What You Do Is Who You Are

by Ben Horowitz

  But there was a flaw in the plan. Two-factor authentication was required on everyone’s work email. The phishing attack was sent to Podesta’s personal email. Now, what past behavior could possibly have given Podesta the idea that he could send and receive tons of highly confidential campaign emails from his personal email account? Oh, snap.

  Not once did Hillary Clinton tell John Podesta, “Don’t take email security seriously.” Not once would she ever have told him that. But Clinton’s actions overrode her intentions. It did not matter that the campaign had taken all the steps necessary to prevent the attack, because John Podesta imitated what Hillary Clinton did, not what she said. The talk said, “Secure your email”; the walk said, “Personal convenience is more important.” The walk almost always wins. That’s how culture works.

  Before condemning Clinton for this catastrophic error, keep in mind that every leader will make decisions she later regrets. Nobody has ever been close to perfect. Furthermore, it is a common and understandable mistake to think of cyber security as an isolated function that, like processing payroll, has no bearing on the larger culture. In fact, the most important aspects of an organization’s performance—quality, design, security, fiscal discipline, customer care—are all culturally driven.

  When you inevitably take an action that’s inconsistent with your culture, the best fix is to admit it, then move to overcorrect the error. The admission and the self-correction have to be public enough and vehement enough to erase the earlier decision and become the new lesson.

  Clinton seems never to have contemplated this kind of admission and course correction; an ironclad rule of U.S. politics is “Never admit you were wrong.” (This rule is one reason why it’s hard to wholeheartedly admire most politicians.) In her book, she accepts some blame for her carelessness, but shrugs off most of the responsibility: “one boneheaded mistake turned into a campaign-defining and -destroying scandal, thanks to a toxic mix of partisan opportunism, interagency turf battles, a rash FBI director, my own inability to explain the whole mess in a way people could understand, and media coverage that by its very volume told the voters this was by far the most important issue of the campaign.”

  She then writes of the leaked Podesta emails, “None of this had anything at all to do with my use of personal email at the State Department—nothing at all—but for many voters, it would all blend together.” The two email screwups were indeed unrelated in the sense that Clinton means—but totally related in the sense that I mean. While it’s likely that the Democratic Party’s emails would have been hacked even if Clinton hadn’t been dismissive of email security, the point is that when you are a leader, even your accidental actions set the culture.

  Walking the talk may be the most difficult skill to get right. Nobody ever does it 100 percent. Even Louverture came up short. To convince slaves to join the revolution, he told them he was working on behalf of Louis XVI. He wasn’t. But without that lie the revolution might never have happened. Should he have risked the revolution to preserve his culture? What would be the point of that? He’d have ended up being able to console himself with having created a pure and perfect culture as he and his fellow mutineers were being executed.

  When I was CEO of LoudCloud, I tried to create a transparent culture where we shared everything important with everyone. This led to a broad sense of ownership and enabled us to get more brains working on the biggest problems.

  But after the dot-com crash in 2000, nobody trusted startups with their business anymore, and LoudCloud was suddenly headed for bankruptcy. I had a slim chance to move us into the software business, which would require less capital and give us a much better chance for survival. I told almost no one of my plans. Why? Because if word got out about the impending transformation not only would our current business fall apart, but so would the deal to enable the new business. When the truth ultimately emerged, as I sold LoudCloud and repurposed the remainder of the company into Opsware, our culture took a real hit. People trusted me a whole lot less. But I had to hurt the culture—to stop walking my own talk, for a time—to save the company.

  Resuscitating our culture afterward wasn’t easy. My approach was to admit all the sins of the past and reset us with a new level of transparency in the most memorable setting I could afford, which wasn’t much. I scheduled an all-company off-site in Santa Cruz, California, and rented rooms in the Dream Inn, a motel. The catered meals were ham-salad sandwiches with drink coupons. I made everyone double up in the rooms, ostensibly to save even more money. The real reason was that sharing rooms was almost unheard-of for Silicon Valley technology companies and I wanted them to remember everything about the off-site. (The ploy backfired on me as I ended up rooming with my chief financial officer, Dave Conte, a heavy snorer.)

  I made it clear that no work would occur the first afternoon and evening. We were to spend that time getting to know each other. That might seem redundant for a three-and-a-half-year-old company, but the idea was to begin to feel comfortable around one another again—a big ask.

  The next day, I opened the meeting by saying, “Okay, I am the one who drove the last business into a ditch, so why should you trust me this time?” Then I had my management team present every aspect of the business, including the financials—especially the financials, down to every penny we had in the bank and all the debt—and the complete product and business strategy. Full transparency again, after a period of necessary obfuscation.

  It mostly worked. Of the eighty people who attended the off-site, all but four stayed with the company through our ultimate sale to Hewlett-Packard five years later. I definitely did not walk the talk on our pivot, but thankfully I didn’t trip and land face-first on the pavement, either.

