Full transcript: Former Netflix Chief Talent Officer Patty McCord on Recode Decode

On this episode of Recode Decode, hosted by Kara Swisher, Patty McCord sits in the red chair to talk about her new book, “Powerful.” As the head of human resources at Netflix, McCord was responsible for the company’s famous “culture deck” that outlined a business philosophy based on high-performing employees who behave like adults.

You can listen to the entire interview here or in the audio player below. We’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as someone who thinks Netflix’s “House of Cards” is too calm these days, but in my spare time I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcast, Spotify, Google Play Music, or wherever you listen to your podcast. Or just visit recode.net/podcast for more.

Today in the red chair is Patty McCord, the former chief talent officer at Netflix. She’s the author of a new book called, “Powerful: Building a Culture of Freedom and Responsibility.” It’s about how to fix human resources, motivate employees and run companies better. Patty, welcome to Recode Decode.

Patty McCord: Thank you, I’m glad to be here.

So, let’s just talk about, Netflix has been famous for its culture, and I want to go into your background and how you got there and stuff like that. But I want to underscore, Netflix is very well known for creating the culture that led to it, especially with Reed and the group of you who were very cohesive for a long time. When you say chief talent officer, you were head of human resources, that’s the new name for an old job, really. But it’s changed a lot, and it’s in the news all the time, and it’s turned out to be a critical part of every company. It’s at the heart of troubles at Uber and other companies, lack thereof, of human resource efforts.

I want to dive right into it, but I do want to get into your background, how you got there, and how the culture of Netflix was conceived.

Well, in terms of my background, I think what’s relevant, is I came out of recruiting. So, I’m not on the psychological side of human resources. People often say to me, no one’s ever called me touchy or feely. I don’t really care about it.

Not a good thing these days.

I don’t care about your feelings, it’s really ... I don’t want to counsel you about it. I always say, “Tell your mom, tell your pets.” Those are both good listeners. I’d probably want you to get back to work.

So, when you’re a recruiter, you matchmake, and you have this deep need to put together great teams that do amazing work. And so, as a recruiter, you don’t get all wigged out when somebody leaves, because it’s an opportunity to find somebody new. And you’re really interested in the work that people do, because you have to understand it to find great people.

So that’s who I am, and that’s how I approach the job. That’s how I met Reed. Reed was CEO of a small startup, Pure Software, when I met him, and he hired me, he told me later, only because I had the only skill that he thought mattered.

Which was?

I was a recruiter. None of that other stuff mattered.

Which has been there at the heart of Silicon Valley, is recruitment has been more focused on than culture, even though they talk about culture.

Yes, and I just did a talk yesterday about what recruitment is, and recruitment isn’t the act of finding somebody who fits a job description. It’s the deeper ... What I’m interested in is the deeper ability to put together great teams. They get something important done, and it’s not the job of HR anymore to be good at it, it’s the job of everybody in management to do it.

I always say the managers only have one job, put together great teams that do amazing work, on time, with quality. Done.

So easy.

It’s so easy. So, that’s my background, that’s how I came into it. And Reed and I worked together at Pure Software, which was acquired by Rational, which was acquired by IBM. And we were together about five years, and we did four mergers and acquisitions in that time. And so, every time we acquired a company, we doubled. I would take their employee handbook and our employee handbook and I’d mush them together, and figure out however many policies I could put out that would piss off the fewest amount of people, and that was my role. And when we sold the company, it was a fine Silicon Valley company, it wasn’t any different than any other.

What did they do?

We made software development tools for other software engineers. Like snap-on tools for geeks. So I was pretty deeply involved in the technology. The other thing that happened for me there was, it was just engineers.

That’s who you were recruiting.

That’s who I was working with every day. And in order to survive, I had to become one of them. I had to learn that their world is digital. It’s good or bad, it’s right or wrong, it’s black or white, it’s zero or one, and any nuance is bullshit. So there’s no gray, right? And I had to lose the HR-speak to get any respect from them. So when we sold the company — it was a fine company, it just wasn’t a great company — and we weren’t that sad about it. So when Reed called me to join Netflix, I thought that was a really terrible idea, and I didn’t want to do it.

I’d already done a startup with him, then I was consulting, so I had time. I knew what he was asking me to do, right? So, I said, “You called somebody who doesn’t know what you’re talking about here.” I thought that the idea of DVDs in the mail was just incredibly stupid. DVD players cost $800. He’s the only guy I knew that had one besides Marc Randolph, the co-founder, and I just wasn’t into it. I wasn’t going back to do that again, and then he said ... I’m like, “Tell me one compelling reason why I should do this with you?” And he said, “Let’s make the company we always dreamed of.” He’s good.

For somebody like me, I’m like, “Damn.” So the first thing he said was, “Let’s do a values exercise. Let’s take the executive team off, and talk about our values.” At that point, we were up to our ears in work and we didn’t have any money, and I’m like, “This is just an utter waste of time, and I don’t want to do it.” It’s the middle of the Enron scandal. “I don’t want to write down integrity and not act that way. You know what I’ll do, Reed, let’s write down if we see it, what it is. Behaviors, not values, not aspirational goals.”

So that was the first chapter of the “Netflix culture deck,” which happened to be a slide deck, because that’s how Reed liked to communicate at that point. And it would typically happen where he’d come up with a bunch of slides, and he and I would argue over them at one-on-ones, then we’d bring it back to our executive team, and we’d edit, and we’d mess with it, and then we’d take it back to the rest of the ... And we’d just roll things through and say, “What do you think about this, is it true?”

And the biggest thing that we did that was different this time was, we wrote it down. So that chapter on the behaviors that we value, we rewrote six times when I was there, and I’m sure they’re still working on ... Reed’s rewritten the whole thing as more of a booklet form now. So we just wrote stuff down, and then we started ...

What was the goal when you were doing this? Because you hadn’t done this at your previous company.

So, over time, once we realized the business was viable, that we might actually make it and that we were starting to see scale, and we got a team in of professional executives. We were starting to feel that pain and pressure that all startups feel about, while we’re a public company, we’re going to have to grow up. It’s time for some of those rules, it’s time for those processes. I remember our CFO sent me, “Oh, by the way, here’s our travel ... Attached is a travel policy, and the expense policy. I’m going to send it out this afternoon. Reed told me you had to look at it.”

Now, this was after we had written the part about high-performance employees and freedom. So that was when I was like, “Wait a minute. If I have adults, who are really smart and really capable, and we want them to operate in a high-performance way, why do they have to go ask somebody in finance about spending money? If they spend it foolishly, we’ll know. Why do they have to go through a third party to book travel to LA and ask permission?” It just didn’t make any sense anymore. And so this is typically how we did it

So, you would create values and then not live them, in other words?

I didn’t want to do that.

Yes, that’s what I mean.

Yes, the whole point was, that was my mission, “Let’s do what we say we’re going to do. Let’s talk about behaviors, let’s ...” Then that was a conversation that lasted quite a while, our executive staff about, “Well, of course you have to have travel, of course you have to have vacation policies, everybody does.” And that started the seed of my rebel HR world.

