The Netflix Culture of Excellence – and How to Capture It In Your Own Life

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Yesterday, I stumbled across a brilliant presentation on Netflix’s corporate culture, via Jason Kottke’s website. The presentation did a brilliant job of outlining how Netflix has used an atypical corporate culture to build a very successful business. Here’s that presentation:

Culture
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In fact, successful is an understatement in describing Netflix. Netflix was born in late 1997. Today, it has over ten million customers, brings in $2 billion in revenue a year, and has had their stock value go up 550% since the IPO. Not only that, they have one of the best customer service ratings of any retail corporation in America. They have a lot of happy customers, turn a healthy profit, and do it in some unorthodox ways.

After reading the presentation (and thoroughly enjoying it), what I found is that the presentation was actually loaded with ideas that people can port to their own life to fuel them to great personal, professional, and financial success.

I pulled out the basic framework of the show – the seven aspects of Netflix’s culture – and I’ve highlighted a few principles from each aspect that you can apply in your own life with great success.

Values Are What We Value
Your real values are represented by what you do, not what you say. You can talk big all you want about saving money or making changes in your life, but it’s just talk unless you do something. A resolution or a goal is worthless unless you’re willing to work for it.

Valuable traits include judgment, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness. What do these things all have in common? Many lead to trusting relationships with other people. And when you have those trusting relationships, they support you over and over again, in direct and indirect ways. Others lead you to discovering new things. New discoveries are where the value comes from in the modern economy. Coming up with useful ideas, implementing them to the extent that you can, and sharing those ideas with others will always increase your personal value.

Actions inconsistent with those values should always be questioned. Always question your own effort in those areas. Can you do better? Similarly, ask yourself if the people around you are also reflecting those values. If they’re not, they’re probably dragging you down and holding you back.

High Performance
Surround yourself with good people. Good people are those that exude good qualities (like the nine traits listed above) and push you to exude those same qualities. Hanging out with selfish people who aren’t curious will encourage you to be selfish and incurious, but hanging out with people who are unselfish and curious will inspire those traits in you.

Merely adequate isn’t good enough. Surrounding yourself with associates and friends who are “kinda okay” isn’t good enough, because they’ll make you “kinda okay.” Strive to surround yourself with people who show off many more good qualities than bad ones. Think about it this way: if a friend or business associate of yours said they were leaving town for good in two months, would you be greatly upset and want them to stay? If the answer is no, they’re holding you back, so why not just move on now?

Hard work is much less important than results. Trying and failing over and over might mean that you should try something else instead. Similarly, acting in ways that drive away and insult other people doesn’t help anyone at all.

Freedom and Responsibility
Be responsible for your own actions and your own mistakes. Being responsible for things means that you’re more valuable to others because that means you take pressure off of them. If you just take care of things, that means others can rely on you – and you’re more valuable to them. This is true in every aspect of life, personal and professional.

Making mistakes is part of getting better. Many people, when they start to see success, start getting more careful. They’re much more afraid to make mistakes. But without mistakes, you can’t get better. You pretty much slot yourself in at the level of success you’re at – you can never be anything more if you spend all your time just avoiding mistakes. This has been a hard one for me to learn and I’m finally really putting it to work by writing about new things and new angles on The Simple Dollar (and it seems that people are really responding to it).

Don’t marry yourself to routines. Routines are very helpful, but they can also be very damaging. A good routine can help you get lots of things done, but bad routines can cost you a lot of money and time. Even more dangerous are routines that start off good but become bad when you and your situation changes, like my coffee shop routine. Always question what you’re doing. Is this worthwhile?

Rapid recovery is always a great model. That means have a big, healthy cash emergency fund as well as a lot of transferable skills, such as communication skills and the values described above. If you have those things in place, it becomes much easier to recover rapidly from whatever happens to you.

Context, Not Control
Think about big, long term goals. Where do you want to be in five years? What would you like to be different in your life? Imagine what you’d like things to be like at that future point. Sketch out the details. Make it as real as possible – and think about it often.

