Patty McCord: “Powerful: Teams, Leaders and the Culture of Freedom […]” | Talks at Google

[MUSIC PLAYING] SPEAKER 1: Good morning. Good morning. Thank you all so
much for coming. Today at Google, we’re delighted
to welcome Patty McCord. Patty is one of the
world’s foremost experts on company culture. She was an early
employee at Netflix, and she was a co-author of
the famous Netflix culture deck, which Sheryl
Sandberg said was one of the most
important documents to come out of Silicon Valley. She’s here today to discuss
her new book, titled “Powerful: Building a Culture of Freedom
and Responsibility,” which was largely an effort
to sort of boil down the message of the famous
Netflix culture deck. So please join me in welcoming
to Google Miss Patty McCord. [APPLAUSE] PATTY MCCORD: So I’m
just going to couple– how many people have seen
the Netflix culture deck? A couple of you. I didn’t write it. I didn’t co-author it with Reed
Hastings, the CEO of Netflix. Reed and I did another
company before Netflix, a company called Pure Software. We sold software tools to
other software engineers. And we grew through a
merger and acquisition. And how we grew was
we’d acquire a company, and every time we’d acquire
a company, we’d double. So we were like
100, 200, 400, 6– right. And then we sold the company
to our largest competitor. And my job was to
take their employee handbook and our
employee handbook and smash them
together and come up with the fewest policies
that would piss off the fewest people. And so what we decided to do
at Netflix that was different was pay attention to
the kind of company that we were working
at, primarily for totally selfish reasons. I didn’t want to work with
brilliant assholes anymore. And I wanted to have
permission to say no. And Reed wasn’t very tolerant
of people who weren’t very smart or weren’t very
into the company. So what we decided
to do differently, for those of you that have
read the Netflix culture deck, is just write stuff down. So my journey was not only to
write down what kind of company that we wanted to
work at, my job was to be the COO of that culture,
which meant if we said this, then did we do this? And that’s the part where
most companies get it wrong. And I want you to
go away from my talk today and think about
what you’re doing here and what you’re saying
you are as Google and who you really
are acting as Google, because that’s what
company culture really is. So since I’ve been away,
I get to talk to people who are outside of
business and who are people who are kind
of on the speaker circuit. So I end up onstage
with a lot of coaches, like real sports coaches from
real professional sports teams. So I was in Montreal
last year in February. Has anybody been to
Montreal in February? So cold. It is so cold. So I called up my daughter,
and I said, hey, by the way, I’m doing this talk in
Montreal in February. She’s like, Mom,
go to Patagonia. Go now. Get a puffy coat. Get the big one. So then I realized how dang cold
it is in Montreal in February. So I figure out
my hotel so that I can go underground so that I
can go up to the venue, which is a place called the Bell Centre. Does anybody know what happens
at the Bell Centre in Montreal? No hockey fans, huh? OK. Well, that’s where the
Stanley Cup is played. Now, at this point
I’ve been talking to groups who are a little
bigger than you, but not much. Like as if this room was full
is kind of my biggest audience. So I go down below. And at the last minute, they
said to me, oh, by the way, you’re not going to
be onstage alone. You’re going to be with this
guy named Scotty Bowman. So I google Scotty Bowman,
and he’s a hockey coach. He’s the winningest
hockey coach in history in the National Hockey League. So I meet him underground. We’re underground at this venue. And he’s this older gentleman. He’s like 70, and he has on a
little suit with a maple leaf pin and an American flag. And we’re talking
about his grandkids. And he says to me,
we’re under the ice. And then it occurs to me,
we’re in a hockey stadium. Like a hockey stadium. So it’s not you guys. It’s not this little
intimate room. I go up onstage, and my
face is on the Jumbotron. I mean, it’s like huhhh! And it’s really scary. And there’s thousands of
people in the audience. And so he introduces
me, nice introduction. The audience claps
very politely, and I go sit on my
little velvet couch. And Scott Bowman comes up,
and the place goes crazy. I’m in Montreal in
a hockey stadium with the winningest
hockey coach in history. They’re clapping like this. [LAUGHTER] If they had had
those foam fingers, they’d be doing
the foam fingers. I mean, people are
like, taking selfies. Because I’m onstage
with God, as far as they’re concerned in Montreal. So he comes up. He sits down. The master of ceremonies,
who has a diamond earring and teleprompter, and
