Powerful: Building a Culture of Freedom and Responsibility

A friend recommended this book for my son, who is doing a Masters in HR, but I had to read it first - I'm not a Netflix consumer, or even into streaming, so I was curious to read about a new approach to culture building in an industry about which I know nothing. I found it such a compelling read that I finished it in two sittings. I may be old school and I've been a senior manager in 'traditional' EU and US companies over the last 30 years, yet this is the most refreshing business book I've ever read. Huge congrats to Patty McCord and Reed Hastings for pulling off such a major sea change. McCord tells it well and I hope my son's generation will be open to this type of cultural agility as they help to create their futures.

How to get the best out of your staff? I am always a bit wary of books that use the template of one company as the success formula for every company. Books like "Blitzscaling". As Freek Vermeulen and many others have explained, companies are too complex for a one size fits all approach. Powerful, building a culture of freedom and responsibility However, it is Netflix and some of the suggestions in “Powerful, building a culture of freedom and responsibility” make a lot of sense. The book is best described as a hard-nosed version of ROWE (Results Only Work Environment). Netflix We all know Netflix. It has continuously reinvented itself and is in my view a lot more sympathetic than “The four” and is likely to be more successful in the long run. It will be interesting what they will do when TV, AR, VR and gaming merge into one. Check your own HRM Here are a few questions for you: 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. How well do you think people throughout the company could describe its business model? Do you share with employees the same information presented in your company’s earnings calls? Is everyone aware of the difficult challenges your company faces? Have you asked them their thoughts about how to tackle these? What areas of your business do you think your people know little to nothing about? How well do you think your people understand who the customer is and what their needs and desires are? Do you regularly share customer research? If you were going to hold an off-site, what is the most pressing issue you would want your people to learn about and debate? Are people free to disagree with a point made by someone in authority during a team meeting? How open have you been with your team about the current prospects of your business and the most difficult problems the company and your team are dealing with? Simple Netflix kept it very simple. Every Single Employee Should Understand the Business. Read that again. Every Single Employee Should Understand the Business Latitude They began with inculcating a core set of behaviours in people, demand these behaviours, but then giving them the latitude to practice those behaviours well. It makes teams astonishingly energised and proactive. The key word is latitude. Freedom to act. Treating people like adults and let them get on with it. That includes transparency and giving people the information they need. It means encouraging and stimulating questions and honest debate. Embrace the thrill You want people to embrace the need for change and be thrilled to drive it. Netflix had come to understand that the most successful organisations in this world of increasingly rapid disruption will be the ones in which everyone, on every team, understands that all bets are off and everything is changing—and thinks that’s great. They wanted people to feel excited to come to work each day, not despite the challenges but because of them. Strip away the policies and procedures Which means they kept stripping away policies and procedures. What Netflix found that after they d had to let many middle managers go in our big layoff, they noticed that everyone moved much faster without all those layers of opinions and approvals. What takes the place of rules, processes, approvals, bureaucracy, and permissions? The answer: Clear, continuous communication about the context of the work to be done. People are adults Which means they don’t tell people what to do. Don’t do incentives. There is no better reward than making a significant contribution to meeting a challenge. Ask any very successful person what their fondest memories of their career are, and they will inevitably tell you about an early period of struggle or some remarkably difficult challenge they had to overcome.In Netflix’s view, 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. Your job A business leader’s job is to create great teams that do amazing work on time. Excellent colleagues, a clear purpose, and well-understood deliverables: that’s the powerful combination. The most important job of management is to focus intently on the building of great teams. The tips (not that dissimilar to “Principles”) The best thing you can do for employees is to hire only high performers to work alongside them. You go to war with the army you have, not the army you might want or wish to have at a later time. People need to see the view from the C suite 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. Fully and consistently communicated to everyone the behaviours you expect your staff to be disciplined about, starting with the executive team and every manager. Make sure that every single employee understand your philosophy and the behaviours you want them to execute Create a culture deck. Create open, clear, and constant communication about the work to be done and the challenges being faced. Practice radical honesty. Truthful people are truthful in everything they do. It is not cruel to tell people the truth respectfully and honestly. To the contrary, being transparent and telling people what they need to hear is the only way to ensure they both trust you and understand you. Your people can handle the truth, straight and in person, and so can you. Encourage people to have strong, fact-based opinions and to debate them avidly and test them rigorously. Get people to base their actions on what was best for the customer and the company. Get hiring managers to take the lead in preparing their teams for the future by making sure they had high performers with the right skills in every position. Find the best creative talent with the skills to execute, and then give those creators the freedom to realise their vision. Make sure that every single member of a team knows where they’re going and will do anything to get there. Hire 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. Hire people who absolutely love problem-solving. Do not fixate on metrics that don’t matter. Do not assume that current employees will be able to grow into the responsibilities of the future. Have the right person in every single position. Your HR people must be businesspeople. Pay top dollar for your best people. Be a great place to be from. Do not make false promises of job security. Unencumbered If you look at the most successful companies of the last decade or so, many of them are Internet firms with teams that work very collaboratively and organically. Harnessing the power of small, unencumbered teams. Unencumbered being the operative word. Trust and transparancy Netflix learned that preparing people for changes to come led to a sense of trust around the company: trust that we would proactively take the company where it needed to go and that we wouldn’t mislead anyone about the changes. Transparency about the difficulty of the decisions didn’t make coming to them any easier, but the honest dialogue did mean that people all over the company were prepared. Too often upper management thinks that sharing about problems confronting the business will heighten anxiety among staff, but what’s much more anxiety provoking is not knowing. Transparency also helps ensure that people take ownership of the positions they’ve advocated and don’t get hopelessly caught up in finger-pointing after the fact. Business and sports The metaphor that Netflix uses is that the company is like a sports team, not a family. Read "Legacy". Netflix as the All Blacks of the business world. One reason the sports team analogy is so helpful in managing people is that everyone readily understands that coaches are letting the rest of the team and the fans down if they don’t replace players who aren’t producing top performance. Power to the people The conclusion from Netflix, and it should not come as a surprise, is that 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. 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. Get out of the way If all your employees have a shared vision, shared purpose, shared passion, shared guiding principles, an understanding and belief in the brand, you are 80% there. Combine that with team sports principles, transparency and radical honesty and you are 90% there. Also, read “Reinventing organisation”. Everything is culture. Heck, you might even become lovable.

