Creative versus industrial firms
A little while ago NFLX released a slideshow talking about their values and culture, largely as a recruiting tool for the company. Its what the founder Reed Hastings wishes he knew when he started his company. It has become NFLX's constitution. You can find the full 124 page presentation at slideshare currently at 9.8 million views. Its a memo for today's businesses as the majority of human resource processes are based around managing industrial firms but not creative firms. A manufacturing company is all about efficiency and not making errors. While in a creative world small errors are okay if you are able innovate quickly and get to the desired result. In a creative firm one really great employee could be worth ten average employees so you can afford to pay up.
Rewarding performance not effort
At NFLX great work is rewarded even if it required minimal effort. The focus is on output not effort. This focus on performance trickles down to holidays. NFLX does not track hours worked per day so they also do not track vacation time. If you get your work done you can vacation as much as you want though if you want 30 days off in a row you need to get a sign off from HR.
Flexibility more important than efficiency
NFLX believes that most companies curtail freedom and become bureaucratic as they grow. Processes get introduced as companies become bigger and more complex. It is a preferred outcome to undisciplined and chaotic growth. As companies grow they tend to dilute the talent pool as the bureaucracy drives high performing employees out. The growing size means the focus becomes on being more efficient but at the cost of being less flexible. NFLX's solution is to keep the bar high by growing the amount of high performance employees faster than business complexity. This means attracting great people and giving them the freedom to make a big impact. It also means concentrating the business on a few big products versus small ones so complexity does not increase too fast.
How to get the best team?
By awarding top of the market compensation and giving them freedom to make decisions. NFLX believes that hiring and working with the best is a better perk than free lunches.
They actually encourage their staff to take a recruiters call, ask them how much and send this number back to HR. Where can I apply!