When CEOs describe their company as being “like family,” we think they mean well.
They’re searching for a model that represents the kind of relationships they want to have with their employees—a lifetime relationship with a sense of belonging. But using the term family makes it easy for misunderstandings to arise.
In a real family, parents can’t fire their children. Try to imagine disowning your child for poor performance: “We’re sorry Susie, but your mom and I have decided you’re just not a good fit. Your table-setting effort has been deteriorating for the past 6 months, and your obsession with ponies just isn’t adding any value. We’re going to have to let you go. But don’t take it the wrong way; it’s just family.”
Unthinkable, right? But that’s essentially what happens when a CEO describes the company as a family, then institutes layoffs. Regardless of what the law says about at-will employment, those employees will feel hurt and betrayed—with real justification.
Consider another metaphor—one that Reed Hastings, the CEO of Netflix, introduced in a famous presentation on his company’s culture. Hastings stated, “We’re a team, not a family.” He went on to advise managers to ask themselves, “Which of my people, if they told me they were leaving for a similar job at a peer company, would I fight hard to keep at Netflix? The other people should get a generous severance now so we can open a slot to try to find a star for that role.”
In contrast to a family, a professional sports team has a specific mission (to win games and championships), and its members come together to accomplish that mission. The composition of the team changes over time, either because a team member chooses to go to another team, or because the team’s management decides to cut or trade a team member. In this sense, a business is far more like a sports team than a family.
Consider what we can learn from the example of America’s winningest professional sports teams. In the National Football League, the New England Patriots have won three Superbowls since the turn of the century. Over the same time period, the San Antonio Spurs of the National Basketball Association have won three NBA championships (and a fourth in 1999), and the Boston Red Sox have won the World Series three times as well.
Each of these winning franchises has been able to build a consistent identity and a long-term relationship with its players—even though many of those players change from year to year.
An NFL team has 53 players on its roster. The only member of the current New England Patriots team that played on their first championship team is quarterback Tom Brady.
A Major League Baseball team has 25 players on its roster. The only member of the current Boston Red Sox team that played on the 2004 World Series champions is designated hitter David Ortiz.
The Spurs stand out for the stability and longevity of their player relationships, yet even their current 13-man roster only includes one player from their first championship in 1999: power forward Tim Duncan.
The reason these teams have been able to remain consistent winners despite high personnel turnover is that they have been able to combine a realistic view of the often-temporary nature of the employment relationship with a focus on shared goals and long-term personal relationships.
While a professional sports team doesn’t guarantee lifetime employment for its players—far from it–the employer-employee relationship still benefits when it follows the principles of trust, mutual investment, and mutual benefit. Teams win when their individual members trust each other enough to prioritize team success over individual glory. It is no coincidence that these teams are known for “The Patriot Way” or “The Spurs Way,” and that television broadcasters often praise them for “unselfish” play.
And paradoxically, winning as a team is the best way for individual team members to achieve success. The members of a winning team are highly sought after by other teams, both for the skills they demonstrate and for their ability to help a new team develop a winning culture. Both the Patriots and Spurs have supplied numerous other teams with veteran leaders and coaches. For example, five of the other 29 NBA teams have a former Spurs assistant as their head coach. Meanwhile, the New York Yankees’ habit of signing former Red Sox as free agents is so well known that it is now a common punchline among baseball writers.
Great sports teams also find ways to maintain their relationships with former players, even long after their departure or retirement. For example, Spurs alumni who are now working as television broadcasters still regularly have dinner with the team and its coaches, even though they might not have played with the team for over a decade. Do you think that current players, seeing that kind of loyalty, might want to play for the Spurs?
Of course, a professional sports team isn’t a perfect analog to your business. It’s doubtful, for example, that you obtain the bulk of your employees by taking turns with your competitors as part of an organized talent draft. But a great sports franchise consistently brings together a disparate team to achieve a common goal despite the reality of staff turnover. That’s something all businesses should strive for.
by Reid Hoffman, Ben Casnocha and Chris Yeh | 12:00 PM June 17, 2014