Lenny's Podcast: Product | Career | Growth
00:41:11 · Lenny Rachitsky, Elizabeth Stone
[00:41:11] S0: I love this concept. Excellence as an operating system. It's very systems thinking you might say for how to set up a company. [00:41:18] S1: Exactly, Lenny. [00:41:20] S0: So, everyone listening to this will want excellence as an operating system. Who would not want this? It'd be helpful for people to hear what are the ingredients to make this happen. One is obviously high talent density, just hiring only the best. Two is accountability. There's the input and the output, essentially. Input, amazing people, the top people, make them accountable, give them autonomy. What would you say are the pillars of creating this excellence as an operating system, if founders are listening to this and like, I want them to do that?
00:41:51 · Elizabeth Stone
[00:41:51] S1: Well, the talent density is the non-negotiable. You have to start with that. If you don't have that, you can't get to a place where you have confidence in decision-making at all levels of the organization, allowing people to take risks and innovate quickly. That's a big part of excellence in the Netflix culture, which is being very comfortable with risk taking. We don't try to avoid failures. We try to recover quickly when we have them. I think there's been great examples of that. Our foray into live was a wonderful example of being comfortable taking a ton of risk, knowing it would be imperfect, knowing we would learn fast and we would be better for it. I've never been prouder of the team, seeing how we worked through that. So, you have to be talent density, comfortable that people are going to take the context that you give them, strong judgment, and risk-taking, and fight for the things that are the best outcomes for the business. You have to be very clear that what you're doing is driving outcomes for consumers and Netflix. So, Netflix matters, Netflix members' matter. It's not about my own personal success or what I prefer. So, there's a selflessness that is part of this excellence operating system. And then the other thing I would say is some of the things that are... they're really unnatural for humans to do. So, I could give a couple examples of things to get comfortable with, which is there are certainly days where I see decisions happening and I think I would make a different decision. Is that really going to be the best thing? But my job, especially in the Netflix culture, is not to step in, in every one of those cases and overrule or veto or question someone. Especially if it's not material, it's not going to burn the place down, let people make that decision and learn from it and ask for those reflections afterwards of how did it go. Maybe I was wrong. Maybe the decision was a great one. But that it's related to the risk taking. And help people learn how to feel comfortable making their own decisions, especially when they're not all going to be the right decisions and they're going to learn something tough from it. I felt that myself from my boss and my peers, saying, "This is your decision. I can provide input. I can help you brainstorm. It's yours in the end." And it just doesn't come naturally.
00:44:19 · Elizabeth Stone
When the stakes are high, when I feel responsible for what the org's doing to let people lean into risk, can be uncomfortable. And I think that also means in cases where things are not going well, as another example, to not assume that process is going to fix it. Something I've learned over the past few years, that when planning is difficult, I've never heard someone say like, "Oh, we figured out the perfect way to plan or the perfect way to go through feedback and leveling and compensation." But every time we saw that and we added more process, we spent more time without getting better outcomes. And so, it's another unnatural thing that I think everyone's inclination when things are hard and complicated, is you think you're simplifying the problem by putting a lot of constraints around it. But it actually goes against the, is there a more creative way to plan or to make people decisions or to make prioritization decisions that actually get us to better outcomes? And so, it's a resistance to do the thing that a lot of bigger companies would do and to feel comfortable in that discomfort very often. So, that's something I feel in my role and I would believe a lot of people at Netflix feel it, because you try not to do the thing that is standard.
00:45:39 · Lenny Rachitsky, Elizabeth Stone
[00:45:39] S0: It's easy to say that and hear that, but I so know what you mean, where somebody screws up and you're like, "Okay, what was the thing that went wrong? Let's put a process in place to avoid this from happening." And what you're saying is you need to resist that, because that slows things down. And the best people don't want to be working in a place with all these checklists and processing gates and things like that. [00:45:58] S1: No. I think the best people want to know there's going to be a blameless retro and they're going to feel so individually responsible that they're going to say, "How do I make sure this doesn't happen again?" Not with process, but with how could I share these learnings? How could I do work differently to make sure that I get to a better outcome next time? When you are trusting people to take those reflections and learn and grow, I think you get much better outcomes over time. And you get a much stronger team, which I think is part of our role as leaders, of you're trying to grow a team that is resilient and durable and knows how to have great impact. You're not trying to control everything.
00:45:58 · Elizabeth Stone, Lenny Rachitsky
[00:45:58] S1: No. I think the best people want to know there's going to be a blameless retro and they're going to feel so individually responsible that they're going to say, "How do I make sure this doesn't happen again?" Not with process, but with how could I share these learnings? How could I do work differently to make sure that I get to a better outcome next time? When you are trusting people to take those reflections and learn and grow, I think you get much better outcomes over time. And you get a much stronger team, which I think is part of our role as leaders, of you're trying to grow a team that is resilient and durable and knows how to have great impact. You're not trying to control everything. [00:46:41] S0: Which is a key to building a team with high talent density. There's two sides of this that I want to chat about briefly. One is the hiring and the other is keeping the people. So, you're famous for the keeper's test. We talked about this last time. Another unnatural thing for people. People that want to understand what this is, they can listen to the first conversation, but how has that evolved over the last couple of years? That still a core part of the culture, this idea of the keeper's test?
00:47:05 · Elizabeth Stone
[00:47:05] S1: It's often cited in a way where you think of keeper's test as that moment where you decide to let someone go, that they're not the right fit for the role and the conversation about that. But it's equally commonly used to have a conversation about how extraordinary someone is, how well they're doing in a role. Because the entry point is for me to say to one of my direct reports or for them to say to me, "How am I doing on your keeper test?" And the lion's share of the time, my response is, "I would fight so hard to keep you. Let me go through a set of things that I think you're doing such a great job at, what your strengths are, where you're having a lot of impact. Here's how you could be even better." So, it's an entry into a conversation that is very positive and uplifting for people, but the framing is, do I pass the keeper test? And then, of course, there's the harder situations where I'm evaluating, does someone pass the keeper test or they're asking me? And this is the toughest thing to say, "To be honest, you're not passing that right now. I think you could get there in some cases." And that comes with feedback and what are those milestones. Or in some cases you're saying, "We've really tried and I don't see the path to success." So, it's an anchor and an entry point for a conversation that can go lots of different directions. And the thing I like about it is it's good hygiene on feedback and checking in on how things are going and forcing a tough conversation sometimes, instead of shying away from it. Or to keep great talent, you do need to say you're doing great. That's an important part of making people feel recognized and valued. So, I don't want it to come across that we just have this very negative view of it. I think there's this positive side of the coin as well.