Powerful: Building a Culture of Freedom and Responsibility - by Patty McCord
Date read: 2018-01-28How strongly I recommend it: 9/10
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Avant garde advice from the former Chief Talent Officer of Netflix. A great read for any company that's trying to manage their talent differently. Patty challenges conventional thinking around such topics as the annual performance review, relying less on market salary bands, and relying less on Performance Improvement Plans. Recommended for any manager to think differently about how they manage their team in an ever-changing environment.
Contents:
My Notes
A company's job isn't to empower people; it's to remind people that they walk in the door with power and to create the conditions for them to exercise it. Do that, and you will be astonished by the great work they will do for you.
The Netflix culture wasn't built by developing an elaborate new system for managing people; we did the opposite. We kept stripping away policies and procedures.
Here is my radical proposition: a business leader's job is to create great teams that do amazing work on time. That's it. That's the job of management.
It's a matter of identifying the behaviors that you would like to see become consistent practices and then instilling the discipline of actually doing them.
Great teams are made when every single member knows where they're going and will do anything to get there. Great teams are not created with incentives, procedures, and perks. They are created by hiring talented people who are adults and want nothing more than to tackle a challenge, and then communicating to them, clearly and continuously, about what the challenge is.
What people most want from work: to be able to come in and work with the right team of people - colleagues they trust and admire -and to focus like crazy on doing a great job together.
Excellent colleagues, a clear purpose, and well-understood deliverables: that's the powerful combination.
The most important job of management is to focus really intently on the building of great teams. If you hire the talented people you need, and you provide them with the tools and information they need to get you where you need to go, they will want nothing more than to do stellar work for you and keep you limber.
You should operate with the leanest possible set of policies, procedures, rules, and approvals, because most of these top-down mandates hamper speed and agility.
The more time managers spend communicating and elaborating and being transparent about the job to be done, about the challenges the business is facing and the larger competitive context, the less important policies, approvals, and incentives are.
People need to see the view from the C suite in order to feel truly connected to the problem solving that must be done at all levels and on all teams, so that the company is spotting issues and opportunities in every corner of the business and effectively acting on them. The irony is that companies have invested so much in training programs of all sorts and spent so much time and effort to incentivize and measure performance, but they've failed to actually explain to all of their employees how their business runs.
How do you know when people are well enough informed? Here's my measure. If you stop any employee, at any level of the company, in the break room or the elevator and ask what are the five most important things the company is working on for the next six months, that person should be able to tell you, rapid fire, one, two, three, four, five, ideally using the same words you've used in your communications to the staff and, if they're really good, in the same order. If not, the heartbeat isn't strong enough yet.
Communication between management and employees should genuinely flow both ways. The more leaders encourage questions and suggestions and make themselves accessible for give-and-take, the more employees at all levels will offer ideas and insights that will amaze you.
Employees should be told never to withhold questions or information from you or their direct superiors. As a leader, you should model this, showing, not just telling, that you want people to speak up and that you can be told bad news directly and disagreed with. Otherwise most people will never be truly open with you.
The conventional thinking is that if you allow people to be anonymous, they will be more truthful. In my experience that's not the case. Truthful people are truthful in everything they do. And if you don't know who is giving you feedback, how can you put their comments into the context of the work they're doing, who their manager is, and what kind of employee they are? Perhaps the worst problem with anonymous surveys, though, is that they send the message that it's best to be most honest when people don't know who you are.
Ask, "How do you know that's true?" Or my favorite variant, "Can you help me understand what leads you to believe that's true?"
Opinions aren't helpful unless the people who hold them are willing to take a stand in their defense by making a fact-based case.
Intense, open debate over business decisions is thrilling for teams, and they will respond to the opportunity to engage in it by offering the very best of their analytical powers.
Be selfless in debating. That means being genuinely prepared to lose your case and openly admitting when you have.
Actually orchestrate debates. You can have people formally present cases, maybe even have them get up onstage. Try having people argue the opposing side, poking holes in their own position.
Debates among smaller groups are often best because everyone feels freer to contribute - and it's more noticeable if they don't. Smaller groups also aren't as prone to groupthink as large groups are.
He had said he needed 150 new people, so I asked, "Are you sure you don't want seventy-five people who you pay twice as much because they have twice as much experience and can be higher performers?"
