September 9, 2024

Raise the bar or leave it: Netflix’s high-stakes talent strategy for high-performance teams

John Kim

Co-founder @ Paraform

After 3 months at Netflix, you might experience a simple one-question test (And it’s not “Are you still watching?”) Your manager will ask, "If this person hands in their 2-weeks notice, how hard would I fight to keep them?" If the answer is "not very," you’re out.


It’s binary: you're either raising the bar or you're not. And if you're not, it’s time to move on.

Performance over loyalty

Netflix’s “Keeper test” sounds harsh because it is. But Netflix CEO Reed Hastings only wants the best of the best. He runs the company like a professional sports team:

"Professional sports teams focus on performance and picking the right person for every position, even when that means swapping out someone they love for a better player."

Of course, this system isn't without its downsides. It can create a culture of anxiety, where employees never feel secure. And the sports team analogy flies in the face of the "we're a family" rhetoric spouted by many companies.


But Netflix isn’t a family. (This is clearly stated on their jobs page.) It's a team. And on a team, you play your best or you get benched.

Proactive termination

At most companies, termination starts with proving incompetence. At Netflix, you can be doing your job perfectly fine and still be asked to leave, simply because "fine" isn't good enough.


Firing someone at other companies usually begins with a long, painful process of documenting their inadequacies before letting them go. After the long journey, it’s difficult to part on good terms. Netflix believes their way is fairer to both parties.


They pay a generous severance. Most former employees land new roles fairly quickly. Netflix hasn’t been on the receiving end of loud public complaints. And they’ve done what they set out to do: build extremely high-performing teams.


The Keeper test also has another benefit: it reinforces long-term thinking. Employees aren’t evaluated on short-term failures, but based on their overall track record. This means they’re more likely to experiment boldly.


If you're being assessed not just on what you did last quarter, but on your cumulative impact, you can start to take more risks. You know you won’t be punished if those bets don’t pay off.

Continuous feedback > formal reviews

So how do you know if you’re doing well? Netflix doesn't do formal annual performance reviews.


Instead, teams rely on frequent, informal 360-degree feedback. Employees are asked to identify things that their colleagues should stop, start, or continue doing.


Netflix calls its culture of frequent constructive feedback “extraordinary candor.” They recognize that it takes courage, vulnerability, and integrity to ask others how you could do better, and to only say things about a colleague that you’re willing to share with them directly. It helps the team improve faster, compared to company cultures where deference to seniority is the norm.

They also have limited planning processes — in a fast-moving industry, planning too far ahead or waiting a year to course-correct means working with outdated information. The feedback loop needs to be tight and constant. This requires competent, driven, trustworthy people.

High stakes lead to higher talent density

All of this – the keeper test, the sports team model, the continuous feedback – is in service of (and works because of) Netflix's obsession with high talent density.


They only hire people who raise the bar, because their entire culture depends on it. As CTO Elizabeth Stone puts it:

“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.”

Netflix's approach can seem extreme, and it's not for everyone. But in an age where talent is the primary differentiator in many industries, Netflix is building a dream roster.

The question isn't whether every company should adopt Netflix's exact talent model. The question is, what could change in your company if you took talent as seriously as Netflix does?

Even if you're not ready (or willing) to adopt Netflix's "Keeper test," you can still learn from their approach to talent. Here are some of their principles, distilled:

• Brutal honesty: Tell candidates exactly what they're in for. Not everyone wants this kind of job — you want the ones who do. Even if Netflix doesn’t actually implement the keeper test, telling everyone about it on their careers page means only the people excited about a high-performance culture will apply.
• The 3-word review: Adopt a "start, stop continue" feedback system among team members. It’s exactly what it sounds like: what should people start, stop, and continue doing? And frame constructive feedback not as criticism, but as a challenge to rise to. Wishy-washy feedback is neither helpful nor kind.
• Planning is guessing: You can’t predict the future, but you can respond to it quickly. Reduce reliance on long-term planning in favor of responsive approaches with shorter adjustment cycles. Maybe the best path forward starts with scrapping last year’s roadmap.

You don't need to go full Netflix to benefit. Start with one principle. See what changes. After all, Netflix didn’t become Netflix by accident.