[MUSIC PLAYING]
SPEAKER 1: Good morning.
Good morning.
Thank you all so much for coming.
Today at Google, we're delighted to welcome Patty McCord.
Patty is one of the world's foremost experts
on company culture.
She was an early employee at Netflix,
and she was a co-author of the famous Netflix culture
deck, which Sheryl Sandberg said was
one of the most important documents
to come out of Silicon Valley.
She's here today to discuss her new book, titled "Powerful:
Building a Culture of Freedom and Responsibility," which
was largely an effort to sort of boil down
the message of the famous Netflix culture deck.
So please join me in welcoming to Google Miss Patty McCord.
[APPLAUSE]
PATTY MCCORD: So I'm just going to couple--
how many people have seen the Netflix culture deck?
A couple of you.
I didn't write it.
I didn't co-author it with Reed Hastings, the CEO of Netflix.
Reed and I did another company before Netflix,
a company called Pure Software.
We sold software tools to other software engineers.
And we grew through a merger and acquisition.
And how we grew was we'd acquire a company,
and every time we'd acquire a company, we'd double.
So we were like 100, 200, 400, 6--
right.
And then we sold the company to our largest competitor.
And my job was to take their employee
handbook and our employee handbook
and smash them together and come up
with the fewest policies that would piss off
the fewest people.
And so what we decided to do at Netflix that was different
was pay attention to the kind of company
that we were working at, primarily
for totally selfish reasons.
I didn't want to work with brilliant assholes anymore.
And I wanted to have permission to say no.
And Reed wasn't very tolerant of people who weren't very smart
or weren't very into the company.
So what we decided to do differently,
for those of you that have read the Netflix culture deck,
is just write stuff down.
So my journey was not only to write down what kind of company
that we wanted to work at, my job was
to be the COO of that culture, which meant if we said this,
then did we do this?
And that's the part where most companies get it wrong.
And I want you to go away from my talk
today and think about what you're doing here
and what you're saying you are as Google
and who you really are acting as Google,
because that's what company culture really is.
So since I've been away, I get to talk to people
who are outside of business and who
are people who are kind of on the speaker circuit.
So I end up onstage with a lot of coaches,
like real sports coaches from real professional sports teams.
So I was in Montreal last year in February.
Has anybody been to Montreal in February?
So cold.
It is so cold.
So I called up my daughter, and I said, hey, by the way,
I'm doing this talk in Montreal in February.
She's like, Mom, go to Patagonia.
Go now.
Get a puffy coat.
Get the big one.
So then I realized how dang cold it is in Montreal in February.
So I figure out my hotel so that I
can go underground so that I can go up to the venue, which is
a place called the Bell Centre.
Does anybody know what happens at the Bell Centre in Montreal?
No hockey fans, huh?
OK.
Well, that's where the Stanley Cup is played.
Now, at this point I've been talking
to groups who are a little bigger than you, but not much.
Like as if this room was full is kind of my biggest audience.
So I go down below.
And at the last minute, they said to me, oh, by the way,
you're not going to be onstage alone.
You're going to be with this guy named Scotty Bowman.
So I google Scotty Bowman, and he's a hockey coach.
He's the winningest hockey coach in history
in the National Hockey League.
So I meet him underground.
We're underground at this venue.
And he's this older gentleman.
He's like 70, and he has on a little suit with a maple leaf
pin and an American flag.
And we're talking about his grandkids.
And he says to me, we're under the ice.
And then it occurs to me, we're in a hockey stadium.
Like a hockey stadium.
So it's not you guys.
It's not this little intimate room.
I go up onstage, and my face is on the Jumbotron.
I mean, it's like huhhh!
And it's really scary.
And there's thousands of people in the audience.
And so he introduces me, nice introduction.
The audience claps very politely,
and I go sit on my little velvet couch.
And Scott Bowman comes up, and the place goes crazy.
I'm in Montreal in a hockey stadium
with the winningest hockey coach in history.
They're clapping like this.
