The keeper test - when “good enough” isn’t enough?

Most companies hide behind the warm fiction of being “a family.” Netflix didn’t. It called itself a team - and built a $300 billion powerhouse on that single, uncomfortable truth. Few workplace cultures are as controversial or as misunderstood, yet none are as clear about the price of greatness: average performance earns a generous severance package; excellence earns radical trust and total freedom.

- Carl Ranger | Head of Training | CEO SA | [e-mail]

This article dives into the philosophy behind Netflix’s ruthless-but-respectful culture and asks a provocative question: what if trading comfort for clarity isn’t cold, but the most human - and effective - leadership choice of all?

What Netflix’s culture really teaches

Every company loves to say, “We’re like a family.” It sounds warm, human and safe. But let’s be honest, families don’t cut underperformers like a sports team would. Families forgive - teams compete. Families give you unconditional love - teams expect you to earn your spot.

Netflix understood that. And in doing so, they built one of the most successful and controversial workplace cultures in the modern business world. Their CEO, Reed Hastings, famously declared: “Adequate performance gets a generous severance package.” Brutal? Maybe. Effective? Absolutely.

Because that simple principle, “Performance over permanence”, helped turn Netflix from a DVD rental service into a $300 billion global powerhouse.

The birth of a radical idea

It all started with a question that flipped Silicon Valley on its head: “What if companies were built like sports teams, not families?”

Reed Hastings and Patty McCord, Netflix’s original Chief Talent Officer, believed that the best organisations don’t hold onto players just because they’re “decent.” They keep the ones who elevate the game.

That idea became the foundation of Netflix’s now-legendary Culture Deck, a 124-slide presentation that would go on to become required reading in boardrooms worldwide. It was bold, uncomfortable, and unapologetically honest.

The key message: “We’re not a family. We’re a team of highly effective people. When we lose a great teammate, we find another great one, fast.”