In fact, that should be a constant process that occurs throughout a startup’s growth. If they didn’t believe then we had no chance at all.īut this isn’t the only type of situation that calls for rethinking your team. I said goodbye to the whiners and the babies and the people who didn’t believe. "I said goodbye to everyone who wasn’t a classically trained engineer and anyone who wanted to do anything other than DVD by mail at that point," says McCord. In 2001, the dot-com bust pulled the rug out from under Netflix, dashing IPO dreams and forcing McCord to axe one third of the only 120 people on staff. There’s no tougher conversation than one that begins with “You’re fired.” Especially if the person on the other side of the table is one of that core, band-of-brothers team you started out with. But when you do, you might also need to have some tough conversations. This is how McCord runs things, with a built-in expectation of high performance, radical honesty, and the motto ‘we’re not family.’ As she explains in her First Round Capital CEO Summit talk, maintaining a “high performance” team is all about instilling people with a sense of both freedom and responsibility. And it drives toward a single point: a company is like a pro sports team, where good managers are good coaches, and the goal is to field stars in every position. At first, they considered something standard - words like “excellence” and “respect.” Instead, McCord suggested they “write down the things we expect in people.” This simple idea led to an infamous document and philosophy now known as, “ Netflix Culture: Freedom & Responsibility.” Sheryl Sandberg even called it “ the most important document ever to come out of the Valley.” It’s a living set of “behaviors and skills” that the Netflix management team updated continuously and fastidiously. Check out their attempt at creating a “ culture they love.In the early days of Netflix, Reed Hastings, Co-Founder and CEO, wanted Patty McCord to help write out the company’s core values. Patty also advised Inbound Marketing company Hubspot to to define their culture and values in a published document. Make sure every employee knows what “high performance” means.Hire people who already have great jobs.Get rid of under-performing employees immediately (no performance improvement plans).Logic and common sense work better than formal policies.According to Patty, some of the biggest lessons in trying to transform and build the culture at Netflix: Patty McCord helped Reed Hastings develop the policy during her 14 years as Chief Talent Officer at Netflix. “We want people to manage their own career”.Big salary is the most efficient form of comp.Pay “top of market” because one outstanding employee is worth more and costs less than 2 adequate ones.“The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people.”.To increase employee freedom as they grow vs.We don’t measure people by how many hours they work or how much they are in the office.Adequate performance gets a generous severance package.Some of my favorites from the many pages in the docuement: Netflix’s travel and expense policy: “act in Netflix’s best interest.” We don’t track hours worked, so why are we tracking days of vacation per year? Employees are allowed to take whatever time they want, as long as they are responsible about it. For example, they have no vacation policy. While it has become a viral hit, most of the advice in the Netflix culture code is just common sense. It simply defines the culture of excellence they were trying to support by defining the values that would determine whether someone “gets rewarded, promoted or let go.” The Things We Think But Do Not Say And yet it contains almost no color or graphics or animations in 127 slides. It has been viewed more than 8 million times, shared more than 20,000 times and has more than 400 comments. Netflix gets that the employees (and their content) are the best marketing assets in any businessĪnd coming from a guy who loves Slideshare, this is the “creme de la creme.” The “piece de resistance.” Or as Jerry McGuire said in his memo, it is “The Things We Think But Do Not Say.”Īside from their content production, this is possibly the best marketing Netflix will ever do.Netflix knows how to create great content (“ House of Cards” anyone?).Netflix is an amazing company with a culture that many companies envy.I needed to cover it here for a few reasons:
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