This company will fire you if you aren’t a star

A few years ago, the then little-known entertainment streaming business Netflix was hailed for having a Eureka moment.

This breakthrough involved a set of 127 slides, which cut through traditional human resources practices and attracted more than five million viewings.

The company’s expenses policy was five words long: “Act in Netflix’s best interests.”

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However, the internal corporate dynamic was perhaps summed up by one slide which proclaimed: “We’re a team, not a family.”

“We’re like a pro sports team, not a kids’ recreational team”.

“Netflix leaders hire, develop and cut smartly, so we have stars in every position.”

It's all because Netflix, with shows like Orange Is The New Black, is king in Australia.

Australia’s labour laws largely protect workers from Netflix-style HR policies.

Managers were advised to apply “the Keeper Test” if an employee wanted to leave to join a competitor.

That is, would you fight hard to keep that person from leaving? The other people should get a “generous severance” package so a “star” can be put in that role.

The slides conceded that the sporting analogy was good but not quite right because athletic teams had fixed numbers of positions on their teams and individuals were competing for a prized spot on the roster.

For corporate teams, Netflix argued that more talent meant they could accomplish more and that meant colleagues helped each other.

“Internal ‘cut throat’ or ‘sink or swim’ behavior is rare and not tolerated,” the slides note. The same goes for “brilliant jerks”.

Still, the message has a Darwinian ring. Loyalty is good, but not unlimited. Netflix did not care how long you spend in the office and will look elsewhere if you produced B-grade performance but got an A for effort.

“Sustained A-level performance despite minimal effort is rewarded with more responsibility and great pay.”

So, would this ethos work in Australia?

Australia’s unfair dismissal laws would apply the brake to speedy sackings of the type envisaged by Netflix. Our workplace laws also allow employees to take “adverse action” claims.

But this would slow the Darwinian selection process, not stop it. Unions are fighting against the idea of “insecure” work – especially for lower paid workers – and would fight the spread of this corporate ethos where possible.

One of the defences cited by Netflix is that they reward success, which is a strong pointer that this system is not for everyone or for all employers.

See the Harvard Business Review’s analysis if Netflix’s HR policy

The roots of the system lie in the start-up culture that flourished in Silicon Valley and produced corporate giants such as Apple and Microsoft.

Some technology companies operating in Australia are already fast to weed out those they see as underperformers. The same goes for other high-tempo industries like investment banking and advertising.

But most employers cannot afford to only employ “stars” or stars of the future. They need a range of abilities and personalities to function and wall-to-wall Alpha males and females would be unworkable (as well as being an old-fashioned pain in the arse).

Brutality not required


Fear isn’t required for excellence.

The Netflix slides are correct in saying that many big companies have “value statements” which are mere verbiage.

Indeed, the bywords at one of the world’s most notorious corporate collapses, Enron, were “Integrity. Communication. Respect. Excellence”.

You can have cut-through without cutting off heads.

The ABC, for example, has a policy on the use of social media by employees. But the columnist Annabel Crabb has reportedly summed up a punchier version for users of Twitter and Facebook: “Don’t be a dickhead.”

Australia can encourage high-performers without making employees walk a tightrope very day.


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