Elizabeth Stone (CTO)22 February 2024

How Netflix builds a culture of excellence

8Frameworks

15Insights

Episode overview

Netflix CTO Elizabeth Stone explains how high talent density enables the company's culture of candor, learning, excellence, and freedom with responsibility. She describes the keeper test, continuous feedback without formal performance reviews, and hiring people who add exceptional skills and perspectives. Stone also discusses Netflix's centralized Data and Insights organization, its combination of quantitative and qualitative research, and her own practices for leadership, presence, and resilience.

Key ideas

High talent density is a prerequisite for Netflix's candor, learning, excellence, and freedom-and-responsibility culture.
The keeper test prompts managers to ask whether they would actively try to retain each team member and supports direct performance conversations.
Netflix replaces conventional performance reviews with timely day-to-day feedback, an annual 360-feedback cycle, and a separate compensation cycle.
Leaders raise quality by setting clear expectations, giving specific private feedback, and actively helping people close the gap.
Netflix hires for additive skills, perspectives, judgment, and the ability to identify better problems—not merely for a checklist of baseline skills.
Freedom and low process can produce bottom-up innovation, but they depend on exceptional talent and strong judgment.
Netflix centralizes data engineering, data science, analytics, and consumer insights to strengthen expertise, career mobility, cross-pollination, and objective truth-telling.
Stone preserves office hours, ask-me-anything sessions, one-on-ones, and quiet morning reflection to remain connected and present.

Transcript available · source text is retained privately and is not published

Frameworks in this episode

Leadership4 steps

Additive Hiring

Stop hiring people who fit the box. Hire people who make the team stronger than it is today.

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Leadership4 steps

Calendar-Defended Proximity

Connection to the front line won't happen by accident as you rise — you have to fight your calendar for it.

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Communication4 steps

Context Not Control

Your job as a leader is to give people the context to decide well — including the context that isn't flattering.

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Productivity4 steps

Excellence Is the Outcome, Not the Artefact

Ask what the meeting is actually for, then spend the effort there — not on the last 20% of polish.

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Leadership4 steps

Expectation, Gap, Fill

Set the bar explicitly, name the exact gap, then jump in with both feet and close it with them.

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Leadership4 steps

Talent Density as Prerequisite

Freedom, low process and candour are not policies you adopt — they are dividends of talent density.

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Strategy4 steps

The Full-Stack Centralized Insights Org

Keep data, research and engineering in one central team — objectivity is the asset you're protecting.

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Leadership4 steps

The Keeper Test

Ask monthly: if this person quit today, would I fight to keep them? If not, have the conversation now.

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People & resources mentioned

Attributed to the moment in the episode. Timestamps are approximate.

People · 9

Elizabeth StoneMentionsElizabeth Stone on her podcast with you talked a lot about her sort non-traditional background for a CTO
“today my guest is Elizabeth Stone Elizabeth is Chief technology officer at Netflix”
▶ Watch at ~1:00approx.
Ali RalMentionswe have a mutual friend that's how we got connected Ali Ral
“a huge thank you to Ali Ral for introducing me to Elizabeth”
▶ Watch at ~2:00approx.
Tim FerrissMentionsCited for his fear-setting framework and as an influence on Paul Millerd's five-episode podcast experiment.
“she did this interview with Tim Ferris”
▶ Watch at ~19:00approx.
Ann Miura-KoMentionsthere's a VC and Muro at Floodgate
“there's a VC and Muro at Floodgate and she did this interview with Tim Ferris”
▶ Watch at ~19:00approx.
Reed HastingsCoinedReed Hastings as founder of Netflix
“it's very very reflective of Reed Hastings as founder of Netflix so when he founded Netflix and grew the company over time”
▶ Watch at ~28:30approx.
Jeff BezosMentionsthe Jeff Bezos thing that like the success of today was set in motion three years ago
“what I think about there is Jeff Bezos has this approach in the morning he just calls it he Putters around”
▶ Watch at ~1:07:00approx.
Rohinton MistryCoinedmentioned
“one of my long favorite books is a fine balance by mystery”
▶ Watch at ~1:08:00approx.
Ali WongMentionsmentioned
“beef was I thought hysterical I'm an Ali Wong fan”
▶ Watch at ~1:09:00approx.
Lenny RachitskyMentionstoday we've got another very special compilation episode something I've been pulling on more and more with the podcast and the newsletter
“thank you Lenny I hope you have a great weekend”
▶ Watch at ~1:13:00approx.

