As reported on TechCrunch.
by GREGORY FERENSTEIN
Facebook’s No. 2 top dog, COO Sheryl Sandberg, recently said that Netflix’s company culture document “may well be the most important document ever to come out of the Valley.” The document, a bullet-point-happy PowerPoint, has become a cultural manifesto for the Internet’s economic epicenter, amassing over 3.2 million views on Slideshare.net.
More than simply a management guide, it’s a window into a philosophy that thrives on uncertainty, creativity, and trust — a blinding contrast to the hierarchical culture that dominated much of the 20th century workplace. To the extent that innovation and the Internet play a role in the modern workplace, it is a crystal ball into the future of daily life.
We’ve summarized the most telling principles below:
Creativity is Most Important
In procedural work, the best are 2x better than the average. In creative/inventive work, the best are 10x.
The technology industry, especially, is haunted by the ever-present fear of obsolescence. As Internet bandwidth speeds rapidly increased, Netflix had to figure out how to retrofit its entire DVD delivery service into a video streaming service that satisfies demand for instantaneous video.
The next big transformation in video and Internet capability is an unknown, and creative solutions to up-and-coming problems are nearly priceless.
The consequences for stunted innovation could not be greater: One of Microsoft’s flagship products, Office, got eaten alive by Google’s free office suite, Google Docs, after the company failed to follow users where they are now spending their time (the Internet).
Prioritize Discovery Over Job Security
Many people love our culture, and stay a long time. They thrive on excellence and candor and change….Some people, however, value job security over performance, and don’t like our culture.
Politically, this principle is the most fascinating: no major Internet company has a union, despite consistently ranking as some of the best places to work.
Creative enterprises have been able to replace the long-cherished values of worker compensation and stability with a challenging, enjoyable environment. “Risk” is an often-praised characteristic of tech founders, who are now asking their employees to jump down that same rabbit hole. The future of work is likely to be as insecure as it is unforgivable. For some, this is utopia…for others, not so much.
Poor Employee Behavior Is Caused By Misunderstanding
Managers: When one of your talented people does something dumb,
don’t blame them. Instead, ask yourself what context you failed to set. High performance people will do better work if they understand the context.
Hierarchical 20th century management structure was modeled off of authoritarianism, a philosophy based on the idea that individual disagreements can only be settled through power. Like kings and dukes or generals and seargents, everyone needed a direct officer who resolved disputes, which, it was presumed, could not be settled through dialog.
An “over-foreman is to smooth out the difficulties which arise between the different types of bosses who in turn directly help the men,” wrote Frederick Taylor, the godfather of hierarchical management. “If two of these bosses meet with a difficulty which they cannot settle, they send for their respective over-foremen, who are usually able to straighten it out. In case the latter are unable to agree on the remedy, the case is referred by them to the assistant superintendent.”
Netflix takes precisely the opposite approach–that workers normally operate under consensus. Acting “stupid” is actually caused by a failure of communication. It is a profoundly different view of human nature.
Unlimited Vacation
Netflix Vacation Policy and Tracking. There is no policy or tracking.
Netflix’s radical approach to management underlies perhaps its most famous management policy: unlimited vacation. Employees are left to decide when and for how long they should go surfing in the Caribbean. Netflix also proudly replaced the entire bureaucratic apparatus sounding travel expenses with five words, “Act in Netflix’s Best Interest.”
Internet companies often see human nature and the world much differently. Sherly Sandberg evidently believes that Netflix’s humble management document reveals something profoundly essential to its philosophy.