This is a fascinating bit of business management theology, and it’s something that I more or less arrived at myself, somewhere along the way in my 40 years of employment after graduating from college. Hard work by itself isn’t ultimately what matters, results matter. This was supposedly first articulated as a Silicon Valley mantra by Patty McCord, an early employee at Netflix, and it could only have arisen in this mostly post-union era of employment.
Compared to a “team” company, a “family” culture can result in a lot of “dead wood” employees. Something that operating as a team should do in merit-based organizations is to help prevent the “suck up” approach to being promoted, but there is always that, no matter what. I always sought to be useful at work, and I agree that someone whose primary skill is “looking busy” should be worried, but I think the Planet Money story misses some points.
The idea “only results matter,” which can alternatively be called “take no prisoners,” has been great for the Netflix back office, but it simply doesn’t apply to many, if not most, of the jobs in this world. It’s one thing to tell somebody to “move those boxes to the loading dock,” and it’s something else to say, “be brilliant and creative and original.” Hourly workers are paid for their time performing a certain set of duties, and not for their spectacular performance, although stand-out workers are probably more likely to be promoted. Technology companies can provide greater opportunities for work schedule flexibility, as well as being places where a superstar talent can shine. But after the DVD heyday, when the streaming revolution kicked in, the workers laid off from the huge Netflix distribution centers weren’t going to “move on to do great things.”
The Planet Money story points out that despite being results oriented, Netflix employees work crazy hours… even while having unlimited vacation? Which sort of puts the lie to the whole idea. It really could be more a case of success being thanks to the old standby of paying top dollar to get top talent, which Netflix does do, and that feeds into the corollary idea of acting like a professional sports team. I would hope that when a top performer is no longer needed and is let go, they get some stock or a huge bonus.
Somewhere in there, you’d think that by now, with Netflix so rich, there must be some staffers who are treated more like tenured professors. Something I saw myself where I worked were a select few employees who rarely seemed to actually be doing anything other than perhaps thinking. Or maybe not. They may not even have been in the office very much. But when they did come up with something it was of such significance the idle time was worth it. It’s up to management to spot talent and make sure it is placed in the right spots. Constant turnover is a given in entry-level service sector jobs, but it can wreak havoc in a professional business.
McCord speaks so breezily of the termination process at Netflix, and she admits to having personally let go of hundreds of employees. Yet McCord was uncomfortable discussing her own termination from the company by CEO Reed Hastings. There is irony in that. So maybe her own goodbye wasn’t so good?
Hastings is still heading Netflix, of course. Founding CEO’s are rarely forced out, and if they overstay their own usefulness that’s when a company starts to falter and, eventually, fail. For example, Ken Olsen was allowed to stay too long at the once giant, but now-defunct, Digital Equipment Corporation. In contrast, Steve Jobs was pushed out of Apple Computer by the inept John Sculley — his only “success” — and Jobs returned to save the company from certain demise. So far, Hastings seems to be in no danger of being forced out.