And, so on.
The Netflix Culture only worked at Netflix because of hundreds of small details that end up connecting directly to the business model, mission, and leadership team.
I will say it once again: it will not work anywhere else.
A particularly annoying manifestation of overfitting is when people in a company use the following rationale: “Everyone who works at my company is happy and successful, that proves that my culture is right”.
In Principles, Ray Dalio says that new employees usually have a hard time at Bridgewater during the first few months, but then end up loving it there.
Patty McCord says in Powerful that “all engineers” despise process, and that is why all are happy at a culture like Netflix’.
That is, of course, BS, and it is just an example of survival bias.
Everyone who “survived” at your company did so because they adapted to the culture and were in some way predetermined to do so.
This proves nothing except that you managed to rule out everyone else.
Transferring learningsIn machine learning, we talk about transfer learning when a model that has been originally trained for one problem can also be applied to a different problem, maybe with some “minor tweaks”.
Similarly, while in the previous section I made it sound like it is hard to apply learnings from one company to another, there are certainly many lessons that have repeated enough to be transferable.
As a matter of fact, even most of what is written in the books I criticized above can be transferred if you are careful enough to adapt them to your situation and context.
After having been at very different companies, all the way from large 100 year old multinationals to my own startup with only 3 people on day one, I feel like I am in a relatively good position to highlight things that are easily transferrable and you might want to apply anywhere, and things that are much harder to adapt.
Of course, I might be over/under-fitting myself, so take everything with a grain of salt.
Transferable lessonsSo, what are the traits that over and over I have seen contribute to a culture’s success no matter the context, and the company?People above all (aka You are exactly as good as your team)This might be the most important invariant: It doesn’t matter how good you are as a manager, you will fail with a bad team, and even the worst manager will seem good when leading an awesome team.
Of course, it is unlikely that a great manager ends up leading a bad team or for a bad manager to assemble a great team.
So, how do you build a great team that will make you (and everyone else) successful?.There is one, and only one, answer: hiring.
As a manager/leader, recruiting should be your number one priority.
This might seem an overstatement, but this is indeed an important thing that separates successful teams from unsuccessful ones, and successful companies from unsuccessful ones.
And, if you still think this is extreme, you might want to know that at Netflix managers who were struggling to hire someone important to their team were encouraged to stop doing everything else and focus on that hire 100% until they closed someone.
And, when I say everything, I mean everything.
They would stop even attending “important” meetings.
Maybe one of the saddest moments of my hiring manager career was when a manager that I was interviewing told me that if they could, they would fire 40% of their team.
That didn’t say much of the manager, and even less of the company as a whole.
Interestingly, the company does not exist anymore.
There are of course other important things to keep your team happy and performing for a long time after they have been hired.
It is beyond the scope of this post to go into all the different management techniques that can help.
However, if I had to highlight just one that seems to valid no matter the context and the situation, that would be the importance of regular 1:1s with the team.
Culture eats strategy for breakfastIt is extremely important for a company’s success to have a strong/clear culture.
This might be even more important than having a strong/clear strategy, because in fact a strong culture will likely lead to a strong strategy, but not the other way around.
Think about any of the successful companies right now.
Google, Apple, Netflix, Salesforce, Amazon… they all have a strong clear culture that you could describe.
Note that they don’t all have the same culture, and indeed some of them are very different, but they all have strong and clear traits that define who they are.
My take on this is that, as Google discovered, one of the most important keys to success in any organization is psychological safety.
While there is much more to it, an important aspect of such safety is having clarity and understanding of how people will respond and act in the organization in response to anything you do or say.
This is only possible in an environment where you have a strong culture and norms that dictate what everyone should expect of each other.
A word of caution here.
Strong culture as I have used above might be misunderstood as one that strongly limits freedom or strongly selects individuals who are “fit” for it.
Besides the many well-known benefits of diversity in any organization, you should build a culture to scale and therefore to include as many (different) individuals as possible.
Of course, there will always be some “kinds” of people that might be more or less attracted to who you are.
That will depend not only on your culture, but also your mission, product, and stage.
That being said, you should do your best to minimize “culture cliques” unless you want to face the issues that many early successful companies face as soon as they start scaling up.
As an example of this, when we started our company Curai, I talked about setting up our cultural values asap.
However, my cofounder pointed me to a post where they advised not to write down your company culture until you had at least 20 employees.
After thinking about we agreed they were right.
If you set up the culture with only 2 people in the room, you run the risk of that culture mirroring your own values.
Having input from at least 20 peoples will make your culture much stronger.
