Netflix's former chief talent officer explains why hard work isn't enough to get ahead

Since Netflix publicly released its 127-slide culture deck in 2009, it’s been viewed more than 8 million times.

Part of what contributed to the deck’s popularity was Netflix’s frank admission that hard work is “not relevant.” In other words, unless you produce meaningful results, you’re not valuable to the company.

On a recent episode of NPR’s Planet Money podcast, hosts Steve Henn and Stacey Vanek Smith spoke with Patty McCord, Netflix’s former chief talent officer who helped create the deck. McCord shared how she and Netflix cofounder and CEO Reed Hastings developed their philosophy.

The pivotal moment occurred in 2001, when the tech bubble burst and the company nearly went bankrupt. In response, McCord and Hastings laid off a third of the company, or about 40 people, including some employees who had been there since the very beginning.

Immediately afterward, the hosts said, McCord and Hastings realised they were somehow accomplishing more with fewer people. That’s when they decided to create the culture deck, which is still shown to all new Netflix employees.

On the podcast, McCord described a conversation with one employee who did product testing, a process that eventually became automated. The employee was incredibly upset, knowing she was about to lose her job.

McCord tried to console her: “You’re the best. You’re incredibly good at what you do. We just don’t need you to do it anymore.”

But around 2013, the tables turned. Netflix started putting out shows like “House of Cards,” and it became clear that McCord had no experience hiring people in the entertainment industry.

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“At the end of that year,” Henn said, “she and Reed Hastings had a conversation, and Patty moved on.”

Today, McCord is a consultant at Patty McCord Consulting.

In 2014, she wrote an article for The Harvard Business Review outlining how Netflix “reinvented” human resources. The two guiding principles in Netflix’s approach, McCord said, were being willing to let go of people whose skills no longer fit and offering them generous severance packages.

In the HBR article, she shared a conversation she had with an engineer in 2002, after she’d laid off the three engineers he managed. The remaining engineer told her he was happier working without them since he’d ended up wasting time correcting their mistakes.

That led McCord to realise that the best company “perk” to reward your stellar employees is giving them equally stellar people to work alongside them.

“Excellent colleagues,” she wrote, “trump everything else.”

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