Let's look at some great Silicon Valley scale-up cultures. I know Amazon isn't based in Silicon Valley, but I regard it as a Silicon Valley company. Three companies, we're going to reference are Netflix, Amazon, and Uber and after that, we'll also mentioned HubSpot who are in Boston. Amazon are currently in the process of changing what the New York Times called their bruising workplace. Uber are currently in the process of changing their baroque culture to become more diverse company. Let's look in depth at Netflix who are currently seen as the best practice in this area and they are currently flying. The origins of Netflix fame in this area is a document that they put on SlideShare called Netflix Culture, Freedom and Responsibility, 127 slides published on August 1st, 2009, there are currently 15 million views. Sheryl Sandberg of Facebook, call this the most important document ever to come out of the valley. It's the first document almost all startup founders reference. It's based on two overarching principles. Number 1, that "A" players would rather work by themselves and with sub-par performance. Number 2, you have to let go people whose skills no longer fit the company as it grows. Moving more deeply into these issues, we see five tenets. The first of these tenets is, hire, reward and tolerate only fully formed adults. This can be explained further as the best employees manage themselves. In other words, the best employee should extinct if you know what to do rather than have to refer to a code of contact, they should know about their expenses. They should know that they don't always hire the most expensive thing. They should know that they don't go for the most expensive meals unless it's a sales meal, they should know all these things without having to check it by the code of conduct. Number 2 is tell the truth about performance. People can handle anything as long as they're told to truth. In other words, having this three months or six months evaluation process means that there's too much tension. In Netflix what people prefer to do is give constant feedback. Sometimes it's hard, sometimes it's not hard. But the point is that people are accepted about it as long as they know exactly where they feel at any moment that allows people in Netflix to have optimum performance. Number 3, managers own the job of creating great teams. Building a great team is the number one job of each Manager. In other words, even if you work in product, even if you work in technology, no matter what you do, what you do is your team and if you're not spending over 50 percent of your time just on the team, then you are not maximizing the possibility of that team's performance. At Netflix, almost all managers spent over 50 percent of their time just on team issues. Number 4, leaders on the job of creating the company culture. What this involves is clearly communicating how the company makes money and what behaviors drive it success. In other words, each Netflix employee understands who the important customers are. Things like the studios or things like directories. They don't just differentiate between whether a customer is an older customer or younger customer. They know even no matter what part they work in, who the important people are and how the company makes money. This again, is not something that you need to be told. This is something that a good employee should be able to work out for themselves, even so leaders have to communicate this within the organization. Number 5, good talent managers, think like business people and innovators rather than HR people. This is something I found myself when I've worked in companies that were technology companies with the people in HR didn't know what we did and I found it never really liked the fact that they weren't prepared to make the effort. They just worked on HR they believed page or to be generic function. Unfortunately, the reality is especially in a fast moving technology where it is that you need to know, for instance, when people are changing DVDs from ordering DVDs to streaming on the Cloud, that's a huge technology decision and requires a different focus, different kind of skill set and people in HR should be able to understand the basis of that, even as customers, even if they don't understand the technical details. HubSpot published their culture deck in 2013, something that was very influenced by what Netflix previously had done. It was called Culture Code, creating a lovable company and also had similar number of pages. They used a five letter acronym HEART. These five letters stood for humility, effectiveness, adaptability, remarkable, and transparency. One of the things that struck me about it, and one of the things I didn't like was that I think they copied Netflix a bit too much. One of the things when you're creating a culture document, which is something I recommend everyone does and everyone writes down, is that you need to have your own culture. Because if you don't have your own culture, it won't be authentic and if a culture isn't authentic, then it won't be worth doing in the first place. Don't copy them, come up with your own one. Interesting caught at to the story was Patty Quillin who is responsible with Reed Hastings for writing the original Netflix document in 2013, after 14 years left the company. Netflix at that stage was transitioning it's model and moving from the older model based around DVDs and fulfillment to a 100 percent streaming and also production. Having had that discussion, the feeling was that she didn't quite have the skills to impart a culture on a global basis. She decided to leave the company. That's a very interesting example of eating your own dog food. The idea that some principle you say applies also to yourself. She looked at what skills she had. She looked at what needed to be done, and she decided that her skills no longer fit, so she left the company.
