Sunday, March 24, 2013

Kings Of Culture: Google And Netflix Are Rewriting The Book On Business

Business owners yearn for the magic elixir that can make their employees productive and satisfied. When labor goes stale, employers resort to scare tactics — usually an increased emphasis on quantifiable standards. Such is the circle that makes "the grind" all the more painful. Capable professionals become cogs in narrow-scoped operations, eventually forgetting how to imagine or create all together.

Three of America's fastest growing companies are committed to avoiding this fate. Google and Netflix ignored conventional wisdom and re-imagined work culture. If businesses want to follow these pioneers into modern prosperity, they'll have to consider giving their employees more free time, unlimited vacation and the right to exhort minimal effort.

The 20 Percent Rule

Google is able to offer the world's best programming talent high salaries, an incredible resume booster and the cachet of working for a renowned business giant. But many employees cite a different reason for coming to work for this prodigious company: 20 percent time. Google allows its employees to spend 20 percent of their time doing whatever they want. Engineers can spend their time tinkering with existing Google programs, developing new projects or playing video games. The 20 percent policy temporarily relieves the demand for productivity, but the results wouldn't show it. Google News, Google Reader and Google Maps are all products of 20 percent time.

The takeaway: when you remove restrictions and allow professionals to make their own choices, they'll reward you with innovation. A sales job at Capital Processing Network or collections job with Capital One probably carry daily outreach requirements. A new PowerPoint might enhance the processes, but demand for productivity dominates working hours, deterring employees from taking a chance.
You don't have to give employees an entire day every week to spark innovation, but dedicated free time demonstrates faith in your employees' abilities.

The Culture Deck

Netflix has redefined the meaning of HR guidelines while revolutionizing the movie rental business. CEO Reed Hastings released the company's culture slideshow. The three-word description of Netflix culture— "Freedom and Responsibility"— is nothing ground breaking. But the extent to which Netflix follows these principles is astounding. Perhaps most unusual, Netflix doesn't limit or track vacation days.

"There is also no clothing policy at Netflix, but no one comes to work naked," the slide show explains. Vacation is an example of Netflix overarching cultural principle: "Flexibility is more important than efficiency in the long term."

Netflix devalues effort and process, measuring employees only on performance. A-level work with adequate performance earns a "generous severance package," according to the slideshow. Hastings values the idea of high performance without hard work. "You don't have to give up your life to do your job incredible well," he said, according to

As businesses get bigger and more complicated, freedom is a tough value to uphold. Process mandates and requirements manage the chaos, but according to Netflix, they also stunt performance. If your business needs a shot of life, remove whatever shackles are keeping your employees down. You'll see a whole new level of ownership from your troops.