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A Learning Perspective on Netflix's Corporate Culture

Your toxic workplace stories?

October 28, 2018
 
 

I read the WSJ article on the toxic corporate culture at Netflix with much horror and little surprise.

The article, At Netflix, Radical Transparency and Blunt Firings Unsettle the Ranks, details through dozens of interviews with current and former staffers what life is like inside the company. The article paints an alarming picture of Netflix’s management style and work environment.

Note: The WSJ article may be behind a paywall. I hope that you can get access through your university library if the link does not work. That is how I was able to read the article.

According to the WSJ article, Netflix employees operate within a prevailing culture that values fear as a performance motivator. Employees enjoy high salaries but retain their jobs only if they are judged to be peak performers. Performance is judged around perceived alignment to the norms and values of the company. Company policy encourages critical public feedback and even self-criticism. (What Netflix calls “sunshining”).  Firings are quick and public.

I do not doubt that in the coming days we will hear pushback from Netflix about the WSJ story. There will be claims that the story does not provide a full picture of what working at Netflix is really like. The company will trot out survey results to show that employees are happy. The company will blame the story on low-performing disgruntled former employees. Or maybe the company will say nothing.

To my eyes, the WSJ article seems to be well-reported and balanced. I buy that the story provides a reasonably accurate representation of Netflix corporate culture.

I also don’t think that Netflix is all that unusual. I’ve seen this sort of cultural orientation at other companies. Tech companies seem to be sadly over-represented in the toxic workplace hall of fame.

What worries me most is not what is going on at Netflix. Instead, I worry about the diffusion of the Netflix culture to other organizations. Netflix is undeniably successful. Many companies will look at what Netflix has been able to do, and work to emulate the Netflix way.

The problem with the Netflix workplace culture is not that it is bad for its employees (it is), but that it will ultimately be bad for the company. (And its stockholders).

To the extent that a company’s long-term success depends on the ability of its employees to learn, to adapt, and to perform with resilience under adverse conditions - then a corporate culture such as in place a Netflix will eventually result in sub-optimal outcomes.

As an academic who works in a center devoted to the advancement of learning, I have become a student of learning science. What you learn when you get into this literature is that fear can motivate short-term performance gains, but that fear destroys long-term progress. Any structure that promotes external punishments or rewards over the development of internal motivation can get quick results. These gains, however, will erode over time.

We also know that diverse teams and organizations will, over time, perform better than homogenous groups. Diversity is important because different experiences and perspectives enable organizations to avoid blindspots. Diversity drives creativity.

At Netflix, there seems to be little room for diverse perspectives. Strong alignment to the dominant culture means that those with different perspectives, orientations, and values will be silenced or pushed out. A diverse organization should not be judged solely on demographic factors. Diversity also encompasses the acceptance of difference.

All of this is to say that whoever designed the Netflix corporate culture was not a student of individual or group performance.

Netflix may be able to be successful in the short term despite its culture. But who knows how much more successful the company might be if its leaders bothered to understand some of the science of learning.

In the long run, Netflix will need to change its culture.  CEO Reed Hastings and his top executives will eventually leave or change. The damage to individual employees and the long-term future of the company will have been done.

Where does higher ed have a dog in this fight?

I think that academia retains more cultural influence than we give ourselves credit. When we hear about crazy practices such as Netflix’s, then we have some obligation to speak out.

I assume that Hastings and Netflix execs are products of our higher education system. It is clear that in some important way that we have failed them.

If nothing else, we need to inoculate ourselves against some college president getting the idea that companies such as Netflix have anything positive to teach us.

What are your experiences with toxic work environments?

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