A reinvented company where you can express yourself and create anything you want with no limits
Imagine two newly constructed houses, like the ones you see in Figure 1 below. Let’s say, for the sake of the explanation, that the building team and the architect were the same for either project. However, there are some differences. Can you spot them?
I clearly imagine your face and your thoughts right now. Your mind is switching from “Well, yes, there are many obvious differences that I can spot from the pictures” to “Wait, is he making fun of me? The two houses are clearly different. Is this a trick question?”.
Well, yes, it is. Or better saying, there is something else you cannot find out just staring at the picture.
The main differences lie in the type of approach the customers have employed for the building project and, in the end, how stressful they became once the houses got finished.
A Matter of Approach
For the first house, the customers are Sasha and Ivan. The two created a fashion company from scratch in Russia, which they have been successfully leading for 32 years by now. Since the start, they quickly learned how to manage their company best and make strong decisions. Then, once their business grew outside the Russian borders, they decided to move to America and construct the house of their dreams. Sasha and Ivan hired some of the best architects and engineers, but they also wanted to be directly involved in every part of the build process. Indeed, they spent a lot of time commuting between work and house building site. But, you know, everything should have been perfect, right? After many requests to let the construction team do the work, Jay, the real site manager, threw in the towel and accepted Sasha and Ivan to be actively involved. For this reason, everyone was very stressed about the relationship. The straw that breaks the camel’s back happened when Sasha and Ivan decided to choose themselves how to solve a big plumbing problem that the builder discovered during construction. Due to their obstinacy, the work has been delayed by 6 weeks. Notably, everyone felt very stressed and frustrated because of the many disputes that happened during the labors.
The second house was requested by a middle-aged couple, Bill and Mitchell. The building process encountered almost the same problems that Sasha and Ivan faced during their home building. Conversely, Bill and Mitchell went for a different approach. They decided to explain their project and their vision in full detail during an initial meeting and let the architect freely take any chance to innovate where needed. Furthermore, the builders were also free to employ the best solution every time some problem would arise as long as the house would respect some previously described fundamental desires. Thus, the issues were brilliantly and promptly solved, thanks to the site manager’s skillful direction. Bill and Mitchel were profoundly happy with the results, and during the construction, they were able to dedicate themselves to their work and their lives without particular stress. The same was true for the builder and the architect.
In the end, the two houses got beautifully constructed and reflect the wishes of their respective clients. What is different is the approach to the projects themselves: how the problems have been faced, the build processes and the whole experience, themselves were profoundly different among the two projects. Shortly we can say that Sasha and Ivan lead through control in the first case while, in the second case, Bill and Mitchell lead by context.
A Different Vision
The two kinds of approach, leading by control and leading by context, are very different from each other. Because of the outcome, even if you could suspect that Bill and Mitchell have chosen the correct approach, leading by context is not always the proper way to act. In fact, some projects could need a lead by control approach, others a lead by context treatment. Surely enough, it is true that we are historically inclined to lead with control. Our society is generally dominated by a vision where you have to strictly control your business if you want everything working correctly and always produce the best result in the less time possible.
However, the problem of employ the wrong method of leading a company is not the real problem. It is not. Millions of companies grow, prosper, and live in complete peace of mind, even with suboptimal direction for their business. Moreover, many companies promote their own culture. Integrity, commitment, knowledge, respect are only some of the values from the lists that most (if any!) companies communicate with their employees. Very often, however, these values do not match reality, and the values are quickly forgotten. Conversely, imagine instead now working for a company where people are free to dream, free to express themselves without fear, and take risks protected by a safe atmosphere. Wow! It’s a dream! Ok, now forget it. It doesn’t exist. Or does it?
One of the most important companies in Silicon Valley has created a culture that has made it one of the most important, innovative, and loved (both by the public and by its employees) in the world. The company name is Netflix, and their so-called “Culture Deck” is publicly available and describes their principles point by point.
There is a problem. If you actually read the Deck, it seems like the exact opposite of the dream described above. Besides being the opposite, it also looks very cynical. What the culture conveys, in fact, is to have an environment where employees live in the profound terror of making a mistake and being quickly rejected if they do not meet the required quality. It’s a nightmare!
