What Makes a Great Company? Netflix has some answers.

John Sumser, CEO of Two Color Hat and one of the top minds in the HR space shared the following post on his Facebook page yesterday.

"Culture. No, I really like this presentation set. Netflix shakes the tree. Performance management in action. http://bit.ly/19zNHk"

The PowerPoint deck John links to is titled "Reference Guide on our Freedom & Responsibility Culture". It is 125 pages but a quick and highly worthwhile read.

The PowerPoint author is Netflix's founder Reed Hastings and it highlights the "performance management" philosophy of Netflix. It is a remarkable document. Some sound-bytes:

• The real company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted, or let go.
• Great workplace is not day-care, espresso, health benefits, sushi lunches, nice offices, or big compensation, and we only do those that are efficient at attracting stunning colleagues.
• The Keeper Test Managers Use at Netflix: “Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at Netflix? The other people should get a generous severance now, so we can open a slot to try to find a star for that role.
• We don’t measure people by how many evenings or weekends they are in their cube. We do try to measure people by how much, how quickly and how well they get work done – especially under deadline.
• Netflix Vacation Policy and Tracking. Until 2004 we had the standard model of N days per year. We’re all working online some nights and weekends, responding to emails at odd hours, and taking an afternoon now and then for personal time. We realized. We should focus on what people get done, not how many hours or days worked. Just as we don’t have an 9-5 day policy, we don’t need a vacation policy. Netflix Vacation Policy and Tracking: “there is no policy or tracking”.
• Netflix Policies for Expensing, Entertainment, Gifts & Travel: “Act in Netflix’s Best Interests” (5 words long).
• Managers: When one of your talented peopledoes something dumb,don’t blame them. Instead, ask yourself what contextyou failed to set.
• Values reinforced in hiring, in 360 reviews, at comp review, in exits, and in promotions.

When I Googled "Netflix culture" and looked at all the attention this presentation is receiving on web sites, news pages, blogs and social networking sites, I was amazed at just how viral this has become.

I don't know the circumstances behind making this presentation publicly available but kudos to whoever made the decision. Not only does it validate the concepts and beliefs most great companies (large and small) already know about building a great organization but more importantly it is fabulous "employment branding" for NetFlix - this is the document's real value.

What I particularly like about this document is that unlike most Best Companies to Work For lists, which tend to focus on perks given to employees, this gets to the heart of what makes a great company. And any CEO of any size company can learn from what Netflix has shared.

Thanks for sharing NetFlix.