in People Management Building a company ~ read.

On "Hiring only great people"

I am currently reading reading Patty McCord's book -- "Powerful" --where she writes about how she helped build Netflix's organizational culture. (TL;DR at Netflix, it’s not the rules they put into place that accounts for their success, it’s the absence of rules.)

When Growth Rocket was smaller, like less than 10 team members, we had rules that were so loose we could've very well claimed we didn't have any.

As we grew to our current size (37 team members), I found myself reining everything in little by little-- from rescinding work-from-home privileges, codifying an official dress code, to formalizing policies related to password sharing/general IT security.

And let me tell you: it didn't feel good having to create an organization that was ostensibly fun and nimble and ending up with something that had to resort to employing top-down, command and control mechanisms.

Lately, I've been racking my brain trying to figure out why I couldn't make the "fun startup where there aren't any rules because everyone is treated like adults" setup work.

As it turns out, the answer was pretty simple and is summarized in this article (and in Patty McCord's book):

"the people that every company wants to hire—are not only worthy of freedom, they thrive on it"

Here's what's probably an unpopular opinion: not everyone is worthy of freedom. Think about it:  for organizations who followed the same growth trajectory we were on, some of the rules the organization ended up implementing were meant for someone or for a small subset of the entire organization.

Your company now has a dress code and grooming guidelines because Jerry decided to show up to work one day hungover, wearing a wife beater and smelling like a wet dog.

Your company probably discarded the unlimited leaves policy it once had because Karen decided to take two months off and abandoned the project she was working on.

Jerry and Karen ruined it for everyone.

As a solution, the article and the book prescribes adopting a culture of accountability and transparency by only hiring great people. People who are worthy of freedom.

While I agree that this should be the goal, the advice is very idealistic. If you run a consultancy business like I do for instance, you need to achieve a certain level of success before you can realistically live by the "only hire great people" principle.

If you are a a day one-profitable small business, and not a VC-funded startup, you can’t even afford real managers in the beginning. You hire people you can hire who are best-suited for the job.

You earn the privilege of being in a position to "hire only great people."

Eventually, when you do achieve the requisite success to hire only great people, you would still have an organization with some team members who are unworthy of trust--team members you accumulated over the years out of necessity

It is at this point when I think creative destruction needs to happen and the only time the transition to an organization built on accountability and trust can begin.

Patty McCord even writes that Netflix didn't start off without any rules like they do today, they got to where they are by slowly removing rules.