he’s working the audience. And he says, Mr. Bowman,
you’re such a legend. You’ve won so many tournaments. You’ve played with
all the great players. What does it take to
be a winning team? How do you give people feedback? And he says, well, we
have an 80-game season. And every 10 games, I sit
down with each player, and I do an assessment
of how they’re doing. They do a self-assessment. We pull all the stats. We get feedback from
the other coaches. We get feedback from
the other players. We talk about who we’re going to
play in the next 10 games, what the competition is, where their
strengths and weaknesses are. And we put together
a plan that we’re going to execute for
the next 10 games so that that person can be
an incredibly high performer. So the guy says to
me, Patty McCord, you’ve been known for
saying how much you hate the annual performance review. And I do. I think it’s an utter,
total waste of time for most companies that do it that way. And so he said, if you
didn’t do that, what would you do instead? And I said, what he said. Because the thing is
that sports coaches know how to put
together teams that win. And that’s really all
that management really is, as far as I’m concerned. For 30 years, I’ve been watching
people put together teams. And it’s all about doing that. And the reason I also put
the slide up that says team is that– and I
know you probably don’t say this much
here, but in case you do– you’re not a family. Right? Work isn’t your family. It’s not undying love. You’re not going to loan your
deadbeat brother-in-law money, and he’ll never pay you
back, because you always do. Because this is work. And you come together
to do something that you can only do here. And that’s create
terrific products that make people happy. And that joy, I
think, of working is what really
makes people happy. And I say that here
at Google, where you have God’s gift to everything. And I know that when you go
home and you say, oh my God, it was an amazing day at
work, almost always when you say that
truthfully from your soul, it’s because you
did something hard with really smart people that
made you really effective. And that’s my observations of
teams over all those years. And in order to
make it work, it’s about putting together
the right teams. So because I started
as a recruiter, I think a lot about talent. And what I want to
talk to you about is you today, because
I think I don’t need to lecture you guys about
how great organizations should move fluidly and
be more flexible and be more accepting of
change, because that’s the world that you live in. But I want to talk to you
about how you navigate through your own career. So I just did a talk
with 1,500 HR people. I know that’s a frightening
idea for most of you. It’s even a frightening
idea for me. Like when I first started
talking to HR people before I wrote the
book, people walked out because I said things
that really upset them. But what I said was
to 1,500 HR people, please raise your hand
if you’re in the job that you had when you
graduated from college. How many people
raised their hand? None. How many of you have
ever done a layoff? 1,500 people raised their hands. How many of you have ever
laid off a family member? There’s always one. Don’t ask me why,
but people do that. Like somebody did. And then I say, how many of
you have said the word family at work? And 900 people
raised their hands. And I say, for all of you
that aren’t in the same job, you mean none of you could
work for a company that could handle retention? So the truth is that
our lives, our careers, are full of lots
of different jobs in lots of different
organizations. And what I love about
Google these days is that you’ve now
admitted that there’s lots of different organizations
in the corporation that is Google, all the
alphabet companies. So if you start thinking
about your career and how you’re going
to be successful and how you’re going
to move forward, here’s my hint from doing this
for a very, very long time. Is what you love to do that
you are extraordinarily good at doing something the
company you work for needs someone to be great at? So if you wake up in
the morning and you don’t want to come to work,
or you’re not looking forward to it and it seems
really horrible, then something’s wrong
with Patty’s algorithm. And I say algorithm because I
worked with geeks all my life, and I love you and I miss you. But if I say words like
algorithm, it helps, right? OK. So what you love
to do that you’re extraordinarily good at doing– is it important? So when you find yourself
coming to work and thinking, they just don’t care about
how good I am at writing. They don’t even
realize how wonderful I am, how talented I am. They may realize
it and not care. That’s the honest truth. And the other part is
if you need somebody to be really, really
good and really, really passionate about a problem