Great book. I read a lot and run my own business and people are such a problem for growth!! This book has gone a long way in understanding how you can grow without having to pander to salary demands for under performers and also having to spend a fortune on perks that no-one seems to want!! It's also an enjoyable and easy read and from the horses mouth and definitely worth the read if you're in my position or any kind of HR or business person.

A thoroughly enjoyable and insightful read. I chose this book because i saw it in a people management magazine a few months ago but it was incredibly hard to put down. Well written and personable. I'd recommend this book to anyone interested in learning how to make a difference at a company as an HR manager

I'm not entirely sure who the book is for, however I think it benefits more experienced readers who can find the interesting parts that are more thought provoking, in between the heavy survivorship bias. In the current world a lot of the advice is either outdated, twee or far too niche to apply to most peoples situation. That said pushing back on some formalities that exist in most companies and the mechanisms of hiring are worth consideration.

Should be mandatory reading for anyone in HR and anyone HR reports to. My next interview question: 'do you have an annual review process?' If yes, I'm standing up and putting my coat on.

This no nonsense approach to hiring talent and removing dead wood is an employee’s dream. We all work with colleagues that we know are less than optimal. However this approach only makes sense if driven from the top of the company and if the local resource pool is abundant in talent. For specialist roles a recruitment hiring process of +6 months is not uncommon, you cannot simply fire without already having another candidate significantly through the process. This is without the regulatory requirements or fear of discrimination overheads in modern workplaces. I think there is a half way house here that might work for companies, the constant feedback cycle and focus on productivity is useful.

