https://www.goodreads.com/book/show/36417234-powerful

I recently completed “Powerful: Building a Culture of Freedom and Responsibility” by Patty McCord. In her book, she shares what she learned working as a Chief Talent Officer at Netflix and elsewhere in Silicon Valley.

Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Lets start!

People don’t care about free sushi

“Our first big realisation was that the remaining people were the highest performers, and it taught us that the best thing you can do for employees is hire only high performers to work alongside them. It’s a perk far better than foosball or free sushi or even a big signing bonus or the holy grail of stock options. Excellent colleagues, a clear purpose, and well-understood deliverables: that’s the powerful combination.”

“We analysed every single truism and best practice, just as we analysed the product. Often when Reed would propose a cut, it sounded so crazy I needed to sleep on it. But as we kept trying things, we kept getting good results. Take our no-vacation-policy policy, which has received a great deal of press. We told people to take the time they thought was appropriate, just discussing what they needed with their managers. And do you know what happened? People took a week or two in the summer and time for the holidays and some days here and there to watch their kids’ ball games, just as before. Trusting people to be responsible with their time was one of the early steps in giving them back their power.”

Everyone should understand the business

“My aha moment reminded me of when my son was six and playing soccer. My husband was the coach, and I’d go to lots of the practices. Watching the kids was hysterical. They’d just clump around the ball. I asked my husband in the car on the way to the team’s first game, “So what’s your strategy for the game?” He said, “Well, I was going to really attempt to have everybody moving down the field in the same direction at the same time.” I responded, “You know, I think that’s achievable,” and he said, “Well, but in the second half, they’ve got to go the other way.”

The World Cup fell later in the season, and I had the kids over to watch. When they saw the view of the game from the blimp, they realized, Oh! That’s what a pass looks like! Business is no different.

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.”

Key points

Questions you need to ask

People must be able to ask questions and offer critiques and ideas. Ideally, they should be able to do so with all managers, up to the CEO.

“Here’s a great example. During new employee college, Ted Sarandos explained what’s called windowing of content. The term refers to the traditional system that developed for feature film distribution: a movie would first come out in theaters, then go to hotels, then to DVD, and at that point Netflix could bid to pick it up. During the Q&A, an engineer asked Ted, “Why does the windowing of content happen like that? It seems stupid.” Ted recalls that the question stopped him cold. He realized that although it was the convention, he really didn’t know why, and he answered frankly, “I don’t know.” He told me that the question stuck with him and that it “made me challenge everything about the windowing of content, and years later, it contributed to my complete comfort with releasing all episodes of a series at once, even though no one had ever done that in television.”

Communication flow in organisations

Key points

Questions you need to ask

The case for radical honesty & a culture of debate

“One of the pillars of the Netflix culture was that if people had a problem with an employee or with how a colleague in their own department or somewhere else in the company was doing something, they were expected to talk about it openly with that person, ideally face to face. We didn’t want any criticising behind people’s backs. Because I was the head of HR, managers would often complain to me about an employee or someone in another department. I’d always say, “Have you told her yet?”

The Netflix executive team modeled honesty in a number of ways. One was to conduct an exercise we called “Start, Stop, Continue” in our team meetings. In this drill, each person tells a colleague one thing they should start doing, one thing they should stop doing, and one thing they’re doing really well and should keep doing.

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.”

Key points

Questions you need to ask

Have a fact based opinion. Be right most of the times

“We set a standard at Netflix that people should develop their opinions by probing into facts and by listening with an open mind to fact-based arguments they didn’t agree with.

I love a distinction Ted Sarandos made to me about how data is best used. He said the decision making of his content team was data informed rather than data driven.

At one point a big disagreement arose between Netflix’s head of marketing and head of content concerning how we thought about our customers. It was developing into a real tussle, because both executives were very strong-minded, and both had good reasons for their views. Reed did a beautiful thing. He arranged a debate between the two, onstage, in chairs facing each other, in front of the rest of the executive team. And the really brilliant twist was that each one argued the other’s side. To prep for that, they really had to get into the other person’s skin.”

Key points

Questions you need to ask

A company is like a sports team, not a family

Just as great sports teams are constantly scouting for new players and culling others from their lineups, our team leaders would need to continually look for talent and reconfigure team makeup.

An appreciation of the core elements of a company’s early success is so important, and it can be retained as companies adapt and grow. But nostalgia that inspires resistance to change will fuel discontent and often undermine growth.

Key points

Questions you need to ask

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. One of our great hires was Anthony Park, who was working as a programmer for a bank in Arizona when we reached out to him. On paper he certainly didn’t look like a slam-dunk fit. He was a “programmer,” not a “software developer.” He was also a pretty buttoned-up, quiet guy, so I worried a little about how he’d cope with our debate-like-crazy culture. We called him because someone told me he had created a Netflix-enhancing app, which he had posted on his website. We brought him in for a day of interviews, and everyone loved him as well as the app he’d created. When he got to me, shortly after we started talking he turned bright red. I asked him if he was okay, and he said, “You’re going to make me an offer, aren’t you?” And I said, “Yes, we are.” He said, “And you’re going to pay me a lot of money, right?” And I said, “Well, you’re not programming for a bank anymore. You know, you’d be here in Silicon Valley and it’s expensive to live out here. We’re going to pay you commensurate with what it will take for you to have a great life with your family here.” He seemed overwhelmed, and I asked again if he was all right. He said with amazement, “You’re going to pay me a lot of money to do what I love to do!” I did wonder how he’d fit in with the high-powered team he was joining, and I hoped they wouldn’t burn him out in a few weeks.A few months later, I sat in on a meeting his team was having, and it was really intense. Everyone was arguing. He suddenly said, “Can I speak now?” The room went silent, because Anthony didn’t talk much, but when he did, it was to say something really smart. Over time, everybody learned to pause and wait for him, and he would always say something that would make us all think, Dammit, why didn’t I think of that? Now he’s a vice president. Organizations can adapt to many people’s styles; culture fit can work both ways.”

Annual performance review is a waste of time

“I asked one very senior HR executive from a Fortune 100 company that I consulted to, “Can you tell me what business metric is affected by the completion of your annual performance review?” He said, “I don’t understand the question, Patty.” I repeated, “What business metric is directly affected by the completion of the annual performance review?” He said, “Again, I’m not sure what you’re asking.” So I said, “Might it be revenue, growth, profit? You know, the metrics that we measure our businesses with.” Then I asked him how much of his staff’s time was consumed by the process, and he said, “I really have no idea! But it’s worth it.” Nowhere else in our companies are we allowed to justify something that takes such incredible effort with merely a feeling that it’s worth it.”

Hiring great performers is a hiring manager’s most important job

Key points

Questions you need to ask

Pay people what they are worth to you

Key points

Questions you need to ask

Letting go of people is hard. But it is something you have to do

Key points

Questions you need to ask

**“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.”**- Former VP of HR at Netflix Jessica Neal

Liked this summary? Read: Notes from Radical Candor — Kim Scott, Lessons from Michael J. Mauboussin, Highlights from The Essays of Warren Buffett, Read Lessons from Managing Oneself, On Writing Well, Deepwork and So good they can’t ignore you

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