A particular Netflix Culture: Freedom & Responsibility document is very popular in the circuits of Silicon Valley. It was uploaded on SlideShare by the internet entertainment service company’s co-founder and CEO Reed Hastings. “Hard work – not directly relevant ” – is engraved as the title of one of the slides under the ‘High Performance’ section. The emphasis is on impact created. A lot of Netflix’s success – the company is on track to exceed $11 billion in revenue this year, valued at $70 billion, and reported a six-time surge in income in Q1 of 2017 – can be attributed to this uncanny approach to its culture.
The creator of this document may not be as famous as the document itself, but her work with Netflix’s talent strategy is often considered as a building block for the company’s soaring success. Patty Mccord was the Chief Talent Officer at Netflix when she decided to articulate the company’s values in the form of things they valued and what mattered to the company. Patty Mccord was with Netflix for 14 years (1998-2012), and besides creating the “most important document to come out of the Valley”, she learnt many a lessons about creating a high performance culture. She shares her journey in an article, “How to Hire” for Harvard Business Review’s January-February 2018 issue. In this article, we capture the lessons HR professionals can draw from her time at Netflix.
#1 People often define ‘culture fit’ incorrectly
A person should not be considered a good culture fit if (s)he is a good drinking buddy or fun to talk to our go out with. But that is how most people define someone a good fit culturally as, according to Mccord. A good cultural fit is a person who is great at doing the job you need to get done. A person with a contrasting personality style can also be a good cultural fit if (s)he is great at doing what you need done. Contrasting personalities also bring cognitive diversity in the team.
#2 Making great hires is about recognizing great matches
Great matches are not always how we expect them to be in an organization, and great matches are what make great hires. Mccord gives the example of a Netflix employee Anthony Park. His banker profile with “programming” skills (not “software developer”) and a buttoned up personality were not entirely what Netflix was used to having. But the way he came up with innovative ideas, he was an asset to the company. In the words of Mccord, “Anthony didn’t say much, but when he did speak, it was something really smart.” Anthony has progressed in the organization. He is a VP now.
#3 It is improbable to find cookie-cutter solutions, one has to be creative
For rarefied skills, it is difficult to find talent by simply using keywords from the job description. Some roles are customized based on the business need, and to find a person doing an entirely similar work in another organization can be challenging for a recruiter.
Sometimes, a recruiter has to approach hiring differently. Take the case of Bethany Brodsky at Netflix. Mccord shares that she had “virtually no technical knowledge” but was still the best recruiter of technical people. It is because, Paddy mentions, “she understood that a candidate’s approach to problem solving was more important than previous experience.”
#4 Assess an individual’s ability to understand the root cause of a problem
As Bethany Brodsky discovered, that an individual’s approach to problem solving was more important than the previous experience (s)he had. She assessed people on the basis of their ability to understand the root cause of a problem, something she wasn’t bad at herself – after all she managed to hire for extremely technical roles and became the best technical recruiter despite having virtually no technical know-how. An individual’s ability to understand the root cause of the problem is what she would assess in interviews. Netflix had begun streaming on Xbox, Roku, and TiVo. While hiring for a technical role, she asked the candidates to tell her which of the 3 devices had seen a million subscribers in 30 days. Almost everybody guessed it to be TiVo because of the popularity of the device back then. There was only one candidate who gestimated Xbox, and correctly. The logic behind his choice was that people using Xbox were already willing to pay a premium and would thus be ready to pay for Netflix too. He was correct, and was hired.
#5 Treat recruitment as an internal process
Patty Mccord was a witness to the industry standard of outsourcing recruitment, and it was then she made an “irrefutable business case” for investing in building a team of internal recruiters. It was a substantial investment, but they ended up saving bundles of money (paid in the form of headhunter fees) because of this investment. The technical nature of the business, in a way, made the managers be more involved in the recruitment process, and that paved the way for hiring top talent. Discussions happen on the kind of talent needed, and the talent acquisition expertise of the recruiter can be amalgamated with the hiring manager’s technical understanding of the role.
#6 Value recruiters
Recruiters should be treated as business partners by hiring managers, and recruiters need to understand the needs of the business. As Mccord highlights, in her conversations with many hiring managers, they have shunned the role of a recruiter, making assumptions that recruiters “aren’t smart and don’t understand what is going on in my business or know how technology works.” An infuriated Mccord has the response, “Then start expecting – and demanding – that they do!” A symbiotic relation is what is needed though, and that requires hiring managers to value recruiters.
#7 Candidate experience takes precedence over everything
Netflix always treated candidate experience as mission critical, so much so that Patty Mccord drove a culture when you are always recruiting, when at football games, dinner parties, everywhere. And it was just not hearsay, recruiting was so important that it took precedence over any meeting a hiring manager was scheduled for, the only exception being executive staff meetings. “Candidates are evaluating you, just as you are evaluating them,” Mccord writes. And Netflix hardly gave a chance to candidates to do a negative assessment of the company.
Patty Mccord started her association with Netflix when the company was in the business of emailing DVDs and a handful of people worked off playing cards tables and she left when the entertainment company is now a household name for its programming and streaming services. And this surge in growth can be owed partly to the practices of the company, which were well and truly mentioned in the “most important document to come out of the Valley,” as Sheryl Sandberg calls it.
1 Page 33, Netflix Culture: Freedom and Responsibility