Patty shares her rebel insights, like:
“When people have a sense of trust for the people that they work with and clarity of what they're going to do, then it makes it easier for them to have independent judgment and make decisions, therefore making an impact.”
“There's a beauty in not knowing anything. That open-eyed naivety is partly what makes entrepreneurs who they are. If you knew better you wouldn't do it.”
Patty's new book Powerful is out now. In it, she covers her Netflix experience in detail. You'll learn about unique management practice, her counter-intuitive habit of encouraging staff to go interview elsewhere and find out "what they are worth" and the business benefits Netflix reaped by burning up processes and treating employees as "fully formed adults"
You can buy Powerful from Amazon or major bookstore or order it from The Rebel Playbook store here.
GLENN ELLIOTT: Hi there, welcome to Rebelplaybook.com. Today, we've got Patty McCord with us. Patty, you did 14 years at Netflix as Chief Talent officer and you also worked at Borland and Sun Microsystems. She is absolutely from the Valley! Patty, you're known for your revolutionary HR ideas like treating people as fully-formed adults, creating jobs with accountability built into them and running an open and honest culture.
What I really want to know is how did what sounds like common sense just not become common practice? How do we get here?
PATTY MCCORD: Well, I'll tell you about my personal journey and you'll have to get here however you can. Hopefully, everybody in our function somewhere, somehow has a little modicum of common sense in them. I'm from Texas and my mama calls it horse sense. "Well, you know, honey, that just doesn't make any sense." Sometimes when I'm doing something that seems stupid, I think, "What would my mother say?"
First, it is common sense, I think you're at the core of it. I think how we got here was we started doing stuff, processes and procedures and administrative and things to protect us from our employees that might sue us and initiatives and they just built on each other, we never threw anything away. Then what we started doing to create consistency and fairness, which I think was a true goal in the beginning, became this thing we call best practices, like the performance review and the annual compensation review that's performance tide at bay.
All of the stuff that we do, and the biggest, most painful, horrible thing we did was we perpetuated this notion that if you join a firm, the rest of your career can be there and that if you're loyal to the firm and you do the right things and you climb the ladder, that you can have lifetime employment. People believed it, and it was never true and it hasn't been true in decades.
I think we've created a system where employees can't help but be cynical: we tell them one thing and we do another and then it just grates on you over time. It just makes you not happy. We got away from why we really love work. I deeply believe that when you go home at night and you say to whoever's there, your pet, "Oh my god, it was a great day at work today," you don't say, "Comma, the macadamia nuts were amazing in the cookies."
GLENN ELLIOTT: No.
PATTY MCCORD: It's always "we did it."
GLENN ELLIOTT: Yeah. Isn't it a good job to challenge, isn't it?
PATTY MCCORD: Yeah.
GLENN ELLIOTT: We've said it before. On a Friday, I remember sitting in our Boston office with the VP salespeople of marketing, we were on the floor, we were exhausted from the week.
PATTY MCCORD: Yes.
GLENN ELLIOTT: We were like, "God, that was a good week."
PATTY MCCORD: Yeah, it was, wasn't it?
GLENN ELLIOTT: We were absolutely spot-off. There's nothing we could do for the rest of the afternoon, but we had a good week.
PATTY MCCORD: Yeah, I was just telling you about my HR posse, my secret gathering of HR people who ran startups in San Francisco and the Silicon Valley. So many of them have ... they have departments around employee happiness. There's the employee happiness officer and you and I, I think we agree on what we believe engagement is, but they think happiness equals engagement. They can't tie the work that they do to any business metric or anything that matters.
I say because the happy workforce is the engaged workforce and it may or may not be, and I challenge each and every one of them. I say, "Look, instead of making people happy next week, just take a week off and start talking to your employees and say, 'Tell me about the greatest day you ever had at work. Tell me about the thing that you're most proud of.'" I said, "I guarantee you none of them will be easy."
They will always be like, "Oh, we thought it was over." My Netflix stories are ... I was like, "Was there ever a moment that you doubted that it would work out?" I'm like, "That would be most."
GLENN ELLIOTT: Yeah. The past ... achievement is not a straight line, is it?
PATTY MCCORD: Especially in early-stage companies, especially in startups. Let's do common sense of startups. Startups are all stupid ideas. They are, because the logical, reasonable ideas that everybody thinks is a good idea somebody is already doing. Logical step big companies can do. In startup, you solve problems by just working hard, just pound it. Most of the ways you solve those problems is screwing it up.
