Fireside Chat With Erin Meyer

1) The beginning of a great chat session between Erin Meyer, the Author, Speaker, and Cultural Expert and Karthik Chidambaram, Founder & CEO at DCKAP (00:00-03:30)

Karthik Chidambaram: So Erin, that was a great talk. I really enjoyed, been taking some notes ​ as well throughout the talk. I have some quotes from you and I feel we can actually frame some of these quotes in our offices. So let me actually read some of the quotes I thought were really cool.

“Individual performance problem is not an individual problem, it's a team problem.” So that was very, very interesting. “And managers don't like to fire employees.” I thought that was very cool as well. “Performance is contagious”. One thing we really loved is, “feedback is superpower”. We would like to frame that and stick it in our office. Feedback is superpower. Thank you Erin. We are really honoured to have you join us.

Really appreciate it. Let me actually start by asking, how did you start working with ? You did talk about this a little bit in your book as well, but as you live in , you're not exactly his neighbor. How was it working with him and how did the magic happen?

Erin Meyer: Yes. Let me just say Karthik. I'm sorry. I just saw my own visual and I see it's ​ gotten all dark around me. So since I'm in Paris, it’s getting to be nighttime. When I started, I had the right lighting. I'm sorry that I looked so washed out. Okay. Thank you Karthik. You are right. I had a very funny experience when I met Reed. I wrote my first book, ‘The Culture Map’ in 2014. And when it first came out, I had a small publisher and it wasn't getting a lot of reading. It built up very slowly.

So one morning I woke up and I opened my email as I always do. And I had this email in my inbox and I'm just going to read it to you because I have it word for word here. It said, ‘Erin, I was in the , Swaziland. So I was in the Peace Corps like you were. Now I'm the CEO of Netflix. I loved your book and we are having all of our leaders read it. I'd love to have coffee with you sometime’.

I just loved that example because it shows the self-deprecation of Reed that instead of having his assistant contact me and say, ‘Oh, you know, Mr. Reed Hastings would like to set up a time to talk with you’, he just said, ‘Hey, we were in Africa together’.

So then I started doing work with his organization. They were getting ready for their rapid international expansion, which they did in January of 2016. I worked with them on getting ready for that international expansion.

Karthik Chidambaram: That's awesome Erin. Actually we found that in you as well. While ​ we've been preparing for this conference, you made us feel very comfortable and yeah, that was really nice. And I think that's something we can learn from Reed and you. So thank you. 2) Get hold of tips from Erin Meyer to operate with freedom and responsibility (03:32-05:30)

Karthik Chidambaram: You talked about freedom in your talk and that was pretty cool. And ​ you're also raising two boys and of course school is the first place that we are all part of. Do you find that schools these days are preparing children to operate with freedom and responsibility? The reason I ask is I also have two kids, a daughter, and a son.

Erin Meyer: Yeah. Well, I think it's such an interesting question because if you think about it, ​ most of our value systems around companies were set up for the industrial era and what I mean by that is that during the industrial era, there was a strong focus on error prevention, consistency, and replicability.

I know in many of your listener’s organizations, they still have, maybe in major parts of the company that the main goal is error prevention, consistency, and replicability. But in growing numbers of workforces, in growing numbers of teams and organizations, we're finding today that the main goal is no longer error prevention and replicability.

It's fresh thinking. It's trying to be innovative, try things out, fail sometimes. And I want to tell you my kids are raised here in . I have these two boys, Ethan and Logan. They're ages 15 and 11. I clearly see in the French school system that they have not transitioned from the industrial era.

I think that the US has maybe doing a better job with that. But what I mean is that there's still a strong emphasis in the school on not making mistakes. Like I'm getting it right. How many did you get right, how many did you get wrong, and teaching the children to prevent error instead of teaching the children to think freshly.

I think that's a very interesting thought when we think about how to raise our children to be successful in organizations of the future.

3) Feedback is superpower! (05:30-08:47)

Karthik Chidambaram: Well, definitely provide them a lot of feedback too. In your talk, you ​ mentioned ‘praise in public and criticize in private’ and that's something I've read as well. But then, what do you think of this feedback culture? Do you think that's going to work for everyone or is it more for companies like Netflix? Your thoughts there?

Erin Meyer: Well, I really think that this depends on how much you've invested in high ​ performance, but also what kind of personalities you've allowed to have on your team.

