Video Of The Week: Patty McCord on Rethinking How We Manage People

The Gotham Gal and I got to see Patty McCord give a talk a few months ago and I was blown away by her pragmatic, no-nonsense, calling out bullshit approach to managing people. Patty helped Netflix build their culture and left about six years ago to advise companies, small and large, how to manage people better.

She’s a breath of fresh air in a world of corporate speak. I think you’ll enjoy her as much as I do.


Comments (Archived):

  1. awaldstein

    Thanks Fred.I find myself working with broader more dispersed teams of wildly diverse ages and background and an very considered about how I place myself in them.BTW–this Kara Swisher interview below weirdly entitled How Nat Geographic uses Instagram (they have 90m followers) is quite good as it is an interview with the three spectacular women who run the three divisions of Nat Geographic. So smart and some of the best, most focused and nuanced thinking on diversity for the massive teams they manage including not only their people, but the diversity in the sources of information and images. Worth a listen as they are quietly making a huge difference.

  2. kenberger

    My wife has met Gotham Gal a couple times, and assumed Joanne would also have the characteristics described here. She also felt she seemed “accessible”. (This was at gatherings where you and I were present, too)

  3. PhilipSugar

    Best quote: Build your company with this in mind: I want to be a company that people want to be from!and I hate f’ing hate yearly performance reviews.

    1. JLM

      .Consider the possibility you are doing something terribly wrong.The performance appraisal, done correctly, is a celebration of the employer-employee contract and the opportunity to ensure alignment amongst strategic, tactical, and individual objectives as well as an opportunity to quell disaffection before it becomes toxic or contagious.It is also the perfect time to ensure that comp is correct, competitive, and fair.Great companies invest a lot of time and effort in appraising performance. It starts right at the top.It is as important as recruiting.JLMwww.themusingsofthebigredca…

      1. PhilipSugar

        Consider you are.You ever built high tech companies and sold them????No.

        1. JLM

          .In 8 companies, I have hired thousands of employees. Been to the pay window several times. Was a founder CEO for 33 years.Invested in plenty of companies, tech and otherwise.I have a bit of experience with backing and advising tech companies as well as working with incubators, accelerators.A good performance appraisal program is not innovative or novel. Pretty ordinary.What is the argument against a good performance appraisal system?JLMwww.themusingsofthebigredca…

          1. PhilipSugar

            I ask you again. Every built and sold a software company?

          2. JLM

            .Asked and answered. I was in business before the invention of the PC. Bought the first copy of Visicalc sold in ATX.Is the point that software companies hire employees who do not desire to have their performance appraised?JLMwww.themusingsofthebigredca…

          3. PhilipSugar

            Nope. Different type of people.

          4. JLM

            .Haha, accountants, CFO, marketing guys? Software engineers? All different? Hate performance appraisals?Feels like you’re pissing on my leg and telling me it’s raining, amigo.JLMwww.themusingsofthebigredca…

          5. PhilipSugar

            No. You are an ass. Yearly performance reviews? I guess if you manage non-craftspeople. Did you see my post we do 8 releases a year. 8 reviews a year? Yup. We do one every time. Yearly. Nope.

          6. JLM

            .Very classy response, Phil.I didn’t see you saying anywhere you did 8 releases/8 reviews per year.Makes perfect sense to me. Why not just say that?Why not just let your facts/ideas carry the discussion rather than calling names?As a general proposition, a diligent performance appraisal system is a critical element on the march toward excellence.JLMwww.themusingsofthebigredca…

