5 Things Project Managers Can Learn From Netflix

Netflix, the US movie subscription service posted this deck on Slideshare, which describes its creative approach to culture, people, process and incentives.

1. Inspire with context setting, rather than managing details

“If you want to build a ship, don’t drum up the people to gather the wood, divide the work and give orders. Instead, teach them to yearn for the endless sea.”

Antoine De St-Exupery

2. Culture is not rules, but behaviors

Enron had an impressive list of values, but evidently didn’t practice them. Culture is not about what behavior gets talked about, but gets rewarded.

3. The best can be 2-10x as productive as the rest

In processes, the best people can be 2x as productive, in creative roles, the best can be 10x as good as the average person. Work hard to recruit and keep the best people on your projects, because they are disproportionately effective contributors.

4. Hard work doesn’t matter

It’s about results, working long hours isn’t relevant as long as results are achieved.

5. Too much process is counter-productive, encourage freedom.

Process will tend to frustrate high performers and drive them out. Maintaining process will often take more time/effort in creative industries than the cost of fixing a mistake. The goal therefore is rapid recovery, not perfect process. For example, spending under a fixed budget each quarter (high degree of freedom) is a better process than fixed approval for every $5k of expenditure (high degree of process).

Netflix also has no vacation policy, employees chose how to manage their vacation in a way that sense for them as long as they get their goals accomplished.

It’s an interesting model, they admit it’s not suited for nuclear power plants or open heart surgery where a checklist might be a better approach, but for a creative project, Netflix offers some interesting ideas to consider.

Winning The Lottery And Speed Skating – Outcomes vs. Process

It’s important, but hard, to separate good process from good outcomes. Often it’s assumed that any good outcome, must reflect a good process and vice versa. But in risky situations this approach could lead you to make major mistakes. Assume you win the lottery. Now, you now have a very large amount of money, but that does not change the fact that lotteries are, as Adam Smith said, “a tax on idiots” and the expected return on any lottery ticket is negative – there are much better ways to spend your money. So just because people win the lottery each week does not mean playing lottery is a good idea (unless you like losing money). So playing the lottery is a bad process, but there’s a chance you hit a good outcome. In fact, it happens every week.

I’m just using the lottery as an example to show that in many cases closer to home, we might be making the same mistake. For example, your project finished ahead of schedule, but how much of that is due to good process that can be repeated? And how much is due to luck? The answer comes down to how good your process is.

Of course, there’s a more positive side to this too, just because you didn’t get the outcome you wanted didn’t mean the process was bad. Speed skating at the Winter Olympics is a good example of this, it takes many years of dedicated training to enter the Olympics, but in a speed skating race you can easily get pushed over by a competitor, and it might be totally out of your control. It doesn’t mean you shouldn’t have won gold, but it means you didn’t win goal. Good process, bad outcome.

So what to do in situations where risk means that outcome and process aren’t totally tied together?

Two things can help:

• Repetition – over time processes and outcomes will converge where risk is present. You might get lucky on one project, but across ten it’s far less likely. Look for multiple instances of a situation before forming a judgment.
• Analysis – good process can be supported by analysis. If something went wrong or poorly look at why it happened. Luck can often be identified with logical analysis – a good process should make sense and be robust.

	Bad Outcome	Good Outcome
Good Process	Changes could make things worse	Ideal situation
Bad Process	Process improvement needed	Unsustainable luck

Project Failure – Scottish Parliament

source: Asif Musthafa (via Flickr)

The Scottish Parliament overran initial costs by a factor of ten and was delayed by 3 years.  It is clear that similar to the Sydney Opera House the design was not finalized before construction and estimates were not backed by a credible cost estimation process. For example, here are the 5 finalists chosen from a shortlist of 12 in May 1998. Only one of these finalists adheres to the budget, every other proposal fails to meet the brief in terms of both cost and size. It is absurd to specific minimal criteria for a brief and then fail to shortlist finalists based on those criteria. When a project starts with this level of disregard for process, it is unlikely to ever get back on course.

Source: House of Commons Briefing (for reference EMBT/RMJM was selected)

From there, the project continues to unravel, for example the architect then added 4,000 square meters (+14%) to his design area. It is perhaps not surprising that the project manager resigned just over a year into the project because there was clear tension between the sponsors’ desire to have the Parliament ready as soon as possible and the architects’ desire for a “gestation period” to really flesh out his design together with a need to be engaged in all decision making. The lead project sponsor (Donald Dewar) and architect (Enric Miralles) sadly both died during the construction period, which further complicated the project.

Detailed reports on the project can be found in the Hollyrood Enquiry and Parliamentary Briefing and this article from Max Wideman.

Quality

It is worth noting that the Scottish Parliament has won many national and international architectural awards. This is similar to many delayed projects in that they fail specularly on time and budget constraints, but the quality of what is delivered can ultimately be extremely high, even if the apparent process in creating it was not.

Conclusions

The process of selecting and managing the new Scottish Parliament had no regard for credible estimates from the outset. As a result it is unsurprising that the final result bore no relation to the initial estimates. It also appears that the sponsors of the project wanted quality above all, and in that context it is not surprising that cost and time gave way to that objective.