One of my favorite quotes at Netflix is ‘no brilliant jerks’. And when we were talking earlier about Nick, you remember Nick, right? Nick was the interloper and William Phelps’s study. You remember that when he acted jerky, the others on the team all started acting jerky also. I think many of us can think of times in our lives that we've seen that dynamic. That one person on the team was jerky and just seemed to get everyone kind of jerky. So I actually feel the first employees that we need to get rid of are the ones that are jerky because if you got a lot of jerky employees, then those feedback dinners, there's no way they're going to work.

It's only once you really have employees who are ready to help one another. And maybe I'll add that at Netflix they have some guidelines for giving feedback and you can use these to. I call them the four A's. So the first is that when you give feedback, it should always be with the aim to assist.

So we don't give feedback to get frustration off of our chest. We don't give feedback just because we feel like, ‘Oh, that guy made me angry’. Feedback should be given only with the aim to assist. Secondly, it should be given only when it is actionable. So there's no point in me giving you feedback about something that you can't act on, but if it's clear to me how you could act in order to improve your performance, then I clearly want to give that feedback, right.

So aim to assist and be actionable. And if I'm those two things, then the last two ways are about how to receive feedback. So when I receive feedback, you remember your amygdala starts going off, right? Your alarm starts going off. That means your trigger is to defend yourself, fight or flight to defend yourself or to hide.

But what they say at Netflix is appreciate the feedback. Show appreciation, ‘Thank you. Thank you Karthik for that feedback. I appreciate it. It's not easy to get feedback like that. I appreciate it.’ Then you can go into the corner and let your amygdala go off for a while. The other one is accept or decline.

So if you really managed to get a high feedback superpower in your organization, then you're going to get a lot of feedback everyday. But that doesn't mean that you have to take it. I mean, you can take some of it and then others, you can think, ‘Okay, I listened and I thought about it, but I don't think I'm going to take it’.

But yeah, I don't think that has to be Netflix. I think any manager who really sees how giving that feedback could improve performance can work step by step to get this, get this feedback culture instituted.

4) Learn more about the Keeper’s Test from Erin Meyer (08:48-10:55)

Karthik Chidambaram: Feedback is superpower. That's cool. That's awesome. And you also ​ talk about firing your hardworking employee for if he is mediocre and things like that.

In the book, you also talked about the keepers test. Essentially, if I were leaving today, would you work hard to retain me? And that's what the keepers test is all about, right? In your talk also you mentioned it. So what about the emotional part of a person who's getting fired?

Let's say, for example, you are working for Reed and you do a good job. Everything's great. And then things don't go that well and you're fired. Then how do you deal with that Erin? Erin Meyer: Yeah, well, Karthik, gosh, that's the most difficult thing we ever have to do, right? ​ As leaders firing people is so difficult because like I said earlier, we love our employees. We want to be right by them.

We hate the idea of kicking them out of the group. We don't want to set their amygdala off even if we know they're going to land on their feet. If we don't know they're going to land on their feet, it's doubly difficult. And of course, they're going to have emotional reactions. What I can say is the more courageous you have been to give candid feedback throughout the process, the easier adequate performance getting a generous severance process will be.

And I actually think that at a company like Netflix, where people hear it when they join the company. They are like, ‘Okay. If I choose to work here, I know it's not going to be a job for life. I'm going to take the job on, I'm going to get lots of freedom and I'm going to really try to just do my very best work.

And if it doesn't work out, then I was able to enjoy working here for a short period of time before I moved onto something else.’ But I didn't have an easy answer to that Karthik, I think. Yes. I mean, gosh I hate that. I mean, that's the worst thing that we could have to do. But that's part of creating a high-performing team and we have to remember we're doing that for the other employees so that we can let them have that freedom and then their performance can cycle up.

5) Have a sneak-peek into the ways for investing in culture (10:56-12:40)

Karthik Chidambaram: Thank you Erin. That makes a lot of sense. Appreciate that. And since ​ we have a lot of B2B distributors in the audience, I have a question from them. How does a B2B distribution or a manufacturing company take a hard look at its culture. Why invest in culture before investing in technology and commerce?

Erin Meyer: Yeah. Well, I think, it's very common, of course, for us not to give our culture much ​ thought, especially if you're a smaller entrepreneurial organization you're just fighting to keep alive. And then as you get bigger, you have lots and lots of things to think about.

