Netflix culture and the Core of Operational Excellence


netflix defeats blockbuster by plaidklaus

The slideshare below describes the core concepts that define the culture at Netflix.  First released in 2009, it provides insight into what co-founder and CEO Reed Hastings calls the “Freedom and Responsibility Culture”

There are several elements of the document that sound just like the ROWE movement that I discussed quite a bit on this blog last year.  Just as I found with ROWE, however, the Netflix culture manifesto fails to deliver a significant “Wow!” factor.  Why?  Because Lean and Operational Excellence provide a much deeper management philosophy that takes into account every aspect of either the ROWE or Netflix schools of thought, and then some.

Consider these 9 Core Values from the Netflix presentation:


  • Judgment
    • You think strategically, and can articulate what you are, and are not, trying to do.
    • You smartly separate what must be done well now, and what can be improved later.
  • Communication
    • You listen well, instead of reacting fast, so you can better understand
    • You treat people with respect independent of their status or disagreement with you
  • Impact
    • You accomplish amazing amounts of important work
    • You focus on great results rather than on process
  • Curiosity
    • You learn rapidly and eagerly
    • You seek to understand our strategy, market, customers, and suppliers
  • Innovation
    • You re-conceptualize issues to discover practical solutions to hard problems
    • You challenge prevailing assumptions when warranted, and suggest better approaches
  • Courage
    • You take smart risks
    • You question actions inconsistent with our values
  • Passion
    • You inspire others with your thirst for excellence
    • You care intensely about Netflix‘s success
    • Youcelebratewins
  • Honesty
    • You are known for candor and directness
    • You are quick to admit mistakes

All of that sounds an awful lot like some terms that are familiar to anyone with a knowledge of Lean:

  • Lead with Humility
  • Respect for Every Person
  • Experimentation
  • Seeking perfection
  • Constancy of Purpose
  • Deliver customer value
  • Achieve results 

To be certain, the slideshare below appears to demonstrate many of the common misunderstandings of what process is, or should be, and especially of what process means in the Lean context.  Nonetheless, there isn’t anything in this document that isn’t already a part of Lean philosophy, or that isn’t represented in the Shingo Model.  Even the stated distaste for process is met later in the document by a healthy awareness that good processes vs. bad processes actually enable creativity, not prevent it.

In spite of the supposed revolutionary nature of Netflix culture, however, what I am more inclined to believe is that Reed Hastings, like the creators of ROWE, has stumbled upon the same core operational Excellence fundamentals that have already been developed, practiced, and that continue to evolve in Lean.

View the presentation below and share your thoughts on whether or not this is Revolutionary, or simply the re-discovery of some universal truths that are already well incorporated into Lean thinking.


What to do when you don’t know the way to go

plot a course for home

plot a course for home by wildwinyan

My 3-year-old is following in his 7-year-old brother’s footsteps and taking an intense interest in Nickelodeon’s Dora the Explorer.  After a couple years of not having to listen to the theme song ad nauseum, we’re back into the thick of things.

For those who are not familiar with the show, Dora frequently goes on adventures and isn’t certain which way to go.  In those situation, she calls upon her trusty map, which shows her the way.

If only we were all so well prepared.

In business and in life, we all need a map.  Too often, we move without thinking or jump in without looking.  We buy into the paradigm that says we ought to fail fast, but we don’t bother to ask, “Fail at what?”  Failing for the sake of failing isn’t the path to enlightenment, it’s just stupid.  Even if you’re prepared to accept failure – that failure needs to be leading in the direction of some intended destination, meandering as the path may be.  Otherwise, the exercise never ends and nothing is ever learned.  It’s just activity for the sake of activity.

Activity without planning at any level is just folly and entirely wasteful.  Planning is the result of consulting the map  –  we can see the current location, the destination, and the obstacles in between.  Without a destination in mind, and a plan for getting from here to there, all that results is misalignment of goals, fits and starts, lost momentum and, quite frequently, situations where people are more than happy to clear an entire forest just to deliver a toothpick.  The purpose, after all, was to show activity over and above the value of delivering the end product.

