innovation

Thanks to Frédéric Filloux, of Monday Note, March 18, 2012, for permission to adapt his post.

Does your company’s business culture support your desired growth? Here’s a culture statement from Reed Hastings, CEO of Netflix, which has rocked the streaming media sector like never before. How does your culture compare?  How could you apply these? Are there things here you think would not apply to your company? Why not? Leave a comment below.

Here’s an excerpt:

Behavior and skills. “We hire and promote people who demonstrate:

1. Judgment

2. Communication: Listening others and articulating views

3. Impact: “You focus on great results rather than on process. You exhibit bias-to-action, and avoid analysis-paralysis”

4. Curiosity : “You learn rapidly and eagerly”, “You contribute effectively outside of your specialty”

5. Innovation: “You challenge prevailing assumptions when warranted, and suggest better approaches ”

6. Courage: “You say what you think even if it is controversial”, “You make tough decisions without agonizing”, “You take smart risks”

7. Passion: “You inspire others with your thirst for excellence”, “You celebrate wins”, “You are tenacious”

8. Honesty: “You are quick to admit mistakes”

9. Selflessness: “You are ego-less when searching for the best ideas.”

Other Netflix core values include:

— “Great Workplace [means working with] Stunning Colleagues : Great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices. We do some of these things, but only if they are efficient at attracting and retaining stunning colleagues.”

— “Corporate Team:  The more talent we have, the more we can accomplish, so our people assist each other all the time. Internal “cutthroat” or “sink or swim” behavior is rare and not tolerated.”

— “Hard Work = Not Relevant : We do care about accomplishing great work. Sustained B-level performance, despite “A for effort”, generates a generous severance package, with respect. Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay.”

— No room for what Hastings call “Brilliant Jerks”. His verdict:  “Cost to effective teamwork is too high.”

— About processes: “Process-focus Drives More Talent Out. Process Brings Seductively Strong Near-Term Outcome.  Then the Market Shifts… Market shifts due to new technology or competitors or business models. [Then] Company is unable to adapt quickly because the employees are extremely good at following the existing processes, and process adherence is the value system. Company generally grinds painfully into irrelevance.”

— “Good” versus “Bad” Process:
“Good” process helps talented people get more done.
- Letting others know when you are updating code
- Spend within budget each quarter so don’t have to coordinate every spending decision across departments.
- Regularly scheduled strategy and context meetings.”

“Bad” process tries to prevent recoverable mistakes:
- Get pre-approvals for $5k spending
- 3 people to sign off on banner ad creative
- Permission needed to hang a poster on a wall
- Multi-level approval process for projects
- Get 10 people to interview each candidate.”

— ” We realized… [that] We should focus on what people get done, not on how many days worked . Just as we don’t have an 9am-5pm workday policy, we don’t need a vacation policy. No Vacation Policy Doesn’t Mean No Vacation. Netflix leaders set good examples by taking big vacations – and coming back inspired to find big ideas.”

“Expensing, Entertainment, Gift & Travel: “Act in Netflix’s Best Interest” Generally means… Expense only what you would otherwise not spend, and is worthwhile for work. Travel as you would if it were your own money. Disclose non-trivial vendor gifts. Take from Netflix only when it is inefficient to not take, and inconsequential. “Taking” means, for example, printing personal documents at work or making personal calls on work phone: inconsequential and inefficient to avoid.”

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In his IPO letter to potential investors, Zuckerberg stated 5 principles that have guided Facebook. These apply to any entrepreneurial business. I suggest you read these and ask how you can apply them to your own business.

The two that the most small business owners neglect are “Move fast” and “Be bold.” Too often we limit ourselves to growing organically, perhaps for fear of going into debt, and thus move slowly and timidly. Then we watch others pass us by.

Focus on Impact

If we want to have the biggest impact, the best way to do this is to make sure we always focus on solving the most important problems. It sounds simple, but we think most companies do this poorly and waste a lot of time. We expect everyone at Facebook to be good at finding the biggest problems to work on.

Move Fast

Moving fast enables us to build more things and learn faster. However, as most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly. We have a saying: “Move fast and break things.” The idea is that if you never break anything, you’re probably not moving fast enough.

Be Bold

Building great things means taking risks. This can be scary and prevents most companies from doing the bold things they should. However, in a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks. We have another saying: “The riskiest thing is to take no risks.” We encourage everyone to make bold decisions, even if that means being wrong some of the time.

Be Open

We believe that a more open world is a better world because people with more information can make better decisions and have a greater impact. That goes for running our company as well. We work hard to make sure everyone at Facebook has access to as much information as possible about every part of the company so they can make the best decisions and have the greatest impact.

Build Social Value

Once again, Facebook exists to make the world more open and connected, and not just to build a company. We expect everyone at Facebook to focus every day on how to build real value for the world in everything they do.

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