When we get audited, right, we’re public, we get audited. KPMG comes down there like, “Don’t like your travel policy, we don’t like your time-off policy, because it’s an honor systems and it all falls to the bottom line, and we’re basically paying people 13 months a year, we don’t like that.”

The SAICS people came in and said, “This is unacceptable, here are five examples of the acceptable vacation policies you can have.” And I had flexible time off, because I don’t care why you take it off. So then Reed came in one day and he said — and I was mad about that — and he said, “Do you have to have paid time off?” And I said, “Of course you do. Everybody’s got paid time off.” I am an HR vice president at that time. That person is on my right shoulder going, “Of course you have to, it’s best practices.” And then the person that hung around with him for eight or 10 years at this point, I said, “You mean legally? I don’t know.” I couldn’t find in California a statute, a law ...

That said you had to have paid time off.

... that said you had to give people paid time off. Exempt employees, salaried employees. So, we discussed just not having it.

And people took off when they want.

And people could take off when they want, but in order to that ... So, the addiction for me about how I changed my job, was I had to figure out, “Wow, that’s a great idea intellectually and conceptually. How is it really going to work?” So then I had to change the focus of the management role from keeping track of when people were at work, to keeping track of, was stuff getting done?

Right, which is the real focus.

Which is the real focus.

Right, there are a lot of rules.

And the real HR person in me says, “Have I ever really fired anybody for being tardy or absent at a quarter of a million dollar salary a year?” No.

You just know if they’re doing their job or not.

Yes, and sometimes they’re getting anything done, and they’re working all the time.

Yes, it was interesting. I have a similar point of view. Like when I was at Washington, they were always monitoring where you were, or different places. And I’d always be like, “I’m at the movies,” and they’d be like, “Well, you can’t do that.” I’m like, “Why? I got my story done, what do you care what I do with my other ...”

Kara, it’s so funny, because when I first did this, all the reporters that came and interviewed me were thinking they were going to get the big new Google scoop. And I remember one guy, I said to him, I’m like, “You’ve been hanging out with me all day, how do they know where you are? You could be at the beach.” Well, I’m like, “Because you’re going to write your story, and it’s going to be on time, and it’s going to be the right amount of words, and it’s going to be edited well, and that’s how they’re ...” It’s the same thing.

And I said to him, I said, “Do you ever go into the offices of the San Jose Mercury News?” And he turns bright red, and he goes, “Only occasionally.” I said, “What for?” And he said, “To fill out my vacation request form.”

Yes, right. Exactly. Although, we’ll talk about the downsides of that, too. So, you were trying to create a culture of adults, really, that’s what you’re talking about, people that have responsibility for themselves.

Upon reflection, since I’ve been gone a while, we already had a culture of adults. I wanted to create a culture where people acted like that.

Right, that they ...

And I started to realize that ... That’s why I named my book, “Powerful,” is that all this stuff about empowering people now, the reason we have to do it, is because we took it all away. People have power, so if you take away the rule or the process that says, “Let me do the thinking for you,” and say, “I hired you because you were a smart grownup person who’s interested in the problem we’re trying to solve, how about you do some of the thinking?”

So, it shifts. What happens is to shift the idea of the responsibility to the person. Like, “You are responsible for your job, and if you get it done, you can get it done any way you want.” I remember talking to Reed about this earlier, and I agreed with him. Really, I used to say it a lot to my employees, “I’m not your mommy, I got kids.” And I’m not even that strict that way. But it’s an interesting concept, because then it can be morphed into a really bad thing, like at Uber. Like when you don’t have adults.

That’s right.

And we’ll get to that in a second. So, you were there, working at this, creating this culture and this deck. So, the deck got very famous, this concept, and why do you think that ... If you could explain to people what the deck was. You just kept adding it on.

Yes, first of all, now when I go into a company, they slap down the deck and say, “We want to do this.” And I say, “Well, roll up your sleeves and let’s get started, because that’s 10 years worth of work.”

Right, right, you have to do your own thing.

In order to have high-performance employees, you had to figure out a way to find them, and then you had to figure out a way when you hired a high-performance employee to do an amazing job on a particular problem, and then they solve it.

What do you do then?

I tell HR people, I’m like, “You know how you hire somebody to do a job and then they do it, and then it’s done, now what?”

Right, exactly.

So, all of that ecosystem around that probably took four years.

Right, to get that.

And then, true story, we’re driving into work and Reed says, “Hey, I met this woman last night who’s CEO of this really cool company that’s putting PowerPoint slides online. And I said, “Wow, that’s a great idea. Wonder what somebody’s going to put out there.” And he said, “I put the deck out this morning.” Like, “You did what?” “What’s wrong with that?”

It was our onboarding tool. We went through it, Reed and I would sit down with people and go through it. And I said, “Well, first of all, it’s just hideous looking, graphically.” You had the little arrows, and the fonts aren’t even the same, and it’s not even written in the same voice. “And second of all, you’re going to scare away all of my candidates.” And he said, “But only the ones we don’t want.”

Once again, Reed, well done. Well played.

It was just to give you a chance to prepare for coming to talk to us, and be realistic with you about what life was going to be like when you got there, and it changed the way we interviewed almost instantly.

Almost instantly.

And the interviews got instantly better.

Because people understood.

Now ... People understood, or they didn’t at all. Or they would say, “This sounds crazy, do you mean I never can take a vacation?” And, “It sounds so cruel and heartless, give me an example of how you guys actually operate.” And it changed my role, although I still interviewed everybody at that point. A lot of times in my interview, I would say, “You know, Kara, I don’t think we’re the right place for you. You’d be a lot happier at Apple.”

Right, where they tell you what to do.

Yes, or just, “You know, at this time in your life, structure might be better for you. So, stay in touch, and when life is different, call me back.” And so it started that, having really honest conversations with people, and what struck people was not that there was any brilliant innovation in the culture deck, because it’s really, it’s just true.

All right, we’re talking to Patty McCord. She’s the former chief talent officer at Netflix, very famous for its cultural handbook, I guess, essentially. She’s the author of a new book called “Powerful: Building a Culture of Freedom and Responsibility” about how to fix human resources, motivate employees and run companies better. We’re going to talk about that, what she’s gleaned out of it and what’s happened in Silicon Valley, because there’s been a lot of, sort of, traffic accidents in Silicon Valley, a lot of which is around HR, when we get back.

Today’s show is brought to you by Audible. Audiobooks are great for helping you be a better you, whether you want to feel healthier, get motivated or learn something new. Patty, what books should I read to get better at something?

I get asked this question a lot, and I was just thinking, I think I want to read “Lean in” again.

Interesting, that would be a good ...

Because, I remember how shocked I was. I’ve been doing this forever, I was affirmative action officer at Sun Microsystems in the 80s, and we celebrated our diversity up one side and down the other. And when I read, “Lean in,” I was just dumbfounded, because I knew the data, and it was worse.

Yes, absolutely. All right, “Lean in,” that’s a great idea.

