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پورتال رسمی گروه آموزشی طلوع راد افتتاح شد

https://raadacademy.ir/ 

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Accelerating the journey to HR 3.0 

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How to Actually Encourage Employee Accountability

by Ron Carucci

from HBR.org

 

Summary.   

Companies have been struggling to define and improve accountability processes —from annual performance appraisals to routine check-ins with the boss — for decades, and most employees still dread the conversations. Most of these processes usually result in forced categorizations in the form of numbers or labels, which can make employees feel threatened, demeaned, and insignificant. Even leaders who are beholden to flawed formal accountability processes can ensure that their employees feel their work is honored while simultaneously embracing opportunities to improve. In order to do so, dignity, fairness, and restoration must form the backbone of ongoing performance-related conversations

 

Fewer words in corporate vernacular induce a tighter wince than “accountability,” and for good reason. Companies and leaders have grappled with what it is and how to achieve it effectively for decades. Ask anyone if they look forward to their performance evaluation or periodic check-in with their boss, and most will give an emphatic “no.”

Data shows that 82% of managers acknowledge they have “limited to no” ability to hold others accountable successfully, and 91% of employees would say that “effectively holding others accountable” is one of their company’s top leadership-development needs. Research also confirms how insignificant today’s accountability systems make employees feel. Gallup found that only 14% of employees feel their performance is managed in a way that motives them, 26% get feedback less than once per year, 21% feel their performance metrics are within their control, and 40% feel as if their manager holds them accountable for goals they set. Add to that the fact that 70% of employees feel their managers aren’t objective in how they evaluate their performance, and it comes as no surprise that 69% of employees don’t feel they’re living up to their potential at work.

The fundamental problem with accountability is that it now involves little more than the process of accounting. The scorekeeping nature of this process yields a built-in negativity bias, where leaders reflexively hunt for shortfalls, and the tallying usually ends with a forced categorization — a rating system of numbers or labels, sometimes stack-ranking employees against their peers. I recently spoke with a leader at a client organization just after his performance review, and he was infuriated. “How could he rate me a 3? I’ve always been a 4. My whole career, I’ve been rated at the top! Now, suddenly I’m a 3, just because he’s only allowed to give out a certain number of 4s?” Listen to the painful conclusions this leader is drawing about himself and his boss. What should have been a productive conversation left him obsessed with a number and resentful of the person who consigned him to it. And he’s not alone. A recent neuroscientific study revealed that we respond to being categorically rated with a sense of being threatened — we literally feel unsafe when someone puts us in a box in this way.

Accountability processes are the formal and informal ways that leaders talk about, assess, and affirm the contributions of those they lead and the improvements they can make to strengthen those contributions. They include everything from annual performance appraisals to routine check-ins with your boss. Even in the face of deeply flawed formal processes, leaders can ensure that their employees feel their work is honored while simultaneously embracing opportunities to improve. To make that experience commonplace, mere tweaks to the tallying processes of accountability won’t move the needle. Companies must dramatically redefine what it means for leaders to create a culture of accountability. Based on my 30 years of observing leaders who do this well and through my research on accountability, I’ve identified three major shifts leaders need to make to ensure that the accountability experience dignifies employees’ work and challenges them to make greater achievements — without making them feel demeaned or insignificant.

Make Dignity the Foundation

Managers must understand the weight of their own judgments. A recent study of the brain shows how other people’s opinions of us influence our sense of self-efficacy. When leaders believe their role is to create conditions in which people make their best contributions — and genuinely enjoy doing so — the following core foundations of accountability improve:

Connections between leaders and direct reports deepen. Instead of obligatory monthly or quarterly check-ins during which employees provide rote updates, conversations should be undergirded by a sense of purpose. Questions like, “What did you learn this month?” or “What do you feel most proud of?” stir employees’ eagerness to tell their stories of achievement and struggle.

The quality of feedback and learning increases. When dignity, not surveillance, is the goal of accountability, the quality of evaluative feedback improves. When employees believe their bosses are genuinely interested in their success, they feel less guarded and less inclined to hide their underperformance. When bosses are committed to their employees’ success and are less focused on documentation, they feel comfortable offering feedback and coaching about underperformance.