  Make Ethics Explicit

  Uber has received a ton of publicity for having a totally broken culture, so you may be surprised to learn that Travis Kalanick designed its culture with great intention and programmed it into his organization with meticulous care. Uber’s culture actually worked exactly as designed—only it had a serious design flaw.

  Take a look at Uber’s highly original cultural code, the values Kalanick laid down after he founded the company in 2009. Proud Uber employees circulated them widely:

  Uber Mission

  Celebrate Cities

  Meritocracy and Toe-Stepping

  Principled Confrontation

  Winning: Champion’s Mindset

  Let Builders Build

  Always Be Hustlin’

  Customer Obsession

  Make Big, Bold Bets

  Make Magic

  Be an Owner, not a Renter

  Be Yourself

  Optimistic Leadership

  The Best Idea Wins

  Kalanick also defined eight qualities he sought in his employees:

  Vision

  Quality Obsession

  Innovation

  Fierceness

  Execution

  Scale

  Communication

  Super Pumpedness

  These are not run-of-the-mill values you’d pull out of a standard management book. Nor are they vague aspirations that would emerge from a consensus-building session off-site. These are values you get when a leader clearly communicates the behavior he wants.

  If he put that much effort into Uber’s culture, where did it go wrong? The problem was that the mind-set implicit in such values as Meritocracy and Toe-Stepping, Winning: Champions Mindset, Always Be Hustlin’, and The Best Idea Wins elevated one value above all: competitiveness. Kalanick was one of the most competitive people in the world and he drove that ethos into his company in every way possible. And it worked: by 2016, the company was valued at $66 billion.

  The trainers at Uberversity, where new employees underwent a three-day initiation, began schooling everyone on this scenario: a rival company is launching a carpooling service in four weeks. It’s impossible for Uber to beat them to market with a reliable carpool service of its own. What should the company do? The correc
t answer at Uberversity—and what Uber actually did when it learned about Lyft Line—was “Rig up a makeshift solution that we pretend is totally ready to go so we can beat the competitor to market.” (Andreessen Horowitz, the venture capital firm where I work, invested in Lyft and I am on its board, so I was keenly aware of the dynamic between the companies—and I am decidedly biased.) Those, including the company’s legal team, who proposed taking the time to come up with a workable product, one far better than Uber Pool 1.0, were told “That’s not the Uber way.” The underlying message was clear: if the choice is integrity or winning, at Uber we do whatever we have to do to win.

  This competitiveness issue also came up when Uber began to challenge Didi Chuxing, the Chinese market leader in ride-sharing. To counter Uber, Didi employed very aggressive techniques including hacking Uber’s app to send it fake riders. The Chinese law on the tactic wasn’t entirely clear. The Chinese branch of Uber countered by hacking Didi right back. Uber then brought those techniques home to the United States by hacking Lyft with a program known as Hell, which inserted fake riders into Lyft’s system while simultaneously funneling Uber the information it needed to recruit Lyft drivers. Did Kalanick instruct his subordinates to employ these measures, which were at best anticompetitive and at worst arguably illegal? It’s difficult to say, but the point is that he didn’t have to—he had already programmed the culture that engendered those measures.

  When news leaked that the autonomous car unit at Alphabet’s Waymo division was developing a ride-sharing app, Uber began aggressively recruiting Waymo’s engineers to jump-start its own autonomous car effort. It did this despite the fact that Alphabet’s subsidiary, Google, was a large investor in Uber, and the fact that David Drummond, Alphabet’s chief of legal and corporate development, sat on Uber’s board. Kalanick even went as far as to buy a Waymo spinoff called Otto, which had allegedly stolen Waymo’s intellectual property. Did Uber execs know that Otto possessed stolen IP? I can’t say for sure, but it would have been culturally consistent.

  Uber’s cultural issues became visible to the world after a young woman named Susan Fowler joined the company as a site-reliability engineer in 2015. Fowler had a degree in physics and had written a book on microservices; she was brilliant and optimistic. But after completing Uber’s training program, she swiftly experienced the culture’s dark side. As she later wrote in a blog post that shook the company:

  After the first couple of weeks of training, I chose to join the team that worked on my area of expertise, and this is where things started getting weird. On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn’t. He was trying to stay out of trouble at work, he said, but he couldn’t help getting in trouble, because he was looking for women to have sex with. It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR.

  Uber was a pretty good-sized company at that time, and I had pretty standard expectations of how they would handle situations like this. I expected that I would report him to HR, they would handle the situation appropriately, and then life would go on—unfortunately, things played out quite a bit differently. When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to. Upper management told me that he “was a high performer” (i.e. had stellar performance reviews from his superiors) and they wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.

  According to federal law, if a company receives a harassment complaint of any kind (it need not even be documented as Fowler’s was), it must formally investigate it. Grasping this law is as basic to being an HR professional as grasping revenue recognition is to being an accountant. So why would the HR person at Uber knowingly commit a crime? Because the HR manager believed that disciplining a high-performing manager would be “uncompetitive.”

