Effectiveness of Culture based Management approach- Study on

Netflix & Next Jump

Analysing the effectiveness of work culture in Netflix & Next Jump starts with
understanding their ethos. Starting with Netflix, their seven aspects of work culture are
listed below
Values are what we Value
High Performance
Freedom & Responsibility
Context, not Control
Highly Aligned, Loosely Coupled
Pay Top of Market
Promotions & Development
The work culture of Next jump is based on core ideas listed below

Better Me
Better You
Better Us

The ideologies followed by Netflix and Next jump companies have changed the way we
approach concepts of organizational development and learning organizations. Both the
companies reinvented HR policies adopted by traditional and orthodox companies. Both
companies revolutionised work culture and environment inside companies by bringing in
new policies that promotes employee welfare.
Starting the analysis with recruitment and HR policies.
As per Harvard business review by Patty McCord(Source: https://hbr.org/2014/01/hownetflix-reinvented-hr/ar/1)
People find the Netflix approach to talent and culture compelling for a few reasons. The
most obvious one is that Netflix has been really successful: During 2013 alone its stock
more than tripled, it won three Emmy awards, and its U.S. subscriber base grew to nearly
29 million. All that aside, the approach is compelling because it derives from common
sense.
The major culture brought in by Netflix is in the department of hiring and managing
talents. They shaped an approach towards talent management as per Patty McCord

Hire, Reward, and Tolerate Only Fully Formed Adults

Tell the Truth About Performance
Managers Own the Job of Creating Great Teams
Leaders Own the Job of Creating the Company Culture
Good Talent Managers Think Like Businesspeople and Innovators First, and Like HR
People Last

Coming to Next Jump, their No fire policy has created wave in the industry. In an effort to
improve the companys own culture, Next Jump CEO Charlie Kim adopted a no fire
policy. Being fired is a highly traumatic emotional event. Its the equivalent of being told

Youre no good. In a no-fire situation, managers become responsible for those they hire
and bringing a new family member into the fold. If there are problems, the manager is
in charge of educating and training that individual. If someone really doesnt work out,
Kim says they are reassigned to looking for a new job, while remaining employed and on
the payroll until the task is met. Many renowned HR managers after reviewing No fire
policy states that the hiring procedure should include aspects of a no-fire policy, even if
the company does not go that far. According to them It is a long-term investment to
grow together and I think those are messages that should be shared in the interview
process and a value that all managers/supervisors need to believe in.
Source (http://www.hrtalentmanagement.com/2014/08/19/next-jumps-no-fire-policyunder-fire/)
The major question asked on Next jumps no fire policy is What if the person is a bad fit
or commits an ethical breach?
According to Next jump CEO, the percentage of employees who said they love, not like,
not tolerate, but LOVE their jobs went from 20% to 90%. Additionally, during performance
reviews, employees are more honest as they do not fear being fired. There is a stronger
level trust.
http://idealistcareers.org/how-would-your-work-life-change-if-your-organization-had-ano-fire-policy/
At Netflix, the fire policy exists but at a different level. They tell the truth about
performance rather than firing unreasonably. Traditional corporate performance reviews
are driven largely by fear of litigation. The theory is that if you want to get rid of
someone, you need a paper trail documenting a history of poor achievement. At many
companies, low performers are placed on Performance Improvement Plans. These low
performers will be given tasks and at one point when they failed to achieve it they are
pushed out. Netflix at the same time tell the truth about poor performing employee first
hand and explain the reason.
The work culture of Netflix and Next jump are very much different from the traditional
ones. Compared to factors of traditional companies like vision, physical setting, organizing
arrangements, technology social factors, Netflix upholds like freedom & responsibility,
context not control, highly aligned, loosely coupled which are focussed to increase
creativity, innovation and efficiency. The so called work cultures of these companies are
not established over a fortnight. They are evolved over a period of time.

Culture is the willing behaviours and beliefs of a group of people. Many cultures are not
passionate, or certainly not passionate primarily about work. Its implied that these
behaviours and beliefs are things people practice by choice, but thats a mild denial of the
role of hierarchy in culture. Most human cultures depend on leaders to define, modify and
reinforce the behaviours and beliefs of the group. This means a CEO or founder has
tremendous power regarding culture. They are the only person who can:

Fire anyone
Hire anyone

Decide how/why people are rewarded

Decide how/why people are punished

And with those 4 powers, every CEO is in fact a Chief Cultural Officer. The CEOs actual
behaviour, not their speeches or the list of values they have put up on posters that defines
what the culture is. Without these four powers any employee at the company is along for
the ride in a culture driven by someone more powerful than they are. By the time the first
handful of employees are hired, the culture already exists whether anyone realizes it or
not. There is no company that has the same culture today that it did 10, 20 or 100 years
ago. Cultures often change dramatically as they shift from birth, to immature success, to
full maturity.
The culture is what creates the foundation for all future innovation. The very notion of
Core Values, a declaration of cultural philosophy for an organization, is a standard move
from the corporate playbook. The existence of a list of values has limited bearing on how
often theyre practiced (e.g. the Ten Commandments). As mentioned above, the behaviour
of leaders defines culture more than anything else. Platitudes are cheap to produce and
put on posters in hallways.
(http://scottberkun.com/2014/critique-dont-fuck-up-culture/)

Next Jump has a great culture and great results have followed: 90% of Next Jumps
employees say they love their jobs. Not like love! Employee turnover is essentially 0,
which is almost unheard of, since so many of the employees are highly sought after
engineers from MIT and other top US east coast universities. Theres a gym where
employees can work out. In the past 3 years over 80% of the employees have worked out a
minimum of twice a week.
Subsidised vacation policy which covers the half of the entire expenses. Free food which
includes breakfast and lunch was then added as an incentive to those who attend a
lunchtime fitness class. Healthy dinners are all around building community through eating
together.
Next Jump is massively into mentorships and coaching and every employee is constantly
being encouraged and pushed to grow and develop both professionally and personally.
They encourage charitable giving. Next Jumpers gave 10% of their pay-checks to these
Forgotten Ones and started handing out envelopes of cash with a note explaining where
this money came from.
http://positivesharing.com/2013/04/happiness-at-work-at-next-jump/

Conclusion

The culture based management approach at Netflix and Next jump has brought positive
results in their growth. Both the companies are moving ahead with impressive track
records. The reasons for their success relies on their work culture and HR policies. They
have brought in new dimensions to organisational developments and management
concepts. The companies uphold creativity and innovation which are the essential
requirements in todays competitive world. Both companies have HR policies tailor made
to promote employee wellness which is the prime reason to increase productivity in any
organizations. The adaptability of such cultures to other organization will depend on the
size of companies. There might be a concern whether such cultures will suit organizations
with large number of employees.