When we first tested annual written 360s, we ran them like everyone else. Each employee selected a handful of people she wanted to receive feedback from, and those people filled out the report anonymously, rating the employee on a scale of 1 to 5 across a series of categories and leaving comments. We used a “Start, Stop, Continue” format for the comments to ensure that people didn’t just pat each other on the back but gave concrete, actionable feedback… We no longer have employees rate each other on a scale of 1 to 5, since we don’t link the process to raises, promotions, or firings. The goal is to help everyone get better, not to categorize them into boxes. The other big improvement is that each person can now give feedback to as many colleagues as they choose at any level in the organization—not just direct reports, line managers, or a few teammates who have invited input. Most people at Netflix provide feedback for at least ten colleagues, but thirty or forty is common. I received comments from seventy-one people on my 2018 report.

Within each theme, the company lists smaller “Rocks” (column 5 of the OPSP) that need to be addressed in order to achieve the company’s big goal for the next 13 weeks, helping to focus everyone on execution. Though employees do not discuss the themes during daily huddles, which are focused on daily operations, they devote 30 minutes at weekly meetings to addressing progress toward the Quarterly Theme.

The City Bin Co. alternates between a Critical Number and Quarterly Theme that are focused on improving the People side of the business (“180 to One,” “Saving Mrs. Ryan”) and the Process side of the business (“Life Begins at 40,” “Bin it,” “Bin’s Health”). It’s important to find the same kind of balance as you sequence your #1 priorities.

When Rob examined the networks of the top ten thousand people in the company, Scott “was the Number 1 most overloaded person.” More than 118 people came to Scott every day for information from the three units he ran. Rob learned in one unit “78 people—some 50 percent—of the 150 top managers in that one unit felt they couldn’t hit their business goals unless they got more of Scott’s time.

You are the customer of the supplier,” I said. “Why doesn’t the same principle apply?”

“Well, we recently renegotiated our lease agreements with the mall operators and owners,” he said. “We went in with a Win/Win attitude. We were open, reasonable, conciliatory. But they saw that position as being soft and weak, and they took us to the cleaners.”

“Well, why did you go for Lose/Win?” I asked.

“We didn’t. We went for Win/Win.”

“I thought you said they took you to the cleaners.”

“They did.”

“In other words, you lost.”

“That’s right.”

“And they won.”

“That’s right.”

“So what’s that called?”

When he realized that what he had called Win/Win was really Lose/Win, he was shocked. And as we examined the long-term impact of that Lose/Win, the suppressed feelings, the trampled values, the resentment that seethed under the surface of the relationship, we agreed that it was really a loss for both parties in the end. If this man had had a real Win/Win attitude, he would have stayed longer in the communication process, listened to the mall owner more, then expressed his point of view with more courage. He would have continued in the Win/Win spirit until a solution was reached they both felt good about. And that solution, that Third Alternative, would have been synergistic—probably something neither of them had thought of on his own.