  There is zero chance that Kalanick thought it was a good idea not to investigate an HR complaint from a promising engineer. That was not the culture he’d intended to construct. Nowhere in his set of values did it say that it was okay for managers to sexually harass their employees. Nowhere was it implied. In fact, by all accounts Kalanick was furious about the incident, which he saw as a woman being judged on issues other than performance. That, of course, was the opposite of “Best Idea Wins.” Somehow his culture was having a weird counterproductive side effect.

  The side effect continued to manifest itself. When an Uber driver allegedly raped a passenger in India, execs back home suspected the company’s Indian rival Ola of paying the passenger to fake her own rape. An enterprising Uber executive, Eric Alexander, took the initiative to acquire the alleged victim’s medical records as a way to try to confirm this suspicion. When the news of this maneuver became public, the world was outraged. Was Uber bribing foreign officials to acquire the medical records of rape victims? What on earth was going on?

  Once the heat came down, even his own board members turned on Kalanick. They were shocked, shocked that there was gambling in the casino. Was the board aware the entire time of the corporate value “Always Be Hustlin’”? One hundred percent they were. Did they know what it meant? If they did not, they were negligent. I doubt they were negligent. There were many stories over the years indicating which way the company would go if a law that it didn’t like hampered its competitiveness.

  Was the board furious at Kalanick for designing such an aggressive culture? On the contrary, they were thrilled as long as he was making them billions. They were only furious once he got caught—that is, once the flaws in the culture became widely known outside the company.

  From Kalanick’s perspective, he had made his priorities crystal clear and the board had signed off on them for years. Openly proud of how he ran Uber, he loved its reputation for being the most competitive company in Silicon Valley. He believed and likely still believes that he did the right thing the entire way and furthermore exercised proper corporate governance as he made his beliefs clear to the board. Nobody can point to a decision that he made to enable sexual harassment, acquire medical records of rape victims, or any of the other transgressions.

  That’s the nature of culture. It’s not a single decision—it’s a code that manifests itself as a vast set of actions taken over time. No one person makes or takes all these actions. Cultural design is a way to program the actions of an organization, but, like computer programs, every culture has bugs. And cultures are significantly more difficult to debug than programs.

  Kalanick didn’t intend to build an unethical organization, just a hypercompetitive one. But he had bugs in his code.

  Huawei, China’s telecom-equipment giant, had a similarly meteoric rise fueled by a powerful but buggy “wolf culture.” These transgressions led to lawsuits, charges of international bribery, and recently the arrest of its CFO for bank fraud.

  It all began with tenacity and competitiveness. As the New York Times reported, employees were given mattresses so they could nap as they worked late nights, and were onboarded in a boot-camp-style training course that entailed morning jogs and the performance of skits about how they’d help customers even in dangerous war zones.

  Employees were also required to study and sign a set of business guidelines each year. More informally—which is where culture lives—there were “red lines” they were told never to cross: disclosing company secrets or breaking laws and sanctions. “Yellow line” situations, however, were a gray area. Workers were essentially encouraged to ignore rules about using gifts or other inducements to win customers. This led to bribery allegations in Ghana and Algeria, to sanction-busting beha
vior in Iran, and to Huawei’s acknowledgment that an employee had stolen the software underlying T-Mobile’s smartphone-testing robot, Tappy—and even the end of Tappy’s arm, which he slipped into his laptop bag—to help Huawei produce its own robot. It led, in other words, to red-line violations.

  In a 2015 corporate amnesty, thousands of Huawei employees admitted to transgressions ranging from bribery to fraud—perhaps, CEO Ren Zhengfei acknowledged, because the company used to evaluate staff solely according to how much business they won. Even after the seemingly shocking results of the amnesty program, Ren emailed everyone to say that adherence to ethical standards was important, of course, but “if it blocks the business from producing grain, then we all starve to death.” (You could argue, of course, that if Huawei was doing the bidding of the Chinese government—breaking the rules as a matter of national policy, the way an intelligence agency would—then its culture was doing exactly what it was supposed to.)

  What you measure is what you value. Huawei’s results echoed Uber’s. Once you remove the requirement to follow certain rules or obey certain laws, you basically remove ethics from the culture.

  It’s impossible to design a bug-free culture. But it’s vital to understand that the most dangerous bugs are the ones that cause ethical breaches. This is why Louverture emphasized ethics so explicitly. Spelling out what your organization must never do is the best way to inoculate yourself against bugs that cause ethical breaches.

  Recall Louverture’s speech to his soldiers: “Do not disappoint me . . . do not permit the desire for booty to turn you aside . . . it will be time enough to think of material things when we have driven the enemy from our shores.” Consider how strange this statement must have seemed. Louverture’s highest goal, like Uber’s, was winning. If he didn’t win the war, slavery would not be abolished. Nothing could be more important than this, could it? If it made his soldiers happy to pillage, why disallow it?