Right? The whiteboards are full of not great idea, they're like, "Not that, not that," because you don't know.
GLENN ELLIOTT: It's funny. I find in our ... people look at it and they think, "Oh, that was amazing success," and they only remember the stuff that worked. There's a litany of failure in every single six months. They literally only remember the products and stuff that worked.
PATTY MCCORD: Yeah, they don't remember groveling like I did to say, "If I could make payroll."
GLENN ELLIOTT: That's funny, I can remember that sick to the pit of your stomach feeling at four in the morning when you're not sure you're going to make payroll that month unless you sell some shit today. If the cash doesn't come in, it's not going to happen.
PATTY MCCORD: Well, let's talk about that in terms of the question you asked me about what makes people just unhappy at work.
GLENN ELLIOTT: Yeah.
PATTY MCCORD: About the thing I know we both believe in, which is trust, because when people have a sense of trust and the people that they work with and what they're going to do and clarity around those things, then it makes it easier for them to have independent judgment and make decisions, therefore making an impact, therefore doing something hard that they're proud of, and it starts with the ... let's take that example.
When it's early and you're protecting your employees from the bad news and they all know ...
GLENN ELLIOTT: Only knows the truth.
PATTY MCCORD: Yeah. The last dot com I remember interviewing came, they were like, "Well, what happened to our company was ... it was going to hell and management didn't tell us," and I'm like, "You didn't know?" "Well, no, nobody said a word." You're in accounting, didn't you notice you weren't paying the bills? I'm just saying.
GLENN ELLIOTT: I've been in places where ... should we tell everyone that we've missed the sales quota for the ... and I'm like, "You think they don't know? The sales team's in the room, look at the misery on their face, everyone knows they're missing the quota, but we pretend that we haven't missed it and then now we've missed the quota and no one trusts us either because we lied." We lied by not saying-
PATTY MCCORD: Yeah, which is the other part of how I became who I am, because I'm a Silicon Valley girl, because I grew up in technology, because I lived in the world of engineers, particularly software engineers my whole life. These guys are Spock-ian. It's good or bad, it's right or wrong, it's black or white, it's zero or one and anything in between is bullshit. In order to get their respect, I would have to actually listen to what they say, really listen, and not prepare in my head my HR response.
I think the annual performance review is a bullshit waste of time. No, the reason why we ... there's that automatic HR speak, just spews. "No, it's a chance for you to connect, you're the vision of the corporation to your individual contribution and your compensation," and the people are saying, they're going, "What? Did you even say anything?" When I talk to HR conferences, I'm pretty cruel, it's pretty heartless.
You should see me do it, where I say to them, "Right now, right here when you're all together with me, back at home in your companies they're talking about you behind your back, they're making fun of you."
GLENN ELLIOTT: Rolling their eyes.
PATTY MCCORD: They're rolling their eyes at the things that you say, and so if you want to do anything that's going to matter, stop saying those things. Listen.
GLENN ELLIOTT: We should write all the HR jargon and then have some sort of filter, a stop system-
PATTY MCCORD: No, in my team I had HR buzzword bingo. Yeah, it was a weekly thing and sometimes we'd add new categories, it was like Jeopardy, "And the answer is." I would get these invitations to these huge conferences, I'm like, "Oh baby! I've got a full diagonal in this e-mail." You could enter an e-mail or a podcast or an article-
GLENN ELLIOTT: Someone smart could probably make a Chrome extension that highlights it all or something for us, where we type it-
PATTY MCCORD: Could do it, yeah.
GLENN ELLIOTT: That could be our new app. We could make some sort of HR jargon app.
PATTY MCCORD: Yeah, maybe like a device that just gives you a little shock every time you say something like empowerment or ...
GLENN ELLIOTT: Yeah. What should leaders do to change their workforce for the better, change their company culture for the better? What kind of key things they should ... places they should start?
PATTY MCCORD: I think the fundamentals really have nothing to do with culture and more to do with logic. personally think the answer to creating a really receptive and able and viable workforce for the future is to teach people as soon as they come to work how to read a PNL, what a business is like, how do you make money, who are your customers, who are your competitors, what are the teams trying to do, what's your short-term vision, what do you need to accomplish, what does goodness look like?