[LAUGHTER]
If they had had those foam fingers,
they'd be doing the foam fingers.
I mean, people are like, taking selfies.
Because I'm onstage with God, as far as
they're concerned in Montreal.
So he comes up.
He sits down.
The master of ceremonies, who has a diamond
earring and teleprompter, and he's working the audience.
And he says, Mr. Bowman, you're such a legend.
You've won so many tournaments.
You've played with all the great players.
What does it take to be a winning team?
How do you give people feedback?
And he says, well, we have an 80-game season.
And every 10 games, I sit down with each player,
and I do an assessment of how they're doing.
They do a self-assessment.
We pull all the stats.
We get feedback from the other coaches.
We get feedback from the other players.
We talk about who we're going to play in the next 10 games, what
the competition is, where their strengths and weaknesses are.
And we put together a plan that we're
going to execute for the next 10 games
so that that person can be an incredibly high performer.
So the guy says to me, Patty McCord,
you've been known for saying how much you hate
the annual performance review.
And I do.
I think it's an utter, total waste of time for most
companies that do it that way.
And so he said, if you didn't do that, what would
you do instead?
And I said, what he said.
Because the thing is that sports coaches
know how to put together teams that win.
And that's really all that management really
is, as far as I'm concerned.
For 30 years, I've been watching people put together teams.
And it's all about doing that.
And the reason I also put the slide up that says team
is that-- and I know you probably
don't say this much here, but in case you
do-- you're not a family.
Right?
Work isn't your family.
It's not undying love.
You're not going to loan your deadbeat brother-in-law money,
and he'll never pay you back, because you always do.
Because this is work.
And you come together to do something
that you can only do here.
And that's create terrific products
that make people happy.
And that joy, I think, of working
is what really makes people happy.
And I say that here at Google, where you
have God's gift to everything.
And I know that when you go home and you say, oh my God, it
was an amazing day at work, almost always
when you say that truthfully from your soul,
it's because you did something hard
with really smart people that made you really effective.
And that's my observations of teams over all those years.
And in order to make it work, it's
about putting together the right teams.
So because I started as a recruiter,
I think a lot about talent.
And what I want to talk to you about
is you today, because I think I don't
need to lecture you guys about how great organizations should
move fluidly and be more flexible
and be more accepting of change, because that's
the world that you live in.
But I want to talk to you about how you navigate
through your own career.
So I just did a talk with 1,500 HR people.
I know that's a frightening idea for most of you.
It's even a frightening idea for me.
Like when I first started talking to HR people
before I wrote the book, people walked out
because I said things that really upset them.
But what I said was to 1,500 HR people,
please raise your hand if you're in the job
that you had when you graduated from college.
How many people raised their hand?
None.
How many of you have ever done a layoff?
1,500 people raised their hands.
How many of you have ever laid off a family member?
There's always one.
Don't ask me why, but people do that.
Like somebody did.
And then I say, how many of you have said the word family
at work?
And 900 people raised their hands.
And I say, for all of you that aren't in the same job,
you mean none of you could work for a company that
could handle retention?
So the truth is that our lives, our careers,
are full of lots of different jobs
in lots of different organizations.
And what I love about Google these days
is that you've now admitted that there's
lots of different organizations in the corporation that
is Google, all the alphabet companies.
So if you start thinking about your career
and how you're going to be successful
and how you're going to move forward,
here's my hint from doing this for a very, very long time.
Is what you love to do that you are extraordinarily
good at doing something the company you work for needs
someone to be great at?
So if you wake up in the morning and you
don't want to come to work, or you're not looking forward
to it and it seems really horrible,
then something's wrong with Patty's algorithm.
And I say algorithm because I worked with geeks all my life,
and I love you and I miss you.
But if I say words like algorithm, it helps, right?
OK.
So what you love to do that you're
extraordinarily good at doing--
is it important?
So when you find yourself coming to work and thinking,
they just don't care about how good I am at writing.
They don't even realize how wonderful
I am, how talented I am.
They may realize it and not care.
That's the honest truth.
