Netflix Has A New Culture Memo. Here’s Why It’s A Big Deal


Netflix updated its 15-year-old code on company culture on Monday. Unlike the original 125-page slide deck the company popularized in 2009, the new version is a lot shorter — but that doesn’t mean it’s any less important, according to co-CEO Greg Peters.

One major change was to the company’s famous “keeper test,” which is a process established in its 2009 deck, to determine whether a manager should keep or fire an employee.

The original test was: “If X wanted to leave, would I fight to keep them?”

The updated memo keeps the original question but introduces an extra dimension: “Knowing everything I know today, would I hire X again?”

Though it might seem nerve-wracking to constantly be evaluated this way, Netflix’s new memo says that the company will work with employees through short-term mistakes or new things they tried that didn’t pan out.

Peters told The Verge in an interview this week that the memo has a new section called the “dream team,” or a concept that explains how Netflix looks for high performers and the best person for each position.

It could mean the end of “personality hires” at the company. According to the memo, the “dream team” involves switching out someone well-liked for someone who does the job better.

Common traits across the dream team include selflessness, creativity, and resilience.

“We are trying to be very clear about this being more of a sports team model than a family model,” Peters said. “We’re going to seek the best player in every position.”

Greg Peters, co-CEO of Netflix. (Photo by Joan Cros/NurPhoto via Getty Images)

Netflix collected over 1,500 points of feedback from its employees and created the updated memo over the course of a year.

The document is now 2,264 words, thousands of words less than previous versions. It reintroduces concepts from the original 2009 deck that had been lost over four prior updates, including having every employee feel a sense of personal responsibility to better the company.

Related: Netflix Gets Streaming Rights to Christmas Day NFL Games

Peters explained why Netflix’s culture memo was important: He said that he prioritizes Netlix’s culture first, above strategy and execution, because a strong culture allows the company to get better at everything else.

Culture is “a vehicle to improve, so that’s why we make a big deal out of it,” he explained.

As for why the culture memo gets shorter with each iteration, Peters said the reason was that the company gets better at condensing and clarifying it over time.

In Peters’ words, Netflix is “trying to constantly do a better job at articulating the practices we can employ as a company to grow and get better.”

Read Netflix’s newest culture memo here.

Related: Blockbuster Takes Jab at Netflix Over Password-Sharing Fees

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