Resources · 30

NunaMentionscompany
“coo at Nuna”
▶ Watch at ~1:00approx.
Merrill LynchMentionscompany
“a Trader at Marl Lynch”
▶ Watch at ~1:00approx.
LyftMentionscompany
“before Netflix she was vice president of science at Lyft”
▶ Watch at ~1:00approx.
SendbirdMentionscompany
“the all-in-one Communications API platform designed for both web and mobile apps”
▶ Watch at ~3:00approx.
VantaUsessoftware · Christina Cacioppo
“join thousands of global companies that use V to automate evidence collection unify risk management and streamline Security reviews”
▶ Watch at ~3:00approx.
Lenny's PodcastMentionspodcast · Lenny Rachitsky
“as a listener of Lenny's podcast you'll get an additional 2 months of unlimited usage”
▶ Watch at ~4:00approx.
LinkedInUseswebsite · LinkedIn
“I was looking at your LinkedIn and looking at your career over the years”
▶ Watch at ~10:00approx.
Analysis GroupMentionscompany
“the training for that came from analysis group”
▶ Watch at ~12:30approx.
WWEMentionscompany
“we announced this week that we're going to be hosting WWE starting later this year and early next year 2025”
▶ Watch at ~16:30approx.
Netflix CupMentionsevent · Netflix
“we had a couple successful events after that including the Netflix Cup last October”
▶ Watch at ~18:30approx.
FloodgateMentionscompany · Mike Maples Jr.
“there's a VC and Muro at Floodgate”
▶ Watch at ~19:00approx.
NetflixMentionscompany · Netflix
“Netflix has a really special and unique culture”
▶ Watch at ~27:30approx.
No Rules RulesMentionsbook · Reed Hastings and Erin Meyer
“there's a recent book no rules rules think it's called”
▶ Watch at ~28:00approx.
ExploMentionssoftware
“explo a game changer for customer facing analytics and data reporting”
▶ Watch at ~42:30approx.
LinearMentionssoftware · Linear
“he's the head of product for linear”
▶ Watch at ~43:30approx.
NetflixUsescompany · Netflix
“I take notes in leadership meetings and I share those notes with the whole organization”
▶ Watch at ~48:00approx.
Chaos MonkeyUsessoftware · Netflix
“a program that runs on your infrastructure that just kills random processes and things and just to see what breaks”
▶ Watch at ~52:00approx.
Netflix Cloud GamesUsesproduct · Netflix
“as we go into new efforts like Cloud games we have a beta that's out now”
▶ Watch at ~53:00approx.
SlackUsessoftware · Slack Technologies
“you can send me a slack message you can send me an email”
▶ Watch at ~1:02:00approx.
UberMentionscompany · Uber
“now she's at Uber”
▶ Watch at ~1:02:30approx.
What I Talk About When I Talk About RunningRecommendsbook · Haruki Murakami
“I've been recommending what I talk about when I talk about running um by muracami”
▶ Watch at ~1:07:30approx.
A Fine BalanceRecommendsbook · Rohinton Mistry
“one of my long favorite books is a fine balance by mystery”
▶ Watch at ~1:08:00approx.
Triangle of SadnessRecommendsfilm · Ruben Östlund
“film triangle of sadness is phenomenal if you haven't seen it”
▶ Watch at ~1:08:30approx.
BeefRecommendstv show · Lee Sung Jin
“beef was I thought hysterical I'm an Ali Wong fan but also just a pretty unique storyline”
▶ Watch at ~1:09:00approx.
Fellow Pour-Over Coffee MakerUsesproduct · Fellow
“my most recent product is a fellow pourover coffee maker which is actually part of my morning ritual”
▶ Watch at ~1:09:30approx.
Peloton BikeRecommendsproduct · Peloton
“my pelaton is probably the favorite product I own”
▶ Watch at ~1:10:00approx.
SubstackUseswebsite · Substack Inc.
“leave a comment on YouTube or in substack”
▶ Watch at ~1:13:00approx.
YouTubeUseswebsite · Google
“leave a comment on YouTube or in substack”
▶ Watch at ~1:13:00approx.
Apple PodcastsRecommendssoftware · Apple Inc.
“you can subscribe to the show on Apple podcast Spotify or your favorite podcast app”
▶ Watch at ~1:13:00approx.
SpotifyRecommendssoftware · Spotify
“you can subscribe to the show on Apple podcast Spotify or your favorite podcast app”
▶ Watch at ~1:13:00approx.

