Netflix Co-CEO Shares Reasons for Updating Culture Memo
Netflix’s company culture underwent a significant update in June, following a year of feedback from 1,500 employees. During a recent interview at The Wall Street Journal’s Tech Live conference, co-CEO Ted Sarandos addressed the pushback received regarding the update and defended the decision. Sarandos emphasized the ongoing effort to enhance the company’s culture, stating, "We are constantly working on improving the culture." He highlighted the importance of evolving the culture to align with how employees work, rather than imposing rigid guidelines.
The revised culture deck introduced a new section titled "People Over Process," emphasizing the recruitment of individuals who are exceptionally responsible and value openness and freedom. Notably, the update removed the freedom and responsibility section and incorporated changes to the "Keeper’s Test," a tool used by managers to assess when an employee should be let go. The updated version now includes a provision encouraging regular communication between employees and their managers about performance.
The "Keeper’s Test" was initially introduced in a comprehensive memo in 2009, when Netflix had fewer than 300 employees. Sarandos acknowledged the evolution of the document, noting that it now better reflects the culture of the company’s current workforce of over 14,000 employees. He remarked on the balance between freedom and responsibility in the updated version, emphasizing the importance of both elements in shaping the company’s culture.
Formerly heralded by industry figures as a pivotal document, Netflix’s culture memo aims to foster an environment that attracts top talent and cultivates high-performing teams within the organization. The company has periodically revised the memo, with a significant update in 2022 that emphasized values like "representation" and "artistic expression" while upholding a meritocratic approach. The 2022 update also highlighted the option for employees to leave if they disagreed with the content they were working on.
Netflix’s commitment to refining its culture to adapt to changing dynamics and employee needs underscores its dedication to fostering a supportive and innovative work environment. While representatives for Netflix did not provide immediate comments on these updates, the company’s continuous efforts to evolve its culture demonstrate a proactive approach to maintaining a thriving organizational ethos.
