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 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.

 

Stump the Chump, and the Steve Jobs Paradox?

Paradox

iTime paradox by IlookingYou

Two weeks ago, I delivered the presentation that’s been adorning the home page to a monthly meeting of the New Hampshire chapter of the project management institute.  That presentation was drawn from a series I put on the blog just a little over a year and a half ago, where I made a connection between common, sub-optimal activities that are found in project environments and Lean’s 7 wastes.

I thoroughly enjoyed the chance to stand up and speak about how Lean is not a set of cost reduction techniques nor a quality assurance program, but a philosophy of how organizations work, how people work, and of how people within organizations work.  While several in the audience were expecting a discussion of Agile software development when they heard the topic would be about Lean in Project Management, I think my focus on understanding environments and behaviors resonated with a few of the audience members.  Many asked if they could obtain a copy of the presentation, which I took to be quite the complement, also.

If the Q&A that followed, however, I was asked a question that – as I put it, “Stumped the Chump.”  One gentleman asked, in response to the portions of my presentation that focused on the Respect for People foundation of Lean and, in particular, the Shingo model, how I would characterize Steve Jobs and Apple’s success, given that Jobs was a well-known egomaniac and had a reputation for being quite stern and non-compromising.

While some members of the audience offered their take on what might have happened at Apple as others took up the cause of Respect for People and the “appropriate” management styles, in an effort to help me out as I stated that the question would require some thought, I thought up my response.  I briefly recounted my understanding of the work Steve Jobs did at Pixar, and the interpersonal dynamics he created within the hallways of Pixar (quite literally) that fostered collaboration and creativity – including several dynamics for idea sharing and generation that were drawn from – you guessed it – the Toyota Production System.

While this answer satisfied the gentleman asking the question, it has stuck with me for the past couple of weeks, as I felt the need to contemplate the question a bit further.  What I may have come to realize, is that there is something of a Paradox involved when a true visionary ascends to the position of influence within an organization.  These situations are remarkably rare, I believe, which is why they are so disruptive, revolutionary, and highly successful.  It is dependent as much upon the circumstances as the traits of the individuals involved, but it is clear to me that the person(s) who creates a whole new paradigm for conducting the work of an organization very often must embrace what I will call the “Jobsian Paradox.”

Clearly, the stories of the founders of the Toyota Production System are not that far from what we hear of Jobs doing at Apple.  The outcomes are revered by many, studied and copied by others, and delved into by an army of commentators looking for the secret to the success these visionaries bring about.  What they have in common, however, is something that is, indeed, contrary to the tenets of creativity and innovation in both project and process.  That is, that at the beginning – when people’s mindsets need to be calibrated towards a new understanding and  that understanding needs to translate into action, someone authoritative, demanding, relentless personality must be at the forefront of creating and driving the system under which change will occur.

From those personalities come systems, and from that relentless focus on driving people to the correct behaviors comes guiding them to possibilities, and from satisfactory mediocre comes the expectation of greatness.  It must begin, however, with unique individuals willing to drive others to the point of aggravation in order to be achieved, which is something of a paradox in the realm of thinking that believes people are intrinsically motivated and that all a brutish task master can do is to de-motivate them.

This is, in many ways, akin to the concept of a Level 5 Leader that Jim Collins discusses.  To foster change, unique, rare, visionary people are needed.  In order to turn their vision into reality, however, a certain drive is required that leads the people with that vision to adopt behaviors we tend to believe, at least in the short term, are counterproductive and entirely suboptimal.

To wrap it up, the Jobs-ian paradox is this:  For true visionaries with the ability to persevere, many of the management practices and behaviors that we associate with high levels of creativity  and innovation among the workforce, are ignored or simply not practiced in order to bring the organization, as a whole, to high levels of creativity and and innovation.

 

What to do when you don’t know the way to go

plot a course for home

plot a course for home by wildwinyan

My 3-year-old is following in his 7-year-old brother’s footsteps and taking an intense interest in Nickelodeon’s Dora the Explorer.  After a couple years of not having to listen to the theme song ad nauseum, we’re back into the thick of things.

For those who are not familiar with the show, Dora frequently goes on adventures and isn’t certain which way to go.  In those situation, she calls upon her trusty map, which shows her the way.

If only we were all so well prepared.

In business and in life, we all need a map.  Too often, we move without thinking or jump in without looking.  We buy into the paradigm that says we ought to fail fast, but we don’t bother to ask, “Fail at what?”  Failing for the sake of failing isn’t the path to enlightenment, it’s just stupid.  Even if you’re prepared to accept failure – that failure needs to be leading in the direction of some intended destination, meandering as the path may be.  Otherwise, the exercise never ends and nothing is ever learned.  It’s just activity for the sake of activity.

Activity without planning at any level is just folly and entirely wasteful.  Planning is the result of consulting the map  –  we can see the current location, the destination, and the obstacles in between.  Without a destination in mind, and a plan for getting from here to there, all that results is misalignment of goals, fits and starts, lost momentum and, quite frequently, situations where people are more than happy to clear an entire forest just to deliver a toothpick.  The purpose, after all, was to show activity over and above the value of delivering the end product.

The guiding principles of an organization are what the people working within that organization turn to when they don’t know the way to go.  Those principles align people and, even if there is no certain way to go, will at least tell you which way you should not go.  In effect, they become your map.  They let you know where the terrain is flat and clear, or rocky and overgrown, and allows you to see all the other route options to help you adjust course and still reach your destination.

Any organization, regardless of size or complexity, needs to have guiding principles (see the Shingo Model for more elaboration on the impact of guiding principles).  When all else fails, adhering to these principles will offer assurance that people are still operating within the spirit of your organization.

