In many ways I’ve thrived in my career through meritocracy. Competition is one of my top five StrengthsFinder themes. I compete for promotions and new job opportunities. I compete with other companies to get top talent onto my team. I’m intrinsically motivated to be the best performer among my peer group. Sometimes I achieve that and sometimes I don’t, but no one needs to tell me to do it. I naturally pursue high-performance.
There are many companies that confidently call themselves meritocracies. They systematize their talent management process to continually promote top performers, and swiftly exit their bottom performers. This is commonly called forced ranking. It’s practiced by a lot of companies and was popularized by Jack Welch, former CEO of GE.
Most recently, Netflix, showcased their own version of this through a Business Insider interview with their former Chief Talent Officer, Patty McCord. Netflix evaluates the type of skills they have now and what they need for the future. They aggressively exit team members with obsolete skills to acquire new talent that possesses these new skills. Netflix also unapologetically states that anything other than top performance earns a “respectful generous severance package.”
This quote from Patty McCord adequately summarizes Netflix’s philosophy on this: “You should be wary of expecting a company to take care of your career for you, because that’s not their job. Their job is to take care of their customers and their clients.” Personally, I find it odd that a Chief Talent Officer wouldn’t consider employee talent development part of the job.
What could possibly go wrong?
On the surface, being intentional about performance and skills management is a good thing. I believe that organizations that employ these methods have honest and positive intentions. However, there are always unintended consequences. In a desire to be swift and agile in the marketplace, we can be hasty and short-sighted with our teams.
Over-competitive and insecure team members will sabotage each other to win the game of musical chairs. Not knowing if you will have a seat when the music stops erodes trust and psychological safety. When you don’t feel safe, you cannot do your best work. Even worse, fear will generate the performance and skill gaps you are actively working to mitigate.
There’s another option here, which is community. Zappos CEO, Tony Hsieh popularized the notion that if you want to take care of your customers and clients, you need to focus on your employees. “Happy employees will be passionate about their jobs and make customers happy through great service.” Because of this philosophy, Zappos focuses on building community and promoting safety.
I recently read the book Leaders Eat Last: Why Some Teams Pull Together and Others Don’t, by Simon Sinek. Simon explained that the healthiest and highest performing organizations have a leadership culture that is more like a family or a tribe. They are more likely to sacrifice the numbers to save the people than sacrifice the people to save the numbers. I highly recommend you watch his famous TED Talk: Why Good Leaders Make You Feel Safe.
It’s difficult to criticize the talent management strategies of Netflix. Obviously, they’ve been quite successful. I’ve even admired their commitment to testing automation in one of my recent blog articles. Perhaps they are right and I am wrong, but I am committed to being a servant leader. I am committed to building a culture where my team feels safe, supported, and challenged to get better every day. In my experience, leading that way tends to take care of 90% of the performance and skills management problems. They just go away.
Team members aren’t interchangeable parts in a machine. Yes, we need to perform and change to meet the needs of the future. Most of the time, I believe we can develop the skills within our staff and coach people past performance issues without tossing them to the curb and grabbing new talent from the market.
In conclusion, I still like meritocracy, but I like doing it in a way that is subordinated to my servant leadership values. Community over meritocracy.
Read this article on my blog site: https://zachonleadership.com/netflix-got-it-wrong-community-over-meritocracy/