Powerful: Building a Culture of Freedom and Responsibility

by Patty McCord

the elaborate, cumbersome system for managing people that was developed over the course of the twentieth century is just not up to the challenges companies face in the twenty-first.

The Netflix culture wasn’t built by developing an elaborate new system for managing people; we did the opposite. We kept stripping away policies and procedures.

A company’s job isn’t to empower people; it’s to remind people that they walk in the door with power and to create the conditions for them to exercise it. Do that, and you will be astonished by the great work they will do for you.

Here is my radical proposition: 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.

It’s a matter of identifying the behaviors that you would like to see become consistent practices and then instilling the discipline of actually doing them.

Great teams are made when every single member knows where they’re going and will do anything to get there. 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, and then communicating to them, clearly and continuously, about what the challenge is.

“If we did that,” I asked him, “how would you know it was great?” He said, “Oh, I’d want to come to work every day and solve these problems with these people.”

Excellent colleagues, a clear purpose, and well-understood deliverables: that’s the powerful combination.

They were all built upon the realization that the most important job of management is to focus really intently on the building of great teams. If you hire the talented people you need, and you provide them with the tools and information they need to get you where you need to go, they will want nothing more than to do stellar work for you and keep you limber.

I came to understand the enormous value of every single employee at the company gaining the same understanding.

People need to see the view from the C suite in order to feel truly connected to the problem solving that must be done at all levels and on all teams, so that the company is spotting issues and opportunities in every corner of the business and effectively acting on them. The irony is that companies have invested so much in training programs of all sorts and spent so much time and effort to incentivize and measure performance, but they’ve failed to actually explain to all of their employees how their business runs.

Over time, we developed “new employee college.” For one whole day each quarter, every head of every department would make an hourlong presentation on the important issues and developments in their part of the business.

How do you know when people are well enough informed? Here’s my measure. If you stop any employee, at any level of the company, in the break room or the elevator and ask what are the five most important things the company is working on for the next six months, that person should be able to tell you, rapid fire, one, two, three, four, five, ideally using the same words you’ve used in your communications to the staff and, if they’re really good, in the same order. If not, the heartbeat isn’t strong enough yet.

Note that I say “fact driven,” not “data driven.” There’s been something of a deification of data in recent years, as though data itself is the answer, the ultimate truth. There’s a dangerous fallacy that data constitutes the facts you need to know to run your business. Hard data is absolutely vital, of course, but you also need qualitative insight and well-formulated opinions, and you need your team to debate those insights and opinions openly and with gusto.

Data is great; data is powerful. I love data. But the problem is that people become overly wedded to data and too often consider it much too narrowly, removed from the wider business context. They consider it the answer to rather than the basis of good questions.

data informed rather than data driven.

Just as great sports teams are constantly scouting for new players and culling others from their lineups, our team leaders would need to continually look for talent and reconfigure team makeup.

Training well and spotting growth potential are vital skills for team leaders.

I know this may sound harsh, because the notion that companies should make special investments in developing people, provide paths for promotion, and strive for high employee retention rates are deeply ingrained. But I’ve come to believe such thinking is outmoded and isn’t even the best approach for employees.

We also suggested that our employees interview elsewhere regularly, so that they could gauge the market of opportunities. This also allowed us to get a better understanding of how sought after they were and what we should be paying them. The advantages of more fluid team building flow both ways.

I believe the best advice for all working people today is to stay limber, to keep learning new skills and considering new opportunities, regularly taking on new challenges so that work stays fresh and stretches them.

He wrote a great piece for First Round Review about his specific tactics for hiring great people, “This Is How Coursera Competes Against Google and Facebook for the Best Talent,” which I highly recommend.

I told him that my ideal company would be one that was a great place to be from, like having been at Apple or Microsoft in the early days.