Netflix: Model for Values that Regenerate

Reed Hastings, the co-founder and CEO of Netflix has been kind enough to share the work Netflix has done to take bold and dramatic steps towards creating a regenerative enterprise. In this slide deck, Hastings presents the Seven Aspects of Netflix Culture and, most importantly, how they permeate Netflix to create the culture that makes a growing company able to thrive in a rapidly changing world:

• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions and Development

Rarely has there been such a clear articulation of values and how they play out to create a specific culture. Beyond that, Netflix values are specifically designed to form a creative and innovative culture with the eschewing of authoritative managing's command and control practices and the adoption of regenerative managing's inspiration and liberation practices.

Hastings explains the tight linkage between enterprise culture and the long-term objective of Netflix, "Culture is How a Firm Operates: What practices give Netflix the best chance of continuous success for many generations of technology and people." Netflix methods to avoid of command and control as the company grows and becomes more complex should provoke deep discussion by the leaders of all enterprises.

I love the Netflix rationale for its approach to compensation! Be sure and look that over.

Embedded here is Version 1, the 1st Edition, of the slide deck of information that Hastings created in 2009. There is also a Version 2, the 2nd Edition, dated Aug 01, 2009.

Some reflections in light of Regenerative Managing

Note that the presentation stops short of defining an enterprise meaningful purpose per se that the values and all of their derivative practices apply to. But the recognition of the need for a meaningful purpose stands out in the Context section. "If you want to build a ship, don't drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea." - Antoine De Saint-Exupery, Author of The Little Prince. What I do not see is evidence for an overall enterprise guiding meaningful purpose for Netflix.

Also note that Netflix requires a culture that supports "rapid innovation and excellent execution" but does not say much about managing practices that insure these outcomes. These outcomes require explicitly exploring to discover new value creation opportunities, exploiting to gain further value from existing opportunities, operation to create immediate value, and orchestration to deal with the "tension... between creativity and discipline."

NOW, especially note, I am not suggesting for a second that these two points are being critical of Hastings' presentation, as if they are shortcomings. Hasting presented culture and he nailed it. I only add these notes to identify meaningful purpose and regenerative practices that join with culture to bring about a regenerative enterprise, like the one Hastings seeks to produce.

The McCord Supplement

Patty McCord, the founder of Patty McCord Consulting and the former chief talent officer at Netflix, provides supplemental commentary to Hastings's slide deck in a recent HBR article.