5 standout examples of Netflix’s fantastic culture

1. Adequate Performance Gets a Generous Severance Package.

Nothing kills a company quicker than mediocre co-workers, and this is especially true at a start-up where there is tremendous pressure to hire key personnel. Think about a 20-person start-up with one bad employee. That translates to 5% of your workforce being ineffective, so that one person can really wreak havoc. Hiring mistakes will happen, and you need to take quick action. That being said, handle these terminations with class and grace. [with a clear feedback and the right support so they can turn it around quickly if they’re gonna, or find the right spot to thrive if they’re not in it].

2. Brilliant Jerks.

Diverse styles are fine as long as the person embodies the company values. It’s easy to tolerate jerks when things are going well, but things don’t always go well. One jerk, especially in a small start-up, can destroy a company. Hiring pressure can push you to hire a jerk, and you will likely regret it. We did hire a couple of jerks along the way. Shortly thereafter, they were given a generous severance package.

3. Responsible People Thrive on Freedom, and Are Worthy of Freedom.

The natural tendency of all companies as they grow is to create more rules and procedures. RESIST IT AT ALL COSTS! Instead, make the bold decision that Netflix made to increase employee freedom (shown brilliantly in slides 43 and 55). We did, and it paid off for the team. Do it, and your team’s motivation will go up big time.

4. There is No Vacation Policy.

Or said another way, take as much vacation as you want as long as you get your work done. You’re worried about abuse, of course, and you’re right. There will be abuse if you haven’t hired the right people. Hire the right people and this policy is self-correcting. By the way, a hidden benefit is that you don’t have to financially reserve for vacation when you go to a no vacation policy.

5. Act in the Company’s Best Interest.

The executive staff had a vigorous debate about enacting a rigid expense and travel policy. Again, the worry was abuse. Our theory was that it’s self correcting. Employees that continually abused the policy would be given a generous severance package. I do remember one employee who tried to expense a one-mile car trip to interview a candidate. Can you imagine receiving a $0.55 expense report? I couldn’t. We talked about it in our staff meeting, and one of his peers set him straight.
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