Netflix CHRO Sergio Ezama on Innovating People Management
On this episode of Redefining Work, I’m joined by Sergio Ezama, chief HR officer at Netflix, one of the world’s most recognizable brands. We take a peek at Netflix’s one-of-a-kind take on compensation and how the company is using generative AI. Plus, Sergio advises new chief people officers on building C-suite relationships.
Sergio came to Netflix in 2021 after 20 years at PepsiCo, where he worked his way from regional HR manager to chief talent officer for the global brand. Sergio made the move because he wanted a new challenge. “After 20 years in one place and being reasonably successful … you want to prove to yourself that you can do it elsewhere,” he says. “And I couldn't think of any place more different than Pepsi and [consumer packaged goods] than Netflix.”
And a challenge it was. On top of switching industries, Sergio came onboard with the streaming giant around the time of the “Netflix Correction,” when the company was responding to unprecedented declines in subscribers.
Despite the complexity of the transition, Sergio is thriving at Netflix. Find out how he’s using the company’s innovative people agenda to transform HR.
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An Unconventional Approach to Compensation
Startups are driven by principles, Sergio says, but as most of them grow, they lean into processes and policies to standardize behaviors. That’s not the case with Netflix. “They cracked the code of becoming large enough without getting into all those processes, policies that we believe are counterintuitive to the type of talent that we attract to Netflix,” Sergio says.
Take the company’s approach to compensation, for example. Rather than a pay-for-performance model, Netflix takes more of a pay-for-potential approach. Managers are empowered to determine annual pay for their reports by answering three simple questions:
How much money could this person make in a similar job at a similar company?
What is the value of their potential impact on the company?
What is the cost to replace this person if they leave the company?
By giving managers the right data and company principles, Netflix leadership trusts them to make the right decisions and retain employees.
Adopting AI With People in Mind
Netflix sees generative AI as a tool to strengthen the business and empower employees — if applied prudently and with user experience as a priority. Netflix is no stranger to using AI, and it’s being strategic in assessing the many new tools coming to market, Sergio says.
“Do I build these capabilities myself? Do I buy them?” he says, are just some of the questions HR leaders should ask. By being thoughtful about what employees need from AI tools, HR leaders can make better purchasing decisions.
Sergio and his team recognize AI’s potential in helping people make better decisions. “It can help us in our call to democratize people and data insights. … Leaders will be able to get a lot of information and insight from their phones rather than by asking the HRBPs,” Sergio says. “In doing that, effectively, HRBPs can dedicate themselves to something of greater value.”
Building Relationships With Leadership Peers
Sergio has learned a lot as a CHRO, and he’s eager to pass on those lessons to upcoming HR leaders — especially about building relationships with C-suite peers. In the C-suite, building relationships requires calibrating your approach to each situation. HR leaders must be able to adapt to the context of who you're interacting with and what's most important to them.
He suggests taking a business-centric point of view and leaning into your natural curiosity. Importantly, he says, don’t be afraid to speak up.
“You need to have a perspective and a point of view beyond your area of expertise,” Sergio says. “And that should lead to moments where you would agree with something — and moments where you would say, ‘I do not think that is a good idea, and here's why not.’”
People in This Episode
Sergio Ezama: LinkedIn
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