If you want to understand how to build a culture and organization for truly “high performance teams”, then take a close look at “Netflix Culture: Freedom & Responsibility” developed at Netflix by Patty McCord and posted by CEO Reed Hastings on SlideShare. Facebook’s Sheryl Sandberg has called it “the most important document ever to come out of the Valley.”
You pretty much need to go through the slide set to absorb it. However, a key idea is that this type of organizational culture is not like a family. Instead, its much more like a professional sports team. Professionals are paid at top rates. The goal is to hire stars for every position. The rationale is that each high performer can deliver 10X in performance. And unlike a family, they don’t mind when its time for a player to leave. The culture also does not provide career planning. The best long-term security is to have a have a great reputation of having accomplished great things and the skills to match.
Of course high performance teams are flat (non-hierarchical) and they typically value innovators, conflict (required to seek out the best of ideas), and clear, direct communication. Other concepts for high performance teams are:
- Results-oriented. Hard work is actually irrelevant, only the results matter. The firm won’t measure anyone’s time in the office or even vacation days. In fact, there is not even an expense policy. The guidance is to simply use common sense to do what is right for the organization.
- Low Process/High Flexibility. High performers thrive on freedom. However, as firms grow, they use processes to combat the complexity from scaling. This has a tendency to cripple innovation and drive out high performers. The proposal made in this slide set is to grow by hiring only truly high performing people and to avoid adding process and new rules. This leaves the organization flexible so that it can adapt to the inevitable changes yet to come.
- Context-focused not delegation-focused. There is some highly relevant advice for managers as well. As we know, high performers thrive on freedom, so consider this concept from Antoine De Saint-Exupery, “If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead teach them to yearn for the vast and endless sea.” According to McCord, “The best managers figure out great outcomes by setting the appropriate context, rather than trying to control people.” Don’t set top-down decisions, don’t use management approvals, and don’t defer to committees. And planning and process should never be valued over result. “When one of your people does something dumb, don’t blame them. Instead: Ask yourself what context you failed to set.” And, “when you are tempted to control, ask yourself what context you could set instead.”
The document explains the behaviors that a high performance culture expects. According to its author, high performance culture is not for everyone. And for that matter, it’s not for every organization.
Questions to consider:
- How would you know whether a “high performance culture” is right for your organization’s mission?
- Could this be established in pockets of the organization or does it need to be driven top-down and implemented everywhere?
- What are the drawbacks or downsides to high performance team culture?
You can find additional information in article posted by First Round Ventures highlighting Patty McCord’s role in defining the Netflix Culture.