How to Create Your Business Culture
Life gets busy. Has What You Do Is Who You Are been gathering dust on your bookshelf? Instead, pick up the key ideas now.
Ben Horowitz’s Perspective
Ben Horowitz is the cofounder of Andreessen Horowitz, and he is one of Silicon Valley’s most respected and experienced entrepreneurs. Horowitz was exposed to a diverse perspective from a very early age. His parents were indoctrinated into the Communist philosophy and his grandparents were card-carrying Communists. Looking at the world through different perspectives helped him learn how to separate facts from perceptions. This ability proved valuable when he became an entrepreneur. Despite the challenges, Horowitz firmly believed in “Treating your employees fairly and always telling them the truth.” He understood that figuring out the right product is the innovator’s job.
What You Do Is Who You Are encourages readers to lead by example. Horowitz uses examples of successful leaders, ranging from Genghis Khan to Dick Costolo. All successful leaders put what they believe into practice. Rather than creating company guidelines, they walk the walk by endorsing its virtues through their own actions. Leading by example in this way will help your employees and newcomers understand what is expected of them.
StoryShot #1: Culture and Revolution: The Story of Toussaint Louverture
Horowitz starts What You Do Is Who You Are by describing the story of Toussaint Louverture. He is known as the man who eradicated slavery in Haiti. He was born into slavery in 1743 in Saint Domingue, now known as Haiti. In his late 40s, he became a leader as part of the revolt of 1791. His effective leadership helped his country see off invasions from the Spanish and the British. For ten years, he led effectively and this resulted in him becoming governor of Haiti in 1801. The first thing he did was put a stop to slavery in his home country.
Horowitz explains that Louverture’s influence was reliant on his ability to make big decisions and communicate these decisions with passion. The decisions he made and the passion he showed helped his army adopt similar values to him and build a strong culture. He would surprise his soldiers with new instructions that forced them to consider their values before taking action. For example, he prohibited his married officers from having prostitutes. This was very rare for the time and helped his officers understand the importance of trust.
Another difficult decision Louverture made was to show compassion to the plantation owners. After taking control, he could have ordered his army to murder all the plantation owners in revenge. Louverture understood this decision would send the wrong message to his army about cultural priorities. So, he decided to push the cultural idea of economic survival rather than revenge. He did this by allowing the former plantation owners to live and continue working the plantations without slavery. By doing this, Louverture showed their culture should always be focused on prosperity over payback.
StoryShot #2: Toussaint Louverture Applied
The second chapter of the book applies the teachings of Louverture to a modern-day management context. There are several examples of successful companies making surprising decisions to ensure that all employees understand the organization’s priorities and culture.
The first example is Amazon. Their company has always had a culture of frugality. They even have a guideline that says, “Accomplish more with less.” Rather than merely writing this guideline down, Amazon’s management forced its workers to think about this guideline. The company’s workers were given office desks constructed from a cheap door with legs attached to it. So, Amazon workers were confronted by frugality every time they sat down to work.
Netflix has also used similar techniques to Louverture. In 2010, Netflix was performing very well in the DVD rental sector. But, the CEO Reed Hasting had also noticed there was a streaming revolution starting. So, he stopped inviting his DVD executives to meetings. This simple decision sent a clear message to the company that their main priority was the streaming part of Netflix.
Louverture may have lived over 200 years ago, but his approach is still used by so many of the world’s most influential companies. Simple changes that are surprising have the potential to imprint your chosen culture into the minds of your employees.
StoryShot #3: The Way of the Warrior
Samurais are the warriors of ancient Japan. Horowitz explains that samurais lived by a range of cultural virtues called Bushido. Modern samurais still follow these virtues. The samurai attitude, behavior and lifestyle are also applicable to maintaining an effective business culture.
A key feature of Bushido is that it is a range of practices rather than a range of principles. So, the samurais were guided by actions instead of beliefs. If you compare this to the modern business world, the samurais would not be motivated by business values. They would instead be motivated by corporate virtues. Corporate virtues describe what the company actually does.
Horowitz believes the most relevant samurai relegation for modern-day management is “remember death all the time.” This may seem extreme, but remembering the constant chance of “death” will encourage you to concentrate as you have already acknowledged the worst possible result. In business, death is not necessarily the most relevant worst possible result. An alternative would be your company going bankrupt or your competitor crushing your company’s sales. If you accept these potential events, you will discover that you’re free to think about more significant problems. For example, thinking about whether your company is an ideal place to work or if you’re proud of your output.
The other samurai virtues that are relevant to modern business are honor, politeness and sincerity. Horowitz uses an example from his own life to show the impact of these virtues. In 2009, he created the venture capital firm Andreessen Horowitz with a fellow entrepreneur. They both agreed that their success was reliant on the entrepreneurs they intended to support. They ensured they always respected entrepreneurs. This does not mean they compromised another one of the virtues: sincerity. They still remained sincere by telling entrepreneurs if they were wrong about something. As long as they provided this feedback with politeness, they stayed true to their virtues. This means that even if their business failed, Horowitz and Andreessen would still be defined by these good deeds rather than outcomes.
StoryShot #4: The Warrior of a Different Way: The Story of Shaka Senghor
A warrior from a slightly different environment than traditional samurais is Shaka Senghor. He was imprisoned at the age of 19 for second-degree murder. He is now a best-selling author who has developed a strong understanding of re-shaping a group’s culture. He developed these skills while in prison and led a gang called the Melanics. He took over this gang when they claimed to have tough moral principles, but very few of them actually lived by these principles.
