How to build a high performance team, according to Patty McCord

Patty McCord, a workplace innovator, culture and leadership consultant, and former Chief Talent Officer at Netflix, recently shared her insights on the future of work at BetterUp Shift 2018. The event brought together the most innovative leaders and thinkers in HR and people development to discuss how to infuse greater meaning into the employee experience.

You can access the recording for this session by registering for the Shift 2018 Digital Conference Experience.

As our world becomes increasingly more dynamic and connected, the conventional ways in which we work have become irrelevant. Many companies are struggling not only to understand and accept this certainty, but to identify how they can respond in the face of change. We’re living in a white water world, as BetterUp Science Board member John Seely Brown, says.

Patty McCord currently consults a number of companies on workplace initiatives as President of McCord Consulting, and spent 14 years at Netflix, where she created the famous culture deck, which has been viewed more than 5 million times.

During her talk, Patty provided critical insights for companies that want to get ahead of the game as the future of work continues to advance. She shared why the idea of a “permanent employee” is no longer a realistic prospect, and how companies can work to build higher performing teams.

Her no-nonsense approach to building the organization of the future blew away attendees not just because of her focus on hiring the best people for your company, but her belief that great output stems from an amazing employee experience, meaningful work, and a circle of trust between the team and the player.

Back in 2001, Patty and her colleagues were excited about the future of Netflix. They believed they were creating something transformational and were optimistic about the future. But then, the .dot com bubble burst, the company didn’t have any good deals, and began losing customers. Netflix laid off 30% of its workforce.

“If we didn’t cut salaries, we would’ve died. It would’ve been over,” said Patty. “But what happened was we started working with incredible focus and unbelievable clarity. We started doing twice as much work with two thirds of the people.”

After the layoffs, Patty created the oft-cited Netflix culture deck, which emphasized prioritizing high performance. “It took me about 4 years to put in the infrastructure to make high performance a critical part of our organization,” she said.

We wanted to create a place where people could do work that means something – Patty McCord

When Reed Hastings, the CEO of Netflix, called Patty to ask her to join the company, she was skeptical. “Believe it or not, I thought mailing DVDs was a dumb idea, but Reed convinced me to join by telling me we could create the company we’d always dreamed of,” she said.

Patty and Hastings had started companies together before, and were committed to building a different kind of organization, one with the right people. Patty wanted to create a company that didn’t necessarily focus on giving employees a lifelong occupation, but rather focused on giving employees an amazing experience.

“I wanted to create a company that meant something on people’s resumes,” she said. “And to do that, we wanted to create a place where people could do work that means something.” To Patty, the mattering part is crucial. “Everyone wants to make a dent in the universe,” she said. “That’s not just good employees – everyone wants to create something that matters.”  

Patty has strong ideas about how to judge and measure employee performance. She believes that performance improvement programs are cruel, as they’re a recipe for employee resentment, which can then lead to lawsuits when employees eventually get laid off.

Rather than score employees on how well-liked they are, Patty recommends looking at the business metrics. “If a team keeps delivering, then the metrics will follow,” she said. “And if they’re not delivering, there’s something going on, and we can diagnose problems in the organization by looking at the business metrics.”

On a trip to Quebec, Patty was inspired by a hockey coach who assessed players based on similar criteria. He implemented performance reviews, gave feedback, and made decisions based on metrics, such as time on ice and number of goals scored.

In HR, it’s easy to think of a group of employees as a herd that needs to be guided in one direction or another. Because of this, we implement policies and procedures to keep them on track.

In HR, it’s easy to think of a group of employees as a herd that needs to be guided in one direction or another. Because of this, we implement policies and procedures to keep them on track. “Engineers, in particular, hate stupid process and senseless bureaucracy,” said Patty. “We’ve created a language that only HR professionals speak, and this kind of talk does not resonate with many of the people in our organization,” she said.

Rather than seeing your team as a herd that needs policy to stay in line, Patty encourages us to change our assumptions about the people who work for our companies. Not only are they trustworthy adults, but they should be held to standards based on high performance and results.

“People don’t want to lay off under-performers because someone is a nice person,” she said. “However, just because someone is nice does not mean they should be part of the organization.”

Unhappy team players often feel they possess talents that their employer isn’t leveraging. This individual may believe that the employer doesn’t know about their talents. “If we’re honest with ourselves, employers do know about these talents,” said Patty. “But they don’t care.”

After all, when when we hire people, we’re asking them to do a specific job function. “There are life factors that make up a whole person, but we need to be honest about what we need people to do,” said Patty.

Patty recommends hiring the best and the brightest – the highest performers – for job functions, and letting go of people who are no longer able to perform. In different seasons of life, people gravitate toward different positions. It’s the natural order of things, and we shouldn’t expect someone to stay in a position where they are not deriving meaning.

At face value, Patty’s views may seem at odds with ideas circulating in today’s talent marketplace. But on closer inspection, she’s advocating for running leaner organizations that maximize the meaning and joy that employees get from their work.

Want to learn more about Patty McCord and her approach to the future of work? Check out Powerful: Building a Culture of Freedom and Responsibility, a book by McCord which details what she learned building company culture at Netflix and elsewhere in Silicon Valley. You can also watch her TED talk on similar topics.