Netflix’s culture is too transparent to be functional, reports the WSJ

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Yesterday, further details surrounding the firing of Netflix’s Chief Communications Officer Jonathan Friedland emerged. A report by The Wall Street Journal highlighted a number of cultural issues within the company. Mr. Friedland was fired in June for saying the “N-word” in full form in a meeting.

The WSJ report highlights that Netflix’s culture focuses on “freedom and responsibility”, allowing every employee to access sensitive information, from how many subscribers sign up to the viewership of shows to contractual terms for Netflix’s production deals.

Netflix’s policy of internal transparency and candor

Keeping transparency in an organization is important, but Netflix takes this to the next level. Executives at the director level and above are permitted to see the salaries of every employee. This can upset team dynamics, according to a number of current and former executives. But others, including Bob Heldt, a former director of engineering, threw their support behind the initiative after it helped people who were underpaid make a case for raises.

Employees are given the freedom to offer harsh feedback to their colleagues. They have introduced something called a “keeper test”, which lets managers take the decision of firing a team member based on just a question. They explain this on their culture page:

“We focus on managers’ judgment through the “keeper test” for each of their people: if one of the members of the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving? Those who do not pass the keeper test (i.e. their manager would not fight to keep them) are promptly and respectfully given a generous severance package so we can find someone for that position that makes us an even better dream team.”

Netflix, in a written statement, likened working at the organization to being in an Olympic team:

“Being part of Netflix is like being part of an Olympic team. Getting cut, when it happens, is very disappointing but there is no shame at all. Our former employees get a generous severance and they generally get snapped up by another company.”

Netflix is a rapidly growing company with its subscribers nearly quadrupling since 2013. But with this level of openness and transparency, for many Netflixers, its culture can be ruthless, demoralizing and transparent to the point of dysfunctional.

Read the full report at WSJ’s official website.