you’re trying to solve, and they can just do it,
but they don’t love it, then you’re not happy on
the other side either. So the reason why
I’m telling you this is it’s your job
to navigate this. It’s not somebody else’s
job to suddenly realize that you are unhappy. Trust me, they know. And it’s not somebody
else’s job to realize that you went home thinking
this was the best working day of your life. It’s yours. So as you go through
your work life, I want you to be really
cognizant of what you’re learning, what you’re
liking, what you’re not liking. Half of what we
learn in our careers is the work that
we do that we hate. I remember driving
away from a job once, looking in
the rear-view mirror like, if I never see that
place again as long as I live. And then I tried to pin it down. What was it about that
place that made me crazy? And it was a company that
had thousands and thousands of employees, and they
talked to them as head count. They didn’t have names. They were just head count to
be grown or shrunk or grown or shrunk. So that’s the part about talent. Your talent is really
important to wherever you work. And you want to make sure
that you’re in a place that recognizes that. And then the last thing I
wanted to talk to you about– and since we’re such
an intimate audience, it’d be really fun if
you could talk to me. The last thing I
wanted to talk to you about is the idea
of transformation. So I spend a whole bunch of
time with really big companies who invite me in to
talk about how they’re going to transform into
an agile tech company like we have here in the valley. And they have no clue. So they can’t do
it, but you can. And so the way to
create the workplace that you want to have is to be
vocal about it and to speak up. And for us to start
talking to each other really honestly about what
works and what doesn’t work. And I think that you can
have incredible conversations about work. You know this story I told
you about Scott Bowman at the beginning of my talk? A couple of days ago,
a couple of weeks ago, I was at this
thing in Texas. And the coach of the
San Antonio Spurs– it’s a professional
basketball team– was on. And it was a very
touchy-feely audience. And somebody said, oh, my
question for you, Coach, is it must be really horrible
when you have to cut people from the team after you’ve put
all that energy into recruiting them and having them
play a whole season and they’ve done their best. And doesn’t that feel terrible? And he said, no. Actually it doesn’t at all. Like, it’s professional
basketball. You didn’t sign up for
a lifetime appointment. Everybody understands that. And I was in the
audience thinking, why can’t we just have
those conversations? Why can’t we have those
conversations with each other? We hired you to do this
thing, and you were amazing. Thank you. We’re done. That part’s over. So now what are you
going to do next? And what I think
about when I think about Scotty’s methodology
for giving people feedback, it’s called a performance
improvement plan. Too bad we ruined that word. Like what if we actually
got together and said, let’s put together a plan so
that we can perform better? What a concept. But that’s not what
we normally do. And so that’s why I think
real transformation comes from two things. One of them is to stop speaking
a language about management that no one understands and just
be able to start telling people the truth. I just don’t love you anymore. I don’t need you. Or maybe you need
something that’s more interesting and
stimulating over here. Or maybe you should move on. Or maybe you can
say, hey, look, I’m looking at a lot of
other opportunities, and I want to think about
what that means for me. That you can really have
those honest conversations. And the second part is that you
can tell the truth about what you want and what you need. And your managers can tell you
the truth about the future. And you can navigate your own
careers through all of that and not wait for somebody
else to take care of you. When I talk to women’s
groups, I say, look, employee engagement does not
mean somebody put a ring on it. And interviewing
with another company to find out what you’re worth– which is what you’re
worth, by the way. And if you feel like
you’re underpaid and you’re waiting for
somebody to notice, that is not going to happen. Go find out what
you’re worth, and that happens with interviewing. Interviews get
you opportunities. Interviews get you jobs. You should be doing that
for the rest of your life. So when you find
yourself waiting for someone in management
to take care of you, I want you to remember my words
and go take care of yourself, OK? That’s my talk for today. Do you guys want to talk to me? Let’s do some Q&A. Yeah. AUDIENCE: Do we have mikes or– PATTY MCCORD: Do you have– do we need mikes? Yeah, in case we
