Powerful: Building a Culture of Freedom and Responsibility

by Patty McCord

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. His passion for the subject and his development of such detailed methods speaks to how seriously so many of our hiring managers took their team-building responsibility.

People’s happiness in their work is not about gourmet salads or sleeping pods or foosball tables. True and abiding happiness in work comes from being deeply engaged in solving a problem with talented people you know are also deeply engaged in solving it, and from knowing that the customer loves the product or service you all have worked so

In addition, rather than using stock options as “golden handcuffs,” we imposed no vesting period. Options would vest on a monthly basis. Those options were available to exercise for ten years, allowing for long-term increase in the stock price.

IN BRIEF ▶ Hiring great performers is a hiring manager’s most important job. Hiring managers should actively develop their own pipelines of talent and take the lead in all aspects of the hiring process. They are the lead recruiters. ▶ The teams and companies most successful in staying ahead of the curve manage to do so because they proactively replenish their talent pool. ▶ Retention is not a good measure of team-building success; having a great person in every single position on the team is the best measure. ▶ Sometimes it’s important to let even people who have done a great job go in order to make space for high performers in new functions or with different skills. ▶ Bonuses, stock options, high salaries, and even a clear path to promotion are not the strongest draw for high performers. The opportunity to work with teams of other high performers whom they’ll learn from and find it exhilarating to work with is by far the most powerful lure. ▶ Making a great hire is not about bringing in an “A player”; it’s about finding a great match for your needs. Someone who is a high performer for one team may not be for another team. ▶ Get beyond the résumé. Be really creative about where you look for talent. Dig further than a list of experiences. Consider wide-ranging experiences and focus on people’s fundamental problem-solving abilities. ▶ Make the interviewing experience extremely impressive all the way through. You want every single person you interview to want to join the comp...

This experience changed our thinking about compensation. We realized that for some jobs we were creating our own expertise and scarcity, and rigidly adhering to internal salary ranges could actually be harming our best contributors financially because they could make more elsewhere. 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.

But that’s if you’re thinking only about keeping to a budget, rather than about the value the person will generate for you, hopefully for quite a few years beyond your current budget year.

In my experience, 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.

“Hey, what do you think of the performance review process over there?” She said, “I hate it! I have a huge team and we’re in the middle of it right now. Why do you think it took three weeks to set up this call? Nobody has time to do anything else. We’ve all just about stopped working on anything else but reviews. It’s an insane amount of time.”

“Engagement” is a term that, when used in business, I dislike about as just about as much as “empowerment.

In my experience, high performers are, in fact, often somewhat frustrated with how their teams are performing rather than satisfied that everything is going swimmingly and life is all good. They are pushing for great results, and achieving those often requires some pain and a degree of discontent. That commitment to achievement is what we want to foster, not the expectation that as long as you’re working hard, the company will have your back.

tell them, “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. The fact is that sometimes you’re hired by a company to do something, and then you do it and it’s done. If I hire people to rebuild my garage, when they’re done I don’t need them to rebuild the back of my house.”

Much media coverage of the labor market in recent years has mourned the passing of lifetime employment. There is no question that the dislocations of the contemporary work world can be horribly stressful and inflict terrible costs on employees and their families, or that they have left far too many people behind. The loss of purposeful and rewarding employment by so many skilled and hardworking individuals is a tragedy that the business community and our politicians must find much more effective ways of redressing. 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.

to my hopes for sharing my experiences in culture building: “The

culture change is honesty about the challenges and the nature of progress along the way. In one of our company meetings, when Reed was taking questions, someone stood up and said, “I think

Keep reminding yourself that people have power. It’s not your job to give it to them. Appreciate their power, unleash it from hidebound policies, approvals, and procedures, and trust me, they will be powerful.