Patty (00:00):
I personally don't believe that hoodies and good snacks guarantee that you'll be in the zone.
VO (00:08):
Welcome to Spotlight on a podcast about how companies are built from the people doing the building. One messy, exhilarating decision at a time.
Peter (00:23):
This is a podcast about a podcast. I want to introduce obviously Jessica Neil, Patty McCord, and obviously love the Truth Works podcast. Really enjoy listening to it. There's some great stuff on it. If you haven't yet come across it, definitely start listening to it. I'm going to jump right into, why don't you guys tell us about yourself. So Patty, obviously claim to fame Netflix, but you had a life before that
Patty (00:50):
And I have a life after it.
Peter (00:51):
You do,
Patty (00:51):
Right? I've been gone
Peter (00:54):
A long, no,
Patty (00:54):
A long time now. It's funny. I know that one of your questions is what's not on Wikipedia and I haven't looked at myself on Wikipedia recently and it's as if I was born, met Reed, started at Netflix, died, and then Jessica and I got back together and it's all been nothing since then. I started out my career as a recruiter, like Jess and
Peter (01:20):
I'm sorry.
Patty (01:22):
Oh no, it's a great job. It was at the time that I started doing it, we were the whos of hr, right? It's like, oh, you're a head hunter, you're a recruiter, you're not really in hr. So I started in pretty big companies. The first company I worked at in tech was Seagate. I live in Santa Cruz and it was a hundred and something, 200,000 people globally. Then I went to Sun Microsystems and it was about a hundred thousand people, but Sun was technically pretty small back then. And it was really cool because I got to work on really high powered computers. And after that I went to a smaller company that was a software company in Scotts Valley. I live in Santa Cruz and it was Borland. That company kind of imploded and one of the VPs that I worked with went his choice was to either teach at Harvard or go to a startup and he went to this startup because he really liked the founder. And so he went to this company with Reid and I called him about something and I said, how's your new HR person? He was like, they're an idiot. We fired. I'm like, well, you should hire me. And that's how I met Reed. Got it. So that was at a company before Netflix. It was called Pure Software.
Peter (02:44):
It
Patty (02:44):
Was a software tools company.
Peter (02:47):
And then that's sold, right?
Patty (02:48):
He made a bunch of money and invested a bunch of startups and I was consulting and then he called me and said, I'm going to go work at this little company called Netflix. And he said, I want you to come too. And I said, absolutely not. That's the dumbest idea I've ever heard in my life.
Peter (03:08):
And here you are. And here I am, Jessica. Alright. Also started as a recruiter.
Jessica (03:14):
I did, I started out as a headhunter, but I was going to be an artist. That was the plan. And I wanted to be a painter and I'd gone to art school in New York and my dad said I'd never make any money and
Peter (03:31):
Dads are great like that.
Jessica (03:33):
And he was right. It was really hard to make money as an artist. But then I moved to San Francisco and I was working in an art gallery and somehow long story short, got promoted to manage the art gallery and as manager I had to sell the art and I became the top salesperson out of all five.
Peter (03:52):
So you were making money in art?
Jessica (03:53):
I was
Peter (03:54):
Up your
Jessica (03:54):
But not my art. The owner of the gallery was interesting man and created quite a toxic work environment. And so I ended up deciding to leave and I applied because I was good at sales. I applied to this entry level sales job and it was head hunting and it ended up being very good at it. And that's how I met Patty and Netflix because they used me as a headhunter and they asked me to come in and run recruiting and I said no a bunch because that's not what I did and I wasn't recruiting more like Patty and I was a business person. And so I said no a bunch. But then I ended up saying yes. And the reason why I said yes was because they thought about things so uniquely compared to all my other clients. They got the talent was the most important thing that we did. They didn't worry about the silly stuff and they were the smartest
Patty (04:53):
People. We it
Jessica (04:54):
Midnight
Patty (04:54):
In Barcelona.
Jessica (04:55):
Well, you did pay me well, which was nice, but it was worth it. That's right.
Peter (05:02):
We can come back to that. Good recruiting practices
Patty (05:05):
When you're a recruiter and especially if you're good, Jessica was where people will, you keep following them or you're internal. I was where you live with the people that you hire. You really do get the whole talent part. I mean it really is about finding the right person. The other thing that Jessica and I have talked about a ton between us is part of the reason I think we were both really good recruiters is because we just really love what people do. I did a talk like this with 600, it was at Glassdoor, somebody here was from Glassdoor and it was 600 recruiters in the room or something. I said, how many you guys hire engineers, software engineers, 600 hands went up. And I'm like, how many of you have sat next to an engineer while they write code? And I mean literally nobody had. And I mean that's the part I loved.