The mere fact of learning how ... I meet people who are ten years in their career and they don't know the difference between profit and revenue. I meet people in HR who literally do not know what product they're making, particularly if it's technical. They've never sat next to somebody writing code, they don't know what that looks like.
GLENN ELLIOTT: I pressure our COO to attempt to write our monthly numbers in a way that everyone in the company can understand.
PATTY MCCORD: Yes.
GLENN ELLIOTT: I said to him recently, I said, "You know this isn't for the engineers' benefit? It's actually because the rest of the leadership team doesn't understand it either."
PATTY MCCORD: Yeah.
GLENN ELLIOTT: I said, "If the cleaner can understand it, you've got a good chance that, actually, the rest of management can understand it, too," because it's amazing how many in the business don't-
PATTY MCCORD: Yeah, to be fair to us in HR a little bit, every team has its own jargon and marketing people speak marketing speak and god knows the geeks speak geek speak. That's maybe part two. Part one is the mechanics of the PNL, the mechanics of how the business works, and number two is making it okay to want to speak all of those languages and then teaching people what they mean.
GLENN ELLIOTT: Teaching people about business and how the business works and where the money flows around other products.
PATTY MCCORD: Yeah, because I think one of the biggest differences in how work works today versus the way I think we're structured to work, the pyramidal org chart and the siloed organizations and engineering builds it and they throw it over the wall to marketing who throws it over the wall to sales. That's just not how it works anymore because we have data, because we're all internet companies no matter what business we're in; we all have websites and direct connections to our customers.
Our employees have direct connections to all kinds of information, so that free flow of information is the world we live in. When we create the workplace, it's significantly different than the real world. Then we have to teach people how to operate in a new, archaic system that's not affective and so they spend time working around it. My biggest issue with a lot of the process and procedure that we do is it's just a waste of time.
If you can't say "the reason why we do this is like anything else in your product" or "anywhere else in your business," you would say, "Okay, if we did this exceptionally well, what would the result be? What timeframe will we be working towards? How would we know it's good?"
GLENN ELLIOTT: Some of those HR processes and those rules and procedures that I know you've tried to get out of places that you've worked, they often ... to protect the company against the theoretical occurrence that hardly ever happens, and when it does happen, it's not that bad anyway.
PATTY MCCORD: Yeah. I just think that is really overblown. That said, we certainly, in the Silicon Valley, are experiencing the backlash of no rules at all. It's not no rules, I've been trying lately to figure out how to articulate this. It's like our conversation this morning about politics, there's no morality, there's no center of decency, there's no shared values around truth and compassion and empathy.
Those things set the culture and very often the dilemma we have, the unhappiness people have, is because people say one thing and do the other. Breaks the trust.
GLENN ELLIOTT: Yeah.
PATTY MCCORD: In Silicon Valley, the big thing we're going through right now, we're a meritocracy. No, we're not, we never have been. We're a meritocracy as long as you're a white guy who codes. They're all the same.
GLENN ELLIOTT: It's interesting, actually. You're a Silicon Valley girl and I'm that UK private equity guy, so you've grown up and you're living in VC, I'm the private equity world. I do see two worlds that are quite different. VC's all about hoping for incredible growth.
PATTY MCCORD: Yes.
GLENN ELLIOTT: Yeah. My world's actually looking to buy ... more proven profit and cash.
PATTY MCCORD: Yeah.
GLENN ELLIOTT: Where they meet is difficult. I met a startup entrepreneur just this week, actually. Got five years in, 30 million dollars' worth of VC cash down the toilet, frankly. He's built a business which is a three million revenue and nine million cost. His ... worth 100 million dollars. I was trying to explain to him, if we paid that for this business, how many years do you think it would take just for us to get that money back?
Do you think that Silicon Valley entrepreneurs are fully-formed adults?
PATTY MCCORD: We talked about this a little bit earlier, nobody's ever fully-formed, it's always a formation. Do I believe that some Silicon Valley entrepreneurs are earlier in the formation than others? Hell, yeah. I met with one a couple of weeks ago and really great guy, really wants to make a great company, has a terrific product and a ton of financing. He said to me, his issue was, "Hey, I want to talk to you about this incredible growth because we just got new funding, we have 150, we're going to go to 300 by the end of the year. Can you help me manage that as the leader of this company?"
