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The Netflix Model Of HR Innovation

Can you emulate a similar radical HR overhaul?

13Apr

There has been much written over the past few months about the lack of diversity in hiring at many Silicon Valley companies. The stats speak for themselves, but it should not be the only element that people think about when it comes to HR in High Tech companies.

A prime example of this is the work done at Netflix that helped to build a company that many would love work for and created a working environment that has created one of the most profitable companies in the world.

There are some key principles that Netflix implemented that many companies could emulate to build success that flies against the traditional company culture. Below we have outlined a few that should be central to your plans if you are looking at revolutionizing your HR programme.

Hire Skilled Adults

The most important aspect that Patty McCord (Chief Talent Officer at the company between 1998-2012) implemented at the company was the ideas that the people who make up the teams should be the best at their jobs and be mature enough to deal with situations at the company in order to push it forward as a whole, without taking advantage of some relatively fluid systems.

Having a workforce consisting of people who are the best fit for the company in terms of skills, and who are mature enough to act in a way that doesn’t harm the company through their actions, is the foundation on which the company was built.

Implementing radical changes in HR requires a workforce that understands why policies are being put into place and the impact that they can have on these either succeeding or failing.

Talk The Truth

This is not a case of avoiding hurting people’s feeling through what you say, but by simply being honest and up-front with what is needed and their role (or lack thereof) within this process, will be appreciated by mature employees.

In an article written for Harvard Business Review, Patty gives a prime example of where an accountant, who had been instrumental in creating their processes, no longer had the skills necessary to work within the finance team. Rather than keeping her on through sentiment, it became clear that she should leave despite the impressive work she had done to get the company to where they were at that point.

As she had the adult mindset, and the company appreciated the work she had done, it was decided that she should leave but be given a large severance package, something that she accepted and used to fund her training to start a different career.

If this had been done in the traditional way, she would have stayed in the team through sentiment, slowly having her confidence chipped away as she struggled compared to other more recent hires, until she either quit or was fired.

Don’t Make Enemies

Talking truth is one of the major ways that this has manifested itself, with people appreciating straight talking rather than skirting the subject. Often, it is trying not to hurt people that hurts them the most.

Therefore, Netflix actively encourage their workforce to look at jobs at their competitors, accept calls from recruiters, then find out as much about the other job as possible before sending it back to the company in order to give them competitor analysis and also gauge their own market worth. This means that Netflix can be fair and competitive when they are increasing wages or making new hires.

It is also about giving good severance packages when people are no longer suited to the company. Keeping people on for the sake of history is not a positive thing for either the company or employee, but simply cutting them off is equally not good for either. Talking plainly whilst showing an employee that they have been appreciated in everything they have done means that when people leave the company they are not resentful towards them.

Trust People

One of the main benefits of having mature employees is that they can be trusted.

Netflix were one of the first companies to start the idea that they would have holiday allowances set by employees. Holidays need to be signed off by managers, but the leaders of the company were expected to lead by example through taking holiday when they could. It was thought that people would be discouraged from taking any holiday if the company leaders were not setting an example themselves.

Going against conventional logic, this has meant that employees take holiday when they can whilst remaining focussed and hard working whilst being mature enough to know not to ruin the system by exploiting it.

Create Teams

Whilst most managers are praised on how they can mentor, coach and motivate their team, Netflix has taken a different approach and instead hired people based on their skills in these areas. This means that the managers are not judged on how they are managing the team in the traditional sense, instead their main KPI in terms of management is simply to create the best possible team.

This will not be a possibility for every company, especially new companies who may not have the budget, or inclination, to hire the finished product, but at larger companies this is a fantastic idea.

If a team is created that can almost manage themselves, then why should a manager need to be able to do all of the more complex human sides of management? As long as the workflow is maintained effectively, the team will be successful. 

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