Responsibility Over Freedom: How Netflix’s Culture Has Changed

Netflix has traditionally been known for its secretive nature: lacking Nielsen ratings, providing minimal explanation for show cancellations, and rarely sharing box office figures for its occasional theatrical releases. Despite this outward opacity, the streaming giant has long maintained an aggressively transparent internal culture. This approach was first encapsulated in 2009 when Reed Hastings, Netflix's co-founder and chief executive, introduced the company's ethos in a 125-slide presentation. This presentation popularized terms like “stunning colleagues,” “the keeper test,” and “honesty always,” emphasizing a philosophy of relentless and unfiltered candor, which stood in stark contrast to Hollywood’s usual business practices. This internal culture, to the frustration of past employees and current competitors, seems to be a key factor in Netflix’s success.

Over the years, Netflix has introduced three additional culture memos. These documents undergo extensive review by top executives and include feedback from employees who can comment on the draft in a shared Google Doc. The latest memo, released internally on May 8, received 1,500 comments from employees and took eight months to finalize, as stated by Sergio Ezama, Netflix’s chief talent officer. The memo is five pages long—half the length of Hastings's final version in 2022—and includes subtle revisions to its core tenets.

In Hastings’s 2009 presentation, titled “Netflix Culture,” the subheading “Freedom and Responsibility” highlighted the trust Netflix placed in its employees to act in the company’s best interests. The new memo maintains these principles but prioritizes the philosophy of “People Over Process,” indicating that Netflix hires responsible individuals who thrive in an open and free environment.

The infamous keeper test now includes a reassuring note: “The keeper test can sound scary. In reality, we encourage everyone to speak to their managers about what’s going well and what’s not on a regular basis.”

As the company has grown to over 13,000 employees, the new memo states, “Not all opinions are created equal,” reflecting the impracticality of involving everyone in every decision, a sentiment echoed by Elizabeth Stone, the company’s chief technology officer.

Netflix is known for frequent organizational changes, a practice that critics argue leads to job insecurity among employees. Ted Sarandos and Greg Peters now serve as co-chief executives following Hastings’s transition to the executive chairman role, and the company continues to evolve. However, the latest memo focuses more on expected employee behavior than on future aspirations.

Tom Riegg, another Netflix executive, encapsulated the company’s approach: “We hired you, and if you think this is the best thing, and you’ve farmed for dissent, and you’ve taken in all the feedback, and this is where you landed, let’s give it a shot.”

Hastings appeared relaxed in a recent video interview, likely because he no longer has to endure the demanding schedule he maintained as chief executive—a role now supplanted by his philanthropic endeavors and owning a ski mountain. Hastings is no longer subject to the intense feedback culture at Netflix, which can be challenging for new employees, especially those from outside Silicon Valley.

For example, Michael Wang, an Asian American employee, initially struggled with giving candid feedback due to cultural differences and has since worked on finding a balance. Elizabeth Stone shared an anecdote about an engineer who introduced himself by admitting to a bug that recently brought down the service. This introduction sparked a positive conversation about the company’s improvement culture rather than prompting calls for his dismissal.

Hastings no longer has to take feedback but still provides it. He praised Sarandos and Peters for waiting a year after his departure to revise the culture memo. “It’s 10 percent better,” he said. “It’s not radically better, but it’s as good as any improvement I ever made on it. So that’s a compliment.”  

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