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 2

Myth Buster25:00

A High Bar Doesn't Mean Over-Polishing

Stone pushes back on the idea that excellence means endless polish. In a quarterly business review, the point is a candid conversation about what went well and where the team is stuck, not a perfect-looking document. She would rather someone spend time framing the right conversation than 20 more hours making a doc look flawless.

Excellence is about reaching the outcome you wanted, not perfect polish
The last 20% of polish can be a bad use of time if objectives are already met
For a quarterly business review, a candid debate beats a pristine deck
This is expectation-setting, done up front to set the team up for success

“I would much rather have someone spend the time thinking about what's the conversation we really want to have how do I tee that up…”
Elizabeth Stone · 26:00

#excellence#prioritization#management

Myth Buster34:30

Netflix Doesn't Do Performance Reviews

Stone clarifies that Netflix has no traditional performance reviews or ratings. Instead there is an annual 360 feedback cycle valued purely for the feedback, plus an annual compensation cycle. Because there's no formal process to surface performance, it has to live in the day-to-day operating rhythm.

No ratings-based performance reviews at Netflix
An annual 360 feedback cycle exists but isn't an input to any output
Performance shows up through promotions and the annual compensation cycle
Real-time feedback must replace the six-month review crutch

“I'll just clarify we don't have performance reviews”
Elizabeth Stone · 34:30

“we do have an annual cycle of 360 feedback where you request and receive feedback from a lot of people but it's not an input…”
Elizabeth Stone · 34:30

#performance#feedback#culture#netflix

Explainer· 4

Explainer28:30

Why Talent Density Is the Means, Not the End

Stone explains that high talent density is intrinsic to Netflix and reflects founder Reed Hastings' belief in a different way to build a company. Candor, freedom and responsibility, and a culture of excellence all depend on it, so talent density is a prerequisite rather than the goal itself.

Talent density is deeply seated at Netflix from its earliest days
You can't have candor, learning, or freedom-and-responsibility without it first
Hiring is a big piece, but so is holding the bar over time
It requires behavior that doesn't feel natural, like constant candid feedback

“it's not the end it's the means to the end”
Elizabeth Stone · 30:00

#culture#talent-density#netflix

Explainer31:30

How the Netflix Keeper Test Actually Works

Stone describes the keeper test as a mental model, not a quarterly process: a manager asks whether they would fight to keep a team member who said they were leaving. If not, that signals a tough conversation about fit. Because no one wants to think that way, the framing forces managers to hold themselves accountable, ideally so no one is surprised when the conversation comes.

The keeper test is a mental framing, not a scheduled review
Managers ask: would I do everything to keep this person if they tried to leave?
Direct reports often ask 'am I passing your keeper test?' in one-on-ones
Ongoing feedback is what keeps the eventual fit conversation from being a surprise

“it's very hard to say to someone I think this isn't the right fit I think you should move on from the company”
Elizabeth Stone · 32:00

#keeper-test#performance#management#netflix

Explainer39:30

Personal Top of Market: How Netflix Pays

Stone explains Netflix's compensation philosophy of 'personal top of market' — being highly competitive on pay so it doesn't become golden handcuffs. Netflix sets the market rather than just beating it, but ideally doesn't rely on pay to make people want to stay or to judge whether they'll thrive.

'Personal top of market' means Netflix sets pay, not just competes on it
The goal is to avoid pay becoming golden handcuffs
Compensation matters for attracting and retaining talent
Ideally people want to be there for reasons beyond the money

“we pay what we call personal top of Market meaning we want to be highly competitive in the pay but we don't want pay to…”
Elizabeth Stone · 39:30

#compensation#hiring#netflix

Explainer54:00

Why Netflix Keeps Data and Research Centralized

Stone explains that unlike many companies that embed data teams inside business lines, Netflix keeps a centralized, functionally diverse team spanning data engineering, data science, analytics and consumer research. It requires extraordinary partnership but yields deeper functional excellence, better career mobility, cross-pollination, and crucially the objectivity to be truth-tellers rather than telling stakeholders what they want to hear.