And the other part is if you need somebody
to be really, really good and really, really
passionate about a problem you're trying to solve,
and they can just do it, but they don't love it,
then you're not happy on the other side either.
So the reason why I'm telling you this
is it's your job to navigate this.
It's not somebody else's job to suddenly realize
that you are unhappy.
Trust me, they know.
And it's not somebody else's job to realize
that you went home thinking this was the best working
day of your life.
It's yours.
So as you go through your work life,
I want you to be really cognizant of what
you're learning, what you're liking, what you're not liking.
Half of what we learn in our careers
is the work that we do that we hate.
I remember driving away from a job
once, looking in the rear-view mirror
like, if I never see that place again as long as I live.
And then I tried to pin it down.
What was it about that place that made me crazy?
And it was a company that had thousands and thousands
of employees, and they talked to them as head count.
They didn't have names.
They were just head count to be grown or shrunk or grown
or shrunk.
So that's the part about talent.
Your talent is really important to wherever you work.
And you want to make sure that you're in a place that
recognizes that.
And then the last thing I wanted to talk to you about--
and since we're such an intimate audience,
it'd be really fun if you could talk to me.
The last thing I wanted to talk to you
about is the idea of transformation.
So I spend a whole bunch of time with really big companies
who invite me in to talk about how they're
going to transform into an agile tech company
like we have here in the valley.
And they have no clue.
So they can't do it, but you can.
And so the way to create the workplace
that you want to have is to be vocal about it and to speak up.
And for us to start talking to each other
really honestly about what works and what doesn't work.
And I think that you can have incredible conversations
about work.
You know this story I told you about Scott Bowman
at the beginning of my talk?
A couple of days ago, a couple of weeks
ago, I was at this thing in Texas.
And the coach of the San Antonio Spurs--
it's a professional basketball team-- was on.
And it was a very touchy-feely audience.
And somebody said, oh, my question for you, Coach,
is it must be really horrible when you have to cut people
from the team after you've put all that energy into recruiting
them and having them play a whole season
and they've done their best.
And doesn't that feel terrible?
And he said, no.
Actually it doesn't at all.
Like, it's professional basketball.
You didn't sign up for a lifetime appointment.
Everybody understands that.
And I was in the audience thinking,
why can't we just have those conversations?
Why can't we have those conversations with each other?
We hired you to do this thing, and you were amazing.
Thank you.
We're done.
That part's over.
So now what are you going to do next?
And what I think about when I think
about Scotty's methodology for giving people feedback,
it's called a performance improvement plan.
Too bad we ruined that word.
Like what if we actually got together and said,
let's put together a plan so that we can perform better?
What a concept.
But that's not what we normally do.
And so that's why I think real transformation comes
from two things.
One of them is to stop speaking a language about management
that no one understands and just be able to start telling people
the truth.
I just don't love you anymore.
I don't need you.
Or maybe you need something that's
more interesting and stimulating over here.
Or maybe you should move on.
Or maybe you can say, hey, look, I'm
looking at a lot of other opportunities,
and I want to think about what that means for me.
That you can really have those honest conversations.
And the second part is that you can tell the truth about what
you want and what you need.
And your managers can tell you the truth about the future.
And you can navigate your own careers through all of that
and not wait for somebody else to take care of you.
When I talk to women's groups, I say, look,
employee engagement does not mean somebody put a ring on it.
And interviewing with another company
to find out what you're worth--
which is what you're worth, by the way.
And if you feel like you're underpaid
and you're waiting for somebody to notice,
that is not going to happen.
Go find out what you're worth, and that
happens with interviewing.
Interviews get you opportunities.
Interviews get you jobs.
You should be doing that for the rest of your life.
So when you find yourself waiting
for someone in management to take care of you,
I want you to remember my words and go take care of yourself,
OK?
That's my talk for today.
Do you guys want to talk to me?
Let's do some Q&A. Yeah.
AUDIENCE: Do we have mikes or--
PATTY MCCORD: Do you have--
do we need mikes?
