Netflix likes to tout its culture of avoiding rules and minimizing corporate bureaucracy. But of course the company has operational guidelines, notoriously detailed in the Netflix Culture document posted on its website. Co-founder Reed Hastings even wrote a 2020 book explaining the principles, titled “No Rules Rules: Netflix and the Culture of Reinvention.”
Now Netflix is releasing an update to its corporate culture rating for the first time in nearly five years, including a copy Variety obtained exclusively before its release on Thursday. The last major update was in 2017, when it distilled Hastings’ original 125-slide presentation from 2009 (which has been viewed over 21 million times).
The fundamentals of the Netflix culture memo, including empowering employees in decision-making, requiring candid feedback, and firing employees who don’t live up to the “dream team,” remain intact. But there are a few key changes. For starters, the document has a new title: “Netflix Culture – Seeking Excellence” (previously it was simply called “Netflix Culture”).
More importantly, the document adds a new directive for employees to act with fiscal responsibility — a change that comes as Netflix in the first quarter saw its first drop in subscribers in more than a decade. The updated Netflix Culture memo also includes a new section titled “Artistic Expression,” explaining that the streamer will not “censor specific artists or voices,” even if employees consider the content “harmful,” and bluntly states “If you find it difficult to support the breadth of our content, Netflix may not be the best place for you.
The Artistic Expression portion of the Netflix Culture doc seems largely a response to the controversy over Dave Chappelle’s “The Closer” that embroiled Netflix last fall over what critics called his transphobic and homophobic comments in the stand-up special. Co-CEO Ted Sarandos defended the company’s decision to keep the Chappelle special on service, sparking a major employee strike in protest.
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“Entertaining the world is an incredible 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,” the new section reads. “To help members make informed choices about what they want to watch, we offer easy-to-use ratings, content warnings and parental controls.
“Not everyone will like — or agree with — everything about our service,” the Artistic Expression section continues. “While each title is different, we approach them with 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 right for them, rather than Netflix censoring specific artists or voices.
The section concludes: “As employees, we support the principle that Netflix offers a diversity of stories, even if we find some titles contrary to our own personal values. Depending on your role, you may need to work on titles that you perceive as harmful. If you’re struggling to support the breadth of our content, Netflix might not be the best place for you.
On the front of the belt, in the “Valued Behaviors” section (formerly called “Real Values”), there is a new entry under “Judgment”: “You are spending our members’ money wisely.”
While this is new to Netflix Culture’s memo, company executives have used similar verbiage in the past – including in the April 2018 quarterly letter to shareholders, which said about its earnings of revenue: “Our job is to spend that money wisely to increase our membership.
That said, other changes to the culture document indicate that Netflix wants to clarify that employees don’t have carte blanche when it comes to company spending. For example, this passage from the document was deleted: “There is practically no control of expenditure and little control of the signing of contracts. Every employee is expected to seek advice and perspective where appropriate. “Use common sense” is our fundamental precept. »
The update also removes the following section: “Note that if our company were to experience financial difficulty, we would not ask our employees to take a pay cut. A sports team with a losing record always pays the top of the personal market for players who it hopes will bring them back to a winning position. On the other hand, if the company is doing well, our widely distributed stock options become very valuable. »
In addition to verbiage about artistic expression, the memo adds three other new sections: “Ethical Expectations” (which says in part, “we act honorably, even when no one is looking” and “We expect all employees to protect confidential company information, whether or not it is marked “confidential””); “Representation Matters” (“Our members want to see a variety of stories and people on screen – and our company and our leadership must reflect this diversity”); and “Employees Direct Our Philanthropy” (documenting that when an employee donates to charity, Netflix donates double that amount to the same group).
The addition of the Ethical Expectations section comes after Netflix said in October it fired an employee who admitted downloading internal data and sharing it outside the company. The information, which was leaked to Bloomberg, included Netflix financials for Chappelle’s ‘Squid Game’ and ‘The Closer’, apparently an effort by an angry staffer to point out that the streamer paid more for it. Chappelle’s controversial content as the top-performing South Korean. Thriller in French.
Even with the addition of the four new sections, the updated Netflix Culture Memo is shorter than the previous version: it is now around 4,070 words, down 6% from 4,340 previously.
According to Netflix, everyone in the company was able to view and comment on the proposed culture note updates in a shared document. Thousands of employees participated in the process, which took place over six months.
The wording of Netflix’s famous ‘Guardian Test’ is essentially the same: “To bolster our dream team, our managers use a ‘Guardian Test’ for each of their employees: if a team member leaves for a role similar in another company, does the manager try to keep them? The document still notes that employees who fail the gatekeeper test “receive a generous severance package so that we can find someone even better for the job”; however, the updated version removed this footnote: “We generally offer a minimum of four months full salary as severance, giving our ex-teammates time to find a new business.”
Some items edited from the Netflix Culture memo are poorly worded items. For example, these two sentences were cut from the goalkeeper test discussion: “Getting kicked out of our team is very disappointing, but there’s no shame” and “We suck at what we want to become”.
Also removed is this scathing observation, which was meant to underscore the fact that a company doesn’t need rules that cover everything: “[W]We also don’t have a dress policy, but no one came to work naked… Most people understand the benefits of wearing clothes to work.
Additionally, Netflix has revised part of the “Freedom and Responsibility” section that previously said, “On rare occasions, freedom is abused. We had a senior employee who organized bribes on IT contracts for example. In the new version, it now reads: “Over the years, some employees have taken advantage of this freedom in various unfortunate ways.”
And this paragraph, which Apple co-founder Steve Jobs named Steve Jobs, was deleted:
We don’t accept the tradition of top executives, who get so involved in the details that their product or service becomes amazing. The legend of Steve Jobs was that his micromanagement made the iPhone a great product. Others take it to new extremes, proudly calling themselves nano-managers. Heads of major networks and studios sometimes make many decisions in the process of creating their content. We don’t emulate these top-down models because we believe we are more effective and innovative when company employees make and own the decisions.
Meanwhile, Netflix’s values section has removed the “Impact” heading. Netflix said it was removed because it’s not technically behavior. The section had these bullet points:
You do an incredible amount of important work
You demonstrate solid and consistent performance so that your colleagues can count on you
You make your colleagues better
You focus on the results rather than the process
Two of these principles are echoed elsewhere in the document, where it says, “You take the time to help Netflix colleagues succeed” and “our core philosophy is people rather than process.”
Finally, here are some other changes worth noting in the Valued Behaviors section:
New entry under “Integrity”: “You act with good intentions and trust your colleagues to do the same”
New entry under “Altruism”: “You openly debate ideas and help implement any decision made even when you disagree”
New entry under “Passion”: “You take pride in entertaining the world”
Changed in “Innovation”: “You like change” becomes “You are flexible and you thrive in a constantly changing organization”
Cut from “Curiosity”: “You contribute effectively outside of your specialty”
You can read the full memo at https://jobs.netflix.com/culture.
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