          7. sigmaalgebra

            Phil isn’t being very clear.In practice, too often, performance appraisals are from a waste of time down to highly destructive for the organization. Destructive? Sure: The communications are usually way too sloppy and, thus, create misunderstandings and serious problems.Lack of performance appraisals is also dangerous, partly as a special case of poor communications being dangerous. E.g., one destructive management technique is “Never let your subordinates see you smile.”; i.e., make the subordinates always struggling harder and harder to get a smile; maybe the poor subordinate thinks he needs to shine his shoes, or she guesses that she needs to wear shorter skirts. E.g., too commonly in organizations, people are fighting, more often people down the hall instead of the competition. One of the too common, pernicious, etc. means of fighting is gossip. Can turn that into a propaganda effort. Performance appraisal done well is no doubt one of the best ways to be clear, avoid misunderstandings, make the gossip and fighting down the hall ineffective, etc.IMHO, But what you have written about performance appraisals together with the rest of how to manage from vision down to walking around is terrific. Your performance appraisals would be terrific for organizations. Not very many people will see this without some effort; but reading your writing should be a good start to sufficient.Apparently, as far as I can see, you have had at least two really big advantages:First, in particular, apparently your military training and experience helped a lot: The US Army has a LOT of really good, serious, life and death type, in super tough situations, with how to manage. It’s SERIOUS as in mess it up and US soldiers can die. Not all of that how to manage carries over directly to commercial organizations, e.g., likely can’t tell a guy who sleeps late to do an extra hour of PT, for whatever role that might have, but a lot does carry over; commercial organizations rarely have anything at all both well considered and good; and if just bringing over nearly everything from the military will be much better than what nearly all commercial organizations have.Second, in addition, you have managed organizations doing good work; you were “The Man”, the guy right at the top, where a lot or all the investment involved was yours. So, you had both the motivation and the authority. With those, you did well. Darned good experience, and enough good experience to provide relatively solid evidence for the efficacy of the techniques.IMHO, no doubt FAR beyond and better than in the video of today.My background is narrow, original research and high end technical, individual contributor or small group management, and unusual for nearly everything in commercial organizations. Until my efforts at startups, I essentially always worked in an organization in an organization chart for a manager.At times, I did some good work. It was usually clear to the organization what the challenge was. Otherwise the challenge was clear to me, and I tried to convince the organization and at times was successful. Okay — good enough start. But for the rest, for nearly everything I did that was good, the organization didn’t have even a weak little hollow hint of a tiny clue how I did the work. Even my Ph.D. dissertation, my advisors didn’t really direct my work; instead I just did the work, submitted a polished document, had that reviewed by an expert, stood for an oral exam, and graduated. Lesson: For the good work I did, management didn’t “assign” it or even in the end really understand it. So, for good work, usual techniques of management may not have much to do with it. Then, HR will likely have still less to do with it. Or, if management could envision and direct the work, then maybe it would not be very original, advanced, new, powerful, or valuable!!!! Or, poor, confused, doubting, frustrated, one million cubic yards of concrete General Groves had finally to accept that he had to leave the technical work to Oppie and his people, even if occasionally they messed up.I’ve been close to others who did such good things: E.g., in my first year as a B-school prof, I just took leadership of the future of practical computing in the school. 12 months later, the carpet and draperies budgets were a bit thin, and I had a lot of department chairs resenting me, but the computing was running just as I proposed. I was appointed Chair of the college faculty computing committee and made sure the staff did the rest without my input — I never called a meeting of the committee or even knew who else was on it!I gave a corresponding grad course that was popular.The computing was in part a Multics knock off, and right away the staff did beautiful things with capabilities and attribute control lists!! They became a world center for D. Knuth’s TeX. They had high end optimization software running, SPSS, a high end spreadsheet with optimization built in, took over all the word processing in the college, etc. The pages per day of academic word processing may have multiplied by 200 or so! The Dean’s secretary wanted and got a special terminal, taller than wide, that could show a full page of typing. All the secretaries got really good with the hierarchical file system, capabilities and attribute control lists, high end text editor, and text formatting — all on their own, no visible training program!So, some of the staff picked up the ball and ran with it.Uh, the longest sitting CIO in US higher education bitterly opposed me. As soon as my proposal was successful, I served on a committee for a new campus CIO.One thingy was writing letters to the alumni. Hmm, might be some bucks involved, right? So, there’s some record keeping, some data base work, some text formatting, and the daisy wheel typing, envelope addressing and stuffing, etc. One guy, a ugrad on staff, just DID IT. He took it on, worked on it, and it HAPPENED. Yup, in simple terms, big bucks. The rest of the campus woke up and said “WOW! We need one of those!” So, the central administrative computing group came over, hat in hand, begging, got the lessons, architecture, code, etc. from the ugrad guy, and quickly each college on campus (55,000 students) got a similar alumni system. “Management? WHAT management?”!!! Instead, no one held back the ugrad guy!!!!

