A few days ago, NetFlix posted their internal corporate culture and policies document to Slideshare and it has begun to make the rounds. With the spectre of Twitter's stolen internal documents still lurking in the backs of our minds I should point out that yes, the corporation actually posted it (it wasn't leaked) and I think that's a pretty bold statement about the company's culture itself. Wouldn't you agree?
The document is long and includes some internal policy stuff that you're likely to skim, but overall it's well worth the time it takes to read through the 128 pages. You may not agree with everything in the document, but I think there are plenty of interesting ideas for start-up leaders, corporate executives, and anyone who has a hand in defining company culture or setting corporate policies.
Here are seven highlights that I found especially interesting:
- Adequate performers get generous severance packages. In other words, the star performers stay, everyone else is shown the door as soon as they prove they aren't stars -- but everyone should be treated well when they are asked to leave (after all, it is as much the company's fault for making a poor hiring decision as it is the employee's fault for under-performing.)
- Evaluate performance based on effectiveness and results, not time spent, or nights and weekends surrendered to the company.
- Get the most out of the organization by setting context and offering freedom, rather than by exerting control and establishing rules and processes. They distinguish between processes that foster productivity (have a budget and spend within it) and hamper it (all expenditures over $5,000 must be pre-approved by your manager.)
- Their vacation policy? Six words: "there is no policy or tracking." They trust their employees to schedule their time off responsibly. Their travel and expense policy? Just five words: "act in Netflix's best interest." When you have hired the right people and those people are all working toward common goals, excessive rules, regulations and policies are unnecessary.
- What's more, Netflix believes that freedom should grow (rather than shrink) as the company gets larger.
- The secret to good management lies in context (strategy, goal-setting, vision and inspiration) rather than top-down command and control. An employee's failure to perform is likely to stem from a manager's failure to set proper context.
- Attract and retain star talent by paying top dollar. By way of analogy, Netflix points out that a Major League baseball team will pay top dollar for a star player, whether that team is winning or losing. Netflix believes companies should do the same if they want to attract their industry's star players. Their logic is simple: excellent people are significantly more productive than the rest. Their test is simple too: if someone doesn't have to take a pay cut when they leave Netflix for their next position, then Netflix probably isn't paying top dollar. Related to this, Netflix firmly believes in cash compensation; equity is optional and at the employee's discretion - pay well upfront and let each employee make their own decisions about how much of their money they tie back to the company's long term success.
And here's the complete document, which ends -- fittingly enough -- with the statement that "Our Culture is a Work in Progress." After all, shouldn't that be true of any culture?