The Culture Code

by Daniel Coyle

  Next Catmull focused on creative structure. Disney had been using the conventional film development model, which worked as follows: (1) studio executives create development teams, which are charged with generating stories; (2) studio executives evaluate those ideas, decide which would be developed, and assign directors to each one; (3) directors make the movies, and executives evaluate early versions, offer notes, and occasionally create competitions called “bake-offs” to decide which film is ready for release.

  Catmull flipped that system on its head, removing creative power from the executives and placing it in the hands of the directors. In the new structure, the directors were responsible for coming up with their own ideas and pitching them, rather than being assigned them by studio executives. The job of the executives was not to be all-deciding bosses but rather to support the directors and their teams as they undertook the painful journey from idea to workable concept to finished film. Early in the transition, Catmull invited Disney directors and executives to Pixar to observe a BrainTrust meeting. They watched the team work together to pick a movie apart and do the hard work of rebuilding it.

  The change in the energy at Disney was immediate. Disney directors called it a breath of fresh air and likened it to the fall of the Berlin Wall. It was a moment of hope, reinforced by the fact that the Disney team’s subsequent movie improvement meetings (they dubbed them the Story Trust) were judged to be the best and most useful anyone there had experienced.

  Catmull, however, wasn’t as quick to celebrate, knowing that real change wasn’t going to happen overnight. “It takes time,” he says. “You have to go through some failures and some screw-ups, and survive them, and support each other through them. And then after that happens, you really begin to trust one another.”

  Which is what happened. The first few films after the acquisition were immediately better, scoring improved reviews as well as box office success. Then in 2010, Disney’s teams began clicking at a Pixarian level, with Tangled ($591 million in worldwide box office), Wreck-It Ralph ($471 million), Frozen ($1.2 billion), Big Hero 6 ($657 million), and Zootopia ($931 million). Catmull notes that the transformation happened with virtually no turnover. “The people who made these films are the same people who were there when they were failing,” he says. “We put in some new systems, they learned new ways of interacting, and they changed their behavior, and now they are a completely different group of people when they work together.”

  We put in some new systems, and they learned new ways of interacting. It’s strange to think that a wave of creativity and innovation can be unleashed by something as mundane as changing systems and learning new ways of interacting. But it’s true, because building creative purpose isn’t really about creativity. It’s about building ownership, providing support, and aligning group energy toward the arduous, error-filled, ultimately fulfilling journey of making something new.

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  * You see this pattern with many highly creative groups, such as Lockheed’s famous Skunk Works (which designed the U-2, the Blackbird, the Nighthawk, and several other legendary planes in record time), Xerox’s PARC (which invented the computer interface that Steve Jobs “borrowed” for Apple), Google X, Procter & Gamble’s Clay Street, and Mattel’s Project Platypus, all of which are essentially the same place: physically distant from the parent group, nonhierarchical, and given maximum autonomy.

  Here’s a surprising fact about successful cultures: many were forged in moments of crisis. Pixar’s crisis occurred in 1998 when it set out to make a straight-to-video sequel to the highly acclaimed Toy Story. The studio embarked on the project presuming it would be a relatively simple process—after all, how hard could a sequel be? But early versions were awful. The story lacked emotion, the characters were flat, and the film lacked the sparkle and heart of the original. Catmull and Lasseter realized this was a question of Pixar’s core purpose. Was it a studio that did average work or one that aimed for greatness? At their urging, Pixar scrapped the early versions and started over at the eleventh hour, aiming for a full theatrical release instead of video. This successful last-minute push crystallized Pixar’s identity and resulted in the invention of many of its signature collaborative systems (including the BrainTrust).

  The SEALs experienced a similar moment in 1983, during the invasion of Grenada. The mission had been straightforward: One team would parachute into the sea, swim to shore, and capture Grenada’s only radio antenna. Unfortunately, a combination of weather, poor communication, and bad decisions led to the team being dropped at night in a storm, overloaded with gear. The result was the drowning deaths of four SEALs—and a subsequent rebuilding of the group’s decision-making and communications systems.

  Danny Meyer’s early days as a restaurateur, too, were punctuated by a string of near-disasters. “We nearly killed a customer when a light fixture fell out of a wall,” he says. “Another time I got into a fistfight with a customer who’d had too much to drink. And I’m not talking just a shoving match. It was a real fistfight in front of the whole restaurant. He punched me in the jaw and slammed my head in a door, and I kicked him in the nuts. Let’s just say that we’re lucky that the Internet didn’t exist in those days.”

  The difference with successful cultures seems to be that they use the crisis to crystallize their purpose. When leaders of those groups reflect on those failures now, they express gratitude (and sometimes even nostalgic desire) for those moments, as painful as they were, because they were the crucible that helped the group discover what it could be.

  This gives us insight into building purpose. It’s not as simple as carving a mission statement in granite or encouraging everyone to recite from a hymnal of catchphrases. It’s a never-ending process of trying, failing, reflecting, and above all, learning. High-purpose environments don’t descend on groups from on high; they are dug out of the ground, over and over, as a group navigates its problems together and evolves to meet the challenges of a fast-changing world.