Trying to get a corporate culture going requires a big time investment, but I believe it is a very very critical time investment. So what do we need to do? The same things we talked about at the beginning. We need to spend a good deal of time as a management team. What are the tough dilemmas that our teams and our managers are facing on a day-to-day basis or employees are facing on a day-to-day basis?

What are the really important ones to us? How will we then guide our employees to make certain decisions when they're faced with those dilemmas? Don't choose 20 of them. Just three to start out with. The three most important ones. And then you need to talk about it a lot and debate it a lot.

One of the things I saw at Netflix is that at every quarterly business review meeting, they have culture on the agenda. So they were constantly coming back and debating it again and again, and I really believe that that is worth the time, although I know it's easy to put it in the back of our minds.

6) “We are a team, not a family.” (12:41-15:25)

Karthik Chidambaram: Yeah. Have culture on the agenda. Have feedback on the agenda. ​ Thank you. That makes sense. Great. And you said that a great workplace has stunning colleagues. And you also shared with us about William Phelps, the professor or your colleague and a jerk creates more jerks.

It's actually scary if you think about it to have poor performers in your team. You always want to have great performers. But the question is a lot of distributors and manufacturing houses are family-run and in the book you talk about Netflix's culture being more of a professional sports team rather than being a family.

The best players of the team stay in and the not so good players get out. So how do you deal with it when a business is family-run, what recommendations do you have, how can they evolve for growth, and how do they strive for high-performance culture?

Erin Meyer: Yeah. So I think the image or the analogy of the company as a family is the most ​ common analogy and any analogy about organizational culture. We are a family and that's clearly from the industrial age. People were in jobs for life and because people were in jobs for life, they wanted to create a family environment so that people would be happy working there for the next 50 years.

Again in some of these companies that the participants are and that you're in, you may also still be wanting to have environments where your employees are there for life. Your goal may be error prevention. Your goal may be consistency and replicability, but if you have parts of the company then your goal is no longer error prevention and replicability.

Like, maybe the eCommerce side, for example, the goal is innovation, the goal is flexibility. Then I do think it's important to think about leaving the analogy of a family behind.

So at Netflix they say, ‘We are a team, not a family’. And the idea is that we should think about our organization as an Olympic team. So we have the best players in every sport and every year we're kind of re-evaluating, ‘do we have the best people there’ and people will come on and go off.

And everyone knows that that's the deal. I don't think that this has to be in contradiction with a family-owned business. I think you can have a family-owned business and still run it like a professional sports team. But of course then if you have family members involved, it gets a little bit more complicated. I don't have an easy answer for that.

7) Innovative decision-making tactics (15:28-17:50) Karthik Chidambaram: Thank you Erin. Yeah. And in your book and in your talk, you've talked ​ about Netflix employees signing contracts worth a million dollars or more, and also empowering employees to make decisions. However, you also mentioned in your talk that a lot of decisions are made top-down and contracts are usually signed by owners or the executive management in a lot of companies. What recommendations do you have to change this approach?

Erin Meyer: Yeah, this is scary, right? As you said, like if you have a family-owned business ​ and the family has invested all of their money and resources into a company, it's scary to think about giving that kind of power to someone you've just hired.

But I also think you have to ask yourself if you're really going for a high-performance in your organization, and you believe that the people that you hired are the best on the market, then don't you and they deserve to take advantage of their skillset? So they do something very interesting at Netflix, which is to encourage risk-taking and maybe I can just get those of you listening to kind of think about it.

So what they do is when employees join the company, often their boss says to them, ‘I want you to think about this as if I'm giving you a set of betting chips. And you can use these chips to take any bets that you believe in. I'm not going to judge your performance based on whether one bet fails or one bet succeeds, or even on how several bets fail or succeed.

I'm going to look at how you use those bets over time and what yield you get from the bets. So after a couple of years, I can look at you and I can think, Oh great. You know, she failed a bunch of times. But she sure succeeded a lot of times.’ And that's where we have an environment that is really innovative and not so focused on error prevention.

But that also requires this whole idea that the boss has to be willing to say, ‘Go ahead and spend the chips as you like. Even if I, as the boss, I'm not comfortable with it.’ I don't know what to say beyond that Karthik. You've got the great employees, use them for what you pay them for.