put it in the video. The last slide is my book, which
there are some you get to have. AUDIENCE: So if you have an
organization, particularly one like Netflix that had a
reputation for this, where a certain number
of low performers, you’re going to churn
them out each year, how do you decide
where that bar is? Do you target a certain
percentage of the organization or absolute performance bar? PATTY MCCORD: No, it was
never like that at all, ever. Ever. So here’s how it
typically happened. I’ll give you a story that– anybody here use DVD by mail? OK. So we had grown. This is when we were
transitioning to streaming, when we were transitioning out
of the DVD by mail business into the streaming business. And we had had an incredible
run that particular year. I don’t remember
which year it was. But we’d grown 30%
quarter over quarter for three quarters in a row. So we’re at our
executive staff meeting. And Reed wants to go
to the white board and do disaster planning,
because he loves it. Like, what if it goes
to shit in a handbasket? That’s his favorite thing to do. So I say, hey, for sport,
what if it kept up? What if we kept growing
quarter over quarter, 30% quarter over quarter
compounded for the next three quarters? CFO goes to the white board. He’s doing top line revenue. And he’s doing that happy
dance, like, look at the money. Look at the money,
look at the money! Ted Sarandos, who’s our head
of content, says– at the time, we said wistfully, someday
we’ll be as big as HBO. And he says, shit, you guys. That’s next year. It’s possible that we’ll
be as big as HBO next year. And we all just
looked at each other. And Neil, who was our head
of product at the time, said, that’s a third of
the US internet bandwidth. [LAUGHTER] AUDIENCE: The ISPs
have noticed that too. PATTY MCCORD: And I’m
looking at him like, what? So afterwards, he and I
are sitting there like, does anybody know
how to do that? ‘Cause files, video
files were so big. You guys remember. You were around at that time. I’m like, how do we do– like,
we had a data center because we shipped DVDs by mail. So we’re brainstorming,
like, is it Google? Is it Yahoo? Is it eBay? Who’s moving that
much data that has– and it’s got to be in
the cloud, clearly. We’re not going to do
this in a data center. So we sit down with our IT
guys, and they’re brilliant. These are brilliant,
wonderful, amazing people. And we say, here’s
the problem set. And they say, no worries. You guys go exec something. We’ll build the cloud. And I looked at them
and said, you know what? If anybody on earth
could do this, it’s you. Not in nine months. We couldn’t do that. It was just the time frame
was too short for these people to be those experts to be able
to accomplish the business objective. And we’re certainly not
going to miss our window, if it’s there, because we
don’t have the right IT team. So I said to them, that’s
not going to happen. But we’ve got nine
months to figure it out. And so we turned, that
year, 97% of that team. And most of them went on to
a company called Chegg, which is a Netflix for textbooks. So they went, and they took
their physical shipping and receiving database
skills to do that. So that was typically
what happened. Typically what happened was
we’d either build something and it’d be done– and when I used to interview
Google people, people who had an offer with you
guys and an offer with us, I would say, look, two
different problem sets. Organizing the
world’s information is a big problem set. We’re delivering
movies and TV shows to people’s homes
or their devices. That’s it. One problem. That’s all we do. So that’s typically
what happened. So the DVD by mail
business still exists. I don’t know if
you guys know that. I still use it on my boat. AUDIENCE: You still use it? PATTY MCCORD: Yeah. And it has a great catalog
because it has everything known to humankind
because you don’t have to buy rights for it. But that business is probably– I bet there’s not 100 people
in that business anymore. So that’s more what happens. I know reputationally what
Netflix has a reputation for, but we never said– why would we do that? If we said in chapter 2, we’re
a high-performance culture, you don’t have to cut the
bottom third performers because you don’t have them. And my experience is this. If you hire somebody
who can’t do the job, they are completely
without fault. That’s in the interview process. That person, that
candidate has no– there’s nothing they did wrong. You hired the wrong person. If you hire somebody and they’re
close but no cigar, right? It’s like, I love you. I love you, man. I love you. Not really sure. You can still do that,
but you should be honest. Should be able to say
to you, you know what? You’re not exactly the skill
set we were looking for, but we love you. And we’re willing to take
the chance if you are. And then if it doesn’t work