  Here are a few ideas to help you do that.

  Name and Rank Your Priorities: In order to move toward a target, you must first have a target. Listing your priorities, which means wrestling with the choices that define your identity, is the first step. Most successful groups end up with a small handful of priorities (five or fewer), and many, not coincidentally, end up placing their in-group relationships—how they treat one another—at the top of the list. This reflects the truth that many successful groups realize: Their greatest project is building and sustaining the group itself. If they get their own relationships right, everything else will follow.

  Be Ten Times as Clear About Your Priorities as You Think You Should Be: A while back Inc. magazine asked executives at six hundred companies to estimate the percentage of their workforce who could name the company’s top three priorities. The executives predicted that 64 percent would be able to name them. When Inc. then asked employees to name the priorities, only 2 percent could do so. This is not the exception but the rule. Leaders are inherently biased to presume that everyone in the group sees things as they do, when in fact they don’t. This is why it’s necessary to drastically overcommunicate priorities. The leaders I visited with were not shy about this. Statements of priorities were painted on walls, stamped on emails, incanted in speeches, dropped into conversation, and repeated over and over until they became part of the oxygen.

  One way to create awareness is to make a habit of regularly testing the company’s values and purpose, as James Burke did with the Credo challenge. This involves creating conversations that encourage people to grapple with the big questions: What are we about? Where are we headed? Many of the leaders I met seemed to do this instinctively, cultivating what might be called a productive dissatisfaction. They were mildly suspicious of success. They presumed that there were other, better ways of doing things, and they were unafraid of change. They presumed they didn’t have all the answers and so constantly sought guidanc
e and clarity.

  Figure Out Where Your Group Aims for Proficiency and Where It Aims for Creativity: Every group skill can be sorted into one of two basic types: skills of proficiency and skills of creativity.

  Skills of proficiency are about doing a task the same way, every single time. They are about delivering machine-like reliability, and they tend to apply in domains in which the goal behaviors are clearly defined, such as service. Building purpose to perform these skills is like building a vivid map: You want to spotlight the goal and provide crystal-clear directions to the checkpoints along the way. Ways to do that include:

  • Fill the group’s windshield with clear, accessible models of excellence.

  • Provide high-repetition, high-feedback training.

  • Build vivid, memorable rules of thumb (if X, then Y).

  • Spotlight and honor the fundamentals of the skill.

  Creative skills, on the other hand, are about empowering a group to do the hard work of building something that has never existed before. Generating purpose in these areas is like supplying an expedition: You need to provide support, fuel, and tools and to serve as a protective presence that empowers the team doing the work. Some ways to do that include:

  • Keenly attend to team composition and dynamics.

  • Define, reinforce, and relentlessly protect the team’s creative autonomy.

  • Make it safe to fail and to give feedback.

  • Celebrate hugely when the group takes initiative.

  Most groups, of course, consist of a combination of these skill types, as they aim for proficiency in certain areas and creativity in others. The key is to clearly identify these areas and tailor leadership accordingly.

  Embrace the Use of Catchphrases: When you look at successful groups, a lot of their internal language features catchphrases that often sound obvious, rah-rah, or corny. Many of us instinctively dismiss them as cultish jargon. But this is a mistake. Their occasionally cheesy obviousness is not a bug—it’s a feature. Their clarity, grating to the outsider’s ear, is precisely what helps them function.

  The trick to building effective catchphrases is to keep them simple, action-oriented, and forthright: “Create fun and a little weirdness” (Zappos), “Talk less, do more” (IDEO), “Work hard, be nice” (KIPP), “Pound the rock” (San Antonio Spurs), “Leave the jersey in a better place” (New Zealand All-Blacks), “Create raves for guests” (Danny Meyer’s restaurants). They’re hardly poetry, but they share an action-based clarity. They aren’t gentle suggestions so much as clear reminders, crisp nudges in the direction the group wants to go.

  Measure What Really Matters: The main challenge to building a clear sense of purpose is that the world is cluttered with noise, distractions, and endless alternative purposes. One solution is to create simple universal measures that place focus on what matters. A good example happened in the early days of Zappos, when Tony Hsieh noticed that call center workers were measured by the number of calls they handled per hour. He realized that this traditional measure was at odds with the group’s purpose and that it was driving unwanted behaviors (haste and brevity, for starters). So he banished that metric and replaced it with Personal Emotional Connections (PECs), or creating a bond outside the conversation about the product. It’s impossible, of course, to measure PECs precisely, but the goal here is not precision; it is to create awareness and alignment and to direct behavior toward the group’s mission. So when a customer service agent spent a company-record 10 hours and 29 minutes on a call, Zappos celebrated and sent out a press release.*

  Use Artifacts: If you traveled from Mars to Earth to visit successful cultures, it would not take you long to figure out what they were about. Their environments are richly embedded with artifacts that embody their purpose and identity. These artifacts vary widely: the battle gear of soldiers killed in combat at the Navy SEAL headquarters; the Oscar trophies accompanied by hand-drawn sketches of the original concepts at Pixar; and the rock and sledgehammer behind glass at the San Antonio Spurs practice facility, embodying the team’s catchphrase “Pound the rock”—but they all reinforce the same signal: This is what matters.

