Berkeley Innovation Index, A New Concept for Measuring Innovation

The Sutardja Center for Entrepreneurship and Technology recently released the first version of a Berkeley Innovation Index (BII) Concept Paper. Developed by a eclectic team of psychologists, engineers and entrepreneurs, this index aims at bringing new insights and possibilities for innovation measurement. Read the full BII concept paper here.

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Innovation is widely recognized as an important variable to create competitive advantage and drive economic growth. Innovation is also a relatively vague concept, but the absence of it results in stagnation and loss of competitive behaviors. Innovation capability is the ability to be innovative, and is a characteristic of individuals as well as organizations. The issue with learning and executing “innovation” is that it is often removed from actual situations, too theoretical, not time-ordered, and not holistic.

In this concept paper, it contends that if innovation cannot be measured, then it is inherently difficult for any person or organization to improve their ability to be innovative. Most past measures have not been insightful or holistic. For example, the numbers of patents or the amount of money spent on R&D have not shown any causality with organizations’ ability to be innovative.

BII is a concept and an open project to offer simple yet powerful ways to measure innovation capability in a holistic sense.  These measures, models and tools are based on previously published research findings. The approach is also intended to cover layers of innovation that range from the following fields: 1) Strategy and Leadership, 2) Innovation Culture from an Organization’s Viewpoint, 3) Organizational Operations and Measures across functions, 4) Mindset: The Innovation DNA of the People, and 5) Tactical measures.

When measured and considered across all levels, we believe that the innovation measurement process can be made more accurate and diagnosable.

To measure your own innovation measurement through BII, click here.

What’s Next for Entrepreneurship Centers?

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Posted by Ikhlaq Sidhu, October 2014

State of the E-Art

You may have seen our previously released slide set, “How to Build a Modern Entrepreneurship Center” (here’s a link –  E-Center 2.0 Public-9-2014-Compressed). It’s a pretty good summary of what we have learned so far, based on our past 10 years at UC Berkeley’s Center for Entrepreneurship & Technology (CET).

Here’s the summary in keywords: Stakeholders; Measures; Curriculum Journey; Psychology; Mindset; Role Models; Balanced Message; Ecosystem; Boards; Boot-camps; Challenge-based; Theory; Inductive; Lean; Pivot; Acceleration; Research-Driven Entrepreneurship; and Industry Interfaces. Take a breath, and now let’s move on.

Artificial Limitations

I think all this really begs the question, “What’s Next?” for start-up programs. And as far as we have come, in my opinion, there are still a couple of major aspects that need our attention.

  1. Too obsessed with the very earliest stage. Every class and project continues to focus on getting a group of students together to form an idea, test it with validation, and make a plan for launching it into a market. This is fine as a learning exercise, but it’s highly limiting in terms of opportunities for students and new ventures. It’s a long way from concept to company, and I submit that success rates will always be low if that remains the only path for students to enter the new venture economy.
  1. Too much on-campus focus. How many ventures start from within a university compared to the numbers that start off-campus? It’s just as important for entrepreneurially minded students to affect and become part of the opportunities emerging off-campus as it is to have access to the opportunities on-campus. Even for teaching, can we really ignore the value creation that occurs outside campus grounds? This overly obsessive inward focus is an artificially imposed limitation of many entrepreneurship programs today.

It’s Time to Break Through

I’m not saying today’s models are bad. But let’s brainstorm to add some new ideas to what we already do today.* Here are five examples:

Examples Today The Alternative
Acceleration 2.0 On campus Business Plan competition Competitions for the area’s best projects with opportunities for students to become part of the winning teams (or vice versa)
Catching the Right Wave Students have all the initial ideas Investors and their Entrepreneurs-In-Residence explain their Investment thesis and concepts on campus to reach the right specialists
Translated Research Research student try to find an application for their own research Researchers interact with industry execs, and entrepreneurs to employ their skills in valuable directions they could not have known about on their own
Challenges are Better than Resumes Executives send recruiters on campus to look at resumes Executive offer challenges that can benefit their firms, and the best students or researchers form teams to illustrate that their skills and creativity and possibly affect the solutions
Venture Collision Student start-ups compete with high profile start-ups High profile start-ups pitch on campus to explain why they are going to win in the market – and how the right students (individually or as nascent teams) could be part of the opportunity, via hiring, morphing, complementing, spin-ins, etc.
* All of these are examples of a “Collider Model” for venture creation.

