Netflix Tells 'Woke' Employees Free Speech is More Important Than their Feelings and if they Don't Like It they Can Leave the Company
INCLUDED Full Text of 'Seeking Excellence': Netflix's updated culture memo that was sent to staff
Netflix has struck back against the apparent culture war taking place inside the company.
In a new "culture memo" made public Friday, the streaming service giant outlined a handful of directives to its employees, explaining that Netflix would not "censor specific artists or voices" in future projects, even if certain employees found that particular content "harmful."
And if the employees don't like the revamped company stance, they're free to leave at any time.
The controversy could have something to do with comedian Dave Chappelle.
Anti-free speech activists recently tried to "cancel" the world-renowned Chappelle for jokes about transgender people, among other supposedly taboo topics; and that venom went up a notch after Netflix signed Chappelle to a megadeal, reportedly worth $60 million.
But Netflix chose not to surrender its position of supporting free expression. Hence, the doubling down on the memo section entitled, "Artistic Expression."
The language reportedly reads: "Entertaining the world is an amazing opportunity and also a challenge because viewers have very different tastes and points of view. So we offer a wide variety of TV shows and movies, some of which can be provocative. To help members make informed choices about what to watch, we offer ratings, content warnings and easy to use parental controls. Not everyone will like — or agree with — everything on our service.
"While every title is different, we approach them based on the same set of principles: we support the artistic expression of the creators we choose to work with; we program for a diversity of audiences and tastes; and we let viewers decide what's appropriate for them, versus having Netflix censor specific artists or voices."
The memo also contains a section aimed at curbing staff spending, under the "Valued Behaviors" heading.
That section reads: "You spend our members' money wisely."
It continues: "There are virtually no spending controls and few contract signing controls. Each employee is expected to seek advice and perspective as appropriate. 'Use good judgment' is our core precept."
According to The Daily Mail, there's even a subsection entitled, "Ethical Expectations," which apparently derives from a former employee being fired in October, after admitting they "downloaded internal data" and shared it with a third party.
Netflix's seismic philosophical shift also coincides with deflating first-quarter results. The streaming service reportedly lost 200,000 subscribers in the first quarter of 2022, and could potentially lose 2 million more soon.
The company also lost subscribers for the first time in more than a decade, and revenue reportedly grew at its slowest pace in years — with shares plunging 35%, and Netflix's market value dropped by $54 billion.
"Well, it's a b***h," said Reed Hastings, Netflix chair and co-chief executive, of the results during a meeting with employees last month, according to The Wall Street Journal.
Netflix's programming-based revenue problems likely cover multiple levels.
The company reportedly churned out 500 original programs last year, which might be great for discerning consumers, but extremely costly on the business end.
There were reports of a single episode of "Stranger Things" from the fourth season drawing a staggering production price tag of $30 million.
And "The Irishman" movie, a 209-minute opus starring Leonard DiCaprio and Robert De Niro, reportedly cost $225 million to make.
Author: Jay Clemons
'Seeking Excellence': Netflix's updated culture memo that was sent to woke staff
Netflix Culture — Seeking Excellence
Great entertainment thrills and inspires. It sparks laughter, tears, gasps and sighs, stirring our emotions and nourishing our spirit. Ever since humans learned to speak, storytelling has been essential to our happiness.
At Netflix, we aspire to entertain the world—creating great stories from anywhere and offering greater choice and control for people everywhere. To help us succeed, we've created an unusual employee culture. This document is about that culture, and how we can continuously improve as a team so that we can better serve our members.
What makes Netflix special is how much we:
Encourage decision-making by employees
Share information openly, broadly and deliberately
Communicate candidly and directly
Keep only our highly effective people
The thing we most value is working with talented people in highly creative and productive ways. That's why our core philosophy is people over process, and why we try to bring great people together as a dream team. Of course, any growing business requires some process and structure. But with our people-first approach, we can be more flexible, creative and successful in everything we do.
We believe a company's actual values are shown by whom they hire, reward or let go. Below are the specific behaviors and skills we care about most. If these values describe you, and the people you want to work with, you're likely to thrive at Netflix.