out, then it doesn’t work out. Everybody tried. So that’s what I’m saying. You can start being
honest in an interview. So that’s more
typically what happens. My experience is you
either join a company that you think you’re
intellectually going to like, and you don’t when
you really get there. Netflix was not a
particularly good place for people who liked structure
or liked just R&D work, because it was so
about deliverables. AUDIENCE: Thanks. PATTY MCCORD: Sure. Right in front of you. AUDIENCE: Hey. PATTY MCCORD: Hi. AUDIENCE: I was wondering. You have the idea of
this generous severance package and the idea that
you let go of people easily. Did you have to change
the company culture to get to the point where
that became acceptable, or was that– PATTY MCCORD: Yeah. It took– if you go back and
read the Netflix culture deck, we wrote each chapter after
the chapter before it. So when we said, we’re going to
have a high-performance culture of adults, and then we’re going
to give them a lot of freedom, it probably took
four years for me to figure out how to do that. So I had to figure out
the severance package. So let’s say that,
in a typical company, let’s say we’ve hired
you to do something. You’ve been here for years. You’re amazing. You’ve done it. The DVD by mail guys, right? Don’t need you anymore. Now I’m going to put you on
a performance improvement plan for three months to
prove you’re incompetent. But we both know you’re not. Well, that’s just mean. So instead, I would
say, you know what? We’ve been talking about this. Can’t wait to see
where you go next. I mean, half of my
Netflix alumni are here. So I can’t wait to
see where you go next. Here’s three months’ pay. Let’s just not go
through this crazy stuff. There’s just no
reason to do that. So that’s how I thought
about the severance packages, was if I did the thing
that people normally do and instead just said,
how much is that worth? Then I’d just paid you that. I also had to have an
incredible recruiting team that would hire
the people for the jobs that we needed getting
done in the future. So that took me a long time, to
have a really, really top-notch recruiting team. I had to think about
competitive offers. I had to think about head-count
dollars in terms of dollars, not in terms of
number of people. So in most companies– I don’t know how it
works here– but there’s three ways you get a requisition
approved if you want to hire somebody in most companies. You write a job description
that either describes the person who left that
you wish hadn’t, a fantasy person that doesn’t
exist, or whatever it takes to get it approved. None of those have anything
to do with actually hiring somebody to solve the problem. And the truth is that when
you find somebody who’s really qualified to
solve the problem, you should pay whatever
it takes to get them. But in some organizations,
especially when I’m with startups, when they
get to step functional scale and I say, that new
team is not this team. You’re not going to make
them into that, particularly on problems of
complexity and scale. So that’s how I
thought about it. I thought about it in
terms of the whole thing. How do we have not
just high performers, but high performers in each
job to solve each problem? That’s the difference. AUDIENCE: Do you have any
kind of personnel development in that kind of world? PATTY MCCORD: Yeah,
but not so formally. My experience is the
best way to develop is to be around
amazing people who you learn from all the time. So I did a lot of
matching with people, putting people with
other people that they could learn a lot from. And making– we had
a lot of systems in place to share mostly
business information. So a lot of our communication
and education in the company was around the business,
not necessarily around those skills. I think you learn best
when you can see it. When you see somebody
behaving like a great manager, then you have a
great role model. AUDIENCE: Patty,
compensation teams love the annual
performance review because it makes
annual increases, equity modeling, super simple,
perhaps even algorithmic. When you throw that
out in favor of lots of feedback and conversations,
how do you connect the dots? PATTY MCCORD: I don’t
have any problem with an annual
compensation review. I think it’s really smart. Actually, I recommend
that you do them quarterly and walk through the
company quarterly. The most important way to
think about compensation is market-based pay. And the most real compensation
information in your company is in your recruitment team,
not in last year’s survey. That’s what is really happening. You want to know what’s
really happening. That’s my problem with most
standard compensation teams, is they operate on systems and
with data that’s really old. And I don’t know if you guys do. I know that you guys are
more analytic than that. But so I would usually walk