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We’re here with Patty McCord. She was the former chief talent officer at Netflix, which was famous for its culture and the way it handled employees. We’ve been talking about how that was formulated, but she’s the author of a new book called “Powerful: Building a Culture of Freedom and Responsibility.”

Now, you just talked about “Powerful,” the idea that people didn’t have power, and you took away ... People take away their power by giving them a set of rules that everyone follows, and you all removed that and treated people like they could handle themselves. But let’s talk about guidelines, because the concept, it sort of got mutated in Silicon valley, where HR is mostly interested in recruiting and not much else. And so, rules get abrogated, and they can be violated pretty quickly, and not just rules, but behaviors can turn toxic. Can you talk about that? If you’re giving people all this freedom, you’re giving people all this freedom, and freedom to fuck up, really, pretty much.

Yes, you can’t tolerate fucking up.

Right.

And you don’t need a rule to do that.

Sure, but what happens when you have this idea of not having rules?

You have to see what the right behavior is. It’s one of the things that I find ... I’ve been gone six years, so I’ve spent a lot of time ... I used to tell somebody, “You know, Brannan’s my street, I don’t work other than Brannan.” But I’ve expanded. People can’t be what they can’t see, and if they see their leadership acting like drunken frat boys then everybody, men and women, are going to say, “Okay, I get that culture. It’s called drunken frat boy.”

They have to see adult behavior, and not just HR teams. HR teams should hold leadership and themselves accountable for living their truth. And so, HR people are in the unique position of saying, “This person is not doing it, it’s not going to work out, they have to go.” And figuring out a way to make that happen. And it’s very often the people that get away with the worst behavior can be someone who’s a very high performer.

Well, that’s it. I think it was Arianna [Huffington] that said, “The high-performing jerks.” I think at Uber that was tolerated, because the high performing was more important than jerks.

Yes, but you’ve got to follow the thread all the way back to follow the money. You write somebody a billion dollar check and they figure they’re pretty goddamn awesome, right? And so the people that are writing the checks have some culpability here too, right? You think.

Right, trust me, enablers is my favorite word of the people. Some of the people who now are horrified that gambling was going on there, I’m like, “You gave them the money. And the reason your children have no teeth is because you fed them the sugar.”

And you said, grow, grow, grow, grow, growth at all cost, growth at all cost, growth at all cost. And when there’s no consequence to anything and the funds are endless, then you have a license to do whatever it takes.

Right. So there are some rules then. What are they? Because one of the things ... I only focus on Uber, because that’s the quintessence of this kind of behavior, which is getting corrected. But when Dara, the CEO, came in, and we had dinner, and he called me, he’s an adult, he called me immediately and said, “Let’s have dinner,” because I obviously had written a lot about it, which I thought was smart. It’s smart to kiss up to press. There’s all kinds of reasons why he’d call me. And he goes, “What do you think the biggest problem I have is?” I said, “You’re a healthy adult person.” I said, “That’s your problem. You don’t see toxicity because you don’t behave that way. And so, it doesn’t occur to you that others are like that. And so you’ll be surprised almost constantly.”

And later he said, “Oh my God, you’re [right] ...” I was like, “I always see toxicity. I always assume ...”

It’s a funny thing, one of my executives said to me one time, “Well, you know, you have this gift, you have this incredible intuition. You’re a diva in that way,” and I really just wanted to leave it at that, because he hadn’t said anything nice about me in a thousand years. And he goes, “I just don’t know how you do it, but you’ll find somebody in an interview and say, ‘This isn’t going to work out. You’re the boss, you hire them, but I’m just telling you.’” And he said, “100 percent of the time you’re right.”

And I said, “I really want to go with that ‘I’m a diva’ part, but the truth is, we both have the same gift, and it’s called pattern recognition. And you do it with numerals and I do it with people.” And when you pay attention, you will realize. So, there’s two parts to it. One of them is you’ve got to be an adult, moral, grounded, thoughtful leader in order to surround yourself with other people like that. You just have to do that, and then other people on the team, not just HR, but other people on the team must have a role where they say, “I need to tell you what I see.”

The Netflix culture, that thing about radical honesty was really about ... Reed and I, a lot, in the beginning, teaching other people how to say, “No, that’s not okay to behave that way. And the consequences are, you’re going to have to work somewhere else.”

Why does that ... Why do people ... because people like rules? Or is it just ... You’re saying a lot of, “That’s the way we do it.” And I think very strong people say, “Well, why do we do it that way?” Like, “Why is it done this way? Why do we pick this choice?” And people just tend to rely on, well, because everybody does.

Well, I think the pendulum swung ... We’re in the middle of another crazy swing, but particularly around here, before all of this blew up, remember the mantra was, “Happy, happy employees.” So if they didn’t have seven kinds of craft beer then they might leave for a company that had eight. God only knows, we would lose our ... I remember an HR person telling me, “They’re going to walk out the door and they’re going to go to a company with a better bartender and more money.” I’m like, “Seriously? Then you say goodbye.”

Exactly.

If you’re leaving for a bartender? Like, “Okay.” But to counter the “everybody’s happy all the time,” then you can pull out that quiet little handbook that has the rules in it, and now you’ve covered both your bases.

Right. I see, that’s right.

And the thing about holding people accountable for real-world adult behavior is that it’s not easy, and it’s not happy.

So how do ... In the book, you talk about a range of things. Let’s talk about what creates a powerful culture and a happy culture. Because you obviously want a happy culture, and I agree with you, I think the seven kinds of craft beer creates a really indulged teenager, like a toddler, almost. Like, “Here, take the sugar, take the sugar, take the sugar,” and it also is kind of ridiculous on some level. You know what I mean? I’ll never forget going to Excite@Home, it was Excite at the time, and they had a slide. You remember the slides, the whole slide era?

I remember going there and they had a Porsche in the lobby, because that was the employee referral giveaway, was that you went into a lottery to win the Porsche. I’m like ...

In any case, the slide was what riveted me. And the garage door, “We started a garage. Here’s the garage door.” I’m like, “That’s fucking ridiculous.” Like, “Okay, I see your ridiculous attempt to being ironic.” So we were on the second floor and they said, “Go down the slide,” and I go, “No, no thank you.” And they’re like, “Go down the slide, everybody does.” I go, “Well, I don’t. I don’t like slides, I never liked them when I was 8, and I’m certainly, I’m certain here at 40 I’m not going to like the slide. I’m not doing your fucking slide.”

And it became a thing, like, “Everyone has fun here.” I’m like, “I’m not fun.” Like, “I don’t know what to tell you,” and it was a really interesting way they were building cultures back then. Google had the bouncing balls that you ... I’m like, “Where’s the chair?” They’re like, “Sit on the ball.” I’m like, “I’m not sitting on your exercise ball, get me a chair.” And it was like it was a constant, it was a really interesting mentality. And parts of me liked that concept of ... Some of it I liked, some of the freedom, I did, but it was almost ... A lot of it, I didn’t. A lot of it I thought, “Well, this is just ridiculous, this is silly.”

