by Ben Horowitz
Your own perspective on the culture is not that relevant. Your view or your executive team’s view of your culture is rarely what your employees experience. What Shaka Senghor experienced on his first day out of quarantine transformed him. The relevant question is, What must employees do to survive and succeed in your organization? What behaviors get them included in, or excluded from, the power base? What gets them ahead?
You must start from first principles. Every ecosystem has a default culture. (In Silicon Valley, our baked-in cultural elements range from casual dress to employee owners to long hours.) Don’t just blindly adopt it. You may be adopting an organizing principle you don’t understand. For example, Intel created a casual-dress standard to promote meritocracy. Its leaders believed the best idea should win, not the idea from the highest-ranking person in the fanciest suit. Many current Silicon Valley companies don’t know that history, and adopt the casual dress without adopting the meritocracy that underpinned it.
And the predominant culture may not fit your business. Intel ran that way because the top engineers were as important in the decision-making process as the top executives. If you’re in fast food, Intel’s culture probably won’t work for you.
Let’s get into the details.
Culture Changes People
Senghor walked into a culture that was designed to fix criminal behavior but that actually increases it. You have to ask why our prison system designed the culture that way. Do the people running it even know what the culture is or what it does?
If you’re a leader, how do you know what your culture is? The question is harder than it sounds.
All leaders get surprised by feedback like “Our culture is really harsh” or “We’re arrogant,” but when they try to examine it directly to figure out what’s going on, they fall prey to the Heisenberg Uncertainty Principle of Management. The act of trying to measure your culture changes the result. When you ask your managers, “What is our culture like?” they’re likely to give you a managed answer that tells you what they think you want to hear and doesn’t hint at what they think you absolutely do not want to hear. That’s why they’re called managers.
The best way to understand your culture is not through what managers tell you, but through how new employees behave. What behaviors do they perceive will help them fit in, survive, and succeed? That’s your company’s culture. Go around your managers to ask new employees these questions directly after their first week. And make sure you ask them for the bad stuff, the practices or assumptions that made them wary and uncomfortable. Ask them what’s different than other places they’ve worked—not just what’s better, but what’s worse. And ask them for advice: “If you were me, how would you improve the culture based on your first week here? What would you try to enhance?”
Senghor told me the story of arriving at county jail, and then at prison, nearly thirty years after it happened, but he remembered it all like it was yesterday. Your first day, your first week in an organization is when you’re observing each detail, figuring out where you stand. That’s when your sense of the culture gets seared in—especially if someone gets stabbed in the neck.
That’s when you diagnose the power structure: Who can get things done, and why? What did they do to get in that position? Can you replicate it? At the same time, how you behave on arrival—how other people see you—affects your standing and potential in the company and determines your personal brand.
First impressions of a culture are difficult to reverse. This is why new-employee orientation is better thought of as new-employee cultural orientation. Cultural orientation is your chance to make clear the culture you want and how you intend to get it. What behaviors will be rewarded? Which ones will be discouraged or severely punished? People’s receptivity when they join, and the lasting impact of first impressions, is why the new-employee process is the most important one to get right. If your company’s process for recruiting, interviewing, orienting, training, and integrating new employees is intentional and systematic, great. If any part of it is accidental, then so is your culture.
Many people believe that cultural elements are purely systematic, that employees only operate within a given corporate culture while they’re in the office. The truth is that what people do at the office, where they spend most of their waking hours, becomes who they are. Office culture is highly infectious. If the CEO has an affair with an employee, there will be many affairs throughout the company. If profanity is rampant, most employees will take that home, too.
So trying to screen for “good people” or screen out “bad people” doesn’t necessarily get you a high-integrity culture. A person may come in with high integrity but have to compromise it to succeed in your environment. Just as Africans in Saint-Domingue became the products of slave culture and then transformed into elite soldiers under Toussaint Louverture, people become the culture they live in and do what they have to do to survive and thrive.
Living the Code
Senghor’s predecessors did not live up to their own code and it eventually cost them their positions. A leader must believe in his own code. Embedding cultural elements you don’t subscribe to will eventually cause a cultural collapse.
As one example, I’ve never met a CEO who doesn’t believe in the value of giving feedback. Everybody wants a transparent culture where people know where they stand. Yet I’ve met many CEOs who require managers to write performance reviews, but won’t take the time to do it themselves. When I was CEO, I had a rule that everyone, including me, was held to: if you don’t complete all your written performance reviews, nobody who works for you will receive their raises, bonuses, or stock-option increases. We always had 100 percent compliance on written feedback, because no manager wanted to be burned at the stake by her people. Cultural consistency on feedback was that important to me.
You could also argue that my rule was self-protective: over time, a hypocritical leader becomes vulnerable to being replaced by another, more walk-the-talk leader. Believing in your own principles is necessary, but not sufficient. You must also do as Senghor did and transfer those principles to your team in a way that sticks. Depending upon where the team is to begin with, this transfer may be a relatively minor effort or an immense undertaking. But it is critical, because it not only establishes the culture, but cements you as the leader.
