Abstract

The case discusses how American online content streaming and production company Netflix Inc. (Netflix) fostered a culture of candor wherein employees were encouraged to give candid feedback to their colleagues to help them improve their performance. The company also had no control processes and policies – there were no vacation limits or expense approvals, which gave visibility to employees to the company’s finances and decision-making. Reed Hastings (Hastings), CEO of Netflix, believed that when Netflix provided freedom to its employees, they displayed more responsible behavior. However, in October 2021, when employees gave candid feedback, it was not taken well by their bosses. The employees raised concerns over Netflix’s comedy special The Closer in which comedian Dave Chappelle (Chappelle) made transphobic jokes. Though there was a huge backlash from its employees, Netflix resisted employees’ calls to take down the special from its service. Analysts pointed out that Netflix aimed to focus on content to serve a diverse set of audiences as the company had recorded a decline of 200,000 in the number of subscribers in the first quarter ended March 31, 2022. To add to its woes, Netflix was facing increasing competition from other streaming services such as Disney+, Amazon Prime, and Apple TV+. For several years, Hastings had believed that Netflix’s culture of giving candid feedback and ‘leading with context, not control,’ had enabled it to become a successful streaming giant. Do you think the company’s shift in culture will encourage the employees to give candid feedback in future? How will the company tackle the challenge of building talent density since many employees have left the company over its culture shift? Will the new culture memo which focuses on Artistic Expression arrest the decline in the number of subscribers at the company and help it regain its top position in the online streaming market?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand how organizations introduce and implement candor at the workplace
• Analyze how fostering a culture of candor helps organizations in improving the performance of its employees
• Evaluate how organizations achieve excellence by reinventing their organizational culture
• Discuss the challenges faced by organizations in sustaining the culture of candor and maintaining talent density.

Keywords

Talent density; Culture deck; Culture memo; No Vacation Policy; Control processes; Lead with context; Innovation; Work life balance; Sunshining; Keeper Test; 360-degree feedback assessment; Responsible behavior; Reed Hastings; Pure Software; Blockbuster LLC