Actually, appearance deceives. We can briefly describe the Netflix culture as the culture of “Freedom and Responsibility” or, taking the title from which this article is inspired, to be identified with the slogan No Rules Rules 1. In Netflix, you will find a work environment in which leading is done by context. Employees have no limit on vacations, no limit on expenses, and decide how to implement an idea with all the needed resources. A company where the employer conveys the clear goal transparently to every employee who will be proud to commit and find the best solution to lead the entire team to unprecedented innovation levels. Seen in this way, it has a different effect, doesn’t it? However, getting to apply this kind of culture is not immediate and is not always suitable for all business types. For sure, it is requested a certain level of maturity. In his book, Reed Hastings describes this kind of maturity, which we will see now. In particular, the maturity requested can be obtained by applying just three simple rules, and the results could be immediate. Just start with three small steps. With every little step, you will be closer and closer to the company of your dreams.
The Three Steps
What Reed Hastings teaches us is that at the root of a paradigm change is that we need to reinvent or, as I would say, innovate the inner working of our company. This is also called the culture of reinvention, and the following three fundamental steps guide it:
- Talent Density
- Increase Candor
- Reduce Control
The three steps are strictly related and should be considered one after the other. The first one lays the foundation for the second one and the second one lays the foundation for the third one. However, to start testing our company’s maturity, one can begin to apply the concepts of the steps out of the box separately. But let’s see briefly what these three steps are.
1. Talent Density
Many times the companies have to face unprofessional employees. In this condition, the companies are forced to spend time working on control policies that become more of a burden than useful practice. And because you cannot apply those rules discriminately only to single persons, all these complicated control processes end up obtaining the opposite results of slowing down the innovation and the work of all the other employees. Furthermore, it is crucial to understand that the “unprofessional employee” condition goes beyond the simple situation where an employee is considered not to have enough competence skills. It is an error to identify the perfect talent to only be recognized as the “best genius” in a field of competence. We are on a different level here. In particular, the unprofessional employees are instead the ones that act disrespectfully with their own colleagues or regarding their work, not taking their own responsibilities and spending more time complaining about something. These particular traits can easily be identified in the immaturity of people. The less is the immaturity, the more should be the sense of responsibility. If we create a company with high responsible and talented people, fewer controls can be applied to the employees. The more talent density we have, the greater freedom we can offer. Moreover, we need to remember one thing. Using the word of Patty McCord, one of the original creator of the Netflix culture:
The employees are adults. You know, we’ve created so many layers and so many processes and so many guidelines to keep those employees in place that we’ve ended up with systems that treat people like they are children. And they’re not. Fully formed adults walk in the door every single day. They have rent payments, they have obligations, they’re members of society, they want to create a difference in the world. So if we start with the assumption that everybody comes to work to do an amazing job, you’d be surprised what you get. 2
Once we set up an environment with a great density of talent, we can start with the second step: Increase Candor.
2. Increase Candor
This is one of the most important things in the Netflix culture. Increase the candor means to increase the practice of the feedback. Every talent has the maturity and the desire to learn from other people. Working in a company where the ideas and knowledge are free to flow and where the opinions are eager to be asked is a benefit that is often overlooked. Sometimes, many arrogant employees might prefer to keep their knowledge for themselves to be always ahead of their colleagues. This is clearly an unfair practice that deeply harms the workplace and the company itself. However, plenty of cultural habits impose a situation where it is often challenging, or even impossible, to communicate sincere feedback to the company’s directors. Promoting the excellent practice of honest feedback would instead be beneficial to everyone. Every employee/employer would quickly improve himself and be implicitly responsible for each other colleagues, reducing traditional control. Moreover, this is the first step in giving more responsibility to every person. The more responsibility each person has, the more will be their commitment to the company vision. While this is one of the most critical parts of the culture and one of the most quickly doable ones, we should remember that it is vital to carefully learn that honest feedback should not justify externalizing one’s own frustration against another person. For this reason, again, a certain level of maturity should already exist in the company (this is the reason why the first step should be mandatory before employ the honest feedback practice). Also, the company should plan to share the knowledge on which is the correct use of honest feedback.
