06 November 2015

The Netflix Culture Deck and what Australian businesses could adopt.

Author :

A recent report by Galaxy, for business service provider Citrix, found workplace flexibility to be more talk than action in Australia, with Citrix Regional Director Lindsay Brown being quoted as saying;

“The harsh reality is the majority of organisations do not trust their employee’s to be as productive at home as they do in the office, even though the economic and social benefits offer a compelling argument we can no longer ignore.” Is rigid adherence to traditional workplace models costing you productivity?"

While the Australian Government talks about reducing Sunday penalty rates and the seven day economy, the rapid growth in value of international tech companies who are not playing by the established rules gives businesses in Australia an opportunity to reinvigorate their corporate culture and the way we do business.

Internet giant Netflix has been at the eye of the storm in regards to changes to corporate culture since a slide deck written by CEO Reed Hastings and CTO Patty McCord hit the internet and was referred to by Facebook Chief Operating Office Sheryl Sandberg as “one the most important documents to come out of Silicon Valley.”

The Netflix Culture Deck outlines the company’s management guidelines, highlighting changes to its corporate culture such as unlimited leave, no performance reviews, rewarding performance not effort, and paying employees what they deserve.

One of Netflix’s most famous responses to its Culture Deck is that the streaming giant hires only “fully formed adults,” giving staff great amounts of freedom to take the risks they need to take to be truly innovative, without being bogged down by processes and procedure manuals.

While organisations – particularly in the US tech start-up space – have been adopting various elements of the Culture Deck, the current Industrial Relations landscape in Australia has made flexibility on the scale of the Netflix model relatively difficult to obtain.

But there are several key takeaways that can be implemented by savvy HR teams and business owners that could easily see Australian organisations take up some of the common-sense approaches to staff management and productivity Netflix has embraced.

Key takeaways to reinvigorate your corporate culture and develop a thriving organisation:

Hire, reward and tolerate only fully formed adults

In her case study “How Netflix Reinvented HR,” by Patty McCord for the Harvard Business Review, McCord discussed the importance of asking staff to rely on logic and common sense instead of formal policies, highlighting that most of the time Netflix would get better results at a lower cost.

Australian businesses spend a lot of time monitoring staff and their performance, the belief seeming to be “give an inch, they’ll take a mile.” Rather than reinforcing and developing an “us v them,” mentality showing the staff they are both important and trusted goes a long way towards creating employee buy-in.

Adultlike behaviour means talking openly about issues with your boss, colleagues and subordinates,” McCord writes. “It means recognising that even in companies with reams of HR Policies, those policies are frequently skirted as managers and their reports work out what makes sense on a case-by-case basis.”

Trusting your employees to work in the company’s best interest empowers them and gives them a sense of ownership.

Performance reviews

The annual performance review is at best an opportunity to address issues that have cropped up and to outline performance expectations for the year ahead. We’ve all heard the collective groan when the email arrives telling us it’s “review time,” again.

By removing performance reviews Netflix created a culture around open communication, with conversations about performance as an organic part of the manager’s work. Building a culture of elaborate rules and rituals around measuring performance doesn’t do anything to actually improve it. Annual reviews that are not followed up on are more like ticking a check list than doing anything to ensure engagement and staff ownership.

Be honest about employee’s performance. If a staff member is underperforming or the role they have been in for the past five years has changed to the point they are no longer being productive it’s better to discuss the situation as it arises, rather than go through a performance management program that is designed to do nothing but show the staff member where the door is.

If you talk simply and honestly about performance on a regular basis, you can get good results – probably better than a company that grades everyone on a five-point scale.”

The key role for managers is to own the job of creating great teams

Managers are managers to ensure they have the right team to get the job done. When a manager spends most of their time micromanaging staff and interfering in the employees tasks what they are really saying is “I don’t trust myself to have made the right decision in hiring you.” This sort of action invariably leaves employees disengaged and not interested in trying.

Knowing the role of your division should be done before you put up an advertisement up on Seek. Understanding the key skills employees will need to get the job done, and the parameters of the tasks ahead means managers are better able to hire the right person, the first time.

The priority for Managers should always be establishing of the right team, with them your will accomplish great things, without them you will find a mish mash of people in the wrong job, or the wrong company.

Company culture is created from the top down

The behaviour of the organisations leaders is the model of behaviour that will be accepted by the company’s employees. If being at your desk at 9am ready to work is important to your business the company’s leaders need to reflect this. Chastising staff for arriving at 9:05 and then making a coffee when the manager is usually found strolling in the door at 9:15 sets up a situation where the employee is receiving mixed messages.

If you as a leader do not model and reward the behaviour that is best aligned with your businesses vision and values, having them is a waste of time.  The saying “the standard you walk past is the standard you accept,” comes into play here as well. Employee’s want to be treated as important and as adults. If you’re fixated on the fact that a team member may be checking Twitter during work hours, despite the fact you spend more time during the day taking personal phone calls you’re setting up a situation guaranteed to leave the staff member disengaged.

Staff Engagement is a business centre.

In her Harvard Business Review article Patty McCord suggest that HR professionals spend too much time on morale improvement initiatives and not enough time looking at themselves as business people. McCord recommends HR professionals examine the questions “What’s good for the company? How do we communicate that to the employees? How can we help every worker understand what we mean by high performance?”

At Netflix I worked with colleagues who were changing the way people consumed filmed entertainment, which is an incredibly innovative pursuit, yet when I started there, the expectation was that I would default to mimicking other companies’ best practices (many of them antiquated), which is how almost everyone seems to approach HR. I rejected those constraints. There’s no reason the HR team can’t be innovative too.” McCord said in the conclusion to her article.

While the world of an innovative tech company is miles away from the world of a corporate office in Australia, the concepts of treating your staff fairly, empowering your staff to make decisions, treating your staff as adults who are worthy of trust and ensuring the staff are clear on their performance and what constitutes productivity can be easily implemented into most companies’ fairly easily.

Netflix’s expenses policy sums up the key to employee engagement, much more than a certain amount of hours behind a desk, or whether or not someone checks social media a couple of times a day.

“Act in Netflix’s best interest.”

If corporate Australia was to take the meaning of those 5 words – not relating to expenses policy – but in general, what sort of changes do you think your organisation would see?

Mike Cullen has recently returned to Akolade after a period as the conference producer for one of Australia's leading economic think tanks. Mike began working in the conference industry in 2007 after looking for a career change from the high pressured world of inbound customer service. Mike has worked for some of the most well known conference and media companies in the B2B space and in his spare time is working on his first novel in a planned Epic Fantasy trilogy.

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