☕ Good Morning! Sippers,

Here are this week’s notes!

A Great workplace is stunning colleagues

In the 1990s, the author rented VHS videos from Blockbuster, but was charged $40 for a late return. This made him consider a new business model for movie rentals.

In early 1997, He and Marc Randolph thought about opening a movies-by-mail business but the cost was too high. A friend introduced him to DVDs, and in May 1998, Netflix, the world’s first online DVD rental store was launched. By early 2001, Netflix had 400,000 subscribers and 120 employees.

Lessons from Crisis: In 2001, the dot-com bubble burst, causing the business of Reed Hastings, the founder of Netflix, to suffer. To cut costs, Hastings and his team decided to lay off a third of their workforce. They kept 80 high-performing employees and let go of 40 lower-performing ones. Despite his concerns that morale would plummet, Hastings noticed that the atmosphere in the office improved significantly in the following weeks. With 30% fewer employees, Netflix’s remaining staff worked with passion and energy. The morale-boosting effect of the layoffs taught Hastings valuable lessons about employee motivation and leadership responsibility. These lessons became foundational for Netflix’s success. Patty McCord, head of Human Resources and Hastings’ colleague, played a vital role in developing Netflix and still influences it today.

Talented people make one another more effective →

• Every employee has some talent.

• Having a high talent density in a company is desirable.

• High performers thrive in environments with a high talent density.

• Teams accomplish more and individual motivation and satisfaction increase in a high-talent-density environment.

• Being surrounded by talented colleagues is exciting, inspiring, and fun.

• Merely adequate performers bring down the performance of everyone on the team.

• Having a team with a high talent density leads to upward performance spirals.

• A great workplace is about being surrounded by talented and collaborative people who can help you be better.

Performance is Contagious →

A study by Professor Will Felps found that one individual’s bad behavior brought down the effectiveness of the entire team, even if the other members were exceptionally talented. This principle of infectious behavior can be seen in many aspects of life, including work environments. After the 2001 layoffs, Netflix made a commitment to retain high-performing employees and get rid of any who displayed undesirable behaviors or weren’t performing at exemplary levels. This ensured that the company was staffed with the best and most collaborative employees on the market.

💡 INSIGHTS →

As a leader, your primary objective should be to create a work environment composed entirely of outstanding colleagues.

Exceptionally creative and passionate colleagues who accomplish significant amounts of important work are considered stunning.

Including jerks, slackers, sweet people with nonstellar performance, or pessimists in the team can negatively affect the performance of the whole group.

Via, No Rules Rules: Netflix and the Culture of Reinvention

Can’t we at least agree on the facts?

Politics is not only polarized in terms of political values and norms but also extends to religion and factual issues. Democrats and Republicans have very different beliefs on scientific and factual issues, such as climate change, fracking, capital punishment, gun ownership, and immigration. The parties cannot agree on facts any more than on values. Neither side has a monopoly on scientific evidence or on the facts.

Of course, facts and values are intertwined. When we hold differing beliefs about fundamental issues like whether capital punishment serves as a deterrent or if human activity causes global warming, it’s no surprise that we struggle to reach a consensus on whether to permit capital punishment or to combat climate change. When we fail to agree on important facts, reaching a consensus on what to do becomes highly unlikely.

Despite the prevalence of such disagreement, both sides exhibit remarkable certainty. Capital punishment advocates remain convinced that it serves as a deterrent to murder, while opponents remain just as certain that it does not deter any homicides.

One possible explanation for their confidence is that they may have never come across evidence that supports the other side of the argument. Perhaps they have never sought out opposing views or consulted sources that are likely to present such data. Regardless of the explanation, their unwavering confidence is remarkable given the complexity of the issues at hand, the presence of conflicting data and arguments, and the lack of consensus.

💡 INSIGHTS →

• Disagreements about fundamental facts can lead to divergent opinions on important issues.

• When people hold differing beliefs about crucial facts, they are less likely to agree on what actions to take in response to those facts.

• Advocates and opponents of capital punishment exhibit a surprising degree of confidence, despite the lack of consensus and the presence of conflicting data and arguments.

• This confidence may be due to a lack of exposure to opposing views or sources that present different data.

• Seeking out diverse perspectives and information is important in arriving at informed decisions that consider all relevant facts and values.

• Issues like capital punishment and global warming are complex, requiring nuanced, informed dialogue.

Via, Think Again: How to Reason and Argue