Yeah, in case we put it in the video.
The last slide is my book, which there are some you get to have.
AUDIENCE: So if you have an organization, particularly one
like Netflix that had a reputation for this, where
a certain number of low performers,
you're going to churn them out each year,
how do you decide where that bar is?
Do you target a certain percentage of the organization
or absolute performance bar?
PATTY MCCORD: No, it was never like that at all, ever.
Ever.
So here's how it typically happened.
I'll give you a story that--
anybody here use DVD by mail?
OK.
So we had grown.
This is when we were transitioning to streaming,
when we were transitioning out of the DVD by mail business
into the streaming business.
And we had had an incredible run that particular year.
I don't remember which year it was.
But we'd grown 30% quarter over quarter
for three quarters in a row.
So we're at our executive staff meeting.
And Reed wants to go to the white board
and do disaster planning, because he loves it.
Like, what if it goes to shit in a handbasket?
That's his favorite thing to do.
So I say, hey, for sport, what if it kept up?
What if we kept growing quarter over quarter,
30% quarter over quarter compounded for the next three
quarters?
CFO goes to the white board.
He's doing top line revenue.
And he's doing that happy dance, like, look at the money.
Look at the money, look at the money!
Ted Sarandos, who's our head of content, says-- at the time,
we said wistfully, someday we'll be as big as HBO.
And he says, shit, you guys.
That's next year.
It's possible that we'll be as big as HBO next year.
And we all just looked at each other.
And Neil, who was our head of product at the time,
said, that's a third of the US internet bandwidth.
[LAUGHTER]
AUDIENCE: The ISPs have noticed that too.
PATTY MCCORD: And I'm looking at him like, what?
So afterwards, he and I are sitting there like,
does anybody know how to do that?
'Cause files, video files were so big.
You guys remember.
You were around at that time.
I'm like, how do we do-- like, we had a data center because we
shipped DVDs by mail.
So we're brainstorming, like, is it Google?
Is it Yahoo?
Is it eBay?
Who's moving that much data that has--
and it's got to be in the cloud, clearly.
We're not going to do this in a data center.
So we sit down with our IT guys, and they're brilliant.
These are brilliant, wonderful, amazing people.
And we say, here's the problem set.
And they say, no worries.
You guys go exec something.
We'll build the cloud.
And I looked at them and said, you know what?
If anybody on earth could do this, it's you.
Not in nine months.
We couldn't do that.
It was just the time frame was too short for these people
to be those experts to be able to accomplish the business
objective.
And we're certainly not going to miss our window,
if it's there, because we don't have the right IT team.
So I said to them, that's not going to happen.
But we've got nine months to figure it out.
And so we turned, that year, 97% of that team.
And most of them went on to a company called Chegg, which
is a Netflix for textbooks.
So they went, and they took their physical shipping
and receiving database skills to do that.
So that was typically what happened.
Typically what happened was we'd either build something
and it'd be done--
and when I used to interview Google people, people
who had an offer with you guys and an offer with us,
I would say, look, two different problem sets.
Organizing the world's information
is a big problem set.
We're delivering movies and TV shows
to people's homes or their devices.
That's it.
One problem.
That's all we do.
So that's typically what happened.
So the DVD by mail business still exists.
I don't know if you guys know that.
I still use it on my boat.
AUDIENCE: You still use it?
PATTY MCCORD: Yeah.
And it has a great catalog because it has everything
known to humankind because you don't
have to buy rights for it.
But that business is probably--
I bet there's not 100 people in that business anymore.
So that's more what happens.
I know reputationally what Netflix has a reputation for,
but we never said--
why would we do that?
If we said in chapter 2, we're a high-performance culture,
you don't have to cut the bottom third performers
because you don't have them.
And my experience is this.
If you hire somebody who can't do the job,
they are completely without fault. That's
in the interview process.
That person, that candidate has no--
there's nothing they did wrong.
You hired the wrong person.
If you hire somebody and they're close but no cigar, right?
It's like, I love you.
I love you, man.