I said, "Well, before we get to you, because it's not about you yet. Why are you going to double employees?" You going to hire another 150 people that don't know what they're doing, you think you're going to get twice as much work done? Well, that's not true, let me just tell you. If you just go out and, as fast as you can, hire another 150 people that are exactly like the 150 people you have, I said, "For example, how many people are in your customer service?"
"Oh, that's a team that we've got to double right away." I'm like, "Okay, so let's parse that, let's unpack that. I'm assuming you have to double it because they're dealing with problems in the product." The product doesn't really work that well so they have to call a human to help them figure out how to use it. You could take those 35 salaries and hire ten really smart, really capable people who have seen a product like this at scale before.
They wouldn't fit in! I'm like, "You haven't even met them," and they're probably not going to be 24 because there's no one on your team that's seen scale; it's not that they're not smart enough, they just don't have that experience. I'm not knocking anybody who's early in their career at all. It's just early in your career you've seen this much and later in your career you've seen this much.
Now, there are people who have seen this much and didn't learn anything, and there are people who have seen this much and can extrapolate it, but those are anomalies. What I walked through was what were the issues in the business that needed to be addressed and what priority order? I'm like, "That's who you want to focus your hiring on so you can build bench strength to then hire."
Then, if everybody wants to hire ten people, then you can do that. Anyway, he says, "Oh Patty, this is so helpful, oh my god. Could you be my personal executive coach because I know if I had you around, I wouldn't be making all these stupid mistakes that I'm going to make," and I said, "Yeah, that's probably true. I could do that for you because I've seen a lot, but then you wouldn't learn anything so you need to go fire your sister's boyfriend, because he's an idiot."
He's like ... we've all got one.
GLENN ELLIOTT: We've all got one.
PATTY MCCORD: Everybody's got one.
GLENN ELLIOTT: [inaudible 00:17:32]
PATTY MCCORD: I think that's a tension between ... there's a beauty in not knowing anything.
GLENN ELLIOTT: Yeah. As long as you learn them gently.
PATTY MCCORD: Yeah. That open-eyed naivete is partly what makes entrepreneurs who they are. If you knew better you wouldn't do it.
GLENN ELLIOTT: Yeah, completely. There's an interesting thing about scaling, actually, as you're growing your startup and naturally you want to and you're able to bring in bigger skills. You hope ... get bigger because you can attract people who have done more. How do you make sure you still keep the fast-moving, entrepreneurial spirit? Because sometimes bringing in the bigger company experience can bring in bigger company caution or speed.
PATTY MCCORD: Yeah, I've been thinking about it a lot. I've been gone five years from Netflix and I've looked at a lot of other companies' issues and I could tell you how we did it then but it's not really relevant. I think that the mind shift is in figuring out what problem you need to solve and really clarity around if you solve this problem in the best possible way, what would be the most amazing outcome?
What most startup people don't do ... they can do that, "Oh, someday," they don't put a timeframe on it.
GLENN ELLIOTT: Right.
PATTY MCCORD: If I say to them, "Tell me the best possible outcome in this part of your business if it was solved in six months," and I ... walk backwards, what would you need to know how to do? What skills and experience would it take for you to know how to do that, who do you got, what are the deltas? Then, you don't hire somebody with just more experience. You hire somebody with enough experience and enough passion around that problem.
That's the deal, it's almost the assumption that as you get older you move slower, as you can see I'm not moving all that slow. I know lots of people who have tons of energy. It's more about is the person interested in your problem and willing to enthusiastically work with you to solve it? Because that's where you do the "Well, we need somebody with a lot of experience," then you hire somebody with a lot of experience from a big company who comes in and says, "You kids, I'm going to tell you what to do."
Both sides aren't open to learning from each other.
GLENN ELLIOTT: It's interesting, you start thinking about looking for the person who could help you achieve that in this timeframe and you're starting to think of work as projects and pivots and great stuff. I know you've spoken a lot about the tour of duty idea, if I was saying to someone, "Well done, you've done a great job," and that's it. It brings this whole tension between team, which you had talked a lot about with Netflix, team versus family.
Let's talk about that. We've ... he was like, "We should treat everyone like family, you're never fire your sister or your brother, or would you?"