But tell me, what does make a powerful culture? Because everyone, to me it seems like you should respond to the people you are. So Oracle should be different than Google, should be different than Microsoft.

Right, there’s so many ways to play with this, but I’ll ... If you go to any company and you ask five really successful people in that company about something that they did at work that they’re proud of, that was meaningful, that sticks with them, that’s going to matter in their career, always the answer is going to be something hard. “We didn’t think we could pull that off and we did.” Or like, “It was so scary, because nobody in the world had ever done that before and we did.” Or, “We didn’t think we had the right person, and the right person showed up with the right ... We changed our minds.” It’s always hard.

And I think deeply, I deeply believe this, that what’s fun at work is getting great stuff done with a team of people that you respect. And so, that’s why the personalities can be different. If you think about ... One of the beautiful things I love about tech and the internet and the world that we’re in — as opposed to the world I joined when I was in HR at Sun Microsystems, I had no clue what that stuff was — but internet companies, there’s a customer, and you’re often a customer of your own product. And so that connection between the work that you do and the people that use that product or service that you provide is very, very close now.

Is very close.

And so, when you can be selfless and say, “What’s going to make me happy is that my customer is happy. What’s going to make me happy is that my company does well. What’s going to make me happy is that I’m proud of the work that I’m doing,” then that’s a whole different definition of happiness. I’m not saying I haven’t had fun at work. I’ve had plenty of fun at work, and I’ve thrown lots of great parties, usually, to celebrate an accomplishment.

That’s where the fun and happy get, it’s like culture, when people telling me, “How do I have a great culture?” and I say, “Well, what is it to you? Is it the bartender? Is it the musical instrument corner where everybody jams?” You and I, we’ve seen this crazy stuff. “They’re pouring a mean oaky chardonnay this afternoon, you’re going to have to stick around for that.” And I’m like, “It’s 2 o’clock in the afternoon.”

I’m also ... I’m always like, I used to, I wandered around at Vox when they had liquor in the refrigerator. I’m like, “So that’s the sexual-harassment-to-come refrigerator?”

Right, it should just have a label on it, “Open for sexual harassment.”

I was like, “You have young people and lots of liquor. Wow, that’s going to end well. I’m pretty certain it’s not.”

So that’s where happiness ... and we can go lots of places with this. I think another thing that changed me profoundly, was when I, partly because of my recruiting background, said, “You know what makes ... What if we were a great company to be from?”

Wow, that’s interesting. Blowing my mind here, Patty.

“What if that was what I wanted to create?” I told that to Reed early. “What if it meant something that you had Netflix on your resume?” Like how you stand back and go, “Oh, you were at Apple.” Or, “Oh, you were early Google.” What if Netflix was like that? And when I started thinking that could be an operating principle for me, the world ...

So how does that manifest itself?

You put the right people on the right teams, to do great stuff that they’re proud of. And because I had recruited, because I had hired so many people, I know that’s what makes our career, especially in tech.

So, how do you find the high performing people? How do you ... Are there ...

My standing joke is there’s an island that I only know about. All the A players are there, and so, I go in the stealth of night. You start ...

But how do you find ... You say, I like that you’re using As and Bs, because I always say, if you have a B and C around, you’re in big ... Google was all As, supposedly, and then ...

People don’t get graded like that. My A player is your D player. I can send you over a qualified software engineer, they’re not going to do you a damn bit a good. It starts ... It’s a different mentality. So, if you start with a problem, not the person.

I see, so the task.

The task. Yes, not even the task, but more of the, “What are we trying to solve for? What would be, if the world was infinitesimally better in six months” — I use the six-month timeframe because that seems to be reasonable — “and the team was just knocking it out of the park and everybody was standing back like, ‘Yes!’ What would that look like?” And when you start with that, you work your way backwards.

I have a very clear methodology, six months out, give me your metrics, give me all your data, what you want to get to, what’s going to be different, and then make a movie of it. Are people having knockdown dragout fights, and somebody’s [wounded], and we’re making a decision and we’re moving? Or is everybody heads down and working quietly? Or is somebody standing up and going over to marketing going, “What the hell?” Instead of going, “Those marketing people.”

What’s that behavior? What’s it look like? And then you drop down and say, “Okay, in order for that to occur, what would people need to know how to do?” “Well, I might need to be able to have an argument and win, or an argument and lose,” right? “I might need to understand cross-functionality better, I might need to be really detail oriented.”

So how do you find for that?

So then you drop down and say, “What kind of skills and experience would it take for somebody to know how to do that in order to accomplish that?” And then you look at the team you have and see what the deltas are.

Right.

Now, two things can happen when you look at that. One of them is — maybe three — “I already have somebody who’d be great at this. Maybe I don’t need to hire somebody new.” Two may be, “Wow, I don’t have anybody on the team that has this experience at all. And not only that, particularly on issues of scale, we’ve only seen five times this. We need somebody who’s seen 500 times.” That’s a really different person. Or you look at the team and go, “Oh, shit.”

“We’ve got nobody.”

“It’s the wrong team.”

Right.

“They’re great people, we wouldn’t be here today without them, literally.” That’s what I always tell people when they come in and they want me to say goodbye to somebody, and they tell me how much they hate them and how incompetent they are, I’m like, “Who’s the boss? Who allowed this incompetent behavior?” And typically, it’s not somebody suddenly becomes incompetent, because you didn’t hire them because they were incompetent. And if you did, you lose, you’re a terrible manager. But the world changes and it’s not the right team.

That’s often the case, I noticed, and I remember thinking there were people who survive, there were all these moments of like ... It’s almost like climbing Everest. The crevasse, “Oh, you’re down. You need to be pushed into the crevasse, because ...” And with a lot of the unsuccessful ones, is they kept those people and dragged them up the fucking hill. I remember thinking, “This person had these skills to get to here,” because a lot of it was about owing people and feeling emotionally connected to them.

Still is.

And thanking them.

Still is, happens all the time.

And some people make it, it’s a really interesting thing. Including amongst CEOs. I remember Pierre Omidyar when he quit, and he said to me, he’s like, “I can’t do this.” And he knew it. He was an adult, now unusual, most of these guys think they can do it, and they can’t. You don’t get a lot of Jeff Bezos and Bill Gates, really, that can take it to the next level. They all think they can, even though most of them can’t, I would say. Or many of them can’t.

Well, it’s the teams they surround themselves with, first of all. I remember Julia Hart, five/six years ago saying to me, “Are you telling me ... Like, what if I put my heart and soul into these people and seven/eight years later we’re successful and they’re going to leave me?” And I’m like, “You want a whole company full of people who’ve only ever worked here?” If you’re really successful, some of them might work out, but not everybody. And so, that’s back to my core of, “Be a great place to be from.” Because then I can say, “Kara, you’re amazing, thank you for everything you’ve accomplished. Let’s figure out how you’ll leverage that, that drive.”

For example, early-stage startups hire people who don’t know much and love building, and some people get addicted to that stuff, and do it over and over and over again.

Right, and they like it.

And the issue is, that for a lot of products, when you build it, it’s done.

