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Amy Sussman/Getty Images for Netflix
- Internal resistance emerged regarding updates to Netflix’s well-known culture memo, according to co-CEO Ted Sarandos.
- During a conference discussion, Sarandos justified the changes and emphasized the necessity for cultural evolution.
- Sarandos highlighted that Netflix’s fundamental values balance responsibility with freedom.
This past June, Netflix revised its iconic culture deck after gathering feedback from 1,500 employees over a year.
In an interview on Tuesday at The Wall Street Journal’s Tech Live event, co-CEO Ted Sarandos acknowledged receiving criticism about these updates but stood by them. “We are continuously striving to enhance our culture,” he stated. “So when someone mentions that ‘the culture is evolving,’ they are absolutely correct. We must adapt our culture. Our goal is to mirror how we operate rather than impose restrictions on it.”
The June revision eliminated the section titled “Freedom and Responsibility,” replacing it with a new segment called “People Over Process.” This new focus emphasizes recruiting individuals who exhibit exceptional responsibility and thrive in an environment of transparency and autonomy.
The update also modified the infamous “Keeper’s Test,” which managers utilize to assess whether they would advocate for retaining an employee who expresses a desire to leave. The revised version encourages regular discussions between employees and their managers about positive aspects of their work experience.
The “Keeper’s Test” was first introduced publicly in a comprehensive memo released in 2009 by Netflix founder Reed Hastings when the company had fewer than 300 staff members; Hastings deemed it perfectly aligned with their needs back then. However, as Netflix has expanded into the largest streaming service globally with over 14,000 employees today, adjustments were necessary.
“We approached this document’s evolution thoughtfully,” remarked Sarandos. “It now better reflects our current business environment shaped by our extensive workforce.”
Sarandos noted that earlier iterations may have leaned too heavily towards emphasizing freedom over responsibility: “We believe both elements are essential.” He added that while some aspects have been redefined, all core values from previous versions remain intact in this updated document.
This memo has previously been described by former Meta COO Sheryl Sandberg as potentially being “the most significant document ever produced from Silicon Valley.” Its purpose is to maintain a workplace atmosphere conducive to attracting top talent while fostering high performance among employees within the organization.
Netflix has made prior revisions as well; notably in 2022 when they highlighted themes of representation and artistic expression while maintaining meritocratic principles within their framework. That update even suggested that employees could resign if they disagreed with certain content projects they were assigned to work on.
No immediate response was received from Netflix representatives regarding inquiries made by Business Insider concerning these recent developments.
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