Finding the Break Points

To me, a key is understanding where, during a firm’s development, student skills and research capabilities are best utilized.   When I think about company lifecycle, some intersecting points are better than others. Here are some common stages:

  • Ideation (your background skills mixed with changes in the environment) – Good timing to mix campus ideas with off campus people.
  • Post Series A Funding (laser focus on meeting growth targets)- Bad timing. Only hiring is possible. These firms cannot afford to deviate from their plan at this stage.
  • Crossing 500-1,000 people – Good timing. It’s the beginning of a period of new experiments and opportunities and usually the firm is looking to diversify product or service.
  • Large Enterprise, post 5000 people. Good timing, you just have to find the right part of the company which is ready to partner, be a customer, spin in a project, or try some moonshot experiment. Here there is always some part of the firm that is in a phase ready for new experiments.

Let me reiterate. My view is that there is nothing wrong with the learning process developed so far, including ideation, validation, adaptation, lean methods, mindset, ecosystem, etc. It’s all great and we now have a vocabulary and a way to teach things that were all very mysterious before.

However, it is far from the reality that firms and innovations all start with a blank sheet of paper or design on a cocktail napkin. So why should we only teach that method to students? In this next phase of entrepreneurship education, we need to look more carefully at the opportunities that can be created with later stage evolutions of technology and business as well as looking at the start from scratch approaches.

Berkeley Method Bootcamp (Download-able Resources)

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Last week, we completed the 4- day Fall 2014 Berkeley Method of Entrepreneurship Bootcamp for over 100 participants including Berkeley students, SkyDeck Acceleration teams, Baker Fellow researchers, and international students and faculty from leading global institutions.    This is the first year the program is now formally part of the formal Berkeley curriculum as an engineering course (IEOR 192).

As a follow up from the bootcamp, we have posted two new slide presentations on the Berkeley CET site at http://cet.berkeley.edu/curriculum/

* For students, entrepreneurs, and innovators: follow this link to the “Concepts of Technology Entrepreneurship“, posted at http://cet.berkeley.edu/wp-content/uploads/BME-Concepts-F20141.pdf

* For faculty at all collaborating institutions:, we have posted  “How to Design a Modern Entrepreneurship and Innovation Center“, (What we have learned over the past 10 years), posted at http://cet.berkeley.edu/wp-content/uploads/E-Center-2.0-Public-9-2014-Compressed.pdf 2014-08-19 16.07.00

Fall Engineering Leadership Program Update

News: UC Berkeley is growing the Engineering Leadership Program (ELPP).  For the first time after 4 years we have opened a fall section.   The program is now full, however we are maintaining a waiting list.  We welcome this year’s new firms: Box, Juniper, Cloudera, GE, Ericsson, Altera, Kaiser Permanente, VW, Mentor Graphics, Synopsys, and Pivitol.  Participants from new firms will join the program with engineering leaders from Google, Yahoo!, Samsung, VMware, Lam Research, SanDisk, NetApp, Qualcomm, Cisco and Applied Materials.

Rejuvenating Innovation at Berkeley

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Reposted from the June 2014 Dean’s message in Innovations online.  Also Congrats to Imprint Energy which just secured a $6M Series A round.

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By Shankar Sastry, Dean, College of Engineering, UC Berkeley

Conventional wisdom has it that entrepreneurs are born that way. At Berkeley, however, we thrive on proving conventional wisdom wrong. After almost a decade of teaching entrepreneurship in Berkeley Engineering’s Center for Entrepreneurship and Technology (CET), Ikhlaq Sidhu, Ken Singer, our talented industry faculty and our hard-working staff have demonstrated that indeed, entrepreneurship can be learned, and that Berkeley can teach it.

