Netflix Culture: Feedback and transparency culture! (episode 2)
Netflix culture is based on 3 pillars that lead to a complete culture of freedom and responsibility:
- High Talent Density
- Candour and Transparency
- As less control as possible
We have explored the first pillar with the notion of talent density in the first post and we will now focus on candour and transparency without which Netflix culture would not be what it is.
Let’s remember this slide summarising the different steps to a culture of freedom and responsibility:
Once Netflix put in place a strategy promoting high talent density, the company relied on candour and transparency.
Here are the different steps and key points:
Start by encouraging candour through feedback
Feedback, whether positive or negative, is a golden opportunity to improve performance or to continue doing what you are doing well. Such a culture of candour allows already talented and successful employees (notion of talent density) to be remarkably talented and successful.
At Netflix, employees all follow the same principle:
“When you talk about someone, don’t say anything you can’t repeat to their face.”
Candour is encouraged and it is thought that it is better to say what you think openly than to have things left unsaid or said behind the backs of colleagues. Netflix has started to build this culture of candour by tackling the hardest part: getting employees to give feedback to their managers or to management more generally (which never really comes naturally to some people).
To encourage feedback, some managers at Netflix put a feedback item on the agenda of some meetings (while taking care to keep it separated from the topic of the day). The feedback item can be at the beginning of the meeting or at the end of the meeting, after the initial topic has been covered.
Encouraging feedback is one thing, making your employee feel comfortable during the exercise and above all listened to (and encouraged to repeat the exercise) is something else. To do this, whatever the criticism — positive or negative — managers are encouraged to react with gratitude through belonging cues, a non-verbal way of accepting the criticism, of showing that the employee was right to do so. Belonging cues can be a sympathetic tone, a positive look in the eye or even a thank you, something that makes the employee feel confident to do it again (with even more courage next time because they know they are being listened to and that their job is not at stake)
Obviously, it is not easy to give feedback. It is not enough to say that candour is the rule in order for it to be applied properly. It is also important to ensure that this candour does not lead to disrespect or unkindness. Giving and receiving feedback can be learned, and Netflix has introduced the 4A rule that everyone should follow when receiving and giving feedback:
Giving Feedback:
Aim to assist: Every criticism and feedback should be formulated with a positive intention, so that the colleague in question can get something good out of it and improve something that will benefit him or her
Actionable: Criticism should not be done just for the sake of criticism, it should be constructive and focus on what the person can change.
Receiving Feedback:
Appreciate: It is not easy to receive criticism. When we receive one, some of us are quickly offended or start making excuses. Netflix is encouraging people to overcome this natural reaction by valuing the feedback they receive.
Accept or discard: All feedback should be listened to and considered. However, it is not obligatory to accept all of it. Just because someone gives criticism does not mean they are right, and you should thank the person for the feedback, but it is up to you whether you accept the criticism or not.
If this rule is followed, the feedback will be constructive and of high quality. It will improve employees’ performance and allow the manager to supervise his teams much less, as they know how to give and receive feedback and correct what is wrong. We will elaborate on this point in the next post.
As we have stated, employees are efficient, talented and know how to give and receive feedback. The next step to this culture of candour and transparency is for the company to be transparent itself.
Organisational transparency improves performance
Netflix surrounds itself with exceptional talented people who become even more exceptional through the Candour culture. As employees are transparent with each other, Netflix has also chosen to be transparent by focusing on organisational transparency.
According to Reed Hastings, organisational transparency makes employees even smarter and, above all, more efficient in their work. Indeed, the information available allows them to make a quick and autonomous decision, without asking their manager.
Company data, reorganisation, reasons for dismissal, mistakes made by so-and-so… everything is said transparently, nothing is hidden! This strengthens the feeling of belonging and creates a sense of responsibility. Transparency also brings trust and is favourable to innovation.
As with everything and as always with transparency and trust, a handful of people could misuse this information but Netflix is clear on this point: every document is marked “confidential. Do not distribute” and above all Netflix will not hesitate to fire and sue someone who uses the shared information to play the stock market or to share it with competitors.
These two steps (setting up a candour culture and establishing organisational transparency) are not enough to make a candour culture last over time. The more the company grows, the more it is necessary to “institutionalise” so that everyone plays the game of candour and feedback.
Maximising candour by creating feedback loops
Evaluation at Netflix cannot take the form of evaluations found in most companies (annual performance appraisal, performance review every 6 months,…) for several reasons:
- Netflix is opposed to this classic evaluation system because it often goes only in one direction: from the top to the bottom. It is the manager who evaluates his employee and at no time the employee evaluates his manager
- The fact that you are evaluated by your manager is contrary to one of Netflix’s principles: “don’t try to please your manager”. Of course, if you are only going to be evaluated by your manager, you have to try to please him! It is important at Netflix to be evaluated by your N+1 but also by other people with whom you work closely
- Traditional evaluations are often based on a review of annual objectives. Something that does not exist at Netflix
Faced with these problems and in order to have an evaluation that is in line with its policy and principles, Netflix has implemented a 360 degree review that is a little different from those that are commonly practiced: The 360 at Netflix is not anonymous and is signed by the reviewers (the N+1 is not the only one to review the person, comments are open to anyone who wants to comment).
A 360 signed by the reviewers allows constructive comments (in line with Netflix’s principles!) and also allows discussion if something is not clear, whereas anonymity can leave room for comments that are anything but constructive.
Because writing doesn’t always allow direct discussion, some teams at Netflix practice a 360 over dinner. A 360 at a dinner gets you out of the formal office setting and the format encourages discussion.
For a successful 360, whether in writing or at a dinner, these rules should be followed:
- Follow the 4A rule for giving and receiving feedback
- Apply the “Start — stop — continue” method with about 25% positive and 75% progress to be made
- 100% applicable, 0% blabla
As a conclusion:
- Once again, candour culture is not for everyone. Some people don’t know how to give feedback and others don’t like to receive it. Again, Netflix is clear from the beginning of the hiring process about this culture.
- The culture of candour and organisational transparency improves performance. The exceptional talent you have through your high talent density strategy are even better when you share all the necessary information with them without any withholding and when they give and receive feedback allowing each other to correct and improve what can be corrected.
- Exceptional talent in a transparent company where candour is the rule will be even more exceptional. You don’t hire stunning people to tell them what to do: you will be able to remove the controls and this will again increase the company’s performance. This will be discussed in the third and final post about Netflix culture…
🎁 Bonus:
In addition of the things we can learn in the books, I’m sharing with you a podcast from Netflix about Feedback Culture
Don’t hesitate to contact me to open the debate on the topic!
Cheers!
