414: Erin Meyer - How To Build A High Performance Culture (No Rules Rules)

Erin Meyer is a professor at INSEAD, one of the leading international business schools. Erin conducted an in-depth study with Reed Hastings, Co-Founder and CEO of Netflix, investigating the underlying principles necessary for building a corporate culture that is inventive, fast, and flexible. The results of that research were published in their book No Rules Rules. In 2019, Erin was listed by the Thinkers50, for the second time, as one of the fifty most impactful business writers in the world and in 2018 she was selected by HR magazine as one of the top 30 most influential HR thinkers of the year.

Notes:

“Corporate culture can be a mushy marshland of vague language and incomplete, ambiguous definitions. What’s worse, company values — as articulated — rarely match the way people behave in reality.”
The Netflix culture deck. 127 slides originally intended for internal use but one that Reed Hastings (CEO) shared online in 2009. Sheryl Sandberg called it “the most important document ever to come out of Silicon Valley.” Erin said "I loved the deck for its honesty. And loathed it for its content.”
"If you want your culture to come alive, you need to avoid speaking in absolutes."
Instead, use either or…
- Security or High Performance?
- Candor or Comfort?
Why did the Netflix culture deck go viral?
- "This is a company that tells the truth. It said what it believed. That is rare."
On May 31, 2015 you got a cold email from Reed Hastings (CEO of Netflix)… Reed told her that he read her book, The Culture Map, loved it, and was having his leadership team at Netflix read it.
Erin's biggest surprise during her time researching Netflix and writing with Reed?
- "That management paradigms are hangovers from the industrial era. Previously, the #1 goal was error elimination. That isn't the #1 goal at Netflix. It's innovation."
Reed Hastings had a company before Netflix called Pure Software. He put in a lot of rules and processes. He realized that "if you dummy proof the system only dummies want to work there." Too many processes can kill flexibility and innovation.
This is "applicable to any environment where innovation is more important than error prevention."
"Most rules are put in place to deal with low performers."
"Instead, create an environment with 'talent density.' Only high performers..."
Performance is Contagious: Professor Will Felps, of the University of New South Wales in Australia, conducted a study demonstrating contagious behavior in the work environment. He created several teams of 4 college students and asked each to complete a management task in 45 minutes. The teams who did the best work would receive a financial reward of $100. (Bezos: "People are pretty good at learning high standards simply through exposure," writes Bezos. "High standards are contagious. Bring a new person onto a high standards team, and they'll quickly adapt. The opposite is also true)
The two different types of jobs:
- Operational - Ice cream scoopers
- Creative - Rely on your brain
Pay Top of Market for talent - Matt Thunell (Manager of Original Content) said about Netflix, “We live in a walled-garden of excellence, where everyone is a high performer. You go into these meetings and it’s like the talent and brain power in the room could generate the office electricity. People are challenging one another, building up arguments. That’s why we get so much done at such incredible speed here. It’s because of the crazy high talent density.” With that said, Netflix doesn’t believe in “Pay-Per-Performance” bonuses.
When you first began to collaborate with Reed to write this book, Erin asked him how he would find the time to collaborate. He said, “Oh, I can give this pretty much whatever time you think it will need.” That surprised Erin... In Reed's mind, the leaders should create a system so that they don't have to be busy, packed with back to back to back meetings...
Candor -- Giving and receiving feedback
- Top performers regularly help other top performers get better by giving feedback
- At Netflix, they do live 360 feedback dinners -- Go around the table giving feedback for each person.
The 4 A method of feedback:
- Aim to assist
- Actionable - It must be clear what could be done
- Receive the feedback with gratitude
- Accept it or decline it... It's not always right. Be grateful for it regardless
Sustain Excellence:
- Humility
- Curiosity to Learn - Never stop learning, never feel like you've mastered it
Life/Career Advice:
- Get the talent right
- Create Candor
- Eat the cake -- Remove rules and processes
If you create an open vacation policy (meaning that vacation days are not tracked), it is imperative that the senior leaders lead from the front and go on a lot of vacations. The rest of the team will follow... If you never go on vacation, then your team will feel like they have to do the same.