Powerful: Building a Culture of Freedom and Responsibility

by Patty McCord

He had been working on some incredibly valuable personalization technology, and very few people in the world had his expertise in that area. I realized that his work with us had given him a whole new market value.

We decided that we didn’t want to use a system where people had to leave to get paid what they were worth. We also encouraged our people to interview regularly. That was the most reliable and efficient way to find out how competitive our pay was.

that? Consider the well-known 80/20 rule regarding sales teams, that 20 percent of your company’s salespeople will generate 80 percent of your sales revenue. That rule might apply much more widely to other types of employees. I know I’ve seen a comparable effect in team after team.

Rather than paying at some percentile of top of market, consider paying top of market, if not for all roles, then for those that are most important to your growth. ▶ Signing bonuses can lead to the impression of a salary decrease in the year after the person joins; paying the salary you need in order to bring in a top performer is the better option.

One of the benefits of the leadership communicating clearly to everyone in the company about where you’re heading and the challenges and opportunities that future will bring is that it better equips people to evaluate how well their skills fit into that future. They can also consider whether or not that future is one they want to be a part of and, if it isn’t, can pro-actively seek out new opportunities.

“Well, we have an eighty-game season, and every ten games I would sit down with them individually. I’d bring all their stats and I would I ask other people—the other coaches, the other team members—for feedback also, and the player would bring a self-evaluation. Then we would have a conversation about what to do for the next ten games.”

I also believe that apprising people of how their performance is being perceived by their teammates and other colleagues is invaluable in allowing them to gain critical perspective. If negative feedback is coming from people besides the boss, it’s much harder for us to fall back on the all-too-easy rationalization that the boss is just biased or has a personal problem with us.

“You want to be a lifelong learner; you want to always be acquiring new skills and having new experiences, and that doesn’t have to be at the same company.

When someone is “fired,” no weapons are involved; they’re not being killed. And who first decided to say that people were being “terminated”? One company’s failure might be another company’s treasure. Many times I found that even people I thought were not very good went on to be really successful because they found the right fit.

The best way for both companies and individuals to contend with the fierce competitive dynamism of business today is to stay limber, to make sure they are developing the skills and gaining the experience required for future success. We should all be proactively preparing for the road ahead.

IN BRIEF ▶ Employees need to be able to see whether their talents and passions are a good match for the future you are heading to, in order to determine whether they may be a better fit at another firm. ▶ People should hear frequently about how well they’re performing. Even if doing away with the annual performance process is not feasible for you, institute much more frequent meetings to discuss performance. ▶ If doing away with the annual review process is an option for you, try it! The process is a big waste of time and can become a stand-in for real-time information about performance. ▶ Either make performance improvement plans genuine efforts to help people improve performance or get rid of them. ▶ The chances you’ll get sued by an employee who is let go are vanishingly slim, especially if you have been responsibly and regularly sharing with that person the problems you perceive with their performance. ▶ The focus on employee engagement is misplaced; there is not necessarily a correlation between high engagement and high performance. There is also not necessarily a correlation between high performance in a current job and high performance in the job of the future. ▶ Use my algorithm in making personnel decisions: Is what this person loves to do, that they’re extraordinarily good at doing, something we need someone to be great at? ▶ All managers can actively help their exiting team members find great new opportunities; goodbyes can be very good. ▶ Managers who adopt thi...

One thing I can promise you about the process of building your own culture of freedom and responsibility is that you will be heartened by how people step up. When people feel that they have more power, more control over their careers, they feel more confidence—confidence to speak up more, to take more risks, to pick themselves up again when they make mistakes, and to take on more and more responsibility. They will amaze you. Just imagine if you had an organization full of people who know they have power. Think of the better judgments they’ll make and how much faster they will make them. Think of how they’ll surprise you with ideas you could never have asked them for. Imagine what it will be like to be so much more honest and open—you with them and them with you.