Sheryl Sandberg of Facebook called the Netflix “freedom and responsibility” deck “the most important document ever to come out of the Valley.”
The document is 124 pages and it outlines the principles behind the unique corporate culture at Netflix. It has had reverberations far outside of Silicon Valley and way beyond Netflix itself. The principles have been debated and adopted by organizations throughout the world. It has been viewed over fifteen million times.
Patty McCord helped write the document. She worked at Netflix for 14 years as the company’s Chief Talent Officer. In her book, POWERFUL: Building a Culture of Freedom and Responsibility, Patty shares what she has learned about building a high-performance culture. I recently asked her to share more about her experience.
Challenge the Rules
You challenge many of the existing HR rules with new ways of thinking. What advice do you have for leaders that will help them embrace these changes?
It begins with questioning, literally, everything we do in HR: policies, procedures, guidelines, practices, permissions. What is the purpose of each of these activities? Do they achieve the desired result? If you started from scratch, would you embrace these methods?
“People can handle being told the truth, about both the business and their performance. The truth is not only what they need but also what they intensely want.” -Patty McCord
Maxine Harris and her partner Helen Bergman started a business and grew it to $35 million through trial and error and constant change. In her new book, Lessons for Non-Profit and Start-Up Leaders: Tales from a Reluctant CEO, Maxine shares lessons that can benefit all of us starting something new. She shares how they overcame obstacle after obstacle to succeed. I recently spoke with her about the lessons she shares in her new book.
When should a start-up start thinking about culture?
Culture is not really something that you think about when you first start a business. You might say, we want to be casual or formal, or we want to maintain an air of professionalism, but short of being doctrinaire, you can’t really control what organizational culture will become. More than anything, culture evolves from the personalities of the founders. I happen to be very chatty and like to ask a lot of questions. Some employees see that as friendly; others see it as intrusive. When I push people to “think smart” and try to do things in better and more creative ways, some people see me as demanding and judgmental, others feel that I am encouraging and stimulating. In both cases, it is the employee who identifies culture based on how they interpret what is going on.
Culture is one of those things that exists in the eye of the beholder. An employee, an outside consultant or a business colleague takes a step back and sees the unspoken rules and nuances of the organization. Sometimes people are only aware of the organizational culture when they are asked what they like or don’t like about their jobs. When we asked people who were joining the organization what they were looking for in their selection of a job, we got a glimpse into the kind of culture in which they would feel most comfortable. And while many said they were looking for an environment in which their opinions were valued and respected, others wanted a cultural milieu in which the boss would tell them what to do and they would have clear guidelines for performance.
Over the years, as Community Connections grew in size and diversified in its programs, culture changed. You could feel the difference. A business with three employees can’t help but be informal and casual. But as we grew and increased our size to over 400 employees, it became impossible not to have some hierarchical structure. You can remember the names of three people, but when the size gets big, and leaders are rushing from one meeting to the next, it’s hard to be as friendly as you’d like to be.
“Culture is the arts elevated to a set of beliefs.” –Thomas Wolfe
Most of us know that success in business depends on people. From an entrepreneur-led startup to a large organization, we don’t go very far without relying on individuals and teams. Some go so far as to say that the only real competitive differentiation organizations have is people.
But hiring the right talent isn’t easy. We’re often worried we may pick the wrong person.
A hiring mistake can cost up to 5x the bad hire’s annual salary. -SHRM
As the CEO of a large company, I’m often pushing managers to fill open positions. To me, an opening that drags on too long causes all kinds of other problems. Customer needs not met, employees doing multiple jobs for too long, and milestones delayed.
Scott Wintrip takes on the topic of hiring talent in his new book, High Velocity Hiring: How to Hire Top Talent in an Instant. Through his global consultancy, Wintrip Consulting Group, Scott has worked with companies around the world to hire top talent in less than an hour. I recently talked with him about his research and his new book.
It’s Taking Too Long!
Why is it taking longer and longer to fill jobs?
Two factors have caused the time it takes to fill a job to reach all-time highs: the skills shortage and an inefficient hiring process.
There’s a persistent talent shortage that’s pervasive across all industries. For example, when you look at middle-skill roles (jobs that require education beyond high-school and below the level of a four-year degree), there’s a gap between the number of jobs and the number of people to fill them. According to the National Skills Coalition, middle-skill roles account for 53 percent of jobs in the United States. However, only 43 percent of U.S. worker have current skills at the middle-skill level.
Copyright Scott Wintrip. Used by Permission.
Qualified people also have more employment choices than ever, including the option of doing their own thing by joining the “gig economy” as freelancers. Because of this, an increasing number of people are leaving the traditional workforce. When you combine this with increased globalization, borders will matter less, creating a talent competition unlike anything we’ve seen before.
The old way of hiring—keeping a job open until the right person shows up—doesn’t work when there’s a people shortage. A reactive process keeps a job open for weeks or months. To have the people they need, organizations must permanently change their hiring strategy by engaging in the new way of hiring: actively cultivating top talent and then waiting for the right job to open.
“Dating and hiring have a lot in common.” -Scott Wintrip
Is it possible to eliminate the performance review process?
Should customers come second?
Do open offices work?
Most businesses have rules and practices that have developed over many years. Whether inherited from long ago practices or invented by the company, these rules often continue unquestioned.
My friend Dr. David Burkus is a business school professor and author who questions many common business practices. His research reveals that many of the rules are outdated, misguided, and possibly counterproductive. His research looks at the contrarian practices of companies such as Zappos and Netflix where the rules are being rewritten.
“Great leaders don’t settle for low levels of efficiency.” –David Burkus
David, in one book, you have assembled some of the most contrarian practices being used in business today. What led you to this approach?
After I wrote my first book, The Myths of Creativity, in which I talked a bit about practices like hackathons and 20% time that spurred innovation, I started to get even more curious about the things innovative companies were doing that seemed unusual or opposite of best practices. As I travelled down that rabbit hole I found lots of people writing about why the ideas were unique and appealing, but no one was making the case for why these practices work so well. Since organizational psychology is my background, I started to look at these ideas through the lens of human behavior and found compelling reasons for why they might be better than best practices.
Do you believe many of our management practices and principles are outdated? Is this a global view?
Well that depends. As Daniel Pink rightly pointed out in Drive, the shift from industrial work to knowledge work left a lot that needed to change about how we motivate people. I think that shift has broader management implications, which I explore in Under New Management. So yes, if you’re organization does mostly knowledge work, it’s likely that your management practices are rooted in some outdated assumptions.
Ban Email and Increase Productivity
Let’s look at email. Does banning email really work? Do these techniques work in larger organizations? Doesn’t moving to other technology tools just move the problem and not address the fact that it is people, not the tool, that cause it?
Email is an amazing tool because it’s cheap and it’s asynchronous. But it’s a difficult tool for exactly that reason. It’s easy to send…so we send it far too much. And because it’s asynchronous, it moved us to a world where we’re always on. There are a lot of other tools that are also cheap and asynchronous, but it’s a matter of how the tool is used.
And yes, to some extent, it’s a people issue. The companies that banned email took a deep look at their communication needs and settled on another tool for internal communication. If you’ve looked at what your team’s communication needs are and email meets those needs….great. But odds are, there’s a better tool out there.
“Leaders are discovering that limiting email improves productivity.” –David Burkus