Interviewing for values alignment

With as little bias as humanly possible

source: repeatforever.substack.com

 As I’ve defined elsewhere

Culture is our shared set of beliefs and mindsets, reflected through our behaviors and supported by our organizational systems (processes, protocols, etc.)

A cohesive organizational culture is honest, clear and reinforced.

A cohesive culture imposes constraints on our decisions. Therefore, it comes with a cost that we must pay in order to maintain it. One of those costs is not hiring candidates who don’t share our values and don’t exhibit the behaviors that we view as essential for our success. 

I’m not saying that we should hire people who are exactly like us in every way. The value of organizational diversity is unquestionable. That diversity needs to be supported by a cohesive non-negotiable core. I’m arguing that this core needs to be wider than “acting in accordance with the law”, but anything that falls outside of the core, we should view as welcomed and valued differences. 

But how do we interview for alignment with that core? 

As Rich Paret points out in the essay that this post will revolve around, The Career Story Interview, companies tend to spend more time on evaluating technical skills than on evaluating organizational skills (such as values alignment) by a factor of six. Those who make the extra effort to create a dedicated interview for organizational skills often leave it unstructured, resulting in questions like “if you could be any animal you could choose, which animal would you be?” and evaluation criteria that can be summed up by “would I enjoy having a drink with that person?”. 

There is a better way. 

In his essay, Rich lays out the foundations for a structured career story interview that credibly evaluates a candidate’s alignment with the company culture. It pulls a lot of good ideas from the Topgrading interview method (which I first covered in 2014), and modularizes the interview so it can be plugged into any recruiting process. A lot of the advice in the essay is applicable to interviewing well in general. 

Before the interview

What you’re listening for: a set of competencies or values, broken down into a set of observable behaviors. For example, “communication” can be broken down into: listens to understand, clear and concise in speech and writing, etc. 6 ∓ 2 competencies/values are reasonable ground to cover in a single interview. 

What questions to ask: the career story interview uses a set of predefined questions for every career chapter:

  • What are you most proud of accomplishing during this time?
  • What were the trouble spots, the things you struggled with, during this time?
  • What’s your most significant memory about the people you worked with during this time?
  • Who would be the person most familiar with your work during this time, and will you set up a time for us to talk with them if we both want to move forward after this interview?
  • What closed this episode of your career and opened the next one?

Rich makes the more general case for favoring past-behavior questions (PBQ) over future/hypothetical situational questions (SQ) which is very much in line with the distinction between MSA and PSQ questions I covered here. As he points out, the questions above work better than the typical “tell me about a time…” questions since they allow the interviewer to see behavioral patterns emerging rather than map a single question to a single competency. 

What you need/like/don’t want to hear: even companies that are mindful of the benefit of structured interviews tend to skip this crucial step. To be effective, the evaluation needs to be as structured as the interview. I like Rich’s language of need/like/don’t want to hear which corresponds to must-have/nice-to-have/red flags. 

Pre-communications with the candidate: unless you’re intentionally trying to assess the candidate’s ability to think on their feet, or their memory recall abilities, it’s crucial to give the candidate as much context as possible ahead of the interview. Failing to do so means that you’ll be evaluating them on those two things instead of on what you actually want to evaluate them on. The specific language that Rich suggests in a few points in the essay is a great starting point (I’ve paraphrased it a bit below): 

In our interview, we’ll be talking about your career from the beginning up until now. To start, we’ll divide your career into a series of episodes. For each episode, I have a set of things I’d like to talk about. It’s your story, so how many episodes there are is up to you. We’ll at least talk about how you started out, what you’ve been doing most recently, and what happened in between.

When you’re telling the story of each episode of your career, it can be helpful to structure the story using the acronym STAR:

Situation: Set the context for the story.

Task: Describe what your responsibility was in that situation.

Action: Explain in detail what you did in the story.

Result: Share what outcomes your actions achieved.

During the interview 

Some good pointers: 

  • A career story interview for a post-entry-level candidate usually takes 60 mins to be done right. Personally, I found it easier to work backward in time and start with the candidate’s most recent chapter. It’s the easiest for them to recall and makes it easier for me to transition to candidate Q&A/selling the role when we’re getting close to time, knowing that I covered the most relevant time period. 
  • Withhold judgment/making a decision until after the interview. 
  • Focus on listening mindfully. Taking detailed notes can help you stay in that mindset. 
  • Don’t interject with your own assumptions. Ask open-ended follow-up questions: Who/What/Why/Can you elaborate? Lou Adler’s SMARTe follow-up questions can be another good tool here. 

