Culture deck

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Special Thanks to
Netflix and Reed Hastings
For the inspiration to put this out there and the slides to borrow (steal) from.

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Culture: What gives Redline Health the best chance of
continuous success for many generations of technology
and people?

Why have a “culture” deck?
• Provide transparency to new Agents
• Promote clarity of company values
• Enforce our own social responsibility to maintain and uphold them to
the benefit of both our clients and partners
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Aspects of our Culture
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• Values are what we Value
• High Performance
• Freedom & Responsibility
• Context, not Control
• Highly Aligned, Loosely Coupled
• First Principal Mentality

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Lots of companies have nice sounding value statements

Enron had a nice sounding Value Statement with 4 values
• Integrity
• Communication
• Respect
• Excellence
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The real company values, as opposed to the nice-
sounding values, are shown by who gets rewarded,
promoted, or let go

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Company values are the behaviors and skills that we
particularly value in fellow employees

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We particularly VALUE in our colleagues these Behaviors
and Skills…

Judgment
You make wise decisions (people,
technical, business, and creative)
despite ambiguity
You identify root causes, and get
beyond treating symptoms
You think strategically, and can
articulate what you are, and are not,
trying to do
You smartly separate what must be
done well now, and what can be
improved later
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Communication
You listen well, instead of reacting
fast, so you can better understand
You are concise and articulate in
speech and writing
You treat people with respect
independent of their status or
disagreement with you
You maintain calm poise in stressful
situations
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Impact
You accomplish amazing amounts of
important work
You demonstrate consistently strong
performance so colleagues can rely
upon you
You focus on great results rather than
on process
You exhibit bias-to-action, and avoid
analysis-paralysis
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Curiosity
You learn rapidly and eagerly
You seek to understand our strategy,
market, clients, and partners
You are broadly knowledgeable about
business, technology and health care
You contribute effectively outside of
your specialty
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Innovation
You re-conceptualize issues to
discover practical solutions to hard
problems
You challenge prevailing assumptions
when warranted, and suggest better
approaches
You create new ideas that prove
useful
You keep us nimble by minimizing
complexity and finding time to
simplify
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Courage
You say what you think, even if it is
controversial
You make tough decisions without
excessive agonizing
You take smart risks
You question actions inconsistent
with our values
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Passion
You inspire others with your thirst for
excellence
You care intensely about Redline
Health’s success
You celebrate wins
You are tenacious
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Honesty
You are known for candor and
directness
You are non-political when you
disagree with others
You only say things about fellow
employees you will say to their face
You are quick to admit mistakes
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Selflessness
You seek what is best for Redline
Health, rather than best for yourself
or your group
You are ego-less when searching for
the best ideas
You make time to help colleagues
You share information openly and
proactively
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We urge to work with people who embody these values

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“You question actions inconsistent with our values”
Part of the Courage Value
Akin to: “I will not lie, cheat, steal, nor tolerate those who do”
All of us are responsible for value consistency

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We strive to uphold these values in our daily routines
and enforce them throughout our business (hiring,
reviews, exits, and promotions)

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Imagine if every person at Redline Health is someone
you respect and learn from…

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Great Workplace is
Stunning Colleagues
Great workplace is not daycare, espresso, health benefits, sushi lunches, nice offices, or big
compensation, and we only do those that are efficient at attracting stunning colleagues

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We are a TEAM, not a family
We are like a pro sports team, not a kid’s recreational
team
Coaches’ job at every level of Redline Health to hire,
develop and cut smartly, so we have stars in every
position

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The Keeper Test Leaders Use:
Which of my people, if they told me they were leaving in two months for a similar
position at a peer company, would I fight hard to keep at Redline Health?

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Honestly Always
To avoid surprises, you should periodically ask your leader: “If I told you I were
leaving, how hard would you work to change my mind to stay at Redline Health?”

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Isn’t Loyalty GOOD?
What about Hard Workers?
What about Brilliant Jerks?

Loyalty is Good
• Loyalty is a good stabilizer
• People who have been stars for us, and hit a bad patch, get a near
term pass because we think they are likely to become stars for us
again
• We want the same: if Redline Health hits a temporary bad patch, we
want people to stick with us
• But unlimited loyalty to a shrinking firm, or to an ineffective
employee, is not what we are about
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Hard Work – Not Directly Relevant
• It’s about effectiveness – not effort – even though effectiveness is
harder to assess than effort
• We don’t measure people by how many evenings or weekends they
are working
• We do try to measure people by how much, how quickly and how
well they get work done and drive results – especially under a
deadline
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Brilliant Jerks
• Some companies tolerate them
• For us, the cost to teamwork is too high
• Diverse styles are fine, as long as the person embodies our core
values
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Why do we care about high performance?
In procedural work, the best are 2x better than the average.
In creative work, the best are 10x better than average, so we place a huge premium
on creating effective teams of the best