One of the simplest ways to dignify those you lead is to ask for the story of their work. Instead of offering a perfunctory “good job” after somebody has finished a project, ask for details (“I’m sure it took more to get here than I can see. Can you talk to me about how you did it?”). As they tell their story, watch how animated they become as they tell you where they struggled and what they felt proud of.

Focus on Fairness

As I’ve written about before, when accountability systems are seen as fair, people are four times more likely to be honest (especially about their mistakes), act fairly toward others, and serve the organization’s purpose instead of their own interests. Our accountability systems have painfully confused sameness with fairness and have been designed largely to avoid litigation and reduce a manager’s biases. In practice, they’ve done more to stunt individuality, and that’s exactly what makes them unfair.

Prioritizing fairness in our accountability processes allows two very important things to change. First, it reestablishes the connection between contribution and contributor. For decades, in an attempt at creating fairness, conventional thinking has kept the evaluation of work separate from the evaluation of people. This made sense when people were producing large volumes of the same output. But in a knowledge economy, people’s ideas, creativity, and analysis are direct reflections of who they are — the nature of today’s work makes accountability personal. It becomes fair when managers acknowledge contributions as the fruit of the unique talents of their employees. Efforts to force contribution and contributor apart are experienced as invalidating and unfair.

Second, focusing on fairness exposes biases within accountability systems. Plenty of research shows that organizations privilege certain groups via implicit biases within their accountability systems. Viewing these systems through the lens of fairness prompts honest questions about how to change them. Who has access to prized opportunities? What are the existing expectations about who will or won’t excel? Whose voices and ideas get included? Questions like these reveal whether there’s equitable opportunity to succeed, regardless of one’s level of ability, and enable leaders to open up opportunities for people to shine with whatever talents they have. For example, a leader might broaden who gets to speak and present at meetings, or take a new approach to acknowledging traditionally privileged roles (like engineers at tech companies or marketers at branding companies) that levels the playing field for other types of contributions.

I spoke with Hubert Joly, a former CEO of Best Buy, whose acclaimed turnaround of the retailer is well known. Key to that transformation was a new focus on helping individuals be themselves, to “be human.” As Joly told me:

When I first started as CEO, and they showed me the forms to fill out about my team’s performance, and they wanted me to put numbers in boxes, I thought, Why would anyone do this? I decided to simply ask people, “How do you feel things went?” — and they would often be harder on themselves than I would have. I would ask, “What do you need from me?” — and they would tell me. It seemed like a much more human approach to holding people accountable.

Joly applied that message to the organization as a whole.“What does it look like when we are at our best?,” store associates were asked during the process of setting standards for the company’s new brand. Allowing employees to help define the standards to which they will be held, Joly recognized, leads to better systems of accountability. When people help set the bar, they are far more motivated to reach it, and often exceed it.

To demonstrate your commitment to fairness, ask those on your team — preferably anonymously — if they feel the playing field in your group is level, if they see some roles or people as privileged, or if they view you as you having “favorites.” Even if your intentions are good, people may still feel like they don’t have an equitable chance for success.

Make Restoration, Not Blame, the Goal

People dread accountability in their organizations. Why? Because when consequences are levied, they often feel shaming and harsh, despite corporate rhetoric about learning from failures. The reflexive response is to hide mistakes or point fingers elsewhere.

If leaders believed that falling short of a goal still had merit, it could radically alter how people treat their own — and others’ — mistakes. As Kathleen Hogan, Microsoft’s Chief People Officer, told me:

In a culture where people struggle to admit they don’t know something, calculating risk can be tricky. Being open about failure helps us balance a growth mindset with accountability. We are learning to not just reward success, but also reward people who fell short while getting us closer. We want it to be acceptable to say, “I don’t know, but I will find out.” Learning from our mistakes gets us closer to our desired results — that’s a new form of accountability for us.

To treat mistakes restoratively, leaders need humility, grace, and patience. They must see any person’s arc of professional success as more than the sum total of any single assignment. Leaders also need the humility to acknowledge their contribution to people’s failures. Did the person have the resources, skills, team support, and realistic timelines to be successful?

We have a long way to go before accountability within organizations becomes a welcomed process that yields fair, actionable feedback and encourages employees to embrace the opportunity to improve their performance and expand their contributions. Making dignity, fairness, and restoration foundational components of accountability systems is a powerful place to start.