8) Tips on survival during these turbulent times (17:53-20:00)

Karthik Chidambaram: Thank you Erin. We have a lot of questions from the audience, so I'm ​ going to actually take some of their questions right now. So we have a question from Chris Lion and his question is how to lead a midsize business through times of risk and unpredictability that too a lot from a manufacturer's perspective. So how essentially do you lead a mid-size business during these turbulent times?

Erin Meyer: Yeah. Well, I don't know if I can answer that question in a sentence or two, I guess ​ if I could, I would be very, very rich, but what I can say is that I think that many of us are seeing today with COVID having hit us out of nowhere.

None of us were expecting that. And we realize now that we have to be more flexible as an organization. We have to be more flexible than we realized we had to be. And we know that once we get out of this COVID mess we want to try to build organizations that are more flexible, more innovative and more reactive, so that when the next unexpected event hits us or when the environment changes, we’re ready.

And I think that even for those of you, you're in your industrial organizations, you're in B2B businesses, but I think that you also at least in some ways are trying to think about being more flexible.

So I would really encourage you. I don't think you're going to do all of these principles from Netflix. I know some of them are just too crazy, but I would really encourage you to start thinking about these principles like how can we start little by little building up talent density and building up candor?

Why do we have all these processes? Can we get rid of some of the processes? Can we get rid of some of the rules? Is that going to make our employees happy or did it even occur to us? I'm sure you were hoping for a more brilliant answer than that, Chris, but I just go back to my key points. I really encourage you to start thinking about trying some of these things.

9) Investing in the right talent results in high performance (20:02-23:45)

Karthik Chidambaram: Well, definitely keep it simple. Yeah, I totally agree with that. We have ​ a question from Scott Zell. And his question is what is your advice about investing in talent and capabilities?

Erin Meyer: Okay. I'm so glad that we got that question because I want to differentiate between ​ Netflix and many of the companies that you are running. So, this whole idea of high performance for giving people more freedom to create innovation, that is for people who are in creative jobs.

And so if you have people who are in creative jobs, you want them to be more innovative, and this is the method to use, but probably, if you're in manufacturing, you probably have some areas of your company where you have employees that are not creative employees, they may be working on assembly lines.

They're doing operational jobs. Maybe you want them to be innovative in the way that they organize those assembly lines or whatever, but other employees you're just hiring them for replicability and error prevention. So you might actually think about how to use these concepts in some parts of the business and not in other parts of the business.

There's actually this fascinating research that was done called the rockstar pay study. And this was done originally with software engineers. So what happened was that there were a bunch of software engineers who came into a lab and they were given a set of tasks to complete within an hour. And they were also again rewarded financially based on how well they did.

And what was really interesting in the study was that although all of those software designers were at least adequate designers, the top performer, I think there were eight of them in the study. The top performer performed better in some tasks at a 10 times greater rate and in some tasks at a 25 times better rate.

Reed knew that research because people in the software, maybe you Karthik, people in the software industry tend to know about that rockstar research, but it hadn't been applied to other creative companies. From what I know about and Reed thought, well, if that's true for software engineers, that should be true for any creative team or organization. Because if you can get a really creative thinker, then it's clear that person's going to perform 10 or maybe 25 times better than someone else.

So I think that's really the answer about hiring top talent and that if you're going for creative roles, then go ahead and hire one amazing person and pay him 10 or even 25 times more than you would instead of hiring 25 or 10 employees who are adequate. Maybe that sounds too exaggerated, but what it means is stay lean and mean.

Hire the best employees, pay them a lot of money and keep your teams lean for creative roles. For operational roles, go ahead and follow the methods you've already been following.

10) Gain insights on reaping the benefits through candor (23:46-25:27)

Karthik Chidambaram: Definitely. Thank you Erin. We have a lot more questions, but we just ​ have five minutes left. So I'm going to run through some of these questions.

We have a great question from Parth Acharya and his question is, are there parts of these frameworks or principles that may apply to people in leadership roles without authority? Because that's always the question, right? ‘Hey, I mean, your principals are great at it. I want to do all this, but I don't have authority in the company’. What do you recommend me to do?

Erin Meyer: Well, I don't think that you can apply the removing rules and process without the ​ buy-in of management. If you have processes and rules in your company and you're not the boss, then there's nothing you can do. Now, that being said, you could go talk to the bosses, right?

