Many years ago, I had an acquaintance who was, to put it mildly, quite full of himself. He actually ended up being a character in a feature film, which was appropriate—given that he was essentially living in his own movie anyway.
Anyway, one of his peak performances as an egotist (which my wife and I still chuckle about to this day) was one evening when he had forgotten his glasses and arrived for a small party at our apartment functionally, if not legally, blind. Walking over to a cluster of us in a corner of the room, he leaned forward, squinted deeply at one of the guests standing next to me, and said, “Do you know me?”
It is a sad reality that many company leaders behave similarly. The gap between how they think their leadership is perceived and how it is actually experienced among the rank and file is often a yawning chasm. Leaders see themselves as smarter, more empathetic, even funnier than do their workers. This has been borne out by a raft of workplace surveys.
One of the ways for members of the C-suite to narrow this (dangerous) divide is through recognition. That is the subject of our cover story by Managing Editor Debbie Bolla (see page 12) and of our annual Baker’s Dozen Customer Satisfaction Ratings (see page 15).
A smart succession plan can protect against leadership deficits. And a buttoned-up governance structure can forestall financial risk. But a well- conceived recognition program can transcend defensive value (in this case, reducing turnover) by actively strengthening employee engagement and increasing productivity.
Look at Netflix. If you visit the likes of glassdoor.com, you’ll get a crowdsourced sense of the company’s culture pretty quickly. Or take this from the about.com tech jobs page: “Netflix is known for having an employee-oriented culture, including unlimited vacation time for salaried workers and allowing employees to take any amount of their paychecks in stock options. Teamwork is highly valued in the Netflix culture, with team members even contributing to peer employee reviews.”
Netflix’s recognition, in other words, is not just about gift cards and gold watches. And, as with so many other corporate dynamics, it starts at the top. Netflix, you’ll recall, suffered a major customer blowback in 2011, following an abrupt price hike that smacked of arrogance and market tone-deafness. Some 800,000 subscribers staged a mass cancellation.
Yet this summer saw the company rewarded for constructive risk taking, when it captured a stunning number of Emmy nominations in its first foray outside distribution and into production. In the second quarter, its revenue topped $1 billion for only the second time ever. Yes, Netflix is well known for paying above market rate salaries. But more is at work than that. Opined workplace culture guru Dov Seidman, founder of LRN and the author of a renowned business bible called How, “If the only reason employees joined Netflix was for the Silicon Valley glory and stock options, they would have bolted two years ago, during the company’s dark days. They didn’t.”
The reality is that Netflix CEO Reed Hastings had reengineered company culture fully four years ago. He produced a famous 128-slide deck on company culture that has been clicked through by nearly 5 million viewers. There, he championed nine behaviors and skills for the Netflix workplace: judgment, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness.
Those might have constituted mere window dressing, of course. But Hastings walked the talk. And he did that no time more tellingly than after the price hike debacle. He didn’t throw his chief marketing officer under the bus. He didn’t ignore the hullabaloo. He took responsibility. He apologized directly to his customers.
“I messed up,” he wrote. “I owe everyone an explanation…. Many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes…. In hindsight, I slid into arrogance based upon past success.”
In that same culture deck, Hastings stresses that his company does not tolerate “brilliant jerks.” He insists on an environment where employees must collaborate with each other, and other stakeholders, conscientiously and humbly. He realizes that workers will face forward when they know their leaders have their backs.
That’s real recognition.
Dirk Olin is Editor-in-Chief of HRO Today magazine