- Netflix seeks top talent but also demands excellence from its workforce.
- Co-founder Reed Hastings discussed five aspects of Netflix’s company culture in a recent podcast.
- Netflix is a team not a family, gets rid of merely adequate performers and tracks down credentials.
Netflix is known for paying top dollar to recruit the best employees – and for demanding huge sums of money from its employees.
Reed Hastings, co-founder and executive chairman of the streaming giant, reviewed five key elements of Netflix’s company culture on the latest episode of “The Tim Ferriss Show.”
The tech billionaire, who left his post as co-CEO of Netflix early last year, spoke of very high standards, finding and removing merely adequate performers, searching for references and insist that people express themselves.
Here are the five topics he covered:
1. The team, not the family
Netflix is run like a top sports team that aims to fill each position with the best person who is also a team player, Hastings said.
Stacking its roster with exceptional artists maximizes Netflix’s chances of success and also motivates, educates and attracts even more talent.
It’s “the energy driver because everyone around you is amazing, you learn so much, you attract other amazing people,” Hastings said.
2. Farewell gift
Netflix strives to eradicate mediocrity, but combines its Darwinian demand for excellence with a certain degree of humanity.
“The reward for adequate performance is a generous severance package,” Hastings said.
“We want people to say, ‘I’m trying really hard and I’m going to give it my all and if it doesn’t work, I have a parachute.'”
Netflix offers a minimum of four months of severance in the United States and above-average plans in other countries. This policy makes it less painful for bosses to eliminate mediocre performers.
“The fact that there is a big severance package makes it easier for the manager to fire that person and try to find someone else who will be a rock star in that role,” Hastings said.
3. Looking for references
Netflix makes sure to hire the best not only by calling the references they provide, but also by finding others who know the potential hire.
Hastings usually starts by searching LinkedIn for mutual connections who are closer to him than to the potential employee, so they are more likely to be candid with him. He likes to talk with them via video chat for one important reason.
“When someone is on Zoom, they are much less likely to lie to me,” he said. “I can ask a few questions and they don’t feel like it’s being recorded, which creates appropriate privacy but also semi-anonymity.”
4. Keep or let go
Netflix encourages its managers to take the “gatekeeper test” about once a quarter, Hastings said.
For each of their reports, managers ask themselves if the person quit to work elsewhere, would they try to change their mind and fight to keep them, or would they accept their departure.
“If we’re not going to fight to keep someone, we should proactively give them a generous severance package and try to find someone we might well fight to keep,” Hastings said.
5. Open and honest
“To silently disagree is disloyal,” Hastings said.
He explained that most people are raised to be polite and pleasant, and primarily aim to please their manager and defer to their decisions.
But when a worker sees the company doing something wrong, holding one’s tongue to avoid confrontation or angering superiors can lead to bigger, more entrenched problems and stall the company’s progress.
Netflix is trying to avoid this problem by encouraging “radical candour” among its staff and pushing bosses to “cultivate dissent” or seek out opinions opposed to their own.
“Sometimes if in order to help them grow I have to be willing to talk with my manager, then that’s OK,” Hastings said.
businessinsider
