Can a company grow indefinitely without becoming mired in red tape?

I just finished reading Michael Holley’s War Room: The Legacy of Bill Belichick and the Art of Building the Perfect Team and Reed Hastings’ 2009 presentation on Netflix’s culture.  Both are full of great ideas on leadership, and as I read them I was struck by how delicate the balance is between creating a culture that focuses on following processes and a culture based on giving employees significant discretion.  Holley’s book described a Patriots team that provides discretion framed by a comprehensive, complex set of recruiting (draft) and management systems, while Netflix’s culture slides emphasize an approach that could be described as “hire great people and get out of their way.”  It’s interesting to see how different organizations balance these

netflix_chaos

two approaches as they grow.  Netflix describes this challenge and their approach very well in slides 46-58 (it’s worth clicking on the link and skipping to slide 46 if you don’t have time to read them all).  They focus on getting higher quality talent to manage the business as they grow, instead of becoming more process-based.

This is more of a question of attracting Theory X employees vs. Theory Y employees.  It’s a question of can Netflix (or other companies) really accomplish the mission of growing a company of autonomous, talented people using a decentralized management structure indefinitely?  Or is there a company size in which this breaks down due to either management complexity or the ability for a company to attract sufficient high-quality talent?

 

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