Netflix culture and the Core of Operational Excellence

netflix_defeats_blockbuster_by_plaidklaus

netflix defeats blockbuster by plaidklaus

The slideshare below describes the core concepts that define the culture at Netflix.  First released in 2009, it provides insight into what co-founder and CEO Reed Hastings calls the “Freedom and Responsibility Culture”

There are several elements of the document that sound just like the ROWE movement that I discussed quite a bit on this blog last year.  Just as I found with ROWE, however, the Netflix culture manifesto fails to deliver a significant “Wow!” factor.  Why?  Because Lean and Operational Excellence provide a much deeper management philosophy that takes into account every aspect of either the ROWE or Netflix schools of thought, and then some.

Consider these 9 Core Values from the Netflix presentation:

 

  • Judgment
    • You think strategically, and can articulate what you are, and are not, trying to do.
    • You smartly separate what must be done well now, and what can be improved later.
  • Communication
    • You listen well, instead of reacting fast, so you can better understand
    • You treat people with respect independent of their status or disagreement with you
  • Impact
    • You accomplish amazing amounts of important work
    • You focus on great results rather than on process
  • Curiosity
    • You learn rapidly and eagerly
    • You seek to understand our strategy, market, customers, and suppliers
  • Innovation
    • You re-conceptualize issues to discover practical solutions to hard problems
    • You challenge prevailing assumptions when warranted, and suggest better approaches
  • Courage
    • You take smart risks
    • You question actions inconsistent with our values
  • Passion
    • You inspire others with your thirst for excellence
    • You care intensely about Netflix‘s success
    • Youcelebratewins
  • Honesty
    • You are known for candor and directness
    • You are quick to admit mistakes

All of that sounds an awful lot like some terms that are familiar to anyone with a knowledge of Lean:

  • Lead with Humility
  • Respect for Every Person
  • Experimentation
  • Seeking perfection
  • Constancy of Purpose
  • Deliver customer value
  • Achieve results 

To be certain, the slideshare below appears to demonstrate many of the common misunderstandings of what process is, or should be, and especially of what process means in the Lean context.  Nonetheless, there isn’t anything in this document that isn’t already a part of Lean philosophy, or that isn’t represented in the Shingo Model.  Even the stated distaste for process is met later in the document by a healthy awareness that good processes vs. bad processes actually enable creativity, not prevent it.

In spite of the supposed revolutionary nature of Netflix culture, however, what I am more inclined to believe is that Reed Hastings, like the creators of ROWE, has stumbled upon the same core operational Excellence fundamentals that have already been developed, practiced, and that continue to evolve in Lean.

View the presentation below and share your thoughts on whether or not this is Revolutionary, or simply the re-discovery of some universal truths that are already well incorporated into Lean thinking.

 

The height of disrespect for people: A UK Healthcare nightmare

The_Doctor_will_SEE_you_now_by_DaYDid

The Doctor will SEE you now by DaYDid

I came across this lengthy article from The UK’s Daily Mail detailing the nightmarish conditions at Staffordshire Hospital, where it is reported that between 2005 and 2008 as many as 1,200 patients died needlessly due to appalling conditions and neglect.

Keep those dates in mind – this is current.  The events described in the article did not happen in some long-forgotten past or in a third-world hell hole.  This scandal is unfolding, right now, in one of the most developed nations on earth.  If you want to know just how far an organization can stray from the Respect for People ideal that lies at the root of Lean and Operational Excellence, forget Foxconn and look at the UK’s NHS.

There are a host of other articles on the Daily Mail site.  This article shares stories from the families of victims of the hospital’s abuses, where people were so thirsty they drank water from dirty vases and patients were often left to soak in their own urine for days.

Of course, the man at the head of it all refuses to accept responsibility, blaming ‘the system’ for the problem.  I know Lean typically advocates looking at the system for the root of the problem and not blaming the individual, but this seems like a bit of a bastardization of that concept.

The scandal runs wide and deep, and would be shocking if it wasn’t so utterly disgusting.  The Guardian has published a guide to the scandal, demonstrating just how far-reaching this is that it requires a guide.

Amazing that, in an era where Lean Healthcare is gaining more and more momentum, a situation like this exists.

The value of delayed decisions

decisions by mihaibrrr

decisions by mihaibrrr

Most conversations about improvement revolve around finding ways to speed things up.  Whether by focusing on the elimination of unnecessary activities, doing less more often, reducing clutter, training the mind to avoid multitasking, or any other approach to speeding up decision making the prevailing message is clear:  do things faster.

The desire to do things faster necessitates making decisions faster, of course.  Process improvement schools of thought are, essentially, designed to speed up decision making to one degree or another.  Last year, I came across Frank Partnoy’s Wait, however, which advocated something different – slowing things down.

Partnoy investigates the cognitive science of decision making across multiple situations, from athletes making decisions in milliseconds to investors like Warren Buffet who delay decisions for weeks, months or years.  In his investigations, he discovers a seemingly simply truth:  That the longer you can delay a decision, the better decision you will make.

Partnoy’s take seems to be out of synch with improvement methods that look to speed up our ability to make decisions. Nonetheless, I think there’s more in common than might meet the eye.  What I see in Partnoy’s book  is that decision making needs to be slowed down in order for genuine improvement to occur.  Adopting continuous improvement methods allows  for as much information gathering as possible prior to making the final decision.