through the organization and say, where have I
hired a lot of people? Because where I’ve
hired a lot of people, that’s going to give me really
current salary information. That’s going to color how I pay
the people that are currently there that you want to stay. So I don’t have any
problems at all with it. The problems I have
are when we take the review and the
compensation and the feedback, and we throw them all
together once a year. And we say it solves
those problems. So I was going to
tell you earlier, the most innovative
work I did at Netflix was not anything new. It was just I stopped
doing old things that don’t matter anymore. So that story I told
you about Scotty Bowman is a story about
giving great feedback. And if you’re going to
give people great feedback, that’s going to affect
their performance. You’re not going to
do it once a year. Name one other thing you do
once a year that you’re good at. That would be nothing. So great feedback–
so if you want to create a system that
says, I believe that feedback can improve performance. I want to create a
system that does that. Then who would ever come up with
the annual performance review? It’s a dumb system to do that. If you say, I want to have an
annual compensation review, where I do a point-in-time
look across the organization and see is pay
working out fairly and equitably for people,
and is it market-based? Am I paying competitively? Then that’s a completely
reasonable exercise to do. There’s where I have the
problem, is we mush it together and we’re not clear. The other problem I have with
a lot of compensation systems is they’re not
transparent to employees. It’s magic that happens in HR. And even some HR people
don’t know how it works. The recruiting team doesn’t
know how the comp team works. It’s just crazy stuff. So again, it’s about– like, I got rid of the– when I was at Netflix, I
got rid of paid time off– keeping track of paid time off. I got rid of travel policies. And I got– actually I didn’t
get rid of these things. I vetoed them before
we installed them. The travel policy
and getting approvals from finance for expenditures. It seemed insane
to me that I would say, any expenditure
over $5,000 has to be– or $10,000– has to be
approved by finance. And I’ve got a company
full of PhDs in math. Like, they know that $10,001
is more than $10,000. They don’t need somebody in
finance to tell them that. But they might need
somebody in finance to sit with them as an
analyst and tell them what things are happening
and how they’re trending. Is this the hook? Are you coming to hook me? Oh, because– look
at your little– see, that’s a Google problem. [LAUGHTER] I told you I’d say that. Does that make sense to you? AUDIENCE: Yes. PATTY MCCORD: I don’t have
any problem with the system. It just needs to be transparent. And it needs to be current. AUDIENCE: And because
you’re paying top of market, the feedback is
kind of irrelevant. PATTY MCCORD: No, they’re
two different things. They’re two different things. AUDIENCE: Is there
pay for performance at Netflix, or not really? PATTY MCCORD: There’s
high performance. So you’re going to
be paid top dollar for doing a fabulous job
with amazing people on time with quality. So we’re going to
just pay there. We’re not going to pay like,
well, you did an OK job, so I’m going to give
you an OK raise. If you did an OK
job, we’re going to talk about where
you’re at and whether or not you still
need to be there. And then how I determine
what pay is is market. What are you worth
somewhere else? Listen, this true story. I would say to my
vice presidents, go interview at Google. They’re like, no. I’m not– what are
you talking about? I love it here. I’m like, no, no, no. Go. They’re like, shit, in
Google it takes, like, seven weeks and five. I’m like, I want to know
what they’re paying VPs. Just get your coat. Go interview. I would tell my employees,
look, when the recruiter calls, before you say, no thanks,
be sure you say how much and come tell me. ‘Cause that’s real comp data. Real comp data is what
somebody else will pay you. So it’s not just
paying people a lot. And it’s not just paying
people for performance. It’s almost the opposite. It’s expecting
extraordinary performance and paying you well for
the extraordinary work. And then the other thing
is not all jobs are equal, and not all jobs are equally
as important to the company. So I do also– so I tend to talk to big
companies now, and lots of startups. So startup CEO dinner,
I’m up in the city. And one guy says,
well, you know, your high-performance thing,
you don’t really mean everybody. And I said, yeah, I do. I mean everybody–
you should have a high performer at every job. And he goes, yeah, but not
the ones that are unimportant. And I said, well, really? Which job at your
company is not important? He goes, well, you know, like,