The guiding principles of an organization are what the people working within that organization turn to when they don’t know the way to go.  Those principles align people and, even if there is no certain way to go, will at least tell you which way you should not go.  In effect, they become your map.  They let you know where the terrain is flat and clear, or rocky and overgrown, and allows you to see all the other route options to help you adjust course and still reach your destination.

Any organization, regardless of size or complexity, needs to have guiding principles (see the Shingo Model for more elaboration on the impact of guiding principles).  When all else fails, adhering to these principles will offer assurance that people are still operating within the spirit of your organization.

Respect for People is not Respect for Person, just ask Clint Eastwood



On my mind lately is the concept of “Respect for People” that is at the core of Lean and one of the fundamental building blocks of the Shingo Model.

I remember just about 3 years ago, as I was first introduced to Lean via the Greater Boston Manufacturing Partnership, there was a video in which Bruce Hamilton mentioned that, sometimes, leaders need to tell the late adopters to get with the program.  “Wait a minute…” I thought. “Doesn’t that contradict the need for management to show concern for each of their charges, and guide them to accepting new ways of thinking & doing?”

I’ve carried that thought with me for some time, and as I continue to evolve my understanding of what the Lean school of thought teaches, I’ve come to realize the error of my previous assumption.

What I have finally come to realize is that Respecting People is a focus on People and not necessary any one single individual within the group.  If you are bending over backwards to accommodate each individual person, you are detracting from the ability of the group to survive, as a whole.  It has taken me a long time to come to this realization.

Lean is about systems.  More importantly, it is about how individuals within systems interact.  So, that necessitates an understanding of how the individual becomes a functioning part of a greater whole.  Coupled with that, is the belief that the role of Leaders is to build teams.  In order to lead individuals to become a valued part of the whole, to the benefit of the system for the benefit of the individual (and not the other way around), it is occasionally necessary to kick a person square in the ass.

The difference between most, traditional management we see and useful foot-in-seat-of-pants action is usually one of experience.  A good leader will make you better than what you are, because he or she knows who you need to become as an individual in order to become part of the team.  The leader knows this, not through some education received in a classroom, but through hard experience.  Simply put, the leader has been there before and knows the way, and is able to get you to the same point.  This does not, automatically, necessitate being nice and pleasant and sidestepping difficult, personality issues or simply telling people how wonderful they are.  On occasion, it requires a stiff hand and a stern voice.

While I suppose I could go on describing any number of situations or personal recollections to illustrate my point, I think there’s a perfectly good example already.  In the 1986 film, HeartBreak Ridge, Clint Eastwood plays Gunnery Sergeant Tom Highway, a Congressional Medal of Honor winner and just about the toughest SOB to ever walk the planet.  His job is to take the ridiculously inept crew he’s been assigned to and turn then into a proper group of Marines.  While his men certainly don’t like the treatment he gives them, they also certainly come to appreciate it when their performance, as a group, turns around.  Most importantly they appreciate it when the long days of hard training and constant, cranky barbs from “Gunny” have prepared them for battle and helped them to stay alive.

Like the Recon Marines under Sergeant Highway’s command, I can also say that one of the toughest-on-me bosses I’ve ever had (which is very different from the “tough” bosses I’ve had) was also the one I learned the most from.  With that in mind, perhaps it’s time we take a step back and decide if we’re really thinking about respecting people when we talk continuous improvement, or just the person?

Zuckerberg in Boston and the death of old attitudes

Tie and T-shirt

Tie and T-shirt by CreativeChica39 on

Mark Zuckerberg was in Boston on Monday, looking to recruit MIT and Harvard students for gainful employment with Facebook.

Zuck’s appearance prompted commentator Jon Keller to consider the Facebook founder “foolish” and “callow” and, in Keller’s opinion, “Zuckerberg hasn’t yet learned the merits of showing respect for your position and the people you are conducting a business meeting with by dressing the part.” (You can read the entire transcript and listen to the audio version here.

