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May 21 - June 25, 2023
It was not obvious at the time, even to me, but we had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls. Our culture, which focused on achieving top performance with talent density and leading employees with context not control, has allowed us to continually grow and change as the world, and our members’ needs, have likewise morphed around us.
which psychologists refer to as “loss aversion.” We humans hate to lose what we already have, even more than we like getting something new.
Faced with losing something, we will do everything we can to avoid losing it.
If you build an organization made up of high performers, you can eliminate most controls. The denser the talent, the greater the freedom you can offer.
When talented staff members get into the feedback habit, they all get better at what they do while becoming implicitly accountable to one another, further reducing the need for traditional controls.
Later, as talent becomes increasingly denser and feedback more frequent and candid, you can remove approval processes throughout the organization, teaching your managers principles like, “Lead with context, not control,” and coaching your employees using such guidelines as, “Don’t seek to please your boss.”
Those who were exceptionally creative, did great work, and collaborated well with others went immediately into the “keepers” pile.
TALENT DENSITY: TALENTED PEOPLE MAKE ONE ANOTHER MORE EFFECTIVE
but the amount of talent per employee was greater. Our talent “density” had increased.
High performers especially thrive in environments where the overall talent density is high.
HIGH PERFORMANCE + SELFLESS CANDOR = EXTREMELY HIGH PERFORMANCE
Feedback helps us to avoid misunderstandings, creates a climate of co-accountability, and reduces the need for hierarchy and rules.
I recommend instead focusing first on something much more difficult: getting employees to give candid feedback to the boss.
But it’s when employees begin providing truthful feedback to their leaders that the big benefits of candor really take off.
The higher you get in an organization, the less feedback you receive, and the more likely you are to “come to work naked” or make another error that’s obvious to everyone but you.
The first technique our managers use to get their employees to give them honest feedback is regularly putting feedback on the agenda of their one-on-one meetings with their staff. Don’t just ask for feedback but tell and show your employees it is expected. Put feedback as the first or last item on the agenda so that it’s set apart from your operational discussions.
You must show the employee that it’s safe to give feedback by responding to all criticism with gratitude and, above all, by providing “belonging cues.”
such cues are gestures that indicate “your feedback makes you a more important member of this tribe” or “you were candid with me and that in no way puts your job or our relationship in danger; you belong here.”
AIM TO ASSIST: Feedback must be given with positive intent.
Clearly explain how a specific behavior change will help the individual or the company, not how it will help you.
ACTIONABLE: Your feedback must focus on what the recipient can do differently.
“How can I show appreciation for this feedback by listening carefully, considering the message with an open mind, and becoming neither defensive nor angry?”
But both you and the provider must understand that the decision to react to the feedback is entirely up to the recipient.
With candor, high performers become outstanding performers.
Set the stage for candor by building feedback moments into your regular meetings.
Today, in the information age, what matters is what you achieve, not how many hours you clock,
LEADERS MUST MODEL BIG VACATION-TAKING
if you want to remove your vacation policy, start by getting all leaders to take significant amounts of vacation and talk a lot about it.
Leadership modeling is the first part of getting the unlimited vacation to work properly.
The clearer the manager is when setting context, the better.
We had proved that with the right employees, clear modeling from management, and enough context setting, we could get along perfectly fine without a bunch of rules.
If you limit their choices by making them check boxes and ask for permission, you won’t just frustrate your people, you’ll lose out on the speed and flexibility that comes from a low-rule environment.
When removing travel and expense policies, encourage managers to set context about how to spend money up front and to check employee receipts at the back end.
The great software engineer is incredibly creative and can see conceptual patterns that others can’t.
She has an adjustable perspective, so when she gets stuck in a specific way of thinking, she has ways to push, pull, or prod herself to look beyond.
We’d be relying on one tremendous person to do the work of many. But we’d pay tremendously.
By keeping our organization small and our teams lean, each manager has fewer people to manage and can therefore do a better job at it. When those lean teams are exclusively made up of exceptional-performing employees, the managers do better, the employees do better, and the entire team works better—and faster.
The risk is that employees will focus on a target instead of spot what’s best for the company in the present moment.
Contingent pay works for routine tasks but actually decreases performance for creative work.
In a high-performance environment, paying top of market is most cost-effective in the long run. It is best to have salaries a little higher than necessary, to give a raise before an employee asks for it, to bump up a salary before that employee starts looking for another job, in order to attract and retain the best talent on the market year after year. It costs a lot more to lose people and to recruit replacements than to overpay a little in the first place.
If the market value for an employee shifts up because her skill set increases or there’s a shortage of talent in her field, we shift her salary up with it.
No one should know your market range better than (first) you and (second) your boss.
It’s my own responsibility to know what I’m worth and ask for it!
Then we told all our employees they should start taking those calls from recruiters and tell us what they learned.
To retain your top employees, it’s always better to give them the raise before they get the offers.
The rule at Netflix when recruiters call is: “Before you say, ‘No thanks!’ ask, ‘How much?’”
If you can’t afford to pay your best employees top of market, then let go of some of the less fabulous people in order to do so. That way, the talent will become even denser.
Divide your workforce into creative and operational employees. Pay the creative workers top of market. This may mean hiring one exceptional individual instead of ten or more adequate people.
Teach employees to develop their networks and to invest time in getting to know their own—and their teams’—market value on an ongoing basis. This might mean taking calls from recruiters or even going to interviews at other companies. Adjust salaries accordingly.
instigate feelings of ownership by guiding people to understand the reasons behind the work they are doing.
