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What Netflix’s New Culture Memo reveals about the future of the company

  • Netflix revamped its groundbreaking culture memo, first released in 2009.
  • The streamer explained his philosophy on representation, artistic expression and other topics.
  • Experts say the updates are progressive but could also conflict with one another.

Netflix

has revised its groundbreaking culture memo to address representation, artistic expression and other issues. The overhauls came just days before a company-wide round of layoffs that affected 150 full-time employees and at least as many contractors.

The changes, first reported in Variety, highlight some of the growing pains the company has experienced as it transforms from a disruptive tech newbie to an entertainment powerhouse with more than 11,000 employees around the world.

The latest Netflix memo, titled “Netflix Culture – Seeking Excellence,” includes new guidelines that say “representation matters,” as does “artistic expression.” It speaks to a tension between companies at the intersection of technology and content creation, trying to balance onscreen and offscreen representation with free speech.

“Although ideally we don’t want these things to conflict, sometimes they are. Sometimes content can be harmful to individuals and communities,” Y-Vonne Hutchinson, ReadySet co-founder and CEO, told Insider. ReadySet is a boutique consultancy focused on diversity, equity and inclusion and has worked with companies from Amazon to MailChimp.

Netflix made waves in 2009 when it first publicly released its management philosophy, then in the form of a 125-slide deck. The company’s policy of providing unlimited vacation time and eliminating employee expense tracking has since been mirrored across America. And experts have said the deck has inspired other employers to formalize their own culture and be more transparent.

Meta Platforms executive Sheryl Sandberg once said that the deck “is possibly the most important document that ever came out of the Valley.”

However, some aspects of Netflix’s management philosophy have caused controversy, such as its ruthlessly high bar for performance (“adequate performance is rewarded with a lavish severance pay,” the front-row said) and distaste for “brilliant jerks.”

Netflix Co-CEO Reed Hastings co-authored a 2020 book explaining the approach called No Rules Rules: Netflix and the Culture of Neuvention.

Insider focused on some key changes to the culture document and asked experts what they reveal about Netflix’s future as it battles growing competition


stream

and a rocky economic climate.

Representation versus artistic expression

The latest version of Netflix’s culture document, released as a 4,000-word memo on May 12, comes as the company’s unique environment and philosophy face new challenges. The company said in a statement that it has asked all employees to provide feedback on changes to the memo and has received more than 1,000 comments.

In July, one of Netflix’s integrity values ​​(“You only say things about co-workers that you say to their face,” as stated in an earlier version of the memo) came to the fore when the company fired three marketing executives for ignoring their boss had criticized. The Hollywood Reporter reported what they thought was private


Relaxed

Announcements.

Some Netflix employees staged a strike in October after the streamer released a Dave Chappelle special called “The Closer” that contained transphobic jokes, a decision the company defended in memos to employees and in interviews.

The May 12 memo’s section on artistic expression reiterates this defense: “Not everyone will like — or agree with — everything in our ministry,” it says, continuing, “We support the artistic expression of creators, with whom we work together; we program for a variety of audiences and tastes; and we let viewers choose what’s appropriate for them, rather than having Netflix censor specific artists or voices.”

“Netflix is ​​weighing the cost of employee dissatisfaction against the benefit of artist loyalty,” said Wedbush analyst Michael Pachter. “They have invested heavily in Dave Chappelle and other artists and clearly hope to be perceived as a safe haven for creators to express themselves without worrying that the company itself will cause them grief.”

The streamer is making a bet, he added, that the costs of internal disagreements aren’t as great as the benefits of supporting creators. “The only way this culture memo will be withdrawn,” he said, “is if they either lose a lot of employees [or] enough key employees to prompt them to reevaluate.”

How progressive values ​​are translated into corporate practice

The updated memo also includes three other new sections – dealing with representation, ethics and philanthropy – as well as minor changes such as rewording the company’s “valuable behaviors” (formerly known as “real values”) and removing a section on stock options, which is extant detailed on the Work-Life Philosophy page of his job website.

“Our members want to see a variety of stories and people on screen – and our company and leadership should reflect that diversity,” the culture memo reads in a new section titled “Representation Matters.”

The passage is progressive in codifying those values, but it’s only as effective as the way it’s put into practice, ReadySet’s Hutchinson said.

“It’s a bit mixed,” she said. “This article on representation is important, but I think it needs to be set against the broader policy itself.”

For media companies as a whole, Hutchinson says, investment and empowerment are just as important as representation — how much money the company spends developing and marketing diverse stories that amplify marginalized voices.

“In an ideal world, we would have a holistic approach,” Hutchinson said.

Tuesday’s mass layoffs at Netflix — affecting 150 full-time employees, 70 jobs at the animation studio and 60-70 contractors across social media and publishing channels — have sparked a fresh wave of scrutiny of the company’s commitment to inclusion. Many fired from Netflix fansite Tudum, and particularly its social verticals — Strong Black Lead, LGBT-centric Most, AAPI-focused Golden, and Latinx-centric Con Todo — have been women and people of color.

The politics of representation could also come into conflict with the artistic expression section. This section concludes, “As employees, we support the principle that Netflix offers story diversity, even if we find some titles to be contrary to our own personal values. Depending on your role, you may have to work on titles that you find harmful. If you’re having a hard time supporting our breadth of content, Netflix may not be the best place for you.”

In other words, Netflix expects employees to work on content they don’t agree with. That could create tension when, for example, a transgender staff member is assigned to work on a project they feel questioned by or subverts their identity — which was an objection to the Chappelle special.

The tension begs the question of what is more important to Netflix — representation or artistic expression?

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