Trending

STREAMING AN HONEST STORY OF HR

By Aysha Ashley Househ

Patty McCord’s approach to HR culture inspires some and sparks irritation in others. Her co-creation of the Netflix culture deck, a key onboarding document for companies, still follows her around, which is why she thought it needed an “instruction manual.” That manual is her new book, “Powerful: Building a Culture of Freedom and Responsibility,” and focuses on how the culture at Netflix was formed. Workforce intern Aysha Ashley Househ spoke to McCord about the difficulties of applying unconventional changes.

Workforce: What was the most difficult thing about applying the unconventional changes to HR?

Patty McCord: It happened gradually, and that’s the part that’s hard for me to explain. They think that either I woke up one morning, or Reed Hastings, the CEO of Netflix, woke up one morning and went, let’s undo everything. That’s not how it worked. One of the first things that we did that was really important was we wrote stuff down. That was how the Netflix culture deck came about. We value honesty.

WF: What made you realize a change needed to be made?

McCord: It was when I started examining the why of what we did. If I said why do we do the annual performance review? Well, it’s to give people feedback on their performance. OK, does that mean constructive criticism, which is negative feedback — which nobody wants to give, or is it giving you feedback: Wow you’re doing a great job, keep doing that. It wouldn’t be very effective to do either only once a year; it’s too infrequent.

WF: One of your main points is to motivate people through a challenge instead of using incentives.

McCord: I started thinking about the bonus system. We were moving so fast that I honestly couldn’t come up with an annual bonus plan because I couldn’t figure out what needed to get done right at the end of the year, and I could be 50 percent wrong because we were inventing things as we went along. I spent my whole life around bonus plans. And I found that the time it took to write, communicate and administer them and to rejigger them was time that we could’ve been getting work done. If I said I want to fill the company with high-performing employees who are really talented and get great work done on time, then why do I have to bonus them for it? They’re already going to do it anyway.

WF: You mention that this is defying convention and it was scary to do that. What made you take that risk?

McCord: It worked. And it was the people I was surrounded by. They were taking risks all the time. They’re experimenting all the time. And that’s how we created a service that I’m sure you love. Because we kept taking risks and experimenting with it.