After the interview

Review your notes, and evaluate whether the candidate exhibited each of the observable behavior you were looking for. The need/like/don’t want to hear list should set a consistent bar across all candidates. 

Interviewing for values alignment

Principled corporate activism

Be clear on where you stand, regardless of where that is 

Corporate activism, or companies taking a stand and acting on social issues, has been a hot discussion topic in the US since the BLM protests in the summer of 2020. 

There is no single right answer to whether and to what extent organizations should take a public stand and action on various social issues (though some disagree even with this statement. But what all right answers have in common is that organizations should be clear and consistent in the stance they take. Not taking a stance is also a stance. 

When organizations don’t clarify where they stand, they foster a false, short-term sense of alignment. Different members can make different assumptions on where the organization stands, and they’ll all be correct. But that false sense of alignment quickly bursts when an external event forces the company to take action (or inaction) and reveal its actual stand. When the misalignment is revealed during a crisis, the damage is far greater. 

Clarifying where you stand leads to short-term pain, when some members have to grapple with the realization that the organization may see things differently than they do. Yet, it pays dividends in the long-run fostering true alignment. 

The now infamous Coinbase is a mission focused company blog post was a commendable attempt in doing just that. Readers directed most of the attention (and criticism) at the stance they took. Still, regardless of whether you agree or disagree with their stance, they deserve credit for taking it, and enduring through the short-term pain on the path for true alignment.

In my reflections and conversations with peers, I tried to extrapolate from that incident (and others) how an organization can more clearly and consistently describe its stance, so when the next big external event happens, it can respond rather than react. 

Two key insights emerged: 

  1. The stance an organization takes on an issue is partially captured by the “sphere” in which it takes action on it, starting with sheer compliance, through actions impacting its members, to action impacting outside the organization at the local, federal or global level. 
  2. Organizations routinely take different stances on different issues. Some organizations care more about issue X, while others care more about issue Y. 

Putting those two insights together allows us to create a map of the organization’s stance on different issues: 

When I re-read the Coinbase post and built the Coinbase version of this map, I ended up with something that looks like this: 

Agree or disagree with the stance itself; it is clearer than what I’ve seen from most organizations.

There are many more nuances and refinements that can and should be captured here, perhaps in future iterations. 

My hope is that experimenting with putting together a version of this map, can help organizations avoid yet-another-knee-jerk-reaction the next time a notable event takes place.

Principled corporate activism

Addressing the shortcomings of the division of labor

Is organizational structure the best solution? 

Source: Amazon.com

A recent post I read and shared about the challenges in using the Chief of Staff role in companies brought me back, full circle, to a post I’ve written more than five years/300-posts ago about the VP of Business and People Operations role

I’ve intentionally invited several colleagues holding Chief-of-Staff (CoS) roles in companies to critique Kovacevich’s post, to learn from their collective experience. I learned from those conversations that some of Kovacevich’s arguments can be dismissed as issues with specific implementations of the role, or issues that can exist in all corporate roles and therefore don’t stem from the CoS role definition in particular. Arguments around the lack of clarity in the role’s responsibilities, or the role’s allegiance to their manager rather than the benefit of the company fall in that category. But a few arguments remained standing and salient: 

  1. There is a gap in the organization’s ability to collaborate cross-functionally well that the CoS role is often meant to address. 
  2. The role’s positioning outside of the formal reporting lines makes it more challenging to accomplish #1. 
  3. The label used to describe the role (“CoS”) often adds, rather than removes, ambiguity — also getting in the way of #1. 

The root cause for the gap described in #1 is Conway’s Law — the unfortunate downside of the function-based division of labor on the executive team. The quote from Rich Mironov I included in that post is still one of the most concise and clear ways to describe the phenomena:

Organizations must have some division of labor … [and] every division of labor creates the potential for narrower thinking, boundary skirmishes, and inefficient resource allocation.”

Specifically, in this case, the five core systems that drive business results are owned by everyone and no one at all. 

Creating a role in the organization that owns all or some of those systems attempts to solve those organizational challenges using organizational structure. 

Similar patterns exist with the VP of People role — a role that in the five-systems model is given some authority over the people, incentive, and org structure systems:

  • It does not own its domain to the same extent that the VP of Sales owns sales, or that the VP of Engineering owns engineering. While in those domains meeting the function’s objectives relies 70% on the function and 30% on effective collaboration with other functions, those ratios are inversed in the People function.
  • A big part of that challenge is due to the org structure. Employees report into their functional orgs, not the People org. The People’s org ability to influence their experiences and actions is only secondary to the influence exuded by their organic reporting chains. A person’s manager will always be more influential than the most influential People program. 
  • The label (“People”) doesn’t help. It invites comparisons to other labels (“Sales”, “Engineering”) even though the underlying responsibility is structurally different. 