Jessica (06:02):
That's the part we both loved. And I mean we'd be like, how'd you do that? Show me how you did that. And I didn't still understand, but when you look at what people do and they put their passion around, I don't know. I just get so much joy out of learning from other people and seeing other people do things that we all thought were going to be impossible.
Peter (06:24):
I guess kind of jumping to the Netflix story. So the culture deck, everyone's heard of it, but yeah,
Patty (06:30):
I wrote it personally. I had a dream one night and I woke up and I wrote
Peter (06:36):
A vision.
Patty (06:37):
The vision, we rewrote our values six times in the time I was there. Reed said to me, let's have an offsite with all the executive team and write our values. I'm like, let's not, how about if we create a product that somebody will buy first, just crazy, call me crazy And I didn't want to do it. It just seemed so esoteric. I'm like, we're just going to waste a whole day wordsmithing some value statement. I said, but what if we wrote down what we want people to actually do? What if we wrote down behaviors instead of esoteric aspirational values? If you have, one of the things we wrote down we wordsmith, but it was really like we don't really want stupid people. Was kind of Reed and I talked about that. I am like, that's not really not going to fly. And then we changed it to intelligence and then over time we realized that it wasn't iq, it was EQ two.
(07:36):
And so when we wrote it as behaviors, it gave us a script to give to new employees and say, here's what you can expect from us and to each other as leaders. This is what we expect from each other. The document took us 10 years to write years and we wrote it. If you ever go back and look at the original PowerPoint presentation, every chapters built on the chapter before. So we couldn't have freedom and responsibility unless we had a high talent density, which was the high performance part. We couldn't rethink compensation unless we rethought everything else. We couldn't say it's like a sports team unless we actually treated it like a sports team. And so Reid and I would usually brainstorm. We'd go through with a couple of other execs, then we'd go through with our management team, then we'd go through with the rest of the company. But the point for you guys all to know is that no one person ever wrote that. I said to Reid one time, I'm like, how many hours do you think you and I spent on that? He's like us. It's thousands if you consider everybody that's put in. And you guys did it after I left? Yeah, multiple times. Multiple times.
Peter (08:57):
Was there a plan to publish it or you said it took 10 years and then I mean
Patty (09:01):
Came out the plan was this, the plan was this that Reid and I at our company before had screwed everything up so badly that it was, I was like, when he called me in the middle of the night, I'm like, give me one good reason I should go do another startup with you, which is the dumbest idea I've ever heard DVDs in the mail. And he said, what if we created the company we always wanted to work at? I was like, oh, now I'm awake. And so we felt like we had to write it down. We felt like if we didn't write it down, we wouldn't hold each other accountable. And at that point I had been so software engineer in my brain, it was like, well, you got to document your code if this is the code we're going to live by.
Jessica (09:49):
But I think when we published it, which this was my mistake, Reed was like, the idea was we didn't know it to go viral, but we wanted it to weed the people. We didn't want out. It was actually very good because we did that in the interviewing process. Everybody had to read it and there were people that would drop out. They're like, no, no, no, that's too unsafe. Yeah, or
Peter (10:13):
They didn't read it. There are no stupid people. And they're like, oh, I'm out.
Patty (10:17):
Or they were like, what? They just didn't like what it said. It allowed us to have, and for those of you that have spent time on documents like this, it allows you to have conversations about the stuff. The last panel talked a lot about interviewing, about the stuff you really want to know. You really want to know what kind of boss makes you crazy. You really want to know if having sole ownership of what you produce is okay with you because most of us are brought up or come up through the ranks going, oh, my boss told me. I mean, we just didn't tolerate that stuff. And so it allowed us to interview for really different skill sets other than just technical.
Jessica (11:01):
And it was our code. I mean it was how we worked. It was how we made decisions is how we got alignment. It was how we decided who was in charge. I mean it was our operating model. And for us, we were obsessed with operational excellence. I was like, if we were consensus, if we were too slow, if we were dragging our feet, like competition would beat us. And at the end of the day, I mean it was part of why we won.
Patty (11:33):
And like somebody said, when do you change it? We were talking about that earlier. We would. So first of all, we talked about culture a lot, a lot. We talked about it as much as we talked about probably anything else. It made some of our executives crazy. But what we would do is, for example, we'd take behavioral values and we would say integrity and honesty. Jessica, somebody on your team that's demonstrated that in the last week, give us this example. And if you couldn't and nobody else could, we would say, is that still
Jessica (12:08):
Important?