Since it opened in 2005, CET has launched numerous student-created ventures and trained over 3,000 Berkeley undergraduates using a one-of-a-kind teaching model, the “Berkeley Method of Entrepreneurship.”

The Berkeley Method, co-developed by IEOR professor Ikhlaq Sidhu, CET’s chief scientist and founding director, and Ken Singer, CET’s managing director, uses games and exercises to develop an entrepreneurial mindset in students while offering the tactics and infrastructure to support the process of creating a new venture (see CET’s curriculum page).

Throughout, CET has offered an educational pathway for aspiring entrepreneurs and innovators. Along with the A. Richard Newton lecture series, CET offers innovative course models like “challenge labs” for mobile applications, big data, social entrepreneurship and other areas. We also offer the Venture Lab to incubate nascent projects, and the new SkyDeck accelerator for more polished firms that are launch-ready.

The 3-D printing startup Twindom, for example, began as a CET class project and then took form in Venture Lab and SkyDeck. Twindom generates lifelike ceramic figurines from photographs and has already attracted $400,000 from Tim Draper and other investors.

Other CET-launched firms include Mixbook, inDinero, Imprint Energy, CellAsic, AdsNative and Eko. Thousands of CET alumni have become integral members of the ecosystem of new ventures and innovation leadership in Silicon Valley and beyond.

What is next for technology entrepreneurship at Berkeley? In 2015, we celebrate the 10th anniversary of CET, as we grow CET to support ever more Berkeley students. IEOR department chair Phil Kaminsky will join the leadership team in the role of faculty director, helping to strengthen CET’s connection with its home department, IEOR. Working with Ikhlaq and Ken, Phil will also lead the development of a new minor in entrepreneurship and technology and strengthen ties with our new Jacobs Institute for Design Innovation.

We are really excited to see CET begin its second decade of nurturing entrepreneurs who share a globally aware, socially committed approach to technology innovation – as you would expect at Berkeley. If you would like to get involved, just let us know.

S. Shankar Sastry
Dean and Carlson Professor of Engineering
Director, Blum Center for Developing Economies
Email Dean Sastry

Seminal Entrepreneurship and Innovation Skills CAN IN FACT BE LEARNED

New Ways to Learn Entrepreneurship

Posted by Ikhlaq Sidhu, April 22nd, 2014

You may already be aware that the Berkeley Method of Entrepreneurship (BMofE, see link on our CET website – https://cet.berkeley.edu/curriculum/) is a unique teaching model for developing the entrepreneurial mindset, in addition to teaching tactics and providing infrastructure for the new venture process. One of the big questions in the field of start-up education has always been whether entrepreneurs are simply “born” or whether entrepreneurial skills can be acquired. Our most recent findings give us reason to believe that these critical skills and behaviors can indeed be taught and learned.

We see support for this in the confluence of two major themes:

1) our own co-authored Comfort Zone research showing that entrepreneurs and innovators are comfortable (and continue to be increasingly so) with ambiguity and with experiences outside their comfort zone

2) empirical research studies on motivating success by Carol Dweck, a distinguished Stanford psychology professor. Her findings show that mental growth, learning, and resilience are linked to a specific mindset (growth mindset), which allows students to be comfortable working outside their comfort zones and accepting of new challenges.

Thanks to Rebecca Loeffler, Visiting Scholar with UC Berkeley’s CET and on loan from Germany’s prestigious Ludwig-Maximilians-Universität München (LMU), we are now bringing together concepts from social psychology (part of Rebecca’s academic focus) with our previous work training entrepreneurs.

So, let’s connect the dots. Prof. Carol Dweck’s work on mindsets is exciting for education, with most of the study being conducted originally in K-12 settings. What she discovered is that children typically develop one of two mindsets: a “fixed mindset” or a “growth mindset”. The fixed mindset characterizes students who believe that ability is a fixed trait. Often children become constrained in their learning by allegedly permanent “labels” such as being smart or not smart. People with a fixed mindset try very hard to hold their label of being smart by avoiding challenges or situations that might have others question their badge of credibility. They are mostly afraid to lose the label of “being smart” which they have already attained.

