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01.17.18

8 Principles for Building a High-Performance Culture

Powerful

W
HEN IT COMES to recruiting, motivating, and creating great teams, Patty McCord says most companies have it all wrong. Powerful is a book of advice gained from her experience at Netflix.

When McCord began her career in Human Resources at Netflix, she began working with Reed Hastings to identify the behaviors that they wanted to see become consistent practices and worked to instill the discipline of actually doing them. When established they were communicated over and over again and eventually became known as the Netflix Culture Deck. They coached all of their people, at all levels and on all teams, to be disciplined about these fundamental set of behaviors.

“A company’s job isn’t to empower people,” she writes, “it’s to remind people that they walk in the door with power and to create the conditions for them to exercise it.” As a leader, you need to model that behavior. If you want people to act like adults, they have to see adult behavior.

There are a lot of great insights in Powerful but here are some takeaways for you to think about:

1. Treat People Like Adults

“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.

Saying to employees, “If you do X, you’ll be rewarded with Y,” assumes a static system. Yet no business is static.

Being given a great problem to tackle and the right colleagues to tackle it with is the best incentive of all.

2. Communicate Constantly About the Challenge

Coming up with simple yet robust ways to explain every aspect of the business isn’t easy, but it pays huge rewards.

Don’t hire people that are stupid. Better yet, don’t assume that people are stupid. Assume instead that if they are doing stupid things, they are either uninformed or misinformed.

If your people aren’t informed by you, there’s a good chance they’ll be misinformed by others.

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.

3. Practice Radical Honesty

People can handle being told the truth, about both business and their performance. The truth is not only what they need but also what they intensely want.

The most important thing about giving feedback is that it must be about behavior, rather than some essentializing characterization of a person, like “You’re unfocused.” It must also be actionable.

When leaders not only are open to being wrong but also readily admit it, and when they do so publically, they send a powerful message to their teams: Please speak up!

4. Cultivate strong Opinions and Debate Vigorously

Our Netflix executive team was fierce. We were combative in that beautiful, intellectual way where you argue to tease out someone’s viewpoint, because although you don’t agree, you think the other person is really smart so you want to understand why they think what they think.

“Can you help me understand what leads you to believe that’s true?”

We had cultivated the practice of asking people about the nature of problems they were tackling rather than assuming an understanding of them.

People become overly wedded to data and too often consider it much too narrowly, removed from the wider business context. They consider it the answer to rather than the basis of good questions.

Good judgment: the ability to make good decisions in ambiguous conditions, to dig deeply into the causes of problems, and to think strategically and articulate that thinking.

5. Relentlessly Focus on the Future

Leaders rarely look to the future in thinking about the team they’ll need. They tend to focus on what their current team is achieving and how much more that team can do.

Another mistake I’ve seen in building teams is assuming that current employees will be able to grow into the responsibilities of the future. This is an especially acute problem for start-ups, because founders often feel a strong sense of loyalty to their early team.

Are we limited by the team we have not being the team we should have?

We were going to make sure our teams were constantly evolving. 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.

I believe the best advice for all working people today is to stay limber, to keep learning new skills and considering new opportunities, regularly taking on new challenges so that work stays fresh and stretches them. [whether that means rising within the company or seizing a great opportunity elsewhere.]

6. Have the Right Person in Every Single Position

At Netflix we had three fundamental tenants to our talent-management philosophy. First, the responsibility for hiring great people, and for determining whether someone should move on, rested primarily with managers. Second, for every job, we tried to hire a person who would be a great fit, not just adequate. Finally, we would be willing to say goodbye to even very good people of their skills no longer matched the work we needed done.

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.

7. Pay People What They’re worth to You

Separate performance review and compensation systems. The tight bind between the performance review process and salary increase and bonus calculations is one of the main factors holding companies back from doing away with the review process.

I realized that his work with us had given him a whole new market value. We realized that for some jobs we were creating our own expertise and scarcity, and rigidly adhering to internal salary ranges could actually be harming our best contributors financially because they could make more elsewhere.

8. Proactively Say Goodbye

One of the benefits of the leadership communicating clearly to everyone in the company about where you’re heading and the challenges and opportunities that future will bring is that it better equips people to evaluate how well their skills fit into that future. They can also consider whether or not that future is one they want to be a part of and, if it isn’t, can proactively seek out new opportunities.

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Posted by Michael McKinney at 08:30 PM
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