What does an organizational culture mean to you? Does it mean bring your dogs to work? yoga in the break room? or twinkies in the pantry? For Ben Horowitz, the founder of Opsware and Andresseen Horowitz venture capital firm, dogs, yoga and twinkies at work are simply perks, not the culture. Sure, they help shape the culture but it’s far from the thing themselves.
Perhaps your culture means the values you list on the wall? Again, far from it. Who you are is not the values you list on the wall nor your marketing campaign nor your beliefs. It’s what you do. What you do is who you are. This book aims to help you do the things you need to do so you can be who you want to be.
Creating culture is complex.
The culture is much more than trying to get people to behave in a way you want them to when no one is watching. Your employees are just people and people are far from uniform. They come from different background, geographies, races and even eras. To get all of them to conform to and be reasonably happy with a common set of norms is a challenging puzzle.
The more you trust, the less you communicate.
The amount of communication is inversely proportional to the level of trust. If you trust me completely, you would need little to no explanation for whatever you do in my best interest. On the other hand, if you don’t trust me in the slightest, all the talking, explaining or reasoning would fall on my deaf ears.
Rules for creating a rule that sets the lasting culture
- It must be memorable. If people forget the rule, they forget the culture too.
- It must raise the question Why? Your rule should be so shocking that everyone hears it is compelled to ask are you serious?
- Its cultural impact must be straightforward.
- People must encounter the rule almost daily.
3 rules at Netscape
When Jim Barksdale became the CEO of Netscape in 1995, he knew he had to change the culture. At a company all-hands he said:
We have 3 rules at Netscape. The first rule is if you see a snake, don’t call committees, don’t call your buddies, don’t form a team, don’t get a meeting together, just kill the snake.
The second rule is don’t go back and play with dead snakes. Too many people waste too much time on decisions that have already been made.
And the third rule of snakes is: all opportunities start out looking like snakes.
The story was so clear and funny that nearly everyone in the room got the point immediately.
The key to great answers is great questions.
If you ask Why am I so fat? you’re saying to yourself because I’m stupid and I have no willpower. The point is asking the wrong question and you will get a wrong answer and a mediocre life. But let’s say you ask How can I use my vast resources to get into the best shape I can ever be? Your brain will start saying I will eat healthy, work out like a pro athlete and live 120.
As a CEO, it’s your job to create a sense of inclusion.
CEOs often make the mistake of delegating inclusion programs to head of HR. These heads are then tasked with achieving diverse representation without considering what the company is trying to achieve. So, they focus on the diversity for its own sake. Worse, some outsource hiring to consultants and firms who have no understanding of the company’s culture and objectives. As a result, when hiring shows progress, the employee satisfaction often plummets.
Culture eats strategy for breakfast, right? Well, not for Ben.
The management guru Peter Drucker famously said “Culture eats strategy for breakfast.” Ben however disagrees. To him, an organization needs both culture and strategy. They do not compete. They co-exist to be effective.
When Jeff Bezos created Amazon’s long-term strategy, a key element was a low-cost structure. So, a cultural attentiveness to frugality made perfect sense. For a company like Apple, the strategy depends on building the most beautiful and perfectly designed products in the world. Then Amazon’s take on frugality would make no sense. If your strategy is to be disruptive and innovative, Facebook’s original motto ‘Move fast and break things’ makes perfect sense. If you’re Airbus making passenger airplanes, it does more harm than good.
The point is to pick the culture that align with your company’s strategic mission and that your culture should complement your strategy and vice versa.
Don’t forget about subcultures.
Subcultures emerge as divisions of a company are often distinct from one another. In tech industry, the difference between tech and sales is most pronounced. As an engineer you need to know, build and troubleshoot things. You must be able to tell exactly how you designed and built it.
But as a salesperson you must know if your customers have the budget, if your competitors are ahead of you or if a particular competitor is a detractor or a promoter. Experiences salespeople often say buyers are liars. Sure, people tend not to volunteer the truth, especially when it comes to cost. But it’s your job to extract the truth. In sales, if you take what you’re told at face value, you won’t last.
Another distinction is when you ask an engineer a question, his instinct is to give you a short, concise answer. They tend to reply Do you have feature X? with a clear yes or no. But ask the same question to sales and you’ll get “Why are you asking about that feature? Which competitor has that feature? Why do you think this feature is important?
Know the differences. Embrace them. Celebrate them. And make sure everyone in your organization does the same.
4 traits to look for in a new hire
Trait #1 Smart
Being smart doesn’t always mean having a high IQ. It means disposed toward learning. Ask something like What’s something that you’ve automated? What’s a process you’ve head to tear down at a company?
Trait #2 Humble
Being humble doesn’t mean being submissive. Being humble means knowing yourself what you’re good at and what you can improve. It’s a capacity for self-awareness.
Trait #3 Hardworking
It doesn’t mean working long hours and weekends. It means doing the best work of your life.
Trait #4 Collaborative
Being collaborative means leading from everywhere, building trust and taking responsibility Ask something like Tell me about a situation in your last company where something was substandard and you helped to fix it.
