Today's Reading

Netflix culture, on the other hand, is famous—or infamous, depending on your point of view—for telling it like it is. Millions of businesspeople have studied the Netflix Culture Deck, a set of 127 slides originally intended for internal use but that Reed shared widely on the internet in 2009. Sheryl Sandberg, COO of Facebook, reportedly said that the Culture Deck "may well be the most important document ever to come out of Silicon Valley." I loved the Netflix Culture Deck for its honesty. And I loathed it for its content.

Below is a sample so you can see why.

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Like every company,
we Try to Hire Well
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Unlike many companies,
we practice:

adequate performance gets a
generous severance package
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The other people should get a generous severance now,
so we can open a slot to try to find a star for that role.

The KEEPER TEST managers use:

Which of my people
if they told me they were leaving
for a similar job at a peer company
would I fight hard to keep at Netflix?
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Quite apart from the question of whether it is ethical to fire hardworking employees who don't manage to do extraordinary work, these slides struck me as pure bad management. They violate the principle that Harvard Business School professor Amy Edmondson calls "psychological safety." In her 2018 book, The Fearless Organization, she explains that if you want to encourage innovation, you should develop an environment where people feel safe to dream, speak up, and take risks. The safer the atmosphere, the more innovation you will have.

Apparently, no one at Netflix read that book. Seek to hire the very best and then inject fear into your talented employees by telling them they'll be thrown back out onto the "generous severance" scrap heap if they don't excel? This sounded like a surefire way to kill any hope of innovation.

Here's another slide from the deck:

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NETFLIX VACATION POLICY
AND TRACKING

"There is no policy or tracking"

There is also no clothing policy at Netflix
but no one comes to work naked.


Lesson: You don't need policies for everything
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Not allotting employees vacation days seemed downright irresponsible. It is a great way to create sweatshop conditions, where no one dares to take a day off work. And to wrap it up like a perk.

Employees who take holidays are happier, enjoy their jobs more, and are more productive. Yet many workers are hesitant to take the vacation allotted them. According to a survey conducted by Glassdoor in 2017, American workers took only about 54 percent of their entitled vacation days.

Employees are likely to take even less time off if you remove the vacation allotment altogether because of a well-documented human behavior, which psychologists refer to as "loss aversion." We humans hate to lose what we already have, even more than we like getting something new. Faced with losing something, we will do everything we can to avoid losing it. We take that vacation.

If you're not allotted vacation, you don't fear losing it, and are less likely to take any at all. The "use it or lose it" rule built into many traditional policies sounds like a limitation, but it actually encourages people to take a break.
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