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February 22, 2024 • 1hr 13min
How Netflix builds a culture of excellence | Elizabeth Stone (CTO)
Lenny's Podcast: Product | Growth | Career
Elizabeth Stone is the Chief Technology Officer at Netflix. Previously, she served as Vice President of Data and Insights at Netflix. Before joining Netflix, Elizabeth held leadership roles at Lyft, Nuna, Merrill Lynch, and Analysis Group. She has a PhD in economics.
In this episode, Elizabeth discusses Netflix's unique high-performance culture, her approach to leadership and career growth, and how Netflix structures its data and insights teams. She also shares insights on maintaining excellence, giving candid feedback, and staying connected with teams across the organization.
How Netflix builds a culture of excellence | Elizabeth Stone (CTO)
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Key Takeaways
- High talent density is a core part of Netflix's culture and success. They focus on hiring and retaining top performers.
- Candor and direct feedback are crucial for maintaining high standards. Netflix encourages frequent, honest conversations about performance.
- The "Keeper Test" is a mental framework managers use to evaluate if they would fight to keep an employee if they were to leave.
- Freedom and responsibility allow talented employees to innovate and solve problems creatively without excessive processes.
- Netflix's centralized data and insights team enables objective analysis and cross-pollination of ideas across the company.
- Being present and building genuine connections with colleagues at all levels is important for leadership effectiveness.
- Reflecting on what gives you energy and doubling down on your strengths can lead to career growth.
Introduction
Elizabeth Stone is the Chief Technology Officer at Netflix. Previously, she served as Vice President of Data and Insights at Netflix. Before joining Netflix, Elizabeth held leadership roles at Lyft, Nuna, Merrill Lynch, and Analysis Group. She has a PhD in economics.
In this episode, Elizabeth discusses Netflix's unique high-performance culture, her approach to leadership and career growth, and how Netflix structures its data and insights teams. She also shares insights on maintaining excellence, giving candid feedback, and staying connected with teams across the organization.
Topics Discussed
Elizabeth's Background and New CTO Role (4:40)
Elizabeth recently transitioned from VP of Data and Insights to CTO of Netflix. She notes the biggest changes are:
- More context switching between different areas
- A steeper learning curve with new technical domains
- Higher stakes and more consequential decisions
As an economist by training, Elizabeth believes she may be one of the first CTOs with this background at a major tech company. She sees economics as complementary to data science and valuable for business challenges.
Career Growth and Success (10:06)
Elizabeth has had rapid career growth at multiple companies. She attributes her success to:
- Dedication and high standards - Giving her best effort to every role
- Team-oriented mindset - Focusing on setting others up for success
- Communication skills - Translating between technical and non-technical stakeholders
- Continuous learning - Observing and learning from talented colleagues
She emphasizes that dedication isn't about long hours, but rather caring deeply about excellence and following through on commitments.
Netflix Culture: High Talent Density (27:44)
A core aspect of Netflix's culture is maintaining high talent density. This involves:
- Selective hiring of top performers
- Giving candid, frequent feedback on performance
- Making timely decisions if someone is not meeting the high bar
Elizabeth explains: "We can't really have any of the other aspects of the culture, including candor, learning, seeking excellence in improvement, freedom, and responsibility if you don't start with high talent density."
The Keeper Test (31:45)
Netflix uses the "Keeper Test" as a mental framework for managers:
- Managers ask themselves if they would fight to keep an employee if they were leaving
- If not, it may be time for a conversation about fit
- This encourages regular reflection on performance and expectations
Elizabeth notes this can create some stress, but generally leads to more clarity than traditional performance review processes.
Maintaining a High Bar for Excellence (39:01)
To maintain high standards in hiring and performance, Netflix:
- Pays top of market compensation to attract talent
- Looks for candidates who will raise the bar for the whole team
- Focuses on additive skills and perspectives in hiring
- Creates an environment where top performers want to work with other top performers
Netflix Culture: Freedom and Responsibility (43:54)
Netflix gives employees significant freedom and responsibility:
- Less prescriptive processes for solving problems
- Room for individual contributors to drive major innovations
- Requires high talent density to be effective
Elizabeth notes this approach has led to many product and technical innovations at Netflix.
Unconventional Processes at Netflix (46:18)
Netflix has some unique practices compared to other large tech companies:
- No formal vacation policy (unlimited vacation)
- No performance reviews
- Fewer prescriptive processes for projects and innovation
Examples of Candor (47:55)
Elizabeth shared two examples of Netflix's culture of candor:
- Transparent leadership communication - She shares detailed notes from leadership meetings with her entire organization.
- Open reflection on major changes - They recently had an honest retrospective on introducing individual contributor levels, acknowledging challenges in the rollout.
Data and Insights Team Structure (51:44)
Netflix has an unusual structure for its data and insights teams:
- Centralized team covering multiple functions (data engineering, data science, analytics, consumer research)
- Works across nearly all areas of the business
- Allows for functional expertise, career growth, and objective analysis
- Combines quantitative and qualitative research capabilities
Elizabeth believes this structure enables more innovation and cross-pollination of ideas compared to embedded teams.
Staying Close to Teams (1:00:12)
As a senior leader, Elizabeth stays connected to individual teams and contributors through:
- Bi-weekly office hours open to anyone
- "Ask Me Anything" sessions with teams
- Quick responses to Slack messages and emails
- Sharing leadership meeting notes with the full organization
Advice on Being Present (1:02:31)
Elizabeth shared advice on being fully present in interactions:
- Prioritize and protect time for one-on-one conversations
- View work relationships as part of your broader community
- Reflect regularly on what gives you energy and enjoyment at work
- Have a daily practice of checking in with yourself (e.g. quiet time in the morning)
Lightning Round (1:07:40)
Some highlights from the rapid-fire questions:
- Book recommendations: "What I Talk About When I Talk About Running" by Haruki Murakami, "A Fine Balance" by Rohinton Mistry
- Recent favorite shows/movies: Triangle of Sadness (film), Beef (Netflix series)
- Favorite interview question: "What would your priorities be if you had my job?"
- Recent product discovery: Fellow pour-over coffee maker
- Life motto: "Something good happens every day" (from her mother)
Conclusion
Elizabeth Stone's insights highlight how Netflix's unique culture of high talent density, candor, and freedom with responsibility drives innovation and excellence. Her career journey demonstrates the value of dedication, continuous learning, and genuine connection with colleagues. For listeners, Elizabeth encourages reflecting on how to show up better for coworkers and pay forward the lessons from Netflix's culture in their own work environments.
