The overall public opinion of Netflix seems positive. Consumers generally love the choices and options that Netflix ushered into the marketplace and onto their devices. Investors have been happy with their returns. And for years, HR professionals have lauded their culture and forward-looking policies—including their parental leave policy.
If you aren’t familiar with that third point, that’s our focus: the Netflix parental leave policy, how it is changing, and the lessons we can learn from those changes.
Netflix History
The company was formed in 1997 as a DVD rental-by-mail service. In 1999, it introduced its monthly subscription model, which changed the movie rental business completely. By the early 2000’s, the company began focusing on building a high-performance culture driven by innovation. Given that, perhaps it isn’t surprising that they introduced a massive shift in their business in 2007 when they introduced their streaming service.
In 2009, they published the Netflix Culture Deck, which went viral (it has been viewed from the original source almost 17.5 million times) and changed the conversation about company culture. At that initial publication, Netflix had less than 1,900 employees.
The Netflix Culture
The slide deck outlined five core principles:
- Freedom & Responsibility: Employees are given autonomy with accountability.
- High Performance: Only top performers are retained.
- Candor & Transparency: Open feedback culture.
- Context, Not Control: Leaders set clear goals and avoid micromanagement.
- Pay Top of Market: Competitive salaries to attract and keep the best talent.
As with any successful culture, policies aligned with that culture. For our purposes today, that included the Netflix Parental Leave Policy, which made headlines when it was unveiled about a decade ago.
The policy was to give new moms and dads unlimited time off in their child’s first year. It was directly connected to the Freedom & Responsibility core value.
The Current Kerfuffle
According to a Wall Street Journal article1 written December 12, 2024 by Jessica Toonkel, Netflix has over the last few years tried to re-adjust and refine that policy. According to current and former employees, “Taking more than six months of leave is now widely understood to be an unwise career move.”
Critics and employees see the shifting of the parental leave policy as a sign that the company culture has changed and what made Netflix special (and successful) is going away.
According to the article,
“Sergio Ezama, Netflix’s chief talent officer, said the company hadn’t pulled back on its parental-leave policy. A Netflix spokesman said the leave policy “has always been to ‘take care of your child and yourself.’” He added that “employees have the freedom, flexibility and responsibility to determine what is best for them and their family.”
In June, the company removed the “freedom and responsibly” section of its founding company memo—which describes its core values.
Our Lessons
As I think about the events I summarized above, three things jump out to me that go beyond the specific story about this policy.
- It is part of the Netflix values and is important in this situation. As the culture at Netflix grew, the number of employees could be measured in hundreds. Now, even after a spate of layoffs and restructurings, Netflix has over 13,000 employees. Would the culture of your company likely shift (not completely change but shift) if the company had 10 times as many employees as you do now? Chances are, yes. And those changes are natural, not necessarily bad. Co-CEO Ted Sarandos said in October that “Netflix never meant for its culture to be static and that it needs to change as the business evolves.”
- The Yin and Yang of Policies. Policies are created to deal with a situation in time (in the case of this policy—to differentiate the organization and attract talent). Policies are helpful until they aren’t. And if you have worked in an organization of any size, you have ample examples of both the helpful and less helpful ones. It’s why I believe policies need expiration (or at least renewal) dates.
- Freedom and Responsibility. This is the most directly related to the backlash and consternation related to the changes to the parental leave policy. The policy focuses on the freedom part of this value, and the backlash is focused almost entirely on this end of the continuum. But it isn’t Freedom or Responsibility. It is Freedom and Responsibility. The value implies balancing the tension between the needs and desire of the folks and the responsibilities and accountabilities they have to the business and their teammates. Sarandos addresses this point quite well when reflecting on the timing of the policy’s creation. “It was probably a little more emphasis on freedom than responsibility, and we think you need to have both.”
I am not defending or deriding Netflix’s shift in their parental leave policy. Rather I am suggesting it is a complex situation where context must be considered, and the subtleties of that complexity require us not to look for a singular either/or “right answer” but look at the situation through the lens that two things can be true.
- The Wall Street Journal, 2024. “Netflix’s Extraordinary Parental Leave Was Part of Its Culture. That’s Over.” Wall Street Journal website, https://www.wsj.com/business/media/netflix-unlimited-parental-leave-roll-back-culture-a962f50e
Kevin Eikenberry is the chief potential officer of the Kevin Eikenberry Group, a leadership and learning consulting company that has been helping organizations, teams, and individuals reach their potential since 1993. His specialties include leadership, teams and teamwork, organizational culture, facilitating change, and organizational learning. He can be reached at info@kevineikenberry.com.