  Focus on Bar-Setting Behaviors: One challenge of building purpose is to translate abstract ideas (values, mission) into concrete terms. One way successful groups do this is by spotlighting a single task and using it to define their identity and set the bar for their expectations.

  One good example is the men’s hockey team at Quinnipiac University, a small school in Hamden, Connecticut. The team fields few highly recruited players, yet it has spent the last half-decade as one of the nation’s top-ranked teams. Quinnipiac’s coach, Rand Pecknold, has built a culture around a specific behavior he calls “Forty for Forty.” The phrase refers to back-checking, which means rushing back to the defensive end in response to the other team’s attack—basically, chasing them down. Back-checking happens around forty times per game, and it is Pecknold’s goal that his players go all-out with 100 percent effort on each one—in other words, Forty for Forty. It is not easy to do. Back-checking is exhausting, requires keen attentiveness, and—here’s the key—rarely makes a difference in the game.

  “It almost never pays off,” Pecknold says. “You can back-check thirty-nine times in a row, and it doesn’t make any difference at all in the play. But the fortieth time, maybe something happens. You get a stick in, you steal the puck, you stop a goal, or you create a turnover that leads to a goal. That one back-check doesn’t show up anywhere in the stat books, but it can change a game. That’s why we are Forty for Forty. That’s who we are.”

  Quinnipiac team members talk about Forty for Forty all the time. They talk about it during practice, during games, and during Pecknold’s regular one-on-one meetings with players. And on those rare moments when a successful back-check happens in a game, Pecknold spotlights the moment.

  “The next day I get it on video, and I set it all up,” he says. “I’m not one to drop f-bombs a lot with the team—you gotta be really careful where you do that. But I do it here. I’ll cue up the tape of the back-check and set it up like it’s a movie. I’ll say, ‘Watch Shutty [forward Tommy Shutt] right here. Look at fucking Shutty go. Look at him take this guy out.’ And everybody goes nuts. Even if Shutty’s back-check leads to a goal, I never talk about the guy who scored the goal or the guy who had the assist—they don’t even exist. All I talk about is Shutty and this great back-check, and how it happened because we were Forty for Forty. You can see all the guys feeling it, and the next time we practice, everybody is on it, doing it, loving it.”

  Pecknold is not the only leader to build purpose around spotlighting a small, effortful behavior. At his restaurants, Danny Meyer is known for moving the salt shaker if it shifts even slightly from its spot at the table’s center. Teachers at KIPP Infinity in Harlem still talk about how founder Dave Levin would place each student’s water bottle in millimeter-accurate arrangement with their notebooks on the first day of school. Pixar puts hundreds of hours of effort into the technical and storytelling quality of the short, stand-alone animated films that run before each of its features. The shorts lose money, but they pay off in other ways. They invest in the studio’s young talent, create experimentation, and most important, showcase the attention and excellence they channel into every task. In other words, these small efforts are powerful because they transmit, amplify, and celebrate the purpose of the whole group.

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  * The call covered a wide variety of subjects, including movies, favorite foods, and what it’s like to live in Las Vegas. It resulted in the sale of one pair of Ugg boots.

  Writing a book, like every journey, leaves a person changed. As I worked on this project over the past four years, I found myself noticing subtle moments of connection that I had previously missed. I appreciated how certain places—the local bakery, my children’s school, the gas station—used small interactions to build a cohes
ive culture. I found myself admiring leaders who opened up about their shortcomings to create honest conversations. At home, I parented a little differently: I talked less and focused more on seeking ways to create belonging. (Card games are the absolute best.) It wasn’t as if I were suddenly graced with X-ray vision; it was more like learning a sport. First you are clumsy; then after a while, you get better.

  One place I used these skills most was in coaching a team. It wasn’t a sports team but a team of writers at the Ruffing Montessori middle school in Cleveland Heights, Ohio, which my two youngest daughters attended. The writing team competed in Power of the Pen, a statewide competition. Students practice all year for a one-day tournament at which they are given three short prompts (“Keeping the Secret,” say, or “Buried Treasure”) to produce three stories, which judges then score and rank. It’s a fun and inspiring event, because it combines the creativity of writing with the scoreboard adrenaline of sports.

  It’s also an event at which Ruffing had historically struggled. In the previous decade (I’d been coaching for two years), its students had occasionally advanced past the first-round tournament but rarely got much further. This result made sense—after all, Ruffing is tiny, consisting of only forty students, competing against Goliath-size schools from around the state. But it made me wonder if our team could do better. So in 2014, as an experiment, I decided to apply some ideas from the research for this book.