Ron Carucci is co-founder and managing partner at Navalent, working with CEOs and executives pursuing transformational change for their organizations, leaders, and industries. He is the best-selling author of eight books, including the recent Amazon #1 Rising to Power. Connect with him on Twitter at @RonCarucci; download his free e-book on Leading Transformation.

 

 

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5 Strategies for Reinventing Your Career in Uncertain Times

by David Lancefield and Dorie Clark

 

Summary.   

Uncertainty can make us cling to the familiar — but it’s also an opportunity to expand our mindsets and explore new avenues for growth. Based on their experience as consultants and leadership coaches, the authors offer five strategies to help anyone reinvent their career: First, explore a range of options, including the unthinkable. Second, imagine your best possible future. Third, build up your capabilities. Fourth, start small. Finally, be ruthless about what you need to leave behind. Ultimately, there are no easy answers, but with these strategies, you’ll have the tools you need to deal with whatever the future may bring.  

 

During times of uncertainty, we tend to hunker down and cling to the status quo. A kind of myopia kicks in, and we focus on our most urgent decisions: how to keep our families safe and healthy, how to keep our bosses happy, or, if we’ve lost a job, how to find a new one as quickly as possible. When we’re overwhelmed, it can be hard to find the time, motivation, and mental energy to think about longer-term questions.

But despite the challenges that extended periods of uncertainty present, those periods also offer unparalleled opportunities for strategic planning. Total control and predictability are always an illusion — and when circumstance strips that illusion away, it can open our minds to the wide variety of paths we could take. On the basis of our experience as consultants and leadership coaches, we’ve developed five strategies that can help anyone leverage the power of uncertainty to reinvent their career strategy.

1. Explore a range of options — including the unthinkable.

Anything can happen in uncertain times. The breadth of possible outcomes can be overwhelming, and even when we understand them intellectually, we often avoid confronting our worst-case scenarios. But explicitly considering the most unimaginable of outcomes can actually make them less intimidating, enabling you to think through your options more clearly and to plan more effectively.

One of us, Dorie, worked with an organization that was drafting budgets detailing what it would do if the pandemic led to revenue declines of 5%, 10%, or 20% for the year. Dorie urged it to craft a scenario in which 50% of revenue evaporated. Thankfully, that financial apocalypse didn’t come to pass. But knowing what it would do in that case meant that the organization was prepared no matter what, giving it a far greater shot at success than peer organizations that avoided even considering such a possibility.

Similarly, if you’re looking for work, consider planning not just for the most likely scenarios but also for one in which you’re unemployed for twice as long as you expect, or in which your spouse also loses his or her job. Although such possibilities can be difficult to think about, figuring out exactly how you would handle them — and setting triggers for action, such as “If I haven’t landed a job by February, I’ll move to a cheaper apartment or rent out the spare bedroom” — can help ensure that you don’t find yourself in a more dire position later on, such as having to sell your home or move in with relatives.

2. Imagine your best possible future.

 

Of course, strategic planning isn’t just about imagining the worst possible outcomes. Equally important is considering ideas and opportunities that might never have occurred to you before. Challenge the assumptions you are making about yourself — things like “I’ve never tried that type of work before, so I wouldn’t be a good candidate” and “I’m just not cut out for management.” Think about different ways you could leverage your skills and fulfill your passions, both at work and in other aspects of your life. Would working a three-day week give you more time for parental care or entrepreneurial ventures? The more you’ve thought through your options, the better prepared you’ll be to act when an opportunity arises.

Although it may sound simple, imagining best-case-scenario futures is sometimes even harder than preparing for the worst. Here are some strategies to help you get started.