PATTY MCCORD: Well, I was thinking about this in the car on the way and I was thinking about the quote about family. The assumption was the family that we're talking about is a warm and loving family with a grandma who makes cookies. It's this glorification of family and what's funny is I've met a fair amount of people who go, "Hell no, I wouldn't want work to be anything like my dysfunctional, messed up family, and oh, by the way, you can divorce."
I was thinking about that, what if you joined a company that says where you're family no matter what you do, no matter how incompetent you are, we're going to help you find a way, what if you just hate the place and you're just there to irritate everybody? My daughter sometimes, I'm like, "You know, I just need to not see you for a while. I'll love you the whole time, but we just don't need to-
GLENN ELLIOTT: If you hire someone and said you're going to join a team where we won't fire any of them. No matter how good or bad they are or whether they've done their job, will the right person get us from A to B next, they'll still be on your team-
PATTY MCCORD: Glen, I have learned so much in the last couple years because I'm paired often with sports coaches. Have I told you candidate story?
GLENN ELLIOTT: No.
PATTY MCCORD: It's such a good story. Okay, this is how clueless I am about the speaking thing. "Hey, would you like to come to do a conference in Montreal in February?" I'm like, "Sure!" Okay, I'm totally clueless, I have no idea what Montreal is like in February. I don't have the clothes. Okay. It's at the Bell Center, I know that that's a big venue, but I don't really even know that.
Right the week before, they're like, "Hey, by the way, instead of having you do a keynote, we're going to have you be on a panel with this guy, Scotty Bowman. He's a hockey league coach, very famous and he'll be on the stage with you." I'm like, "Okay, great," I Google him, I'm like, "Wow, what a guy, huh?" It's a blizzard, I walk underground, I go to the green room, getting ready for my talk and Scotty Bowman's down there, and he's this 70-year-old man in a suit.
We talk about his grandkids and golf and he says to me, "We're under the ice." It occurs to me, I'm in a hockey stadium. About how big is it? It's big, it's really big. I go up the stairs and there's spotlights on me and there's a jumbotron with my face and people are like ... I go and sit down and then he comes up, standing-O. He's the winningest coach in the National Hockey League, ever.
People are like, you can tell, they're like, "We're in the presence of greatness," he's the old guy, he sits down, emcee says, "Mr. Bowman, you've coached all the greats, you've won so many tournaments. You have this unbelievable track record for winning, what's your secret, what is it that you do with your individual players that makes the team so great, what do you do about feedback?"
He says, "Well, we play an 80-game season and every ten games I sit down with each player and they do a personal evaluation, I run the statistics, I do an evaluation, I talk to the other coaches, we talk to the other team players. We talk about what it's going to take to win against the next team that they're playing, what their strengths are, what their weaknesses are, how we can work against them and what kind of team spirit we need to have to be able to do that."
He's like, "Oh, very interesting." He says to me, "PATTY MCCORD, you hate the annual performance review. I have never heard you say what you'd do instead." I'm like, "What he said." Because it was so ... I went from Montreal to Ireland and I met the guy who's the winningest coach of the Irish games, which are weird as all ... the Irish games, right? He said, "I know going in that for these young men," it's men's Irish games, "This is a moment they'll have only once in their life and I want them to come away with a sense of being a winner, or at least being a fighter and being an adult."
"I turned boys who play sports into men who move on after this," and I thought ... because in a team you always want to be known ... having been from a great team. That, I think, for me in my career, was my biggest epiphany. The day I decided I didn't want to keep people anymore. I wanted it to be a great place to be from.
GLENN ELLIOTT: To be from.
PATTY MCCORD: That's a different way of saying, "We hire you to do a job and then it's over, then you're done." That sounds so cruel and heartless and what I really mean is we're going to hire you to do something amazing with incredible people that you're going to be proud of. When that's done, if there's another wonderful match for you and another wonderful thing with other wonderful people, that's great.
If not, look what you have.
GLENN ELLIOTT: That's great, too. It's interesting, I love that, making Netflix a great place to be from. It goes right at the heart of killing off one of the biggest lies in business or HR with people, which is, "I'm going to give you a permanent job." Yeah? It's a permanent job, 100,000 dollars a year. You go, "Permanent, yeah, great," except it's not. There are no permanent jobs.
PATTY MCCORD: No.
