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How Netflix Reinvented HR

"We also departed from a formal travel and expense policy and decided to simply require adultlike behavior there, too. The company’s expense policy is five words long: “Act in Netflix’s best interests.” In talking that through with employees, we said we expected them to spend company money frugally, as if it were their own. Eliminating a formal policy and forgoing expense account police shifted responsibility to frontline managers, where it belongs. It also reduced costs: Many large companies still use travel agents (and pay their fees) to book trips, as a way to enforce travel policies. ..."

This was Patty McCord in the Jan/Feb 2014 HBR. Patty was the former chief talent officer of Netflix. https://hbr.org/2014/01/how-netflix-reinvented-hr

So here is a totally unstructured approach to expenses.

 

  • Would it work in your company?
  • Could you support a culture and paradigm change?
  • Do you think you'd save money?

Answers

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Sure that approach makes sense - if your travel and expense is internal and non-billable.

Netflix is not a consultancy or other professional service firm. Those usually require a policy because their clients have right of audit (and often mandate T&E conform to their own policy).

Sure, everyone can go on Travelocity and cut out the agency middleman. I doubt that takes advantage of a company's leverage if they are a big spender in the travel arena. Most large / mature business want to negotiate favorable rates.

Patty's comments (about PTO) "Some people worried about whether the system would be inconsistent...In general, I worried more about fairness than consistency, because the reality is that in any organization, the highest-performing and most valuable employees get more leeway." Hmmm.

Agreed with the Tell the Truth About Performance excerpt. The Maria scenario was very good.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

There was a thread a couple of months ago about T&E policies where I answered a "conceptual" policy would be good for them and cited a tech company (that I could not remember) with the same policy...... it was Netflix!

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