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Building a Great Company Culture-The Netflix Way

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Netflix has built a highly influential corporate culture and when its former Chief Talent Officer Patty McCord and CEO Reed Hastings decided to sum up its HR policies in a PowerPoint presentation little did they realize that it would create such a tremendous impact that Facebook’s Sheryl Sandberg would term it as “the most important document to ever come out of the Valley.”

The ‘culture doc’ as McCord and Hastings termed it is still evolving and is constantly being worked on and has influenced many companies to bring out a similar document of their own. the concepts in the presentation have been featured in an article on HBR written by McCord where she has focused on the most important lessons she’s learned in transforming culture and the areas in which traditional HR managers falter.

The PowerPoint deck which explains how the Netflix culture evolved and motivated performance at Netflix was created with the purpose to help young entrepreneurs according to Reed Hastings and in an interview with HBR he says that the presentation was created with inputs from over 100 Netflix employees. This indicates how Netflix takes its employees’ views seriously.

The results of following such a HR policy has been Netflix’s stocks  have more than tripled during last year, it won three Emmy awards, and its U.S. subscriber base grew to nearly 29 million. Beyond all this the outstanding feature of the presentation is that the approach it prescribes towards employees is based on common sense.

The presentation starts with saying that freedom and responsibility are the main features of the culture at Netflix and goes on to mention excellence as the main focus of its culture. When HBR asked Reed Hastings  on the reason why most companies do not stress on innovation when it comes to talent management he said most of the HR policies followed today are based on the experience gained from managing industrial firms for over hundreds of years. But this has to change when it comes to HR at creative firms and he pointed out a crucial difference when he said, “Industrial firms thrive on reducing variation (manufacturing errors); creative firms thrive on increasing variation (innovation).”  Innovation is what Netflix looks for in its own employees.

We will in a series of posts brief you on the main points in this impressive presentation which has created ripples beyond the Silicon Valley.

 

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About Author

As a Senior Correspondent. I write on topics relevant to entrepreneurs, startups and SME’s. I am a writer, editor and teacher put together through experience in writing and editing on topics ranging from human interest features, writing for children, HR, management and education. I was a regular writer on the HR and management space for The Hindu. I dabbled in teaching and also worked for an overseas education consultancy. My interests include reading and music