          8. awaldstein

            I think you are right on.Doing work in vertical applications of the crypto world with widely dispursed, widely diverse groups in every way.The most positive and challenging situation that demand flexibility and respect for a new order.You have earn every ounce of respect.Really enjoying this.

    2. LE

      Would you agree (or disagree) that software companies are different from traditional (non software) companies in one respect: In a software company the people writing software often just simply love what they do. In a sense that they will spend hours and hours doing it instead of something that a (for lack of a better way to put it) ‘normal’ person would do instead as soon as they can. And not only that they will do it for free. (Open source). They will even let others profit from it. Where else do you find that? You don’t even find musicians (who love what they do, right?) giving away their creative work. That doesn’t happen. Nor do you find photographers or artists giving away work just for a ‘thank you’. Nerds do all the time. They solve problems others have for a thank you.For example even though I am not a software person or programmer I really love writing things that help me. As such even though my wife is on sitting at the beach right now I am here at the office writing some automation routine that I wanted to complete. I don’t think that is exclusive to people who write software as much as people who love what they do (and there are others things that I do that I love equally well). Those things all fit into the category of ‘things you would do without pay’. Things that are more fun than skiing, boating and so on. Not sure I would say writing a comment at AVC is more fun than skiing or boating but it is more stimulating, I don’t get paid for it, and I don’t even get rewarded for it yet I continue to do it. So I must get something from it, right?In a corporation there are many jobs and most are not ‘love what you do’ type jobs. They are jobs that people don’t love enough to do literally all the time.Also for software people being appreciated, is, I think, valued much higher than being appreciated doing many other things. I think it’s something about being a nerd and not as socially accepted. So when you find something that gets compliments from others you get reinforced and feel good. And then you want to do it again.I guess my point probably is hiring for companies where people love what they do has to be drastically different than companies where people are waiting for the weekend so they can ‘let loose’ and party.

      1. PhilipSugar

        Look, at our Wawa example. I get it. You evaluate once a year based on a checklist that you do every day.Got it.Let’s say I have a gal that came up with an algorithm that saved us 10 person years of work in a week…….That is the leverage of tech companies.Huge leverage.

      2. JLM

        .Every company I have ever been associated with has people in the core skill who are passionate about their work.I would point out that this is not an “entry level” passion as entry level people don’t have an experienced enough view of things to embrace the passion.Surrounding the core mission of the company is a support and delivery system which dwarfs the core craftsmen.In developing tall complex buildings, as an example, you have a single “developer” supported by project managers, inspectors, construction managers, project admin, accountants, marketing team, finance team, and gov’t relations to say nothing of architects, engineers, consultants ( glass, roof, elevators, fire protection, tech systems, commo) plus property management, asset management, and investor relations.The core of it all is the developer.It is the developer’s job to keep this group inspired, motivated, and “on plan.”JLMwww.themusingsofthebigredca…

  4. Vendita Auto

    Like to be at dinner with Patty McCord, Hans Rolsing & Margrethe Vestager {European competition commissioner} ……. mindsets,. I know Hans Rolsing has passed

