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.

 

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.

Perseverance, intelligence and flexibility – 3 things that will never get you past HR

The Processor

The Processor by monkehranch on deviantart.com

A great, and yet depressing, article appeared on wsj.com last week.  Authored by David Wessel and entitled “Software Screening Rejects Job Seekers” the article references a forthcoming book from  Peter Capelli, “Why Good People Can’t Get Jobs.”

The focus of the article is “the now-ubiquitous use of software to screen applicants” in hiring practices and a downward spiral stemming from the use of software applications in order to handle the volume of resumes companies received.  Software made it both less necessary to employ a large number of recruiters and HR pros, as well as possible to receive a larger number of resumes, and those resumes came in droves.  The volume became impossible to handle, so more software support was needed, and the filtering of resumes has become so exact that a whole new skill – tricking the filtering software – has emerged.

All of which, in my humble opinion, is just another example of how the workplace culture inside of most companies has completely gone astray.  Although individuals are touted as “the greatest asset” by many companies, the emphasis placed on truly dealing with those individuals is becoming less and less.  Hiring is based on nothing more than technical skills, and even within that, the keywords describing those skills must match exactly to what the person who wrote the req thought of when they were writing it.

Since we all know that establishing supportive, long-term relationships are the key to enjoying work, getting the most out of people, fostering creativity and innovation – what sense does it make to put such a heavy over-emphasis on skill sets and key words?  If culture is the king that eats strategy for breakfast, shouldn’t the effort be expended on identifying people who fit within the company?  Personality, after all, is something that is innate – and doesn’t change.  Skills, however, can be learned.

The keyword – based paradigm is born from a belief that managers don’t really ever have to engage their employees.  The belief, instead, is that by finding someone who already knows how to do that job, that the person can be plugged into a role and left alone, forever.  Like buying a new gear for a machine – simply insert the right part correctly and it will run all by itself.

Unfortunately, humans don’t operate that way, and the “soft skills” that are fundamental to personality – things like perseverance, intelligence, flexibility, and other intangibles are what makes a person enjoyable to work with….or not.  Those are also things that need to be fed and cared for in order to grow – unlike skills, which can be learned through a training class, a book, a PowerPoint presentation or CBT module.

In spite of the teaching of many management thinkers from gurus such as Deming and Scholtes, to more recent works from Pink and Sinek, to the innovative discussions of “Maangement 2.0” taking place at the Mix, over the past 30 years the fundamental mindset of management has not changed.  What is needed, instead of “Managers” –  is a caste of teachers and mentors who aggressively look for raw material they can shape and inspire into becoming the workers and leaders that companies need.

Unfortunately, we may never get it, because anyone who had ever wished to rise through the ranks learned to do so not by developing and inspiring others, but by figuring out the keywords to make it look like they did.

Ownership is easy when you’re not fighting for survival

Fight In Wolf Pack

Fight In Wolf Pack II by amrodel on deviantart.com

Right on the heels of my recent post advocating the development of a “Shop Owner Mentality” in order to create pride and dedication within organizations, an article by Nacie Carson was published on FastCompany.com entitled “Think Like An Entrepreneur, Act Like An Employee.”

In my article, I wrote:

People who are proud of their shop always want to have that pride.  They want it to sustain and grow.  They never want to see their pride diminished.

In your workplace, do people act like shopowners?  Do they do work extra hard to take care of the shop, own its processes, design its delivery of goods and services, and constantly seek out innovative ways to provide value?  Are they looking for ways to grow the business, since that growth leads to both stability and prosperity?

Odds are, they are not.  Most people are just trying to survive it all, in return for a paycheck and some sense of satisfaction, if it can be found at all.  Most people have jobs and not purposes.  That lack of purpose prevents the emergence of any kind of pride in the ability to do the job, grow the company, satisfy the customer or improve the quality of whatever it is they are selling.  Instead, pride gets twisted until it becomes not pride of ownership, but pride of survival.

 

My perspective was this:  Most people would love to be calling the shots, but fear of reprisal prevents them from experimenting with risky project that, although they might have great rewards, just aren’t worth the potential downside if the project fails.  As a result, people embrace self-protection and learn to keep their heads down.  In other words, they learn to survive.  The only way this can be systematically overcome is for leaders at the top of organizations to embrace management styles and practices that encourage, and even reward, risk taking.

The FastCompany article has a different take on the situation:

Traditionally, the roles of employee and entrepreneur represent two completely different professional archetypes, each with their own ideal skill set. For example, success for an employee is often measured by how well they take direction from superiors, act within the scope of their job responsibilities or function, and reinforce the mission, vision, or values of the organization. Success for entrepreneurs is typically determined by their ability to direct their own work and act without precedent, to expand and grow their job responsibilities and functions, and to envision and support a mission, vision, and set of values on their own. Another way to look at it is to think of the role of an employee as implementing the tactics of an organization–the individual actions that contribute to the success of the larger strategy. The role of an entrepreneur is to develop that larger strategy, and implement it themselves or oversee its implementation.

From my experience in professional development and management consulting, I can tell you that the number one complaint organizations have about their employees is their inability to act tactically but think strategically–or, as above, to act like an employee but think like an entrepreneur. This requires being a follower and a leader simultaneously, and knowing which hat to wear when.

 

First off, I hate when someone says “the organization” has a complaint, perspective, takes an action, or anything else.  Organizations do not act – people within organizations act.  In the above passage, “the number one complaint organizations have about their employees” really means “the number one complaint people at the head of organizations have about their employees” or, in other words, “the boss is complaining about the employees’ inability.”

Yep – that’s right – the behavior of the rank & file is all their fault.  It’s not that management styles prevent risk taking, it’s that those people at the bottom just don’t know how to get to the top.

The article goes on to depict a situation where an entrepreneurial-minded young man rewrote some of the code behind one of his company’s critical reporting processes – without asking permission – and his efforts yielded success.  Of course, he was also a year out of college and, quite very likely, had nothing to lose.  Take a seasoned professional who isn’t yet vested in the 401K plan, has children in need of braces, summer camp, daycare, and a house to live in – and the willingness to unilaterally initiate an enterprise-changing project diminishes greatly.  Why?  Because in many places the very fact that you undertook something without three levels of review and approval threatens your ability to stay at least in the middle of Maslow’s pyramid.

The article’s point is well taken, and offers some very solid advice:

After all, if you are super productive, all you’ll get is more work to do, right?

Yes, and in more than one sense. You may be assigned more responsibilities and tasks, but you will also likely be offered more opportunity in the organization…as long as you make sure someone notices the effort. Like the proverbial tree in the forest, if a man works 80 hours a week and no one sees him, does he still get a raise? (No.) This is why productivity, when combined with a great professional brand, is an awesome recipe for increasing your value within an organization. The point is to look at your job responsibilities and required skills from a place of ownership, initiative, and personal direction. Remember, it’s about strategy and tactics.

 

However, I’d hate to be in the organization where everyone is looking for a big project to undertake in order to make a name for themselves.  That sounds like a place without standards, where it is more likely that people will seek to make themselves look good by making others look bad, and where management, rather than leading the people within the organization to reach their potential, is content to sit by and let the wolves destroy each other just to see which one is the strongest.