When I heard the audio on the radio while driving to work this morning, I was absolutely puzzled.  The comments in the article take up both sides, but several echoed my feelings.  Which are that the same folks who bemoan the fact that our economy is being torn asunder by business-as-usual corporate honchos, that we’ve lost the ability to innovate, and that kids in American schools aren’t trained to think for themselves are the same people who, when confronted with an overwhelming display to the contrary in the from of a game-changing, twenty-something, multi-billionaire, will also manage to find fault with that, too.

So Zuck wore a T-shirt.  He was recruiting college kids, while on campus, for jobs as innovators…..right?  Seems like a pretty savvy move.  Plus, let’s see…..Steve Jobs in his trademark black shirt and Tony Hsieh in his comfy clothes are changing the expectations for corporate life – which has long been demeaning, held up by appearances over production, and….well…..just plain broken.

What Generation Y and the millenials seem to “get” intuitively, and what anyone from the upper reaches of Gen X and beyond seem to struggle with, is that work is not just supposed to be something that allows you to do fulfilling, enjoyable things with your life.  Rather, work can and should be something that provides that enjoyment all the time, and that living is something that doesn’t take place outside of 8-5, Monday through Friday.

As a result, there’s an increasing realization that appearances are just that – appearances.  Superficial portrayals put on to give the audience a sense of a person’s smarts.  Which, ultimately, is a complete and total waste of energy.  Most people would prefer to be judged on the merits of their ideas and actions, and not the clothes they wear while creating and doing.  Simply put – what value does the suit and tie add?  What message does it send other than, “I am a good boy.  I play by the rules, even if I don’t understand them.” or on the other end of the spectrum “I am in charge around here and you should do as I say because I have better attire.”

What complete nonsense.

Keller also blasts facebook for not creating anything.  Well, it’s certainly growing and creating revenue, and that means jobs.  Something the traditionalists in their fine wool attire seem to be losing more than creating lately.  Those new jobs that places like facebook create, however, are different from what we’ve known in the past.  Knowledge work is giving people more freedom in how they work, and technology is creating freedom in where people can work, too.  And since the value of that work is in the ideas people generate, it makes a lot of sense to give them the freedom to work where and how they want, and to dress in a way that enables them to use brain power for creating new ideas – which have value – and not for deciding whether or not the green tie goes with the yellow shirt – which has no value at all.

It’s also interesting that Keller believes the donation of $100 Million to a school district is a “productive” act.  Hmmm….I wasn’t aware that large, public bureaucracies, especially in public education, were known for making good use of money and operating efficiently to achieve clear-cut positive benefits for everyone.  I guess the definition of “productive” in Mr. Keller’s mind is far different from mine.

Given the massive, overwhelming, and growing dissatisfaction people have had for decades with corporate life, not to mention the outcomes that traditional thinking seem to be creating, I’d like to think people would be applauding those who are thinking Differently.  Young, wildly successful people like Zuckerberg have shown that thinking differently about what work can be like, and restoring a sense of humanity to the workplace by focusing on outcomes rather than appearances, leads to tremendous profitability, value creation, and just might be they key to re-invigorating corporate life to the point that we are able to innovate our way out of the current economic crisis.

Tuesday’s Tune: How do you like me now?

_over the top

_over the top by lithp on

If you’ve ever been misjudged, underestimated, turned down, told you couldn’t do something or just plain been wronged by someone, you know that you’re first fantasy is to imagine yourself coming back and showing that person just what they were missing.

While this song from Toby Keith is about a romance that never was, I’ll focus on a few lines from the lyrics and re-purpose them to any situation where proving yourself to a doubter just plain kicks ass:

How do you like me now?
How do you like me now,
Now that I’m on my way?
Do you still think I’m crazy
Standin here today?

All of us have at least one moment in our life when we are told we’re just not good enough.  Well, that’s a good thing.  It’s a sign you’re pushing your limits and pursuing a vision or, at the very least, trying out new things until you find one.

Don’t give in to the naysayers – odds are, they gave in to theirs, and misery is very often fond of company.