like payroll or something. And I said, seriously? You don’t what
somebody really good figuring out how to pay your
really brilliant engineers, who I’m sure are the ones
that are really important? And he goes, well,
I’m just saying. I’m like, you don’t want
them to be accurate? He’s like, well,
it’s just they don’t have to be like– yes, they do. They have to be really great. And I said, hey, by
the way, tip for you. Your finance
organization hates you. [LAUGHTER] And he goes, I don’t think you
know my finance organization. I’m like, oh, hell yeah, I do. You just told me,
a perfect stranger, you think your payroll
supervisor is stupid. They know you think
they’re all stupid because they can’t write code. It’s a completely
different skill set. And furthermore, when
you’re not looking, they’re thinking of ways to
torture you, because that’s what finance people do. So yeah, I don’t– the pay for
performance thing works when you, you know, what
you do is valuable, then you should
pay a lot for it. Do you want to yell? Or here– here it comes. AUDIENCE: So how do you build a
culture of excellence like that without also creating a culture
of fear and ego and toxicity? PATTY MCCORD: Well,
fear is a hard one to get rid of, because
part of it is adrenaline. So I remember one time, one
of our executives was talk– one of them was, he
was talking about that this particular year,
the things that we were going to do and succeed at were
not going to be incremental, they were going
to be monumental. And he used climbing
K2 as his metaphor. [LAUGHTER] Here we are. So at the end– this had been a
big culture of fear was the new meme
around the company, and we’re at this
executive meeting. And it was bigger meeting,
quarterly business review. And at the end, Reed
and I go to the front. We’re answering questions. And he says, I want
to hear you and Patty talk about the culture of fear. I’m like, oh, for God’s sake. Really? So Reed says, well, you just
used the metaphor of K2. You have to have oxygen.
And if you get halfway up and a blizzard comes in, you
go back down to base camp, there’s no shame. This isn’t for the timid. So the toxicity and
the egos, those people just don’t need to
work there anymore. Somebody’s got to
just ferret that out. And you have to– that’s why the culture of
honesty is so important, so that I can say to
you, hey, wait a minute. Excuse me, but in this
meeting, she’s still talking, and you just cut her off. So can you let her finish? Thanks. And then you do, and she
lives, and life goes on. You have to model
the right behavior. You have to be able to say, that
was a jerk move right there, buddy. I mean, you just have to be able
to have those conversations. It’s the shitspering
that gets us in trouble– you know, talking
shit in a whisper? That’s toxic. And you can be– in my book, there’s a
chapter about debate. We loved debate on
behalf of the customer, on behalf of the customer,
on behalf of the customer. And you can be pretty
worked up when you’re talking about the product. I used to tell my HR team, we
are a service organization. It is not spelled
S-E-R-V-A-N-T-S. And the people that we
serve don’t work here. The people that we serve are
our moms and our neighbors and ourselves. So it’s our job to
put together teams that build incredible stuff. When I talk to my– I’ve been gone six years. So it’s a long time, and Netflix
is a very different company now. Netflix is a global
original content company. And what’s very successful
for them now is they’ve extended that culture of
freedom and responsibility to the creative talent. That’s why they get
the people they get. That’s why Shonda Rhimes wants
to work at Netflix and not at ABC, because nobody’s walking
around telling her what to do. AUDIENCE: I’ll hand over
the mike in a second. Just like, how do– does it create a culture of,
like, competition [INAUDIBLE]?? PATTY MCCORD: No,
because remember how I started with team? So the thing about the
individual competing with individuals, that shouldn’t
happen when you have a larger collective thing to do. I mean, it might
happen for you guys because you have more products. But these teams
are formed to focus on solving a particular problem
in a particular time frame. And teams are formed to do
that because individuals can’t. They can’t. That’s the deal. I tell, back when I
talk to startup guys, again, I’m like, OK,
in your little startup, here’s the first
sign of trouble– nostalgia. Remember how it used to be? And I tell them, really
successful companies are not made of 50
people working 24/7. AUDIENCE: It’s
not about product. It’s solving– it’s groups
that are solving a problem, like functional– PATTY MCCORD: That’s right. Groups solving problems
that are clear to everybody. So everybody has a role. So when people are
competing, then what are they competing for? Is it one meaty job and