Clarity & ownership are importantAs mentioned in the previous paragraph, one of the most important keys to success is clarity.
No matter how big or small a company is, it is important to have clarity in mission, strategy, and ownership.
Of course, such clarity is not easy, but it is on leaders and managers to push for as much clarity as possible.
It is really hard for anyone to work in a confusing environment where goals are not clear and the direction is changing constantly.
You might think that this is precisely the definition of early startup, and you are probably right.
However, even in such environment you can seek and provide clarity.
A couple of techniques that I like are the concept of DRIship, and OKRs.
DRI, or Directly Responsible Individual, is a concept used to explicitly describe that any activity in an organization has to have a clear owner.
Confusion over ownership is one of the worst things for a team.
Have you ever been involved in a situation where someone thought someone else was in charge of making the decision they should have made?.Of course.
We all have.
I won’t have time in this post to convince you why ownership matters so much, but I would recommend the book Extreme Ownership, which makes a really compelling case of why that matters in all kinds of situations.
OKRs (Objectives and Key Results) are also a good way to provide clarity on goals and ways to measure progress in an organization.
While I did refer to this book as an example of underfitting in the first section, I do think that John Doerr’s Measure What Matters is well worth a read.
Process mattersMake no mistake: every company has some flavor of process.
Of course some companies might have way too much process while others like Netflix strive to only define the MVP (minimum viable process).
In any case, process matters.
Process brings clarity on what to expect and how things are run.
As you will read in the Netflix slide deck, there is such thing as “good process”.
Even when deciding not to define a process you are implicitly defining one and you are inviting others (teams, individuals) to implement their own.
So, you should be intentional about what process needs to be defined to bring clarity and what process can be left out for people to figure out on their own.
That decision should, of course, be directly connected to the company culture.
What needs adaptationThere are many other things that cannot be easily transferred from one company to another.
Here is my top three selection.
CultureThis might be a bit counter-intuitive.
I mentioned above that having a strong culture is a “must-have” for any successful company.
What I am saying here is that the details of that particular culture will not travel well from one company to another.
In other words, as I mentioned in the title of this post, the Netflix Culture will not work in your company.
Another way to see this is by looking at the many successful companies I listed before (Google, Apple, Netflix, Salesforce…) and realizing that their cultures are not at all similar.
Some times they are very, very different.
So, why is that?.I have already mentioned a few things in this post that partly explain this.
A company culture needs to be aligned to the company mission, stage, business model, focus area, strategy, and people, among many others.
For example, as much as I loved Netflix Culture, this culture is based on the premise that anyone you hire has to be “experienced”.
I knew this was not going to be very successful when going into Quora and realizing that there were many bright recent grads, and my boss and CEO was twenty-something.
This anecdote is true for any other culture.
You want to adapt Bridgewater’s culture outside of finance?.Good luck with that.
Please let me know if anyone is even mildly successful at that attempt.
Do you want to copy Facebook’s culture in your company?.Good luck if your company is anything but a social media startup.
As a matter of fact, Facebook is even struggling with scaling their culture now that they are not a startup anymore!2.
ProcessSimilarly to culture, while process always matters, the details of the process are hard to directly transfer from one company to another.
Yes, you will be able to use some concrete techniques like OKRs, but beyond that, most things will need to be adapted to your particular context.
As a matter of fact, process is a representation of your culture plus your strategy, so they need to go hand in hand.
PeopleFinally, and perhaps more importantly, people are very different from one company to another.
While, as I mentioned above, you should strive to make your culture as inclusive as possible, your company will attract different people, and for different reasons, than any other company.
This is key, since everything else, including culture and process, will need to align to the people you have in the company.
Is that all?Of course not, there are many other things that matter in a company culture.
For example, I am a fan of the three C’s: Challenge, Care, and Communicate.
This is an extension from the two-dimensional challenge and care framework presented in Radical Candor.
I do think those three things in combination are really key.
However, I am also aware that there are many examples of successful companies that do not observe one or more of them.
For example, Apple does not care too much about the “communicate”, while Netflix does not care too much about the “caring” aspect either.
Some reading recommendationsI know in this post I have been generally critical of management book.
However, there are many great books on these topics out there.
Even the ones I criticized above I would recommend if you take with a grain of salt.
However, if I had to pick a few to recommend, these are probably my favorite five.
Note that any of them in isolation is also likely to over/under-fit.
However, in combination, I think they do give a great way to start addressing culture:The AdvantageThe AllianceMultipliersRadical CandorExtreme Ownership.