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What Netflix Can Teach Us About HR

02 February 2014 / by Ashley Freeman

The best thing you can do for employees — a perk better than foosball or free sushi — is hire only “A” players to work alongside them.”

Patty McCord, Harvard Business Review

 

There has been a lot of buzz online lately about the ‘Netflix HR Revolution.’ Leading HR publications are convinced that Netflix’s compelling approach to talent and culture has reinvented the business of human resources.

In a PowerPoint document on the ideas that shaped culture and performance at Netflix, Patty McCord and Reed Hastings outline the elements that make it stand out in the area of talent management.

 

 “We’re like a pro sports team, not a kid’s recreation team. Netflix leaders hire, develop and cut smartly, so we have stars in every position”

‘Netflix Culture: Freedom and Responsibility’ Document

So what is it that Netflix can teach us about the delicate business of HR?

 Netflix are unapologetic about their hunger for excellence, and are dogged about what they believe to be the best way to find it. For example, in the document they write that hard work is irrelevant. Sustained B-level performance, with A-level effort, only generates ‘a generous severance package, with respect’, while an A- level performance, despite minimal effort, is rewarded with more responsibility and great pay.

Netflix focus on what people get done, not how may days they have worked, tapping into a deep understanding of  how to maximise productivity, creativity and motivation.

They develop their people by giving them the opportunity to develop themselves.

They have been encouraging the same seven cultural behaviours since the company was launched:

– Values what we value
– High performance
– Freedom and Responsibility
– Context, not control
– Highly aligned, loosely coupled
– Pay top of the market
– Promotions and development

 

We’d like to home in on one aspect in particular – Context not Control.

Netflix’s policy of ‘Managing Through Context’ is based on the idea that people do better work if they understand the context – if they can link what they do to company goals, or understand the key metrics of success.

Netflix call this context. We call it involvement.

 A clear idea of the bigger picture, and their part in it, is essential to context and involvement in an employee.

 At Netflix, developing a great team is clearly the manager’s most important task. Great teams accomplish great work, after all. It is a rigorous talent management process that means that its’ employees can:

 

Imagine every person at Netflix is someone you respect and learn from”

‘Netflix Culture: Freedom and Responsibility’ Document

 Netflix undoubtedly sets a fine example of an organisation that is nailing its involvement strategy. By making these radical changes to company culture, they have become an entertainment force, growing to 29 million subscribers last year.

 We could all learn a lot from them.

If you would like to discuss with us an involvement strategy for your team, please call us today!

 

 

 

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