Kill the corporate red tape.
If your employees must constantly seek for your approval whenever a decision needs to be made, your business will become stiff and sluggish – the opposite of what it should be.
Netflix is an epitome of corporate nimbleness. With grace and agility, they adapted to the changing needs of viewers, industry landscape, and successfully embraced the transition from DVD rental to online streaming service. This nimble adaptation wouldn’t have been possible had Netflix followed the old-fashioned processes and hierarchies.
Give freedom and responsibility. Netflix has far fewer rules than other companies because they believe in giving their employees freedom. But freedom only works when it’s accompanied by the responsibility of acting like accountable adults.
Hold people to the highest level of transparency.
Transparency puts the clamp on politicking and backstabbing. Politics are not just nasty, it’s so inefficient. Think about it. If I’m going to stab someone in the back, I have to go get a knife, hide it, wait until I’m alone with that person, and catch them off guard. And I’d better be sure to kill them or they’ll come back after me. It takes planning and it’s high risk.
Anonymous surveys can backfire.
The conventional wisdom is anonymity leads to truth. In Patty’s experience however, that’s not the case. Truthful people are truthful in everything they do. And if you don’t know who gave you that feedback, how can you put their comments into the context of the work they’re doing? Perhaps the worst problem is anonymous surveys can send the signal that it’s best to be most honest when people don’t know who you are.
Divide big groups into smaller groups of three or four.
Small groups carry multiple benefits. It cut down the group-think that tends to prevail in larger groups, forcing everyone to speak up. Hanging back and staying silent is glaringly conspicuous in smaller groups. Working in smaller groups also allows team members to get to know one another’s personalities and ways of thinking. Moreover, it helps counteract the danger of expertise. The problem with experts is that they’re too aware of the current constraints. Someone with fresh eyes can sometimes find their way around constraints, almost out of ignorance.
Ignite public debates.
Keep the debates civil and strage them in front of a group. So often employees, including senior executives, keep their disagreements to themselves. However those differences of opinion might be the most important information to the company. Staging formal debates also models how good debating is done.
The way to do that is to set the context – be extremely clear about what the group is going to decide and the reason for conversation. If the discussion digresses, or if someone keeps stubbornly digging in, you can always stop and say ‘What problem are we trying to solve here?’ or Patty’s favorite ‘What leads you to believe that’s true?’
Although debates can be hard for people and someone is going to lose the day, everyone will eventually come to appreciate that they always come out alive and usually the best decision gets made after the debates.
Don’t go to the perks war.
Perks rarely work. Perks are like candy: short-live and great for a sugar rash. But then you will see a crash, usually self-entitlement and greed. As Patty puts it “If someone wants to walk out your door and go to another company because it serves better craft beer, you should just say to that person ‘Have fun! Oh, and let’s do happy hour at your place soon.’”
Instead of pouring all that effort and money into crazy perks, invest in things that really make a difference:
- Having great managers people enjoy working with
- Providing training that help your employees grow
- Increasing compensations to help you attract and retain the best possible talents
This is not to say perks don’t have a place at all. A nice office with some snacks so that people aren’t hungry and wandering around the streets mid-afternoon makes business sense.
Build a team-spirit, not a family.
There’s a big difference between a team and a family. Teams change regularly and are built to win at all costs, while families stick together no matter what. Having a team attitude can lead to tough decisions.
The successful evolution of Netflix is largely due to their willingness to aggressively develop talents and encourage their departure when the time comes. And they do so with tact and empathy. To soften the blow, Netflix often gives generous severance packages.They also encourage their people to interview for jobs at other companies so they know their market value and make sure they’re happy with the job they have.
Treating employees like teammates instead of family members can be harsh. Loyalty is great but not if it’s at the cost of your team member’s happiness and the needs of your business.
As Patty puts it, “Just as great sports teams are constantly scouting for new players and culling others from their line ups, our team leaders would need to continually look for talent and reconfigure team makeup. We set the mandate that their decisions about whom to bring in and who might have to go must be made purely on the basis of the performance their teams needed to produce in order for the company to succeed.”