by Ben Horowitz
Fortunately, Maggie Wilderotter is smart, confident, and deeply empathetic—a natural leader. I work with her on the boards of Okta and Lyft and those companies’ CEOs don’t have to be told to pay close attention to everything Maggie says. It’s just obvious.
When Wilderotter arrived at Frontier, she told me, “Everybody wanted to show me the org chart, to make sure I understood the pecking order. I didn’t even look at it, because I believe that work gets done through the go-to people. They may not have titles and positions, but they’re the ones who get the work done.”
She went on a listening tour of the company and its far-off markets to find out how things were actually run and who those go-to people were. As she put together her strategy, they—not the top executives—were the ones she consulted. She asked the employees what they loved about the company and what they hated. Finally, she spent time thinking about how to dismantle the hierarchy and close the communications gap between the white- and blue-collar workers.
She began by firing her most lackluster executives. She fired the doctor, the chef, and the six pilots. She sold the hangar and the corporate jet and became the only Fortune 500 CEO at the time who flew commercial. And she gave all the employees their first raise in five years.
Her message was “We’re all in this together,” but she knew she had to back those words with actions to make them stick. To change the dynamic, Wilderotter arbitrarily took the side of the front line over leadership in every dispute. The details of the disputes mattered less than the principle of giving the workers a voice. If someone in leadership reacted poorly to the idea that the workers on the front lines—and, by extension, the customers they represented—were always right, that person’s tenure at Frontier would be short.
But just because Wilderotter began by siding with those on the front lines, to shift the overall dynamic, didn’t mean that they were always right.
People in the local markets would tell me, “I’m not allowed to install the service properly in a way that will satisfy the customer.” I would ask, “What do you need?” And they would say, “I don’t have the tools to do my job”—meaning literally hammers and screwdrivers. So I’d tell them to go down to the hardware store and buy the tools they needed and give their tech supervisor the bill. The idea was to encourage them to stop complaining and start taking ownership.
That was a good start, but to really make a difference, Wilderotter had to address the union contract. Like many such contracts, it was negotiated between the company’s lawyers and the union heads with no management involvement. Because she’d never worked at a company with unions, she questioned why the negotiations had to be done that way:
We had a very adversarial relationship with our union. The lawyers at corporate would fly around the country and be assholes and do this win-lose thing. The union members worked for the general managers in Connecticut, so I said the general managers should negotiate directly with their employees. And the result was that union members, the people who were installing phones and repairing them, ended up with compensation packages like everyone else: they got profit sharing and stock options. In exchange, they gave on things like health-care copays. Having shared goals and targets helped make us all one company, helped build this circle of trust. The union guys started to say, “Wow, we can actually make this job and this company better! We can win.”
“We’re all in this together” had to be a two-way street. Frontier began offering premium television and pay-per-view options to compete with the cable companies. But after it acquired some of Verizon’s assets, Frontier discovered that 46 percent of its former Verizon employees subscribed to cable instead of using Frontier’s product.
I said to those former Verizon employees, “We have to collectively win in these markets. I bought you because you have great assets, and one of the best assets is all of you in this room. But let me make it perfectly clear who the enemy is. The enemy is not us, it’s the cable guys. I know 46 percent of you write a check to the cable guys every month, and I will tell you I’m not signing that check anymore. You’ve got thirty days to disconnect your cable and convert to our services or you’re fired.” There was, like, this rumbling. And I said, “We’re all in this together, but you need to decide where your loyalties are. They’re either to us and to all of you having jobs, secure jobs that I can continue to fund, or they’re not. So pick a side. Because on day thirty-one, if you’re still a cable subscriber, you don’t work here anymore.”
Almost all of the employees made the switch. Those who didn’t were indeed fired. Those who did became part of Wilderotter’s new meritocracy.
The cultural changes took years to accomplish, but they produced exceptional results. In the eleven years that Wilderotter ran Frontier, the union never went on strike. And the company transformed itself from a weird, sleepy, regional Baby Bell that made $3 billion a year into a national broadband provider with operations in twenty-nine states and revenues in excess of $10 billion.
By tearing down the caste system, Wilderotter built intense loyalty among Frontier’s employees and freed them to do their best work. Her approach earned her the nickname the CEO of the People.
Mastering Inclusion—Seeing People
Inclusion is a huge and complex issue, and I am not qualified to address all the societal issues associated with it. So I will focus on how you can apply Genghis Khan’s, Don Thompson’s, and Maggie Wilderotter’s principles to give your company a competitive advantage—the advantage of acquiring the best talent available. All three understood more than just national or racial or gender diversity; they also understood cognitive and cultural diversity—people’s disparate and unique ways of processing information, thinking, and interacting with others. By seeing people for who they were they could see what they truly had to offer.