Take those big long-term goals and make smaller goals out of them. Break down those big points into smaller bites. What can you do this week to take yourself closer to that goal? What kind of exercise and diet can you enjoy today to start building better health? Can I cut back on my spending this month to reach my financial goals? What do I need to do this week to get me into that MBA program?

Don’t let the little things get in the way. We all have tons of little things that need to get done in our lives and it’s easy to lose sight of the big goals and the steps you need to take to get there. Those things often don’t return immediate results. What’s important is to ask yourself whether the things you’re doing today will actually matter in five years. Will it build the kind of future you want?

Highly Aligned, Loosely Coupled
Choose activities that are helpful in multiple ways. Making better dietary choices is often both a money-saver and helps in the long term with your health. Getting more exercise makes you more productive and energetic in the short term and also helps with your health. Turning off the television exposes you to less advertising (direct and indirect) and frees up time for other activities. Working on transferable skills helps you professionally and personally, now and later. Doing things that are really synergistic in your life are always helpful.

Find friends that also engage in these activities. Find someone to walk with in the evenings. Find someone who’s interested in the same hobby you’re interested in. You can have very different lives, but you’re aligned in one aspect of your life. You can use that to push each other in unexpected ways towards greater success.

Associate with people slightly better than you. If you decide to find a workout buddy, find someone who is in a bit better shape than you (not Michael Phelps, but someone just a bit better). This pushes you to succeed but doesn’t overwhelm you by being completely outclassed.

Pay Top of Market
If a service is truly vital to you, don’t be afraid to support it. If a service is really invaluable to you – you use it every day and you want to keep using it every day – support that service. Sign up for their premium options. Tell your friends about the service. Fill out surveys if they send them your way (and be dead honest with any criticisms you have). Without support, valuable services go away, and if you rely on those services, you’re stuck out in the rain.

If you rely on equipment, make sure that equipment is reliable and efficient. Again, if you find yourself doing certain tasks every day, make sure that equipment is as reliable and efficient as you can make it. If you cook every day using the same pans, make sure those pans are the best you can get. If you work on a computer every day, make sure you’ve got a stable computer with plenty of memory and a big monitor and other peripherals and software that maximize your use. Don’t worry about the equipment in your home that you rarely use – you can go bargain-basement there, since you don’t rely on it. The things that should be quality are the things you really use, because you rely on them.

If someone is valuable to you, let them know. If you have a friend or family member that’s really important to you, don’t hesitate to let them know. Whenever those important people need help, stand up and help as much as you possibly can, without hesitation. Again, if those people are key in your life, you need to show them how valuable they are to you. It’ll do nothing but cement your relationship and make it much more sustainable.

Promotions and Development
Don’t be afraid to move on when you change. Over time, you grow and change as a person. Your passions change. Your interests change. Your skills and abilities change. Your personality changes. If your job doesn’t change, it won’t always be a great match for you. Don’t be afraid of that – be willing to look around for other options when you find yourself changing.

Don’t be afraid to move on when the situation changes. Obviously, many jobs do change. Sometimes, they change with you in a positive direction. At other times, they change away from you. The work you do changes, moving from tasks you enjoy to tasks you loathe. The culture changes, with the people you valued moving on. Again, don’t be afraid of this – it’s a sign that you need to make a change, too.

Never shy back from taking on big challenges. We are often thrown big challenges, things that will push us far outside of our comfort zone into areas that we might not be comfortable at all with. They push our skills and abilities beyond the limit. Those aren’t things to be avoided – those are things to dive into, throwing everything you’ve got at them.

To put it simply, Netflix’s corporate model is a great model for success in life. It’s well worth trying them out, don’t you think?

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24 thoughts on “The Netflix Culture of Excellence – and How to Capture It In Your Own Life

  1. I work at a company that thinks a lot about corporate culture and values. I’d read the Netflix presentation yesterday and noticed a lot of parallels. The impression that I got was that at Netflix (and at the place I work), you either “get it” or you don’t — and if you don’t, it’s going to be The Absolute Worst Job You Ever Had. If you do get it, it will be The Absolute Best Job You Ever Had.

