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What if you fired all the average performers?

Interesting quotes from Netflix CEO Reed Hastings:

Like every company, we try to hire well.

But, unlike many companies, we practice “adequate performance gets a generous severance package.”

We’re a team, not a family.

We’re like a pro sports team, not a kid’s recreational team. Coaches’ job at every level of Netflix to hire, develop and cut smartly, so we have stars in every position.

The Keeper Test managers use:

Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at Netflix?

This should be deeply uncomfortable for a lot of people. Questions it raises:

  • Would I make it at a company like Netflix?
  • Is this why some startups make it big?
  • Is this why most people at average companies feel like they are surrounded by Dilberts?
  • Would I want to work at a company like this?
  • Would I want to run a company like this?

What do you think?

(Original presentation below. Start at slide 25.)

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Comments

  1. Subhash October 21, 2010 at 1:38 am #

    Thanks for sharing this, Andy.
    Not sure why you wanted people to start at slide 25 though :)

    I particularly like this
    “Imagine if every person at Netflix is someone you respect and learn from…”

    Subhash

  2. trish bertuzzi October 21, 2010 at 10:15 am #

    I have a different view of this… instead of firing the average reps you should fire the managers. They are the ones that made bad hires and/or didn’t provide the tools, training and support the reps needed to get from good to great.

    More food for thought…sometimes you need good old fashioned B players to round out a team. Steady Eddy is not a bad guy. You didn’t build the plan based on everyone blowing their number away did you?

    Love Netflix but not in love with their sales culture.

  3. David Blanar October 21, 2010 at 10:15 am #

    I’m not sure what it is you’re asking here. Talent management is a strategic decision. Most footballers can’t play for Manchester United; it’s a policy the club intentionally maintains, signalled by the remuneration package (eg. salary).

    You may not want to work in such an environment, which is fine, you’re under no obligation to do so. But some people want to achieve; winners are not medeocre, they’re the best. They are, by definition, not everyone.

  4. trish bertuzzi October 21, 2010 at 11:39 am #

    You missed my point so perhaps I did not articulate it well. I would assume that at Manchester United the coaches have ownership of the success or failure of the players. If not, why have coaches or talent scouts at all?

    My point was that perhaps instead of firing the sales reps for “adequate” performance (when was adequate so horrible btw?) they should fire the managers/coaches for not doing their job well. Every salesperson deserves the opportunity to be successful and sometimes, in spite of their best efforts, that is not possible.

    Just another way to view the problem and potential solution.

  5. David Blanar October 21, 2010 at 11:48 am #

    HI Trish – I was responding to the article, not your post (which hadn’t appeared when I was writing) but I’ll respond to you as well.

    Presumably coaches and managers are under the same performance programme as the ‘line staff’. When the team doesn’t do well, it’s everyone’s fault. But putting that to one side … I think your other question is worth considering seriously.

    “When was adequate so horrible?”

    Well, Netflix didn’t say adequate was ‘horrible’. Just not the standard which they want to encourage and promote. Ultimately it’s a strategic decision: hiring superstars is a valid choice which brings its own problems: how do you get superstars (with associated egos) to play as a team? How do you ensure consistency of management of highly-talented teams, which by definition is difficult to do?

    I’m sure everyone has something in their lives which they’re good at. Really good at. When you’re excellent at something, ‘good enough’ just isn’t.

    I accept, of course, that this might not be everyone’s desired working environment. :-)

  6. trish bertuzzi October 21, 2010 at 1:13 pm #

    Well, David there I go again thinking the whole damn world is talking to me. Sorry about that but it did lead to you providing some great commentary so thanks for that. :)