How Netflix built a culture of agility
Whether you are a fan or a critic of Netflix’s unconventional culture, it’s hard to deny the agility of its high performing teams. Netflix’s former Chief Talent Officer Patty McCord explains how she and CEO Reed Hasting went about building a culture to unleash that agility.
Patty McCord was Netflix’s Chief Talent Officer from 1998 to 2012. Over that period, Netflix’s teams navigated rapid change and growth, going from a small DVD-by-mail service into a global media and video streaming giant and disrupting an entire industry. According to Patty, what enabled them to do so was their distinctive culture.
And she argues that the practices and behaviors underlying that culture can – and should – be replicated in other companies: “Every company and every manager is free to institute the practices we used to instill the core set of behaviors that made the Netflix culture so limber.”
Starting with why
How did Patty McCord realize that they needed to break away from traditional management practices at Netflix? “I just started examining the why of what we did,” says Patty. “Why do we do the annual performance review? What’s the purpose of it? Well it’s to give people feedback on their performance (…) It wouldn’t be very effective to (give negative or positive feedback) only once a year; it’s too infrequent.” Asking “why” led Patty and the rest of the senior management team not only to eliminate annual performance reviews but also many other sacrosanct traditional management procedures. Once you start asking why, Patty says, you realize that many of the procedures you take for no granted are not in sync with what’s needed in business today, like adaptability, innovation, and speed. “It’s about questioning what you do. And being able to have a good logical answer to why,” says Patty. “When I talk with big corporations I say I’m okay if you decide the way you’ve always done it is terrific and it works really great at your company. Just decide. Don’t just do it because you’ve always done it. Do it because you’ve decided that it works.”
Freeing teams from unnecessary rules
Patty says each time they would propose stripping away another stifling bureaucratic procedure or policy, it would seem frighteningly “crazy” to Patty at first. “But as we kept trying things, we kept getting good results,” she says, pointing to the success of their “no-vacation-policy policy” and lack of a travel and expenses policy (staff is simply asked just to use good judgment about how they spend the company’s money)
Excerpt from Business Digest N°285, April 2018
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Published by Caroline Schuurman