Patty (12:08):
Important? Is it still real? If we think it's important but it's not real, then what in the system makes that so and so it was kind of a test for us forever.
Jessica (12:24):
Still is. Yeah. But I think that that's a very good point that I want people to hear is that we spent just as much time, if not more, on how we worked together
Patty (12:36):
As
Jessica (12:36):
We did the business. And I think companies that are willing to do that, you have a much greater chance at these things actually codifying and becoming real because you all know it's important and you make a decision together as a team that you're going to do this, and then you walk out of the room and you start doing it. And we did that all the time. And one asset that we did have is that Reed was the first one to walk out of the room, start doing it. If it was, we said, okay, well we're not being great at being a feedback culture. Then in every meeting you had with him,
Patty (13:16):
Then he would walk out of the room and meet with all of your employees
Jessica (13:19):
And say, give me feedback. But I mean it's a better problem to have than not. Then say he would come in and say, guess what they said
Patty (13:26):
About you.
Peter (13:27):
I guess it is interesting that as you publish it, it becomes so viral and then you probably look at it and say again, this is the culture we built. These are common sense and maybe not common practice. I think somebody said that on one of your podcasts, but just why do you think, honestly, it was so unique and even from an HR perspective,
Patty (13:46):
Because it was common sense, common and because so many of our team when I was there were technical, and you guys work with software engineers, it's good or bad. It's right or wrong. It's black or white. It's
Peter (14:02):
Very binary.
Patty (14:03):
Yeah, completely. It's zero or one. It's digital. And so being straightforward was, I could say to them, they'd say, what's our policy on this? And I would say, I don't know. You seem to be an intelligent person. What do you think we should do in this situation? Do I look like your mother? What would you do in this situation? And then when I wrote my book, I wrote my book because after I left Netflix, I consulted with lots and lots of startups. I did Warby Parker and Peloton and a bunch of little companies when they were little, little, little, little. And they would slap the culture deck on the table and say, we do this. And I would say, well, it took us 10 years. You want to get started. And we didn't mean it as a Bible, we meant it as an onboarding document as much as anything else. This is what you can expect from us. So when I wrote the book, I wrote it as the Hitchhiker's guide to the Netflix sculpture deck. How do you really operationalize it? That was our job as CHROs. Our job was to operationalize those things,
Jessica (15:25):
Make it a product, not to
Patty (15:26):
Do hr.
Jessica (15:27):
Not to do hr. I think that's the other thing is I think companies get really confused and make things a lot more complicated than they need to be. And we were more practical and I think clarity was king. It's like if people understand the deal and they understand expectations, they know what we expect. That's half the battle. And I go to these companies that I advise now, and if you go down a few layers, you get ask, oh, what are the three most important things for the company? And you get totally different answers from revenue, the new or they don't know. And so I think we were just very good at simplifying and getting down to what was most important and being very clear on how to get there.
Patty (16:24):
Yeah. The other thing I've learned from the years I've spent outside of Netflix in talking to groups like yours, and I didn't realize it when I was doing it, right? I mean, so hindsight's 2020. Here's the most important thing you can do. If you're N-C-H-R-O or people leader in your company, throw shit away. If you're doing something because you've always doing it or because everybody else is doing it and you can't go up to your geekiest engineer and explain why in one sentence
Jessica (17:01):
Stop. I think that there's a lot of well meaning, well intended things that we are doing and we're moving so fast and there's all the reactive work that comes with what we do with the org changes and the terminations, and then you're trying to be strategic and run these projects. And then you have everybody in the company that thinks that they understand how to do your job better than you. But I think we just, I don't know. I think that there's that time for reflection and thinking about the things that are actually going to move the needle. And I always thought about it as my job was to be the chief effectiveness officer. It's like, how do I make the company more effective? And if these things are not, then they got to go.
Peter (17:45):
So at what point then in a company's growth or life cycle, does it all just go sideways and everybody forgets they're running a business
Patty (17:52):
Every
Jessica (17:52):
Day. Every
Patty (17:53):
Day. Come on. Always. Still, you probably get this all the time too. We still get on our podcast. Who's an example of somebody that's doing it right? Oh, when the pandemic happened, Patty, who do you think has the best practices on working from home? I'm like, fucking nobody. Nobody.
Jessica (18:15):
We're all making it up. We just really figured out the future of work, the wizard and as
Patty (18:22):
The bang. I know we were just whispering in the background, like ai, ai, ai.
Jessica (18:27):
What about when we lived Monterey?
Peter (18:30):
Monterey?