You make wise decisions despite ambiguity
You use data to inform your intuition and choices
You look beyond symptoms to identify systemic issues
You spend our members' money wisely
You make decisions mostly based on their long term, rather than near term, impact
You seek what is best for Netflix, not yourself or your team
You are humble and open-minded about others' great ideas
You make time to help colleagues across Netflix succeed
You debate ideas openly, and help implement whatever decision is made even when you disagree
You make tough decisions without agonizing or long delay
You take informed risks and are open to possible failure
You question colleagues' actions inconsistent with these behaviors
You are willing to be vulnerable, in search of truth and connection
You give and take feedback to and from colleagues at any level
You listen well and seek to understand before responding
You are calm in stressful situations
Your writing and thinking are concise and coherent
You adapt your communication style so you can work effectively with different people, including those who don't share your native language or cultural norms
You work well with people of different backgrounds, identities, values and cultures
You are excited to help build diverse teams where everyone feels welcomed and respected
You recognize we all have biases and work to counteract them
You take action if someone is marginalizing a colleague
You treat everyone with respect regardless of their position at Netflix
You exhibit and are known for candor and transparency
You only say things about colleagues that you are willing to share with them
You admit mistakes openly and share learnings widely
You always share relevant information internally, even when uncomfortable
You act with good intent and trust your colleagues to do the same
You care deeply about Netflix's success
You inspire others with your drive for excellence
You are excited about your work
You are proud to entertain the world
You are tenacious and optimistic
You develop new ideas that prove impactful
You look for every opportunity to reduce complexity and keep things simple
You challenge prevailing assumptions, and suggest better approaches
You are flexible and thrive in a constantly evolving organization
You learn rapidly and eagerly
You seek alternate perspectives to improve your ideas
You see patterns and connections that other people miss
You seek to understand members' changing tastes and desires
It's easy to talk about valued behaviors; it's harder to live them. In describing courage we say, 'You question colleagues' actions inconsistent with these behaviors.' We all work to keep each other accountable for living up to these standards, especially our leaders.
Honest, Productive Feedback
At Netflix, positive and constructive feedback is part of everyday life—not only an annual event. Meaningful feedback can be hard to give or accept. But like any new habit, it gets easier with practice. So we help people learn to give and receive feedback through coaching and modeling the behaviors we want to see across the company. It takes courage and selflessness to ask someone what you could be doing better, or to ask yourself what feedback you have yet to share with a colleague. Both rely on trust and positive intent, which is why we invest time in developing strong professional relationships. We know this level of candor can be especially challenging for new hires, people in parts of the world or cultures where direct feedback is uncommon, and if there's a power imbalance. But it is an important part of getting stronger, as individuals and as a company, because it's what fuels our dream team.
A dream team is one in which all of your colleagues are extraordinary at what they do and highly effective working together. Our version of a great workplace is not great perks, although we have many. It's about investing in a dream team of talented people who are excited to pursue ambitious shared goals. On our dream team we encourage collaboration, share information and discourage politics. There's lots of love and there are demanding peers. It's exhilarating and how we learn the most, do our best work, improve the fastest and have the most fun.
To help us attract and retain stunning colleagues, we pay employees at the top of their personal market. This is a good-faith estimate of the highest compensation each employee could make at a similar role in local peer companies, combined with what we would pay to replace them if needed. Some employees' estimated personal market will rise rapidly, either due to their performance or a shortage of talent in that area. For others, it may be flat year-to-year due to market conditions, even if they do great work.
We model ourselves on being a professional sports team, not a family. A family is about unconditional love. A dream team is about pushing yourself to be the best possible teammate, caring intensely about your team, and knowing that you may not be on the team forever. Dream teams are about performance, not seniority or tenure. It is up to the manager to ensure that every player is amazing at their position, plays effectively with others and is given new opportunities to develop. That's how we keep winning the championship (entertaining the world). Unlike a sports team, as Netflix grows, the number of players also grows. We work to foster players from the development leagues so they can become the stars of tomorrow.