Where does all of this leave me? With better questions than answers. That’s ok for now. 

Organizations are trying to tackle some of the core shortcomings of their functionally-oriented division of labor using org structure solutions (CoS, VP of People) with minor success at best. 

Is an org structure solution the best way to solve this challenge? 

If so, what are the attributes of an effective org structure solution? How do we avoid some of the pitfalls mentioned above? 

I don’t have good answers to these questions. Yet. I have a hunch that looking at this challenge as a part & whole polarity to be navigated, rather than a solution to be solved can yield exciting insights. 

To be continued… 

Addressing the shortcomings of the division of labor

Structures as scaffoldings / structures as shoes

Reinforcing behavior without dependence 

Photo by Kirill Sharkovski on Unsplash

I’ve written quite a bit about the critical role that the organizational environment, and specifically, its processes and structures play in driving behavior change, and reinforcing the culture

Recently, I came across an interesting edge case that I’m not sure how to solve yet. I hope that a clearer articulation here, and any dialogue that may ensue as a result, may help shed some more light on the shape of the potential solutions. 

It happens when the behavior that we want to reinforce becomes dependent on the structure that we’ve put in place. Let me give a couple of examples. 

  1. Situation: we want our team to take time off to celebrate holidays that are important to them. → Solution: we identify a subset of the holidays that most team members view as important and make them “official company holidays” → Complication: people take the company holidays but are more reluctant to take other holidays off assuming that if they are not company holidays, they are not important enough to justify taking time off for them. 
  2. Situations: we want our team to take time off when they are dealing with distressing events in their lives. → Solution: when events that are broadly distressing take place (let’s say, a national tragedy), we remind and encourage our team to take time off if they need to. → Complication: team members use the company-wide communication as a barometer for which events are distressing enough to justify taking time off. If we haven’t communicated about it, it must not be distressing enough to justify. 

I’m not sure that there’s a broader pattern here, given that the two examples that are more present for me are focused on taking time off work. Or perhaps the complications are not as common as I believe them to be. Nonetheless, these examples raise a question with broader applicability: 

How do we design structures that are less likely to generate behavioral dependency?

The best metaphor that I was able to come up with is the difference between scaffoldings and shoes. Both are structures that we commonly use. Scaffoldings are temporary: when we remove them, the building, in its new form stands freely on its own. Whereas shoes, in some way weaken us. While they allow us to traverse challenging surfaces with more ease, once we remove them, our ability to traverse more standard surfaces on our own diminishes, compared to someone who’s been walking barefoot their entire life. 

Structures as scaffoldings / structures as shoes

Increasing relational productivity

What management *should* be doing

Photo by christie greene on Unsplash

Time to pay down some “writing debt” and cover some good articles I came across last year, that stood the (short) test of time between now and then. Starting with this BCG piece, I made reference to in my 2020 wrap-up

How the lockdown unlocked real work

I have my qualms with some of the framing and word choices. Specifically, the careless use of terms like complexity and complicatedness just because they sound less judgmental than what they’re really trying to describe: bureaucracy. But I digress. 

The core piece of value in the article is its “side box”, which highlights “complementarities” — when one factor of production increases the contribution of the other factor of production to the overall outcome — as a core reason for the existence of organizations in the first place. It then introduces a distinction between two types of complementaries: proximity and relational: 

  • Proximity complementarities — complementaries that accrue directly from physical co-location, such as the scale economies made possible by the steam engine or the assembly line — both requiring grouping people together. The discipline of management developed in this context and the close control of work it made possible. 
  • Relational complementarities — complementarities that accrue from the alignment and coherence of the actual behaviors of each node and the way it increases the contribution of every other node. This is articulated visually in a post I covered a couple of years ago titled “People as Vectors” and more abstractly in “Bounded Specialization”.

Most business models rely on both types of complementarities, but because the former is far more visible, organizations tend to over-rely on it, assuming that proximity will make up for any gaps in the productive content of the relationships. Proximity functions as a misleading proxy for working effectively together.

For example, avoiding the hard work of creating trust and explicit commitments around deliverables, knowing that if anything doesn’t go according to plan, we can just walk down the hall and talk it out. 

The pandemic has abruptly swept away organizations’ ability to (over)rely on proximity. The pace of change prevented organizations from applying a bureaucratic procedural response. Instead, they had to strengthen relational productivity by increasing the degree to which people interact effectively and work together in the service of a collective task. Three levers play a role in this endeavor: leadership, engagement and cooperation. 

