From startup growth to team building and navigating change: a fireside chat between Patty McCord and Karoli Hindriks

From startup growth to team building and navigating change: a fireside chat between Patty McCord and Karoli Hindriks

Andreia Mendes
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Patty McCord was the chief talent officer at Netflix from 1998 to 2012. She is responsible for “Netflix's Culture Deck”, described as “the most important document to come out of Silicon Valley” by Sheryl Sandberg, former COO of Meta Platforms. Her book “Powerful” is mentioned by Karoli Hindriks, Jobbatical’s CEO, as “one of the most influential management books she’s ever read”. In addition to her role as a consultant and advisor to start-ups and entrepreneurs, Patty now serves on the Jobbatical board of directors.

Karoli met Patty for the first time in 2018 at a conference in Canada. Five years later, the two sat down virtually for a fireside chat during Jobbatical's final all-hands meeting of 2023 and discussed a range of topics including Patty's board experience at Jobbatical, the challenges and rewards of growing a start-up, and the intricacies of building a team in an organization constantly adapting to change.
Here is how the conversation went:

Karoli: People tend to be too shy to ask questions. I went to Patty over and over with our questions and now she’s sitting on our board, helping us on a much bigger scale. So the lesson here is: be bold, stay humble. 
So, Patty, this year you joined our board. How has it been? 

Patty: It’s been great. I love the other board members, I learn something every time I go on a call. When I started joining boards, a really close friend and a mentor of mine, said: “Here’s the criteria: it has to be a problem you might be familiar with but you don’t have to be an expert at; it has to have other people that you want to learn from; and you have to look forward to every meeting”. And that’s exactly how it is [with Jobbatical]. 

Karoli: Thank you! Patty was a vital part of our pivot in 2019. That was the time when I was sending her a lot of questions!
With your past work and your time on Netflix, you’ve seen a lot of ups and downs and changes.
What are some of the things that are important when companies are executing a change and what are some of the difficulties you have seen with it? 

Patty: I would say that huge changes, like your pivot, are big, hard things to do, no matter what. But I think the most important thing for all of us is to always look forward and not back. Don’t be nostalgic about what happened before and how it’s not like it used to be.
That's one of the things I love about you, Karoli. You always focus on where we’re going to be, and what we’re going to do, you look forward. As employees you always have to have that mindset, you have to get used to change. It's going to happen for the rest of your career. 
I talked to 500 CEOs and I said “Raise your hand if you're still in the job you had when you graduated from university”.

Karoli: How many hands?

Patty: None. Zero.
And I said, “Raise your hand if the most important metric you measure is retention”. 
So the thing is to constantly communicate to each other what's happening differently, how things are changing, what we could do better - I mean, it's all in your values. But also to know that the team's going to change over time, it just will. It's a muscle, right? It's a muscle you all can have.

Karoli: But this retention topic is interesting because most companies still do consider it a main metric. One of the questions in investor conversations is still “what's your retention?”.
What do you think about that?

Patty: You know, if you hire really great people - which I think you do -, and you hire somebody that doesn’t work out very early on, that's oftentimes, in a startup, because you didn't know what the job was. That is not the employee's fault ever, it’s whoever hired them. 

The second thing that can happen is we hire you to do something and you work really hard for a couple of years and you do it and it's done. We don't need to do that again. 

The third thing that happens is just change. You guys are on a new business now. You know that this team is different from the original team that was doing what you were doing before. The team you're building in the future is going to be different too. You want everybody to be an A player. For the job they have to do now and the job they have to do in the future. 

The other thing you and I have talked about before is - and I believe this firmly now that I'm on the board - we want to make Jobbatical a great place to be from. So that someday they'll say “Oh, you worked at Jobbatical? In the early days? That must have been so exciting!”.

Karoli: So if you think about Netflix, as it grew to a mega-corporation… On this journey, what are some of the things that you remember that made you really proud, like “We did this”? Something that changed the game. 

Patty: I remember at one of our company meetings, Reed [Hastings] being on stage and showing the graph with a million customers. And I thought “Oh! How can that be? Whoever thought we'd be here?”. And now they have 150 million customers or so. 
I've been gone from Netflix for a dozen years now. I wrote my book. And Netflix is now a movie studio. 

Karoli: Yeah, that's a big change. 
Your book has been the most influential management books for me. It's like my little Bible and all my management team knows that. We have our own ways of interpreting it: “What was working there and what could work here with a little modification?”.

Patty: Of course! I wrote my book to inspire people to do it differently and be brave enough to experiment. I mean, your whole company is an example of testing, changing, creating a process that's around forever. 

Karoli: If you had to rewrite your book today, are there some things that you would maybe look at differently? 

