How Company Culture Can Drive Competitive Edge
In 2004, Blockbuster ruled the video rental world. With revenue of $6 billion, it had the world queuing patiently in stores to rent their Friday night entertainment. Meanwhile, Netflix was quietly mounting a challenge. Within 6 years, Blockbuster had filed for bankruptcy, and Netflix had grown its revenue to $2.2 billion (How Netflix Destroyed Blockbuster – INFOGRAPHIC).
Today, the estimated value of Netflix is over $152 billion. There are hundreds of reasons for this market coup, but one of the key success factors behind the rise of Netflix was its culture. Patty McCord, Chief Talent Officer at Netflix from 1998-2012, pioneered a culture of freedom and responsibility. This culture was based on hiring talented people and giving them the freedom to do their job well.
Since then more and more companies are adopting a culture of freedom. Less companies now demand that their people arrive at work at 9am on the dot. Less companies are restricting their people to 20 days of holiday, no more, no less. Less companies are forcing their people to come into the office, when it’s just more practical to work from home. However, the majority of the corporate world still sticks to these outdated rules.
The thing that these companies don’t realise is the creating a culture of freedom doesn’t just deliver happy people – it delivers better commercial performance too. Here are 4 reasons why every company should consider adopting a culture of freedom starting right now.
#1 – Innovation
Freedom means that your people can assess their role, and execute it their way. It means they are not shackled by existing process, and no one ever says “because that’s how we’ve always done it”. When people are free to put their stamp on their role, they find new ways of working, which encourages an innovative mindset. This is so important in today’s business world as the world around us is changing fast. It’s impossible for the company’s top management to keep up to date with all the latest advances, so the rest of the company should be free to experiment and try new approaches. The companies that don’t are soon to be left behind, if they haven’t already gone bust.
#2 – Employee Preference
Employees now expect freedom and flexibility. In a 2017 Powwownow survey, 70% of people said they felt the offer of flexible working made a job more appealing to them. Even more telling is that 30% of people said they would choose flexible working over a pay rise if they could only choose one. This is especially the case in Gen Y and Z workers. This means that the workforce of today and the CEOs of tomorrow are all in favour of freedom and flexibility. Based on this, if your company wants to attract and keep the best talent, creating a culture of freedom needs to be high on the to-do list.
#3 – Wider Talent Pool
Imagine you’re recruiting for a new Senior Graphic Designer. After a long interview process, you’re down to the last 2 candidates. Both are equally creative, and are excellent at delivering high quality design concepts from start to completion. However, there are 2 small differences.
Candidate A is a specialist at creating animated graphics, however, wants to work from home 2 days a week for personal reasons.
Candidate B is average at creating animated graphics, however, is happy to work from the office 5 days out of 5.
Who gets the job?
Some people would choose A and others B. However, here’s the truth… When you prioritise freedom, and allow people to work from home occasionally, your available talent pool grows hugely. Rules on office hours and attendance serve mainly to restrict the talent you have, and in a world that requires high levels of specialisation this is a very dangerous recruitment policy.
#4 – Happy Employees Perform Better
Happy people deliver better results. Studies show that happy employees are more creative, more productive and are far better at handling adversity. Nothing breeds unhappiness and discontent more than unnecessary and draconian rules. Forcing people to come into the office when they need to collect their child from school that one day is simply counterproductive – it’s also a sure-fire way to make your best people leave.
It’s well established now that building a culture of freedom can deliver a true competitive advantage to your business. However, there will come a time where the balance shifts. Instead of freedom delivering an edge to your business, there will soon be a time when inflexible HR policies and unnecessary attendance rules will dent your profits. Soon the question won’t be, “should we create a culture of freedom?”
It will be “can we afford not to create a culture of freedom?”
And when you ask yourself this question, really look at your business and decide what it resembles most. Are you Netflix, or are you Blockbuster?
Guest Blogger Bio:
Oliver Lee is a leadership blogger who believes all leaders have a golden opportunity. The opportunity to fill their teams’ days with happiness, fun and purpose.
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