NAFCU Services Blog

Originally published on CUinsight.com.

Lots of people find strategy discussions the most difficult part of planning – when you get deep into the weeds, it can be hard to tell the difference between a strategy, a tactic, a mission, a goal and an objective, and where exactly is the dividing line between short-, medium- and long-term anyway?

If strategy is hard, then developing and implementing a high performance corporate culture that is aligned with your strategy and will deliver on all of its promise is like climbing Mt. Everest. Getting culture right – right for you, right for your employees, right for your members – makes a huge difference in your ability to execute to plan.

Culture and high-performing workplaces are top-of-mind this week because I came across a fascinating presentation on the role culture plays at Netflix in ‘achieving excellence’ -- if you have not seen it yet I highly recommend it (available on Slideshare - download requires a free registration).

The PowerPoint is entitled ‘Netflix Culture: Freedom and Responsibility,’ and it highlights seven pillars of the culture at Netflix:

• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• Pay Top of Market
• Promotions & Development

Space won’t permit me to cover all 128 slides and their insights, but one of the things that struck me from the start was the realistic tone throughout the document. While I would not describe it as a ‘How-To’ manual, it uses plain language to de-mystify many of the jargon-laden debates we often find ourselves caught up in when discussing concepts like culture.

That plain language drove home how to manage a key step in creating a high performing culture – evolving your employee base, and it all starts with taking a ‘no BS look’ at a set of common values. In Washington D.C. we’re familiar with the phrase ‘walk the walk’ – at Netflix, they talk about ‘actual company values, as opposed to the nice-sounding values, [as] shown by who gets rewarded, promoted, or let go.’ So within those seven pillars, there are nine values Netflix looks for in employees:

• Judgment
• Communication
• Impact
• Curiosity
• Innovation
• Courage
• Passion
• Honesty
• Selflessness

The detail in each section makes for great reading, but what I found particularly insightful is how they deal with employees that don’t live up to all of their expectations with regard to those values. We’ve all read about various ways of transforming your workforce, most famously Jack Welch’s ranking all of GE’s top executives into "A", "B", and "C" players, with ‘C’ players being non-producers. Welch recommended firing the ‘C’ players as non-producers (also known derisively as ‘rank and yank’). This tends to generate a very competitive working environment, to say the least.

On an intellectual level we can all agree that we want the best and highest performing workforce we can get – leaving aside the impact on morale, though, it is difficult on an emotional level to get comfortable with a ‘Glengarry Glen Ross’ scorched earth approach to measuring performance and making changes.

Among the many tactical gems in the PowerPoint is how Netflix implements workforce changes to get the employees that fit their values, in a positive manner. To use their phrase –

“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. Netflix leaders hire, develop and cut smartly, so we have stars in every position.”

Netflix understands that not everybody is comfortable with the expectations that come with a high performance environment, and some instead favor job security and stability more than performance.

There is nothing wrong with that – Netflix employees that are not a good fit with the team are not treated harshly, or as failures. Instead they are (correctly) just seen as not being a fit with the organization, and given an opportunity to find another workplace that is a better fit. All of us need to get better at attracting and retaining only employees that fit our values, and helping those that don’t fit realize we are not right for them.

We’ve taken a similar approach in our organization, and have (far less eloquently) discussed these issues in terms of being passionate about your job. If a position is not igniting that inner drive in one of our employees, then we need to help them find a job that does – either here or somewhere else. Taking this approach really helps everybody, because the sooner someone finds that passionate opportunity, the sooner they will unlock a tremendous amount of creativity, performance and happiness at work. And it gives us an opportunity to find someone who is as passionate about what we do as we are.

Netflix is pretty far removed from what credit unions do on a daily basis. But there are many lessons in this deck that are universal, and can be applied to help create high performing credit union workforces.

Post written by Dave Frankil, President, NAFCU Services Corp.

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