  • For inspiration, delve into your most vivid difficult moments — challenges you faced during the pandemic, for example — and think about the skills or creative adaptations you drew on to meet them. Perhaps you struggled without the routine of a daily commute but then repurposed your commute time into a new fitness regimen. This could suggest that going forward, you should consider remote work opportunities.
  • Construct a personal highlights reel to help you remember the moments when you were at your best. The patterns you discover can serve as clues. If you’ve consistently enjoyed mentoring colleagues, for instance, you might consider how to develop new skills around coaching or look for ways to make it a larger part of your professional life.
  • To understand what you value, think about how you spend your free time. One of David’s clients, who had long nursed a side passion for writing, recently left her job and has now started to work on a book.
  • Go beyond your past experience and current industry to explore new arenas and emerging trends. A few years ago one of David’s former colleagues noticed that interest in AI was rapidly growing. Although he lacked formal experience in the field, he applied for and soon landed a role in a new innovation unit focused on developing and implementing AI technologies.

3. Build capabilities relevant to your future self.

In normal times, it’s typical to first identify a job you’d like to have and then work to acquire the skills needed to land it. But in periods of extreme uncertainty, that can be a risky approach, because the company or even the sector you’re focused on may face unexpected disruptions. We suggest taking a “skills first” approach instead: Identify the skills you’ll need to cultivate in order to grow toward your broad personal and professional goals, and then determine which jobs might be a good fit. A colleague of ours was committed to the idea of becoming a “global leader.” To pursue that high-level goal, he determined that he had to improve his cross-cultural communication skills, regardless of the requirements of any particular job opening.

To identify and develop new skills, we recommend the following strategies:

  • Find opportunities to practice new skills in your current role. Without changing his formal role at all, the colleague we just mentioned made an effort to cultivate relationships with coworkers from vastly different backgrounds to better understand their diverse experiences.
  • Explore online programs and courses. Our colleague invested in several courses focused on managing across cultures, bolstering his confidence and helping him avoid rookie mistakes.
  • Reach out to people you can learn from through informal mentoring or formal coaching. Your network is your best educational resource — and the people in it might also be in a position to advocate for you in the future as they become aware of your growing skill set. Our colleague asked a mentor if he could shadow her on certain calls and meetings to observe how she handled various situations, giving him valuable real-world perspective.

4. Start small.

To move past the paralysis of uncertainty, focus on what you can change in the short term. If your tasks feel intimidating, try “chunking” them into more-manageable sub-tasks. Writing a book might seem overwhelming, but drafting a high-level outline can be done in an afternoon. If you’re not sure what to prioritize, start with some “no regret” moves — actions that will be helpful regardless of changing circumstances — such as brushing up your résumé or updating your social media profile. Finally, ask yourself, “What small move could I make today that would bring me joy?” or “What could I accomplish if I gave myself a week?”

An executive we know was contemplating a career move, but after years of focusing exclusively on the day-to-day tasks of his job, he found the prospect of rebuilding his skills and network somewhat daunting. As a first, step, he decided to set up five calls every week with people in his network (university friends, previous customers, and people he knew socially) to catch up on news in their various industries and learn more about different roles and organizations. After a few months, some of those people started sending him job openings they thought would be relevant — and he eventually landed one of them.

5. Be ruthless about what you need to leave behind.

Planning for an uncertain future isn’t just about arming yourself with new skills or making new connections. It’s also about making strategic choices concerning what — and who — to abandon. Of course, it’s hard to give up things in which you’ve invested a lot of time, effort, and energy. And it’s easy to be nostalgic about the past, especially when facing uncertainty in the present. But moving forward means taking a clear-eyed view of what’s no longer serving you and giving yourself the space to pursue something new.

One of David’s colleagues had always envisioned herself in a portfolio career, one that would include serving on a corporate board. She realized she was not on track to achieve that goal because she chronically overfilled her calendar with work and volunteer obligations. Once she understood the opportunity cost of her current schedule, she began delegating more responsibilities. She created formal handover plans, developed a script for turning down requests and more assertively saying “no,” and practiced such delicate conversations. Once she had eliminated the unnecessary responsibilities that were weighing her down, she had a lot more time and headspace for exploring director opportunities.

Human beings are wired to avoid uncertainty — but no matter how hard you try, there’s no escaping it. Instead, it’s best to view uncertainty as an opportunity for growth, whether that means exploring new skills, a new job, or an entirely new career. There are no easy answers, but with the strategies described above, you’ll have the tools to deal with whatever the future might bring.

