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In What You Do Is Who You Are, Ben Horowitz turns his attention how organisations can create and sustain their cultures

Published 4 years ago on Nov 02, 2019 5 minutes Read

When I first founded a company, one called Loudcloud, I sought advice from CEOs and industry leaders. They all told me, "Pay attention to your culture. Culture is the most important thing."

But when I asked these leaders, "What exactly is culture, and how can I affect mine?" they became extremely vague. I spent the next eighteen years trying to figure this question out. Is culture dogs at work and yoga in the break room? No, those are perks. Is it your corporate values? No, those are aspirations. Is it the personality and priorities of the CEO? That helps shape the culture, but it is far from the thing itself.

When I was the CEO of Loudcloud, I figured that our company culture would be just a reflection of my values, behaviors, and personality. So I focused all my energy on "leading by example." To my bewilderment and horror, that method did not scale as the company grew and diversified. Our culture became a hodgepodge of different cultures fostered under different managers, and most of these cultures were unintentional. Some managers were screamers who intimidated their people, others neglected to give any feedback, some didn't bother returning emails-it was a big mess.

I had a middle manager-I'll call him Thorston-who I thought was pretty good. He worked in marketing and was a great storyteller (an essential marketing skill). I was shocked to find out, from overhearing casual conversations, that he was taking storytelling to another level by constantly lying about everything. Thorston was soon working elsewhere, but I knew I had to deal with a much deeper problem: because it had taken me years to find out that he was a compulsive liar, during which time he'd been promoted, it had become culturally okay to lie at Loudcloud. The object lesson had been learned. It did not matter that I never endorsed it: his getting away with it made it seem okay. How could I undo that lesson and restore our culture? I hadn't the first clue.

To really understand how this stuff works, I knew I had to dig deeper. So I asked myself, How many of the following questions can be resolved by turning to your corporate goals or mission statement?

• Is that phone call so important I need to return it today, or can it wait till tomorrow? 

• Can I ask for a raise before my annual review? 

• Is the quality of this document good enough or should 1 keep working on it?

• Do I have to be on time for that meeting? 

• Should I stay at the Four Seasons or the Red Roof Inn? 

• When I negotiate this contract, what's more important: the price or the partnership?

• Should I point out what my peers do wrong, or what they do right? . Should I go home at 5 p.m. or 8 p.m.? 

• How hard do I need to study the competition? 

• Should we discuss the color of this new product for five minutes or thirty hours? 

• If I know something is badly broken in the company, should I say something? Whom should I tell? 

• Is winning more important than ethics?

The answer is zero.

There aren't any "right answers" to those questions. The right answers for your company depend on what your company is, what it does, and what it wants to be. In fact, how your employees answer these kinds of questions is your culture. Because your culture is how your company makes decisions when you're not there. It's the set of assumptions your employees use to resolve the problems they face every day. It's how they behave when no one is looking. If you don't methodically set your culture, then two-thirds of it will end up being accidental, and the rest will be a mistake.

So how do you design and shape these nearly invisible behaviors? I asked that of Shaka Senghor, who ran a powerful gang in the Michigan prison system in the 1990s and 2000s. Senghor knew that the lives of his guys depended on the gang's culture. He told me, "It's complex. Say someone steals one of your guys' toothbrushes, what do you do?"

I said, "That seems innocent enough. Maybe the thief just wanted clean teeth?"

He corrected me: "A guy doesn't take that risk for clean teeth. It's a diagnostic. If we don't respond, then he knows he can rob your guy of something larger or rape him or kill him and take over his business. So if I do nothing, I put all our members at risk. killing the guy would be a big deterrent but it would also create a super violent culture." He spread his hands. As I said, it's complex."

Identifying the culture you want is hard: you have to figure out not only where your company is trying to go, but the road it should take to get there. For many startups, a culture of frugality is vital, so it makes sense to require that employees stay at the Red Roof Inn. But if Google is paying a salesperson $500,000 a year and it wants to retain her, it will probably prefer that she sleep well at the Four Seasons before her big meeting with Procter & Gamble.

Likewise, long days are standard in the startup world you're in a race against time. But at Slack, CEO Stewart Butterfield is convinced that if you actually work hard when you are at work, you can efficiently get a lot done. He punches out early and encourages his employees to do the same.

The culture that works for Apple would never work for Amazon, At Apple, generating the most brilliant designs in the world is paramount. To reinforce that message, it spent $5 billion on its sleek new headquarters. At Amazon, Jeff Bezos famously said, "Your fat margins are my opportunity." To reinforce that message, he made the company be frugal in everything, down to his employees' ten-dollar desks. Both cultures work. Apple designs dramatically more beautiful products than Amazon, while Amazon's products are dramatically cheaper than Apple's.

Culture is not like a mission statement, you can't just set it up and have it last forever. There's a saying in the military that if you see something below standard and do nothing. then you've set a new standard. This is also true of culture-if you see something off-culture and ignore it, you've created a new culture. Meanwhile, as business conditions shift and your strategy evolves, you have to keep changing your culture accordingly. The target is always moving.

This is an extract from Ben Horowitz's What You Do Is Who You Are published by Harper Business