Strategic Discipline Blog

Just over two weeks ago I had the honor to be invited to Broomfield, Colorado to attend the Charter School Growth Fund’s 2008 Business Planning Conference as a guest with one of my clients. They had earned the opportunity to compete for one of the Growth Funds Grants and my client asked me to come along to help them with their work toward earning this prestigious awarding process.

One of the real values from this was the opportunity to see how other schools built their school system and the highlight for me was the listening to Netflix CEO, Reed Hastings. Reed was instrumental in helping create Aspire Public Schools, one of the charter schools who previously had been awarded funding through the Charter School Growth Fund and currently serves on Aspire’s Board of Directors.

If you read my previous post on Emergency you’ll discover this closely connects with it. Reed spoke about his company’s core set of values. He told his story about how he started Netflix one day after he was about 40 days late returning a video. It sparked him to think about developing a better way to rent movies.

While he spoke passionately about his love for children and the desire to help students and improve the education system, the parts that interested me the most were his discussion on building Netflix. Jim Collins book Good to Great is an essential part of the Gazelles Coaching Process [Rockefeller Habits] and so it interested me greatly to hear Reed say that he goes back every year and reads the portion in that book on Level 5 Leadership. 

He noted the essentials for building his business included the following:

1. Level 5 Leadership
2. Values
3. Sense of Mission
4. High Performance Mania
5. Freedom and Responsibility

Netflix has established a set of core values which include: Judgment, Passion, Selflessness, Honesty, Courage, Communication, Curiosity, Impact, and Innovation. He explained this in detail offering that these provide the keys as to how to succeed in their organization. These organizational values he notes should be the key behavior and skills they hire for. These values constantly guide the behavior of the organization.

He noted that we do our best work when we are surrounded by other stars. When you have an organization that lives the same values it develops a tribal mentality to succeed because everyone understands exactly how to act. 

High performance mania he explained is the desire or missionary zeal that team members aspire to move the business forward. He noted the conflict of values that can often exist in an organization between kindness versus the pursuit of excellence. He offered that some businesses want to call themselves a family, yet he believes that Netflix is a team, not a family. He compared it to a pro sports team versus a kid’s casual team. He said its commonly known in his company that adequate performance gets a generous severance package. Honesty in their organization allows them to judge performance on values and not on popularity or security

He feels that the unifying principles his values provide is helping the team to determine what and when sacrifices need to be made to achieve goals. My client Nations Financial Group, mentioned in the “Emergency” Blog witnessed that first hand. In fact after watching his staff tenaciously refuse to allow their vendors challenges to hurt their client relationships he’s considering adding a couple of values to his group of Core Values. Several members demonstrated commitment and determination that far exceeded what any normal business might expect. This is how stars are born, how businesses go beyond their present influence and how other team members gain confidence and commitment to the cause by seeing how well others respond in the face of adversity.

Could your business use a set of core values to inspire and monitor the behavior and skills your company needs?

Reed Hastings also spoke about increasing employee freedom as your company grows versus restricting. He also had a very interesting approach to vacations that I’ll discuss in my next blog.