 

From: hbr.org 

 

 

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تمرکز

ویژه کسانی که میخواهند تمرکز بهتری داشته باشند و از مطالعه خود نتیجه بهتری بگیرند

تمرکز

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How Netflix Reinvented HR

by 

Patty McCord

From the January–February 2014 Issue

 

Sheryl Sandberg has called it one of the most important documents ever to come out of Silicon Valley. It’s been viewed more than 5 million times on the web. But when Reed Hastings and I (along with some colleagues) wrote a PowerPoint deck explaining how we shaped the culture and motivated performance at Netflix, where Hastings is CEO and I was chief talent officer from 1998 to 2012, we had no idea it would go viral. We realized that some of the talent management ideas we’d pioneered, such as the concept that workers should be allowed to take whatever vacation time they feel is appropriate, had been seen as a little crazy (at least until other companies started adopting them). But we were surprised that an unadorned set of 127 slides—no music, no animation—would become so influential.

Netflixorganizationalculture 131001173045-phpapp02 from Rose Nolen

People find the Netflix approach to talent and culture compelling for a few reasons. The most obvious one is that Netflix has been really successful: During 2013 alone its stock more than tripled, it won three Emmy awards, and its U.S. subscriber base grew to nearly 29 million. All that aside, the approach is compelling because it derives from common sense. In this article I’ll go beyond the bullet points to describe five ideas that have defined the way Netflix attracts, retains, and manages talent. But first I’ll share two conversations I had with early employees, both of which helped shape our overall philosophy.

The first took place in late 2001. Netflix had been growing quickly: We’d reached about 120 employees and had been planning an IPO. But after the dot-com bubble burst and the 9/11 attacks occurred, things changed. It became clear that we needed to put the IPO on hold and lay off a third of our employees. It was brutal. Then, a bit unexpectedly, DVD players became the hot gift that Christmas. By early 2002 our DVD-by-mail subscription business was growing like crazy. Suddenly we had far more work to do, with 30% fewer employees.

One day I was talking with one of our best engineers, an employee I’ll call John. Before the layoffs, he’d managed three engineers, but now he was a one-man department working very long hours. I told John I hoped to hire some help for him soon. His response surprised me. “There’s no rush—I’m happier now,” he said. It turned out that the engineers we’d laid off weren’t spectacular—they were merely adequate. John realized that he’d spent too much time riding herd on them and fixing their mistakes. “I’ve learned that I’d rather work by myself than with subpar performers,” he said. His words echo in my mind whenever I describe the most basic element of Netflix’s talent philosophy: The best thing you can do for employees—a perk better than foosball or free sushi—is hire only “A” players to work alongside them. Excellent colleagues trump everything else.

The second conversation took place in 2002, a few months after our IPO. Laura, our bookkeeper, was bright, hardworking, and creative. She’d been very important to our early growth, having devised a system for accurately tracking movie rentals so that we could pay the correct royalties. But now, as a public company, we needed CPAs and other fully credentialed, deeply experienced accounting professionals—and Laura had only an associate’s degree from a community college. Despite her work ethic, her track record, and the fact that we all really liked her, her skills were no longer adequate. Some of us talked about jury-rigging a new role for her, but we decided that wouldn’t be right.

So I sat down with Laura and explained the situation—and said that in light of her spectacular service, we would give her a spectacular severance package. I’d braced myself for tears or histrionics, but Laura reacted well: She was sad to be leaving but recognized that the generous severance would let her regroup, retrain, and find a new career path. This incident helped us create the other vital element of our talent management philosophy: If we wanted only “A” players on our team, we had to be willing to let go of people whose skills no longer fit, no matter how valuable their contributions had once been. Out of fairness to such people—and, frankly, to help us overcome our discomfort with discharging them—we learned to offer rich severance packages.

With these two overarching principles in mind, we shaped our approach to talent using the five tenets below.

Hire, Reward, and Tolerate Only Fully Formed Adults

Over the years we learned that if we asked people to rely on logic and common sense instead of on formal policies, most of the time we would get better results, and at lower cost. If you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing. Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause. Instead, we tried really hard to not hire those people, and we let them go if it turned out we’d made a hiring mistake.

Adultlike behavior means talking openly about issues with your boss, your colleagues, and your subordinates. It means recognizing that even in companies with reams of HR policies, those policies are frequently skirted as managers and their reports work out what makes sense on a case-by-case basis.

