Creating a Culture of freedom & accountability
The Rockstar Principle – Hire the best and pay top of Personal market: Research has it that the best performers outperforms the average counterparts by a factor of two or three. An excellent software developer outperforms an average one by 10 times, sometimes expressed as 10xer. These Rockstars are known to work faster, harder, solve more problems and get more done than any average employee. The choice is to have 5-10 average performers or 1 Rockstar. Retaining these Rockstars needs a constant watch on the market and keep paying at the very top. Implement the “Keeper Test”- Always ask yourself “If a person on your team were to quit tomorrow, would you try to change your mind? Or would you accept their resignation, perhaps with a little relief?”. If the answer is latter, you should give them a severance package now, and look for a star, someone who you would fight to keep”.
Open the Books: Foster complete transparency. There is no better way to build trust quickly than to shine a light directly on a would be secret – “sunshining” the secret. Increase transparency by sharing quarterly financial data, org restructuring, glaring mistakes etc with employees to increase the amount of responsibility people take for the company’s success. “whisper wins and shout mistakes”. Sunshining on mistakes, be it even a leader, encourages everyone to think that making mistakes is normal. Self-disclosure builds trust, seeking help boosts learning, admitting mistakes fosters forgiveness and broadcasting failures encourages people to act courageously.
No decision-making approvals needed: Don’t seek to please the boss, seek to do what is best for the company. Give freedom to exceptional people to implement bright ideas that they believe in, innovation will happen. Socialize big ideas and “farm for dissent” , actively seeking out different perspectives before making any major decision. Getting it perfect does not matter, what matters is moving quickly and learning from what you are doing.
Learn from failures: For projects/ ideas that don’t succeed, be candid about your failed bets and talk about the learning, Don’t make a big deal about it – When a bet fails, the manager must be careful to express interest in the takeaways, but no condemnation – nobody will scream, and nobody will lose the job. Sunshine the failure – it is about learning, and taking responsibility for your actions. To survive a big mistake, you must lean all the more into the sunshine. Talk openly about it – you will be forgiven.
For more information refer to the Netflix Culture deck which has a set of 127 slides – though initially used internally it was shared on the internet in 2009 and became a major sensation –https://www.slideshare.net/reed2001/culture-1798664. Their culture and values are transparently detailed for everyone who wants to apply in Netflix: http://jobs.netflix.com/culture
Why you should read this book: While there are many learnings that we can take from what Netflix did to reinvent their culture, it is not for everyone. In Netflix’s creative context, the difference between top performer and average performer was significant and hence they chose to consistently pay in the top 1% to these top performers. Deeper, older, more regulated organizations may find this difficult to implement. [There have also been naysayer articles (Wall Street Journal) saying how this same famed Netflix culture is also “ruthless, demoralizing and transparent to the point of dysfunctional.” Hastings has said no to employee job security saying “You gotta earn your job every year at Netflix,”]
Goodreads Links: No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings | Goodreads
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