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Workplace culture - beware of promises in the brochure
ALSO: Daniel Coyle gives us the lowdown on the realities of reviving culture
A couple of years ago the founder and long-time boss of Netflix, Reed Hastings, published a book lifting the lid on the unique culture that has powered his extraordinarily successful firm.
Netflix holds a special place in the world of Silicon Valley folklore partly because it has ripped itself down several times and started again. The business started as a DVD-by-post business, then it was one the first movie-streaming sites (it was at this stage it tried to sell itself to Blockbuster for $50m), then when it saw rights owners coming back for their assets it became the biggest commissioner of video content in the world. Today - another switch - it makes more content that any other organisation in the world.
The company has made some noteworthy decisions along the way. When the business was transitioning from DVDs-by-mail to streaming they were faced with the challenges of senior leaders trying to defend the revenue from their lucrative postal business. Most of us have worked in this cake-and-eat-it challenge. The postal operation was profitable and the managers of it wanted to slow-walk some of the proposed innovations of the streaming alternative, especially as their business depended on it. Hastings’ response was the stuff of legend. He banned the managers from the incumbent business from attending his weekly meeting. Even though they accounted for over 95% of revenue they were no longer able to take a seat at the top table.
Hastings’ book No Rules Rules is his attempt (following earlier books by others, not least his former head of culture) to explain how such innovation is fostered by unshackling employees from bureaucracy. The world famous Netflix Culture Deck had labelled a historical relationship between company size and bureaucracy. It was this bureaucracy that they ascribed for the end of creative innovation in most firms. Bigger firms create more rules, more rules kill invention. Smart employees know not to try something unheard of, they start presuming that there are rules against such adventure.
Hastings’ book (written as a back-and-forth discussion with INSEAD professor Erin Meyer) attempts to frame ideas like ‘unlimited vacation’ and ‘no expenses policy’ as the nurturing climate that leads to breakout success.
In that context it’s worth reading this Hollywood Report article from last week. Netflix’ first quarter results last week were off the charts bad and the streamer has seen half of its value wiped out in a month.
The article claims that the reality of Netflix is a culture that is internally like ‘the Hunger Games’ (something that former employees have confirmed to me) and is externally perceived as aggressively arrogant. While it wasn’t the attention grabbing part of Netflix ‘ offering, a significant amount of the platform’s success had been based on the mundane retention of viewer favourites like Friends and The Office. Hollywood Reporter suggests that Netflix’ response to losing this content was to move towards the ‘Walmart-isation’ of the business (which involved creating large amounts of undifferentiated programming). The organisation was riven with rivalries and internal politics that led to very average content being green lit.
In that context it was enlightening to finish Hastings’ book. It has the ring of the 70-20-10 mythology that Google celebrated as its cultural differentiation with the rest of the business world. While discussion and debate about 20% time was ubiquitous at business conferences and amongst job candidates, there was just one problem with it: inside the company it didn’t exist.
The lesson of workplace culture is that we need to strive to separate the story from the reality. More often than not the mythology that a leader wants to tell you is just that, the story they’d like you to believe.
Still interested? One of the very earliest episodes of Eat Sleep Work Repeat interviewed Patty McCord the co-creator of the Netflix Culture Deck. (She’s pretty clear in what she says to me that the no vacation policy was a way to get workers to take fewer breaks for an intense period of work).
Lot of coverage of Airbnb’s decision to go remote first (more). CEO Brian Chesky goes out of his way to emphasise that this isn’t to devalue face-to-face work but to compartmentalise it as something that is done deliberately.
Just a reminder that Professor Raj Choudhury at Harvard believes that because this work from anywhere future is what top talent desires it is likely to become the default for many firms over time. (An interesting debate to be had here…)
In that vein, research says that workers being able to choose where they work makes them happier
The idea of divergent vs convergent meeting modes got a boost this week with research that confirmed that Zoom meetings are significantly less effective at generating creative thought
The Telegraph newspaper describing hybrid working as a ‘remainer cult’ is one of the most deranged pieces of writing I can remember. I can only presume it reflects that they are trying to make their mainly retired audience angry. (Their own media pack says that the average Telegraph reader is aged 61)
‘Becoming entrepreneurial about forging connections’ - a masterclass by Daniel Coyle
If you find yourself becoming interested in the magic of workplace culture one of the go to authors of the subject is today's guest, Dan Coyle.
Dan's 2018 book The Culture Code allowed him to go deep with some of the most successful cultures in the world - in the arenas of business, sport and even the military. He's returning after the blazing success of the Culture Code with a book that gives more of the energy of that title but drawn into a workbook, The Culture Playbook - imagine something like a journal with prompts of what to write.
He joined me for a discussion where we reflect on the challenges of the last 2 years and what any organisation should be thinking about as they set about creating a winning, forward-looking culture.