To strengthen our dream team, our managers use a 'keeper test' for each of their people: if a team member was leaving for a similar role at another company, would the manager try to keep them? Those who do not pass the keeper test (i.e. their manager would not fight to keep them) are given a generous severance package so we can find someone even better for that position—making an even better dream team. Being on a dream team is the thrill of a professional lifetime, and team members are incredibly supportive of each other. This is why 'You make time to help colleagues across Netflix succeed' is a valued behavior.
Managers communicate frequently with each member of their team so surprises are rare. We also encourage employees to check in with their manager at any time by asking, 'How hard would you work to change my mind if I were thinking of leaving?'
Dream team members take informed risks, which require courage and encouragement from leaders and peers. We have many successes and failures, which is how we learn and why everyone is evaluated on their whole record (versus simply mistakes or bets that didn't pay off).
Loyalty is great as a stabilizer. Employees with a strong track record at Netflix get leeway if their performance takes a temporary dip, or if they are in a new role. Similarly, we want employees to stick with Netflix through any short term dips the company may have. That said, we don't believe in long-term allegiance to a stagnant company, or to an only-adequately-performing employee.
On our dream team, there are no brilliant jerks as they are detrimental to great teamwork. We insist on decent human interactions, no matter how brilliant someone may be. When highly capable people work together well, they inspire each other to be more creative, more productive and ultimately more successful as a team than they could be individually.
Succeeding on a dream team is about being effective, not about working hard. Sustained 'B' performance, despite an 'A' for effort, gets a severance package with respect. Sustained 'A' performance, even with a more modest level of effort, gets rewarded. Of course, to be great, most of us have to put in considerable effort. But we don't measure someone's contribution by the hours they work.
Dream teams are not right for everyone. Some people prefer job security, and choose to work at companies that are more focused on stability and seniority, and less rigorous about performance management. Our model works best for people who value excellence and the opportunities it provides.
You learn a lot at Netflix working on hard problems with stunning colleagues, and that increases your market value. Knowing that other companies would quickly hire you if you left Netflix is comforting. We see outside interviewing as acceptable, and encourage employees to talk with their managers about what they learn in the process. Ultimately, your ability to earn a great income is based on your skills and reputation, not on your seniority at one company.
Freedom and Responsibility
At some companies, people ignore trash on the floor, leaving it for someone else to pick up. At other companies, people lean down to pick it up, just like they would at home. We try hard to be a company where everyone feels a sense of responsibility to make us better. Picking up the trash is a metaphor for taking care of problems, small and large, and never thinking 'that's someone else's job.' Creating a sense of ownership helps this behavior come naturally.
Our goal is to inspire people more than manage them. We want our teams to do what is best for Netflix. This, in turn, generates a sense of responsibility, accountability and self-discipline that drives us to do great work. Freedom itself is not the goal; the goal is creating a strong sense of caring for Netflix so that people do what is best for the company.
In some organizations, there is an unhealthy emphasis on process and not much freedom. These organizations didn't start out that way, but every time something went wrong the python of process squeezed harder. Specifically, many organizations have freedom and responsibility when they are small and everyone knows each other. As they grow, however, their business gets more complex, and sometimes the level of passion and talent goes down. As the informal, smooth-running organization starts to break down, pockets of chaos emerge. At this point, the general outcry is to 'grow up' and add processes to reduce the chaos. As rules and procedures proliferate, more value is placed on following the rules. The system is dummy-proofed, and creative thinkers are told to stop questioning the status quo. This kind of organization may be very specialized and well adapted to its business model. However, over 10 to 100 years, the business model inevitably has to change, and most of these companies are unable to adapt.
To avoid this, we work hard to maintain employee excellence and keep our business as simple as possible given our growth ambitions. We want to be a company of self-disciplined, accountable people who discover and fix issues without being told to do so.
Some examples of our unusual amounts of employee freedom:
We share documents internally broadly and systematically, so people can read and often comment on them—including memos on each title's performance, our strategy decisions and product feature tests. There are some leaks, but the value of highly-informed employees is much greater.
