Reference no: EM133438869

"At Netflix, Radical Transparency and Blunt Firings Unsettle the Ranks

Netflix takes its culture seriously, believing it a crucial ingredient in the success the company has enjoyed enroute to becoming a behemoth with 137 million global subscribers. To many Netflixers, the culture, at its worst, can also be ruthless, demoralizing and transparent to the point of dysfunctional.

The Netflix way emphasizes "freedom and responsibility," trusting employees to use discretion-whether it is about taking vacation, flying business class or expensing an Uber ride home. Virtually every employee can access sensitive information, from how many subscribers sign up in each country to viewership of shows to contractual terms for Netflix's production deals. Executives at the director level and above-some 500 people-can see the salaries of every employee.

Employees are encouraged to give one another blunt feedback. Managers are all told to apply a "keeper test" to their staff-asking themselves whether they would fight to keep a given employee-a mantra for firing people who don't fit the culture and ensuring only the strongest survive. In little over a decade, Netflix has gone from a DVD-by-mail outfit to a globe-spanning Hollywood powerhouse with more than 6,000 full- and part-time employees, including nearly 2,000 added just this year so far. The company has more than doubled its full-time employee base since 2011, as it has transformed from a DVD-by-mail company into a streaming service, ventured into Hollywood in a big way and expanded globally. "As you scale a company to become bigger and bigger how do you scale that kind of culture?" said Colin Estep, a former senior engineer who left voluntarily in 2016. "I don't know that we ever had a good answer."

"Being part of Netflix is like being part of an Olympic team," the company said in a written statement. "Getting cut, when it happens, is very disappointing but there is no shame at all. Our former employees get a generous severance and they generally get snapped up by another company."

The streaming service appeals to people who want to work on the vanguard of media and technology. It pays rich salaries, sometimes offering to more than double pay for new recruits and giving six-figure raises in a year. Mr. Welch, the former Netflix talent executive, said the company's hiring decisions are based 50% on cultural fit and 50% on hard skills, versus 80% on hard skills at other companies where he has worked.

New employees soon learn to speak Netflix. The lingo includes phrases like "What is your north star," "highly aligned, loosely coupled," and "context, not control." "If you don't use that lingo on a daily basis, you're not going to succeed," said one Netflix short-timer."

Question

What do you think about the Netflix culture as described above? What is such a culture trying to achieve and what are the risks associated with it? Analyze the culture and compare it with that of Zappos.