Category: 3 – SHELF it (All Categories are 1 – Read ASAP!, 2 – BUY it!, 3 – SHELF it, 4 – SOMEDAY it)
Comments: A helpful insight into Netflix’s culture – which is unique even by Silicon valley standards.
Insights that resonated:
1. Optimize for high talent density and attract + retain this talent by paying top-of-market. Do this in cash – not with bonuses, RSUs, etc. There are thus no stock cliffs at Netflix – it is the manager’s duty to keep ensuring the employee is continually paid top-of-market. Employees are encouraged to do their own research as well – e.g. interview elsewhere and come back with a competing offer to ensure the manager has the right data.
2. Netflix is a high performing sports team, not a family. One practice that drives this hope is “the keeper test.” Every 6 months to a year, every employee is encouraged to ask their manager – “if I had an offer to leave Netflix, would you fight to keep me?” If the answer is yes, all is well. If no, then the employee is paid a generous severance. If in between, it is a chance to receive helpful constructive feedback and course correct. It helps that this is not done in isolation – candid feedback is a big feature of the culture at Netflix.
(I’ve thought about this practice a bunch since and think it would be helpful across companies with different cultures.)
3. After optimizing for high talent density, provide near complete freedom and responsibility for creative roles – no control processes (e.g. expense, procurement, etc.) and complete decision making power. This comes with the responsibility to do the right thing for Netflix.
Marler's Observatory 