I love you.
Not really sure.
You can still do that, but you should be honest.
Should be able to say to you, you know what?
You're not exactly the skill set we were looking for,
but we love you.
And we're willing to take the chance if you are.
And then if it doesn't work out, then it doesn't work out.
Everybody tried.
So that's what I'm saying.
You can start being honest in an interview.
So that's more typically what happens.
My experience is you either join a company
that you think you're intellectually going to like,
and you don't when you really get there.
Netflix was not a particularly good place
for people who liked structure or liked just R&D work,
because it was so about deliverables.
AUDIENCE: Thanks.
PATTY MCCORD: Sure.
Right in front of you.
AUDIENCE: Hey.
PATTY MCCORD: Hi.
AUDIENCE: I was wondering.
You have the idea of this generous severance
package and the idea that you let go of people easily.
Did you have to change the company culture
to get to the point where that became acceptable,
or was that--
PATTY MCCORD: Yeah.
It took-- if you go back and read the Netflix culture deck,
we wrote each chapter after the chapter before it.
So when we said, we're going to have a high-performance culture
of adults, and then we're going to give them a lot of freedom,
it probably took four years for me
to figure out how to do that.
So I had to figure out the severance package.
So let's say that, in a typical company,
let's say we've hired you to do something.
You've been here for years.
You're amazing.
You've done it.
The DVD by mail guys, right?
Don't need you anymore.
Now I'm going to put you on a performance improvement
plan for three months to prove you're incompetent.
But we both know you're not.
Well, that's just mean.
So instead, I would say, you know what?
We've been talking about this.
Can't wait to see where you go next.
I mean, half of my Netflix alumni are here.
So I can't wait to see where you go next.
Here's three months' pay.
Let's just not go through this crazy stuff.
There's just no reason to do that.
So that's how I thought about the severance packages,
was if I did the thing that people normally do
and instead just said, how much is that worth?
Then I'd just paid you that.
I also had to have an incredible recruiting
team that would hire the people for the jobs
that we needed getting done in the future.
So that took me a long time, to have a really, really top-notch
recruiting team.
I had to think about competitive offers.
I had to think about head-count dollars in terms of dollars,
not in terms of number of people.
So in most companies--
I don't know how it works here-- but there's
three ways you get a requisition approved if you want to hire
somebody in most companies.
You write a job description that either describes
the person who left that you wish hadn't, a fantasy
person that doesn't exist, or whatever
it takes to get it approved.
None of those have anything to do with actually hiring
somebody to solve the problem.
And the truth is that when you find somebody who's
really qualified to solve the problem,
you should pay whatever it takes to get them.
But in some organizations, especially when
I'm with startups, when they get to step functional scale
and I say, that new team is not this team.
You're not going to make them into that, particularly
on problems of complexity and scale.
So that's how I thought about it.
I thought about it in terms of the whole thing.
How do we have not just high performers,
but high performers in each job to solve each problem?
That's the difference.
AUDIENCE: Do you have any kind of personnel development
in that kind of world?
PATTY MCCORD: Yeah, but not so formally.
My experience is the best way to develop
is to be around amazing people who
you learn from all the time.
So I did a lot of matching with people,
putting people with other people that they
could learn a lot from.
And making-- we had a lot of systems
in place to share mostly business information.
So a lot of our communication and education in the company
was around the business, not necessarily
around those skills.
I think you learn best when you can see it.
When you see somebody behaving like a great manager,
then you have a great role model.
AUDIENCE: Patty, compensation teams
love the annual performance review
because it makes annual increases,
equity modeling, super simple, perhaps even algorithmic.
When you throw that out in favor of lots
of feedback and conversations, how do you connect the dots?
PATTY MCCORD: I don't have any problem
with an annual compensation review.
I think it's really smart.
Actually, I recommend that you do them quarterly
and walk through the company quarterly.
The most important way to think about compensation
is market-based pay.
And the most real compensation information in your company
is in your recruitment team, not in last year's survey.
That's what is really happening.