There were three keys to Genghis Khan’s approach to inclusion:
He was deeply involved in the strategy and implementation, down to having his own mother adopt children from a conquered tribe to symbolize the integration process.
He started with the job description he needed to fill, be it cavalry, doctors, scholars, or engineers, and then went after the talent to fill it. He did not assume that every person with a particular background could do the job that people with similar backgrounds had done—that all Chinese officials would make great administrators.
Not only did he make sure that conquered people were treated equally, but through adoption and intermarriage, he made them kin. They weren’t brought into the empire under some separate but supposedly equal side program. As a result, they felt truly equal—and became more loyal to him and to the Mongols than to their original clans.
Compare this to modern companies where:
CEOs delegate inclusion programs to “heads of diversity.”
These heads of diversity are tasked with achieving diverse representation rather than with the whole company’s success. So they often focus on achieving specific race and gender targets rather than on finding talent from diverse pools.
Companies often outsource integration to hired diversity consultants who have no understanding of the company’s business objectives. That is, the companies make no further efforts to turn themselves into a great place to work for their new hires. As a result, while hiring numbers show progress, the real story lies in employee satisfaction numbers and the attrition rate of new hires. The first will be low, the second high.
If the key to inclusion means seeing someone for who they are even if they come in a color or gender that you’re not used to, then it follows that hiring people on the basis of color or gender will actually defeat your inclusion program. You won’t see the person, you will just see the package.
This seems obvious enough, but it’s actually trickier to understand than it would seem, because if you are hiring your own race or gender then you can see them just fine. If a woman hires a woman, there will probably be no problem later. If a man does it, then he runs a strong chance that he’l
l only see that she’s a woman and not who she really is. Because most advisors on inclusion come from the groups being included, they often miss this point. And this is why hiring women and minorities into senior positions usually accelerates your inclusion efforts.
Good intentions, pursued without meticulous forethought and follow-through, often lead to catastrophe. A few years ago, my friend Steve Stoute and I were discussing his career in the music industry, a relatively integrated field. He was reminiscing about his time as president of Sony Urban Music, and he went off on how ridiculous his title was. He said, “They couldn’t call me president of Black Music, because that would be offensive, so they called it Urban Music. But that’s not even the real problem. Since we called it ‘Urban Music,’ I was only allowed to market in cities—as if no black people lived out in the country.” He went on to say that even calling it “black music” wouldn’t have helped: “We had Michael Jackson. What white people don’t like Michael Jackson? It’s not black music; it’s music.”
Many companies fall short of Genghis Khan’s standard by implementing a sort of Urban HR. They set up the diversity department as though female talent, African-American talent, and Hispanic talent are fundamentally different from white talent, male talent, or Asian talent. If you only listen to music from one race then you probably do not understand music. If you only hire talented people from one race or gender, then you probably do not understand talent. I know this because until recently I did not understand talent.
A few years after we started Andreessen Horowitz, I looked at the makeup of our organization and of other top companies in tech. The pattern was clear. Every organization tended to resemble the person in charge. If a woman ran the company, women were overrepresented. If a Chinese-American person ran engineering, you’d find lots of Chinese-American engineers. If an Indian-American ran marketing, there’d be Indian-Americans all over the marketing department. Why? It all started with the hiring profile. People understand their own strengths, value them highly, and know how to test for them in an interview.
Our firm had this issue in every department. Our head of marketing was a woman and she had a lot of women working for her. I asked her what was in her profile that made it difficult for men to get a job in marketing. “Helpfulness,” she replied. I was floored. Of course! We were a services firm. Every job description in our company should have helpfulness in the profile, but I was the founder and I had never even considered it. I was blind. I could not see the exact contours of the talent we needed to find, so we were missing out.
People who come from different backgrounds and cultures bring different skills, different communication styles, and different mores to the organization. When we tested for helpfulness, women scored higher (though of course there are helpful men, too). Testing for it required me to think differently about how we assess candidates. One thing to look for is volunteer work, which helpful people naturally like to do. It also turns out that during the interview, helpful people want to talk much more about the interviewer than about themselves: by learning about her they can anticipate her needs and be, well, helpful.
Similarly, when we tested for the ability to create a relationship, African-Americans scored higher. We’d look for it by seeing how candidates built relationships with us during the interview—after interviewing someone, did you want to spend more time with him? One young African-American man who was great at it turned out to have the highest tips of any Cheesecake Factory waiter in the nation. He was absolutely expert at creating an instantaneous relationship. If you’re having trouble seeing the value in a particular talent pool, the answer is not to set up a parallel talent process for those groups; the answer is to fix the talent process you have so you can cure your blindness.
