Previously, I wrote about the disadvantages of regulations on construction sites and how regulations can be replaced through accountability, transparency, and trust. In this article, I would like to explore the basic solution, which is to hire wonderful people.
Netflix is well known as one of the wonderful hits of the last two decades. Launched as a DVD mail company in 1998, it now has 3500 workers and generates more than $7 billion a year from 81 million subscribers to its online streaming service. Of course, they not only stream content, they also produce your favorite series like House of Cards, Orange Is the New Black, and Making a Murderer.
So what’s the key to Netflix’s lasting success?How is it that a company grows so fast, replaces models so often, and retains a fan visitor base?
Remember that regulations are meant to protect quality, consistency, and profits as a business grows. However, at Netflix, it is not the regulations put in position that are its success, but the absence of regulations.
If you’re familiar with the tech startup scene, you’ve no doubt heard of “Netflix Culture Deck” and its mythical influence. Facebook COO Sheryl Sandberg called the undeniable PowerPoint presentation “one of the most important documents to come out of Silicon Valley,” and it has been viewed millions of times around the world.
In the featured presentation, Netflix executives use the classic logic of regulations and the short-term benefits of eliminating errors. But the game continues to teach that, over time, a process-driven culture drives out the high-performing workers that corporations seek. stay. When the market adjusts quickly due to new technologies, competition, or business models, regulatory-driven corporations cannot stay and lose consumers to adapting competition. . “
Netflix summarizes its culture and competitive merit on the first slide:
Freedom and responsibility
Instead of creating endless regulations and processes, which is how top companies handle significant growth, Netflix argued that a company focuses in particular on two things:
1. Invest in hiring high-performing employees.
2. Build a culture that rewards the most productive and gets rid of the worst permanently and without improvements.
Netflix posits that the other guilty people, the other people every company needs to rent, are not only worthy of freedom, but thrive there. themselves.
Taking this conviction literally has led to a number of HR innovations unprecedented in the past. For example, Netflix’s “unlimited vacation policy. “as they wished. (Hourly staff has received a more structured policy. )Some rules were provided; for example, other people working in accounting and finance were invited to be in the workplace at the beginning or end of a quarter. In addition, anyone wishing to have more than 30 consecutive days off will need to meet with Human Resources.
Netflix has also resisted the temptation to institute any kind of formal and spending policy. According to McCord, “We made the decision to demand only the behavior of adults . . . The company’s spending policy can be summed up in five words: “It acts in the most productive way of Netflix’s interests. Save when possible.
The results? The company stored money by allowing workers to book their own trips online, eliminating the need to pay an agent to do so.
Of course, there was also a learning curve. According to McCord, managers needed to communicate with workers “who ate at fancy restaurants ( meals that would have been smart for sales or recruitment, but not for dining alone or with a Netflix colleague). “Similarly, members of the IT branch might be likely to buy more devices than necessary. But McCord proved that the show was an overall success. It is still in force today.
The real “no rules” catalyst on Netflix, the real catalyst for their high-trust culture, the fact that they hired better. In an article he wrote for the January 2014 Harvard Business Review, McCord summarizes why this principle works so well. Not bad:
“If you’re careful to hire other people who put the company’s interests first, who perceive and prefer a high-performance workplace, 97% of your workers will do the right thing. Most corporations spend time and money writing and enforcing HR policies to deal with the disruptions that the remaining 3% can cause. Instead, we tried not to hire those other people, and let them pass if it turned out we had made a hiring mistake.
How can you apply this precept to your pictorial environment?Ask yourself the following questions:
• How are your managers evaluated?To build giant or if they adhere to the regulations and get all their reports on time?
• How much more can you do in the hiring process?
• If you spend less on law enforcement, can you increase the reimbursement you offer (resulting in higher quality candidates)?
Is it designed for the most productive to thrive or oppose the worst?
• Are managers reluctant to let go of underperforming ones?For what?
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Kevin Kruse is the leader of Employee Engagement 2. 0 and one of the most sensible speakers on leadership. Join their newsletter at kevinkruse. com.
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