Here are my notes from Powerful: Building a Culture of Freedom and Responsibility by Patty McCord
Patty was the Chief Human Resource Officer at Netflix and the co-creator of the famous Netflix Culture Deck that is still popular on the Internet. In the book, she talks about the talent acquisition, growth strategy, and high-performance culture at Netflix, particularly during their time of rapid growth.
“A business leader’s job is to create great teams that do amazing work on time. That’s it. That’s the job of management.
Here are notes, quotes, and thoughts from each chapter.
#1 – The greatest motivation is contributing to success. Treat people like adults.
“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.” Great teams are made when things are hard. You want people who say, “I want to come to work every day and solve these problems with these people.”
More people don’t make better stuff. There is power in small, unencumbered teams. The best thing you can do for your employees is to hire only high performers to work alongside them. Put confidence in people who you know can produce.
#2 – Every single employee should understand the business. Communicate constantly about the challenge.
Constant reminder: Here’s where we are…here’s what are trying to accomplish.
Make sure every employee actually knows how the business runs. If people on your teams don’t understand something, then you haven’t taught them. Don’t let investors or board members know more about the inner workings of the business than the people who actually work in it.
Millennials are not some sort of alien being. “Teach them how to read a P&L instead of how to tap a beer keg, or give them an honest-to-God project they have to collaborate on rather than doing an online training about collaboration.”
#3 – Humans hate being lied to and being spun. Practice radical honesty.
Part of being an adult is being able to hear the truth. You owe the adults you hire the truth.
Great hiring question: “What will you do to make my company grow?”
Covering for people puts undue pressure on the boss to provide cover and cheats an employee of the chance to improve.
Build honest communication by having everyone provide this feedback to everyone: What should you stop doing? What should you start doing? What should you continue doing?
Never have the attitude: “I know this is a problem but I’m not saying until someone asks.”
If you want to know what someone is thinking, there is no good replacement for simply asking them, preferably face to face.
#4 – Debate vigorously. Cultivate strong opinions and argue about them only on the facts.
Great questions: How do you know that’s true? Can you help me understand what leads you to believe that’s true?”
Have an opinion and be right most of the time. Don’t trust people who are great at winning an argument due to their powers of persuasion rather than the merits of their case.
Data certainly informed Netflix content, but it couldn’t answer the question of what people would watch if they could.
A spirited debate, even heated, can be healthy if they are about serving the business and the customers. Be willing to fight for the good of the company, not just fight to defent your opinion.
Orchestrate the debates you want.
Sometimes experts are too aware of the current constraints. People with fresh eyes can sometimes find ways around those constraints, almost out of ignorance.
#5 – Build the company now that you want to be then. Relentlessly focus on the future.
Don’t automatically expect your current team to be the team you need tomorrow. If you start with the team you have, you may be able to do more tomorrow but it won’t necessarily be amazing.
Build an ideal team by starting with the vision down the road.
Managers are not personal career planners.
Too many times, companies give people half of a job they need done, because the person can’t do the whole job.
If your people won’t take charge of their own growth and development, that’s a warning sign.
#6 – Someone really smart in every job. Have the right person in every single position.
Get a great fit, not an adequate one. Be willing to say goodbye to even very good people if their skills no longer matched the work you need done.
“Knowing when it’s time for people to move on goes hand in hand with bringing in top performers with the skills you need.” – John Ciancutti, Hiring Manager at Netflix
Retention is not a good metric to evaluate your team-building success or your team culture. It’s not about how many people you are keeping but how many great people you have with the skills and experience you need.
Companies don’t exist to make happy employees…they exist to serve customers. Employee happiness should be a byproduct. Happiness in work comes from solving a tough problem with talented people you know and knowing the customer loves the solution you both made.
A bonus program will not incentivize people to do anything they are not going to do anyway.
You need the right people with the right skills to do one specific thing. Just because they are great in one environment doesn’t mean they will excel in yours.
“Many of the people we let go from Netflix because they were not excelling at what we were doing at the time when on to excel at other jobs.”
Many big businesses spend a lot of time and money on extensive employee reviews and personal improvement plans without having one guess how that work affects any important business metric.
#7 – Pay people what they are worth to YOU. Compensation is a judgment call.
A salary survey cannot tell you what someone is worth to you.
Pay at the top of the market and insist on high performance. “If you focus intently on hiring the best people you can find and pay top dollar, you will almost always find that they make up much more in business growth than the difference in compensation.”
#8 – The art of good good-byes. Make needed changes fast and be a great place to be from.
Tell people if they are not performing well enough so they can make speedy corrections or move to a new firm.
Sometimes, it’s in everyone’s best interest to move people on to a new job quickly rather than keep trying to improve their performance.
High performers are often somewhat frustrated by how their teams are performing rather than satisfied that everything is going swimmingly and life is all good. Sometimes, people are hired by a company to do something that gets done. It’s okay to move on.
You are a team not a family.