As part of this, we strive to develop good decision-making muscles at every level of the company, priding ourselves on how few, not how many, decisions senior leaders make. We expect managers to practice context not control — giving their teams the context and clarity needed to make good decisions instead of trying to control everything themselves. We also help employees learn by sharing a lot of information internally, including through memos where they can comment and ask questions. It takes an unusually responsible person to thrive on this level of freedom — someone who’s self-motivated, self-aware and self-disciplined, who doesn’t wait to be told what to do and picks up the trash like they would at home. That said, context not control should not be confused with hands-off management. Managers need to be involved in the work being done around them, and actively coach their teams. They may also have to step in when someone is about to make a decision that is unethical or could materially harm Netflix, during a crisis or if a new team member lacks the full context.
We avoid decision-making by committee, which tends to slow companies down and undermine accountability. For every significant decision, we identify an informed captain who’s responsible for making a judgment call on the right way ahead. Then different teams, each led by their own informed captain, implement the decision. This highly aligned and loosely coupled approach gives teams the freedom to move quickly and operate independently, while ensuring responsibility for the outcome.
We’ve learned that the best ideas can come from anywhere, which is why we expect informed captains to seek out different opinions and listen to people at every level. We call this farming for dissent. Of course, not all opinions are created equal — and with 10,000-plus employees, it’s impractical for everyone to weigh in on most decisions (this memo being an exception). So on an important creative decision, for example, the opinion of someone working in TV, film or games will carry more weight than an engineer, and vice versa when it comes to our product or technology. After a decision is made, we expect everyone, including the people who argued for a different approach, to disagree then commit. This helps ensure the outcome is as successful as possible. Afterwards, when the impact is clear, the informed captain should reflect on their choices — what worked and what didn’t — so everyone can learn how to do better next time.
Launching a game, TV show or film, running a marketing campaign, managing compensation and closing a quarter all take process. And companies need strict rules against things like harassment, marginalizing colleagues, leaking company information, or insider trading. But we work hard to keep rules at Netflix to a minimum and ensure any process is good (simple, efficient, impactful). Our vacation policy, for example, is two words: “Take vacation.” And our expenses policy is just five words: “Act in Netflix’s best interests.” This (almost) no rules rule gives employees the freedom to exercise their judgment. It also prevents the process creep that typically happens when companies grow and try to dummy proof their organizations — stifling creativity and making it harder for businesses to adapt.
You might think that this kind of freedom would lead to chaos. In reality, while we’ve had our fair share of failures — and a few people have taken advantage of our culture in bad ways — our emphasis on individual autonomy has created an extremely successful business, with many opportunities for employees to develop and grow. In entertainment and technology, our biggest threat is a lack of creativity, adaptability and innovation. It’s why trying to minimize rules and processes (rather than errors) — while giving people the freedom to use their own judgment and learn from their mistakes — is a far superior recipe for long-term success.