    More companies should really spend more time on things like company culture and values, as well as common goals. When you value your employees, they will most definitely produce more value.

  2. Wow, that presentation was fairly mind-blowing. What an exhilarating and terrifying place to work in – kind of like living your life on a bike going down a huge hill. It’s funny b/c in B-school we talked a ton about corporate cultures, but Netflix isn’t one we studied. I wish we had because it’s so radical and uncomfortable, and simple.

  3. This post has a ton of excellent information in it. I feel a great company is all about the people. If they are taken care of, usually they will have a strong commitment to their job and work that much harder. Everyone has to be on board though because a few cogs in the wheel can slow down progress tremendously.

  4. One of your best posts. I like the blend of philosophy and practical advice; it’s often difficult (but essential) to make the leap from the big picture to daily action. And I always like a good reminder to keep my values front and center.

  5. NetFlix is famous in the Silicon Valley as the company without a limit to holidays. This culture of excellence and “freedom” is actually a double edged sword. I’ve known people who worked there say that they know they can take days off but they were compelled to stay because they want to look better than the others, so the end result is that most employees don’t take advantage of their unlimited days off. Those who slack off do get canned so there is a bit of fear, too. I would say that it works really well for the company as a whole because people are being maximally productive, but it’s not necessarily the best for an employee.

  6. Hmmm…apparently 2 of Enron’s corporate values are the same as 2 of the 5 values at my workplace. It just shows how meaningless these “values” buzzwords can be unless they are given specific definitions and explained to employees using examples of real behavior, as Netflix seems to have done. At my company, there is definitely a huge gap between the stated values and the attitudes and behaviors actually favored.

    Netflix’s attitudes towards procedures (i.e., bureaucracy) and correcting mistakes seem enlightened and probably help the company react to challenges in the marketplace.

  7. Excellent, excellent post! I would have never thought to compare corporate culture to meaningful personal development, since corporate culture is something most of us are trying to get away from. Then and again, Netflix is no ordinary corporation…

    I kind of disagree that surrounding yourself with excellence makes you lonely. If by lonely, you mean you’re close to less people, then I agree. I’d rather have quality relationships than makes my life richer than quantity (befriending anyone in the hopes of finding one or two people you click with) any day. Although having both is definitely better!

    Which brings me to another thought. If more excellent people influenced others, then you bring up everyone (or at least a lot more people) as a whole.

  8. Packed with powerful advice, not the least of which is to evaluate yourself and your friends/coworkers against the list of recommended 9 traits. I also like the the idea of reevaluating and shaking it up by not getting married to routines and also moving on.

    Finally, we all could benefit by verbally recognizing those we value.

  9. Hey, how come I’ve started to be moderated again all of a sudden?? Trent, what did I say?!?!

    The pain, it cuts so deep. Sigh…

  10. Should our relationships with others really only be about how “valuable” they are to us?

    For a company to measure its employees that way is perfectly sensible. Employees are the tools through which it accomplishes its goals and their utility is the only point in keeping them around.

    But in our personal lives, such a utilitarian approach seems very cold. Or maybe you are using the term “valuable” in a more expansive way than I am hearing it. Liking, shared history, compassionate caring, familial duty, are all reasons to maintain relationships that are not obviously “valuable.”

  11. Thanks for posting about this, Trent. I saw this yesterday – in the link from kottkes’ site – and immediately downloaded it and sent it to a couple of colleagues (our firm is in the UK, and is a very traditional business that has been running for 135 years).

    Everybody was amazed at the sheer value held in that presentation – in fact, I have an A3 copy of the slide that captures the 9 core values they are looking for in people, pinned up next to my monitor.

    Every day, I re-read the chart, and check that my day to day activity adheres to those values. Whether or not my company operates the way Netflix does, I can add real value by increasing my value to the company up to the real ‘superstar’ operating level. It’s changed the way I think and behave already.