You could go outline these principles. You could ask them to think about them and you could get some discussions started. That being said, I really believe that candor, the element of candor can come from anywhere. I think you can always get discussions started.

I think we could really benefit from hearing one another’s feedback more. I'd like to hear your feedback more. Can we start putting that on the agenda every week? In our one-on-ones, on our team meetings. Could we dare to go out and give one another feedback and a team? And I think that we can really get a lot of the benefits of feedback even without authority.

I think for the high performance team, the keeper test that only be applied by the boss, but you as the influencer can of course be talking to the bosses to try to get that going.

11) Learn more about strengthening the culture (25:28-27:44)

Karthik Chidambaram: Thank you. We have another question from Ulan Kenzler. How do you ​ recommend moving from an existing organizational culture to the one you described? I think this is a great question. Let's say for example, if the company has just under 50 people, how do you transition from one culture to another?

Erin Meyer: Little by little. So obviously if you have an organization that has been operating with ​ error prevention, replicability, as the overwhelming ethos and you are full of processes and you are full of rules, you can't just say, well, let's get rid of this.

But start with step one, increase talent density. So that's the first thing. Don't go onto the other things. Increase talent density a little. Start having those conversations on the team, start asking yourself the keeper test. Start thinking, talk with your team about the desire to really create a high performing work environment.

And then of course you have to make some tough decisions and then your talent density increases a little. As your talent density increases a little, you can start getting a little bit more candor going. What do you want to do to get the candor going first? If you're the boss, get your team giving candid feedback to you.

That's the first step. You can't expect them to be candid with one another first. First, get it to you. It's the most difficult part, ask for the feedback. And when someone dares to give you direct blunt feedback about what you can do better as the boss, celebrate it publicly. Send emails to people.

‘Oh, I got this feedback. I love it.’ And one thing that's crazy at Netflix is like Reed and the executive team are always sending their three sixties around so that everybody can see the criticism that they received. And they specifically cut out the criticism and put it in the emails. But when you start celebrating, thank the feedback that comes to you, then people start thinking if they can give feedback to you as the boss, well, then they can dare to give it to one another.

And then you get the feedback and now get rid of some of the process. Can we get rid of some of the process around here? Little by little, right. It's a journey.

12) Great conversations can never be undermined (27:45-30:18)

Karthik Chidambaram: Thank you. This is gonna be the last question. And again we have a lot ​ more questions, but sorry, we couldn't cover everything.

So this is from Ryan Van Hoozer. This was a terrific presentation, Ryan says. If a manager chooses to set a high standard for employees performance, how do you recommend addressing adequate employees that have been incredibly loyal that is decades of working with a company. How do you deal with that? Erin Meyer: Yeah. Well, I think it's challenging because you, that wasn't the deal when you ​ hired them. Clearly with the new employees, the deal should be clear when you hire them. You should say, ‘Look on this team, we're going for high performers and you look like you are a real high performer.’

You should be focused and tell them my goal is to create a high performing work environment for everybody. I'm continually making sure I have everybody know that's the deal. If you have people in your organization who have learned that the deal is that they can work there for life and they'll be loyal, but they don't have to give you their best.

Then that's of course difficult, but you need to start being candid with them now. One-on-ones, don't do it immediately. Don't pull the rug out of them. Because you had a different deal with them. Start moving towards it, candid feedback. You go in, you have the meetings, this is what I'm working towards.

I'm trying to create this. This is what I've seen happening. This is what I need from you. If you're able, if you're going to stay in this role, little by little, you have to be tough, but if it doesn't work out, we're going to have to move on to try to find you another solution.

But you got to start now to lay the groundwork because you had one deal with them. And now if you want to create a new corporate culture, you have to set up a new deal. And I'm sorry, it's the most difficult kind of discussion you can have. I know that right. You're going to lose sleep over it. I know it.

Karthik Chidambaram: Erin, thank you so much. It was awesome listening to you. I wish we ​ had another hour, but again, thank you so much. Thank you so much for joining the DCKAP eSummit. Thank you for answering all the questions. Appreciate it.

Erin Meyer: Thank you Karthik. I'm so sorry. I didn't get to answer all of your questions here, ​ please join me on LinkedIn. Send me a personal message if you'd like to chat more, I really look forward to hopefully seeing you face to face next time. Okay. Best of luck with the rest of the conference. Thank you.