Is the unique corporate culture that helped video streaming leader Netflix achieve “disruptive innovation” backlash?
Last week, the new quarterly financial report was released. For the first time in more than a decade, the number of total subscribers fell, and revenue grew at the fastest rate in many years. Therefore, the stock price plummeted 35%, the second largest one-day decline in history, and the market value evaporated by 54 billion US dollars.
In the midst of an unprecedented crisis in which investor trust has plummeted, Bloomberg reported that Netflix may also lose an even more valuable resource: star employees.
As share prices plummeted, wiping out the value of many employee stock options, it might spark a wave of employee exodus. Current and former employees said last week that more people intend to leave the company than at any time in the past.
Employee morale has taken a hit, the most unwelcome outcome for Netflix, which has relied on an all-star cast to help innovate and stay ahead of its competitors.
Success team culture, lose team culture?
Netflix’s corporate culture is very different from other Silicon Valley companies. Although many companies are committed to poaching talents, they also create a flat and happy organizational atmosphere and provide many benefits.
Netflix clearly stipulates that the company “only needs” first-class talents. The founder, Reed Hastings, even more bluntly said, “We Are Not Family.” Please leave. The company is full of great people, so each other inspires maximum creativity and execution, but the work environment is also frighteningly high-pressure.
Here are a few of the items on Netflix’s list of employee expectations:
- We don’t have Japanese sushi or espresso. You are here to fight, not to party.
- As long as we only need A coffee, we will also give A coffee in return.
- We don’t need loyalty, just success.
- We give you full freedom, but you must also take full responsibility.
- We just want superheroes.
Hastings also explained that this is the “professional team” business method: the coach leads the team to the championship, does not control each player, but delegates the power to them and allows them to personally implement the game plan, which is the biggest goal of the team. act in the interests of. But if a player can’t make the best possible contribution to the team, he will ask to leave.
Hastings has long believed that this team culture is the secret to Netflix’s success. But perhaps it is also because of this harshness that employees want to leave under this crisis. Because the company has long created an atmosphere of “performance first”, it lacks the emotion of mutual care and support, which can attract employees to stay.
Netflix wants to start “saving money”, and its corporate culture is forced to transform
If more and more employees do not trust that they can earn high salaries and maximize their value at Netflix, it will be a great worry for the company’s growth. In addition to being impacted by its own corporate culture, Waidian also found that in an increasingly competitive industrial environment, Netflix began to shift its strategy of “saving money”, which further changed its corporate culture.
In addition to high talent density, another important principle is “low management and control”, which refers not only to trusting employees, and proposals do not require approval from supervisors. In the capital-intensive streaming film and television industry, it also means that if employee proposals involve a lot of expenses, Netflix may Trust the employee, and almost always let him do it.
For example, Kari Perez, a former director of Netflix’s communications department, wanted to hold an awards ceremony in Mexico, invite celebrities to score Mexican films, and then award the winners a contract with Netflix, thereby opening up Netflix’s local popularity. It cost a lot of money to hold the awards, and Perez’s supervisor at the time did not support it, because there were few similar practices in the past, but because of the corporate culture, Perez did it, and it was a great success.
But in the future, there will be a question mark as to whether employees will be able to execute their ideas without any scruples.
“Bloomberg” pointed out that Netflix began to cut costs as growth slowed. This does not mean that content investment will decrease, and content spending is expected to grow to more than $20 billion this year, but investment content will be scrutinized more closely. On top of that, out of pressure, supervisors may be more reluctant to give their subordinates room to make mistakes. The already generous company accounts may also be tightened.
Even unique hiring practices are starting to change.
“Bloomberg” pointed out that Netflix is reorganizing its engineering department, dividing it into lower-paid entry-level employees and higher-paid senior employees. This deviates from the original insistence on hiring only the best employees, but Netflix said that this is to help employees mentor each other and promote career development. Due to the size of the company, the number of employees in 2013 was regarding 2,000, and now it has grown to more than 10,000. .
The corporate culture was forced to change in the crisis, and the Wall Street Journal noted that Netflix felt increasingly like “a different company.” Frustrated employees demanded that top executives issue new free allotments to make up for the lost value of their original options.
Netflix has successfully subverted the film and television industry with its corporate culture, but the increasingly crowded Red Sea market has in turn become another hidden concern. Can Netflix maintain a high pace of innovation? Streaming faucets are going through a major test.
(Translator: Zhang Fangyu;Business weekly“Reprinted with permission; source of the first picture:Unsplash）