Leadership: managers add value by getting people to do what they wouldn’t do spontaneously in the absence of interaction with them. Specifically, by maximizing alignment between the individual’s actions and what the organization as a whole is trying to accomplish: navigating across multiple priorities, and identifying and removing blockers. Tactically, that requires having conversations with a broader set of nodes in the network (not just direct reports) and having those conversations focused on creating clarity around a core set of questions: “What are your current priorities, the things you must accomplish, the battles you must win?”, “What are you worried about?”, “Do you feel like you know what you need to know?”, “If not, do you know who to go to get what you need?”.

Engagement: defined here as the degree and intensity of individuals’ connectedness to the organization and its goals, to the roles they occupy in the organization, and to the tasks they perform. The tactics called out here included anchoring the organization’s day-to-day activities to a higher goal, organizing work around time-limited and iterative sprints — focusing people on the immediate priorities that they can control and completing commitments they’ve made to the team, rather than on the uncertainties they can’t control. 

Cooperation: defined here as the process by which people put their autonomy, initiative, and judgment in the service of a collective purpose or task — which sometimes means compromising their own goals or needs for the greater good. The tactics mentioned here included explicitly building trust among far-flung team members, by giving everyone on the team enough air time, and identifying and proactively managing interdependencies.

The evidence presented for decomposing relational productivity to these three levers was somewhat lacking, and the tactical examples under each seem partial at best. 

Nonetheless, the distinction between proximity and relational complementarities and the interaction between the two is a powerful lens to looking at and making sense of organizational behavior and the initial levers for starting to strengthen relational productivity are a good starting point as any for further exploration down that path. 

Increasing relational productivity

OrgHacking 2020 wrap-up

This is my 6th full year of posting on OrgHacking and continuing my annual tradition of writing an end-of-year wrap-up post (previous reviews: 2019, 2018, 2017: 1 & 2, 2016, 2015). I’m going to stick with last year’s 3-part format in a slightly abbreviated form. 

And what a year it was. Pair the global pandemic that’s been raging since March upending traditional ways of working, with a couple of major life events: starting a new full-time job and getting married — and 2020 became a year of many “firsts”. 

Part 1: 2020 reflection 

At the end of last year, I highlighted org governance and distributing power, value generation (performance) and value allocation (comp), and distributed work as areas of interest for 2020. Those remained top-of-mind for me throughout the year, with the latter in particular becoming a lot more real due to COVID-19. I did not get to just think about them, but also write about them, with the relevant posts captured in the “organization fundamentals” and “distributed work” sections of Part 3. 

It was fascinating to see the “two sides of the same coin” relationship between performance and compensation a lot clearer (the value you generate for the group, and your share of the collective value) and see how they fit in broader frameworks of fundamental challenges of organizations. 

The big a-ha moment around distributed work came from shifting my language from talking about “remote work”, which stands in contrast to “co-located work”, to “distributed work” which is more of a spectrum. Companies start to work in a distributed fashion a lot earlier than they used to (it’s hard to find a 100-person tech company that’s 100% co-located), and while many have hit “peak distributed” during the pandemic, some will stay there, and some will go back to a lower lever of distribution that’ll still be higher than their pre-pandemic level. It highlighted that many of us have been working distributedly for quite a while, but perhaps not in a very skilled way. It also highlighted the role that the human element plays in that dynamic: from the challenge of attempting to collaborate in a way that goes beyond our evolutionary wiring, to the possibility of mitigating the relational biases that we tend to rely on heavily while working co-located. This takes me to intentional community design, but I’ll skip that rabbit hole for now. 

My personal life events (and perhaps pandemic-related fatigue build-up) have impacted my writing in the last couple of months of the year, and I did not stick to my weekly cadence. There are a few pieces of content I came across and did not have the time or mindshare to write about: 

I’m hoping to get back to them at the beginning of the new year, but I’m also planning to hold my intention of writing a weekly post a bit more lightly in 2021. We’ll see how it goes. 

Part 2: 2021 areas of interest 

My 2021 areas of interest seem to be a refinement and evolution of my 2020 themes:

  • Intentional governance/design of productive communities/organizations in general and the value generation (performance)/value distribution (compensation) challenge in particular. 
  • Collective sense-making — an emerging category this year, that I hope to continue to explore further. Most likely, through the work of Dave Snowden and the Cognitive Edge. 
  • Building human connection and addressing human needs in collaborative efforts. I slot some of the more interesting challenges of distributed work into this category and the maturing DEI space which is finally generating some balanced, evidence-based approaches and practices. 

Part 3: 2020 posts by emergent categories 

About mid-year I moved away from the old naming convention of using [] in summary posts. Therefore, original (synthesis) posts are indicated below with an *. 

