Netflix updates famous culture memo: What has changed

Courtesy of Netflix

Netflix on Monday released the latest update to its culture memo, a set of guidelines for the company’s business operations.

The new version of the influential document does not reflect any truly fundamental changes to the company’s core principles. The new title is “Netflix Culture: The Best Work of Our Lives,” whereas it was previously called “Netflix Culture: Striving for Excellence.”

One of the most noticeable changes: Netflix has replaced the heading “Freedom and Responsibility” and now summarizes these principles in a section titled “People over Process.” However, the principle that Netflix continues to give its employees the opportunity to act independently without a lot of bureaucracy remains enshrined in the document. The new version puts “an emphasis on responsibility and a focus on good and bad processes versus no processes at all,” wrote Chief Talent Officer Sergio Ezama in a blog post about the new version of the culture memo.

Netflix still doesn’t have an officially defined expense or vacation policy. The company’s vacation policy consists of two words: “Take vacation.” And its expense policy consists of five words: “Act in the best interest of Netflix.”

“You might think that this kind of freedom would lead to chaos,” Ezama noted. “While we’ve had some failures – and some people have taken advantage of our culture – our emphasis on individual autonomy has created a very successful company.”

Netflix’s new culture memo includes these two points as some of its four core principles (alongside the entries “The Dream Team” and “People Before Process”):

Netflix’s infamous “Keeper Test” is still part of the new version. This test encourages managers to fire employees who answer “no” to the question “If X wanted to leave, would I fight to keep them?” The new version, however, is worded a little more mildly: “In theory, the Keeper Test can sound scary. In reality, we encourage everyone to regularly talk to their managers about what’s going well and what’s not. This way, you avoid surprises,” the updated version says.

Netflix’s updated culture memo is shorter: It’s 2,264 words, compared to more than 3,800 in the last version. “We shortened it by focusing on what’s most important and what makes Netflix different,” Ezama said.

Co-founder Reed Hastings presented the original 125-page Netflix culture presentations in August 2009. Since then, Netflix has revised the document four times. According to Ezama, the latest version took “12 months to create, with every employee given the opportunity to voice their opinion.” In total, Netflix employees submitted more than 1,500 comments.

“We believe our culture is key to our success, and that’s why we want to make sure that everyone who applies for a job with us knows what motivates Netflix – and that all employees work on a shared understanding of what we value most,” Ezama wrote.

Read the new Netflix culture memo at this link.