The Netflix Culture of Excellence

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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