A brutal working culture at streaming giant Netflix has been highlighted in a major exposé in the Wall Street Journal [1]. Since its publication on 25 October, the WSJ piece has been distilled in a variety of business articles with such encouraging headlines as ‘10 ways to get axed in Netflix’s cutthroat work culture’ (Fast Company) [2], ‘All the ways Netflix culture sounds like your worst work nightmare’ (Quartz at Work) [3] and ‘Working at Netflix sounds absolutely terrifying’ (Vanity Fair) [4].

The primary theme that emerges from the coverage is that Netflix promotes a harsh environment of what could be called ‘job insecurity’, in which employees are in a number of different ways persuaded to believe that they are permanently skating on thin ice.

In one incident that the WSJ recounts, a marketing executive was fired by the head of marketing during a New York photoshoot for the second season of Orange is the New Black, in the presence of former chief talent officer Tawni Nazario-Cranzin. When the exec asked Nazario-Cranzin what she could have done differently, she was told that she should have moved quicker to fire an underperforming team member.

“I was trying to help somebody in their career,” the exec explained to the WSJ, “and they maybe saw that as a sign of weakness.” The exec told the paper that she cried all the way through her six-hour flight back to Los Angeles, wondering how she was going to break the news to her pregnant wife. As the WSJ points out, the exec was a victim of the firm’s so-called ‘Keeper Test’, which pressures managers to fire or be fired.

The exposé also flags up the company’s ‘Sunshining’ policy, under which employees who have made mistakes are forced to confess to them in front of their entire teams – a process that takes errors out of the traditional, private sphere of one-on-one conversations and makes them central to a climate of ‘radical transparency’. The practical effect, in conjunction with the Keeper Test, is to instil workers with a constant, lingering fear. Emails about individual firings are routinely sent across multiple divisions, with hundreds of employees at a time learning the often highly specific details of each case.

How could a cultural milieu like this be compatible with effective workplace performance?

The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “This story makes an interesting contrast with what has emerged over the past 48 hours about the management style of Leicester City FC owner Vichai Srivaddhanaprabha, who tragically died in a helicopter crash at the weekend [5]. Many reports have highlighted Mr Srivaddhanaprabha’s kindness towards the club’s fans and his engagement with local, charitable causes. The impression that comes across is of an individual who managed to combine effective commercial performance in his business interests with a human touch.”

She explains: “there can be little doubt that Netflix has been, and remains, a highly successful commercial enterprise. And, as the WSJ piece indicates, the firm’s ruthless culture has underpinned that success to a large extent. Perhaps the company’s business model is that it only wants people for short periods of time, during which they are well rewarded for their efforts to survive amid an atmosphere of intense pressure. It’s highly reminiscent of how commentators once described the working culture at IBM: the firm owned you; you worked around the clock to meet the demands of the job, and you were essentially on call 24/7. Netflix is demanding a similar level of loyalty from its people.”

Cooper notes: “it is clearly working, in terms of delivering a product that customers enjoy and returns that are delighting shareholders. However, the question is: is it sustainable? If Netflix were more willing to invest in its people as a long-term strategy, rather than pursue its current, short-termist policy of attrition and churn, it is likely that – combined with an already appealing product – its profits and shareholder returns could be greater still. Which would more than justify the investment.”

She adds: “if Netflix CEO Reed Hastings had been involved in a similar accident to the one that claimed Mr Srivaddhanaprabha, would people be talking about him in the same, glowing terms? This leads us to questions of authentic leadership: do you want to be remembered because you made a group of anonymous shareholders happy, or because you formed close bonds with your employees by fostering genuine, human relationships?

“Any individual leader has to ask themselves what their legacy is going to be. That is all down to the values that they embody and promote – and ethical companies are routinely cited as more effective commercial performers than those not so inclined [6].”

For further thoughts on the importance of authenticity, check out these learning resources from the Institute

Source refs: [1] [2] [3] [4] [5] [6]

Image of Netflix HQ signage courtesy of JHVEPhoto, via Shutterstock

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