Let me offer two examples.

When Netflix launched, we had a standard paid-time-off policy: People got 10 vacation days, 10 holidays, and a few sick days. We used an honor system—employees kept track of the days they took off and let their managers know when they’d be out. After we went public, our auditors freaked. They said Sarbanes-Oxley mandated that we account for time off. We considered instituting a formal tracking system. But then Reed asked, “Are companies required to give time off? If not, can’t we just handle it informally and skip the accounting rigmarole?” I did some research and found that, indeed, no California law governed vacation time.

So instead of shifting to a formal system, we went in the opposite direction: Salaried employees were told to take whatever time they felt was appropriate. Bosses and employees were asked to work it out with one another. (Hourly workers in call centers and warehouses were given a more structured policy.) We did provide some guidance. If you worked in accounting or finance, you shouldn’t plan to be out during the beginning or the end of a quarter, because those were busy times. If you wanted 30 days off in a row, you needed to meet with HR. Senior leaders were urged to take vacations and to let people know about them—they were role models for the policy. (Most were happy to comply.) Some people worried about whether the system would be inconsistent—whether some bosses would allow tons of time off while others would be stingy. In general, I worried more about fairness than consistency, because the reality is that in any organization, the highest-performing and most valuable employees get more leeway.

The company’s expense policy is five words long: “Act in Netflix’s best interests.”

We also departed from a formal travel and expense policy and decided to simply require adultlike behavior there, too. The company’s expense policy is five words long: “Act in Netflix’s best interests.” In talking that through with employees, we said we expected them to spend company money frugally, as if it were their own. Eliminating a formal policy and forgoing expense account police shifted responsibility to frontline managers, where it belongs. It also reduced costs: Many large companies still use travel agents (and pay their fees) to book trips, as a way to enforce travel policies. They could save money by letting employees book their own trips online. Like most Netflix managers, I had to have conversations periodically with employees who ate at lavish restaurants (meals that would have been fine for sales or recruiting, but not for eating alone or with a Netflix colleague). We kept an eye on our IT guys, who were prone to buying a lot of gadgets. But overall we found that expense accounts are another area where if you create a clear expectation of responsible behavior, most employees will comply.

Tell the Truth About Performance

Many years ago we eliminated formal reviews. We had held them for a while but came to realize they didn’t make sense—they were too ritualistic and too infrequent. So we asked managers and employees to have conversations about performance as an organic part of their work. In many functions—sales, engineering, product development—it’s fairly obvious how well people are doing. (As companies develop better analytics to measure performance, this becomes even truer.) Building a bureaucracy and elaborate rituals around measuring performance usually doesn’t improve it.

Traditional corporate performance reviews are driven largely by fear of litigation. The theory is that if you want to get rid of someone, you need a paper trail documenting a history of poor achievement. At many companies, low performers are placed on “Performance Improvement Plans.” I detest PIPs. I think they’re fundamentally dishonest: They never accomplish what their name implies.

One Netflix manager requested a PIP for a quality assurance engineer named Maria, who had been hired to help develop our streaming service. The technology was new, and it was evolving very quickly. Maria’s job was to find bugs. She was fast, intuitive, and hardworking. But in time we figured out how to automate the QA tests. Maria didn’t like automation and wasn’t particularly good at it. Her new boss (brought in to create a world-class automation tools team) told me he wanted to start a PIP with her.

I replied, “Why bother? We know how this will play out. You’ll write up objectives and deliverables for her to achieve, which she can’t, because she lacks the skills. Every Wednesday you’ll take time away from your real work to discuss (and document) her shortcomings. You won’t sleep on Tuesday nights, because you’ll know it will be an awful meeting, and the same will be true for her. After a few weeks there will be tears. This will go on for three months. The entire team will know. And at the end you’ll fire her. None of this will make any sense to her, because for five years she’s been consistently rewarded for being great at her job—a job that basically doesn’t exist anymore. Tell me again how Netflix benefits?

“Instead, let’s just tell the truth: Technology has changed, the company has changed, and Maria’s skills no longer apply. This won’t be a surprise to her: She’s been in the trenches, watching the work around her shift. Give her a great severance package—which, when she signs the documents, will dramatically reduce (if not eliminate) the chance of a lawsuit.” In my experience, people can handle anything as long as they’re told the truth—and this proved to be the case with Maria.

