Content Operations TeamRecommendations

NETFLIX

Problem Area

Problem Area

Netflix wants to get into the streaming business

(a cutting edge business that needs innovation)

But…

Problem Area

In our opinion, by 2014, your growth will hit an inflection point

Problem Area

Dysfunctional Death Spiral

Let’s look at a team

Content OperationsAroon… leads with fearKerry… bright, talented, marked for terminationSuresh… early employee, watches a lot of TVSrikumar… hard workerAleks… checks in code without permission Jeremy… has an MBA and is kept in a closetPallavi… only tolerates it because of her H1-B

How has this team performed?

In 2 years, 6 managersTeam goes weeks without checking in codeTeam just about botched the iPad launch

Why do we care about this team?

This team gets your content to your website

If this team doesn’t perform you won’t have a streaming service

This team’s problems show up in all Netflix teams

What got them here?

Employees call it

a culture of fear

Why are the employees afraid?

You fire 25% of them each year

What’s wrong with leading with fear?

Team dysfunctionPoor performance

Difficulty hiring new employeesOpenings go unfilled

Operations failCustomers quit

But isn’t our culture great?

Netflix has high ideals

Culture deck distributed over the internet by the CEO

Where did it go wrong?

The goals conflict and when applied to reality create an explosive mixture

Freedom and Responsibility

Extreme top-down management environment

Everyone is responsible, but no one is really free

All Star Team

Above average pay to get the best of the best

(but the best are used to a system that recognizes their performance, excellent

performers are quickly disillusioned)

The result has been average employees that are really good at not getting fired

Adequate Performance Equals Generous Severance

No objective performance review(no performance review at all, actually)

=Anxiety

Results in Dysfunctional Teams

The iPad launch

Aroon was on vacation during this key time frameA different team couldn’t get the iPad content into

the encoding systemSuresh did not want his team to take on this task

Suresh would rather have the iPad launch fail than have his team take on this risk

“Have them fail and have everyone know it”

Best Team Practices

Tie the team back to the organization

Make the team see the organization’s success as their success

Build trust between team members

An affiliative approach would help heal the turf wars and lack of trust

Recommendations

Innovation Sustains Enterprise Viability

PR

OD

UC

T

PER

FR

OM

AN

CE

2000 2014

SUSTAINING TECH

MARKET

TRAJECTORY

Clayton Christensen

Innovation Sustains Enterprise Viability

PR

OD

UC

T

PER

FR

OM

AN

CE

2000 2014

NETFLIX (DISRUPTIVE TECH)

SUSTAINING TECH

MARKET

TRAJECTORY

OVERSHOOTING NEEDS @ > COST

Clayton Christensen

Fear> Turnover

2000

2014

Collapsing Fear Spiral Kills Innovation

Need to reset culture…Or long term viability at risk

2 Options for Cultural Reset…Team Option Allows for Hypothesis

Testing

Hypothesis: Injecting Accountability & Trust

Accountability via Ownership

Trust via

Insulation

Culture of Fear.....Communitarian Culture

Incremental $ Value of Communitarian Culture

Accountability via Ownership

Trust via

Insulation

How to Inject Accountability & Trust?

Task to goal responsibilityCreation of subteams w/ leads

(training, empathy, trust)Realign skill sets to workloadClean communication channel

team leader/ senior mgmtInnovation contestFormal recognition (increased

ownership, faster review times, public pat on the back, etc)

Leadership training (balanced style)

Accountability via Ownership

Trust via

Insulation

Leadership Style - Desired

Leadership Style - Now

ConclusionSUCCESSFUL BUSINESS MODEL AND

FLAWLESS EXECUTION COMPENSATED FOR CULTURE OF FEAR

CULTURE OF FEAR

…PUTS LONG TERM VIABILITY AT RISK

…ADDRESSED THROUGH ACCOUNTABILITY AND TRUST

RECOMMEND IMPLEMETING MEASURES IN CONTENT OPS TEAM SETTING (6MOS)

REVIEW RESULTS …CORPORATE ROLL OUT

Questions?