And so then what do you do? How do you then get people out of a company, to do that? It’s usually done in a really horrible way.

I hate it.

You know what I mean?

It’s another whole segment we can do on firing.

Well, I want to, I want to talk about it. But it’s like, usually they don’t do it right. It’s always ugly, it’s always ...

Yes, there’s a lot of this in my book about how to be respectful and honest and straightforward with people. The two rules I had for termination were, you couldn’t be surprised, and you had to keep your dignity. And so, in the exercise I just gave you ...

The person who’s being fired couldn’t be surprised?

That’s right.

Right, okay. You shouldn’t be surprised.

Couldn’t.

Couldn’t.

So, I would say, when you’d come in and say, “I’ve had it with this guy, he’s out of here. You know how frustrated I am, I’ve told him over and over, ‘One more time, and you’re out of here.’” Okay, and I would say, “Great, why don’t you wait here, I’m going to ask him how his doing.” And he’d be like, “Well, that one-on-one was October.”

Yes, they don’t tell them. Right, so they didn’t tell them.

And then I go ask, and the person says to me, “Every six months, she gets her knickers in a wad and she yells at me, and tells me I’m not communicating, or whatever the hell it is she needs, and I cry. So, she gets all done, and then I just go hide for six months until it happens again. It’s been like this for six years.” And the person has no clue, no clue.

So, in the exercise that I just gave you, I can come back and say, “I’ve got some news that we need to talk about. I started looking at what we’re going to do six months out and I don’t see you in it. And man, I don’t want you to leave mad. And I wish you didn’t have to leave, let’s see if there’s somebody, someplace else in the company where your skills are really necessary. But if they’re not, then let’s figure out a way for you to leverage what you learned here, what you’ve got here, so you can get a great new job somewhere else, and make this contribution at your next level.”

People never like to have that conversation.

No, but they don’t know how. It’s all part of a whole system that I’m advocating. They don’t have that conversation because they don’t know how. And the reason they don’t know how is that they think that feedback means negative, constructive criticism. And it’s hard. And you know why it’s hard? Because when you only do it once a year in the annual performance review, what else in your life do you do once a year that you’re good at? Nothing.

Right.

But if I’m talking about this kind of stuff as part of our regular conversation, I can say after the meeting, “What the hell went on in there? This is not ... You didn’t even speak up when the issue that you have been burning my left ear off for the last three months came up for a discussion.”

Lots of people don’t like conflict.

Yes. I’m like, “You didn’t even open your mouth. So, guess what, you don’t ever tell me you don’t get heard, because you don’t get heard if you don’t speak.”

Better, would be in the meeting to say, “Kara, about your opinion about this that I’ve been hearing about for six months, you want to tell the rest of the folks what you’ve been telling me?” And then you do, and you don’t die, and maybe people at the table say, “God, she’s a bit ... But she’s right.”

Right, a 100 percent. What was interesting, though, is sometimes the manager, some people, you say it and they still don’t listen. I had this conversation yesterday about something else, and another manager would be like, “Well, I don’t think you’re being clear.” I’m like, “Here, here’s the email, it’s quite clear.” They just don’t hear it. You know what I mean? It couldn’t be clearer. And then they’re like, “You really did.” I’m like, “I really did.” And it doesn’t matter. And then they complain about the thing. It’s really fascinating.

Well, there’s a couple ways to deal with that. One of them is patience, because if you’re right, you’ll be right. And the other thing is, we’re not clear about consequences.

What will happen if ... Right.

Like, if you keep venting to everybody else and not speaking up when a decision is made, then you’re going to have a reputation for somebody who just complains and has no solution.

Right, exactly.

Problem finders are cheap. You find one of those every day, and engineers love this, the cynicism of ... The conspiracy theory of “management’s got their heads up their ass,” or whatever it is. So you have to teach them how to think about it. “Oh, okay, if you were in management, what would you do?” Question one. Question two is way more important, “If you’re in management, what information would you need to make the right decision about this?”

Yes, that’s true.

And when you’re in management ... I consulted to a startup where the CEO said to me, “You know, we believe in mistakes like you do, we think mistakes are really important. Every time somebody in my company makes a mistake, I give them a bottle of champagne.” I’m like, “Well, that’s fucking stupid.” That’s such a Silicon Valley thing.

Let me just tell you, here at Recode, we don’t like mistakes, and people pay the price. They get no ... They get hit with a bottle of champagne.

It’s just crazy stuff. And so, he says, “Well, and I’m really good about standing up in the company and telling them when I made a mistake.” And I said, “Okay, that’s great, but you’ve got to be humble, and you have to say, ‘I made a mistake. When I made that decision, here’s what I knew. Now that I’ve realized it was a bad decision, here’s what I know now, that I didn’t know then.’”

My mom — I’m Texan — my mama says, “You know, honey, the difference between a wise man and a fool is the wise man doesn’t make the same mistake twice.”

Yes, exactly. That’s right.

So, that’s where ...

Yes, it’s not a celebration of mistakes. I think what they’re trying to communicate is that failure is not the ... They love that Thomas Edison quote, they like to throw that back at you. And what’s interesting about it is that mistakes aren’t good, they just aren’t, but tolerance of mistakes and then moving on from them.

And it’s an early company, it’s a very startup phenomenon. Startups are all dumb ideas, because if they were an obvious idea, somebody else was already doing it. So, just, by their nature, they’re dumb. And how you figure stuff out when you’re making stuff up is your whiteboard’s full of, like, “Not that, not that.” But if you don’t try it, you don’t know.

Right, that’s what it’s getting to, which is a very good thing.

And that’s what it’s getting to, and that’s healthy, too, but you got to ... The other thing that I will say that was fun at Netflix was so many times when we would say, “No, no, no, we tried that and it didn’t work,” somebody new would say, “Yes, but it will now.”

Right.

And we realized, “Damn it, they were right.”

They were right. Just the other day, I had a thing like that before, like, “So what if it didn’t work before?”

Because at scale, it’s a different ...

Exactly.

Especially like, Netflix was a great example. I would sit at tech meetings and they’d be like, “Well, early adopters ...” I’m like, “You’re all members, we don’t care what you want anymore. We care what my mom wants.”

I think what’s interesting about that, someone the other day, they were ... In journalism, it’s like when someone breaks a story, a reporter will always go, “Oh, I knew that.” And I’m like, “Fucking lot of good that does me. What are you telling me, that you’re smart? I think you’re an idiot now, because you didn’t put it on the site.” But that’s a very similar thing, “I knew that, I was aware of that.”

Somebody asked me one time what I’d fire you for, and I’m like, “Good question.” They asked me in the interview, and I’m like, “Sexual harassment, breaching confidentiality, punching me in the nose ... Oh, I know what I’d fire you for: I would fire you if we were in a meeting talking about something that went wrong and you said, ‘I knew that but nobody asked me.’” I’m like, “I’d have run you over in the parking lot.”