People practices

Organization fundamentals

Sense-making

Distributed work

Behavior change

Small-group dynamics

Large-group dynamics

DEI

Knowledge Management

Misc

OrgHacking 2020 wrap-up

Paradoxical Change and Getting Unstuck

A polarity lens on change

“The Paradoxical Theory of Change. … change occurs when one becomes what he is, not when he tries to become what he is not… By rejecting the role of change agent, we make meaningful and orderly change possible.”

This quote by Arnold Beisser opens up the core chapter on change and transformation in Barry Johnson’s new book “And — Making a difference by leveraging polarity, paradox or dilemma.” I first came across the concept of Polarity Management 4 years ago and it’s become one of the foundational tools in my mental toolbox ever since, when I’m mindful enough to notice that the situation I’m trying to navigate is actually a both/and rather than an either/or dynamic. 

I won’t cover the basics of polarity management in this post. There are several good overviews of it available elsewhere, including my older post. “And” introduces several polarity archetypes: meta-polarities or polarity patterns, if you will, that aggregate together typical dynamics shared by a large set of specific polarities. This post will cover one such archetype/pattern shared by all polarities that, at their core, have to do with the tension between “continuity” and “transformation”. Other labels often used to describe this tension include: being/becoming, expansive/focused, traditional/innovative, familiar/new, stability/change. 

The core polarity is captured in this polarity map: 

Source: “And”

On the one hand, there is a force attempting to Transform the situation. It is moving from “Missing” something valued, which is seen as a problem (-B), to “Going After” that which is “Missing,” which is a vision for a preferred future (+C).  

On the other hand, there is a force for Continuity. It is moving from avoiding the loss of something valued (-D) to “Holding On” to it with great pride (+A). 

Since traditional approaches to change view transformation as solving a problem, when the change effort encounters resistance, they suggest looking for ways to overcome or get around it. To get everyone “aligned” to move in the desired direction. The polarity lens clearly shows that this approach will likely make matters worse in the long-run: extend the time and effort it would take to reach the desired upside, and make it inherently unsustainable and likely to be reversed at a later date. 

Failing to notice and manage the polarity leads to getting hooked and stuck: 

Source: “And”
  • Hooked: The more powerfully we value something from our past (+A), the more powerfully we are afraid of losing it (-D).
  • Stuck: The hook (+A/-D) becomes a wall that blocks the natural flow of the force that knows something is missing (-B) and wants a transformation by going after it (+C). This leaves the system stuck in the downside of Continuity. 

Alternative approaches orient differently toward resistance. Resistance is viewed as a resource that can be included in the process of making the transformation. The assumption is that there is wisdom in the resistance. Combining the energy of “going after” and “holding on” is likely to accelerate the pace at which the desired upside will be obtained and will make this destination more stable and long-lasting in the long-run. When we experience the downside of the pole towards which we were moving, it is recognized as the natural flow between the two poles. An early warning sign that some self-correction is necessary, not an indication that the direction is inherently wrong.

Managing the polarity well, can help the system get unstuck, following a 5-step process: 

Source: “And”
  1. Seek what value is being held (+A). Listen to those who are resisting the move towards what we are “Going After” (+C). Affirm the value to which they are “Holding On” (+A). 
  2. The affirmation transforms the wall into a bridge to the fear of losing what is valued (-D). Listen to and respect the legitimate fear of losing what is valued. 
  3. After identifying the resistor’s point of view (+A/-D) ask the question: “How might we (those holding on and those going after) gain what we are “going after”…
  4. .. without letting go of what the resistors value…
  5. … in order to move towards a Greater Purpose that works for both groups?”

The response to this question is the last step in the general SMALL (Seeing, Mapping, Assessing, Learning, Leveraging) process, synthesizing the insights of managing the polarity by:

  • Identifying “Action Steps” that will allow us to capture the upside of the two poles. 
  • Identifying “Early Warnings” that we’re getting too close to one of the poles and its downside is becoming noticeable. 

In another favorite book of mine, Mastering Leadership, Anderson & Adams describe Integral Leadership as follows: 

“This ability to hold opposites, conflict, tension and polarity, without avoiding them, oversimplifying them, or resorting to quick fixes, is the hallmark of this leadership… the ability to see and hold the whole system…with both fierce commitment to transformation and with compassion for what is.

The approach outlined above offers a tangible way to make progress in that compelling journey. 

Paradoxical Change and Getting Unstuck

Self-managed People practices

Terminations and compensation changes at Holacracy One

Photo by Tingey Injury Law Firm on Unsplash

Ever since I read Brian Robertson’s book five years ago, one of my deepest qualms with Holacracy has been the gap it created around People practices such as performance management, compensation changes, and terminations.

