🎯How Netflix keeps crushing it with its culture of excellence
How does Netflix do it?
Today, we’re going to talk about one of the most successful and influential companies in the world: Netflix.
Netflix is not just a streaming service. It’s a culture-shaping powerhouse that has revolutionized the entertainment industry, disrupted the cable TV market, and created some of the most popular and acclaimed shows and movies of our time.
But how does Netflix do it? How does it consistently produce high-quality content that attracts and retains millions of loyal subscribers? How does it foster a culture of excellence, innovation, and creativity among its employees?
To find out, we watched an episode of Lenny’s Podcast, a show that features interviews with product, growth, and career leaders. The host, Lenny Rachitsky, is a former product lead at Airbnb and a writer of a popular newsletter on business and tech.
In this episode of the week, Lenny talks to Elizabeth Stone, the chief technology officer of Netflix. She previously served as vice president of product data science and engineering, and as vice president of data and insights, at Netflix. Before Netflix, Elizabeth was vice president of science at Lyft, chief operating officer at Nuna, a trader at Merrill Lynch, and an economist at Analysis Group.
In their conversation, they discuss:
Elizabeth’s advice for career advancement
Netflix’s unique high-performance culture
How, and why, Netflix maintains a high bar for excellence
Intentional leadership practices
How to foster an “open door” culture within your team
The Keeper Test and how it contributes to maintaining a high bar for excellence
The power of transparent communication
Much more
You can watch the full episode here ⬇️
Here are some of the key takeaways we learned from Elizabeth:
Success and career growth
Elizabeth shared her journey from being an economist to becoming the CTO of Netflix. She said that she always followed her curiosity and passion, and sought out opportunities to learn new skills and solve new problems.
She also said that she never had a specific career goal or plan, but rather focused on doing her best at whatever she was working on, and being open to new challenges and feedback.
She advised aspiring leaders to:
Seek out mentors and sponsors who can guide and support you
Be proactive and vocal about your interests and aspirations
Take risks and embrace failures as learning opportunities
Be humble and curious, and always seek to improve yourself
Build relationships and trust with your peers and managers
Netflix culture: high talent density
Elizabeth explained that Netflix’s culture is based on the idea of having a high talent density, which means hiring and retaining only the best people for each role.
She said that Netflix believes having a high talent density leads to higher performance, satisfaction, and innovation.
She also said that Netflix does not compromise on its hiring standards, and does not settle for mediocrity or complacency. Netflix expects its employees to be exceptional, passionate, and aligned with its vision and values.
She said that Netflix’s culture is not for everyone and that some people may find it too demanding, too intense, or too competitive. She said that Netflix is upfront and transparent about its culture, encouraging candidates and employees to self-select in or out.
Netflix culture: candor and directness
Elizabeth said that another key aspect of Netflix’s culture is candor and directness, which means giving and receiving honest and constructive feedback and having open and respectful discussions about any issues or disagreements.
She said that Netflix believes that candor and directness lead to better decisions, outcomes, and relationships.
She also said that Netflix does not tolerate politeness, sugarcoating, or avoiding conflicts. Netflix expects its employees to be candid and direct, and to share their opinions and perspectives, even if they are unpopular or controversial.
She said that Netflix’s culture requires a lot of courage, maturity, and empathy and that some people may find it too harsh, too confrontational, or too personal. She said that Netflix trains and coaches its employees on how to give and receive feedback effectively, and how to handle difficult conversations gracefully.
The Keeper Test
Elizabeth described the Keeper Test, which is a tool that Netflix uses to evaluate its employees and maintain a high bar for excellence.
The Keeper Test is a simple question that managers ask themselves about each of their direct reports: “If this person told me they were leaving for a similar job at a peer company, how hard would I try to keep them?”
If the answer is “I would try hard to keep them”, then the employee is a keeper. If the answer is anything less than that, then the employee is not a keeper and should be let go.
Elizabeth said that the Keeper Test is a way of ensuring that Netflix only keeps the people who are truly exceptional, passionate, and aligned with its vision and values.
She also said that the Keeper Test is a way of showing respect and honesty to the employees and allowing them to find a better fit elsewhere.
She said that Netflix’s culture is very generous and supportive to its employees and that it offers them a lot of freedom, responsibility, and compensation. But it also expects them to deliver outstanding results, and to be keepers.
Netflix culture: freedom and responsibility
Elizabeth said that the final element of Netflix’s culture is freedom and responsibility, which means giving its employees a lot of autonomy and flexibility and trusting them to make the best decisions for the company.
She said that Netflix believes that freedom and responsibility lead to more creativity, more ownership, and more accountability.
She also said that Netflix does not have a lot of rules, policies, or processes, and does not micromanage or control its employees. Netflix expects its employees to be self-motivated, self-disciplined, and self-aware, and to act in the best interest of the company.
She said that Netflix’s culture is very empowering and rewarding to its employees and that it allows them to experiment, innovate, and grow. But it also requires them to be responsible, reliable, and rational, and to justify their actions and choices.
We hope you enjoyed this newsletter and learned something new and useful from Elizabeth Stone.
YOUTUBE CORNER
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