Thursday, August 6, 2009

Who thought that a DVD rental would be the coolest place to work? By Even Aas-Eng

Today I picked up an article in a TechCrunch newsletter about Netflix. The American online DVD rental service apparently has a very interesting corporate culture that everyone now can read about after the management added their “Reference Guide on our Freedom & Responsibility Culture” To slideshare.

Some Highlights from the guide are:
- Netflix Vacation Policy and Tracking: "there is no policy or tracking."
- "There is also no clothing policy at Netflix, but no one has come to work naked lately."
- Netflix's policies for Expensing, Gifts and Travel: "Act in Netflix's Best Interests."
- Netflix on compensation: “When top of market comp done right... Nearly all ex-employees will take a step down in comp for their next job.”

So if you work at Netflix you can go on vacation whenever you like, show up naked in the office, receive a 50 inch LED TV as a gift from a Netflix partner (if it’s in Netflix best interest that you accept it) and while you are doing all this you will get the best compensation in the market!
I guess by now you really want to work with online DVD rentals!

Jokes aside, I think the presentation was very interesting. Its miles away from our Nordic “social welfare state” corporate culture, but it’s also miles away from most big American corporations excruciatingly boring “code of conduct”. What surprises me the most is that Netflix is not a small company. They are around 2000 people and their listed on NASDAQ. Alternative corporate cultures aren’t exactly uncommon in cool, tech start ups but they have a tendency to disintegrate as the companies go public.

Most companies like Netflix uses stock options as a way to keep the best talent. Google is a prime example, they gave all employees various number of options. Their strategy was never to be leading in compensation. When they went public in 2004 the initial offering was 85$, in 2007 Google hit 700$. Between 2004 and 2007 Google hired about 10 000 people, all got options. Because of the continuously rise in the Google stock its most have been a very effective way of keeping the best talent. There are two problems with this model though, its volatile and short term. Today Google shares are hovering around 450$.

Netflix offers stock options to those who want them but their strategy to keep the best talent is to offer them the best compensation in the market and let the employees decide what to do with it. The get rich quick opportunity disappears but you get long term stability and safety. I think most people would prefer the Netflix way.

Personally I have worked in India where I couldn’t wear jeans at the office except on Fridays and I have worked for Google where you got an incentive to buy a bike to save the environment… I prefer McCann here in Oslo where we have a mix of Nordic welfare stat socialism and IPGs code of conduct!

You can find the preso here: