Netflix opened for business in 1998. Since then, the company has gone through ups and downs, survived changing technologies and markets, and become a moviemaker. Patty McCord was there for 14 years, starting in 1998. She was one of the people responsible for the HR policies that so many people want to hear more about.
You can get some of those lessons from reading articles in the business press. Some feature specific practices, like the Netflix vacation policy. Others are about how you can be more “people-oriented.” But if you want to get an idea of why Netflix approaches HR the way it does, you need to read Powerful: Building A Culture of Freedom and Responsibility by Patty McCord.
In Powerful, Patty McCord says creating a culture is an evolutionary process, and she thinks of it like an experimental journey of discovery. The book will introduce you to several of the policies that Netflix created, but it will also introduce you to that journey. Early in the book, McCord sums up the lessons shewill present.
“The fundamental lesson we learned at Netflix about success in business today is this: the elaborate, cumbersome system for managing people that was developed over the course of the twentieth century is just not up to the challenges companies face in the twenty-first. Reed Hastings and I and the rest of the management team decided that, over time, we would explore a radical new way to manage people—a way that would allow them to exercise their full powers.”
Read this book if you’re curious about Netflix. You’ll like it if you’re interested in new ways we can do HR. If you like thinking about how work will be different in the future, you’ll like this book, too. No matter what your other interests, you’ll get lots of ideas about things to try in your business.
I’m glad that McCord waited for a few years after leaving Netflix before writing this book, Distance in time gives us perspective, and I believe the book is better for that. It’s also better because Patty McCord has worked as a consultant with other companies since leaving Netflix in 2012. We get the benefit of her experience at Netflix and her experience with other companies.
I only have one tiny quibble with this book. Patty McCord writes about a high-tech, fast-growth company. If your company is like that, great, but most companies aren’t. Then what? Then you can ignore the few bits that only apply to high-tech, fast-growth companies and get all the other lessons from the book.
I got many great quotes from the book. Here are a few of them. You can see more on my Goodreads page.
“Yes, engaged employees probably deliver higher-quality performance, but too often engagement is treated as the endgame, rather than serving customers and getting results.”
“Perhaps the worst problem with anonymous surveys, though, is that they send the message that it’s best to be most honest when people don’t know who you are.”
“I love data. But the problem is that people become overly wedded to data and too often consider it much too narrowly, removed from the wider business context. They consider it the answer to rather than the basis of good questions.”
“it’s absolutely great for employees to be happy, but that it’s best for both them and their companies if the reason they’re happy is that they’re doing great work with great people.”
“One of the reasons that I’m no fan of the annual performance review process is that not only does it take up a lot of your HR department’s time, but it is so often removed from any true connection to business results and serving customers.”
In A Nutshell
Powerful: Building A Culture of Freedom and Responsibility by Patty McCord is a great business book. Read it for the story of Netflix, for a look at how cultures develop, and a whole bunch of ideas to try.
You can check out some of my highlights and notes from this book on my GoodReads page.
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