May 22, 2017
Most firms operate with either a hard or soft edge.1 Those with a hard edge emphasize clear performance targets, disciplined practices, and absolute accountability for results. Those with a soft edge emphasize the importance of strong bonds among people and teams working in a fast-paced and creative environment.
No company is entirely hard or soft, but most favor one over the other based on the demands of their business, their particular histories, and even the idiosyncrasies of their leaders. A preference for a hard or soft culture becomes part of a firm’s DNA—replicating over time and shaping the way its people think, feel, and behave.
The challenge is to create a corporate culture that embraces a productive contradiction—an environment that is at once both hard and soft. Netflix, for example, models the harder side of cutting-edge cultures with its emphasis on personal accountability. Zappos, in contrast, embodies the softer side with its emphasis on creating a communal and playful work environment. But both firms strive for an ideal mix between the hard and soft sides of their culture.
The goal, then, is not being one or the other—but, instead, pushing both to productive extremes. One reason that a hard/soft combination, when skillfully managed, provides a competitive advantage is that it can’t be easily replicated. Emphasizing the hard or soft side of corporate culture is far easier than boldly promoting both at once.
Netflix emphasizes that its people and teams are fully accountable for their results. This means that one’s intent, hard work, and past performance are largely irrelevant in assessing performance. If an employee stumbles and fails to perform, he or she is given time to recover—but not too much time. Those who can’t meet the firm’s high standards, even those who are average, are offered a generous severance package. This can be a tough environment for some people, but Netflix doesn’t try to accommodate them. Instead, it seeks to be clear about its culture and then hires and promotes those who can thrive within it.
Zappos sees itself as a family and goes to great lengths to create a friendly and supportive work environment. It requires, for example, that its supervisors spend time outside of work with their team members to promote close interpersonal bonds. It even believes that play, including an element of weirdness, is good for business. The company sponsors celebratory events on a regular basis. This past year, Zappos…
Zappos and Netflix have developed effective ways to sustain a hard/soft culture. For example, Zappos places great emphasis on customer happiness. It tracks a variety of service statistics such as the number of calls handled by its call-center members every day. However, Zappos doesn’t set targets on call time or push its people to upsell customers. Its key metric is what it calls the Personal Emotional Connection. This is assessed several times a week by colleagues who listen in on calls and assess the effectiveness of call-center members in relating to the firm’s customers. The ratings are shared with each call center member and improvement areas are identified. Zappos, a soft culture in many ways, uses hard metrics to ensure that its people are doing what is needed for it to be successful.