Jessica (18:30):
Yeah. Run rate cloud. It's all about the cloud. No. How about the data science? Data science. Data science.
Patty (18:40):
I just did a podcast with somebody else about ai. I am like, oh, get over it. It's going to be fine. Yeah, chill out. It's new. It's scary. Oh my God. We are going to ruin this next generation of people again,
Peter (18:57):
It'll take our jobs. I mean, when we're all plugged into the matrix, we won't notice.
Jessica (19:02):
Not speaking to your
Peter (19:03):
Questions are, oh, I don't have any
Jessica (19:04):
Really good, I don't think Peter expected us to. I mean, he knew what he was getting into.
Peter (19:09):
I really have nothing. This was chat. GPT. I just came up with
Jessica (19:13):
Random utilizing ai. That's good.
Peter (19:17):
This is where wild and honest. Yeah,
Patty (19:19):
But no, I mean, think your answer really matters to you. You're never going to figure it out.
(19:29):
And I'm telling you from my experience, as soon as that day you walk in and go figure that one out, you're wrong again. Right? Because now, so here's the other thing that happens when you scale. When you scale, okay, the first problems of a startup are problems of difficulty. And so how you solve problems of difficulty is you hire the smartest people that you can afford to hire and you work hard. Then if you get to problems of scale, your first problems are difficulty. Now you're at problems of scale and breadth. Now it's kind of helpful to have a couple of people around that have seen a hundred x because I think that people can imagine maybe 10, but 50, but a hundred. And then you've got to reprogram those people. They tend to come from larger, more established companies that have a lot more rules and process. And what we found, I mean, was that those people read the culture deck like, oh, I have died and I want to be here. I want to be here. I want to be here. And they're the same ones that would walk into our offices and go, let's do trust falls.
Jessica (20:43):
Yeah. Well, yeah. And I mean, I think the deprogramming was really the
Patty (20:49):
Hard part.
Jessica (20:49):
It was hard, but it was really important because we also were making it up as we go along. We didn't hire a lot of junior people because they hadn't seen 10 X where we were. And so we hired pretty senior people and they came with 10 to 15 years of experience and at Microsoft, at Google, at wherever. And this was such a foreign place because we really were asking them to be an entrepreneur and make decisions and run teams and not have rules, and that's all they knew. So it wasn't that it was bad, but we just had to teach them differently. Okay. Yeah. You get to actually make the decision on budget.
Patty (21:34):
The other thing I think that's really important about making the leader's job to create leaders. So as you move up the management chain, I think that the most important things that you do, I always say a manager's job is to build great teams that do amazing work on time with quality, period. That's it. And if your team isn't doing amazing work on time with quality, then something's up and you don't come to, and when they would come to us, I would say, you want some coaching on how to do that? How can we think about that? Seems like, Hey, look, we looked ahead at what we're doing next year, and I got to tell you, you've got a great team, but it's the wrong team. It's not that they're not great and you did a great job. How are you going to do that again for a different type of, and that's how
Jessica (22:43):
They learn.
Patty (22:43):
That's how you scale.
Jessica (22:44):
Yeah.
Peter (22:45):
Well, now I'll just go into Pete's brain for a minute, but I had this random thought, maybe I had food poisoning. But we're hearing again, A players higher, A players bs, higher Cs. It comes up all the time. Which sort of got me thinking though, is I think our definition of a player, definitely a player, people who hire Cs,
Patty (23:06):
Because people used to ask me this all the time when I would do talks, how do you hire A players? I would say, I know an island where all the A players secret. And only Jessica told me where it was, but we are not telling anybody. So my A player might be your D player. It was the other thing about reprogramming. A lot of times we would hire an incredible leader from another company and they would bring in, I remember one of 'em and brought in, I want to bring over a bunch of people from my team. And when we interviewed them, it was like, they're not good enough for us. Whoops. So everybody's a-player is different. So that's how I feel about A-players I. What did you,
Jessica (24:01):
Well, I think and the example of the leader who brought over their team, I think a lot of people just haven't seen what great looks like when you meet that person. That is so game changing. And you see the difference. And it's not that those people aren't good, they're good, they're really good, but there's a difference between great and good. And when you have someone great in the role, it 10 Xs things, when you have someone that's just good in the role, it's just good. And so I think founders, CEOs, leaders, teammates, when they haven't seen great, it's hard to explain what it is, but when you can get the organization to see it and experience it, it can start to duplicate.
Peter (24:49):
I gets to that point when you think about those managers that maybe a players in the job they have, but they're responsible for hiring. How do you equip them to actually hire a players or do you not? Do you take them out of it? You create a different interview loop.