On the importance of feedback I will leave you here two more resources:
- The importance of feedback by Luca D’Andria 3
- Stop Pretending That You Can’t Give Candid Feedback 4
Having the possibility to loosen the traditional scrutiny operations lead us to the last step: Reduce Control.
3. Reduce Control
The last step is to reduce control. Reducing traditional control is the most valuable aspect both for the employers and for the employees and, at the same time, probably the most challenging step to take. Reducing control means to get rid of the abundance of procedures that until now have been outlined by our old-style company: remove any travel policies, expense policies, vacation policies. This kind of practice can be seen as a real leap of faith. Still, if you are at this third step and are really considering applying these final pieces to your puzzle, you should have successfully applied the previous step and are perfectly aware of the talents you work with. Moreover, at this point, the message that the company must convey to its employees must be unequivocal: ACT IN THE COMPANY’S BEST INTEREST. You have been given the freedom but, as everyone knows, “with great power there must also come great responsibility” (thank you, Stan Lee), so missteps are hardly allowed. Overall, the “no rules rule” would increase the speed at how the employees bring innovation, decrease the time of slowing down practices, increase the sense of belonging to the project, and an incredible valorizing feeling of responsibility. The managers, in the end, would learn to “lead with context, no control.” This means to lead, illustrating, entirely transparently, the final goals, and leave to the highly talented teams and employees to manage their own time and reach the desired objectives. Consequently, instead of having the typical pyramidal hierarchical structure where the CEO is sitting on the top, we would have a tree branching structure where the CEO represents the tree’s root with the most important values and goals. From the sources, the tree will grow, and its branches, representing every manager and team, having recognized the root’s goals and vision, will adapt and reach their objective to make the whole tree thrive. Shortly, the root does not directly control its branches. Instead, the branches themselves would organize their work and be responsible for doing the best with the resources they need to employ to let the whole tree thrive.
Many other advantages could arise from the correct application of this culture. For example, it is also essential to understand that reducing control permits to give a chance to employees to take the initiative to develop new creative and innovative projects with no approval policies. This is advantageous to all the company because everyone would learn something from the project’s experience. For instance, those projects could either be a complete success or a failure (and if it has to fail, it should be better to miserably fail to gain the most information about the failure). Whatever the result, thanks to a correct feedback culture, the employee who starts the project should perform an in-depth investigation of the reason for the success or failure. Above all, if it was a failure, the analysis should be shared with everyone to quickly reach a shared knowledge of what things led to the defeat to learn something new and avoid repeating the same errors.
Rinse and repeat and the importance of understanding different cultures
Finally, after engaging in the culture, we should be aware that this is just the starting point. There is one more thing to know: Rinse and repeat. The culture should be enhanced and improved. The three steps briefly described above are precisely the ones that are deeply rooted in the Netflix culture. Once they are applied and accepted by the employers and employees, a new level of the same three-step is unlocked to refine every aspect.
Furthermore, we should take care of another fundamental thing. Besides the rules, it is essential to understand if this culture applies to your company and face the implementation problems in different cultural realities. Not every country would respond in the same way to these ideas. You should be aware of the cultural aspect your employee would face when implementing the ideas. A company should learn how to adapt and tune every step to respect and still be satisfying for every person.
This article was meant to be a brief introduction of an innovative paradigm on how to reinvent a company and get the best out from the people while assuring them a highly creative environment with almost no rules. Switching from leading by control to leading by context is a significant paradigm shift that could seem like a leap of faith. However, following three simple steps (talent density, increase candor, and reduce control), the company can benefit from a greater level of innovation and greater maturity and happiness. There are many other (positive) implications of using this kind of culture that I’ve not mentioned in this post. Also, there are many critical cultural traits to consider to better integrate the whole culture into a multi-cultural organization. Some of them are the way of communicating, type of leadership, or scheduling model.
The next thing
Studying different cultures and respecting every person is fundamental if we want to create a happy workplace where every employee feels respected and appreciated. Indeed, my next studies will go exactly in this direction. With no spoiler, let’s say that a kind of culture map can be created by attentively listening to our own needs and our international colleagues’ and clients’ needs. Afterward, we can use the map to collaborate with different cultural realities successfully and obtain the best results.