That being said, I just want to put it on the record (again) that I’m bearish on the future of Netflix. The proximate reason is that major competitors with deep pockets and huge corporate backing are coming into the field of streaming (hello Disney!). But the ultimate rationale is that I think Netflix’s “superstar” system in relation to employees is going to kill any ability to navigate a tough patch with all hands on deck.
Here is a positive view of the firm’s system, How Netflix Reinvented HR.
Basically, Netflix’s culture is hyper-rational and takes for granted that its employees are similar. “Grown-ups.” This is fine during a growth phase, or when times are good. But if Netflix seems like it might not be the future, why wouldn’t all the superstar employees find better opportunities? And once some superstars start leaving, that will reduce Netflix’s prospects, meaning all the superstars will leave en masse, accelerating the decline. And according to Netflix’s credo, they would be behaving entirely rationally.
The company doesn’t make a pretense of loyalty to its employees beyond what they can bring to the table for the company. Similarly, the company won’t be able to lean on any sentimental loyalty from its employees if it needs to right its ship or seems like anything less than a sure bet.