Build a Powerful Culture of Freedom and Responsibility

powerful

Powerful

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

 

Many people think that compensation rules the day, but you have a different philosophy. What’s the “greatest motivation”?

I truly believe the greatest motivation is to be part of an amazingly talented team that gets real work done that matters to our companies and our customers.

 

“Be selfless in debating. That means being genuinely prepared to lose your case and openly admitting when you have.” -Patty McCord

 

Hold Rigorous Debates

Creating a High-Trust Culture for High Performance

 

How to Increase Trust

 

Why is culture so difficult to change?

Why are so many employees disengaged?

What should a leader do when she arrives at a company that is struggling?

 

The founding director of the Center for Neuroeconomics Studies recently wrote a book, Trust Factor: The Science of Creating High-Performance Companies to answer these and other questions. Paul J. Zak, PhD, is also a professor at Claremont Graduate University. He recently answered some of my questions about his extensive research into trust. His book is fascinating and contributes to the body of work on trust and organizational culture.

 

Survey of 200,000 employees: 71% of companies have mediocre to poor cultures.

 

Spot the Signs of a Low-Trust Culture

In one part of the book, you tell a story of walking into an office full of cobwebs, old furniture, and a struggling culture. What are some of the signs of a low-trust culture?

Distrust drains employees’ energy, so people move slow, think slow, and lack a passion for their jobs.  Organizations with low trust also have lower profits, so offices often look out-of-date, even while new employees show up as turnover tends to be high.  We have also shown that people take more sick days when they work at low-trust companies, so one sees empty desks.  All these factors are signs of a low-trust syndrome and a downward cycle of productivity, innovation, and profits.

 

“High-trust companies invest in employee health and productivity.” –Paul J. Zak

 

Why Healthy Cultures are Based on Trust

trust factorWhy is a healthy culture based on trust so vitally important to its success?

Companies are, first and foremost, people. As social creatures, we naturally form teams to accomplish goals together.  Extensive research shows that teams are more effective when they have a clear objective and when team members are trustworthy. Trust reduces the frictions that can arise in teams so getting things done takes less effort and as a result more and better work is done.  By measuring brain activity while people work, we’ve shown that people are more relaxed when they trust their colleagues. They innovate more and shed the stress from work faster than those in low-trust companies.  Creating a culture of trust provides powerful leverage on performance because it harnesses what our brains are designed to do: cooperate with others in teams.  And the neuroscience I’ve done shows how to create a culture of trust in a system so it has the maximum effect on brain and behavior.

 

Workers in high trust organizations are paid an average of $6,450 more.

 

I love the biological explanation of the Golden Rule. Explain the connection between oxytocin and trust.

How to Build A Culture Primed to Perform

How do you create a culture that is primed to perform?

What does science say about changing organizational culture?

Is there any tool that can help measure and track your culture over time?

 

Build A Culture Designed to Perform

Neel Doshi and Lindsay McGregor have just written a book, Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation, that answers these questions and more. It is written as a guidebook for those who know how important a strong culture is, but they don’t know what steps to take to create one. I recently spoke with Neel and Lindsay to learn more.

 

“Culture is what tells your people why they should work.” -Doshi/McGregor

 

The Magic of a Great Culture

Often people think of culture as something that is like art, but you say that the “magic behind great culture is actually an elegantly simple science.” Tell us more about your research.

We all know that culture is important. We’ve felt it. Some cultures are filled with fear and stress, while others inspire creativity and enthusiasm. What has eluded us, however, is why. Our research provides an “elegantly simple” answer: culture is what tells your people why they should work, and why they work is what determines how well they work.

Here’s the kicker though: not all “whys” are created equal, and too often, cultures are designed to motivate using the destructive “whys.”

Our answer is not only elegantly simple, but also empirically powerful. Using our total motivation framework, we’ve measured the motives of over 20,000 people at more than 50 major institutions. We’ve observed an incredibly strong relationship between their culture and performance metrics like sales and customer experience. In one study, employees with high levels of total motivation (or ToMo for short) generated 38% more in revenues than their low ToMo counterparts.