I knew we had to change our selection process if we wanted to compete at the highest level. Like many companies, our recruiting networks emanated from our employees. So we had to broaden our talent network. To build our African-American talent network, for instance, we held events with prominent African-American leaders such as Bernard Tyson (CEO, Kaiser Permanente), Judy Smith (the crisis manager who inspired the show Scandal), and Ken Coleman (a leading Silicon Valley executive), and reached out to African-American tech organizations such as /dev/color, NewMe, and the Phat Startup.
Next, we changed our hiring process. When a manager wants to make a new hire, she must now have people from talent pools different from her own (for instance, U.S. military veterans, African-Americans, etc.) review the hiring criteria and make suggestions about what they would hire for and how they would test for those qualities. For example, one criterion men often overlook when hiring a manager—but women rarely do—is the ability to give feedback. Women are more willing to confront a coworker and have a difficult conversation; men often avoid the issue until it gets superhot. We also made sure that our interview teams came from a range of backgrounds, so that we were better able to see the complete candidate.
Our new process is not perfect, but it is clearly better than our old one. Today half of our 172 people are women, and the firm is 27 percent Asian and 18.4 percent African American and Hispanic. That’s a lot of talent that we might not have seen had we stuck to our old process.
More important, we haven’t just improved our numbers. We’ve improved our cultural cohesion. Because we test for helpfulness, we value it and we value the people who have it. We can see them for who they are, not what they look like.
It’s easy to value the things that you test for in an interview and nearly impossible to value things that you don’t. When a company hires an African-American employee because he or she is African-American, then race becomes a reason for making decisions in that culture and the culture often becomes racist. What you do is who you are. If someone enters a company through the Urban HR division, everyone will remember that fact, and the employee will be suspect and have to prove herself over and over. Whereas if everyone is hired on the same criteria, then the culture will see people for who they are and what they uniquely bring to the table.
8
Be Yourself, Design Your Culture
I don’t want you to be me, you should just be you.
—Chance the Rapper
The first step in getting the culture you want is knowing what you want. It sounds obvious and it is; it sounds easy, but it’s not. With seemingly infinite possibilities to choose from, how do you design a culture that gives your organization the advantages it needs, creates an environment you are proud of, and that—most importantly—can actually be implemented?
A few points to keep in mind:
Whether your company is a startup or a hundred years old, designing your culture is always relevant. Cultures, like the organizations that create them, must evolve to meet new challenges.
All cultures are aspirational. I have worked with thousands of companies and none of them ever achieved total cultural compliance or harmony. In a company of any significant size there will always be violations. The point is not to be perfect, just better than you were yesterday.
While you can draw inspiration from other cultures, don’t try to adapt another organization’s ways. For your culture to be vibrant and sustainable, it must come from the blood, from the soul.
Be You
Step one in designing a successful culture is to be yourself. That’s not so easy.
In 1993, the basketball player Charles Barkley famously said, “I am not a role model. Just because I dunk a basketball doesn’t mean that I should raise your kids.” Many people thought this statement was clever, and it led to a Nike ad campaign. After the campaign became wildly popular, a reporter asked Barkley’s teammate Hakeem Olajuwon if he, too, was “not a role model.” Olajuwon replied, “I am a role model.”
Olajuwon explained that Charles Barkley was one person in private and a totally different person in public. As maintaining a dual personality was extremely stressful, he said, Barkley was constantly looking for a way out. Because he did not feel he was really
the person the NBA wanted him to be, when he went out partying, he did it to the extreme. Olajuwon said that he himself was the opposite: exactly the same in public and private. As a result, he was indeed a role model.
This interview revealed a key to leadership: you must be yourself. Other people will always have ideas of what you should be, but if you try to integrate all those ideas in a way that’s inconsistent with your own beliefs and personality, you will lose your mojo. If you try to be someone else, not only will you be unable to lead, but you’ll be ashamed to have people emulate you. In essence, Charles Barkley was saying, “Don’t follow me. Even I don’t like me.”
Under the spotlight, managers find it very hard to just be themselves. Say that an excellent coworker, Stan, gets his first promotion to manager. All his colleagues are excited. But then Stan becomes “Manager Stan”—and magically transforms into a dick. Because he feels he has to establish his authority, he stops treating you like a person and starts treating you like someone he has to impress with his power. Nobody likes or respects Manager Stan.
At the CEO level, this issue plays out more subtly. Many CEOs model a successful leader whose methods they haven’t internalized or whose best practices don’t apply to their company. For example, a CEO might read about Jack Welch’s “rank and yank” process, where he ranked all the General Electric employees and eliminated the lowest performers. The CEO decides to do the same—look how well it worked for Jack! When he brings the idea to his managers, one says, “But we have this super-intense hiring process where we’re only allowed to hire the very top people in the industry. Our bottom ten percent is pretty darned good.” The CEO thinks, That’s right. In fact, I set up that process.