September 6, 2010

Summer is drawing to a close, and with it, vacation season. With these thoughts in mind, I was intrigued by Daniel Pink’s musings in The Telegraph about Netflix’s unusual policy. Pink writes:

“At Netflix, the vacation policy is audaciously simple and simply audacious. Salaried employees can take as much time off as they'd like, whenever they want to take it. Nobody – not employees themselves, not managers – tracks vacation days.”

Sure, Netflix used to have a standard vacation policy, but in about 2004, employees realized that the policy didn’t jibe with how they were actually working. Since no one tracked the time they spent checking work e-mails at home or working from home, why should their vacation be logged? 

Netflix’s no-policy vacation policy does have some rules, of course. Managers have to know where staff are and how to contact them, and the staff have to make sure their work is handled in their absence. But rather than hurting productivity at Netflix, the policy has helped the company continually innovate—and grow to a market leader with $7 billion in sales.

"Rules and policies and regulations and stipulations are innovation killers,” the article cites Steve Swasey, Netflix's vice-president for corporate communication, as saying. "If you're spending a lot of time accounting for the time you're spending, that's time you're not innovating."

Over at OpenSource, Chris Gram took the concept one step further, wondering if a “no-policy” policy would be even better for businesses. Gram, who spent 10 years at open-source software company Red Hat, writes, “[Red Hat] employees were given a lot of freedom, much more than in any other company I'd ever worked for. Yet Red Hat also had a strong culture of accountability.” In fact, Gram notes, he found that the more freedom the company gave, the more accountability it received in return.

Need another example? Consider Best Buy’s Results Only Work Environment (ROWE), in place since 2005. ROWE gets rid of most traditional rules and expectations about work: Salaried employees are allowed to decide how, when and where they do their work—whether it’s from home, in the office or in the middle of the night. ROWE has had significant positive results on turnover, satisfaction and productivity at Best Buy—which, like Netflix and Red Hat, is one of the most innovative businesses in its arena. 

Would a no-policy policy be the best solution for your business? Only you can tell—but it’s one way to shake up your culture and get innovation flowing. For any company seeking to innovate, these success stories suggest the place to start is by getting innovative with your management policies.

Join the conversation ( 9 )

• Anita Campbell 1 year 5 months and 7 days ago

  

  @Martin, yes definitely a two-way street.
  
  @Staci, when people are happier and not stressed out, productivity does go up. :-)
  
  

• TJ McCue 1 year 5 months and 7 days ago

  

  Hi Anita, I'm with Jen here -- I love this. I read about policies like Netflix' and am thoroughly impressed. Of course, as you and Joel point out, trust is key to all this.
  
  The R.O.W.E. workplaces obviously grasp this and have dynamic work environments. If you focus on the results, and not the time or way (within reason) that people get there, you can get a lot more done. In my mind, if a person can get to the results in less time or in a non-traditional way, why stop them?
  
  But I think bigger than trust, or right alongside it, is creating a culture of innovation, of taking risks, of accountability. A culture that rewards getting things done in the best possible way.

• Staci Wood 1 year 5 months and 8 days ago

  

  I think it's fantastic to see this type of thinking in place - working so successfully - and as Joel put it "to actually let adults be adults." When people enjoy what they're doing and are granted such flexibility, I think it's a win-win situation for everyone involved and I also think that the flexibility actually increases productivity.

• Martin Lindeskog 1 year 5 months and 8 days ago

  

  It is a two-way street. I like these examples. Instead of all rules and policies, common sense should be used together with applying some core values throughout the organization.

• Anita Campbell 1 year 5 months and 8 days ago

  

  Joel, that's true. And I agree with Jen that management also has to trust. When there's trust, it's easy to let people make their own choices.
  
  - Anita

• Anita Campbell 1 year 5 months and 8 days ago

  

  Julie, "untethered and unplugged" is a great way to put it.
  
  Jen, isn't it too bad that some managers don't realize the importance of trust? The Netflix no-policy policy puts the focus back where it should be.
  
  - Anita

• Joel Libava 1 year 5 months and 8 days ago

  

  Anita,
  
  Being a free-wheeling dude myself, I'm all for it.
  
  Kidding aside, (for a sec) I think that some workplaces could benefit from a no-rules vacation policy. It may be nice to actually let adults be adults. (And be responsible for their own actions.)
  
  The Franchise King®

• Jen Turi 1 year 5 months and 8 days ago

  

  Love, love, love this! I write our blog and have written so many posts about engagement, motivation, retention, and they all go back to trust. I can't imagine a better way to instill trust then the examples you list above. You can take a look at www.careercurve.com/blog if you're intersted. Thanks so much for a great post.

• Julie Rains 1 year 5 months and 9 days ago

  

  Creating and keeping a culture of accountability is a magnificent feat. It would be interesting to know how hiring practices and team collaboration influence the success of this approach. Hopefully the employees do get some time away, untethered and unplugged.