Culture is an entirely quantifiable and engineerable asset—and the most important one. ToMo gives leaders the tools to unlock the highest levels of performance in their people and company.

 

“Why you work determines how well you work.” -Doshi/McGregor

 

Why You Work Determines How Well You Work

What is total motivation? How does this drive performance?

Total motivation is simply the notion that why you work determines how well you work. The effectiveness of the “why” depends on its distance from the work. Let’s take a mid-level management consultant for example:

Play is when you work for enjoyment of the work itself. Play is the most powerful motivator: twice as potent as purpose and almost three times more than potential. Our fearless consultant might enjoy conceptual thinking and the process of breaking down big puzzles into digestible, actionable pieces.

Purpose is when the outcome or impact of the work is why you do it: maybe she values seeing how a new strategy improves a client’s well-being and helps his customers.

Potential is when the work enables a future outcome aligned to your personal goals: she might want to manage operations at a big company or a company of her own down the line, and this job will help her achieve that.

 

“Culture can’t be managed by chance.” -Doshi/McGregor

 

How To Create An Optimistic Workplace

Make Work Happy

Do you want to create an optimistic workplace?

How does a strong purpose help in difficult times?

How do leaders set a positive leadership presence?

 

“The climate suffers when employees don’t believe their leader has their back.” –Shawn Murphy

 

My friend, author and speaker Shawn Murphy is the CEO & Founder of the leadership blog, Switch & Shift. His new book, The Optimistic Workplace, is a guide to creating and maintaining a powerful, positive, optimistic culture that creates results.

Previously, Shawn shared with us the powerful implications of positive, contagious emotions. I wanted to go deeper into the research for his new book, and so I asked Shawn to share more about the leadership insights he gained from decades of working with business leaders.

 

“Optimistic climates support employees’ exploration of purpose.” –Shawn Murphy

 

Find Your Purpose

I was fascinated by the research on eyeblinks. How does the eyeblink reflex relate to purpose?

Researchers used startle probes to measure the reflexive eyeblink caused by a stimulus, in the case of this research it was an image. The images ranged from positive, to neutral, to negative.

What researchers learned was the length of the eyeblink gave insight into the person’s emotional response to the pictures. The longer the eyeblink, the more unpleasant the response to the picture.

How this connects to purpose is that the researchers, Carol Ryff and team, found that those who had a clearer sense of purpose in life recovered faster from negative images. The research gets at a person’s resiliency. Purpose in life strengthens the core of our identity. The clearer our sense of purpose, the stronger our resiliency is; we can recover faster from negative stimulus in our life.

In a work context, we can summon our purpose to guide us through difficult times at work. It can also help us make better decisions, as purpose serves as a guide in decision making: Does this opportunity support my purpose?

 

“Resilience can be strengthened when a person has a sense of purpose.” –Shawn Murphy

 

Start Small to Cultivate Optimism

To cultivate optimism in the workplace, you say, “Start small,” and, “Forget about the ‘big bang.’” Most people who have a passion for culture want to jump right in with sweeping initiatives and major change. Why start small?

In my 20+ years as an organizational change management consultant and in leading change in my own company, I’ve learned that the big bang causes more confusion, comes across as rah-rah, and alienates people from what the change purpose and message is.

 

“Workplace optimism is the belief that good things will come from hard work.” –Shawn Murphy

 

So, rather go for broke, start small. Create a pocket of excellence. The change starts in a small group within the organization. The group is typically a supporter of the change. Let the small group experience success and gradually widen it to other pockets within the company.

Word of the success travels through networks of people. This approach organically builds support through achieved success and not through possible success. It’s the latter that is the focus of big bang change efforts. It’s what disillusions people about change efforts.

 

Research: You can transform the work experience by focusing on the best positive realities.