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Feeling sqeezed by the war for talent?

We can help loosen the grip.

Find out about having Bill or Richard speak for your corporate or association meeting. Our signature program - "Contented Cows Give Better Milk - Your People, Your Profit" - can help you learn the secrets to creating a great place to work, to attract, retain, and get the most from the top talent in your industry.

By Richard Hadden
August 2006

THE FOLLOWING IS AN EXCERPT from our new book, "Oomph! How Great Leaders Get Everyone Playing Their 'A' Game". The book is still a work-in- progress, but we're closing in on it. Stay tuned for publication details, and more excerpts from "Oomph!"

To paraphrase a popular bumper sticker, "Stuff Happens". Drawbridges get stuck, alarm clocks with perfectly good track records fail, people lose their carkeys, their babysitters don't show up, they have bad days, transiently forget how to do something they mastered years ago, say things they don't mean, and, in short, are subject to all the foibles of being human. Just ask Mel Gibson.

Leaders who are fair usually give people the benefit of the doubt. And in return, they usually receive the benefit of Discretionary Effort. Or what we call "Oomph".

A good model for extending the benefit of the doubt comes from an interesting source: Netflix, the Los Gatos, California-based online mail order DVD rental company.

In the special circumstance of 2005's Hurricane Katrina, Netflix took proactive steps to help their customers affected by the storm, who had a lot more to worry about than their DVD account. The company ascertained from the Postal Service the ZIP codes whose residents were not receiving mail, and notified each of them by e-mail that they could at least take Netflix off their list of concerns. Their accounts would be suspended until such time as the customer wished to resume the relationship. They needn't worry about items that may have been lost in transit, in either direction, or in the storm, and they wouldn't be charged the monthly fee until they wanted to start their service again.

According to Steve Swasey, the company's Corporate Communications Director, replies flooded in from the affected customers, expressing appreciation for Netflix taking even this small step to be of help, and not add to their troubles. The irony of this wasn't lost on those Netflix customers who were still getting power bills for electricity not delivered to uninhabitable or non-existent homes.

But this is how Netflix regards all its customers, even in ordinary circumstances. It's simply the way they do business. The benefit of the doubt. Trust. The company's management understands that a DVD may occasionally be lost or damaged during shipping through no fault of the customer, even in good weather. Therefore, its policy is to replace lost movies at no charge. (In my case, the company was very understanding when my letter carrier delivered a Postal Service baggie containing shards of "Walk The Line", with accompanying official USPS apology sticker, mass-produced expressly for such "mishaps".)

However, the Netflix policy also states "If an excessive number of lost DVD reports are filed on an account, we will place the account under review and notify the customer via email."

In other words, stuff happens. But we're not here to enable you to steal DVD's from us.

We like the fact that their policy doesn't state a specific number of allowable losses. That game would be pretty easy to crack, wouldn't it? Instead, their policy operates from a foundation of trust, and extends to those who continue to earn that trust.

The same practice works well with people at work. We start from a foundation of trust. If we've hired right, most of the people we've hired will enrich their trust account a little bit (sometimes a lot) each day. Then, when the drawbridge gets stuck, and they arrive later than usual, we barely remember. If the drawbridge gets stuck three times a week, a little coaching is probably in order.

As we suspected, Netflix's policy of trust with its customers also extends to its employees.

"We hire adults, and expect them to behave like adults," said Swasey.

The "we hire adults" attitude is particularly evident in Netflix's vacation policy, which is best defined by the fact that they have no vacation policy for their salaried workforce. (Production workers in their distribution facilities have a vacation policy that balances time off with customer demands.)

"Our policy is this," Swasey said, "As long as you get your work accomplished, take as much time as you want, whenever you want." Netflixers have to let their manager know when they're going to be gone - they don't have to ask permission - they simply need to let the boss know, and then they are free to take vacation time at their own discretion. No one "vacates" during a big project, or when a particular task is mission critical. But when projects are completed, work is done, milestones are reached, Netflix says "Take some vacation time if you want. And have a good time."

This skeptical American writer, steeped in a culture of 2-3 weeks max vacation at any given time, asked Swasey, "What if someone wanted to take, like, a month or more at one time?"

"Oh, sometimes people take several months at a time. That's no problem," explained Swasey. We have a lot of software engineers and other professionals whose families live overseas. When they finish a big project, they go home to visit, sometimes for a couple of months or more. Plus, in our business, people can work online from almost anywhere. And our people do."

We should have known that Netflixers weren't taking undue advantage of the vacation non-policy. The company, with its simple and extremely well executed business model has one of the best-oiled distribution systems on the planet; it grew from nothing in 1999 to more than 5 million subscribers in 2006, and posted sales of $682 million in 2005. Online customer service trackers ForeSee Results and FGI Research ranked it the number one website for customer service in 2004 and 2005, and Fast Company gave Netflix the magazine's 2005 Customers First Award. But wait, there's more. Netflix has stayed well on top of its market, despite Blockbuster Video's attempts to capsize it. And, get this - Wal-Mart - not known for throwing in the towel (selling them, yes, but not throwing them in) abandoned its short-lived try at the DVD rental business, and told its customers to go to Netflix.

It would be hard to rack up successes like that with an AWOL workforce. Or one that wasn't putting forth some pretty serious Oomph.

2006 Contented Cow Partners, LLC. Permission required to reproduce.

Leadership...the Workplace...Creating a Great Place to Work...Getting Discretionary Effort from Your Workforce. Every week, we speak to corporate and association audiences about these topics, at conferences, conventions, and management meetings.

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Richard Hadden and Bill Catlette
Contented Cow Partners, LLC

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