When we stopped doing formal performance reviews, we instituted informal 360-degree reviews. We kept them fairly simple: People were asked to identify things that colleagues should stop, start, or continue. In the beginning we used an anonymous software system, but over time we shifted to signed feedback, and many teams held their 360s face-to-face.

HR people can’t believe that a company the size of Netflix doesn’t hold annual reviews. “Are you making this up just to upset us?” they ask. I’m not. If you talk simply and honestly about performance on a regular basis, you can get good results—probably better ones than a company that grades everyone on a five-point scale.

Managers Own the Job of Creating Great Teams

Discussing the military’s performance during the Iraq War, Donald Rumsfeld, the former defense secretary, once famously said, “You go to war with the army you have, not the army you might want or wish to have at a later time.” When I talk to managers about creating great teams, I tell them to approach the process in exactly the opposite way.

In my consulting work, I ask managers to imagine a documentary about what their team is accomplishing six months from now. What specific results do they see? How is the work different from what the team is doing today? Next I ask them to think about the skills needed to make the images in the movie become reality. Nowhere in the early stages of the process do I advise them to think about the team they actually have. Only after they’ve done the work of envisioning the ideal outcome and the skill set necessary to achieve it should they analyze how well their existing team matches what they need.

If you’re in a fast-changing business environment, you’re probably looking at a lot of mismatches. In that case, you need to have honest conversations about letting some team members find a place where their skills are a better fit. You also need to recruit people with the right skills.

We faced the latter challenge at Netflix in a fairly dramatic way as we began to shift from DVDs by mail to a streaming service. We had to store massive volumes of files in the cloud and figure out how huge numbers of people could reliably access them. (By some estimates, up to a third of peak residential internet traffic in the U.S. comes from customers streaming Netflix movies.) So we needed to find people deeply experienced with cloud services who worked for companies that operate on a giant scale—companies like Amazon, eBay, Google, and Facebook, which aren’t the easiest places to hire someone away from.

Our compensation philosophy helped a lot. Most of its principles stem from ideals described earlier: Be honest, and treat people like adults. For instance, during my tenure Netflix didn’t pay performance bonuses, because we believed that they’re unnecessary if you hire the right people. If your employees are fully formed adults who put the company first, an annual bonus won’t make them work harder or smarter. We also believed in market-based pay and would tell employees that it was smart to interview with competitors when they had the chance, in order to get a good sense of the market rate for their talent. Many HR people dislike it when employees talk to recruiters, but I always told employees to take the call, ask how much, and send me the number—it’s valuable information.

In addition, we used equity compensation much differently from the way most companies do. Instead of larding stock options on top of a competitive salary, we let employees choose how much (if any) of their compensation would be in the form of equity. If employees wanted stock options, we reduced their salaries accordingly. We believed that they were sophisticated enough to understand the trade-offs, judge their personal tolerance for risk, and decide what was best for them and their families. We distributed options every month, at a slight discount from the market price. We had no vesting period—the options could be cashed in immediately. Most tech companies have a four-year vesting schedule and try to use options as “golden handcuffs” to aid retention, but we never thought that made sense. If you see a better opportunity elsewhere, you should be allowed to take what you’ve earned and leave. If you no longer want to work with us, we don’t want to hold you hostage.

We continually told managers that building a great team was their most important task. We didn’t measure them on whether they were excellent coaches or mentors or got their paperwork done on time. Great teams accomplish great work, and recruiting the right team was the top priority.

Leaders Own the Job of Creating the Company Culture

After I left Netflix and began consulting, I visited a hot start-up in San Francisco. It had 60 employees in an open loft-style office with a foosball table, two pool tables, and a kitchen, where a chef cooked lunch for the entire staff. As the CEO showed me around, he talked about creating a fun atmosphere. At one point I asked him what the most important value for his company was. He replied, “Efficiency.”

“OK,” I said. “Imagine that I work here, and it’s 2:58 PM. I’m playing an intense game of pool, and I’m winning. I estimate that I can finish the game in five minutes. We have a meeting at 3:00. Should I stay and win the game or cut it short for the meeting?”

