Answered: main features determined by its culture

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Netflix founder, Reed Hastings quoted that ‘adequate performance gets a generous severance package’ What are the main features determined by its culture as organizational metaphors?

Case Study I: Netflix Culture of Success
Вy Mohan
Netflix's Squid Game is all the rage right now. The show may be about ordinary people fighting to the
death to win money, but it certainly isn't reflective of the streamin service that brought it to life. In fact,
it's quite the opposite. Netflix has created an enviable culture for its employees. As a result, the
company
has grown into the behemoth it is today.
Netflix changed the way the world consumes media. But they were only able to do so because of their
unique business processes. Unlike many other startups, Netflix eschewed gyms and communal lunches.
Instead, the company culture focused on supplying team members the tools to become ambitious
professionals. This unique approach in the Netflix culture has led to an executive suite that looks like this
now. What also set the Netflix company culture apart was its drive for feedback. Company executives
encourage their employees to own their voices and share their thoughts. But while Netflix believes in
the power of 'people over process', the company isn't big on emotion.
The streaming service has been known to cancel shows in their prime, and the same can be said of
their employees. Netflix founder, Reed Hastings, when promoting his Netflix culture book, No Rules
Rules, described a point in the company's culture memo: 'adequate performance gets a generous
severance package'.
Hastings has also spoken of the 'Keeper Test' where managers ask a simple question: "Would you keep
the person
they wanted to leave?". If the answer is 'no', the person is let go.
Job security isn't high on the list of priorities for Netflix. In this high-performance culture, it's more
important to take smart risks and challenge prevailing assumptions about an industry.
We can imagine Hastings using a business flow chart, like this example, tohighlight Netflix's corporate
culture.
The high-pressure environment of Netflix requires employees to demonstrate consistently strong
performance. Otherwise, you won't be at the company very long.
Though the Netflix culture isn't easy to adapt to, team members who do stick it out succeed, according
to Hastings. And clearly, the high-performance approach has worked for Netflix. Therefore, it's a huge
part of their company culture and values.

Transcribed Image Text:The values of a successful business model How did Netflix capture such a high market value? By building up team members in a great workplace. Other companies can't boast the results Netflix has achieved because they don't have the same company culture. Netflix culture puts a heavy emphasis on high performance, as well as freedom, which are hallmarks of a great workplace. But they also expect more accountability from team members. Even though they are an entertainment service, Netflix isn't interested in the niceties when it comes to values. Netflix believes in employees who discover practical solutions using data. They also want their 'dream team' to be constantly curious enough to find new business avenues. Inconsistent employee effectiveness isn't encouraged. And the brand isn't afraid to end the employment of someone they deem to be the wrong person for the job. The Netflix company culture focuses on ensuring that people from a variety of cultures can align. This explains how the company has earned market value internationally. There is also an emphasis on speaking one's mind, even if it's uncomfortable for those involved, such as the 'Keeper Test' mentioned above. The company culture focuses on being passionate about the brand, not just oneself. There is a section dedicated to inclusivity in Netflix, but the company also believes in not being political. But the major component of Netflix's dream team is employees that deliver more than they promise and who make each other and the company better. Imagine this: your employee is knee-deep in an important project when another priority project falls into their lap. The employee works after hours and on weekends. They feel burnt out without a work-life balance. But with no choice, they carry on. According to Netflix, there is a better way to work. It's as simple as giving your dream team the freedom they deserve. Establishing trust and communication with employees will be the highest ROI strategy you will use. It's worked for Netflix. Additionally, Netflix provides employees unlimited vacations without approval, no traditional performance reviews, and an extra generous salary. It isn't surprising that Netflix puts so much thought into their employees and business model. After all, even Netflix fonts for shows are well- planned. Netflix creates a special company culture and a great workplace by keeping a people-focused approach, prioritizing quality over quantity. Research shows that in an eight-hour day, we are only productive for about four hours. Netflix measures success not by the number of hours worked, but by high-level ideas. In fact, if you're spending long hours doing average work at Netflix, you could be fired. These principles guide the Netflix work culture, and it's helped the brand become the world's largest subscription streaming video service, with over 200 million paid subscribers. So, how do you create the same kind of special culture alongside a high-impact business like Netflix has? For one, Netflix managers use the Keeper Test to evaluate employees: if one of your employees told you they were leaving for a job at another company, would you fight to keep them at Netflix? Managers use this strategy at Netflix to build a dream team that wins together, loses together

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