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No matter how honest, though, we treat people with respect. One might assume that with dream team focus, people are afraid of making mistakes. We try all kinds of things and make plenty of mistakes as we search for improvement.

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Within a dream team, collaboration and trust work well because your colleagues are both exceptionally skilled at what they do, and at working well with others. You share information openly and proactively. People like loyalty, and it is great as a stabilizer. Employees with a strong track record at Netflix get leeway if their performance takes a temporary dip.


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Similarly, we ask employees to stick with Netflix through any short term dips. But unconditional allegiance to a stagnant firm, or to a merely-adequately-performing employee, is not what we are about. Our view is that brilliant people are also capable of decent human interactions, and we insist upon that. When highly capable people work together in a collaborative context, they inspire each other to be more creative, more productive and ultimately more successful as a team than they could be as a collection of individuals.

Succeeding on a dream team is about being effective, not about working hard. Being on a dream team is not right for everyone, and that is OK. Many people value job security very highly, and would prefer to work at companies whose orientation is more about stability, seniority, and working around inconsistent employee effectiveness. Our model works best for people who highly value consistent excellence in their colleagues. To help us attract and retain stunning colleagues, we pay employees at the top of their personal market.

We make a good-faith estimate of the highest compensation each employee could make at peer firms, and pay them that maximum. Typically, we calibrate to market once a year. The market for talent is what it is. At all times, we aim to pay all of our people at the top of their personal market. A sports team with a losing record still pays top of personal market for the players they hope will get them back into a winning position.

On the other hand, if the company does well, our broadly distributed stock options become quite valuable. Ultimately, your economic security is based on your skills and reputation, not on your seniority at one company. At Netflix, you learn a lot working on hard problems with amazing colleagues, and what you learn increases your market value.

Knowing that other companies would quickly hire you if you left Netflix is comforting. We see occasional outside interviewing as healthy, and encourage employees to talk with their managers about what they learn in the process. While our teammates are fantastic, and we work together very well, we know we can always do better. We strive to have calm confidence, and yet yearn to improve. We suck compared to how great we want to become.

There are companies where people walk by trash on the floor in the office, leaving it for someone else to pick it up, and there are companies where people in the office lean down to pick up the trash they see, as they would at home. We try hard to be the latter, a company where everyone feels a sense of responsibility to do the right thing to help the company at every juncture.

We try to create the sense of ownership so that this behavior comes naturally. Our goal is to inspire people more than manage them. We trust our teams to do what they think is best for Netflix — giving them lots of freedom, power, and information in support of their decisions. In turn, this generates a sense of responsibility and self-discipline that drives us to do great work that benefits the company.

We believe that people thrive on being trusted, on freedom, and on being able to make a difference.

So we foster freedom and empowerment wherever we can. In many organizations, there is an unhealthy emphasis on process and not much freedom. Specifically, many organizations have freedom and responsibility when they are small. Everyone knows each other, and everyone picks up the trash. As they grow, however, the business gets more complex, and sometimes the average talent and passion level goes down.

As rules and procedures proliferate, the value system evolves into rule following i. If this standard management approach is done well, then the company becomes very efficient at its business model — the system is dummy-proofed, and creative thinkers are told to stop questioning the status quo. This kind of organization is very specialized and well adapted to its business model. Eventually, however, over 10 to years, the business model inevitably has to change, and most of these companies are unable to adapt.

To avoid the rigidity of over-specialization, and avoid the chaos of growth, while retaining freedom, we work to have as simple a business as we can given our growth ambitions, and to keep employee excellence rising. We work to have a company of self-disciplined people who discover and fix issues without being told to do so.

We are dedicated to increasing employee freedom 3 to fight the python of process. Some examples of how we operate with unusual amounts of freedom are:.

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You might think that such freedom would lead to chaos. Most people understand the benefits of wearing clothes at work. There are a few important exceptions to our anti-rules pro-freedom philosophy. We are strict about ethical issues and safety issues. Harassment of employees or trading on insider information are zero tolerance issues, for example.

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Transferring large amounts of cash from our company bank accounts has strict controls. But these are edge cases. In general, freedom and rapid recovery is better than trying to prevent error. We are in a creative business, not a safety-critical business.

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Our big threat over time is lack of innovation, so we should be relatively error tolerant. Rapid recovery is possible if people have great judgment. The seduction is that error prevention just sounds so good, even if it is often ineffective. We are always on guard if too much error prevention hinders inventive, creative work.

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On rare occasion, freedom is abused. We had one senior employee who organized kickbacks on IT contracts for example. But those are the exceptions, and we avoid over-correcting. Some processes are about increased productivity, rather than error avoidance, and we like process that helps us get more done. One such process we do well is effective scheduled meetings. We have a regular cadence of many types of meetings; we start and end on time, and have well-prepared agendas. We use these meetings to learn from each other and get more done, rather than to prevent errors or approve decisions.

We avoid committees making decisions because that would slow us down, and diffuse responsibility and accountability. We farm for dissent; dissent is not natural or easy, which is why we make a concerted effort to stimulate it. Small decisions may be shared just by email, larger ones will merit a memo with discussion of the various positions, and why the captain made such a decision.

We are clear, however, that decisions are not made by a majority or committee vote. When the captain of any particular decision is reasonably confident of the right bet for us to take, they decide and we take that bet. Afterwards, as the impact becomes clearer, we reflect on the decision, and see if we could do even better in the future.

If you disagree on a material issue, it is your responsibility to explain why you disagree, ideally in both discussion and in writing. The back and forth of discussion can clarify the different views, and concise writing of the core issues helps people reflect on what is the wise course, as well as making it easy to share your views widely.

The informed captain on that decision has the responsibility to welcome, understand, and consider your opinions, but may not agree. Once the captain makes a decision, we expect everyone to help make it as successful as possible. Later, if significant new information becomes available, it is fine to ask the captain to revisit the topic. Silent disagreement is unacceptable and unproductive. We want employees to be great independent decision makers, and to only consult their manager when they are unsure of the right decision. The legend of Steve Jobs was that his micromanagement made the iPhone a great product.

Others take it to new extremes, proudly calling themselves nano-managers. The heads of major networks and studios sometimes make many decisions in the creative process of their content. We do not emulate these top-down models because we believe we are most effective and innovative when employees throughout the company make and own decisions.