“You should finish the game,” he insisted. I wasn’t surprised; like many tech start-ups, this was a casual place, where employees wore hoodies and brought pets to work, and that kind of casualness often extends to punctuality. “Wait a second,” I said. “You told me that efficiency is your most important cultural value. It’s not efficient to delay a meeting and keep coworkers waiting because of a pool game. Isn’t there a mismatch between the values you’re talking up and the behaviors you’re modeling and encouraging?”

When I advise leaders about molding a corporate culture, I tend to see three issues that need attention. This type of mismatch is one. It’s a particular problem at start-ups, where there’s a premium on casualness that can run counter to the high-performance ethos leaders want to create. I often sit in on company meetings to get a sense of how people operate. I frequently see CEOs who are clearly winging it. They lack a real agenda. They’re working from slides that were obviously put together an hour before or were recycled from the previous round of VC meetings. Workers notice these things, and if they see a leader who’s not fully prepared and who relies on charm, IQ, and improvisation, it affects how they perform, too. It’s a waste of time to articulate ideas about values and culture if you don’t model and reward behavior that aligns with those goals.

The second issue has to do with making sure employees understand the levers that drive the business. I recently visited a Texas start-up whose employees were mostly engineers in their twenties. “I bet half the people in this room have never read a P&L,” I said to the CFO. He replied, “It’s true—they’re not financially savvy or business savvy, and our biggest challenge is teaching them how the business works.” Even if you’ve hired people who want to perform well, you need to clearly communicate how the company makes money and what behaviors will drive its success. At Netflix, for instance, employees used to focus too heavily on subscriber growth, without much awareness that our expenses often ran ahead of it: We were spending huge amounts buying DVDs, setting up distribution centers, and ordering original programming, all before we’d collected a cent from our new subscribers. Our employees needed to learn that even though revenue was growing, managing expenses really mattered.

The third issue is something I call the split personality start-up. At tech companies this usually manifests itself as a schism between the engineers and the sales team, but it can take other forms. At Netflix, for instance, I sometimes had to remind people that there were big differences between the salaried professional staff at headquarters and the hourly workers in the call centers. At one point our finance team wanted to shift the whole company to direct-deposit paychecks, and I had to point out that some of our hourly workers didn’t have bank accounts. That’s a small example, but it speaks to a larger point: As leaders build a company culture, they need to be aware of subcultures that might require different management.

Good Talent Managers Think Like Businesspeople and Innovators First, and Like HR People Last

Throughout most of my career I’ve belonged to professional associations of human resources executives. Although I like the people in these groups personally, I often find myself disagreeing with them. Too many devote time to morale improvement initiatives. At some places entire teams focus on getting their firm onto lists of “Best Places to Work” (which, when you dig into the methodologies, are really based just on perks and benefits). At a recent conference I met someone from a company that had appointed a “chief happiness officer”—a concept that makes me slightly sick.

During 30 years in business I’ve never seen an HR initiative that improved morale. HR departments might throw parties and hand out T-shirts, but if the stock price is falling or the company’s products aren’t perceived as successful, the people at those parties will quietly complain—and they’ll use the T-shirts to wash their cars.

Instead of cheerleading, people in my profession should think of themselves as businesspeople. What’s good for the company? How do we communicate that to employees? How can we help every worker understand what we mean by high performance?

Here’s a simple test: If your company has a performance bonus plan, go up to a random employee and ask, “Do you know specifically what you should be doing right now to increase your bonus?” If he or she can’t answer, the HR team isn’t making things as clear as they need to be.

At Netflix I worked with colleagues who were changing the way people consume filmed entertainment, which is an incredibly innovative pursuit—yet when I started there, the expectation was that I would default to mimicking other companies’ best practices (many of them antiquated), which is how almost everyone seems to approach HR. I rejected those constraints. There’s no reason the HR team can’t be innovative too.

A version of this article appeared in the January–February 2014 issue of Harvard Business Review.


Patty McCord was the chief talent officer at Netflix from 1998 to 2012 and now advises start-ups and entrepreneurs. She is the author of Powerful: Building a Culture of Freedom and Responsibility (Silicon Guild, 2018).

From: HBR.ORG

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