  5. sigmaalgebra

    In summary: (1) She has some okay points, but they are fairly well known and obvious. (2) Too many of her points are conjectural and with at best face validity, likely dangerous if applied and need testing, at least in practice and hopefully as science. (3) Generally she doesn’t understand growth and change at all well. (4) On recruiting, qualifications, and skills, she makes a lot of standard HR mistakes. (5) We should strive and expect to have much better approaches than she outlines.Broadly JLM’s remarks are better on essentially every topic she touched on and have the benefit of a LOT of quite practical testing.Maybe her central point is how an organization can do well doing things that are new. On this, she is stumbling around in the dark, bumping into the furniture, knocking over chairs, and with no chance of finding the light switch — extra credit for knowing the source of this analogy.Since she mentioned the 1960s, maybe her HR shop would be good at hiring secretaries who could type 60 words a minute, but beyond that HR is nearly hopeless at recruiting people to do things that are new, especially new and technical.In current practical terms, say, server farms, Internet data rates, mostly are depending on existing commercial products. Since the companies offering those products are eager to sell, let them describe their products. Much of that work is called technical sales support. For how to combine the products of Intel, Micron, Western Digital, Supermicro, Linux or Microsoft, Cisco, …, if the size of the project is big enough, then, sure, hire a consultant for a day or two a week for a few months, make good video recordings of the meetings, and transcribe the video.Generally, for getting skills at such things, let your people go do that, using the Internet, Skype, PDF files, going to trade shows, hiring consultants, visiting some profs in some research universities, etc. E.g., do understand the question of P versus NP but likely don’t get discouraged by it.By now, the question of P versus NP is old, but still I wonder how an HR shop would handle that question in one of their interviews?But much more is possible. To see how to do that, borrow from where it has been done successfully. The best examples are in academic, military, and bio-medical research.For technical hiring, the hiring manager is usually the best qualified person in the organization. But, and she did touch on why, too often for work that is both technical and new, the hiring manager is not well informed and is conflicted.But lots of organizations, when well motivated, have done well hiring and managing people to do things that are technical and new.Of course, one example is the Manhattan Project. Of course, in the US the work started with Szilard and then with Wigner and Teller, then Einstein, then Fermi, …, Groves, Oppenheimer, Ulam, von Neumann, …. There is a book,Richard Rhodes, The Making of the Atomic Bomb, a documentary The Manhattan Project, Modern Marvels at…and a movie with Paul Newman.Q. But, but, but, the Manhattan Project was way too expensive for anything commercial and, besides, was so economically profligate that its ROI was awful.A. The Manhattan Project cost about $2 billion and saved about 1 million US casualties from the US being able to avoid an invasion of Japan, about $2000 per casualty, that is, a huge bargain with fantastically high ROI.Curiously, in all that information about the Manhattan Project, I didn’t notice much role for HR shops!One example was in the middle ages in Rome: There was a tall monolith, and the work was to lay it down, move it to another location in Rome, and erect it again. Nice work.But with some irony, a better example was how the monolith got to Rome to begin with: Caligula’s slaves cut it as a solid piece of rock from the headwaters of the Nile, floated it to Rome, and erected it.Gee, I wonder how Caligula was successful without an HR shop?

    1. JLM

      .Great financial analysis on Manhattan Project. Very true.JLMwww.themusingsofthebigredca…

  6. jason wright…when will companies like Apple, Amazon, Google and Facebook scale to the point of failure?

  7. LE

    Interesting video. However at 17:20 where Patti says the ‘millenial’ attitude is no different and that it’s always been that way. ie “I was a millenial in my 20’s”. Make no mistake about it. It is different the attitude, entitlement, expectations and so on. Kids in their 20’s are different then when I was growing up because they can be. And the collective group’s attitude is different as well. And since most people are lemmings they will simply follow the collective group and how they operate use that for their cues. If everyone else drinks from a funnel at the college party that must be what you do. (What in the fucking world btw could be more idiotic than drinking like that health wise?).That said I thank my lucky stars that I don’t work for a corporation and have to fit in with what others think is the right way to be or how to spend my time and please others or be judged. I think that is the big misconception about corporations and people who work there. Seems that people fit into buckets. Those buckets essentially say that unless you are a superstar or (hate the term) ‘rockstar’ in your job (we would call that back in the day a primmadonna) you will have to be liked and accepted by the group to advance at a company. If you are not off the bell curve in some way you’d better really defy gravity or you are out. The group will say you don’t play well with them.The ‘engineer black or white’ I have always found to be correct as well. Hard time seeing nuance in things. That has been my experience as well.[1] “It’s called being in your 20’s” nope was not like that when I was in my 20’s or even close to what goes on now. Nothing like it at all.