Five years ago, I wrote

Dealing with “human spaces” problems such as hiring/firing, compensation, growth, etc. is not part of the Holacracy “operating systems” but mere “add-ons/apps” that each business should figure out on its own, once they adopt Holacracy. Yet at the same time, it’s been acknowledged that Holacracy is at odds with traditional “human spaces” solutions, and the friction between the two is a key cause for some companies attempting to adopt Holacracy but failing to successfully do so.

To use the “Holacracy as an Operating System” metaphor which Robertson introduced in his book: he created a new OS that’s incompatible with the existing apps (manager-led people practices) and launched it without an ecosystem of compatible apps. Only radical early adopters would switch to a new OS without an ecosystem of compatible apps already in place, which sadly, not only slowed down Holacracy’s adoption but also made it the target of very valid critique. 

Since then, I’ve learned to look at Holacracy less as a monolithic dogma and more as a source of inspiration for several potent building blocks for designing more human organizations. Top of which are the “OS Kernel”, the Holacracy Constitution, a compelling alternative to CEO/founder dictatorship for governing organizational power; and variations of the Integrative Decision Making process for more effective decision-making. 

While those are important pieces of the larger puzzle, it is still missing the key pieces of people practices and will not be complete without them.  

Robertson has softened up over the years too. When I heard him speak last year, he had a growing appreciation for the human aspect of the organization and for the need to cultivate not just “role” but also “sole”. 

In a series of blog posts published earlier this summer, he outlined how his Holacracy-run company, Holacracy One, handles two of the most challenging people practices in any organization —  terminations and compensation changes: 

Getting fired without a boss

A self-directed compensation system

The processes are also covered in detail in the company’s governance system, GlassFrog. 

Termination process (Partnership Review)

Roles: 

  • Partner — the person whose affiliation with the organization is being reviewed. 
  • Partnership Assessor — responsible for assessing Partners for continued partnership during scheduled Partnership Reviews.

Process: 

  1. New Partners automatically go through a Partnership Review after three, six, and twelve months of tenure. Any Partner can request a Partnership Review for another Partner. 
  2. All Partnership Assessors must participate in the review or waive their right to attend. They can also invite additional Partners to attend, as long as no other Partnership Assessor objects.
  3. After sharing the context for the review (the reason it was called) participants vote (advocate for / neutral / against) on the following prompt: “knowing what I know now, if this partner weren’t already in the partnership, I would invite the reviewed partner into the partnership again now with their current relationship terms”. If the vote is not unanimous the Partnership Assessors explain their votes, discuss the matter and vote again. 
  4. To remain in the company, a Partner must have more “advocate” than “against” votes and at least one “advocate” vote. 
  5. If the decision led to a negative outcome, the Partner is notified and has three days to decide whether they want to accept the outcome or discuss it with the Partnership Assessors. If they opt for the latter, they have two weeks to have those discussions and decide whether to request a do-over. 
  6. The outcome of a do-over Partnership Review is immediate and final. A negative outcome kicks-off the Partner offboarding process. 

Compensation change process (Compensation Review)

Roles: 

  • Partner — the person requesting the compensation change. 
  • Compensation Architect — responsible for designing, implementing, and evolving the organization’s overall systems and related processes for determining Partner compensation. As well as defining and publishing the organization’s possible compensation tiers, along with general criteria to guide others in assessing placements within it.
  • Compensation Guardians– responsible for assessing proposals for compensation placements against other existing placements, and against the general guidance published by the Compensation Architect.

Process: 

  1. Impact write up: The Partner submits a write-up of (a) the skills and other capacities with which they contribute most of their value to the organization, and (b) any constraints or weaknesses that limit the value those skills and capacities would otherwise be able to add. Part (a) can be written by someone else (after obtaining the Partner’s permission), but part (b) must be written by the Partner. All Compensation Guardians with relevant focus must confirm that the write-up is materially complete and accurate.
  2. New compensation level proposal: The Partner submits a proposal for a new compensation level, using one of the allowed levels defined by the Compensation Architect. The proposal outlines arguments for and against the change, and an assertion that the author thinks that granting the new level is the right decision for the organization all things considered. The proposal can also be authored and submitted on behalf of a different Partner. 
  3. Compensation Review: The proposer schedules a “Compensation Review” meeting with all relevant Compensation Guardians. Compensation Guardians can waive their right to attend, as well as invite additional Partners to attend, as long as no other Compensation Guardian objects. The Compensation Review follows the same structure as the Partnership Review (above) with a modified prompt: “If this person didn’t already work here, would you advocate for hiring them again at their proposed new compensation level?”. To be approved, a proposal needs more people advocating for it than against it, and at least one positive advocate.
Self-managed People practices

Creating a global company culture

Netflix’s No Rules Rules — Part 2

source: erinmeyer.com

Every good plan changes when it meets reality, and my plan here is no different. While this was intended to be part 3 of the series, I decided to cover it now and leave the specific Netflix practices for later. 