  12. Words to live by, plain and simple. Whether applying it to fixing your finances, starting a diet, or just living your life…these are words to live by.

    No wonder they are as successful as they are, and too bad so many other businesses out there just don’t get it.

  13. This is a minor point in the presentation, but one I really appreciate about Trent’s approach to frugality, so I thought it worth mentioning–that it’s okay and even good to spend top dollar on equipment you use a lot and are going to get a lot of use out of. I sometimes have a tendency to go “too frugal” and always go bargain basement, even if it’s not the best choice (having to buy two pairs of cheap shoes instead of one good pair can end up costing me more). I finally spent serious money (okay, serious for my salary, which was minimum wage minus tuition until the job I started this week) in two areas, my computer and my pan set, and I felt really guilty about it for a long time. But they were some of the best purchases I’ve made and I get so much easy, trouble-free use out of them that I don’t regret them a bit. This has gotten a little rambly, but basically I just wanted to say thanks to Trent for helping me realize that spending more for something of quality CAN be a frugal, responsible financial decision. (And thanks for the post oh-so-long-ago suggesting a serious cook look into hard-anodized pans. I use mine every single day and just love them to pieces. They’re easily the nicest thing I own or ever have owned.)

  14. I was formerly employed at the Netflix CS center in Hillsboro, OR, where I worked on their technical support team.

    On January 2, 2009, this team was disbanded; all subsequent customers requiring technical support were thereafter simply told to contact Microsoft. Things have turned-out well for me, and I have no axe to grind with Netflix, but give this background in the interest of full disclosure.

    What I really want to mention is the management turnover at the Hillsboro facility. In my last six months I had three managers in a five month period, and no manager at all for one month. One of my co-workers counted the managers she had in two and one-half years; the number was twenty-three! Anyone who became a manager would be gone within three months, whether they were on the customer service or tech support side. It surprises me still that there were always a ready supply of folks willing to give it a go.

    Netflix was an excellent company to work for, and I was pleased with the pay and benefits they offered. Overall, I enjoyed my time there, but want to pass along the fact about their management turnover.

    Nigel

  15. Hello. I just read your post from 2007 about crockpots. I am writing a book on Indian crockpot cooking. I was wondering if anyone can tell me – is it safe to use the crockpot on HIGH setting when you are not at home. I can’t find this bit of info anywhere. I might end up calling Rival. But I was wondering if anyone knows. If you want to look at my site…anyone is interested in talking crockpots again..wwww.indianasapplepie.com
    I am excited i found this site. i really like it. -Anupy

  16. Huh! I find this post funny because I’ve been a customer’s of Netflix off and on for the past three years. After the last time dealing with them (about three months ago), I had such abysmal customer service that I vowed never to use them again. I understand that any company can have moments of poor customer service and probably everyone has a bad customer service story to relate about every company, but I couldn’t help read this post with a bit of a chuckle. My sense is that once Netflix cornered the market, so to speak, they have really put customer service in the backseat.

  17. stopped using netflix, blockbuster was a better value and better service. would not work for netflix without buying stock in a coffee company, cause it sounds like you need alot of focus and adrenalin to stay there. I believe in performing, but not everyone can excel all the time all year round.

  18. As an ex-employee I feel I need to clear up some of the misinformation. First, when I was there an informal study showed the turnover rate to be close to 25%. And the employees that are fired usually have no idea its coming, since there is no review system. The net effect is that no one knows who is going to get it next. Which brings us to the real problem at Netflix: everyone is so concerned about the firings that nobody will stick their neck out. There is no innovation going on there. Nothing is attempted that takes more than a couple weeks to plan. It’s just fighting fires and trying to look good… When it comes to website features, you will notice that improvements come at a glacial pace. And site outages are common, at least for various site features (just check how often your friends recommendations are actually visible and working). There is no attempt by anyone to make Netflix the “best place to work”. Everyone that works there knows this culture goal is total BS. I am just surprised at how many people will believe something posted in a slide deck, when literally hundreds of ex-employee postings say the opposite.

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