Netflix CEO Reed Hastings and People Manager Patty McCord worked for months to outline the details of the company culture, in terms of daily behaviors, they wanted to create at Netflix. The result was a stack of PowerPoint slides, or “culture deck” they could share with employees. Culture deck values include freedom coupled with responsibility, meaning employees have wide latitude for how they carry out their work, as long as they meet their performance objectives. For example, employees take paid time off at their own discretion, but they are expected to perform at a high level. Employees also are entrusted with types of information that many companies would keep confidential.  They can look up measures of company performance, and managers can look up the salaries of all employees.

When the culture deck was posted for public viewing, prospective hires could research the company in advance to determine whether or not they would fit in the company’s culture As a result, recruiting and hiring results improved.

Sharing the culture deck supports a Netflix practice related to communication: radical honesty. The intent of radical honesty is to empower employees by giving them factual information about the company, including data about its performance, objectives, and desired behaviors and outcomes.

A major challenge of radical honesty, which Hastings and McCord considered a strength of Netflix’s high-performance culture, is that some messages are bound to be disappointing or critical, so they are hard to receive. In particular, people tend to feel threatened by criticism, even if it is true and relevant. In practice, efforts to deliver radical honesty in performance feedback have sometimes come across as harsh. Ideally, employees are receiving ongoing and complete feedback, so they should not be surprised by such a message. In practice, however, some managers struggle to meet this standard for delivering feedback. As part of providing employees with full information, these situations, including firings, typically are disclosed to the whole team or workforce. Some employees respect the aim of openness, but it has the potential to shame those in the spotlight.

1. What benefits do you think Reed Hastings and Patty McCord obtained from putting their vision for Netflix in writing in the culture deck? How effective do you think this medium was for this message?

2. What pros and cons do you see in managers following Netflix’s practice of being radically honest about their employees’ performance?