GLENN ELLIOTT: We pretend it's not. It's interesting, I've started to say, back at work just as I'm talking to people, I say, "Yeah, well, when you leave RG," they look at us slightly like, "Does he know something I don't?" I'm like, "Yeah, I know something"-
PATTY MCCORD: Because you're going to leave.
GLENN ELLIOTT: We're all going to leave, unless we literally die at our desks, we're all going to leave and it's going to be okay. It's going to be good.
PATTY MCCORD: When you and I met was when I addressed the group of HR people and I said, "Okay, everybody raise your hand if you're in the job that you were in when you graduated from college and if you're an intern, don't raise your hand." Of course, nobody ... there were 600 people there. I said to them, "What? They couldn't retain you? What a bunch of terrible companies."
GLENN ELLIOTT: That's crazy, isn't it?
PATTY MCCORD: Yeah. I used to think it was cynical and now I'm starting to believe it's one of our cruelest lies. I don't know what to do about my country, I don't know what to do about people who want their old life back but I know that we did them a terrible disservice thinking that it would last forever.
GLENN ELLIOTT: Yeah.
PATTY MCCORD: In real life, all of real life, something comes in left field and you deal with it. That's what happens. Back to how do I think we make great employees, we teach them those skills, those life skills of all bets are off. We want employees ... my fantasy company of the future is when you walk in, you go, "Okay, well, we've rethought this whole thing. Here's where you're going, this is what we thought would happen, it's not what's happening, we're going to change direction, we're going to change this, this and this," and the entire company goes, "Yes!"
GLENN ELLIOTT: Yes.
PATTY MCCORD: Not like ... or culture conversations. I tell startup people that the sign that things are changing could be for the worst, the first sign is nostalgia.
GLENN ELLIOTT: Yeah, absolutely.
PATTY MCCORD: Remember how it used to be, and then I tell them startups have three endings. Bigger, smaller, eaten. Smaller is dead. Those are the only three endings, so you don't ever want to go backwards.
GLENN ELLIOTT: No. That's that thing I've heard you say before, is will there be more change? Yeah, because that's growth.
PATTY MCCORD: Yes, that's right. You know why it's different than it used to be? Because we're successful, because we have a whole new set of problems.
GLENN ELLIOTT: I get that all the time. We come a lot at work ... whenever I do a restructuring of something, I always get a comment from somebody, "Will there be any more restructuring?" Absolutely.
PATTY MCCORD: Absolutely. Me too. People would say, "Why are we organized this way?" and I'd say, "Because that's the way we're organized." Will you change it? Of course!
GLENN ELLIOTT: Yeah, that's the best thing we can think of today and if we wake up to another better idea, we'll do that.
PATTY MCCORD: Yeah. It's looping back to one of your questions, which was what are the things that are institutionalized in the way that we run companies that simply don't work anymore? One of them is that the functional silos, the teams that have allegiance to their ... "I'm a marketing person," and all work these days is done collaboratively. That sense of understanding the team part, which is the team we belong to is the team that delivers something to our customers.
My HR people would say, "But we're a service organization," and I would say, "Yes, we are and it's not spelled SERVANTS." I would say, "And by the way, the people we serve don't work here."
GLENN ELLIOTT: Yeah, the customer.
PATTY MCCORD: We serve our customers, that's right. That, I think, is something that's easier for people to perceive now because of the flow of information. It used to be that only management knew that stuff ... you don't need to know that stuff, little person, you're not important enough.
GLENN ELLIOTT: Do you think that stuff like Slack and these things has helped-
PATTY MCCORD: Yeah. Even the fake news. It's just there's stuff out there about everybody and so everybody has a right to question stuff because they're not whispering the questions. They're out there ...
GLENN ELLIOTT: Even stuff like Google Docs. In the old days, it was on your hard drive and "Could you send it to me?" It was just there.
PATTY MCCORD: I did a talk with ... I know Robert Hohman from Glassdoor, CEO of Glassdoor, I've known Robert for a really long time and Glassdoor has all its ... CEOs hate it, HR people hate it because it's all full of negative stuff, and Robert said, he goes, "You know, Patty, we've been around for 20 years," I said, "Oh god, that's right, we baited with you." He said, "So 20 years." Let me tell you, statistically, that it's really about 50/50.
That half of the comments on Glassdoor overall are very positive and some of them ... he said CEOs and HR people, they only read the negative stuff.