You want to know what's really happening.
That's my problem with most standard compensation teams,
is they operate on systems and with data that's really old.
And I don't know if you guys do.
I know that you guys are more analytic than that.
But so I would usually walk through the organization
and say, where have I hired a lot of people?
Because where I've hired a lot of people,
that's going to give me really current salary information.
That's going to color how I pay the people that are currently
there that you want to stay.
So I don't have any problems at all with it.
The problems I have are when we take
the review and the compensation and the feedback,
and we throw them all together once a year.
And we say it solves those problems.
So I was going to tell you earlier,
the most innovative work I did at Netflix
was not anything new.
It was just I stopped doing old things that
don't matter anymore.
So that story I told you about Scotty Bowman
is a story about giving great feedback.
And if you're going to give people great feedback,
that's going to affect their performance.
You're not going to do it once a year.
Name one other thing you do once a year that you're good at.
That would be nothing.
So great feedback-- so if you want
to create a system that says, I believe that feedback
can improve performance.
I want to create a system that does that.
Then who would ever come up with the annual performance review?
It's a dumb system to do that.
If you say, I want to have an annual compensation review,
where I do a point-in-time look across the organization
and see is pay working out fairly
and equitably for people, and is it market-based?
Am I paying competitively?
Then that's a completely reasonable exercise to do.
There's where I have the problem, is we mush it together
and we're not clear.
The other problem I have with a lot of compensation systems
is they're not transparent to employees.
It's magic that happens in HR.
And even some HR people don't know how it works.
The recruiting team doesn't know how the comp team works.
It's just crazy stuff.
So again, it's about--
like, I got rid of the--
when I was at Netflix, I got rid of paid time off--
keeping track of paid time off.
I got rid of travel policies.
And I got-- actually I didn't get rid of these things.
I vetoed them before we installed them.
The travel policy and getting approvals
from finance for expenditures.
It seemed insane to me that I would
say, any expenditure over $5,000 has to be--
or $10,000-- has to be approved by finance.
And I've got a company full of PhDs in math.
Like, they know that $10,001 is more than $10,000.
They don't need somebody in finance to tell them that.
But they might need somebody in finance
to sit with them as an analyst and tell them
what things are happening and how they're trending.
Is this the hook?
Are you coming to hook me?
Oh, because-- look at your little--
see, that's a Google problem.
[LAUGHTER]
I told you I'd say that.
Does that make sense to you?
AUDIENCE: Yes.
PATTY MCCORD: I don't have any problem with the system.
It just needs to be transparent.
And it needs to be current.
AUDIENCE: And because you're paying top of market,
the feedback is kind of irrelevant.
PATTY MCCORD: No, they're two different things.
They're two different things.
AUDIENCE: Is there pay for performance
at Netflix, or not really?
PATTY MCCORD: There's high performance.
So you're going to be paid top dollar
for doing a fabulous job with amazing people on time
with quality.
So we're going to just pay there.
We're not going to pay like, well, you did an OK job,
so I'm going to give you an OK raise.
If you did an OK job, we're going
to talk about where you're at and whether
or not you still need to be there.
And then how I determine what pay is is market.
What are you worth somewhere else?
Listen, this true story.
I would say to my vice presidents,
go interview at Google.
They're like, no.
I'm not-- what are you talking about?
I love it here.
I'm like, no, no, no.
Go.
They're like, shit, in Google it takes, like,
seven weeks and five.
I'm like, I want to know what they're paying VPs.
Just get your coat.
Go interview.
I would tell my employees, look, when the recruiter calls,
before you say, no thanks, be sure you say how much
and come tell me.
'Cause that's real comp data.
Real comp data is what somebody else will pay you.
So it's not just paying people a lot.
And it's not just paying people for performance.
It's almost the opposite.
It's expecting extraordinary performance
and paying you well for the extraordinary work.
And then the other thing is not all jobs are equal,
and not all jobs are equally as important to the company.
So I do also--
so I tend to talk to big companies now, and lots
of startups.