Product Innovation vs Operational Excellence (or, Magic vs. Might?)

 

Warrior vs Sorcerer

Warrior vs Sorcerer by Pydracor on deviantart.com

There is so much written about innovation these days, it’s mind numbing.  Most of what you read, however, is all about product innovation – and there is very, very little written about process innovation.

Product innovation is something that is discussed as almost ethereal.  It is something that comes about through a little bit of magic & wizardry.  It’s romantic, intellectual, and fun.  It is the thing that enables companies like Apple & Google to push to the forefront of their industries and become the giga-bucks companies other people write books about.  It is the Holy Grail of major corporations and startups alike – both are encouraged to go on a quest for the magical, mystical powers of innovation.

Product innovation appears to be the realm of the unexplainable – that the way to go about that business is to assume a muse, or some divine spark is, ultimately, going to descend upon the workers bees and imbue them with the powers of insight and creativity.  You have to create innovation space, and adopt managerial styles and practices, that allow creativity to flourish.

Process innovation, on the other hand, is seen as something a little more grungy and foul-smelling.  It is the world of brute force and awkwardness, no matter how elegant it tries to become.  Process innovation tends to be something that people feel can be learned.  All you need to do is study Toyota, or Southwest Airlines, or General Electric and Motorola – and you will soon understand the simplicity of process innovation and be able to apply it easily, right?

Wrong.

The world is littered with great product ideas that could not be produced, as well as with companies that couldn’t sustain their operations long enough to even see the next wave of competitors, much less contend with them.    It doesn’t really matter if you have a great idea, but can’t operate the company, and especially not in the long run.

Even Google, which would seem to be a company based on Magic over Might, understands the need for a strong Operational focus in order to achieve the much-sought-after essence of Innovation.  Consider this passage from their recruitment site (emphasis added by me):

How we hire

We’re looking for our next Noogler – someone who’s good for the role, good for Google and good at lots of things.

Things move quickly around here. At Internet speed. That means we have to be nimble, both in how we work and how we hire. We look for people who are great at lots of things, love big challenges and welcome big changes. We can’t have too many specialists in just one particular area. We’re looking for people who are good for Google—and not just for right now, but for the long term.

This is the core of how we hire. Our process is pretty basic; the path to getting hired usually involves a first conversation with a recruiter, a phone interview and an onsite interview at one of our offices. But there are a few things we’ve baked in along the way that make getting hired at Google a little different.

How we interview

We’re looking for smart, team-oriented people who can get things done. When you interview at Google, you’ll likely interview with four or five Googlers. They’re looking for four things:

Leadership

We’ll want to know how you’ve flexed different muscles in different situations in order to mobilize a team. This might be by asserting a leadership role at work or with an organization, or by helping a team succeed when you weren’t officially appointed as the leader.

Role-Related Knowledge

We’re looking for people who have a variety of strengths and passions, not just isolated skill sets. We also want to make sure that you have the experience and the background that will set you up for success in your role. For engineering candidates in particular, we’ll be looking to check out your coding skills and technical areas of expertise.

How You Think

We’re less concerned about grades and transcripts and more interested in how you think. We’re likely to ask you some role-related questions that provide insight into how you solve problems. Show us how you would tackle the problem presented–don’t get hung up on nailing the “right” answer.

Googleyness

We want to get a feel for what makes you, well, you. We also want to make sure this is a place you’ll thrive, so we’ll be looking for signs around your comfort with ambiguity, your bias to action and your collaborative nature.

How we decide

There are also a few other things we do to make sure we’re always hiring the right candidate for the right role and for Google.

We collect feedback from multiple Googlers

At Google, you work on tons of projects with different groups of Googlers, across many teams and time zones. To give you a sense of what working here is really like, some of your interviewers could be potential teammates, but some interviewers will be with other teams. This helps us see how you might collaborate and fit in at Google overall.

Independent committees of Googlers help us ensure we’re hiring for the long term

An independent committee of Googlers review feedback from all of the interviewers. This committee is responsible for ensuring our hiring process is fair and that we’re holding true to our “good for Google” standards as we grow.

We believe that if you hire great people and involve them intensively in the hiring process, you’ll get more great people. Over the past couple of years, we’ve spent a lot of time making our hiring process as efficient as possible – reducing time-to-hire and increasing our communications to candidates. While involving Googlers in our process does take longer, we believe it’s worth it. Our early Googlers identified these principles more than ten years ago, and it’s what allows us to hold true to who we are as we grow.

These core principles are true across Google, but when it comes to specifics, there are some pieces of our process that look a little different across teams. Our recruiters can help you navigate through these as the time comes.

At Google, we don’t just accept difference – we celebrate it, we support it, and we thrive on it for the benefit of our employees, our products and our community. Google is proud to be an equal opportunity workplace and is an affirmative action employer.

 

So……these wizards of innovation have a clearly operational focus – collaboration, trust, responsibility, a focus on the long-term, and all of those things emphasized right from the beginning – in the hiring process – to make sure the company is populated with people who allow the organization to sustain its operational focus.

That is the strength of the organization – not it’s magical ability to develop innovative products & solutions, but it’s powerful, day-to-day, operational focus and wherewithal to sustain it.  No matter the industry, any organization without a sense of its self and dedication to the every day operational activities of the company, will fail in its quest.  Others will out-innovate and pass you by, talent will leave the organization and, at best, you will find yourself an also-ran in the market desperately clinging to a plummeting reputation as you pursue weaker and weaker opportunities until, eventually, the light goes out.