Netflix Considers Revamping Culture Memo to Emphasize Creativity and Responsibility

Key Takeaway

• Netflix is revising its culture memo, potentially removing "freedom and responsibility" to emphasize ownership and creativity.
• The company aims to redefine its ideal employee as "the unusually responsible person," moving away from the "brilliant jerks" concept.
• Amidst growth and market challenges, Netflix introduces more structured salary bands and spending limits, signaling a shift towards greater operational efficiency.

Culture Memo Revamp

Netflix, the renowned streaming service, is contemplating significant changes to its corporate-culture memo, a document that has been central to its identity and operational philosophy. Among the proposed changes is the removal of the "freedom and responsibility" section, which has been a hallmark of Netflix's approach to employee management. Instead, the company is considering language that emphasizes employees taking ownership of their actions. This shift is part of a broader effort to streamline and simplify the culture memo, making it more accessible to employees and potential recruits. The changes were discussed at Netflix's annual business review meeting in Los Angeles, attended by employees at the director level and above. Some executives expressed concerns about the proposed changes during the meeting.

Emphasizing Creativity and Responsibility

The revamp aims to place a greater emphasis on creativity and creative freedom, reflecting Netflix's commitment to fostering an innovative work environment. The company is exploring the addition of language that describes its ideal employee as "the unusually responsible person" and is considering removing references to not wanting "brilliant jerks," which some feel is too vague. These changes are indicative of Netflix's evolving perspective on its culture, as it seeks to balance freedom with responsibility in a growing and increasingly complex business landscape.

Historical Context and Proposed Changes

Netflix's culture of "freedom and responsibility" has been a defining feature of its success, allowing employees broad leeway in sharing internal documents and setting their own policies for travel, entertainment, and parental leave. Co-founder Reed Hastings, who recently stepped down as co-CEO but remains executive chairman, has been a vocal advocate for this culture, even co-authoring a book titled "No Rules Rules" about the company's unconventional approach. However, as Netflix has grown to 13,000 employees and faced business challenges, it has begun reevaluating some of its cultural practices. The company has already started to impose more cost discipline, establishing formal salary bands and capping spending on company swag.

Adjusting to Growth and Market Challenges

Netflix's consideration of changes to its culture memo comes at a time when the company is navigating increased competition in the streaming market and a need for greater cost control. The move towards more structured salary bands and spending limits reflects a shift from the company's previous stance on employee freedom and responsibility. This evolution suggests Netflix is seeking a balance between maintaining its innovative culture and ensuring operational efficiency and accountability as it continues to grow.

Management Quotes

• A Netflix spokeswoman:

  "Declined to comment."

• Reed Hastings, Co-founder and Executive Chairman of Netflix:

  "Joking that he wasn’t even dead yet and they were changing the culture memo... He then added that he approved of always reviewing the culture memo and making changes."