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“Only say about someone what you will say to their face.”
At Netflix, it is tantamount to being disloyal to the company if you fail to speak up when you disagree with a colleague or have feedback that could be helpful. After all, you could help the business—but you are choosing not to.
Our brain is constantly on the watch for signals of group rejection, which back in more primitive times would have led to isolation and potentially death.
A feedback loop is one of the most effective tools for improving performance. We learn faster and accomplish more when we make giving and receiving feedback a continuous part of how we collaborate. Feedback helps us to avoid misunderstandings, creates a climate of co-accountability, and reduces the need for hierarchy and rules.
they don’t want to hurt the recipient’s feelings, yet they want to help that person succeed. The goal at Netflix is to help each other succeed, even if that means feelings occasionally get hurt.
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.
Your behavior while you’re getting the feedback is a critical factor. 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.”
“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;
“Brian, the day you find yourself sitting on your feedback because you’re worried you’ll be unpopular is the day you’ll need
to leave Netflix.
Clearly explain how a specific behavior change will help the individual or the company, not how it will help you.
A culture of candor does not mean that you can speak your mind without concern for how it will impact others.
First focus on developing a high-talent-density workplace. Second develop a culture of candor, assuring that everyone gives and receives a lot of feedback. With a climate of candor, the boss is no longer the primary individual to correct an employee’s undesirable behavior.
Because of our high-talent density, our employees were already conscientious and responsible. Because of our culture of candor, if anyone abused the system or took advantage of the freedom allotted, others would call them out directly and explain the undesirable impact of their actions.
When you offer freedom, even if you set context and clarify the ramifications of abuse, a small percentage of people will cheat the system. When this happens, don’t overreact and create more rules. Just deal with the individual situation and move forward.
“A great lathe operator commands several times the wages of an average lathe operator, but a great writer of software code is worth ten thousand times the price of an average software writer.”
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.
Managing people well is hard and takes a lot of effort. Managing mediocre-performing employees is harder and more time consuming. 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.
The risk is that employees will focus on a target instead of spot what’s best for the company in the present moment.
I love this quote from former chief executive of Deutsche Bank John Cryan: “I have no idea why I was offered a contract with a bonus in it because I promise you I will not work any harder or any less hard in any year, in any day because someone is going to pay me more or less.” Any executive worth her paycheck would say the same.
Many imagine you lose your competitive edge if you don’t offer a bonus. We have found the contrary: we gain a competitive edge in attracting the best because we just put all that money into salary.
offers. One place offered you $200,000 plus a 15 percent bonus and another offered you $230,000. Which would you choose? Of course, you’ll choose the bird in the hand over the bird in the bush: $230,000.
If he is worth his salt, his market value is going to rise, and the risk that he’ll move will grow. So it’s paradoxical that when it comes to adjusting salaries, just about every company on earth follows a system that’s likely to decrease talent density by encouraging people to find a job elsewhere.
“It’s disloyal to sneak around and hide who you are speaking to, but openly interviewing and giving Netflix the salary data benefits all of us.”
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.
no better way to build trust quickly than to shine a light directly on a would-be secret.
“This guy Jack managed to instigate feelings of ownership by guiding people to understand the reasons behind the work they are doing. I don’t want my employees to feel like they’re working for Netflix; I want them to feel like they are part
Although just about all companies talk about empowering staff, in the vast majority of organizations, real empowerment is a pipe dream because employees aren’t given enough information to take ownership of anything.
This in turn encourages employees to take risks when success is uncertain … which leads to greater innovation across the company. Self-disclosure builds trust, seeking help boosts learning, admitting mistakes fosters forgiveness, and broadcasting failures encourages your people to act courageously.
The one exception is for a leader considered unproven or untrusted. In these cases you’ll want to build trust in your competency before shouting your mistakes.
Netflix does not operate in a safety-critical market, like medicine or nuclear power. In some industries, preventing error is essential. We are in a creative market. Our big threat in the long run is not making a mistake, it’s lack of innovation. Our risk is failing to come up with creative ideas for how to entertain our customers, and therefore becoming irrelevant.
This motivates employees to think of themselves as entrepreneurs—who typically don’t succeed without some failures.
In our creative business, rapid recovery is the best model.
“We don’t expect employees to get approval from their boss before they make decisions. But we do know that good decisions require a solid grasp of the context, feedback from people with different perspectives, and awareness of all the options.”
This means that she sets up multiple meetings, where she outlines her proposal and enters into discussions in order to stress-test her thinking and collect numerous opinions and data points before making her decision. Socializing is a type of farming for dissent with less emphasis on the dissent and more on the farming.
When you sunshine your failed bets, everyone wins. You win because people learn they can trust you to tell the truth and to take responsibility for your actions. The team wins because it learns from the lessons that came out of the project. And the company wins because everyone sees clearly that failed bets are an inherent part of an innovative success wheel. We shouldn’t be afraid of our failures. We should embrace them.
Ted was right. With our dispersed decision-making model, if you pick the very best people and they pick the very best people (and so on down the line) great things will happen.
One of the reasons this is so difficult in many companies is because business leaders are continually telling their employees, “We are a family.” But a high-talent-density work environment is not a family.
When people behave badly, don’t pull their weight, or aren’t able to fulfill their responsibilities, we find a way to make do. We don’t have a choice. We are stuck together. That’s what family is all about.
For people who value job security over winning championships, Netflix is not the right choice, and we try to be clear and nonjudgmental about that.
Would the company be better off if you let go of Samuel and looked for someone more effective? If they say “yes,” that’s a clear sign that it’s time to look for another player.
believing that replacement costs are not as important as ensuring the right person is in every position.
“Start, Stop, Continue” format
Often the boss chooses to be the first to receive.
Because everyone is watching, people are careful to be generous and supportive in the way they give the feedback—with the intention of helping you succeed.
the first question you need to answer when choosing whether to lead with context or control is, “What is the level of talent density of my staff?”
When considering whether to lead with context or control, the second key question to ask is whether your goal is error prevention or innovation.
Likewise, if you are running a hospital emergency room and give junior nurses the context to make decisions themselves with no oversight, people might die. If you are manufacturing airplanes and don’t have plenty of control processes ensuring every part is assembled perfectly, the possibility of deadly accidents increases. If you are washing windows on skyscrapers, you need regular safety inspections and daily checklists. Leading with control is great for error prevention.