So startup CEO dinner, I'm up in the city.
And one guy says, well, you know,
your high-performance thing, you don't really mean everybody.
And I said, yeah, I do.
I mean everybody-- you should have
a high performer at every job.
And he goes, yeah, but not the ones that are unimportant.
And I said, well, really?
Which job at your company is not important?
He goes, well, you know, like, like payroll or something.
And I said, seriously?
You don't what somebody really good
figuring out how to pay your really brilliant engineers, who
I'm sure are the ones that are really important?
And he goes, well, I'm just saying.
I'm like, you don't want them to be accurate?
He's like, well, it's just they don't
have to be like-- yes, they do.
They have to be really great.
And I said, hey, by the way, tip for you.
Your finance organization hates you.
[LAUGHTER]
And he goes, I don't think you know my finance organization.
I'm like, oh, hell yeah, I do.
You just told me, a perfect stranger,
you think your payroll supervisor is stupid.
They know you think they're all stupid
because they can't write code.
It's a completely different skill set.
And furthermore, when you're not looking,
they're thinking of ways to torture you, because that's
what finance people do.
So yeah, I don't-- the pay for performance thing works when
you, you know, what you do is valuable,
then you should pay a lot for it.
Do you want to yell?
Or here-- here it comes.
AUDIENCE: So how do you build a culture of excellence like that
without also creating a culture of fear and ego and toxicity?
PATTY MCCORD: Well, fear is a hard one
to get rid of, because part of it is adrenaline.
So I remember one time, one of our executives was talk--
one of them was, he was talking about
that this particular year, the things that we were going
to do and succeed at were not going to be incremental,
they were going to be monumental.
And he used climbing K2 as his metaphor.
[LAUGHTER]
Here we are.
So at the end--
this had been a big culture of fear
was the new meme around the company,
and we're at this executive meeting.
And it was bigger meeting, quarterly business review.
And at the end, Reed and I go to the front.
We're answering questions.
And he says, I want to hear you and Patty
talk about the culture of fear.
I'm like, oh, for God's sake.
Really?
So Reed says, well, you just used the metaphor of K2.
You have to have oxygen. And if you get halfway up
and a blizzard comes in, you go back down to base camp,
there's no shame.
This isn't for the timid.
So the toxicity and the egos, those people
just don't need to work there anymore.
Somebody's got to just ferret that out.
And you have to--
that's why the culture of honesty is so important,
so that I can say to you, hey, wait a minute.
Excuse me, but in this meeting, she's still talking,
and you just cut her off.
So can you let her finish?
Thanks.
And then you do, and she lives, and life goes on.
You have to model the right behavior.
You have to be able to say, that was a jerk move right there,
buddy.
I mean, you just have to be able to have those conversations.
It's the shitspering that gets us in trouble--
you know, talking shit in a whisper?
That's toxic.
And you can be--
in my book, there's a chapter about debate.
We loved debate on behalf of the customer,
on behalf of the customer, on behalf of the customer.
And you can be pretty worked up when you're
talking about the product.
I used to tell my HR team, we are a service organization.
It is not spelled S-E-R-V-A-N-T-S.
And the people that we serve don't work here.
The people that we serve are our moms and our neighbors
and ourselves.
So it's our job to put together teams
that build incredible stuff.
When I talk to my--
I've been gone six years.
So it's a long time, and Netflix is a very different company
now.
Netflix is a global original content company.
And what's very successful for them now is they've
extended that culture of freedom and responsibility
to the creative talent.
That's why they get the people they get.
That's why Shonda Rhimes wants to work at Netflix and not
at ABC, because nobody's walking around telling her what to do.
AUDIENCE: I'll hand over the mike in a second.
Just like, how do--
does it create a culture of, like, competition [INAUDIBLE]??
PATTY MCCORD: No, because remember
how I started with team?
So the thing about the individual competing
with individuals, that shouldn't happen when you have a larger
collective thing to do.
I mean, it might happen for you guys
because you have more products.
But these teams are formed to focus
on solving a particular problem in a particular time frame.