Patty (25:03):
Again, you go back to the purpose. Build great teams, do amazing work on time with quality that serve the customer. I forgot the last part of it, right? The customer. The customer, the customer, the customer, customer. So we're not here to make our employees happy. We're here to serve our customers. That's who we do.
Jessica (25:19):
But I think that's a good point because I don't think a lot of organizations hold managers accountable to building great teams. That's not their lead team. You're accountable for leading the team, you're accountable for getting stuff done on time, blah, blah. But they don't judge them upon how many great people that they've hired or not great people that they hire. And we did that in Netflix.
Patty (25:43):
We like you hired a shitty team. No, somebody else said, I hired somebody from another, I have somebody from another team on the interview loop. We did that too. And we would often, the person that we would pick from another team to be on the interview team had to be someone who had a track record of hiring great people. The other thing that's super fun is when the technology changes and you hire somebody that knows more than everybody on the team knows because they don't, right? Can't. When we switched to streaming, we moved to cloud, the cloud, the cloud, the club, and we hired people from Amazon and Microsoft and we had, the reprogramming of them was hard, but man, what they knew. Yeah, they knew a lot, right? I mean, it was like, oh, all of a sudden we're like, they're like, no, we've seen this and here's what this next step looks like. And then everybody runs faster and everybody, you know how it is. It is that, fuck yeah. If you've been on a great team, dad, sir,
Peter (26:48):
Don't call.
Patty (26:50):
If you've been on a great team, you know what it feels like. You know what it's like to go home and go, we did it.
Jessica (26:57):
And I mean those are the best times at work is when it's so hard. But you're doing it with these people and in the moment you're not looking at it as the best time at work you've ever had. But when you look back at it, it really is the best time at work you've ever had.
Patty (27:14):
I did an assignment once to a company I was consulting with, and this was in the days of the chief happiness officer and the person, I'm like, so what do you do? I'm interviewing the HR team. What do you do on your team? Well, I'm in charge of making people happy and because happy people do better work. And I'm like, really? What's your evidence of that? Help me understand why you believe that to be true. Well, everybody knows it's true. I'm like, eh. Right. Not a good answer, but the assignment I gave the team was find each of you find three people in the organization that are amazing. It doesn't matter by title, but people that have a reputation for getting stuff done and ask them about a time for them to tell you about a time that they felt great about what they did at work that day. And I said, every single story will be about something hard.
(28:05):
It will be like, we can't, right? Then we did, but we did. And so I think that was the joy for those of you who are at early stage startups was the joy we tried to keep as we had a company that scaled, which was, somebody said to me one time, I think management made a big mistake in this decision, and I don't understand why management decided to do that. And I'm like, because we make this shit up. We didn't know it was a brick wall. It's like, oh, oops, do that. Didn't do that again. It seemed logical. But
Peter (28:48):
No, it is a good point. We see that quite a bit. When you can go into the early stage company, if you're building something amazing, you're building with purpose the hours, the time. I guess what I would say is generally when people are excited about the work they're doing, they don't actually care about 9, 9, 6. It's not that big of a deal because it's like, I choose to do this thing, not you're forcing me to
Patty (29:13):
Fit
Peter (29:14):
Into something.
Patty (29:14):
It's the same feeling Jessica had when she painted. It's the same feeling we all have when time passes and
Jessica (29:21):
You're
Patty (29:21):
Just in the zone. And so I personally don't believe that hoodies and good snacks guarantee that you'll be in the zone. I just don't.
Peter (29:34):
So let's jump to compensation. That was always a thing like, oh, Netflix pays people way more than anybody. But you guys took an interesting approach where it was you kind of chose your mix of cash
Jessica (29:46):
Equity. I think total comp, it was on par with what Google or Facebook or whomever we were competing with talent for. But because we didn't do the traditional base bonus equity, we didn't do any bonus. And with the equity, you got to choose the percentage from your total comp that would go into getting options. And then those options were granted monthly and they were yours for 10 years no matter what your employment size was. So because it looked like if total comp at Google was 700,000, then we would give you 700,000.
Patty (30:24):
Say, what do you want in base? What do you want?
Jessica (30:26):
The
Patty (30:26):
Reason why we didn't do performance bonuses, that was me. Good job. Why would we want somebody who couldn't make their performance bonus
Peter (30:37):
If
Patty (30:37):
We were going to
Peter (30:37):
Call high performance, pay them extra money for doing the job you hired them to do,
Jessica (30:41):
Right? Or not? Or it's interesting because there's all this Google's doing and Amazon's doing pay for performance. They're ruining all these things out. For the high performers, you're going to unlock more, but that's just because they have a bunch of people not performing.