Netflix resisted embedding or splitting data teams by function or business line
One centralized full-stack team spans data engineering, science, analytics and research
Benefits: functional excellence, career mobility, cross-pollination of ideas
The most important payoff is objectivity — being truth-tellers with the data
Consumer insights and data science/engineering were combined about two years ago

“our job is not to tell the story that someone wants to hear with the data or to solve the problem that someone thinks is…”
Elizabeth Stone · 56:00

#data#org-design#user-research#netflix

Story· 2

Story48:00

Context Not Control: Sharing Leadership Notes With Everyone

As an example of candor, Stone describes being a transparent leader who shares information freely under Netflix's 'context not control' principle. She takes notes in leadership meetings and shares them with her whole organization, including candid reflections on what isn't going well, so teams understand what leadership is focused on.

'Context not control' means giving people the context to do their jobs well
She shares leadership meeting notes with the entire organization
Those notes include candid reflections on problems, not just wins
This level of transparency is rarer at other companies

“it's part of the culture to context not control”
Elizabeth Stone · 48:00

“I take notes in leadership meetings and I share those notes with the whole organization”
Elizabeth Stone · 48:30

#transparency#candor#leadership#netflix

Story49:00

Introducing IC Levels Was a Rocky, Sacred Change

Until about two years ago, Netflix had no IC levels — all engineers were simply senior engineers, all data scientists senior data scientists. Stone introduced leveling as the org scaled and needed a language for composing teams, but it was a big, roller-coaster change that many had seen as sacred. She later ran a candid retro admitting it hadn't all gone perfectly.

Netflix had no IC leveling system until roughly two years ago
The lack of levels was tied to no promotions process and no performance reviews
Scale forced a need for scaffolding to compose teams by experience
Stone ran an open postmortem rather than pretending the change went smoothly

“it was a big big big shift because it it was seen as something that was sort of sacred”
Elizabeth Stone · 49:30

#leveling#org-design#candor#netflix

Q&A· 3

Q&A06:30

Why More Tech Companies Should Hire Economists

As a PhD economist and possibly the first economics-trained CTO of a Fortune 500 company, Elizabeth Stone argues economics is essentially a flavor of data science and a useful lens for business problems. Its concrete edge is understanding incentives and anticipating unintended consequences, which helps with both internal leadership decisions and external strategy.

Economics is a set of technical skills and a way of framing problems, complementary to data science
The most tactical value is thinking through incentives and unintended consequences
Useful for internal leadership (clarifying priorities, motivating a company) and external strategy (competition, consumer behavior)
Stone expects economists to become more common on tech teams

“economics is a flavor of data science”
Elizabeth Stone · 06:30

“understanding incentives and thinking about unintended consequences”
Elizabeth Stone · 08:30

#economics#data-science#hiring#leadership

Q&A37:00

Does the Keeper Test Create a Hunger Games Culture?

Asked whether constant keeper-test talk breeds fear of being fired, Stone says the opposite has been true for her: having the conversations puts her more at ease than not knowing where she stands. The real stressor is the high bar and being surrounded by amazing people, which is why knowing your standing beats guessing.

Not having feedback conversations is more stressful than having them
The genuine pressure comes from a high bar and talented peers, not the test itself
Knowing you're doing well, or getting concrete things to improve, relaxes people
Culture plus candid conversations is meant to take stress out, not add it

“in my personal experience I have felt a lot more at ease by having these conversations than by not having them”
Elizabeth Stone · 37:00

#culture#feedback#psychological-safety

Q&A52:00

Is Netflix Still Running Chaos Monkey?

Asked whether chaos monkeys still randomly kill processes, Stone says not unbridled ones — Netflix carries too much responsibility for the member experience. Instead it runs intentional resilience experiments and low-profile tests of its systems, more by design than pure randomness, so it can avoid bigger failures.

