Netflix has a new culture memo. Here’s why it’s a big deal

Netflix updated its 15-year-old corporate culture code on Monday. Unlike the original 125 pages the company popularized in 2009, the new version is much shorter — but that doesn’t mean it’s any less important, says co-CEO Greg Peters.

One major change involved the company’s famous “keeper test,” a process set out in the 2009 strategy paper to determine whether a manager should keep or fire an employee.

The original test was: “If X wanted to leave, would I fight to keep him?”

The updated memo retains the original question but introduces an additional dimension: “Would I hire X again knowing everything I know today?”

While it may seem nerve-wracking to be constantly judged in this way, Netflix’s new memo says the company will work with employees even on short-term mistakes or new things they’ve tried that haven’t worked.

In an interview with The Verge this week, Peters said the memo included a new section called “Dream Team,” a concept that explains how Netflix looks for top performers and the best person for each position.

This could mean the end of “personality hires” in the company. According to the memo, the “dream team” involves replacing someone who is popular with someone who does the job better.

The common characteristics of the dream team include selflessness, creativity and resilience.

“We’re trying to make it very clear that this is more of a sports team model than a family model,” Peters said. “We’re going to look for the best player for every position.”

^{Greg Peters, co-CEO of Netflix. (Photo by Joan Cros/NurPhoto via Getty Images)}

Netflix collected over 1,500 feedback points from its employees and created the updated memo over the course of a year.

The document now runs to 2,264 words, thousands of words fewer than previous versions. It reintroduces concepts from the original 2009 deck that were lost in four previous updates, including making every employee feel a sense of personal responsibility to improve the company.

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Peters explained why Netflix’s culture memo was important: He said that for him, Netflix’s culture comes first, ahead of strategy and execution, because a strong culture enables the company to become better in all other areas.

Culture is “a means of improvement and that is why we make so much of it,” he explained.

When asked why the culture memo gets shorter with each iteration, Peters said the reason is because the company gets better at condensing and clarifying it over time.

In Peters’ own words, Netflix is ​​trying to “continually better articulate the practices we can use as a company to grow and improve.”

Read Netflix’s latest culture memo here.

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