Anthony Wood, Founder and CEO of Roku Inc.
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Roku co-founder and CEO Anthony Wood worked at Netflix in 2007 but says his company's cultural similarities to the streaming giant are largely coincidental.
"The culture at Roku was the same before I worked at Netflix," Wood said in an interview. "Just similar philosophies."
Netflix and Roku have cultural documents comparing themselves to sports teams.
“Working at Roku is like being part of a professional sports team,” Wood wrote in 2015 in a document that every employee receives. "We attach great importance to recruiting the best people, we pay well in a highly competitive market, we encourage excellent teamwork and we expect everyone to work at a high level."
A former manager said every job at Roku is like a "field goal kicker," where employees are expected to meet specific, detailed goals. Some employees thrive under the pressure. If they can't, they won't be around for long.
"We expect you to do a good job," said Wood. "If you don't do a good job, you will eventually get fired."
Wood and Netflix CEO Reed Hastings cite their culture as the reason their companies are successful. But both cultures can create environments of fear and confusion, albeit for different reasons.
At Netflix, as the Wall Street Journal explained in a 2018 story, employees formally screen each other and give blunt feedback to both bosses and subordinates. Workers "sunshine" errors, offer public apologies and acknowledgments of neglect.
"We expect you to do a good job. If you don't do a good job, you will eventually get fired."
In contrast, Roku does not give any performance ratings at all. Wood also made the unusual decision to pay employees at market rates rather than giving pay increases to internal performance. That irritated some younger employees who were expecting a cursory pay raise every year as a performance review, Wood said.
"We now have a lot of younger employees who are very focused on getting raises," said Wood. “You know, I've been here for a year, I should get a raise. And you may not get a raise. Or maybe you could. Sometimes they don't get it and give up and post on Glassdoor. So it's a bit of a cultural mismatch. "
David Orrell | CNBC
Finding out the market price can be difficult, Wood acknowledged, especially because California and New York state laws prohibit asking employees how much they make. But Roku can make competitive salaries because it knows what to pay to poach employees from other companies, Wood said.
Read the published culture documents from Roku and Netflix
Click here to learn more about how Roku defied skepticism to build a $ 45 billion companyClick here for an in-depth Q&A with Roku CEO Anthony Wood.
Outstanding in ambiguity
Annual reviews are not required as staff should receive real-time feedback, Wood said.
"The work is hard but rewarding, and I have a lot of autonomy," said Taylor Yanez, a Roku engineer. "We don't do annual reviews, which takes a lot of time."
But while Yanez said he received immediate feedback from colleagues, seven former Roku employees who left in the past 18 months said they felt confused by Roku's culture. They spoke to CNBC on condition of anonymity, either because they feared a possible backlash or because the contract language in their severance packages forbids talking about their layoffs.
"I literally don't know why I was fired," said a late manager. "It's the strangest place I've ever worked."
Former employees said that while they were assigned certain tasks, bosses rated them on various metrics, as goals often changed as Roku grew. Aside from the fact that there are no performance ratings, Roku has a very low hierarchy – almost all Roku engineers are referred to as "Senior Software Engineers" regardless of their tenure or position. Mix in the recent hiring surge – Roku has nearly tripled its workforce since going public in 2017 to more than 1,900 – and the result can be confusing.
Several former Roku employees said their supervisors told them that working in ambiguous environments was part of the job. This contradicts the Roku culture document which claims, "Roku teams communicate clearly and in real time with each other and with other teams across the company. Plans, milestones and strategic context are well known."
"There is no formal training," said a senior executive, "Roku is about finding information."
Roku is trying to improve some of its organizational infrastructure as it grows, including formally introducing an internship orientation for the first time this year, two of the people said.
"We compete to attract and retain the best talent and treat people like adults," said a Roku spokesman. "We offer onboarding and training for new and existing employees, and we look for those who are particularly resourceful, innovative, and self-sufficient. And we have a culture of real-time feedback that has been remarkably successful."
Netflix with a twist
Netflix and Roku offer unlimited vacation time and give employees the right to dictate their own schedules while they can get their work done. Both have deliberately flat organizational structures that place less emphasis on titles and hierarchies.
Unlike Netflix and other big tech companies, however, Roku offers few external employee benefits, such as employee benefits. B. on-site childcare, free daily lunches with catering, affordable health plans or extensive personal wellness services. Roku doesn't even match 401 (k) posts.
Instead, Wood decided to put that money into workers' salaries, believing that employees should be responsible for how they spend their money. Every Roku employee, past and present, who spoke to CNBC said the company met or exceeded their expectations. It pays a base salary and grants limited units of shares, but does not give any bonuses.
Given the stock's performance, it's easy to see why employees were eager to stay with the company. Roku stock has gained around 2,000% since the company's IPO.
Roku's executive website page also reveals a lack of diversity – including the absence of women. That will change soon. Wood said Roku just announced a new HR director, Kamilah Mitchell-Thomas. previously Chief People Officer of Dow Jones, replacing current HR director Troy Fenner. Roku's board of directors has three women out of nine members.
But Wood said that diversity for diversity's sake doesn't dictate who he hires.
"My focus is on hiring the best people I can find," said Wood.
Wood said he met weekly with an executive coach, Dave Krall, who was Roku's 2010 president and chief operating officer and previously CEO of Avid Technology. He defines his leadership as hiring the right people and giving them the freedom to do their jobs.
"Running a business takes change as it grows," said Wood. "If you're 15 or 20 people I'm the product leader at this point. When it gets bigger and you hire more older people, you don't have to do that and they don't want you to do that because that's their job . I used to make our product roadmap. I don't do that anymore. Today we have new initiatives. To push ourselves into new business areas and expand our businesses, that is my focus today. "
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