Patty (31:00):
That's the other thing. For those of you in startups who tell me, well, we can't do that because we don't have that much money. We didn't either. We didn't either. So how I approached it was using math, mathematicians love math. Okay, well, we just interviewed this guy from Google and he's making 500 grand a year and he's amazing. And he would hit the ground running, but everybody else on the team is making two 50. What do I do? I'm like, well, two of the people on the team you have been telling me for two entire years are okay, so let's call them 0.5. So we're paying them a whole salary for 0.5 contribution. So if they weren't here and this person came in and did 1.5, aren't we mathematically? We're ahead. Okay here. So that's how you do it. And it's somewhat ruthless. So for those of you who think that we're evil and the reputation of all we do is fire people, my experience with people not working out is kind of threefold.
(32:19):
One, you hired the wrong person. And it happens, especially at the startup, you hire people like, well, they're breathing because seem smart. We don't know how to solve it. They seem to have a couple of ideas. Let's give it a go. And it turns out that you were actually solving the wrong problem. You not only hired the wrong person, but you had the wrong, oops. That happens. And so when that happens during the interview process, you can say, Hey, look, here's the deal. You're breathing. You're smart. You have an idea. We don't really know what it is, but it not, sure. So it's a risk on your side. It's a risk on our side. Happy to want you to come do it, but no harm, no fo. Second one is you hire somebody to do something and they do an amazing job. And then they did it, particularly people who build things and they built it and they're done.
(33:14):
You're like, great. So now you can do project management. Do not ever put a code writing software engineer on project management because remember, those are the people that manage them. So sometimes you hire people and they're done. And it might take a year and it might take 10, right? I was there 14 years, I was done. The third one is sometimes it just, you switch it up and it just doesn't work anymore. That happy little team dynamic breaks and it is just broken. And the thing about having the unhappy person on the new team is not just that they bring themselves down, everybody's watching. So people don't realize the harm that the person who's not performing anymore does to everybody else.
Jessica (34:23):
Well, there's a couple of things. I just think, and you and I talked about this a lot, but saying goodbye and saying goodbye making a normal thing. You and I talk about why we call it firing. Why do we call it termination sounds? So I mean, yeah, there's no weapons, there's not blood. If there is, you're termin. That's horrible. And who has a bad reputation? But anyways, I think if you can make it normal and get really good at saying hello equally as you're good at saying goodbye, it's just so much better for everybody. And it's a normal thing. I mean, we're not married. This is a job. And maybe it's a job for a long time. Maybe it's a job for a short amount of time. Maybe you don't like us. Maybe we don't like you. It's okay.
Peter (35:13):
I argue. I hear a lot of think there's a fear, especially in the early stages. I mean, to your point, sometimes it's like, oh, you're interested in working at our startup? Okay. And then at the same time, there's a lot that goes into not making the wrong hire. I think that's been drilled into people about, and people have heard me say this,
Jessica (35:33):
Nobody's figured out the AI yet. So it's still humans hiring humans, and it's just going to be imperfect.
Peter (35:40):
Yeah, it's going to be messy at the same time that it's sort of an rational over analysis of like, well, if I hire the wrong person, and it's like they've been hammered on, that's the most expensive mistake you can make.
Patty (35:52):
No, it's not. The most expensive mistake you can make is hanging on,
Peter (35:55):
Right? Hanging on
Patty (35:57):
A bunch of folks that don't. Especially when people know when they're not doing good job. They know it. I mean, if you've ever been in that situation. And the other thing about why we're both so emotional about this is that firing and terminating and the way we do it creates the emotion of shame. And that's like, I did something wrong. I'm ashamed I got fired. And whenever I'm coaching people on how to have that conversation with somebody, I'm like, you need to have the conversation that this person can repeat to their grandmother at Thanksgiving. And I've done plenty of exit interviews where you can say, that bitch in HR hated me like that. If that's what it works for your grandma, I'm completely okay. But my rules were no surprises. Keep your dignity. If this is your job, if you're in the people part of the world being really good at goodbye, I'm the queen of the good goodbye. And I'm really proud of it. And my very best friends in my life now are people that
Peter (37:11):
Fired. I've
Patty (37:12):
Said goodbye to you. Fired. Yeah, absolutely. Absolutely. And I mean, it's
Peter (37:18):
Wonderful. Well, back to the podcast. Oh
Patty (37:21):
Yeah.
