many employees find jarring when entering the Netflix vortex, especially those coming from outside Silicon Valley.<\/p>\n Mr. Wang said that receiving candid feedback was fine but that as an Asian American, he had initially found it hard to provide it because \u201cit rubbed against my cultural background.\u201d More recently, he said, he was told that he\u2019s \u201ctoo direct,\u201d so he\u2019s now working on being more sensitive.<\/p>\n Ms. Stone, the chief technology officer, recently recounted being at a happy hour event in New York City where an engineer introduced himself and proceeded to say, \u201cI\u2019m the engineer who wrote the bug in the code that brought the service down two weeks ago.\u201d<\/p>\n<\/div>\n<\/div>\n \u201cHe knew introducing himself that way to me would spark a good conversation about what\u2019s the culture around improvement,\u201d she said. \u201cIt wasn\u2019t like: \u2018Why is this person still here? This person should be fired.\u2019\u201d<\/p>\n As for Mr. Hastings, he may not have to take any more feedback, but he can still dole it out. He said he appreciated that Mr. Sarandos and Mr. Peters waited a year after his departure to reformulate the culture memo as their own.<\/p>\n \u201cIt\u2019s 10 percent better,\u201d he said. \u201cIt\u2019s not radically better, but it\u2019s as good as any improvement I ever made on it. So that\u2019s a compliment.\u201d<\/p>\n<\/div>\n<\/div>\n