If you are charismatic enough, you can sometimes get away with saying your culture is something it isn’t. People will believe you, at least for a while. But you won’t get the behaviors you need and you’ll never become who you said you were.
Culture Is Universal
You might think you can build a ruthlessly competitive culture that your employees use only to deal with outside forces but set aside when dealing with each other. You might think you can build an abusive, shame-you-for-your-failures culture that people participate in at work, but relinquish at quitting time. But that’s not how it works. Cultural behaviors, once absorbed, get deployed everywhere.
Imagine you’re a manager. Your company has the cultural value “We have each other’s backs,” meaning that you support one another when the chips are down. Now, imagine that one of your distribution partners is attempting to close a large deal and calls on one of your people for help, but your employee is busy and drops the ball—no show, no call, no help. The partner, furious at losing the deal through lack of support, calls you to vent. Do you have your employee’s back or your partner’s back? Is your allegiance to the culture or to the tribe?
If your allegiance is to the tribe, which is the more instinctive call, keep in mind that the idea behind supporting one another when the chips are down is to foster trust and loyalty throughout the company. It’s nearly impossible for a company to be able to maintain one set of ethics with partners and an entirely different set in-house. If you support the employee, he will learn two lessons: 1) you have his back, and 2) dropping the ball is totally acceptable. The way you treat that partner will eventually be the way your employees treat each other.
When the Code Gets Weaponized
When a few members of Senghor’s squad wanted to kill a couple of white prisoners, they were selfishly trying to manipulate the code. This move is common: Uber’s CEO, Dara Khosrowshahi, refers to it as “weaponizing the culture.” Senghor’s guys were attempting to weaponize the cultural elements of “self-love and fighting oppression” to boost their own status. They could gain credibility as “killers” by picking an easy target. Senghor revealed their true motives by simply increasing the difficulty of the target—and the consequences of hitting it.
Stewart Butterfield, the founder and CEO of Slack, faced a similar situation when one of Slack’s core cultural values, empathy, ended up with a lot of unintended consequences. (As the samurai realized, virtues are superior to values, but until that understanding becomes widespread, a lot of companies will continue to have values.) The empathy value was primarily aimed at customers, but it was also meant to improve communication internally by helping you understand your fellow workers better. If you are an engineer and you really understand the struggles of a product manager and the process she went through to get the customer data she’s presenting, you’ll take it more seriously.
But when employees got feedback from their managers that they needed to work more effectively with their peers or raise their overall game, a few weaponized the empathy value and fired back with “By giving me that feedback, you’re not being empathetic!” Instead of using empathy to improve communication, these employees wanted to outlaw it because it hurt their feelings. Their pushback made some managers hesitate and begin to withhold feedback, fearing it might seem like unempathetic criticism.
Butterfield had to send a clear message about which behaviors were and were not part of the culture. So he began to shift the emphasis away from empathy and toward one of the core attributes he wanted to build into the culture: being collaborative. Then he defined what that value meant in practice. At Slack, “collaborative” means taking leadership from everywhere. Collaborative people know that their success is limited by uncollaborative people, so they are either going to help those people raise their game or they are going to get rid of them.
When You Have to Change Yourself to Change Your Culture
Cultures tend to reflect the values of the leaders. Ultimately, Senghor had to change himself to get the culture that he wanted. Business leaders face the same challenges, but often assume that they are “good people” and ignore their own shortcomings. This produces dangerous cultural consequences.
I had many of these moments when I was the CEO of LoudCloud, and each of them felt like they could go either way. Once, after a quarter that was strong on revenue but low on bookings—an accounting term for guaranteed contracts that will eventually become revenue—some of my employees devised an elaborate way to make an unguaranteed contract sound like a booking. Basically, the team suggested that we toss actual bookings and unguaranteed contracts into the same bucket. I really did not want to miss our bookings number, and technically the proposal was not a lie or illegal, so could I get away with it? I was leaning toward trying to. That is, I was willing to be deceptive as long as I could claim that we had followed the letter of the law—and therefore been truthful.
Then Jordan Breslow, my general counsel, came by and said, “Ben, this whole discussion is making me very uncomfortable.” I said, “Jordan, why? We’re not saying anything that’s not true, and if we miss the bookings number, that might lead to a blizzard of bad press followed by customers not trusting us and us missing another quarter and being forced to do a layoff.” He said, “Yes, but we are proposing to tell the truth in such a way that what people hear is not true.” I thought: Oh no, he’s right.
I then made a rule that we would only report numbers related to revenue that were defined by standard accounting law and that had been audited by an outside firm. I had to change in order for us to change our culture from telling the truth to making sure people heard the truth. This shift derived from our original cultural goal of trust. Trust, as I discussed in the Louverture chapter, is the foundation of communication. Simply saying something you feel more or less comfortable terming “the truth” doesn’t build trust. What builds trust is the bona fide truth being heard.