Chapter 10 of No Rules Rules discusses the work that Netflix has done to adapt its unique culture to its multi-national footprint. Since Netflix started off in the US, many aspects of its culture aligned relatively well with general US culture. In places where intentional differences were introduced, the degree of difference was small enough that behavior change and convergence could be driven through standard means: role modeling, training, education, and processes/incentive systems. However, as Netflix expanded internationally, some aspects of its culture were at more extreme odds with local cultures. For example, its high candor culture, which celebrates direct negative feedback, was at odds with Japanese culture, which favors a much more indirect approach to negative feedback. 

The need to more deliberately explore and reconcile those cultural differences led to the initial collaboration between Reed Hastings and Erin Meyer, the book’s co-authors. Meyer is a leading researcher in the field of cultural differences, and her capstone research is covered in detail in her 2014 book The Culture Map. A more digestible summary of it is available in an HBR article titled: 

Navigating the Cultural Minefield

Meyer’s research “stands on the shoulders of giants,” synthesizing and integrating previous work by leading researchers such as Edward Hall, Geert Hofstede, Robert House, Mansour Javidan, Roy Chua, Michael Morris, and Richard Nisbett.

Meyer created a framework for analyzing and comparing cultures across 8 scales: 

  1. Communicating (low context <> high context)
  2. Evaluating (direct negative feedback <> indirect negative feedback)
  3. Leading (egalitarian <> hierarchical)
  4. Deciding (consensual <> top-down)
  5. Trusting (task-based <> relationship-based)
  6. Disagreeing (confrontational <> avoids confrontation)
  7. Scheduling (linear time <> flexible time)
  8. Persuading (principles first <> application first)

Communicating —  This scale measures the degree to which cultures are high- or low-context. In low-context cultures, good communication is precise, simple, explicit, and clear. Messages are expressed and understood at face value. Repetition and putting messages in writing are appreciated to clarify communication. In high-context cultures, communication is sophisticated, nuanced, and layered. Messages are both spoken and read between the lines. Less is put in writing, and more is left for verbal interpretation.

Evaluating —  All cultures believe that criticism should be given constructively, but the definition of “constructive” varies greatly. This scale measures a preference for frank versus diplomatic criticism. While often confused with communicating, many countries have different positions on the two scales.

Leading — This scale measures the degree of respect and deference shown to authority figures, placing people on a spectrum between the egalitarian and the hierarchical. 

Deciding —  This scale explores the differences between building group agreement and relying on an individual(usually the boss) to make decisions. We tend to assume that it’ll be strongly correlated with the “leading” scale, but this is not the case in all cultures. 

Trusting —  Cognitive trust (from the head) can be contrasted with affective trust (from the heart). In task-based cultures, trust is built cognitively through work. If we collaborate well, prove ourselves reliable, and respect one another’s contributions, we come to feel mutual trust. In a relationship-based society, trust is a result of weaving a strong affective connection. If we spend time laughing and relaxing together, getting to know one another on a personal level, and feeling a mutual liking, we establish trust.

Disagreeing — This scale measures how cultures view open disagreement — whether they feel it is likely to improve group dynamics or negatively impact team relationships. Some counties view the public airing of disagreement very dimly, while others are quite comfortable having spirited, confrontational meetings.

Scheduling — This scale measures how much value cultures place on being structured versus reactive. In some cultures, people treat the schedule as a suggestion, while others stick to the agenda. 

Persuading —  This scale measures a preference for inductive versus deductive arguments. Some cultures tend to find deductive reasoning more persuasive, whereas other cultures typically prefer an inductive style.


Netflix used Meyer’s research to identify the countries where the Netflix culture is most at odds with local cultures to:

  •  Support team members in those countries better, knowing that they’ll likely take a little longer to adapt.
  • Look at elements of its own culture that are most at odds and mitigate some of those tensions, such as increasing formal feedback in cultures that are less direct on the “evaluating” scale. 

On Meyer’s website, individuals and groups can take Meyer’s 24-question assessment, see where they fall on each of the eight scales, and compare their culture to the cultures of the countries in which they’re doing business. 

