Hiring for Culture is a very topical subject right now, and one that I keep hearing about at HR Events and from our own client base – its become one of the most important criteria in their Recruitment processes. Recently, I heard a great story about how Netflix place huge emphasis on culture and how this has shaped the entire direction of their business, and underpins not only Recruitment but everything they do. With that in mind, I wrote a case study on how this came about, and what the outcomes have been.
“The horse was the dominant force of human transportation for about 5,000 years. Domesticated, Kazakhstan 3,000 BC. So, for 5,000 years, if you wanted to make a contribution to personal transportation, it was a better saddle, better hooves, better breeding then, in one generation, from 1900 to 1930 everything changed; internal combustion engines.”
That’s a quote directly attributable to Reed Hastingsh, CEO of Netflix, giving a thoughtful masterclass that technological shifts don’t happen incrementally, they happen with vigor and immediacy and change a habit that has lasted for years. Like John Lennon said before him, (or Ferris Bueller depending on your age), innovation happens pretty fast; if you don’t stop and look around, it can pass you by. Just ask John Antioco, former CEO of Blockbuster, who could have bought Netflix for $50million in 2000 but as he said himself, ‘management and vision are two separate things.’ Indeed, they are and for this blog post let’s look at those two separate things that when distilled down in to one, have helped made Netflix such a phenomenon; culture.
Reed Hastings sold his first company in 1997 for $750million. Which is certainly an impressive outcome, but he maintained that for his next business endevour, he would ensure there was a definable company culture in place before the business scaled and became too big to fix. This decision, to set culture from the get go, matters to the people you hire and if you want to attract and retain a certain type of employee, it’s a wise decision, rather than trying to retrospectively adjusting the culture to try and hold on to the best staff.
There are a million stories surrounding Netflix, all of them fascinating, all of them have substance but one that is often overlooked is the boring one of logistics (and how the culture impacted logistical decisions). Remember, Hastings built a company based on posting DVD’s to millions of customers and then had to change fairly quickly to a nascent, largely unproven streaming service from scratch. It’s easy to forget how revolutionary this was 20 years ago. No late fees, keep the DVD’s as long as you want. This was a challenging business model at the time, but remember at our Kazakh horse – it can be achieved but everyone has to be on board at the same time, going in the same direction. It can be argued that you need to be tough and thorough but it takes more courage to let your culture be organic and malleable from the beginning, sharing values, especially when you’re hiring and growing exponentially.
A buzz term heard in tech companies, no doubt originating in Silicon Valley, is the idea of ‘First Principle Thinking – the idea that everything you do is underpinned by foundational belief so, instead of following the process or being a sheep, they’ll bravely stick their head above the parapet and ask, ‘what’s best for the company?’ This can all sound very happy clappy hippy dippy. So many companies tout how cool and radical they are but you soon find upon joining that despite all the high fives and bean bags, the ship is not for turning.
Back to Reed Hastings. No sooner had Netflix got the drop on Blockbuster with the posting of DVD’s, by the late 90’s, streaming on the internet was becoming a reality. Netflix now needed first principle thinkers to adapt and dream it all up again. So, how would Reed not only get the right people this time (which is important) but also avoid hiring the wrong people (equally important).
Around 2005, it was evident to Reed and Wall Street that while Blockbuster was anything but and would file for bankruptcy by 2010, Netflix was a hit and it wouldn’t be going anywhere for a long time to come. He knew that company culture can begin very quickly. From the smallest, earnest start-up to established multi-nationals so it’s imperative to get this right from the start so he introduced a culture deck.
Initially, this was something Reed was doing for himself, to figure out not only what he was looking for in a hire but also to potential employees that this was the culture of Netflix, read it, study it. Some loved it, some hated it. By the late 2000’s, every candidate was given a copy of the deck and it was eventually made public for everyone to read and share. The great thing about the deck, even today is that it’s not a marketing piece, it’s not some sort of sales circular, it’s a sincere, honest piece on a living, breathing real company.
But, not everybody is a first principle thinker, some people want to go to work, do their job and go home and that’s fine. Within that deck, that is laid out clearly, Netflix may not be for you equally though, many people became candidates for Netflix because they loved that what was described in terms of freedom and responsibility that might not have otherwise thought about them as a place to work. Again, though, this demands a commitment to culture.
One term that Reed Hastings uses to describe the culture of Netflix which I love, is that it’s like a sports team, not a family. I can’t stand companies who describes themselves as a ‘family’, in the most David Brent way. Families can help each other and support each other, unconditional love, but family can also take advantage of one another, not do their part because there is a cushion of familial understanding. And most people have a real family somewhere else that don’t live in their office. This is a job, you’re getting paid. A sports team like fraternity will support you but push you, get annoyed with you but knows that if you succeed, they succeed.
The Netflix culture deck, linked below, is a fascinating read. Spotify, Facebook, Linkedin all have culture decks now but Netflix were the first to do it and it certainly doesn’t have the polish or the whiff of mandatory fun off it like the others mentioned have. Hastings deck not only gives you an insight in to how Netflix operates but over the 100 odd slides, it’s clear that this an organic, living breathing document that changes and grows form month to month. It’s a testament to Hastings commitment to culture and to first principle thinking. He wants his employees to accomplish and scale correctly because if you’re employees don’t care about the product, neither will your customer.
We hope you enjoy reading this case study and click here to read more about this interesting approach – if it works for Netflix, it could certainly benefit many other employer brands.
Author: Ellie Doyle
Ellie brings a pragmatic approach to clients hiring challenges, and believes in the power of asking the right questions. She has a phenomenal network of industry contacts – if anyone knows the person for the job, its Ellie. She is famous for her ability to retain even the smallest detail.