Really great conversational style read. Recommended for all across the business not just those in the HR department. Easy to understand principles with clear examples.

Na minha de Organização Exponencial e Reinventando as Organizações, esse é um livro indispensável para o gestor do século XXI, independente se trabalha em uma startup ou não. O modelo Netflix de gestão de pessoas é validado e pode ser adaptado em várias esferas.

La cultura corporativa de Neflix es de las más importantes de Silicon Valley y posiblemente del mundo, su "culture deck" tiene miles de descargas, con una premisa en realidad muy simple: la empresa como equipo de élite. En el Culture Deck y en diferentes artículos de google se profundiza en esto, pero aquí McCord, la autora intelectual del tema (junto a Reed Hastings) profundiza un poco más en sus métodos y visiones. Es tan simple de entender que asusta, el caso es saber llevarlo a cabo

The foundation of a great business book is a great story and boy does Patty McCord have a great story. She joined Netflix right at the start, carpooled into work with the CEO each day and spent 14 years pioneering a radically performance focused HR approach. What makes her journey especially exciting and valuable is that her experience at Netflix isn’t just a reaction to the unique circumstances Netflix was in - pioneering a new market and a new technology- its the fact that McCord and CEO Reed Hastings set out from the start to build a company based on a different approach to people. So this isn’t the Netflix story told from a people and HR perspective, the Netflix story was always going to be told from a people and HR perspective, that’s what makes what happened at Netflix so valuable as a case study for everyone else. McCord and Hastings had worked together before and had noticed that as companies grow and startups become scale ups, something bad happens. The talent density tends to drop. The ratio of super top high performers becomes less. It’s something I’ve personally seen and heard of a hundred times. It’s what is behind the constant warnings to entrepreneurs “Watch your culture as you grow”. These warnings are made with good intention, but they are ultimately useless as they come with no guidance as to what to do, how to “watch your culture” and what practically to do to keep that fast growing, autonomous startup mindset as you grow to hundreds or thousands of employees. Powerful is that guidance, it’s the manual. With several decades of work in the Valley, Patty has developed a love for working with software engineers and that influence means she applies a product manager’s approach to HR. She has a goal of operating with minimal process and constantly tests eliminating procedures. But she does this in an agile way, like a good product manager would. She sets a low bar for people process innovation - “Is it safe to test?”, rather than “will this work”. If it is safe let’s change the process (commonly “lets remove the process) and see. If it turns out he policy was needed just re-instate it. There are some things in the book that can only work in the Valley, in that unique place where VC cash at times is plentiful and the oversupply of jobs to talent distorts things like no where else on Earth. It’s easy to focus on these things, like “constantly ask your staff to interview elsewhere and see what they are worth” and dismiss the book as not practical to your situation or industry. But that would be a tragedy because the vast majority of the learnings and advice in this book are applicable to so many businesses and organisations. The new employee college, teaching every single person how to read the P&L, tacking everyone how the company makes money, teaching everyone the key projects and key performance indicators for each department, communicating to everyone constantly what the 5 big challenges are the company is faced with, encouraging a practice of constant, respectful, radical honesty and feedback, understanding that great jobs are challenging jobs where great things get done, accepting that perks and food are at best peripheral decoration and the core thing you need at work is amazing people to work with and a great challenge to overcome - these are the central tenants of Powerful and they are applicable to any business, anywhere. Powerful is beautifully written and Patty has an engaging, irreverent style. I flipped between the Kindle version and the audio book and can heartedly recommend both, sometimes its great to hear Patty’s voice and emphasis in the material. Powerful is a fantastic read for managers, leaders, CEO’s, HR people - anyone at any level who cares about business and people and wants to help the people they work with do their best work.

Excellent read for people looking for new ways to work with people. Loved how stories from the author are weaves into the book.

Good book esp for a new HR perspective.