Powerful by Patty McCord is one of the best business books I’ve read in a while. Patty McCord was the chief talent officer at Netflix from 1998 to 2012, and along with founder Reed Hastings, she was responsible to create the wildly innovative culture at Netflix which is very well known today.
I first discovered the book via this HBR article: How Netflix Reinvented HR, and I was intrigued by the embedded slide deck which was written in 2009, and is popularly known as the Netflix culture deck. This deck has been downloaded more than five million times, and explains how Netflix shapes their culture and motivates performance.
Several things in the deck make you do a double take; for instance, Netflix’s formal expense policy is five words long: “Act in Netflix’s Best Interest”.
That’s it? Can a public company worth over a $150 billion really have an expense policy which is essentially no policy. Apparently, the answer is yes. In the book Patty McCord states that they rarely had any trouble with this type of policy – occasionally someone would eat at a restaurant that they shouldn’t, or buy a gadget that they shouldn’t, but by and large this policy just works.
Similarly, the no defined vacation policy which is not very uncommon these days was pioneered by Netflix.
Compared to some of the other ideas mentioned in the book – these two things seem almost trivial. The most powerful thing to me was the thought that Netflix says that adequate performance gets a generous severance package. The idea is that they want to hire only top performers, and pay their top performers top of the market rate. This is because while in procedural work the best performers perform 2x as much as the average performers, in creative work the best performers contribute 10x as much as the average performers, so it makes sense to hire just one great person rather than two average ones.
Obviously, the flip side of this is the immense pressure a lot of Netflixers must come under to perform, and this is clearly not for everyone.
The question when reading business books is how relevant they are to what you are doing. In terms of directly actionable things – I believe there was just one – Patty McCord talks about getting feedback on yourself in the form of Start, Stop and Continue, and I am interested in implementing that for myself, and see what my colleagues have to say about my performance in these three simple buckets.
While other things may not be actionable for me in their pure form I did some further reading on almost everything mentioned in the book and concepts such as managing with context, not control, and avoid rules can always be adapted to suit your style.
While these things are all at a tactical level, the foundation of all of this is to hire high performance people, and Netflix does a great job on defining what high performance means to them. That is something you can certainly model yourself on if it resonates with you.
In deciding whether you should read this book or not, I would say that go ahead and read this HBR article on How Netflix Reinvented HR, and if you find that interesting then you will definitely find value in the book.
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