“It is not enough to be busy; so are the ants. The question is: What are we busy about?“
– Henry David Thoreau

What constitutes an effective day, putting in a lot of hours or getting done what needs to get done?  Working hard for the sake of working hard is tiring, useless and often leads to burnout.  Many industries stress long work days: investment banking, fashion and pretty much any job in New York City.  However, anyone who has ever worked for themselves knows that there’s a lot more to success than hard work and often long hours are counter-productive.  Studies have shown that after 50 hours in a week, our effectiveness plummets.  For this reason, many companies and entire countries are trending toward a shorter workday. Netflix is an interesting exception.

Netflix has a different culture

A couple of years ago, Patty McCord, one of the early members and senior manager at Netflix changed the tech industry when she pronounced “Hard work is irrelevant”.

She also shook up the Netflix culture by going against the rah-rah corporate cheerleading that espouses that “we’re all big, happy family.”  That statement has always bothered me because it’s not true.  Companies are nothing like families, but managers love to say that to try to force unity.

It’s a team, not a family

A company is more like a professional sports team, not a family and there are some important differences on how each operates and is managed.  For starters, you can’t fire a family member for not pulling their weight.  If a team member isn’t performing, they’re out.  Modern efficient management doesn’t tolerate employees, contractors  or freelancers who don’t do their jobs, no matter how much everyone loves them.  It’s do or die.

Watch below to hear how Netflix manages their team, which has lead to years of amazing growth – more than doubling in 2015.

If you want to study the now famous slide deck Patty McCord used to change the culture at Netflix, here it is.  (The article says Reed Hastings made it, but since he’s CEO, he gets to take all the credit.)

Timestamps:

0:00 – Management techniques from Netflix
0:48 – Hard work is irrelevant
1:55 – What is your effective hourly rate?
3:10 – Foster a culture of results
4:10 – We are a team, not a family
7:50 – The free agent economy
8:55 – Planet Money #647 for more info.