Team members who help the team win are richly rewarded members who don’t make the cut, get cut. The denser the talent, the more freedom you can offer everyone.Ī company should be likened to an elite sports team, argues Reed. If you build a company overwhelmingly dominated by high performers, you don’t need the controls. But if you avoid or eliminate these people, you don’t need the rules.
At most companies, the processes and rules are put into place in order to manage subpar employees. The most foundational tenet of a high-performing firm culture is: a great workplace is stunning colleagues. Suddenly, he found, “he entire office felt like it was filled with people who were madly in love with their work.” Rather than being left with a demoralized band of survivors, Reed discovered that holding on to only the highest performers actually improved morale and productivity. The first and most important piece of the puzzle was a realization that Reed stumbled upon rather painfully when he had to lay off a third of Netflix’s staff in 2001, after the dot-com bubble burst.
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