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In the world of sports, there’s a phenomenon known as the commentator’s curse – the tendency of a player to make a mistake right after the commentator waxes lyrical about their talent or abilities.
Apparently, the curse also applies to editors. Less than a month ago, I wrote about Netflix’s culture playbook, including five reasons why the deck - which has been viewed over five million times and is arguably one of the most influential pieces of content in the HR industry – is so brilliant.
Just a few short weeks later, the Wall Street Journal has reported Netflix is strongly considering amending its playbook to remove the “freedom and responsibility” section.
Senior Netflix executives, including co-founder, former co-CEO, and now Executive Chairman Reed Hastings, who co-authored the original culture deck, discussed the decision during its annual business review meeting in Los Angeles as they mulled over ways to trim the culture deck for existing employees and future hires.
The planned move would see the language shifting to emphasize employee ownership of actions rather than focusing on ‘freedom.’
Netflix’s proposed culture change could erode trust
Some leaders expressed concerns about the shift, and with good reason. “Freedom and responsibility” have been central to Netflix’s meteoric rise over the past decade. Employee freedom is laced throughout the culture deck, covering policies on compensation, sharing internal documents, and vacation policies.
But Hastings and Netflix leadership appear to have decided to ditch the model, deciding that freedom is no longer the most valuable culture to pursue.
The streaming giant has already rowed back on policies that exemplified freedom in a bid to deal with escalating costs and tough competition from other platforms. Formalized salary bands have replaced discretionary salary decisions from managers for certain roles, and caps are now in place on expenses.
Whether it’s U-turns on RTO mandates – see Dell, for example – or whatever further plans Netflix has to revise its ‘freedom’ policies, there seems to be an alarming trend in employers attempting to combat tough economic headwinds and competitive business environments by cracking down on how employees complete their work, rather than whether it is valuable.
Instead of diving into disengagement to see how they could improve the worker experience, many companies see it as a reason to crack down on employee freedom and flexibility.
These decisions, whilst potentially delivering short-term financial gains, will ultimately result in an erosion of trust between employers and employees. The long-term impacts include – as Hastings references in his original culture deck - employee disengagement, difficulties in attracting the best talent, and dampened business success.
Stream of success or box-office bomb? It depends on how Netflix manifests the culture changes
With all the above said, we don’t exactly know yet what a shift from freedom to employee ownership actually means.
Netflix’s culture playbook is so valuable because it codifies what such abstract concepts mean in the context of the company and day-to-day processes, and we won’t know exactly what changes will be made until the playbook is finalized.
Hastings has reportedly described the shift in an internal meeting as a testament to Netflix’s commitment to ongoing evolution, and the best culture decks do evolve over time – as Patreon’s former VP of Operations, Tyler Palmer, has previously said, “Unless you invest in revising, updating, and reshaping your culture deck, it will become useless.”
Moreover, Hastings and his team are not rushing into the decision and will take on feedback before finalizing and distributing the new playbook, so there’s no guarantee that the changes will negatively impact employee engagement, team performance, talent acquisition, and so on.
However, it remains to be seen how much Netflix will listen to the feedback from employees, and whether the change in language from “freedom and responsibility” to “employee ownership” will mean significant changes in the trust and flexibility afforded to its workers.
One thing is for certain. If Netflix continues to abandon the trust that attracted and engaged so many of its most impactful workers, it will have more issues on its hands than password-sharing crackdowns or whether the latest Netflix Original movie will be a blockbuster or a bomb.