The iterations surrounding any approach that looks to fail fast and learn constantly are all doing 1 thing – allowing for as much learning as possible prior to making a decision that can’t be undone.  Partnoy’s work reinforces the wisdom of this approach and makes it clear:  slowing down your thought processes, rather than speeding them up, results in the best possible outcomes.

 

Project problems can’t be solved with an operational focus

loves_distance__by_peggyopal-d41wf2f

loves distance by peggyopal

Straight from the Project Management Institute’s web site (and the PMBoK) is this definition of a Project

It’s a temporary group activity designed to produce a unique product, service or result.A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.

And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies. 

 Unfortunately, very often, projects are assessed by using metrics that are not about identifying unique & temproary activities.  Rather, persistent, on-going measures such as average weekly costs or hours worked or material dollars spent are used to determine if a project is running as it should.

Unfortunately, these sort of measurements are more attuned to understanding operations because they establish linear costs over time.  Project have peaks and valleys, spikes and low points, periods of tremendous activity and periods when they have very little at all.  Whether or not they should is a different question – there’s certainly plenty of room for levelling out the workload in projects and avoiding these ups and downs on the individual person, however, there are still times in the life of a project when you  may have multiple people working simultaneously on different sub-projects, and times when only 1 or 2 activities need to be going on.

As such, run rates for a project are erratic, as they should be.  Attempting to smooth costs on the entire project is dangerous.  It leads to people lingering on the project with little to do, just to keep the expenses constant.  Individuals or the departments they report to in a matrix need to keep spending flat.  Projects, however, are characterized by their temporary nature, and the ramping up and down of expenses can be considered an indication of efficency, not inefficiency.

There is, of course, much merit to the argument that bouncing people on and off a team leads to a loss of learning, mometum and flow – so it is better to have folks on the team continue to add cost, even if there is little for them to do.  I agree – right up until they begin producing work just for the sake of producing it.  If there is nothing of value for them to contribute, but disassembling the team creates a long-term problem, then look for learning opportunies within the project.  Have people sit in on working sessions outside of their functional area.  You might find people are adaptable to lots of different tasks, and this type of cross-training is invaluable when you need a pinch-hitter for an unexpected crisis.

Nonetheless, even when analyzing the cost reports for these activities, be very aware of who is doing what, such that you can distinguish between time spent adding genuine value through the transformation of work products and time spent in learning & watching.  Doing so will prevent assessing projects as the outcome on-going costs and, instead, allow you to determine the specific costs that create specific results which, in turn, allows for investigations into better methods for producing the same results.

 

 

So long, Ray Lewis, and a tale of two retirements

Ray_Lewis_by_youngandreckless

Ray Lewis by youngandreckless

If any of you watched the Ravens – Colts football game this past weekend, you were treated to the final home game played by one of the NFL’s all-time greats.  Ray Lewis, an iconic figure for over a decade in the NFL, has announced he will retire at the end of this season. While I am not a fan of Ray Lewis, personally, any fan of the game of football still must respect and appreciate him for his tenacity, toughness, on-the-field and locker room leadership and overall football smarts. 

 What has always turned me off to Lewis is his ballsy bravado and showmanship that is so very much the hallmark of many a famous athlete.  It does nothing for me, whatsoever.  Nonetheless, watching him play the position of inside linebacker has been a site to behold for a very long time.  

The Ravens defeated the Colts handily and, although the game was well out of reach, Lewis took the field for the game’s final play – a meaningless kneel-down to run out the clock from the Colts rookie QB sensation, Andrew Luck.  There was no need for Lewis to be on the field.  In fact, he stood about 15 yards away from the line of scrimmage, deep in the defensive backfield, avoiding even the suggestion of contact on the final play of a game in which he played with a large, heavy brace on his injured arm. 

This play, however, was the most memorable thing for me in the entire game, even with amazing circus catches from Anquan Boldin and explosive runs pulled off by Ray Rice still lingering in my mind’s eye.  Ray Lewis left the stadium where he made himself a legend in the one place where he should have – on the field.  He was not on the sideline, high-fiving teammates, hugging coaches or waving to spectators.  He was active, involved, in the game and doing his job – no matter how trivial or small the play he was going to be remembered by everyone in that stadium as spending his last final moments right where he should have been – on the field. 

Now, let’s contrast that with another story…… 

I knew someone who, after spending over 30 years with a company, decided to retire.  After a long but unspectacular career, it was time to leave the rat race as just about every single one of us who is not a legendary NFL icon will do.  Unfortunately, also unlike those legendary NFL icons, leaving the job with an iota of respect wasn’t in the cards. 

You see, the rulebook indicated employees needed to work on such-and-such days in order to receive certain benefits.  This meant reporting to work for 2 more days, even though operations on those days were just about completely shut down for the Holidays.  And, of course, there’s no way that a full day of work could be done with all the retirement congratulations going on, not to mention the complete lack of motivation to throw yourself into anything knowing you are never – ever -never-ever-never coming back. 

Rather than thanking this person for a lifetime of commitment and riding off into the sunset with a feeling of admiration and respect, like Ray Lewis, the company required reporting to work for a couple more days just to satisfy some meaningless policy requirement from which no value to anyone could be derived. And that is the difference between running an organization on the basis of cost vs. running one on the basis of value, and the difference between people in an organization that understand what Respect for People means, and those who do not.