When I'm hiring, I look for someone who gets really excited about the problems we have to solve. You want them to wake up in the morning thinking, God, this is hard. I want to do this! Being given a great problem to tackle and the right colleagues to tackle it with is the best incentive of all.
"Are we limited by the team we have not being the team we should have?"
Companies don't owe their people anything more than ensuring that the company is making a great product that serves the customer well and on time. They don't owe people the chance to take on a role they're not prepared for and don't have the talents for. They don't owe them a different job created to reward them for their service. And they certainly don't owe them holding the company back from making the personnel changes needed to thrive.
On a regular basis, take the time to envision what your business must look like six months from now in order to be high-performing. Make a movie of it in your head, imagining how people are working and the tools and skills they have. Then start immediately making the changes necessary to create that future.
More people will not necessarily do more work or better work; it's often better to have fewer people with more skills who are all high performers.
The ideal is for people to take charge of developing themselves; this drives optimal growth for both individuals and companies.
Retention is not a good metric by which to evaluate your team-building success or whether you've created a great culture. The measure should be not simply how many people you are keeping but how many great people you have with the skills and experience you need. How many of them you are keeping? How many new people with the skills and experience you need are you hiring? You also want to closely monitor how rigorously you are evaluating whom you need to replace and how efficiently you're acting on that determination.
People's happiness in their work is not about gourmet salads or sleeping pods or foosball tables. True and abiding happiness in work comes from being deeply engaged in solving a problem with talented people you know are also deeply engaged in solving it, and from knowing that the customer loves the product or service you all have worked so hard to make.
Making great hires is about making great matches. One company's A player may be a B player for another firm, and vice versa. There is no generic formula for what makes people successful, despite a great deal of effort and all sorts of assessments to try to come up with one.
Finding the right people is also not primarily about "culture fit." What most people really mean when they think someone is a good culture fit is that the candidate is someone they'd like to have a beer with. That approach is often totally wrong-headed. People can have all sorts of different personalities and be great fits for the job you need done.
Hiring great performers is a hiring manager's most important job. Hiring managers should actively develop their own pipelines of talent and take the lead in all aspects of the hiring process. They are the lead recruiters.
Get beyond the résumé. Be really creative about where you look for talent. Dig further than a list of experiences. Consider wide-ranging experiences and focus on people's fundamental problem-solving abilities.
We also encouraged our people to interview regularly. That was the most reliable and efficient way to find out how competitive our pay was.
The skills and talents for any given job will not match a template job description, and salaries should not be predetermined according to templates.
Consider not only what you can afford given your current business but also what you will be able to afford given the additional revenue a new hire might enable you to bring in.
If you can't find good, solid data showing that the process is contributing to some important business metric, then I strongly advise you to lobby for doing away with it.
"Do you have any proof of the value of the annual review process to your business?"
In my experience, high performers are, in fact, often somewhat frustrated with how their teams are performing rather than satisfied that everything is going swimmingly and life is all good. They are pushing for great results, and achieving those often requires some pain and a degree of discontent. That commitment to achievement is what we want to foster, not the expectation that as long as you're working hard, the company will have your back.
People often come up to me after a talk to ask for career guidance. I tell them, "You want to be a lifelong learner; you want to always be acquiring new skills and having new experiences, and that doesn't have to be at the same company. The fact is that sometimes you're hired by a company to do something, and then you do it and it's done. If I hire people to rebuild my garage, when they're done I don't need them to rebuild the back of my house."
Either make performance improvement plans genuine efforts to help people improve performance or get rid of them.
The chances you'll get sued by an employee who is let go are vanishingly slim, especially if you have been responsibly and regularly sharing with that person the problems you perceive with their performance.
The focus on employee engagement is misplaced; there is not necessarily a correlation between high engagement and high performance. There is also not necessarily a correlation between high performance in a current job and high performance in the job of the future.
Use my algorithm in making personnel decisions: Is what this person loves to do, that they're extraordinarily good at doing, something we need someone to be great at?
When I talked with my former VP of HR Jessica Neal about this, she said a great thing about what a company's culture should be: "Culture is the strategy of how you work. And if people believe it is a strategy and that it is important, they will help you think about it deeply and try things."