WIXLIB

Reference Guide on ourFreedom & ResponsibilityCultureThese slides are meant for reading,rather than presen ng1

Freedom & ResponsibilityApplies to ourSalaried EmployeesOur hourly employees are important,but have more structured job roles2

Culture: what gives NeGlixthe best chance ofcon nuous successfor many genera onsof technology and people?3

Seven Aspects of our Culture Values are what we ValueHigh PerformanceFreedom & ResponsibilityContext, not ControlHighly Aligned, Loosely CoupledPay Top of MarketPromo ons & Development4

Lots of companies havenice soundingvalue statements5

Enron Had A Nice‐SoundingValue Statement with 4 ValuesEnron headquarters IntegrityCommunica/onRespectExcellenceTheir 4 values were chiseled inmarble in the main lobby, buthad liXle to do with the realvalues of the organiza on6

The real company values,as opposed to thenice‐sounding values,are shown by who getsrewarded, promoted, or let go7

Real company values are thebehaviors and skillsthat we par cularly valuein fellow employees8

We Par cularly Valuein our Colleaguesthese Nine Behaviors and Skills 9

You make wise decisions(people, technical, business, andcrea ve) despite ambiguityJudgmentYou iden fy root causes, and getbeyond trea ng symptomsYou think strategically, and canar culate what you are, and arenot, trying to doYou smartly separate what mustbe done well now, and what canbe improved later10

You listen well, instead ofreac ng fast, so you can beXerunderstandCommunica onYou are concise and ar culate inspeech and wri ngYou treat people with respectindependent of their status ordisagreement with youYou maintain calm poise instressful situa ons11

You accomplish amazingamounts of important workImpactYou demonstrate consistentlystrong performance socolleagues can rely upon youYou focus on great results ratherthan on processYou exhibit bias‐to‐ac on, andavoid analysis‐paralysis12

You learn rapidly and eagerlyCuriosityYou seek to understand ourstrategy, market, subscribers,and suppliersYou are broadly knowledgeableabout business, technology andentertainmentYou contribute effec velyoutside of your specialty13

You re‐conceptualize issues todiscover prac cal solu ons tohard problemsInnova onYou challenge prevailingassump ons when warranted,and suggest beXer approachesYou create new ideas that proveusefulYou keep us nimble byminimizing complexity andfinding me to simplify14

You say what you think even if itis controversialCourageYou make tough decisionswithout excessive agonizingYou take smart risksYou ques on ac onsinconsistent with our values15

You inspire others with yourthirst for excellencePassionYou care intensely about NeGlix'successYou celebrate winsYou are tenacious16

You are known for candor anddirectnessHonestyYou are non‐poli cal when youdisagree with othersYou only say things about fellowemployees you will say to theirfaceYou are quick to admit mistakes17

You seek what is best for NeGlix,rather than best for yourself oryour groupSelflessnessYou are ego‐less when searchingfor the best ideasYou make me to helpcolleaguesYou share informa on openlyand proac vely18

JudgmentCommunica/onImpactYou make wise decisions (people, technical,business, and crea ve) despite ambiguityYou listen well, instead of reac ng fast, so youcan beXer understandYou accomplish amazing amounts of importantworkYou iden fy root causes, and get beyond trea ngsymptomsYou are concise and ar culate in speech andwri ngYou demonstrate consistently strongperformance so colleagues can rely upon youYou think strategically, and can ar culate whatyou are, and are not, trying to doYou treat people with respect independent oftheir status or disagreement with youYou focus on great results rather than on processYou smartly separate what must be done wellnow, and what can be improved laterYou maintain calm poise in stressful situa onsCuriosityYou learn rapidly and eagerlyYou seek to understand our strategy,market, subscribers, and suppliersYou are broadly knowledgeable about business,technology and entertainmentYou contribute effec vely outside of yourspecialtyPassionInnova/onYou re‐conceptualize issues to discover prac calsolu ons to hard problemsYou challenge prevailing assump ons whenwarranted, and suggest beXer approachesYou create new ideas that prove usefulYou keep us nimble by minimizing complexity andfinding me to simplifyHonestyYou inspire others with your thirst for excellenceYou are known for candor and directnessYou care intensely about NeGlix' successYou are non‐poli cal when you disagree withothersYou celebrate winsYou are tenaciousYou only say things about fellow employees youwill say to their faceYou are quick to admit mistakesYou exhibit bias‐to‐ac on, and avoid analysis‐paralysisCourageYou say what you think even if it is controversialYou make tough decisions without excessiveagonizingYou take smart risksYou ques on ac ons inconsistent with our valuesSelflessnessYou seek what is best for NeGlix, rather than bestfor yourself or your groupYou are ego‐less when searching for the bestideasYou make me to help colleaguesYou share informa on openly and proac velyWe Want to Work with People Who Embody These Nine Values19

“You ques on ac onsinconsistent with our values”Part of the Courage valueAkin to the honor code pledge:“I will not lie, nor cheat, nor steal, nor tolerate those who do”All of us are responsible for value consistency20

Values reinforced in hiring,in 360 reviews, at comp review, inexits, and in promo ons21

Seven Aspects of our Culture Values are what we ValueHigh PerformanceFreedom & ResponsibilityContext, not ControlHighly Aligned, Loosely CoupledPay Top of MarketPromo ons & Development22

Imagine if every person at NeGlixis someone yourespect and learn from 23

Great Workplace isStunning ColleaguesGreat workplace is not day‐care, espresso, healthbenefits, sushi lunches, nice offices,or big compensa on,and we only do those that are efficient ataXrac ng stunning colleagues24

