Netflix and TikTok Cultures Reveal the Dark Side of Innovation

I never hear people say anything negative about innovation. Instead, they attribute all sorts of virtues to innovation — including new products that make society better, career opportunities that improve workers’ skills, and stock prices that enrich investors by soaring.

Last month I spoke about innovation with a class of executive MBA students from the School of Management Friborg (Switzerland)† One of the students contacted me afterwards and thanked me for an “inspiring presentation and especially your focus on intellectual humility, the importance of the people and the culture of an organization.”

One thing I didn’t share with the students was the dark side of innovation – which is that working in innovative companies – think Tesla or Netflix – is extremely demanding. How’s that? Based on analysis of Glassdoor comments, the more employees spoke positively about innovation, the more likely they were to quit. The reason could be that innovation comes with longer hours, a faster work pace and poor work-life balance, according to Sloan Management Review†

This ironic twist is something I understand from my experience in the management consulting industry with an up or out work culture. Consulting’s high prestige and excellent career development opportunities consistently attract the cream of the crop among the best college and university graduates.

Once on board, the consultancies demand almost constant travel to clients and 80-hour work weeks. After a few years, most new recruits burn out and fail on the partner track. However, the prestige of working for such companies and the skills they develop make them valuable to other employers. So recent graduates keep flowing there.

Giving up this concept of your life to work on a dream team is certainly a hallmark of the most innovative tech companies like Netflix and TikTok.

For the decade ending in 2020, Netflix was a clear innovator. Compared to my sample of 37 publicly traded technology companies, Netflix’s average annual revenue growth of 27.5 percent and its average annual increase in stock prices of 35.5 percent is well above average.

Netflix’s culture is based on the metaphor of a consistently excellent sports team. With former HR chief, Patty McCord, co-CEO Reed Hastings developed a PowerPoint presentation on Netflix’s culture based on the idea that the company should say goodbye to all but its “most effective people,” according to Vanity. fair.

In 2012, McCord found himself on the wrong end of a tough question: “Would you hire them again today?” As the Netflix Culture document explains, Netflix suggests that people who “value job security very highly and would rather work at companies more focused on stability” should work elsewhere, Vanity Fair noted.

In 2018, the Wall Street Journal reported that Netflix’s culture remains tough. Netflix’s written statement reads: “Being part of Netflix is ​​like being part of an Olympic team. Being cut, when it happens, is very disappointing, but it’s no shame at all. Our former employees get a generous severance package.” and they are generally picked up by another company.”

While I haven’t studied TikTok’s culture, Beijing-based ByteDance’s business unit is clearly growing rapidly — with revenue reaching $4 billion in 2021 and expected to triple to $12 billion by 2022. Wall Street Journalin the six years since its founding, TikTok recorded the most downloads of any app through the first quarter of 2022, the Journal noted.

It sounds to me like TikTok’s work culture also illustrates the dark side of innovation. In a nutshell, the Journal wrote that employees experience “anxiety, secrecy and unrelenting pressure” and that “U.S. staffers talk about sleep deprivation, working weekends, and mandatory meetings with colleagues. [– 85 hours a weeks’ worth –] on the other side of the world.”

Working at TikTok is stressful. Melody Chu, a former senior product manager, left last November. Before leaving, she suddenly lost weight, struggled with sleep and missed dinners with her family to attend meetings with colleagues in China, leading her to seek marriage counseling.

She has also learned a lot. As she told the Journal, “Working at TikTok has stretched me in more ways than I could count, teaching me more about product strategy, execution, and cross-cultural nuances than I could have originally imagined.”

TikTok — which gets a lot of applications from people who want to work there — said it has adapted its practices and work culture to achieve its goal of “building and nurturing a team capable of supporting our growing global community,” according to the news.