In contrast, individuals with the growth mindset believe that ability is the product of effort and can therefore be learned or trained. They believe that they can overcome challenges and develop new mental capabilities. Those who have a “growth mindset” are not afraid of being wrong. Instead they find reward in the experience of overcoming challenges. They continue to take on challenges outside of their comfort zones and they continue to grow.

As mentioned earlier, the amazing part is that this growth mindset can be learned. It comes down to reward mechanisms. For those who are rewarded by themselves or others for “being” smart or successful, it generally leads to less self-driven challenge, less growth, and a downfall in measured results. But for those who are rewarded for the process of “overcoming challenges or trying new strategies or for even effort” the result is a positive reinforcement for taking on harder tasks and a continued increase in capabilities and results (i.e. to get in to the growth mindset on your own, “don’t tell yourself your are brilliant, instead, be proud of the challenges that you have been able to overcome”)

In our most recent Comfort Zone research work, originally developed by Prof. Paris de l’Etraz at the IE Business School, we observed that among the segments of entrepreneurs/innovators, managers, and engineers, it is the entrepreneur segment that is the most tolerant of ambiguity and the most comfortable to take on challenges outside of his/her own comfort zone. Moreover, it turns out that people in each segment would like to increase their comfort with ambiguity believing that they would actually be happier professionally and personally, however, only entrepreneurs/innovators actually continue to grow in this manner. Every other segment regresses slightly after their high school years, while entrepreneurs and innovators markedly increase their comfort with ambiguity.

There are several major results (or at least hypothesis) that could be concluded from this:

  1. A growth mindset allows a person to be comfortable with ambiguity and therefore creates the seminal condition from which entrepreneurship and innovation skills and mindset can be formed.
  2. Developing a growth mindset is essential to become a successful entrepreneur. Successful entrepreneurs are likely to reflect a growth mindset.
  1. A growth mindset can be fostered through certain kinds of feedback and rewards.
  1. Since reward structure has a direct effect on mindset, it’s likely that corporate environment or social environment plays a significant role in creating and incentivizing entrepreneurs and innovators.
  1. Ultimately, we can teach people in ways that will bring out their intrinsic innovation and entrepreneurial potential.

The Path from Executive Education to Corporate Innovation

dilbert-cartoon_1Posted by Ikhlaq Sidhu, December 23rd, 2013

I’m on my way back from Shanghai after being invited to work with a group of Chinese executives on their product innovation and intrapreneurship strategies, using aspects of my newly developed model for professional/executive education. It’s really an exciting model, that I used with Coca-Cola on their beverage strategy in China, with Tencent, a leading retailer with hundreds of stores, GM, World Health products, and other multi-nationals seeking global innovation.

Simultaneous Translation of Coca-Cola Exec in China

Photo: Coca-Cola and World Health Products executive discussing strategy options for China in Shanghai with simultaneous translation. December 16, 2013.

The Issue:

While many institutions and programs I’ve worked with excel at providing executive education programs with a clear impact, these are more the exception than the rule. For many, I’d say that the time has come for a change. Historically, executive education has focused on succession planning. The formula was that you take experienced, trusted managers and then have them spend some time being polished by academic experts. And that has become a big business: Business Schools today make about 40% of their revenue from Executive Education. That model needs to be refreshed, if it is to effectively solve the problem of innovating in a global environment.

First, most Executive Programs have mixed reviews in terms of quality. It turns out that half of professors actually score below 3.5/5. In other words not all program professors are “best in class”.

Second, case method and other generic materials are often not relevant. They provide very few targeted insights for the executives. Picking useful cases requires significant industry experience-based judgment and they must be supplemented with additional insights. Many of these programs simply do not have ways to address the actual context, strategy, and threats that their firm’s executives are facing.

