Hire, reward, and tolerate only fully formed adults
You may think this comes with the territory, working at a serious-minded law firm, but the Netflix credo is driving at something different than maturity defined in geriatric terms. They’re talking about people with sound firm-spirited judgment.
97% of your employees will do the right thing. Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause. Instead, we tried really hard to not hire those people, and we let them go if it turned out we’d made a hiring mistake.
I like to call managing for the 3% “managing for failiure.” And the concept isn’t limited to personnel decisions, believe me. Do not, please, manage for failure.
A very specific example at Netflix is their vacation/time-off policy. They launched with 10 vacation days, 10 holidays, and some sick days, based on the honor system. But after Sarbanes-Oxley kicked in (Netflix was now public, recall), they were required to account for time off. Rather than comply with formalities, they decided to tell salaried employees to take whatever time off they felt appropriate, just work it out with your colleagues.
Same thing with T&E reporting: Netflix’s entire expense policy is five words:
Act in Netflix’s best interest.
Can it be abused? Sure; and you’ll catch it in a heartbeat. Don’t manage for failure.
Tell the truth about performance
Formal reviews are ritualistic and perfunctory Kabuki dances. Kill them.
And don’t worry about creating a paper trail to avoid litigation, documenting poor performance; if somebody isn’t cutting it, they know it and you know it.
I know, I know, you’re objecting with every litigator’s bone in your body, so here’s the story of one manager who thought what you’re thinking and wanted to get rid of “Maria” with a series of increasingly harsh performance reviews for the record:
I replied, “Why bother? We know how this will play out. You’ll write up objectives and deliverables for her to achieve, which she can’t, because she lacks the skills. Every Wednesday you’ll take time away from your real work to discuss (and document) her shortcomings. You won’t sleep on Tuesday nights, because you’ll know it will be an awful meeting, and the same will be true for her. After a few weeks there will be tears. This will go on for three months. The entire team will know. And at the end you’ll fire her. None of this will make any sense to her, because for five years she’s been consistently rewarded for being great at her job—a job that basically doesn’t exist anymore. Tell me again how Netflix benefits?
“Instead, let’s just tell the truth: Technology has changed, the company has changed, and Maria’s skills no longer apply. This won’t be a surprise to her: She’s been in the trenches, watching the work around her shift. Give her a great severance package—which, when she signs the documents, will dramatically reduce (if not eliminate) the chance of a lawsuit.” In my experience, people can handle anything as long as they’re told the truth—and this proved to be the case with Maria.
This approach to talent management will no doubt produce great results in the short term, but I wonder if it will really improve a firm’s talent pool for the long term.
The premise of this approach is that technology is ever changing, and the company should not be bashful about moving people in and out in order to keep humming at the highest level as the process of change takes place. So new employees come in ready to use the latest tech and contribute at a high level right away, and they leave as soon as they are no longer able to contribute.
But does a law firm work that way? Do your associates come in ready to contribute at a high level right away? Clearly not! Do they reach a point where they can’t contribute anymore because the substance of their work has changed and they can’t keep up? Some yes, but this is rarely the case when speaking of associates – often firms lose talented associates who can still contribute, but they are asked to leave for other reasons (i.e. they are not on the partner track, and probably because the partnership has not made an effort to get them onto it). If you’re talking about partners, then of course this happens, but they are the ones making the personnel decisions and are highly unlikely to choose the exit for themselves.
Reducing useless bureaucracy will assist any organization (especially those that have implemented it in order to avoid facing the hard realities that it does such a good job of obscuring). But I have zero confidence that managing partners will take that message away. Odds are, they will read an article like this and respond by (a) increasing bureaucracy in order to “measure performance” better (has there ever been a more futile refuge for the ineffective?) and (b) wringing ever more hours out of their already overworked associates while reducing what little job security is left for them (after all, aren’t they supposed to “cull to keep only the A Team?”).
If you want to reinvent HR, you have to start by knowing what you want to achieve with your talent. Do you want to build a lasting business by putting in the hard work to train the next generation, or do you want to pick the last bits of meat off the bone before you retire? Make sure your talent management matches what you’re trying to achieve.
A friend I’ve known for years but who prefers anonymity writes from Europe:
Thanks, David! I know who you are….