Very good. On that note, we’re going to go to the next section. Patty McCord is here, she’s a former chief talent officer at Netflix. She’s the author of a new book called “Powerful: Building a Culture of Freedom and Responsibility.” When we get back we’re going to talk about one of the key tenets of doing that, and I also want to ask about cohesion, which you will find out what I mean when we get back.

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We’re here with Patty McCord, she was the chief talent officer at Netflix. She has a new book called “Powerful,” which is about building company cultures. Before we get to this last section we’re talking about, what does that? What do you think? Because I do think there are some hard-and-fast rules, but not a whole lot, essentially. But one of the things I was thinking about today is cohesion. Of all the companies — I’ve covered all of them — when I think about what they have in common, it’s the cohesion of the staff, even if they don’t like each other. It doesn’t have to be people who like each other. Google was a very ... Its early stages was a very cohesive group of people. I cannot say they all liked each other, they were rather mean to each other, more than most. But it was cohesive as a group of people, which I thought was important.

Facebook is absolutely cohesive, and they actually seem to like each other, too. It’s a very cohesive and friendly, friend culture. I see a downside to that, too, is that when you have a cohesive culture, you have that, “We did that.” You have a lot of people giving each other a pass, you have a lot of ... no new ideas. And I was talking to someone at Facebook about this, and they’re like, “We’ve been together 10.” I forget who it was. They’re, “Isn’t that great?” I’m like, “No, that’s not great. Maybe it was, but now it’s not, because there’s nobody ... Everyone knows everyone’s role — like in high school — and nobody breaks out of it.”

I said, “You need a really irritating person there to say, ‘What?’ ‘Huh?’” Like, “You need to hire ...” And they’re like, “Do you want to work for us?” I’m like, “No, no. That’s not my point. My point is that if you don’t introduce new irritants into the culture, and it doesn’t have to be an irritating person, but it’s a problem.” And I think that’s where companies die, is when there’s not ... There’s too much cohesion. So I’m just curious of what you think about that. You may think I’m crazy, but I’m not.

I don’t think you’re crazy. I think ... Well, a little bit, but not completely. If you start with the business itself, and know that successful businesses evolve ...

Change.

... they have to. I remember an engineer early on when we were a 100 people, said something like, “I don’t think management understands that things are really different, and they’re not like they used to be, and we don’t all know each other.”

Not like they used to be.

I call that the nostalgia factor. Now when I coach small companies I’m like, “Watch out for that, that’s the first sign.” I said, “Well, you’ve told me this seven times, and I’m a vice president, reporting to the CEO. So, management is aware, let’s strike that out of the sentence. I’ve talked to Reed about it five times, I’ve talked to you about it seven. So, okay, awareness is there.”

And I said, “Do you know why things are changing?” (in a panicked voice) “Why???” I’m like, “Because we’re successful.”

(laughing) Your voice.

“Do you know what we want to be when we grow up?” “What?” I’m like, “A global corporation.”

Right. Yes, yes. “Well, what do you mean? I thought it was going to be this small group of people for all the years.”

Yes, this small group of people. So I think part of what brings cohesion is purpose, and what the business is trying to do, and then where on disruption and the irritants are really necessary, is when the business morphs. So when things change, then those assumptions don’t serve you very well, because you think you’ve solved all the problems and you know the answers to all of them, and it’s not true.

And you stick with the business that brung you. You dance with the date that brung you. You know what I mean.

Yes. I learned that by being at Netflix. I always tell people I’m a serial entrepreneur, and I really love startups, and the beautiful thing about Netflix for me was — I got three — and I didn’t leave home. The first one was, “Could we come up with a business model that might actually traject past the money that we raised?” And man, it was close. The second was DVD by mail, right? How could we make ...

And then you shifted.

Then we shifted to streaming, and I left right at the cusp of original programing and global expansion, and they’re all distinctly different companies, at distinctly different times.

I remember when Reed shifted to streaming and everyone was giving you ... And I was like, “No, no, no, this is exactly right. I like him for doing this.” You know what I mean? Like, “Good for him.” But he took it, it was an interesting moment when he did that.

It was an interesting moment to live it, too.

Yes, I bet. Because he was right.

But how we had cohesion around that was we talked about it, and we talked about it honestly, and we talked about it openly, and it was incredibly painful as we started to realize that the DVD by mail business didn’t need to be innovated anymore.

Do you have to talk honestly all the time to people? It’s an interesting question, because I remember when we sold to Vox after just a year. I just decided we had to, because of lots of reason. Because there was lots of funding from competitors, they were starting to try to poach our employees at enormous salaries that we just couldn’t, because we weren’t sustainable. And I remember someone saying, “Well, we’re doing this, and now we’re doing this.” I’m like, “Yes, we’re just doing this, we’re just shifting. I just think we have to.” And I remember thinking, if I had asked everyone’s opinion, we wouldn’t have done it. It was an interesting ... You know what I mean?

Yes, you’re using honesty in a couple of different ways there, right? So when you are deciding something and it is up to the executive team or the leadership team to make the decision and you’re going to make the decision, you must say, “Here’s the decision we’re going to make, happy to take input. In the end, we’re going to make the decision.” Now, I’ve worked with companies who explicitly say, “We’re going to be a consensus-driven organization and everybody’s going to have input.”

Right, that’s what I mean. So what ...

And then I say, “That’s wonderful, that’s a really utopian ideal, and it doesn’t move very fast, and it doesn’t get much done.”

It also creates, I think, this is just me, that it creates a culture of unhappiness if they don’t do your ... If you don’t listen to their input.

You always grow out of it if you’re successful.

Right. No, I get that. I get that, but it’s really interesting, because then people feel like they aren’t heard. I’m like, “No, I listen to you, I just don’t agree with you.”

Well, and, “There’s some things I don’t need to hear you about.”

Right, exactly.

But if I’m making a change about a technical platform, then you really ...

“None of your beeswax.”

It’s none of your beeswax, right. But to have cohesion, you have to trust the other people that they’re doing the right thing and they’re thinking the right thing and they’re doing it for the right reason.

And speaking up, and ...

I would say, the difference in nuance for me in your comment about honesty, there’s a part of the respect that goes with honesty that says, “I guess I’m just going to leave it to you to decide, because this is your thing, and I’m going to trust that you’re going to make the right decision.”

I get that. I get that. It’s interesting. It was a question of, I think you’re always thinking about how much stuff you should say and how much you shouldn’t.

So, like I’m saying, when you’re in the middle of the decision-making process, once the input phase is over and now you’re arguing and deciding, then it’s nobody’s business until you’ve decided.

But it is a Silicon Valley thing where everyone does get a say, which is interesting. Again, I remember sitting in another company and someone put up their hand, and I think it was someone who just shouldn’t have been saying anything. And I was like ... And they’re like, “Well, we listen to everyone.” I’m like, “Why? Why are you listening to that guy?”

I remember this, too.

Do you like that? Or do you think ...

This was my role in the company. My role in a company was to say, “I know that you’ve been trying to get noticed, and I noticed that in a large company meeting you raised your hand and you questioned whether or not our head of product had done the math. PhD in math.” He was like, “Yes, I thought you’d be proud of me for standing up.” I’m like ...