GLENN ELLIOTT: Yeah. I was at a dinner a few weeks ago with six CEOs and Chedman back in the UK and I start talking about Glassdoor, and three-quarters of the room, they were like, "What is it?" I'm like, "Oh, tell me your company name quickly." I start reading them the reviews, it blew their minds because they've managed to somehow get to where they were without ever looking at it."
PATTY MCCORD: All employees know, though, don't they?
GLENN ELLIOTT: You've got 107 reviews, and that's a good one, your product needs more testing results.
PATTY MCCORD: Yeah. The other thing, they have found such interesting data.
GLENN ELLIOTT: I bet.
PATTY MCCORD: They found these weird ... when Amazon had the big brouhaha about their culture, they found that, consistently, Bezos voted in the top five CEOs. They're voted a great company to recommend to work from, and very low in work/life balance. Then he went and said, "Well, I wonder if there's a weird, inverse correlation there," and in some companies there are. The thing about a company like Amazon is they're very clear they're a really hardworking company and probably all the negative stuff is true.
With 150,000 people, there's another 150 people that think they've died and gone to heaven. Trust me, you know that. People get a lot of stuff done and it's a great place to be from.
GLENN ELLIOTT: Yeah, absolutely great. We have a director from Amazon.
PATTY MCCORD: We all do, because it's a great place to be from and the other thing about companies like that ... this is the aspirational dream I want people to have is each successive generation of innovation usually comes from people who were employees of someone else. I have another startup CEO, she said to me, "I can't agree with you, what if I work really hard and I train somebody up for ... maybe we succeed and it's seven years later and after I've put all this into them, I want them to leave."
I'm like, "You want to have somebody seven years out who only has seven years of work experience here? Really? That's going to be your best person, all of them?"
GLENN ELLIOTT: Yeah.
PATTY MCCORD: I'm like, "Okay, it's an interesting experiment, but a costly one if you're not right."
GLENN ELLIOTT: It's interesting. On my leadership team, the average ... is usually about four years, because we're a fast-growing company so ... our chief product officer just left because he's done an amazing job for us, he's taken us from ten engineers to 80 and the whole product department and all sorts of stuff. He wasn't the guy who was going to get us from here to the next four years and it was interesting.
One of our ex-investors said, "Oh yeah, that's just reward gateway, it's how we all get ... those things." I'm like, "How else do people do things?" They just say, "Well, he joined us in 2001 and he's nice, therefore, he'll always be there," and I'm like, "That's not good for him!" Deserves to be-
PATTY MCCORD: I used to say I always changed jobs every four or five years, between the fourth and fifth year, throughout my whole career. I used to think of it as degrees, like, "Oh yes, I have a bachelor's degree in software engineering." The reason I stuck with Netflix for so long was I got four companies and I never had to leave home. They were significantly different companies with whole different ...
When we started streaming to devices, which is a whole part of the company that's lost now in the change to original programming, because Netflix is HBO now. It's producing its own content, but when it was about technology and the ubiquity of the service was to be in the smart TVs, in the DVD players, in the game players, so that ability to have our software delivered wherever you watched video, we didn't have anybody who'd worked at a hardware company. I mean no one.
We're an internet, we were web ... literally no one. We didn't know who to hire, we knew we were smart but I couldn't go, "You know what? I'm going to make you a Nintendo guy."
GLENN ELLIOTT: It doesn't happen.
PATTY MCCORD: Doesn't happen. That was one of many. My first Netflix startup was "could we create a business model before we ran out of money?" That was four or five years, then the next one was DVD by mail and then was the transition for the tech event to streaming, so a company that consists of ... constantly reinvents itself, but let's juxtapose that to a company like Google, which absolutely looks for people who will have a very long tenure with the firm.
The way they do that is because so much of what they do at Google is invention. It's very large and they have a lot of money, so the Alphabet breakup is simply an acknowledgment of what was already happening at Google. If you start at Google and you're working on Search, then you can transfer that to Maps, which transfers to self-driving cars, which transfers to ... you can ... they want people to be able to move across those organizations because it's very large, which is why, I think, back around again, we ended up with this big company structure was success has always been bigger.
GLENN ELLIOTT: I can imagine. You made a big transition yourself, so you've gone from ... you went from being-
PATTY MCCORD: From single to plural.