Our policy for travel, entertainment, gifts and other expenses is five words long: 'Act in Netflix's best interest.'
Our vacation policy is: 'Take vacation.' We don't have any rules about how many weeks per year. Frankly, we mix work and personal time quite a bit, doing email at odd hours or taking off a weekday afternoon. Our leaders make sure they set good examples by taking vacations, often coming back with fresh ideas, and encouraging the rest of the team to do the same.
Our parental leave policy is: 'Take care of your baby and yourself.' Parents generally follow local norms.
You might think this much freedom would lead to chaos. Instead, it has created an extremely successful business model over the last 25 years. The lesson is you don't need policies for everything. You can be groundbreaking without them. Freedom can (and does) lead to chaos when we fail to couple it with a strong sense of responsibility. That is why freedom and responsibility go together.
Freedom also doesn't mean your managers are not involved in your work. Getting input from leaders, peers or direct reports improves decision making. It's another example of how freedom can't exist without responsibility.
There are a few important exceptions to our anti-rules pro-freedom philosophy. We are strict about ethical and safety issues. We have no tolerance for harassment of employees or trading on insider information, for example. We also have strict controls around our members' payment information. But these are all edge cases.
In general, we believe freedom and rapid recovery are better than trying to prevent error. We are in a creative business and our biggest threat over time is a lack of innovation. So we are relatively error tolerant except where safety is an issue—and we focus on ensuring that any error prevention efforts don't limit inventive, creative work. Rapid recovery is possible if people have great judgment.
Over the years, some employees have taken advantage of this freedom in various unfortunate ways. But those are the exceptions, and we try to avoid over-correcting. Just because a few people abuse their freedom doesn't mean the rest of our employees aren't worthy of great trust.
Some processes are about increased productivity, rather than error avoidance. One process we do well is purposeful, scheduled meetings. We plan an agenda ahead of time, including thinking through what needs synchronous discussion versus what can be done offline. We use these meetings to learn from each other and get more done, rather than prevent mistakes or approve tactical decisions.
For every significant decision, we identify an informed captain of the ship who is an expert in their area. They are responsible for listening to other people's views and then making a judgment call on the right way forward. We avoid decisions by committee, which would slow us down and diffuse responsibility. It is sometimes challenging and always important to agree up front who is the informed captain for a project.
On big strategic issues, the captain farms for dissent and other alternatives to ensure they are truly informed. Dissent can be difficult, which is why we make an effort to stimulate discussion. Often, groups will meet to debate topics. But then the captain needs to decide. We don't wait for consensus or vote by committee, nor do we drive to rapid, uninformed decision making. Small decisions may be shared just by email, while large ones will merit a memo with a discussion of the various positions and why the informed captain made that decision. The bigger the decision, the more extensive the debate. Afterwards, as the impact becomes clearer, we reflect on the decision and see how we could do even better in the future.
Disagree Then Commit
If an employee disagrees on an important open issue, it is their responsibility to explain why, ideally in person and in writing. Discussion clarifies the different views, and concise writing of the core issues helps people reflect on the wise course. It also makes it easier to share views openly and widely. The informed captain on that decision has the responsibility to welcome, understand and consider the different opinions (aka farming for dissent), even if they don't agree. Once the informed captain makes a decision, we expect everyone—including those who disagreed—to commit and help make the outcome as successful as possible.
Our members want to see a variety of stories and people on screen—and our company and leadership should reflect that diversity. Just like our members, our employees have unique perspectives based on their backgrounds and experience. As we grow, we are working to make our employees, suppliers, off and on-screen talent better reflect our membership so that we can better entertain the world. We have evolved our employee and leadership diversity to be some of the best in our industry, and we'll continue to improve so that everyone feels a sense of belonging at Netflix.
Entertaining the world is an amazing opportunity and also a challenge because viewers have very different tastes and points of view. So we offer a wide variety of TV shows and movies, some of which can be provocative. To help members make informed choices about what to watch, we offer ratings, content warnings and easy to use parental controls.