“Why would you ask such a stupid question?”

“You didn’t do yourself any favors there, buddy.”

So, when you have ... The reason, because they weren’t thinking of the James Damore thing. Google was ... They had the radical TGIFs where you could insult ... and they would go down to like, “I didn’t like the ...” It was often kombucha-related, or something like, “I didn’t like whatever fantastic thing you got. It wasn’t quite right, my fantastic lunch.”

Yes, I have these all the time.

But it would be everything. And so they would tolerate and encourage it, and then they moved on to boards and more boards. They have so many boards there, and that’s where the James Damore thing popped up. And then, which I think was a shock to everyone, they’re like, “Yes, you can’t say that, you’re fired.” Which I think a lot of people internally were like, “Wait, I thought we could say anything.” And it was like, “You could, just, there are consequences,” which I thought was interesting. And so, they had missed the part of a consequence part.

Well, A) if somebody asked me, “Would you have fired them?” I’m like, “Hell yes.” But hopefully, I wouldn’t have hired him, because I’m telling you, he was exactly who he is in the interview.

I agree. Right, exactly.

So, some of it is that tolerance for the brilliant asshole, and I don’t know if this guy was brilliant or not, but he certainly has an asshole behavior. And that’s the, “If you can’t see it, you can’t be it.” If people don’t see people acting decently and respectfully with each other ...

Why did that get so much attention, the firing? The minute, I was like, “You got to fire him.” I remembering arguing with Google, but then like, “I don’t know.” Because I called them up and I said I’ll be writing about his firing. And they’re like, “Well, we don’t know.” And I’m like, “Oh no, you’re going to fire him, you have to.”

You have to fire him.

You have to fire him, what are you talking about? I’m like, “I’m typing it right now,” and they’re like, “Whoa.” I’m like, “No, you’re firing that guy, this is where ... I know where the story’s going to end, I’m just waiting for you to get there.” And it was an interesting thing, though. A lot of people in Google found that problematic. It was touch and go with the top executives there.

It’s human nature.

Because other companies certainly don’t tolerate it elsewhere in the country. Here they do.

Well, that’s the myth of “the engineer gets an input on everything,” and that’s what makes them happy.

So, finishing up, I want to talk about what impact has this sort of mentality of Silicon Valley, which is everyone gets to talk, it’s a flat culture, although it sometimes isn’t. It’s a fake news flat culture. It’s everyone is happy, everyone gets what they want, it’s a very indulgent culture. Google, I think, really did lead the way on a lot of things, but a 100 percent, they changed the way people ... Some of which I thought was great. Like the 20 percent, the rethinking. I remember experimenting with quonset huts and how people work physically, which I thought was great. The bicycles, all these ideas was one innovation after next. Some of which worked, some of which didn’t.

Have they changed culture, or does culture snap back? Because I’m trying to get to the idea of what makes the powerful culture? Is it that indulgence, or is it ... Because where is the workplace culture going?

I don’t think it’s the indulgence at all. I just don’t. I’m a business person first, and then this other culture stuff later. And so, to me, it’s like it doesn’t matter if everybody’s happy, and you’re not getting anything done and you’re not successful. In the end, it always plays out. And part of the reason Google had such an impact with their culture is they had such an impact with their product. And so, the association ...

Was that related, the culture?

There was an association with it. I remember Reed asked me one time. Early on, we had just gone public. He’s like, “I need you to be a professional HR person and do a best practices survey on stock options in Silicon Valley,” and as I’m going through my slide deck, I’m explaining RCUs and he says, “This can’t possibly be as complicated as you’re making it.” And I’m like, “Dude, I haven’t even gotten to the taxes.” And he goes, “What is this?” And I’m like, “Well, the SEC got wind that we’ve been putting money out here, and they’d like us to do something different.” And he said, “Well, who does this?” And I said, “Everybody.” He’s like, “Why?” And I said, “Well, HR people are sheep, and Google does it, and we call it best practices.” And he said, “What did we do before Google?” I’m like, “Whatever Microsoft did.”

Right.

So, some of it is a correlation between ...

Yes, right. They look successful, let’s follow them.

And the influx of younger workers into the system, too, it’s an interesting thing. Now, when I come in and people are, “Thank God we probably washed through the millennial story now, because I’m so sick of it.” It’s like, “Really? They’re twenty-something, what do they want? Everything. When do they want it? Now. Just like you did.” Okay, and you know what” I said, “And my son’s 30.” And I’m like, “So, what are we going to call you? Like a thirlennial.

“Thirtysomething,” remember that show?

Yes, I do.

They were so dissatisfied, those handsome people.

But he’s getting married, and he’s grown up, because he’s 30 and he’s not 20 anymore. So ... What were we talking about?

I was talking about the impact, has the Google mentality infected other ...

I think it, I’ve been in Silicon Valley for 30 years, it changes.

It’s a changed workplace at large across the country.

I do think so. I do think that ... Here’s what I think has profoundly changed: Collaboration. That, back in the day, your engineering team delivered a product to marketing — to market, to sales — to sell. And they were distinctly different organizations that had their own behavior sets and their own set of rules. Don’t even get me started about sales cultures, right? But I don’t think ... Every company I talk to now delivers their products to their customers collaboratively. You a rarely have a, “Let’s talk about how we’re going to solve this problem,” and somebody from marketing, and somebody from sales, and somebody from engineering, and somebody from product.

It’s people from cross-disciplines are together now, and it’s partly because we’re more networked. Social networking helps us, and we can collaboratively work and be more informative with each other. We’re the top stand on hierarchies, like, “I know something you don’t know.”

“I’m gatekeeper.”

And the farther I go into the pyramid, then the more information I have, which means, the flatter the pyramid, the more the people at the bottom are expected to not be able to handle it. Okay, here’s a great example: Open compensation.

What’s that?

Like, should we tell people’s salaries? Should we post people’s salaries? And my theory is, you should be able to explain why you’re paid what you’re paid. If it’s like, “We’re cheap,” then say, “We’re cheap.” Or if it’s like, “This person makes more because they’re worth more in the market,” it’s a market based system.

I think what happens is, you realize that none of it is organized and it’s often judgment.

Judgment, just a judgment call.

Yes, always has been. A bad judgment call, some of the time.

Lots of times, and we can do that one too. But I remember saying to the exec team, “I think we should be able to share compensation.” “We can’t do that. No, we can’t do that. People would freak out. They would flip out, it’s so emotional. It’s very personal information, you wouldn’t share.” I’m like, “So, first of all, they share it anyway.” Just in case you think that just when you got promoted you stopped sharing, you didn’t. We all see it. But we can handle it, because we’re executives, and we’re smarter, and we’re selfless, because we’re mature, we’re the special ones. Of course everybody in payroll can handle it.

Right, because they know.

Because they’re not smart enough?

Right, right.

And all those people in the middle ... I’m like, “Really?”

Yes, that’s an interesting question, and I think they should ... Because I think it does reveal that certain people, especially men, can do better at getting more money, and it’s very clear.