you’ve got two people? That’s what drives competition. Is it that you know that in
the end, there’s only one job, and there’s four people
trying to get it, instead of just picking one? It goes back to
honesty, I think. SPEAKER 1: All right. We’ll do two more questions. Over there, I think,
and then over here. AUDIENCE: Thank you very much. I actually read the book. PATTY MCCORD: Ah. AUDIENCE: Amazing book. Thank you very
much for the book. One big impression I
actually got from the book is one of the major
components for Netflix to sustain such a
culture and model is to have a very powerful
and strong recruiting team. PATTY MCCORD: Yes. AUDIENCE: And the HR
department was [INAUDIBLE].. My question is, I guess for
a smaller company, maybe a startup or even Netflix
in its early days, where the recruiting
in HR is not as strong as it is right now,
is such a culture sustainable? PATTY MCCORD: Well,
since you read the book, you know that the other
secret of the great recruiting team at Netflix is that it’s
not the great recruiting team’s job to recruit people. It’s everybody’s. And the number one job
of a hiring manager is to know the right talent
to build an amazing team that gets quality work done on time. And so I used to say– I’ll tell you this
one last story. Back in the day, when I was a
software engineering recruiter, I studied the habits
of software engineers. And so I happened to
know that there’s always that weird ethnic
restaurant in the strip mall that is the place du
jour that you eat. This is before we
all had restaurants all over our campuses. So I’d go find that little
Thai place in Cupertino. And in the lobby,
they’d have the fishbowl you put your business card
in, you get a free lunch. Do you guys still go to those
funky little strip mall joints? And I’d go, and I’d
just take the fishbowl. And I’d go to the
back and dump it out. This is in the old days
before cell phones. And I’d just dump it out,
write down all the names, and go back to work
and call them all, because it was where all
the software engineers work. And now I say, that’s why
God gave us LinkedIn now. So you can do that. You should be looking
for members of your team all the time. It’s everybody’s job. It’s HR’s job to
facilitate it and to really understand what the market is
and where to go get people. But it’s everybody’s job
to bring great talent in. And that’s the difference. It’s not just a great
recruiting team. And my great recruiting
team was, and is, so great there because
they feel like they’re partners in bringing in talent. They’re not recruiters in HR. Do you have a question? AUDIENCE: Hi, Patty. My question is how do
you evaluate or think of high performance
in the context of very ambitious and risky
projects that didn’t go well? PATTY MCCORD: Well, I think you
figure out what you wanted to– you do it like
any other software product, any other product. You postmortem it. When it didn’t go well,
you stop and say– you pause, and you
get the team together and say, what should we
have done differently? Did we mis-scope it? Did we miss the readiness of
the product for the customer? Was it the wrong team? Were we unclear about goals? So I mean, everything
I learned about people, I learned from product managers. You start with the end,
and you work your way back. What are we trying
to accomplish? What’s it going to look like? What’s quality look like? When’s the delivery date? That’s the other thing
we don’t do very well, is put time wrappers on stuff. So it’s like, so yeah,
we accomplished it, but it was six months late. What should we
have known when we made that date at the beginning
that we didn’t know now? So that’s the part about– you talked about development. That’s the continuous learning
part that I think all of us should do as teams. Make sense? OK. SPEAKER 1: All right. Well, thank you, Patty. Thank you, everyone, for coming. Let’s give one more
round of applause. [APPLAUSE]

4 thoughts on “Patty McCord: “Powerful: Teams, Leaders and the Culture of Freedom […]” | Talks at Google

  • Great talk, it's taken time for me to learn some of these lessons as well. Intresting point: poor staff recruitment is my fault, not theirs. 🙂

  • A broad sweeping statement like, "they're looking for ways to torture you, because that's what finance people do" at 31:41 is a bit unhelpful and damages her credibility. Otherwise, a powerful talk.

  • It must have killed the attendants of this talk that some of McCord's ideas – be the principle you claim to have – was simply not possible at Google. E.g. Don't Do Evil when in fact you are collaborating with oppressive and democratic regimes to curtail human freedoms. Maybe that explains why the file and rank keep revolting inside of Google, even actively trying to sabotage the behemoth's most vile ventures.

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