Patty: When I was a speaker, people would come up to me and say “I really like what you said. I'd love to do the things that you talked about, but we can't. We can't because we're regulated. We can't because we're in Estonia. We can't because of our boss. We couldn't possibly work remotely.” The pandemic happened and everybody was working remotely in 48 hours. Right? 
I would love to go back and make my next chapter be about “You know what? You could have always done this. That muscle was always there. You just chose not to do it”.

Karoli: That's the ‘change muscle’ that I talk about with my team.

Patty: It's a huge opportunity and you are already doing it. To keep trying and keep experimenting and reach into “how can we do this better?”.
What I recommended people do during the pandemic was to every day write down something that went well and something that didn’t. And don’t look at it every day. Look at it at the end of the week and go “Are there patterns?”. Because then the patterns are what matter. 

Karoli: Another question I wanted to ask you… Our headquarters are like 500 miles from Santa Claus. If you would have a wish - for the world, for the industry, anything. What would you wish for?

Patty: I just wish we could all have more conversations together.
I just don't think we're listening to each other very well. And maybe it's because we were apart [during the pandemic]. My mom says the difference between a wise man and a fool is that the wise man doesn't make the same mistake twice.

Karoli: This is almost like a mantra at Jobbatical. Mistakes are great, but let's not make them twice. 

Patty: I think the last couple of years have seen a lot of mistakes for a lot of us and we're in a kind of bad place. It's time to get back together again.

Karoli: I do agree. 
Let's talk a little bit about the startup world. When we talk about these amazing tech companies, they all start from a tiny startup. There's an idea. There's excitement. And then, you have to build this company. You build it with people. You want to have amazing people.
What do you think are the must-haves in terms of attitude and mindset for an employee of a company that wants to become a category leader? 

Patty: So the three things you want in early-stage startup employees are: you want them to be able to work hard (that’s why it tends to be a lot of young, single people, early on); you want them to be the smartest people you can hire for what you can afford to pay them; and you want them to believe. The belief is a full third because most startups seem like really stupid ideas. If they were obvious, somebody else would already be doing it. Right? That's just the nature of it.

The other thing I found is that most of us can imagine ten times bigger, some people can imagine a hundred times bigger… but other than that you have to have been there. 

Problems of scale are learned problems and are very particular to whatever thing you're doing. When you get to scale and complexity, those are different skill sets. 

The IPO, right? The IPO is the Graduation party! It's a wonderful milestone. It feels amazing. But it's a graduation to a different company.

Karoli: I have been telling my team that I'm dreaming of Jobbatical becoming a big, not soulless, but big corporation.

Patty: Because look at how much time, money, effort, and pain you save people the more people you serve! I love when you said this morning “It's all about our customers”. Making it seamless for them.

Karoli: Making it feel almost like fun!

Patty: Which is really, really important. If that's everybody's job, then everybody can be a customer. We can all be users. 

Karoli: Yes. It's like not only the sales team is selling. In the same way not only the product team is building. 

Patty: And the cross-functional stuff has to matter. If you see patterns in the question, then that's a problem in the product.

Karoli: Yes!
So we talked about the IPO stage. To get to IPO you have to become a unicorn.
If you have to mix a potion for a company with the main ingredients that help build a unicorn, then what would you think the ingredients should be?

Patty: I think we've already talked about most of them. Right? 
This willingness to go forward all the time, to think about what's best, to make it better.
To be willing, at some point, to clean up all this stuff that sits in the code that everybody knows you should fix but you don't. 

Karoli: The engineers are all laughing right now.

Patty: I know. Been there, guys. Been there, done that.
I used to have on my screensaver a message that said “Do today what moves us furthest the fastest”. What I learned, over the years, about how to do that is to, every single day, take a look at everything we do, all the processes we have, and say: do we still have to?

Karoli: So basically it's kind of correlated to our “start with why”. Why are we here? Why am I doing this? Is this actually moving a needle?

Patty: And go one step further. Two steps further. 
One step further is: what if I didn't? What if I stop doing it? 
Would there be consequences and what would they be? That’s second. 
Then I could look at solving the problem the way you've looked at solving a problem that's been around forever. 

Karoli: It’s good to use our experience. 
It was super interesting to have this conversation. What I have been enjoying, this past year, is how actively you are taking part in our board. You are acting hands-on and thinking with us. It has been a turbulent year, but I believe that that’s a fertilizer for us taking the market next year. And throughout all those decisions, you have been such a support for us. 
Thank you for that, for not only being a superstar but being a hands-on superstar on our board.

Patty: I only have one speed, so that’s it. Thank you for having me. And swim on!

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