You want to go there?

No, no, we don’t. But I do want to end up. We have to finish. We have to stop in very briefly at the #MeToo movement and everything else, the sexual harassment. Is there going to be real profound change from this, do you feel?

First we got to write some checks.

Right. Okay.

So when I talk to women’s groups or HR groups and the doors are closed, I’m like, “Okay, let’s review. What are the three most female-dominated organizations in any company? HR, Finance and Sales and Marketing. We own pay. We own two of them. So, seriously, go home and right now, write some checks, and make it better.” Because until we have pay equity ... When I look back at my time at Sun, we celebrated ... Our Cinco de Mayo party was to die for. We hired elephants and tents and Mariachi bands, and yet we didn’t touch pay.

Right, that’s where it counts.

It’s 25-30 years later and it’s still ...

Don’t give me a party, pay my salary.

Yes, it’s like, “Stop it.” I got interviewed two days ago, somebody from Time, and she said, “What do you think about the response of the MeToo movement after all these harassers have been fired, and now all these women are taking their place.” And I said, “Isn’t that interesting, because out here in the Silicon Valley, I hear the VCs and executives go, ‘It’s a pipeline issue, if there were qualified women ...’” I’m like, “These women are in the room, just sitting next to Matt Lauer. She’s a qualified journalist. You want to find qualified people, open your eyes.”

Well, it’s the same thing with the boards. Years ago I wrote a piece about the Twitter board, because it was driving me crazy. It was 10 white men of the same age, essentially. And I always talk about — it’s my favorite lead of all time — which was the board of Twitter, which had three Peters and a Dick, which they did. That was their names, and I remember Dick Costolo calling me and saying, “That was rude, but really funny.” And I was like, “Well, I was trying to make a point.”

He’s a funny guy.

Yes, he is. At the very least, if you want to argue the pipeline issue everywhere else, you can’t argue it on boards. There’s qualified women, people of color, all kinds of people that you can pick for boards. So, there’s a play. There’s just no pipeline issue on a board, and it was really interesting. I was like, “You just didn’t want to change. You’re just being ...” I used the phrase, “It’s not a meritocracy, it’s a mirror-tocracy.” And it was.

Oh God, yeah. Carol Bartz ...

Carol Bartz.

Carol Bartz.

Big old glass of Chardonnay in her hand, yes.

At Sun in the ’80s, everybody always wanted her to be on these women’s panels. And I’d set her up, because I ran diversity, and I remember her saying, “Here’s the deal: Be really good. Be really fucking good. Get promoted a lot. Pay attention to those people who dismiss half of the employed population on the basis of their genitals. Because they’re stupid. That’s just stupid. So, then make sure that they work for you eventually, and then just watch for them to be stupid and fire them.” She’s like, “It’s slow and it’s methodical, but really, it works. So, just be amazing and fire them.”

I think what it is, is that ... But you think it’s sustainable, because that now change will happen.

I hope so.

I mean, after Ellen Pao it didn’t.

I know, but I think we’ve had it. I get asked about this a lot. It’s like, “What are women doing this time?” I’m like, “We’ve had it!”

We’ve had it.

It’s enough. It’s enough. And the other thing that I’m really hoping, I’m really hoping it’s different, is that there are men at our sides who will help us.

Help us? It’s in their interest, it’s not even ...

I just talked to a friend who’s an engineering exec, and he said, “Yes, the company I joined went too far, and they lowered the bar.” And I sent him this long email. I’m like, “You remember how I loved you, and I still do. Do not ever say ‘lower the bar’ again, as long as you live. And I am there, inside of your head, listening like I always have been.” And I said, “I know it doesn’t seem like much to you, but it’s a death of a thousand cuts, and we can’t take it anymore.”

It’s interesting.

“And you’re a good guy and we need you on our side and you’ve got to help, and whenever ... Just call me, anywhere you are.”

The lower the bar thing is really interesting, I’ve always noticed that they only bring standards up when it comes to women and people of color, but not the 10 idiot white men they hired. It’s really, I was like, “You never used it for that ... I know that guy’s an idiot, I’m pretty certain, and that guy’s an idiot.” But you never use the word standards, those are a thousand cuts.

One of the things that’s interesting about the had enough thing is, it was someone the other day, and they were like, “Well, things will change.” I said, “You’re lucky we don’t kill you, because that’s next. You might be dead.”

Yes, there can be death, right.

And I have two sons. I was like, “You might be dead.” And he was like, “Ha-ha.” I go, “No, really, we might kill you.” Like, you’re lucky.

It’s a really interesting thing, and I hope it doesn’t degenerate, because after, Ellen Pao, we did a story about people saying, “Now we can’t hire women.” Sort of, it’s the Mike Pence rule.

Give me a break.

I know, you know what I mean, “Now we can’t work with them, now I have to ...” Someone the other day was, “I have to go to dinner, someone has to be there when I go to dinner with a woman.” I’m like, “What? You can’t control yourself?” “Because they might say something.” I’m like, “Come on.”

Somebody asked me about it day before yesterday. I’m like, “I’m not having this infantile discussion.”

Yes, exactly.

Really, I’m just not.

It’s the victimization.

I’ve been a grownup ... Stop it, just get over it, “Well, hurt.”

Yes, I know it’s always people with the biggest guns who feel like they’re under siege. That’s my feeling.

I like that.

Anyway, Patty, this has been great. I want to finish up because ... What is the key, if you would take away ... I don’t like to do one thing, but what do you think the key part of a powerful company is? I think it’s treating people like adults, but you may have a different opinion.

I’m with you on that, but I think really the key is context. Having people understand your business or your service or your client or your ... What do you do and how does it work? I often say the No. 1 perk I would give a customer service rep, I’d teach him how to read a P&L.

That’s a great idea.

Because then they would say ...

They understand.

They would say, “Damn it, if I don’t piss of that customer, then they might tell somebody we’re a good company, and that’s going to be $17.49 of marketing spent that doesn’t have to happen. And I can go home at night, and I go, ‘I contributed $5,000, the bottom line, today. Yay me.’”

Yes. All right. Patty, we’re going to have come back. I’m going to have you come back. The thing that I’m doing, we’re going to talk about the future of work and how jobs are going to be when we go forward. But this has been great. I recommend that you get the book. It’s by Patty McCord, she was the chief talent officer of Netflix. Her book is called “Powerful: Building a Culture of Freedom and Responsibility.” Responsibility, what’s that?

Anyway, it was great talking to you, thanks for coming on the show. If you enjoyed the interview as much as I did, be sure to subscribe to the show. Be the first to listen to future episodes, or catch up on previous episodes. You can find more than a 175 past interviews, including with Reed Hastings, and whatever App you use to listen to this, or on our website recode.net/podcast. Don’t tell Reed that he’s one of my favorite executives in Silicon Valley, don’t tell him.

I won’t.

All right. And if you have a minute ...

He doesn’t need any more.

Yes, that’s true. He’s still a great guy.

He’s a great guy.

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This article originally appeared on Recode.net.