No unbridled chaos monkeys; the member experience is too high-stakes
Netflix runs intentional resilience experiments at scale
The aim is intentional learning, not chaos for its own sake
New efforts like Cloud Games are tested in deliberately low-profile ways

“not unbridled chaos monkeys no”
Elizabeth Stone · 52:00

“it's not for Pure chaos it's for intentional learning”
Elizabeth Stone · 52:30

#engineering#resilience#reliability#netflix

Takeaway· 4

Takeaway10:30

Elizabeth Stone's Secret Sauce for Rising Fast

Stone went from associate to VP, manager to COO, and VP to CTO across four companies, each in roughly two to three years. She attributes it to dedication to excellence (not long hours), operating as part of a team and setting others up for success, fluently translating between technical and non-technical audiences, and learning by observing the people around her.

Dedication is about holding a high standard, not working wild hours or weekends
She frames her work as delivering for a team, not personal ambition
A relative advantage is translating technical to non-technical and back
As an introvert and only child, she learns heavily by observation and osmosis

“the dedication piece really isn't about long working hours it's more about how much I care about Excellence I guess”
Elizabeth Stone · 14:30

“being someone that people can leverage to translate from technical to non-technical and non-technical to technical”
Elizabeth Stone · 12:00

#career#leadership#communication

Takeaway19:00

The Last 5% Is What Makes Work World-Class

Stone recalls her mother repeating that the last 5% of effort is the part that really matters. That extra push is what turns good work into excellent or world-class work, and she tries to model that standard for her teams.

The final 5% of effort is what separates good from world-class
The bar is best set by example, not by demanding hours from others
Stone thrives in company cultures where this is the shared expectation

“the last 5% is the 5% that really mattered”
Elizabeth Stone · 19:30

#excellence#standards#culture

Takeaway40:30

Hire People Who Raise the Team's Bar

Rather than checking whether a candidate has skill A, B and C to fit a box, Netflix hires for people who will identify the right problems, add new perspectives, and make the team stronger. Looking for additive skills means each new hire up-levels the group and reinforces talent density.

Move beyond box-checking a fixed skill list at scale
Look for additive skills and perspectives that push the team's thinking
Interviews assess baseline skills plus what makes someone exceptional
Adding people who up-level the team compounds talent density

“we're also looking for the things that make people exceptional or even stronger than the team we've got”
Elizabeth Stone · 41:30

#hiring#talent-density#interviews

Takeaway1:00:30

How a CTO Stays Close to the Ground

As she has risen in the org, Stone deliberately protects time to stay connected with individual teams. She runs bi-weekly office hours that people book months out, plus AMAs of varying sizes, and holds herself to responding quickly to messages — connection points she says she wouldn't want the job without.

Bi-weekly sign-up office hours, booked out months ahead
Ask-me-anything sessions of different sizes to stay approachable
It only happens if she deliberately makes it a priority
Fast responsiveness keeps a two-way flow of communication open

“I still have bi-weekly office hours people sign up for slots”
Elizabeth Stone · 1:00:30

#leadership#connection#management

Key ideas

Frameworks in this episode

Additive Hiring

Calendar-Defended Proximity

Context Not Control

Excellence Is the Outcome, Not the Artefact

Expectation, Gap, Fill

Talent Density as Prerequisite

The Full-Stack Centralized Insights Org

The Keeper Test

People & resources mentioned

People · 9

Resources · 30

Insights & moments

⚡Myth Buster· 2

A High Bar Doesn't Mean Over-Polishing

Netflix Doesn't Do Performance Reviews

✶Explainer· 4

Why Talent Density Is the Means, Not the End

How the Netflix Keeper Test Actually Works

Personal Top of Market: How Netflix Pays

Why Netflix Keeps Data and Research Centralized

❝Story· 2

Context Not Control: Sharing Leadership Notes With Everyone

Introducing IC Levels Was a Rocky, Sacred Change

?Q&A· 3

Why More Tech Companies Should Hire Economists

Does the Keeper Test Create a Hunger Games Culture?

Is Netflix Still Running Chaos Monkey?

▲Takeaway· 4

Elizabeth Stone's Secret Sauce for Rising Fast

The Last 5% Is What Makes Work World-Class

Hire People Who Raise the Team's Bar

How a CTO Stays Close to the Ground

Myth Buster· 2

Explainer· 4

Story· 2

Q&A· 3

Takeaway· 4