During 2013 our office became collectively addicted to Breaking Bad. For those not hooked the drama, streamed by Netflix, revolves around a terminally ill chemistry teacher named Walter White. Motivated by the urge to provide for his son and wife, White reinvents himself as a market-leading producer of crystal meth operating under the nom-de-guerre of Heisenberg. From a learning and development perspective, the show provides, at best, a complex example of the transformative potential of human beings. Yet when it came to an end, we each suffered withdrawal symptoms lasting several weeks.
Happily another Netflix blockbuster is now trending across the web and has got our office buzzing. First uploaded to slideshare in 2009, Netflix's "Culture: Freedom and Responsibility" presentation has been viewed getting on for seven million times.
And fresh interest was stimulated this month when Patty McCord's article "How Netflix Reinvented HR" was published in HBR. McCord is Netflix's former Chief Talent Officer, and both an architect of the company's culture and co-author of the presentation.
Given that in 2013 Netflix's valuation on Standard & Poor's 500-stock index increased by almost 300%, both the presentation and McCord's article warrant serious consideration.
Where at the outset Breaking Bad's White is driven by family loyalty, Netflix is bracingly honest in distancing itself from this construct: "We're a team, not a family" .... "unlimited loyalty to a shrinking firm, or to an ineffective employee, is not what we are about" . What this means in practice is that Netflix is unsentimental about letting go of people who no longer match its immediate needs. McCord illustrates this through a series of case studies, one focusing on Laura, a bookkeeper with Netflix from its inception. McCord explains how Laura played an important role in the company's early growth devising systems for tracking rentals and royalty liabilities. In the wake of its IPO, however, the company needed something extra, and recognized that:
Despite her work ethic, her track record, and the fact that we all really liked her, her skills were no longer adequate. Some of us talked about jury-rigging a new role for her, but we decided that wouldn't be right.
Taking responsibility for individual and mutual growth and development is a key indicator of a healthy family, but not, it would seem of a team. Of the 126 slides in Netflix presentation, just 4 are given over to development, and these are positioned right at the back end. There is a reason for this. Netflix holds that "Formalized development is rarely effective, and we don't try to do it"
Instead the company maintains that people develop by "surrounding them with stunning colleagues and giving them big challenges to work on," and that "high performance people are generally self-improving through experience, observation, introspection, reading, and discussion."
At first sight there appears much to admire here. Devolving responsibility to individuals for their own learning implies a high degree of regard and trust. When it comes to formal technical training there maybe strong arguments in support of this, though it doesn't appear to have held true in Laura's case.
And it is a risky assumption that even high-performers come uniformly equipped to think about new problems in new ways. Organisations increasingly face wicked problems, challenges that demand sophisticated approaches to individual and collaborative learning and unlearning. Effectiveness in this area is needed if, as demanded by Netflix's corporate behaviour "Judgment", people are "to make wise decisions .. despite ambiguity."
Wise judgement in times of uncertainty hinges on a mix of skills and processes that enable:
- divergent thinking
- making connections
- understanding and simplifying complexity
- building relationships with unfamiliar others and eroding silos
- being reflective, reflexive, resilient and open
- authentically listening with and learning from others
Employees rarely come with these critical capabilities ready installed, and it is all too easy for organisations to assume they are on track until it's too late to put things right. Investors will hope there is no substance to the question posed by one contributor to Hacker News: "Is Netflix just forming a monoculture of people with the same definition of good judgement?"
Whether the concern justifiably applies to Netflix or not, it's a question other businesses should be asking of themselves. The necessary capabilities are woefully under-developed in schools and in higher education. And they cannot be reliably developed on-line, through reading or through solitary reflection. Yes, in exceptional cases they can be grown through a blend of these things and experience, but this urgent growth is best achieved and dependably accelerated by structured interventions, including formal experiential and reflective learning, and coaching. None but the most optimistic of companies would assume matters of such urgency could be left to chance and blind faith.
But, of course, Netflix is not thinking about the generality of high-performers, because as McCord explains, its policy is to "Hire, Reward, and Tolerate Only Fully Formed Adults." I'm not sure I have ever met a fully formed adult, but I suspect they might be ill-suited to a world reimagining itself at an astonishing pace and re-forming in utterly surprising ways.
A crucial episode of "Breaking Bad" is entitled "Say my name," a demand Walter White makes of a rival gangster. What he wants to hear, of course, is not "White" but "Heisenberg," a name guaranteed to conjure an edgy sense of unpredictability. When matters don't unfold as planned, White turns, as ever, to his crooked lawyer Saul Goodman, who trades under the slogan "Better Call Saul." Ultimately even Saul is powerless to make good the chaos Heisenberg has created around him.
Netflix has recently announced plans to stream the Breaking Bad spin off Better Call Saul. Here in the office we can barely wait for the twists and turns of its plot. And as the unexpected becomes the new normal, businesses everywhere should be equally impatient about developing their capabilities for responding to the unknown challenges ahead. If they do not they will find themselves trapped in conventional ways of thinking and behaviours. Calling Saul won't get them out of jail. It's crystal clear.