GLENN ELLIOTT: Exactly.
PATTY MCCORD: I'm plural!
GLENN ELLIOTT: To being plural and now you're helping lots of companies, how are you finding that?
PATTY MCCORD: Well, I'll tell you something I tell CEOs. I say, "You know," it's back to your permanent thing a little bit. We have this hierarchy of goodness. The best employees, well, they're our executives. They're the highest-paid, they have the most power. They're the smartest, they have ... whatever they are, those are the most important. Those are permanent, full-time employees. Below them are anybody in management. They're also very important, they have a lot of power, you pay them a lot of money, you want them to be with you for a really long time and they're going to have all this career progression.
Then there's those highly-paid individual contributors, they're very good, you like them very much, you really want to retain them. Then, well, there's those hourly workers that some companies and they're nice people but they're not that smart, you don't pay them that much. Then, there's those high-price consultants that ... they know something you don't know and you have to pay through the nose for them, or they're contractors.
You really don't want to be part of the team because they're just going to build something, then they're going to leave. God forbid a part-time worker or a temp or your Lyft driver. We look at them, literally, from goodness to "oh, those poor people." I say, "These are just cards in your deck." If you stop thinking that your company has to be completely filled with people over here, then A) you're not being truthful, and B) you're not giving anybody in the ecosystem a chance to be extraordinarily good at the way they want to work.
I love what I'm doing. Somebody asked me yesterday, a reporter asked me, "Well, if you had the right company, would you go in?" Never say never, but I love visiting all the people that I visit, I love having a conversation, I walk away and I feel like I left a seed. At the end of my talks, I say, "Look, you can go back and do everything the way you've always done it, I really don't care. I'm not here to start a revolution, you have to start it yourself."
If you're going to choose to do those things, then choose it.
GLENN ELLIOTT: Nice.
PATTY MCCORD: Don't just go do it because everybody else does it and then call it best practice, because you haven't measured it. It's okay, you can say, "Hey, we need a lot of procedure, we make medical devices and there can't be any errors," makes total sense to me. It's great. It's pretty wonderful being plural.
GLENN ELLIOTT: Being plural. You're loving being plural and you've been enjoying writing a book lately, haven't you?
PATTY MCCORD: Yes. I'm done.
GLENN ELLIOTT: You're done?
PATTY MCCORD: It's Patty-in-a-box.
GLENN ELLIOTT: Patty-in-a-box. That sounds great. For just 19 dollars, 99?
PATTY MCCORD: Yeah, Patty-in-a-box. It's the tenets of ... it's called "Powerful" and it's about creating cultures of freedom and responsibility and because my deep belief is that you don't empower people, you can only take it away, so what I want to talk through is it's a very practical book about how I thought about some of the experiments that I did and ... because I meet with people that throw down the Netflix culture deck document and go, "We want to do this," and I say, "Okay, well, get started."
We took 14 years to write that one, and then Reid spent the last five years rewriting it, just so ... you've got 20 years ahead of you, just so you know. What I walked through is ... when we did this, what was happening, what do we try and then right now in my consulting business and when I speak to other people, what do I see other people doing and what are the thematic things I think that businesses are struggling with?
I know you see them, too, when we talk to people. It's how do we be agile, how do we be innovative, how do we deal with all the changes in the workforce, how do we rid ourselves of the things that we know are stupid? It's walking through here's how to think about recruiting in the future, here's some thoughts on compensation.
GLENN ELLIOTT: That sounds great.
PATTY MCCORD: Freedom of responsibility.
GLENN ELLIOTT: When's it out?
PATTY MCCORD: January.
GLENN ELLIOTT: January. Patty, thank you so much. It's been amazing.
PATTY MCCORD: It's wonderful.
GLENN ELLIOTT: I love seeing you. Patty's book, "Powerful: Building a Culture of Freedom and Responsibility" is out January 18, that must be, yeah? You can pre-order it on Amazon now because I checked this morning, I've already pre-ordered my copy ... for employee engagement, which Patty has also constructed ... because she's ... the queen of HR rebels, is also out in February, I think, and you can also pre-order that on Amazon, too.
There's more interviews like this and all sorts of stuff at RebelPlaybook.com. Patty, thank you very much.
PATTY MCCORD: You're very welcome.
GLENN ELLIOTT: Thank you.