Netflix has created a culture that fosters innovation through freedom and responsibility. They avoid rigid policies and focus on attracting talented employees. Netflix values impact, courage, judgment, communication, passion, honesty and selflessness. While their culture of autonomy has led to success, they may need more structure and policies as the company expands globally to prevent legal issues and ensure cultural replication. Netflix's continued growth relies on anticipating new customer demands through constant innovation.

2. Quick Netflix Overview Netflix is the world’s largest subscription viewing service for streaming movies and TV episodes over the Internet and DVDs by mail. Netflix, founded in 1997, has changed the nature of the in-home entertainment market through it’s proprietary recommendation and rating system and subscription plans with no due dates or late fees. The company believes that continuous success means continuous growth in revenue, profit, and reputation. To foster this, Netflix believes in a culture that supports rapid innovation and excellent execution, effective teamwork and high-performance people, and a culture that avoids rigidity, politics, mediocrity, and complacency

3. Netflix’s Nine Valued Behaviors & SkillsThese will all be represented within the four quadrants of the Competing Values Framework

4. With the right people, instead of a culture of process adherence, there’s a culture of freedom and responsibility, innovation and self-discipline

5. Green QuadrantThe green quadrant is fundamental at Netflix. The company changed the way viewers watch and rent movies. It started when they anticipated the shift from VHS to DVDs, and they are constantly looking for market shifts in demand for new products.

6. LeadersReed Hastings, CEO/Co-FounderFounded company during time when DVDs only had a US household representation of 5%Saw an under-represented market & created a new movie watching platform for home viewersNeil Hunt, Chief Product OfficerConsistently encourages his website team to produce breakthrough innovationsCreated the Netflix rating system for subscribersConstantly updating and renewing the Netflix website to become easier for customersTed Sarandos, Chief Content OfficerRealized early that Netflix had value in the monthly subscriptions and featuring smaller/independent films instead of hit movies because no one had done it beforeRecognized as an innovator in film acquisition and distribution

7. Organizational CultureIncrease, not limit, employee freedom as Netflix growsContinue to attract and nourish innovative peopleEmployees are encouraged to think outside the box and strategize change, while envisioning new market demandNetflix has developed a culture of freedom, responsibility, innovation and self-discipline by hiring the “right people” to work there1 of the 9 Netflix Values RepresentedCuriosity: learn rapidly & eagerly; help outside of specialtyInnovation: re-conceptualize issues; create new ideas that prove useful

8. Business OutcomesNetflix has been able to capitalize on being an innovator in many areas, leading the way for competitors to follow

9. We’re a team, not a family. We’re like a pro-sports team, not a kid’s recreational team. Coaches’ job at every level of Netflix is to hire, develop, and cut smartly.

10. Blue QuadrantNetflix’s beginnings were filled with short-term goals to allow them to become innovators of their market. Now, they continue their blue structure with their constant intent to increase their subscriber base.

11. LeadersLeslie Kilgore, Chief Marketing OfficerBelieves success comes with strong products are combined with superior valueGrew Netflix subscriber base from under 100,000 to 12.3 million in 9 yearsWhile marketing tends to be more “green,” Leslie’s position has focused mostly on goal attainment and creating shareholder value David Wells, Chief Finance OfficerFocuses on strategic planning and analysisExtremely “blue” focus with finance; he creates and aims to exceed set financial goals and maintains a strong profit focus in his position

12. Organizational CultureNetflix pays their employees at the top of the market – this is core to obtaining their high-performance cultureThe follow a motto that “one outstanding employee gets more done and costs less than two adequate employees – we endeavor to have only outstanding employees”At Netflix, hard work is not directly relevant, it’s about effectiveness and getting work done as efficiently as possiblyThey value growth & being the first ones there1 of the 9 Netflix Values RepresentedImpact: accomplish amazing amounts of important work; focus on resultsCourage: make tough decisions without excessive agonizing; take smart risks

13. Business OutcomesNetflix maintains a profit focus and, since it went public in 2002, has been driven to deliver shareholder value.

14. “There is also no clothing policy at Netflix, but no one has come to work naked lately” – Patty McCord, Chief Talent Officer

15. Red QuadrantWhile Netflix is not an inherently “red” company, the organizational culture is very metrics driven. They have established a culture that promotes freedom and openness, while removing all policies. Netflix has two rules: prevent irrecoverable disaster and adhere to moral, ethical and legal issues.

16. LeadersAndrew Rendich, Chief Service & Operations OfficerOversees Operations Engineering, Application Development, IT Operations, Content Operations, Customer Service, Data Sciences & DVD Shipping and Receiving

17. Played a key role in creating a logistics system that drives Netflix’s DVD service in a timely & cost-effective mannerDavid Hyman, General CounselResponsible for all legal affairs & government relations in regards to Netflix

18. Handles a wide variety of company issues, including marketing, partner licensing, consumer protection, privacy & intellectual propertyOrganizational Culture1 of the 9 Netflix Values RepresentedInstead of having specific policies, Netflix asks its employees that they use judgment insteadNo 9-5 workday No vacation policyNo dress code“Act in best interest” are the direct quotes for the expensing, entertainment & gifts, and travel “policies”Netflix recognizes the difference between “good” and “bad” processesGood processes help talented people get more doneBad processes try to prevent recoverable mistakesJudgment: make wise decisions despite ambiguity

19. Business Outcomes(From the first paragraph in the 2010 Q4 Letter to Shareholders)In addition to the traditional metrics reported in annual reports (i.e., profit, ROA, operating income, etc.), Netflix provides its own unique metrics (i.e., subscriptions, etc.) showing where the company places value

20. The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people.

21. Yellow QuadrantNetflix’s employee strategy is to provide employees with freedom to grow and nourish innovations that breed long-term success. They also value teamwork over individuality, and thus possess strong yellow tendencies.

22. LeadersPatty McCord, Chief Talent OfficerAttracts unique, high-talent employees & has led the company to being named by ForeSee Results as the #1 website for customer satisfaction

23. Believes that managing the talent mix at Netflix is paramount to the company’s success

24. Adamant about keeping a lean organization with open communication, approachability and honestyOrganizational Culture4 of the 9 Netflix Values RepresentedDevelopment of employees is not through formal programs, but by giving people the opportunity to develop themselves by surrounding them with stunning colleaguesNetflix does not tolerate “brilliant jerks”The cost of teamwork is too highThey keep the people who fit and lose the ones that don’tNetflix has a culture where they hire “the rare responsible person”This person fits into the company culture by being self motivating, self aware, self disciplined, etc.Communication: treat people with respect; listen wellPassion: inspire others with thirst for excellenceHonesty: non-political during disagreementsSelflessness: seek what is best for Netflix; take time to help colleagues; share information

25. Bottom-line ValueNetflix provides an environment that fosters talent and does not stifle creativity or freedom.