Not everyone will like—or agree with—everything on our service. While every title is different, we approach them based on the same set of principles: we support the artistic expression of the creators we choose to work with; we program for a diversity of audiences and tastes; and we let viewers decide what's appropriate for them, versus having Netflix censor specific artists or voices.
As employees we support the principle that Netflix offers a diversity of stories, even if we find some titles counter to our own personal values. Depending on your role, you may need to work on titles you perceive to be harmful. If you'd find it hard to support our content breadth, Netflix may not be the best place for you.
Context not Control
We strive to develop good decision-making muscles across our company. We pride ourselves on how few, not how many, decisions our senior managers make. That said, we don't believe in hands-off management. Each leader's role is to coach, set context, give suggestions and feedback, and be highly informed about their team's work. Rather than micro-managing small decisions, leaders can explore the details of different projects. This information can then be used to set better context for their teams, so more decisions are made well. We believe Netflix is most effective and innovative when employees across the company make and own decisions.
We also believe fewer management layers makes us more agile. Our 'context not control' culture works best when leaders manage many direct reports, giving each employee sufficient autonomy to do the best work of their lives. Sometimes we have smaller teams due to specialization or sub-scale environments, but those should be exceptions and not the norm. Generally leaders find between six and twelve direct reports a good balance between too many layers and too little time to add value.
There are some exceptions to 'context not control'. For example, when: it's an urgent situation and there is not enough time to develop and share context; a new team member hasn't yet absorbed enough context to be confident; it's recognized that the wrong person is in a decision-making role (temporarily, no doubt); or an unambiguous ethical or compliance breach needs to be stopped.
Highly Aligned, Loosely Coupled
As companies grow, they can become highly formal and inflexible. Negative symptoms include:
Senior management is involved in many small decisions
There are numerous cross-departmental buy-in meetings to socialize tactics
Pleasing other internal groups takes precedence over pleasing members
The organization is highly coordinated and less prone to error, but slow and frustrating
We avoid this by being highly aligned and loosely coupled. We spend lots of time debating and writing down strategy and context, and then trust each other to execute on tactics without prior approval. Often, two groups working on the same goals won't know the details of, or have approval over, the other's activities. If something doesn't seem right later, we have a candid discussion. We may find that the strategy was too vague (i.e. insufficient context) or the tactics were not aligned with the agreed strategy. And we discuss how we can do better in the future.
The success of a highly aligned, loosely coupled work environment depends on talented individuals working well together, and setting effective context. Ultimately, the end goal is to grow the business for a bigger impact while increasing flexibility and agility. So we seek to stay fast and nimble, even as we grow.
Beyond candor in our day-to-day interactions, we act honorably, even when no one is looking. One test we use is to ask whether we would be ashamed if our actions were made public—and avoid doing anything where the answer would be yes.
Separately, we have lots of information that we want to keep confidential because it is commercially sensitive. We expect all employees to protect confidential company information, whether or not it is marked 'confidential'.
Employees Direct our Philanthropy
Netflix donates tens of millions of dollars to worthy causes around the world every year. Instead of leadership picking particular causes, we do this through a two-to-one employee match. When an employee donates to a charitable group, Netflix donates double that amount to the same group. This democratizes our giving decisions, and incentivizes employees to support causes they're passionate about.
Seeking Excellence to Drive Success
We do not seek to preserve our culture—we seek to improve it. Every new employee helps to shape and evolve the culture so we find new ways to accomplish more together. We are learning faster than ever, because we have more dedicated people with more diverse perspectives working to excel as the dream team.
That cultural excellence propels our business excellence, which increases member satisfaction and in turn propels our long term growth and stock price. It's how we build an extraordinarily successful company entertaining the world.
As we wrote in the beginning, what is special about Netflix is how much we:
Encourage decision-making by employees
Share information openly, broadly, and deliberately
Communicate candidly and directly
Keep only our highly effective people
Finally, Antoine de Saint-Exupéry, the author of The Little Prince, shows us the way:
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.
Mostly for our salaried employees; there are limitations on this for our hourly employees due to legal requirements.