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Why do we care about high performance?
Great Workplace is
Stunning Colleagues

The Rare Responsible Person
• Self motivating
• Self aware
• Self disciplined
• Self improving
• Acts like a leader
• Doesn’t wait to be told what to do
• Never feels “that’s not my job”
• Picks up the trash lying on the floor
• Behaves like an owner
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Responsible people Thrive on Freedom,
and are Worthy of Freedom

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Our model is to increase employee freedom as we
grow, rather than limit it, to continue to attract and
nourish innovative people, so we have a better chance
of long-term continued success

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Most companies curtail freedom as they grow to avoid
errors
(sounds pretty good to avoid errors)

Strong Near-Term Outcome
• A highly-successful process-driven company
• With leading share in its market
• Minimal thinking required
• Few mistakes made – very efficient
• Few curious innovator-mavericks remain
• Very optimized processes for its existing market
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Then the Market Shifts...
• Market shifts due to new technologies or new competitors or new
business models
• Company is unable to adapt quickly because the employees are
extremely good at following the existing processes, process
adherence is the value system
• Company generally grinds painfully into irrelevance, due to inability to
respond to the market shift
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Seems Like Three Bad Options
1. Stay creative by staying small
2. Try to avoid rules as you grow, suffer chaos
3. Use process as you grow to drive efficient execution of current
model, but cripple creativity, innovation, flexibility, and the ability to
thrive when market inevitably shifts
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A Fourth Option
• Avoid chaos as you grow with Ever More High Performance People –
not with rules
• Then you can continue to run informally with self-discipline and avoid
chaos
• The run informally part is what enables and attracts creativity
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The Key
Increase Talent Density Faster
Than Complexity Grows

Increase Talent Density
• Top of market compensation
• Attract HIGH-Value people through freedom to make impact
• Be demanding about high performance culture
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Minimize Complexity Growth
• Few big products vs many small ones
• Eliminate distracting complexity (barnacles)
• Value simplicity
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With the Right People,
Instead of a Culture of Process Adherence,
A Culture of Freedom and Responsibility,
Innovation and Self-Discipline

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Is Freedom Absolute?
Are all rules & processes bad?

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Freedom is not absolute.
Like "free speech" there are some limited exceptions to
"freedom at work"

Two Types of Necessary Rules
1. Prevent irrevocable disaster
• Ex. Financials produced are wrong
• Ex. Hackers steal our customer's credit card information
2. Moral, Ethical, Legal issues
• Ex. Dishonesty, harassment are intolerable
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"Good" vs "Bad" Processes
• "Good" processes help talented people get more done
 Spend within budget each quarter to avoid coordinating every spending
decision across departments
 Regularly scheduled strategy and context meetings
• "Bad" processes try to prevent recoverable mistakes
 3 people to sign off on banner ad or creative
 Permission needed to hang poster on wall
 Multi-level approval process for projects
 Get 10 people to interview each candidate
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Rule Creep
• "Bad" processes tend to creep in
- Preventing errors just sounds so good
• We try to get rid of rules when we can, to reinforce the point
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Example Netflix Vacation Policy and Tracking
Until 2004, Netflix maintained a standard N days per year policy
Yes, we left this example straight from Netflix

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Meanwhile...
Most employees were working online some nights and
weekends, responding to emails at odd hours, and taking an
afternoon now and then for personal time

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One Netflix employee pointed out...
We don't track hours worked per day or per week, so why are
we tracking day of vacation per year?

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Netflix realized...
They should focus on what people get done, not how many
hours or days worked. Just as they didn't have a 9-5 policy, they
didn't need a vacation policy.

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Redline Health maintains a similar policy with all
employees and contractors
We want results for our business and our clients more than
anything else.

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Current Netflix Vacation Policy
"there is no policy or tracking"
"There is also no clothing policy at Netflix, but no one has come
to work naked lately." - Patty McCord, 2004

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Another example of Freedom & Responsibility...

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Most companies have complex policies around what
you can expense, how you travel, what gifts you can
accept, etc.
Plus they have whole departments to verify compliance
with these policies

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Redline Health's Policy for
Expensing, Entertainment, Travel, and Gifts:
"Act in Redline Health's Best Interests"
In accordance with the law...but only 6 words long

"Acting in Redline Health's Best Interests" Generally Means
1. Expense only what you would otherwise not spend, and is
worthwhile for work
2. Travel as you would if it were your own money
3. Disclose non-trivial vendor gifts
4. Take from Redline Health only when it is inefficient to not take, and
inconsequential
 "taking" means, for example, printing personal documents at work, or making
personal calls on a work phone: inconsequential and inefficient to avoid
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Summary of Freedom & Responsibility:
As We Grow, Minimize Rules
Inhibit Chaos with Ever More High Performance People
Flexibility is More Important than Efficiency in the Long
Term

