“Candor is not just a leader’s responsibility, and you should periodically ask your manager: “If I told you I were leaving, how hard would you work to change my mind?”
This is just one of several unusual or surprising policies or questions posed in a Powerpoint presentation shared by Netflix CEO and Chief Talent Officer. I find it interesting and relevant to share with all of you because I think these notions of being consistently honest with ourselves and our colleagues goes against what we inherently believe, which is that good things will come to good people.
Netflix encourages speaking up both as an employee and a manager. If you don’t feel you are getting the most out of your team, it is encouraged that you find new team members who will outperform the ones you have, even if they are doing just fine. As an employee, you are rewarded for “sustained A-level performance, despite minimal effort,” which I find a little infuriating. Imagine a scenario where a coworker rarely came into the office and rarely contributed in meetings, while you worked long hours and coordinated large meetings, but due to some arbitrary scale of success you were terminated and your colleague was not. Or, even worse, imagine watching that happen from afar. I would feel paralyzed, unclear how I should behave or react.
Netflix also promotes a process-free (or limited) environment where employees are authorized to spend within their budget, make decisions on assignments for which they are ultimately responsible, and cut much of the red tape that paralyzes other businesses. How does this continue to work for Netflix? Are there employees just that much better at communication, following the prescribed guidelines or role descriptions, or is it something else? I think empowering employees is huge and can have massive implications for eliminating much of the red tape we have all experienced.
The rest of the presentation, along with a Harvard Business article, can be found here. I could spend all day detailing the rest of the Netflix value system, but instead look to you for your thoughts on what Netflix is doing, how sustainable it is for the long-term, and if any of these policies or lack-of-policies are things you would adopt or wish your organization would adhere to?
I understand the concepts on paper, but it would be mind-boggling to consider promotion with minimal effort, firing with A+ effort, in practice. I’m of the belief that effort counts and that human capital isn’t quite as expendable.
Yes, I can see the purpose of weeding out triers and building a collection of doers, but that group isn’t necessarily going to work well together. The standards that make someone fail inspection with serious effort might be extremely costly in the long run if several people are on-boarded and fired over a period, meanwhile the position doesn’t have someone with a maturing understanding of the company and the challenges.
I’d love to have a chance in an office of only elite workers, but can’t imagine it in a company like mine, scaled down to 65 employees and always meeting tight deadlines.
Katie, thanks for this post. I wanted to wait until we had discussed the Netflix case in class to respond. You both have brought up some interesting points. As far as Netflix re-inventing HR, I think it is more of them introducing a new way to do HR. “Adequate Performance Gets a Generous Severance Package.” When I first read that, I thought, “That has got to be stressful working at Netflix.” But then I thought about it a little more and read more about its culture, and I think it is great. Netflix is all about attracting the best talent and keeping it while it is useful–and paying the talent extremely well. People cannot expect to be paid above industry average if they cannot contribute above average work. Yes, it would be frustrating to be putting in a lot of effort while other colleagues appear to do less and get promoted, but of course, that is the nature of the beast. Netflix is not a culture for everyone, but what it does seems to be working quite well for them. Also, I heard from my techy friends that Netflix actually helps you find a job if you get let go.
The company that I work for (ExxonMobil) has the opposite approach to hiring talent when it comes to experience. We RARELY hire experienced employees, as we go to universities and hire straight from college. In fact, we try to “hire-to-retire,” which has worked very well for the company. Being in the oil and gas industry, I think it is generally known that compensation, similar to Netflix, is above the energy industry average. Contrary to Netflix, we do not release adequate performers. Maybe that is a reflection of the different industries. Even during past recessions, my company did not let anyone go.
What’s the point? I guess it goes to show that there are many ways for companies to approach hiring (and lay-offs), and both extremes can produce successful results.