Netflix - A Gutsy Company

Netflix is a gutsy company because it is not just a company that rents movie DVDs. I am not even a client of theirs, I haven't ever been. But I am a fan of their gutsy way of thinking.  I think of them as a company that has gutsy people. They try out new ideas. Even in HR. That's what first caught my attention.Have you ever seen a company's policy manual being posted online for other companies to see? Netflix has. They have put a 128 page document on Slideshare which they call their Reference Guide on Our Freedom and Culture on and say that the slides are for you to read and not for presenting. (click here to read that document). Have you ever wanted to read any company's policy manual? It is quite possible that you have not even read your own company's policies - until someone flings one at you that prevents you from doing something. What is interesting is that in this case folks like me who are reading it. That is something. Hats off to Patty McCord who heads HR at Netflix. They currently have close to 600 employees.The Guide talks about Values that Netflix cares about. It takes guts to state your values in public. If you do not live by them, then it is easy to attract sniggering critics. One of the Netflix values is about Passion. This is explained in terms of four elements: You inspire others with your thirst for excellence; you care intensely about Netflix success; you celebrate wins; you are tenacious. Isn't that just a neat way of telling people how to behave. I that one about caring for the company's success. That could be the single largest indicator of employee engagement.They define a great workplace not by the cafeteria food, fancy offices or big compensation. They define a great workplace is one which has stunning colleagues. Isn't that cool. What if you are not a "stunning colleague" ie someone you respect and learn from. They state that "adequate performance gets a generous severance package". Takes guts to say that. Their stated position is that the difference between the best are twice as good as the average when it comes to procedural work. In creative work, the best outsmarts the average ten times. That to me is a neat way to think of just HOW MUCH better is someone compared to the average performer in your company.They advise you to ask your manager regularly - "If I told you I was leaving how hard would you work to change my mind to stay at Netflix." They also say if you are a star and hit a bad patch, they would support the star. Likewise they expect the stars to stay if Netflix hit a temporary bad patch. Think about it, that is what we expect of our friends.What of you needed to take vacation. How many days can you take off? The answer: As many days as you need to. No strict compensation rules; very few formal titles; you get to choose your stock to cash ratio.I admire their guts in cannibalising their own golden goose. Since 2000, they have been working hard to move away from a profitable DVD rental business model to delivering streaming movies over the net. Cool move since broadband penetration will only improve worldwide and will become cheaper and cheaper for faster and faster speeds.Their cool business model idea: They have a predictive analytics software that allows them to predict what movies you will like based on movies you have watched. When you watch a movie and rate it, you are telling Netflix what kind of genres you like. What Netflix has done is "tagged" thousands of movies with adjectives like "Action", "Comedy" and also some not so conventional adjectives like "Superhero", "Gritty" etc. By using a match of the genre and the adjectives, they are able to keep improving the movies they offer you. They also know what people like you are watching. The predictive analytics software works like a friend who knows your taste in movies and buys tickets for a film that he/she just KNOWS that you enjoy.  Isn't that amazing. That is also what Amazon.com has been doing to suggest other books when you buy from their site.I am sure they have their share of detractors. Netflix has also done crazy things like hiring actors to fatten the audience at the launch of their services in Canada. (Read that here). You might argue that politicians do that all the time - hiring crowds from the neighboring villages and bringing them to their rallies to show how popular they are. But having Netflix do that is just stupid. That however does not in any way reduce my admiration for their guts. Creative people are gutsy. Dreamers are guts. Here's wishing that 2011 is the year of dreamers and guts people.