“If you want to build a ship, don’t drum up the people to
gather wood, divide the work, and give orders. Instead,
teach them to yearn for the vast and endless sea.”
-Antoin De Saint-Exupery,
Author of The Little Prince
*translation uses “people” instead of “men” to modernize
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The best Leaders figure out how to get great outcomes
by setting the appropriate context, rather than by trying
to control their people

Context, not Control
Context
• Strategy
• Metrics
• Assumptions
• Objectives
• Clearly-defined roles
• Knowledge of the stakes
• Transparency around decision
making
Control
• Top-down decision making
• Management approval
• Committees
• Planning and process valued
more than results
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Exceptions
• Control can be important in an emergency
- No time to take long-term capacity-building view
• Control can be important when someone is still learning their area
- Takes time to pick up necessary context
• Control can be important when you have the wrong person in the role
- Temporarily, no doubt
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Leaders: when one of your talented people does
something dumb, don't blame them.
Instead, ask yourself what context you failed to set.

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When you are tempted to control your people, ask
yourself what context you could set instead.
Are you articulating and inspiring enough about goals and
strategies?

Good Context
• Linked to company/functional goals
• Relative priority (how important/how time sensitive)
 Critical (needs to happen now), or...
 Nice to have (when you can get to it)
• Level of precision and refinement
 No errors (credit card handling, health info, etc.), or...
 Pretty good/can correct errors (website), or...
 Rough (experimental)
• Key stakeholders
• Key metrics/definition of success
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Why managing through Context?
High performance people will do better work if they understand
the context.

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Investing in Context
This is why we do new employee orientation, and why we are so
open internally about strategies and results.

Highly Aligned, Loosely Coupled
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Three Models of Corporate Teamwork
1. Tightly-Coupled Monolith
2. Independent Silos
3. Highly Aligned, Loosely Coupled
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Tightly-Coupled Monolith
• Senior management reviews and approves nearly all tactics
• Lots of x-departmental buy-in meetings
• Keeping other groups in agreement has equal precedence with
pleasing clients
• Mavericks get exhausted trying to innovate
• Highly coordinated through centralization, but very slow, and
slowness increases with size
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Independent Silos
• Each group executes on their objectives with little coordination
• Work that requires coordination suffers
• Alienation and suspicion between departments
• Only works well when areas are independent
- Ex. GE: aircraft engines and Universal Studios
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The Redline Health Choice
1. Tightly-Coupled Monolith
2. Independent Silos
3. Highly Aligned, Loosely Coupled
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• Highly Aligned
 Strategy and goals are clear, specific, broadly understood
 Team interactions are on strategy and goals rather than tactics
 Requires large investment in management time to be transparent and
articulate and perceptive and open
• Loosely Coupled
 Minimal cross-functional meetings except to get aligned on goals and strategy
 Trust between groups on tactics without previewing/approving each one –
groups can move fast
 Leaders reaching out proactively for ad-hoc coordination and perspective as
appropriate
 Occasional post-mortems on tactics necessary to increase alignment
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teamwork effectiveness is dependent upon high
performance people and good context
Goal is to be
BIG and FAST and FLEXIBLE

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What is a first principle?
Simply put, a first principle is a foundational or bedrock idea. It
cannot be further deduced or simplified.

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For our purposes, our first principle is our WHY
Why do we exist in business?

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We are here for our clients

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When Pam started Redline Health in 2005, there were
no other health insurance agents in Siloam Springs, AR.
NONE.
She was determined to provide a client-centric agency
for her community to rely on.

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Since then, our drive has been clear:
SERVE our CLIENTS

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If a product or service serves our client base more
effectively, we pursue it.
If a product or service hinders our clients, we move
away from it.

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Serving our clients' need should always be the
foundational rock our products, services, and decisions
are built upon.
It is the duty of all of us to ensure the entire team lives this moto.

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Culture is How Our Firm Operates
What practices give Redline Health the best chance of continuous success for many
generations of technology and people?

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Continuous Success =
Continuous growth in revenue, profits and reputation

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Need a culture that supports rapid innovation and
excellent execution
There is tension between these two goals; between creativity and discipline. Both
are required for continuous growth.

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Need a culture that supports effective teamwork of
high-performance people
High performance people and effective teamwork can be in tension also – stars
have strong opinions

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Need a culture that avoids the rigidity,
politics, mediocrity, and complacency that infects most
organizations as they grow

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This slide deck is our current best thinking about
maximizing our likelihood of continuous success

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Our culture is a work in progress.
We strive to refine our culture as we learn more.

Culture deck

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