    1. PhilipSugar

      Many maybe most are, but here is the thing if you have the right mix it is doable. Cannot imagine all.

  8. Kirsten Lambertsen

    The exercise she provides is great. I love concrete heuristics that I can go out and apply *today*.I’ve worked with engineers as long as she has, and I don’t agree with her black-and-white take on them. She used that idea to support her argument for being honest with people. I’d suggest that *all* people prefer truth… or rather, all people that *you want to have around* prefer honesty. So, I think she could drop the bit about it being the preferred mode for engineers. Marketers, illustrators, office managers — they all prefer straight talk.

    1. JLM

      .Agreeing more with you than you do with yourself.If not truth, what? If not honesty, what? Kohlrabis?”People were people long before they became engineers,” said the engineer.JLMwww.themusingsofthebigredca…

    2. sigmaalgebra

      Flatly, she doesn’t understand engineering or engineers. Maybe she was from HR? Figures!For what HR SHOULD do, see…here.

  9. JLM

    .People who run things become better at HR stuff than HR people will ever be because they see the people in their element in actual execution.HR is a staff function.Trust your own instincts when you have experience.HR is great for hiring admin, benefits admin, and general admin, but do your own onboarding, recruitment closing, promoting, discipline, and firing.Your team works for you, not HR. Do the work to develop relationships, inspire, motivate, appraise, grade, discipline, on board, and fire. Even if it feels awkward at first.Own your team. Own your company culture. Your values will become theirs.JLMwww.themusingsofthebigredca…

    1. sigmaalgebra

      Excellent summary, and more than a summary!! Kept!!But to borrow from the B-school scene in Dangerfield’s Back to School, IIRC “You left out a bunch of stuff.”!!!! “:-)!!!!HR can be just terrific at smiling, being nice, offering candidates ice water, coffee, tea, soda, snacks, aspirin, hanging up hat, coat, gloves, giving out a map of the floor space of the building with restroom locations highlighted, helping with travel arrangements, lodging, expense accounting, e-mail access, phoning home, the organization chart and interview scheduling, smiling, being nice, offering candidates ice water, coffee, tea, soda, snacks, aspirin, making introductions, giving the candidate business cards of the people they meet, handing out, summarizing the benefits package, outlining relocation assistance, schools, churches, shopping, residential real estate, spousal opportunities, company sponsored clubs and events, smiling, being nice, offering candidates ice water, coffee, tea, soda, snacks, aspirin, and, in case I didn’t mention it, smiling, being nice, offering candidates ice water, coffee, tea, soda, snacks, aspirin.Discussing anything about the position or the candidate’s qualifications, giving psychological tests, asking deliberately tricky, stressful questions, trying to manipulate or trick a candidate, absolutely forbidden!!!!!!Instead, did I mention, smiling, being nice, offering candidates ice water, coffee, tea, soda, snacks, aspirin?

  10. LE

    One thing to keep in mind is that the thing that makes Netflix a top company is that they have great (and now I find) very addictive content. Content that is so good I actually get a bit down when I have finished watching a series of episodes and it ends. It’s content that I would easily pay way more than I am paying right now considering the value that I get from it. To me it is that good. Obviously their model would not allow charging different prices for different content but if I was the typical customer they could. I would pay $80 a month easy for what I pay $10 now for. Maybe even $100 or $120. It has that much value to me. Old movies didn’t but the series they have put money into does.That is what drives the company. The delivery method of the content and the engineering required to do so is just fulfilling demand that has been brought on by a great creative operation. That is really the core of the company. What they are able to do creatively. You could also argue that if they were a traditional network on cable with the same creative they would do very well as a premium package or vod. HBO never had so many series (let alone you could binge watch) as Netflix has now. Along those lines Netflix today is a much different company than it was when Patty was there (not that it detracts from many of her points but it’s needs today are quite different than years ago).