Third, and this is a pretty important one, these programs are not accountable. There is no mechanism to follow up to see what came from the experience. Sometimes the courses can be “interesting” or “fun”, but in the next week, its business as usual.

And my best reason to believe that it’s time for a change is that most of these programs are focused on research results of the past. Firms live in the present and plan for the future. In fact, the pace of innovation has been accelerating significantly in the last 100 years and its not slowing down. The current issue for most firms, as pointed out by banking innovator Carlos Beldarrain, is that, the minimum pace of innovation to simply survive, is also accelerating. The time is right to find a model that works even better.

The Solution:

Here is the challenge I offer to those interested in evolving what is generally today’s state of the art for executive education:

  1. We need to actually focus on the goals of the firms. This means that successful programs will build in the time and methods for the faculty to actually know the company and its people at a deeper level.
  2. There has to be a mix of academic and industry experts. For year’s at Berkeley, we have been bringing Silicon Valley know how into our teaching program though entrepreneurs, investors, innovators, and executives. Choosing the right faculty is also critical because they need to have the breadth of how to teach executives as well as a relevancy on current industry issues.
  3. The firm’s executive champions have to be directly involved. I’ve always been known as an innovator. But with experience I’ve learned, no matter how capable you are at innovation, you can’t innovate within an organization without “permission” from the organization to actually create the innovation. For this reason, its critical that the executive sponsors participate to “offer the permission” for the participants to innovate, and to let them know that its safe to do so. By the way, “some people” are going to innovate anyway, as Steve Jobs said, you can’t stop them and you can’t ignore them either.
  4. It’s really about the project, not the lecture or the case. Yes, there are essential materials to cover, but the project has to be a real problem of the firm. Barriers such as confidentiality or NDAs cannot be excuses to work on fake projects.
  5. Projects need to be holistic. A company’s project cannot be only about design or only about strategy or only about branding. No, you need complete alignment on the project, because the result has to be financial success and impact or maybe learning and failure. Isolated skill development is not an executive level challenge.
  6. And finally, we need to have accountability of the result. What happened after one quarter, one year, or longer. You can’t teach it if you have not lived it in some way, and you also are not qualified to offer your certification if your institution does not have skin in the game, just like your students.

For institutions and programs who can evolve and incorporate these aspects, I respectfully suggest that it will result in a big step forward for both education and innovation.

Avoiding the Traps of Big Data…

Avoiding the Traps of Big Data

by Ikhlaq Sidhu

Traps of Big DataBy now it’s well known that Target Corporation (Target) “knew a teen girl was pregnant before her father did”.  Not only was the story told many times over in the New York Times, but it also became one of the lead examples illustrating the intrinsic value of “big data”.  A bit creepy, yes, but basically Target uses a pregnancy prediction score inferred from past purchases to develop a pregnancy-likelihood and confidence interval on every woman who shops at Target.  They use this score to target baby product ads at the right time and to the right people.

If you are a retailer or other business you might think this implies that you could mine all kinds of seemingly unimportant data to increase profits or save costs, if only you had the right “big data” hardware and software technology.  But there is a bit more to this story.  All the data and analytics tools are not going to do you much good unless you also have sound judgment and employ the leadership lessons articulated below.

Today’s data analytics technology is becoming increasingly powerful.  It’s as if we previously had the equivalent of a glider and now we have a jet powered fighter plane.  Without a skilled pilot, the new technology is more dangerous than it is helpful.  If we take a closer look at the Target example, we can see the leadership skills required to make use of these more powerful tools.

Lesson 1:  It’s critical to have a  revenue-driven or risk management-driven business case.

To start with, in Target’s case there is a well researched business thesis:  based on studies from the 1980s, we know that people mindlessly buy everyday items by habit and are almost completely immune to advertising or coupons that attempt to get them to switch to other products.  But there is one big exception – a life changing event like getting married, moving to a new city, or having a child.  Without this powerful business insight, the pregnancy prediction score and ad targeting would be pretty useless.