But I genuinely might have gone the other way if Breslow hadn’t stopped me. Culture can feel abstract and secondary when you pit it against a concrete result that’s right in front of you. Culture is a strategic investment in the company doing things the right way when you are not looking.
Change Culture Through Constant Contact
When Senghor decided to dramatically redirect the Melanics, he did it through urgent emphasis in daily meetings. This is one of the best ways to change culture in a company.
I recently recommended to Lea Endres, CEO of NationBuilder, which builds software for community leaders, that she follow Senghor’s lead. NationBuilder was operating close to the red and Endres was frustrated because, despite her reminding everyone that cash collection was a priority, she couldn’t get her team to care enough about it. Our conversation went like this:
Lea: I’m really worried about cash collections. We use this outsourced finance firm and they don’t care. We have a low cash balance and we got surprised last month. A couple more surprises and we’re in deep trouble.
Ben: Is there a team on it? How much do you need to collect this month?
Lea: Yes. And $1.1 million at least.
Ben: If you have a crisis situation and you need the team to execute, meet with them every day and even twice a day if necessary. That will show them this is a top priority. At the beginning of each meeting you say, “Where’s my money?” They will start making excuses like “Boo Boo was supposed to call me and didn’t,” or “The system didn’t tell me the right thing.” Those excuses are the key, because that’s the knowledge you’re missing. Once you know that the excuse is that “Fred didn’t answer my email,” you can tell Fred to answer the damned email and also tell the person making the excuse that you expect way more persistence. The meetings will start out running long, but two weeks later they’ll be short, because when you say, “Where’s my money?” they are going to want to say, “Right here, Lea!”
Two weeks later:
Lea: You wouldn’t believe some of the excuses. One was that we have an auto email that is one sentence long that tells customers they are late—but it doesn’t tell them what to do! I’m like, “Well, then, let’s fix the damned email!” We’re making progress and they know I want my money.
End of quarter:
Lea: We collected $1.6 million in September! And the team loves hearing me say “Where’s my money?!?!”
To change a culture, you can’t just give lip service to what you want. Your people must feel the urgency of it.
6
Genghis Khan, Master of Inclusion
Inter century anthems based off inner city tantrums
Based off the way we was branded
Face it, Jerome get more time than Brandon
And at the airport they check all through my bag and
Tell me that it’s random.
—Kanye West, “Gorgeous”
Genghis Khan was the most effective military leader in history. He conquered more than twice as much land as anyone else, and he did it in a series of astonishing campaigns. He subdued some twelve million square miles—an area roughly the size of Africa, stretching from the Persian Gulf to the Arctic Ocean—with an army of just one hundred thousand men.
Most companies today struggle with how to create an inclusive culture, but Genghis Khan mastered this difficult art nearly a thousand years ago. He subsumed peoples from China and Persia and Europe, practitioners of Islam, Buddhism, Christianity, and even cannibalism, within one contiguous domain. He built his realm on such firm foundations that after his death it continued growing for 150 years.
How could a fearful boy named Temujin, who shrank from dogs
and cried at the slightest provocation, who grew up an outcast in a tiny nomadic tribe in the middle of nowhere, achieve such feats? What cultural innovations enabled this success?
Temujin was born in 1162 in one of the harshest, most arid regions of the world, near the modern-day border of Mongolia and Siberia. According to The Secret History of the Mongols, a court history, he emerged from the womb clutching a large clot of blood, an augury that he would be a conqueror. Both the bloodshed and the augury would prove prophetic.
Temujin was raised in a small tribe of Tayichiud, one of the two leading clans among the thirteen that made up the Mongols. His father, Yesugei, a middle-rank clan leader, had kidnapped his mother, Hoelun, to make her his second wife. Kidnapping a prospective wife was a standard move at the time; Hoelun, then fifteen, was already married. The new couple named their first boy Temujin, after a warrior whom Yesugei had captured and executed named Temujin Uge. Not exactly Leave it to Beaver, but a fitting origin for the man who would become The Great Khan.
We don’t know how Temujin looked as a boy, but in Genghis Khan: His Conquests, His Empire, His Legacy, Frank McLynn writes that as an adult he was formidable: “robustly healthy, tall, broad-browed, with a long beard and eyes like a cat,” all of which “made him appear calm, ruthless, calculating and self-controlled.” His worldview, Temujin himself would later declare, was piratical:
It is delightful and felicitous for a man to subdue rebels and conquer and extirpate his enemies, to take all they possess, to cause their servants to cry out, to make tears run down their faces and noses, to ride their pleasant-paced geldings, to make the bellies and navels of their wives his bed and bedding, to use the bodies of his women as a nightshirt.