How McMahon, senior VP of sales at Opsware hired his head of sales, Mark
At started with the Interview where McMahon asked “What would you do if I punched you in the face right now?”. After a brief of silence, Mark replied “Are you testing my intelligence or my courage? To which McMahon said “Both”. So, Mark said “Well, you’d better knock me out.” McMahon without hesitation replied “You’re hired.”
It’s Mark’s ability to keep his poise under fire, listen carefully, a courage to discover why a question is being asked and above all, his competitiveness that earned him the job at Opsware.
Telltale signs you’re going off track of your culture
- People are quitting too often (even when the business is performing well).
- You’re failing at your top priorities.
- An employee does something that truly shocks you.
Know your Prophets of Rage (PORs) and manage them well.
PORs tend to be self-righteous perfectionists. No obstacle is too great and no problem too hard to overcome for PORs. And they usually don’t care whom they piss off to get the job done. There’re 3 ways to managing PORs:
- Don’t give feedback on their behaviors, give feedback on the counterproductive effect of their behaviors (instead of saying “It’s totally unacceptable for you to scream at people” say “you have a very important mission, but when you screamed at Andy that left a negative impression on you and your team”)
- Recognize you can’t fix a POR completely, no matter how hard you coach.
- Focus your coaching on what a POR can do (e.g. if your prophet is a great salesperson who constantly fights his peers, ask him to sell them his ideas instead of overpowering them).
3 high-level decision-making styles
- My way or the high way (I don’t care what you think you’re doing it my way)
- Everyone has a say
- Everyone has input, then I decide
In business, the third style tends to work best. You wouldn’t need me to say the first style disempowers at best and destructive at worst. And the second style drives everyone nuts.
Are you a peacetime CEO or a wartime CEO?
|Peacetime CEO||Wartime CEO|
|– Knows proper protocol to win||– Violates proper protocol to win|
|– Focuses on big picture and empowers people to make detailed excisions||– Cares about a speck of dust as if it interferes with prime directive|
|– Builds scalable, high-volume recruiting machines||– Builds HR that can executive layoffs|
|– Has a contingency plan||– Rolls a hard six|
|– Take advantage of opportunity||– Paranoid about opportunity|
|– Avoid profanity at all costs||– Use profanity purposefully|
|– Avoid engaging enemy ships||– Engage competition as a direct threat|
|– Expand the market||– Win the market|
|– Tolerates deviations from the plan||– Completely intolerant|
|– Avoid raising his voice||– Rarely speaks in normal tone|
|– Minimize conflict||– Highlights contradictions|
|– Busy setting audacious goals||– Busy fighting enemies|
Switching from peacetime to wartime can be easier. As soon as CEO becomes overwhelmed by details and problems, the company often reacts quickly and everyone will pick up the wartime mentality. That said, most CEOs never switch from one mode to another because they possess personalities better suited for one.
Take a look at Apple for example. The transition from wartime Steve Jobs to peace time Tim Cook dramatically changed Apple’s culture. Cook wasn’t half as involved as Jobs had been in product decisions that many believed Apple has stopped pursuing excellence. The new culture may prove to have its advantages but it feels like a different place.
Likewise, when Uber switched from wartime Kalanick to peacetime Khosrowshahi, the new CEO simply didn’t have institutional knowledge to be involved in every decision-making. It also didn’t help that he was simultaneously trying to fix the bugs in the old cultural code.
Assign meaning to your difficult decisions.
When you have to layoff, be the first yourself to assign meaning before the media or the remaining employees have a chance. 3 things you can do to assign a meaning:
- State the facts clearly (We have to lay off 30 people because we came in million dollars short of projections…)
- Own your mistakes and shortcomings.
- Explain why your decision is essential for your strategic mission.
Create a safe space to share problems.
When Ben was a CEO, his favorite opening line is “I know with great certainty that there’re things that are completely broken in our company and I want to know what they are. If you don’t know what they’re, then you’re of no use to me in this meeting.”
This technique got Ben deluged in bad news but also created a culture where surfacing and discussing problems wasn’t just tolerated but encouraged.
Use an object lesson to cement a lesson.
What you say means far less than what you do. If you want to model a lesson, do something dramatic. It doesn’t need to be Sun Tzu-style beheading but it should at least raise the eyebrows.
Make ethics explicit.
“Do the right things” means little. Does it mean doing the right thing only when someone’s watching? What if the right thing conflicts with other equally right and important things? Don’t leave ethical principles unsaid. Paint a clear picture of the ethics you expect out of your people.
People leave people, not companies.
Your team loyalty ultimately boils down to the quality of your relationship. The meaningful relationships extend far beyond the workplace. It takes a genuine interest in the person both socially and professionally. It also requires staying true to your word and that when they’re left behind, you’re the first one there to pick them up.
Final thoughts and Checklist
There’s no single culture that makes universal sense. Your company’s culture is a unique representation of your personality, beliefs and strategy. And it is never a one-off decision. It should keep evolving as your company grows and conditions change. With that in mind, here’s a checklist you can use to develop your own uniquely beautiful culture:
- Cultural design
- Cultural orientation
- Shocking rules
- Incorporate outside leadership
- Object lessons
- Make ethics explicit
- Give cultural tenets deep meaning
- Walk the talk
- Make decisions that demonstrate priorities