Lesson 2:  You need modeling, simulation skills, and creative measures.

Second, a model must be developed using samples or estimation.  This also requires human insight and creativity.  In Target’s case, they used the baby registry as the sample space from which a model could be developed and then used to analyze larger data sets.

Lesson 3:  Understand the concept of Value of Information.

Third, is the concept  called the Value of Perfect Information popularized in Douglas Hubbard’s book, How to Measure Anything.  The idea, which we will slightly adapt here, is that you can estimate the maximum that you could expect to save or expect to gain with a given decision by assuming you had perfect information.  By comparing  the perfect information to the expected result (given that you have no new information), you can figure out how much it’s worth to be more accurate.  In Target’s case,  they could figure out how much more value could be captured by more accurately modeling a Pregnancy Prediction Score (i.e. from 80% confidence to 90% confidence interval).  This concept allowed Target to estimate whether it’s worth the expense to get better data and a better model.

Lesson 4:  Yes, you still need the tools. 

Lesson 5:  The process must however lead to decisions.

Lesson 6:  It’s a continuous process, not a one-time event.

With this background and context, data can be collected and analyzed and used to determine who to target with coupons.  And with this information, there is a new state of business results and the cycle of business justification and data collection starts over.

Measurement and Learning Models

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Lesson 7:  Big data leadership requires judgment for ethical considerations and privacy.

The risks?  After some time, people start to feel as if they are being observed a little too closely.  To counter this, Target then began interlacing baby product coupons to pregnant women with coupons for lawn mowers and other random items to avoid the perception that they are spying on their customers.  Even then, this case may be immersed in privacy, ethics, and regulatory issues.

If Target crosses the line about what information they collect and how they use it, they run risk of a public backlash.  If by chance they violate a regulation, they may suffer legal action and even damage the brand itself.

The central point is that leadership skills for big data require a great deal more than technology and statistics.  In fact, to manage it effectively, requires a holistic understanding of the business case, modeling techniques, value of information, decision-based action, and ethical judgment.  The enabling technology is great, but it’s just the first step.

Get Out of Your Box – in Madrid

Comfort Zone Scale

Post by Ikhlaq Sidhu

Comfort Zone Scale

Comfort Zone Scale

I’ve just returned from Madrid, teaching in the final week of our inaugural Global Engineering Leadership Program.  This program extends the content I designed for the Silicon Valley Professional Program, with an Asian and European perspective on technology firm leadership.

While the program covers a variety of new and interesting topics, including Positive Psychology, What Does it Take to Innovate Within a Large Firm?, and New Management Issues with Big Data, the most surprising discussion theme related to the implications of a person’s comfort or tolerance for ambiguity.  Tolerance for ambiguity is often correlated to innovation and entrepreneurship.  But how do you measure it?  Is your professional comfort zone different than your personal comfort zone?  If you are more comfortable with ambiguity, will you be less stressed, more effective in your career, or even happier as an individual?

Take a minute to measure your own ambiguity tolerance by answering a few questions in this link, http://bit.ly/18qerkF.  Assess your comfort level with ambiguity, and help support our research in this area.  Research results will be posted to this website.

Our Madrid discussions started by reviewing the research in “Quant Mentality” by Prof. Paris de l’Etraz, with whom I am collaborating to further his work.  Prof. de I’Etraz originally defined a “Comfort Zone Scale”  (illustrated below) to self-assess a person’s comfort with increasing levels of personal and professional ambiguity.

Slide1

The scale is simple to use and intuitive to understand.  On the left of the drawing is Certainty and on the right is Uncertainty.  The levels P1 to P4 refer to your personal life.  P1 means you hate uncertainty in your personal life, while P4 means that you are very comfortable with uncertainty in your personal life.  Similarly, W1 means you hate uncertainty in your professional life, while W4 means that you are very comfortable with uncertainty in your professional life.

If you are P2/W4, for example, it means that in your personal life you are a bit careful and dislike uncertainty while in your professional life you are willing to go to Alaska to try to sell ice to Eskimos!