Peter (37:22):
So just some more history. So why start the podcast? Because fame, fortune, podcasting.
Jessica (37:29):
Well, we were texting. Well, we were always texting. We were texting. I was like, oh, I don't know. I want to hang out with you. And then I think she moved to Texas. I moved to Texas and she went to the other side, dark side venture capital, talking to all these companies. And I'm like, Patty, people really need to know the truth about work. They don't understand how compensation works. They don't understand how leadership works. They don't understand how work works. They don't understand why companies make the decisions that they make. And I know you are really interested in this as I am, and we should just do a podcast together. And she was like, oh, okay.
Peter (38:07):
Alright. Done podcast will.
Jessica (38:10):
It was a way for us to get together and do what we're doing right now, which is talk about have fun. We wanted that. We wanted to talk about important things. And look, I think it was not to be famous or Patty's already super famous, so she doesn't need to be more famous. But it was really to give back and say, okay, these things are hard. Let's not them as harder than they need to be, and let's really get under the cover and talk about how it actually happens. And then we just like to geek out on this stuff.
Peter (38:45):
Yeah. But I guess we'll open it up. Yeah. Are there any questions from the audience
Speaker 5 (38:50):
Over there? Hi. Hi, I'm Shelby. Hi, Shelby. Well, I've been in HR 20 years and I've made lots of mistakes. And I'm wondering what is that one mistake that kept you up at night that all of us could learn from? One mistake,
Jessica (39:08):
Yours?
Patty (39:10):
It was pretty early in my career, and a gay employee complained that his manager had sexually harassed him on an offsite. The manager was very, very, very important to the company at the time. And it was one of those, there's two sides to every story. And I believed the victim and I got overruled. And so I did what I thought at the time was the right thing for the company. And look at my voice still breaks. It was the wrong thing to do. I should have held my ground. And it was long time ago, and it was like never again. I didn't trust my own instincts. The C ffo that we had at Netflix that he and I argued a lot. One time, one time he came in, we argued all the time, not a lot,
VO (40:11):
All
Patty (40:11):
The time. He came in one time and he goes, you're a diva. I'm like, really? I like that. You can say that to me more often. Why am I a diva? And he said, because every time you tell me you don't think this person is going to work out. They don't every time. You're always right about that. And so I think it's this special intuition that you have. And I said, actually, we have the same gift. Yours is with numerals, mine is with people. And it's pattern recognition. And what I learned to do from that situation was trust my pattern recognition. I mean, I should have known that I knew he was lying, and then all I had to do was wait. And he did it again. Not harass somebody else but lied about something.
Jessica (41:02):
So many mistakes. But I was trying to think about the ones that haunted me. And it was when I didn't say anything and because I was tired or because I just didn't want to hear no or whatever. But it was those things that I could have influenced and I could have changed and I could have pushed and because of whatever headwinds I was facing from workload, from personal or whatever, you wimp out in those moments. And there's just those moments where maybe I wimped out where I was like, well, I should have said something. And eventually I did. But those were the ones that would kind of stick with me.
Patty (41:55):
I think that leaves us in a really great place, which is, it's really important when in our jobs, when you're working with other leaders, particularly CEOs, you're the one person, right? It's really lonely. It's really scary. It's really hard being a CEO and you got to be that one person they can trust. And how I found that you gain that trust is you say, I know you don't want to hear this and you probably don't believe me, and you're going to disagree me, but I'm going to tell you anyway
Jessica (42:33):
To work. I think there's a question.
Speaker 6 (42:36):
Hi, Heather. Robert, I am curious about your perspective on diversity when talking to leaders and executives these days. Obviously a lot of companies have rolled back their perspective and there's assumptions as to,
Jessica (42:56):
We just did a podcast, we did a podcast on this. Well, podcast, you have to.
Speaker 6 (43:02):
And so I'm curious about even, and maybe you discussed this already about your own perspective over the years on how that has changed with diversity. And then right now, if you're talking to executives, what you actually say to them?
Jessica (43:16):
So I think there is confusion around DEI and all of the things, and Patty and I talked on the podcast is like when things become an HR initiative, they're just sort of death. And so I think it became that. But I think Patty and I believe this to be true, and I think what companies are saying is that they're rolling back DEI don't think if you talked to a founder that they would say diversity doesn't matter, that people being included in this workforce and doing great work doesn't matter. They're going to say that that matters. But I think what happened was that there was sort of a surgence into this, and there was a lot of money put behind this and a lot of effort. And there were things like Covid and Black Lives Matter that I think ignited a lot of this really good stuff. Now, not all of that stuff worked right? And I think it's fair to go back and look at that and say, that's not moving the, but this is right. And this is good for our business. So I think unfortunately, with all the things happening in the world, it's become this thing. But I don't believe that businesses and good businesses really think that it's not helpful. It absolutely is. If you want to build a great product and you want to have a product that resonates with your customers, it's got to look like your customers.