Like every company,we try to hire well25

But, unlike many companies,we prac ce “adequate performancegets a generous severance package.”26

We’re a team, not a familyWe’re like a pro sports team,not a kid’s recrea onal teamCoaches’ job at every level of NeGlixto hire, develop and cut smartly,so we have stars in every posi on27

The Keeper Test Managers Use:“Which of my people,if they told methey were leaving in two monthsfor a similar job at a peer company,would I fight hard to keep at NeGlix?28

The other people should get a generous severance now,so we can open a slot to try to find a star for that roleThe Keeper Test Managers Use:“Which of my people,if they told methey were leaving in two monthsfor a similar job at a peer company,would I fight hard to keep at NeGlix?29

Honesty AlwaysTo avoid surprises, you should periodicallyask your manager: “If I told you I wereleaving, how hard would you work to changemy mind to stay at NeGlix?”30

Isn’t Loyalty Good?What About Hard Workers?What about Brilliant Jerks?31

Loyalty is Good Loyalty is good as a stabilizer People who have been stars for us, and hit a badpatch, get a near term pass because we thinkthey are likely to become stars for us again We want the same: if NeGlix hits a temporarybad patch, we want people to s ck with us But unlimited loyalty to a shrinking firm, or to anineffec ve employee, is not what we are about32

Hard Work – Not Directly Relevant It’s about effec veness – not effort – eventhough effec veness is harder to assess thaneffort We don’t measure people by how manyevenings or weekends they are in their cube We do try to measure people by how much,how quickly and how well they get work done– especially under deadline33

Brilliant Jerks Some companies tolerate them For us, the cost to teamwork is too high Diverse styles are fine – as long as personembodies the 9 values34

Why are we so manic onhigh performance?In procedural work, the best are 2xbeXer than the average.In crea ve work, the best are 10xbeXer than the average, so huge premium oncrea ng effec ve teams of the best35

Why are we so manic onhigh performance?Great Workplace isStunning Colleagues36

Seven Aspects of our Culture Values are what we ValueHigh PerformanceFreedom & ResponsibilityContext, not ControlHighly Aligned, Loosely CoupledPay Top of MarketPromo ons & Development37

The Rare Responsible Person Self mo va ngSelf awareSelf disciplinedSelf improvingActs like a leaderDoesn’t wait to be told what to doNever feels “that’s not my job”Picks up the trash lying on the floorBehaves like an owner38

Responsible PeopleThrive on Freedom,and are Worthy of Freedom39

Our model is to increaseemployee freedom as we grow,rather than limit it, to con nue toaXract and nourishinnova ve people,so we have beXer chance oflong‐term con nued success40

Most CompaniesCurtail Freedom as they get BiggerBiggerEmployee Freedom41

Most Companies Curtail FreedomAs They Grow to Avoid Errors(sounds preXy good to avoid errors)42

Desire for Bigger Posi ve ImpactCreates GrowthGrowth43

Growth Increases ComplexityComplexity44

Growth Shrinks Talent Densityin Most FirmsComplexity% High Performance Employees45

Chaos EmergesChaos and errors spikes here – businesshas become too complex to runinformally with this talent levelComplexity% High Performance Employees46

Process Emerges to Stop the ChaosProceduresNo one loves process, butfeels good compared to thepain of chaos47

Process‐focus Drives More Talent Out% High Performance Employees48

Strong Near‐Term Outcome A highly‐successful process‐driven company–––––With leading share in its marketMinimal thinking requiredFew mistakes made – very efficientFew curious innovator‐mavericks remainVery op mized processes for its exis ng market49

Then the Market Shirs Market shirs due to new technology or newcompe tors or new business models Company is unable to adapt quickly, becausethe employees are extremely good atfollowing the exis ng processes, and processadherence is the value system Company generally grinds painfully intoirrelevance, due to inability to respond to themarket shir50

Seems Like Three Bad Op ons1. Stay crea ve by staying small2. Try to avoid rules as you grow, suffer chaos3. Use process as you grow to drive efficientexecu on of current model, but cripplecrea vity, innova on, flexibility, and ability tothrive when market inevitably shirs51

A Fourth Op on Avoid Chaos as you grow with Ever More HighPerformance People – not with Rules Then you can con nue to run informally withself‐discipline and avoid chaos The run informally part is what enables andaXracts crea vity52

The Key: Increase Talent Density fasterthan Complexity GrowsBusxityelpmoiness C53

Increase Talent Density Top of market compensa on AXract hi‐value people throughfreedom to make impact Be demanding about highperformance culture54

Minimize Complexity Growth Few big products vs many small ones Eliminate distrac ng complexity (barnacles) Value simplicityBusxityelpmoiness C55

With the Right People,Instead of aCulture of Process Adherence,Culture ofFreedom and Responsibility,Innova on and Self‐Discipline56

Is Freedom Absolute?Are all rules & processes bad?57

Freedom is not absolute.Like “free speech”there are somelimited excep ons to“freedom at work”58

Two Types of Necessary Rules1. Prevent irrevocable disaster– E.g. Financials produced are wrong– E.g. Hackers steal our customers’ credit card info2. Moral, ethical, legal issues– E.g. Dishonesty, harassment are intolerable59

Mostly, Though, Rapid Recovery isthe Right Model Just fix problems quickly– High performers make very few errors We’re in a crea ve‐inven ve market, not asafety‐cri cal market like medicine or nuclearpower You may have heard preven ng error ischeaper than fixing it– Yes, in manufacturing or medicine, but – Not so in crea/ve environments60