In my mind, the intra-cultural comparisons are more interesting than the inter-cultural ones. As my assessment suggests, while on some scales, my disposition was a blend of the two cultures of the countries I’ve spent the most time in (US and Israel), on others, I was more extreme than both in one direction or the others. Suggesting, perhaps obviously, that country culture is not the only contributing factor to my culture, and the two can differ quite significantly.  

Therefore, I see the tool’s key value as a fascinating diagnostic for organizations in codifying their organizational cultures across the eight scales, by aggregating all team members’ individual results. And it’s not just the medians that matter; it’s also the variabilities. Understanding on which scales there’s strong cultural coherence (low variability) and on which scales there’s weak cultural coherence (high variability) can help an organization focus its efforts on the latter if it wants to create a more coherent culture. 

Creating a global company culture

A cohesive culture is not for everyone

Netflix’s “No Rules Rules” — Part 1

Source: No Rules Rules

I recently finished “No Rules Rules” by Reed Hastings, Netflix’s founder and CEO, and Erin Meyer, a business professor at INSEAD. 

There’s a lot to extract from this book and I’m going to split that into a few blog posts with this rough game plan: 

  • Part 1: (this post) high-level review of the book. 
  • Part 2: review of specific Netflix processes and practices discussed in the book (may be split into more than one post). 
  • Part 3: the culture map. 

The book aims to provide a pretty deep dive into Netflix’s company culture: how it came to be, how it’s reinforced and what business benefits it unlocks. 

Hastings and Meyer tag-team the writing, with Hastings typically providing the history of how a certain element of the culture came to be, how it evolved over time, and why it’s important, and Meyer providing both scientific backings to the merits of the element/practice and detailed on-the-ground depiction on how it manifests in the day-to-day life of Netflix’s employees. 

In a nutshell, Netflix’s culture is described as three key elements that are deeply intertwined: high talent density (quality of employees), high level of candor, and high level of freedom (low levels of control). The latter two are the source of Netflix’s famous “Freedom & Responsibility” (F&R) motto. 

After a brief introduction, the book goes through three iterations across these elements, each time offering a more evolved and sophisticated way to implement the element and take it to the next level. It concludes with a chapter on taking the Netflix culture global, which will be the sole focus of Part 3 of this series. 

Source: No Rules Rules

Three things made this book a very worthwhile read: 

  • First, it shows how the three cultural elements are intertwined, and how “leveling up” one element unlocks the next level of the other elements. 
  • Second, some of the practices, like “sunshining” and in-person 360 feedback are finally described in a level of detail that makes them “safe enough to try” and opens the door to experimenting with them, at least in some contexts. Though the first point is an important caveat here: optimizing the part doesn’t necessarily optimize the whole. 
  • Third, this is not a “Kool-Aid” book. As a reader, I didn’t get the impression that it was written by a Netflix culture zealot. There were no claims that these structures will work well outside of Netflix. I appreciated the authors’ efforts to share the challenges with the trade-offs the culture implies, alongside its strengths. Kyle and Donna’s struggles with the vague vacation policy, Jaime’s struggles with the vague expense policy, and Russel and Han’s struggles with paying top-of-market salaries are just a few of many examples that are covered in detail and demonstrate that the Netflix way is not necessarily the easy way. 

It is easy to come away from reading a book like this one with the wrong conclusion that the Netflix way is the best way and that every company should follow its lead. This is the lesson that many CEOs have (hopefully) learned, often times the hard way, trying to imitate Steve Jobs’ leadership style. 

The deeper and more useful insight from this book, in my mind at least, is the power of a cohesive culture, where elements reinforce rather than contradict one another, and the iterative process by which it evolves and strengthens. 

And even with that, a healthy amount of skepticism is still merited. As Steven Sinofsky once observed: 

Like so many company processes, when a company is doing “well” then the processes are exactly the right ones and magical. When a company is not doing so “well” then every process is either a symptom or the cause of the situation.

An often under-appreciated aspect of cohesive cultures is that inherently, they would never be a good fit for everyone. This is something that often gets missed by some of the big exposés about the Netflix (and to some degree, the ones concerning Amazon) and more recent critiques of the book. The personal stories of the individuals for which the culture didn’t work, or the edge cases where the culture broke can sometimes distract us from the bigger picture. 

And again, Sinofsky says it better than I can: 

Like so many things in business, there is no right answer or perfect approach. If there was, then there would be one [approach] that everyone would use and it would work all the time. There is not.

As much as any system is maligned, having a system that is visible, has some framework, and a level of cross-organization consistency provides many benefits to the organization as a whole. These benefits accrue even with all the challenges that also exist.

In the same essay, he also points out that “the absence of a system is itself a system”. And that approach too is not without its challenges. 

A cohesive culture is not for everyone