Closing our series of articles commenting on how Netflix reinvented HR. This is an interview asking about the aftermath of the strategic changes implemented in the company. I find it easy reading with interesting vocabulary, with nothing much else to add. Wouldn’t it be wonderful to actually be able to make such changes and see how things panned out afterwards? Don’t forget to comment below or send personal work to: email@example.com My suggestion for homework, rewrite the interview with other words, to mean the same thing.
Crafting a Culture of Excellence
Netflix founder and CEO Reed Hastings discusses the company’s unconventional HR practices.
HBR: Why did you write the Netflix culture deck?
Hastings: It’s our version of Letters to a Young Poet for budding entrepreneurs. It’s what we wish we had understood when we started. More than 100 people at Netflix have made major contributions to the deck, and we have more improvements coming.
Many of the ideas in it seem like common sense, but they go against traditional HR practices. Why aren’t companies more innovative when it comes to talent management?
As a society, we’ve had hundreds of years to work on managing industrial firms, so a lot of accepted HR practices are centered in that experience. We’re just beginning to learn how to run creative firms, which is quite different. Industrial firms thrive on reducing variation (manufacturing errors); creative firms thrive on increasing variation (innovation).
What reactions have you gotten from your peers to steps such as abolishing formal vacation and performance review policies? In general, do you think other companies admire your HR innovations or look askance at them?
My peers are mostly in the creative sector, and many of the ideas in our culture deck came from them. We are all learning from one another.
Which idea in the culture deck was the hardest sell with employees?
“Adequate performance gets a generous severance package.” It’s a pretty blunt statement of our hunger for excellence.
Have any of your talent management innovations been total flops?
Not so far.
Patty talks about how leaders should model appropriate behaviors to help people adapt to an environment with fewer formal controls. With that in mind, how many days off did you take in 2013?
“Days off” is a very industrial concept, like being “at the office.” I find Netflix fun to think about, so there are probably no 24-hour periods when I never think about work. But I did take three or four weeklong family trips over the past year, which were both stimulating and relaxing.