Patty (45:03):
That's right. And I think that we didn't treat it. We could have treated it like a product, which is, wow, let's take a look at the demographics of the world and we don't reflect our customer base. And let's take a look at the up and coming resources in terms of qualified people to work in our companies. We need everybody that we can get. We don't really care. We just want them to be great and and all that kind of stuff. And if you don't ever give anybody a chance, they never get a chance.
Jessica (45:38):
Yeah,
Patty (45:38):
Right. It's just period. End of story. If you don't get in the first store, you don't get in the top door.
Jessica (45:45):
Do you remember Eris Bonnette, the
Patty (45:47):
Researcher,
Jessica (45:48):
Eris? Oh God. She
Patty (45:49):
Was so
Jessica (45:50):
Interesting.
Patty (45:52):
She was so good. And one of your questions was like, do you ever have people where you think she was a Harvard sociologist slash data scientist? And I read her background. I'm like, this was the one. She was
Jessica (46:03):
Like, no. And I was like, yeah. And she was fantastic. Yeah, she was. But she has all this data about how diversity training doesn't work. It doesn't move the needle. And it's not that it's not well intended, it's not good. But people go and after the training, maybe half hour later, they can tell you what they learned. But two days later, a month later, they've forgotten it all. But she was like hiring. Does that move the needle? Yes, yes. And so she had all this data and she spent years of her life researching
Patty (46:35):
This stuff. That's a really good podcast. She was so cool. She was like, what? She did this research where she looked at the circumstances surrounding women in the workforce in the sixties, seventies, eighties, right through the decades. This is fascinating. And what was really fascinating to me was that the social circumstances around people's employment, women could not move into women always had to start as secretaries. Was that it? No,
Jessica (47:08):
No, no, no. Remember it was they couldn't get tens on the performance reviews, right? So only men got tens. Women could get nines, but they could never get a 10. And then one of her partners or whatever that she worked with, they changed the scale to be six. And then all these women were getting sixes. But just our minds, men are so great, they're 10. A woman could never be a 10. She could only be a
Patty (47:36):
Nine. So I think what we learned about it was we didn't treat DEI as a product that if it's going to fall to us to do it, do we set up objectives to start with? Did we say what we wanted out of it? Did we achieve our goals? Did it work?
Jessica (47:55):
Did
Patty (47:56):
It work? That's so important to the things that we do just because we think of some new HR initiative. How many HR initiatives have you been in companies where it's like three years ago, remember our initiative was
Jessica (48:11):
Nobody cared.
Patty (48:12):
Nobody cared.
Jessica (48:14):
But in going back and talking to your business, that's what I would talk about. Let's talk about, let's get rid of this stuff that's not working. Let me tell you about the stuff that is, and let me tell you how it's making an impact on the bottom line. And if you can roll it back to this is impacting revenue, guess what? They're going to care about it.
Patty (48:32):
Or anecdotally, we hired somebody that was outside of the norm of who we normally hire, and they turned out to be really successful. And oh, by the way, they brought to the organization a perspective that we didn't have before. That's why I am mad that I left off to serve the customer. Because if let's take ai,
Jessica (48:53):
Who
Patty (48:53):
Do we want to use? Ai? White people? No, I mean we want it to be a tool that really helps us all as a society get better and learn more and learn faster and automate and make it interesting and curious and all those things. So who do we want to be involved in? One of the biggest issues that we all know that are involved in AI is like, what are the models pulling from? Are they pulling from diverse data that represent lots of different kinds of people, or are we going to get a perspective that basically tells us what we already know? And that was why she was a great example of both of us are like, yeah. And then what?
Jessica (49:34):
She
Patty (49:35):
Was so good. She was so good. Ris. Oh,
Jessica (49:37):
Ris.
Patty (49:37):
Yeah. So that's the beware of the HR initiative.
Jessica (49:46):
Beware and don't do things that matter. And there's probably a few things that matter.
Patty (49:57):
Teaching people, you already talked about it here
Jessica (49:59):
Today, teaching people how to be great at hiring that matters, teaching people how to change the organization, be great leaders, have great one-on-ones. Just be great. Just be great. Oh my God. Oh my God.
Peter (50:10):
All right. Well, thank you both. This has been super fun. Thank you.