And teams are formed to do that because individuals can't.
They can't.
That's the deal.
I tell, back when I talk to startup guys,
again, I'm like, OK, in your little startup,
here's the first sign of trouble--
nostalgia.
Remember how it used to be?
And I tell them, really successful companies
are not made of 50 people working 24/7.
AUDIENCE: It's not about product.
It's solving-- it's groups that are solving a problem,
like functional--
PATTY MCCORD: That's right.
Groups solving problems that are clear to everybody.
So everybody has a role.
So when people are competing, then
what are they competing for?
Is it one meaty job and you've got two people?
That's what drives competition.
Is it that you know that in the end, there's only one job,
and there's four people trying to get it,
instead of just picking one?
It goes back to honesty, I think.
SPEAKER 1: All right.
We'll do two more questions.
Over there, I think, and then over here.
AUDIENCE: Thank you very much.
I actually read the book.
PATTY MCCORD: Ah.
AUDIENCE: Amazing book.
Thank you very much for the book.
One big impression I actually got from the book
is one of the major components for Netflix
to sustain such a culture and model
is to have a very powerful and strong recruiting team.
PATTY MCCORD: Yes.
AUDIENCE: And the HR department was [INAUDIBLE]..
My question is, I guess for a smaller company, maybe
a startup or even Netflix in its early days,
where the recruiting in HR is not
as strong as it is right now, is such a culture sustainable?
PATTY MCCORD: Well, since you read the book,
you know that the other secret of the great recruiting
team at Netflix is that it's not the great recruiting team's
job to recruit people.
It's everybody's.
And the number one job of a hiring manager
is to know the right talent to build an amazing team that
gets quality work done on time.
And so I used to say--
I'll tell you this one last story.
Back in the day, when I was a software engineering recruiter,
I studied the habits of software engineers.
And so I happened to know that there's always
that weird ethnic restaurant in the strip mall
that is the place du jour that you eat.
This is before we all had restaurants
all over our campuses.
So I'd go find that little Thai place in Cupertino.
And in the lobby, they'd have the fishbowl
you put your business card in, you get a free lunch.
Do you guys still go to those funky little strip mall joints?
And I'd go, and I'd just take the fishbowl.
And I'd go to the back and dump it out.
This is in the old days before cell phones.
And I'd just dump it out, write down all the names,
and go back to work and call them all,
because it was where all the software engineers work.
And now I say, that's why God gave us LinkedIn now.
So you can do that.
You should be looking for members of your team
all the time.
It's everybody's job.
It's HR's job to facilitate it and to really
understand what the market is and where to go get people.
But it's everybody's job to bring great talent in.
And that's the difference.
It's not just a great recruiting team.
And my great recruiting team was, and is,
so great there because they feel like they're
partners in bringing in talent.
They're not recruiters in HR.
Do you have a question?
AUDIENCE: Hi, Patty.
My question is how do you evaluate or think
of high performance in the context
of very ambitious and risky projects that didn't go well?
PATTY MCCORD: Well, I think you figure out what you wanted to--
you do it like any other software
product, any other product.
You postmortem it.
When it didn't go well, you stop and say--
you pause, and you get the team together
and say, what should we have done differently?
Did we mis-scope it?
Did we miss the readiness of the product for the customer?
Was it the wrong team?
Were we unclear about goals?
So I mean, everything I learned about people,
I learned from product managers.
You start with the end, and you work your way back.
What are we trying to accomplish?
What's it going to look like?
What's quality look like?
When's the delivery date?
That's the other thing we don't do very well,
is put time wrappers on stuff.
So it's like, so yeah, we accomplished it,
but it was six months late.
What should we have known when we
made that date at the beginning that we didn't know now?
So that's the part about--
you talked about development.
That's the continuous learning part that I think all of us
should do as teams.
Make sense?
OK.
SPEAKER 1: All right.
Well, thank you, Patty.
Thank you, everyone, for coming.
Let's give one more round of applause.
[APPLAUSE]