Roku’s unique culture is being tested by a surge of new employees

Anthony Wood, Founder and CEO of Roku Inc.

David Paul Morris | Bloomberg | Getty Images

Anthony Wood, co-founder and CEO of Roku, worked part-time at Netflix in 2007. But he says his company’s cultural similarities to Netflix are mostly coincidental.

“The culture at Roku was the same before I worked at Netflix,” Wood said in an interview. “Just similar philosophies.”

As Netflix, Roku publish a cultural document, and both companies are likened to sports teams.

“Working at Roku is like being on a professional sports team,” Wood written in 2015 in a document that each employee receives. “We take great care in recruiting the best people; we pay well in a competitive market; encourage excellent teamwork and expect everyone to perform at a high level. “

A former executive said that every job at Roku is like being a “field goal kicker,” where employees are expected to achieve specific, detailed goals. Some employees thrive under pressure. If they can’t, they won’t be there for long.

“We expect you to do a good job,” said Wood. “If you don’t do a good job, you will end up getting fired. “

Wood and Netflix CEO Reed Hastings stress that their culture is the reason for the company’s success. But the two cultures can also lead to an environment of fear and confusion, albeit for different reasons.

At Netflix, like the Wall Street Journal explained in a story from 2018, employees formally examine each other, giving direct feedback to bosses and subordinates. Workers “spotlight” mistakes, publicly apologize and acknowledge failures.

“We expect you to do a good job. If you don’t do a good job, you will end up being fired.”

In contrast, Roku does not give any performance rating. Wood also made the unusual decision to pay employees on the basis of a market rate rather than granting increases linked to internal performance. This angered some younger employees who expected a superficial increase each year when it came time to review performance, Wood said.

“We have a lot of younger employees now, and they’re very focused on getting raises,” Wood said. “You know, I’ve been here a year, I should have a raise. And, you might not get a raise. Or you could. It just depends on what we think the rate is for you. Sometimes they understand and adapt, sometimes they don’t understand, and they give up and then they publish on Glassdoor. So it’s a bit of a cultural shift. “

Antoine Bois

David Orrell | CNBC

It can be difficult to determine the market rate, Wood acknowledged, especially because California and New York state laws prohibit asking employees how much they are paid. But Roku can glean competitive salaries because he knows what to pay to poach employees from other companies, Wood said.

Excel in ambiguity

Annual reviews aren’t necessary because employees should receive real-time feedback, Wood said.

“The work is hard, but it’s also rewarding, and I am given a lot of autonomy,” said Taylor Yanez, engineer Roku. “We don’t do annual reviews, which takes a tremendous amount of time.”

But while Yanez said he received instant feedback from his peers, 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 contractual language of their severance packages prohibited talking about their layoffs.

“I literally don’t know why I was fired,” said a recently deceased manager. “It is the strangest place I have ever worked.”

Former employees have said that while they were assigned specific tasks, bosses rated them on different metrics, as goals changed frequently as Roku grew older. In addition to the lack of performance review, Roku has very little hierarchy – almost all Roku engineers are referred to as “senior software engineers,” regardless of their tenure or role. Toss in a recent wave of new hires – Roku has nearly tripled its workforce, to over 1,900 employees, since its IPO in 2017 – and the result can be confusing.

Several former Roku employees said their bosses told them that working in ambiguous environments is part of the job. This flies in the face of the Roku Culture Document, which states that “Roku teams communicate clearly, in real time with each other and with other teams across the business. Plans, milestones and strategic context are widely known. . “

“There is no formal training,” said a mid-level executive, “At Roku, finding information is up to you.”

Roku is trying to improve some of its organizational infrastructure as it grows, including formalizing an internship focus for the first time this year, two of the people said.

“We compete to attract and retain top talent anywhere and treat people like adults,” a spokesperson for Roku said. “We ensure the integration and training of new and existing employees and look for those who are particularly resourceful, innovative and autonomous. And we have a culture of real-time feedback, which has been remarkably successful. “

Netflix with a touch

Netflix and Roku both offer unlimited vacations, giving employees the right to dictate their own schedules as long as they can get their jobs done. Both have deliberately flat organizational structures, with an emphasis on titles and hierarchy.

But unlike Netflix and other big tech companies, Roku offers few perks for outside employees, such as on-site child care, free breakfasts every day, inexpensive health care plans, or plenty of perks. for personal well-being. Roku doesn’t even match 401k contributions.

Instead, Wood chose to funnel that money into workers’ wages, believing that employees should be responsible for how they spend their money. All past and present Roku employees who have spoken to CNBC have said that Roku has met or exceeded their expectations. The company pays both base salary and grants restricted stock units, although it does not give bonuses.

Considering the stock’s performance, it’s easy to see why employees are eager to stay with the company. Roku shares have gained around 2,000% since the company went public.

by Roku the senior management The website page also illustrates a lack of diversity, including the absence of women. That will change soon. Wood said Roku just announced a new HR manager, Kamilah Mitchell-Thomas, previously Chief People Officer of Dow Jones, who will replace current Head of Human Resources Troy Fenner. Roku’s board of directors has three women out of nine members.

But diversity for the sake of diversity won’t dictate who Wood hires, he said.

“My goal is to hire the best people I can find,” said Wood.

Wood said he meets weekly with an executive coach, Dave Krall, who was president and COO of Roku in 2010 and, before that, CEO of Avid Technology. He defines his leadership as hiring the right people and allowing them the freedom to do their jobs.

“The leadership that a business needs changes as it grows,” said Wood. “When you have 15 or 20 people, I’m the product manager at that point. As it gets bigger and you hire more experienced people, you don’t have to do this anymore and they don’t want you to do it. , because that’s their job. I used to do our product roadmap. I do not do it anymore. Nowadays we have new initiatives. Pushing ourselves into new areas of business and growing our business is where I am practical today. “

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