Think about this …what are you? This is effectively the size of the mental box that holds you back from experimenting and testing new ideas.  When evaluating your own comfort zone size, here are some quick guidelines:

  1. The scale is designed to find out if you “can be comfortable” having progressively less certainty about what will happen as a result of your decision.
  2. The scale should reflect your “ability to be comfortable” not the ability to withstand discomfort.  So if you are in an environment which causes you to take repeated risks that you are not comfortable with, then you are not higher on the P1-4 or W1-4 scale.

I consider myself a P2/W3, while Prof. de l’Etraz says he is a P1/W4.  We suspect that a measure of your comfort level and tolerance for ambiguity while making critical decisions may be seminal to innovation, entrepreneurship, and engineering leadership overall.   Moreover, people seem to change levels throughout their lives.  It’s also likely that this psychological characteristic could be changed with training, for those who want it.  So go ahead, use the link  http://bit.ly/18qerkF to let us know where you are on the scale.  It’s been a big topic in Madrid!

How to Build a High Performing Team

High Performance Team
High Performance Team

High Performance Team

If you want to understand how to build a culture and organization for truly “high performance teams”, then take a close look at “Netflix Culture: Freedom & Responsibility” developed at Neflix by Patty McCord and posted by CEO Reed Hastings on Slideshare.  Facebook’s Sheryl Sandberg has called it “the most important document ever to come out of the Valley.”

See:  http://www.slideshare.net/reed2001/culture-1798664.

You pretty much need to go through the slide set to absorb it.  However, a key idea is that this type of organizational culture is not like a family.  Instead, its much more like a professional sports team.  Professionals are paid at top rates.  The goal is to hire stars for every position.  The rationale is that each high performer can deliver 10X in performance.  And unlike a family, they don’t mind when its time for a player to leave.  The culture also does not provide career planning.  The best long-term security is to have a have a great reputation of having accomplished great things and the skills to match.

Of course high performance teams are flat (non-hierarchical) and they typically value innovators, conflict (required to seek out the best of ideas), and clear, direct communication.  Other concepts for high performance teams are:

  • Results-oriented.  Hard work is actually irrelevant, only the results matter.  The firm won’t measure anyone’s time in the office or even vacation days.  In fact, there is not even an expense policy.  The guidance is to simply use common sense to do what is right for the organization.
  • Low Process/High Flexibility.  High performers thrive on freedom.  However, as firms grow, they use processes to combat the complexity from scaling.  This has a tendency to cripple innovation and drive out high performers.  The proposal made in this slide set is to grow by hiring only truly high performing people and to avoid adding process and new rules.   This leaves the organization flexible so that it can adapt to the inevitable changes yet to come.
  • Context-focused not delegation-focused.  There is some highly relevant advice for managers as well. As we know, high performers thrive on freedom, so consider this concept from Antoine De Saint-Exupery, “If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders.  Instead teach them to yearn for the vast and endless sea.”  According to McCord, “The best managers figure out great outcomes by setting the appropriate context, rather than trying to control people.”  Don’t set top-down decisions, don’t use management approvals, and don’t defer to committees.  And planning and process should never be valued over result. “When one of your people does something dumb, don’t blame them.  Instead: Ask yourself what context you failed to set.”  And, “when you are tempted to control, ask yourself what context you could set instead.”

The document explains the behaviors that a high performance culture expects.  According to its author, high performance culture is not for everyone.  And for that matter, it’s not for every organization.

Questions to consider:

  1. How would you know whether a “high performance culture” is right for your organization’s mission?
  2. Could this be established in pockets of the organization or does it need to be driven top-down and implemented everywhere?
  3. What are the drawbacks or downsides to high performance team culture?

Posted by Ikhlaq Sidhu

You can find additional information in article posted by First Round Ventures highlighting Patty McCord’s role in defining the Netflix Culture:  http://firstround.com/article/The-woman-behind-the-Netflix-Culture-doc#ixzz2YrMlvtfi.