Before becoming the leader, Shaka would constantly confront the leaders about stealing from other gang members. He pointed out that this was against the group’s principles and that you cannot be a proper leader if you don’t follow the group’s culture. Shaka gained power within a gang by pointing out these inconsistencies. He didn’t use this power to encourage violence, though. He had seen the pain that the gang’s violence had caused and decided to completely change the cultural code. Shaka did this by setting regular meetings. During the meetings, he and the members would eat, workout and study together. This consistency helped the group adopt a more focused approach and keep the group’s virtues. In the same way, day-to-day meetings are key to effectively changing a culture in modern companies.
StoryShot #5: Shaka Senghor Applied
The reason that Shaka Senghor was able to effectively change a dangerous gang’s culture was his willingness to view things from the perspective of a newcomer. It is always worthwhile talking to new workers about their first impressions. This is because they can tell you what they think the company culture is based on observing how people work. If they are unsure about the culture or think it is something completely different, you must re-shape it.
When re-shaping a company’s culture, you must be open to change. Again, the author uses an example from his personal life to show why. Horowitz is the CEO of LoudCloud. In this position, he was once encouraged by another employee to rewrite the accounts to make them seem more successful than they had been. This isn’t illegal but would have formed an inaccurate perception within the workers’ minds. Trust was one of the company’s virtues, which means he decided to demonstrate trustworthiness by publishing their legitimate poor quarter performance.
So, to be a true leader, you have to walk the walk.
StoryShot #6: Genghis Khan, Master of Inclusion
One of the essential features of any successful culture is a sense of inclusion. Everyone needs to feel like they belong there and are working toward achieving common goals. Inclusion has been a tool used by influential leaders for centuries. Genghis Khan was the master of inclusion. He might not have been the nicest person, but he was arguably the greatest leader in military history. He understood that the Mongols lacked a common goal. Finding this common goal is what made them so successful.
Genghis Khan had several ways that he tried to encourage inclusion. Here are the ways that Horowitz highlights in the book:
- He prohibited any inherited titles and instead forced people to prove their worth. This meant anybody who performed well would easily rise in his ranks.
- He valued loyalty above many other characteristics. This is shown by him killing all disloyal men of the leaders he conquered.
- He was willing to bring talented men from defeated tribes into his own army. For example, he made great use of the Uighur peoples’ advanced civilization. He sent their experienced workers, like judges and scribes, all through his empire.
- He encouraged marriage between tribes to incorporate cultures and build alliances.
Inclusion was the key to Genghis Khan’s success, but it can also be the key to success as a manager in the modern world.
StoryShot #7: Inclusion in the Modern World
Horowitz uses the example of Frontier Communications in 2004 to highlight the impact of encouraging inclusion. Maggie Wilderotter was CEO at that time. She noticed that the organization was clearly class-based. The white-collar staff would never communicate with the blue-collar staff as they felt they were above them. As soon as she arrived and noticed this behavior, she sacked the least effective executives. She used these funds to offer every worker a raise. Throughout her time there, she also supported the underdogs when there were clashes within the workplace. This level of inclusion helped the company to grow and thrive.
Horowitz also has an example of inclusion having a positive impact within his own company. He has implemented greater inclusivity during recruitment to ensure people from a diverse talent pool have opportunities to contribute. They now have a company that is 50% female, 27% Asian and 18.4% African American. As well as improving diversity, the company culture has improved following these decisions. The diversity means people have different experiences, strengths and opinions. Just as Genghis Khan successfully combined tribes, Horowitz successfully combined various experiences.
StoryShot #8: Be Yourself, Design Your Culture
We must learn from these successful historical leaders. That said, Horowitz also encourages us to be ourselves and design our own cultures. Being yourself means you have to understand your strengths but also accept your weaknesses. Understanding your weaknesses will mean you can develop a culture that prevents these weaknesses from surfacing too often. For example, Horowitz struggles with spending too much time talking. So, he has decided to surround himself with people who aren’t big talkers. This simple decision has stopped one of his weaknesses from leaking into the company’s culture.
You should also incorporate your personal strengths into the company’s culture. An example of this is the CEO of Twitter. Dick Costolo is considered a very hard worker, which was hugely important when he first started at the company. He noticed that other workers were leaving work early and not working hard enough. So, to support those staying late, Costolo would go back home for dinner but then return to the office to talk to the people who were still there. This was a way of compensating hard work, which was one of his strengths, and leading by example.
You have to consider three main points when deciding which virtues to base your company around:
- Employ people who are well-matched to your culture. New hires should symbolize your virtues.
- Ensure that the virtues are actionable, like the samurai’s bushido code.
- Your virtues do not have to be unique, but they must differentiate you from your competitors.
Be inspired by other successful cultures but make sure you don’t only consider their virtues. Think about the culture’s context and how the virtues relate to their leader
StoryShot #9: Edge Cases and Object Lessons
There will be cases where your cultural virtue will result in an unexpected negative effect. As soon as this happens, your company must immediately reevaluate and amend its priorities. One example of this is Research in Motion. RIM is the company that created BlackBerry. They built the company on the virtue of valuing customer satisfaction more than anything else. This virtue allowed them to become the leaders in battery life and great keyboard speed. One fault in this virtue was that RIM didn’t pay enough attention to its competitors. The first iPhone was released. They didn’t worry about Apple because they had failed to beat BlackBerry’s user experience for those two features. This was a mistake. BlackBerry should have noticed the market was moving away from battery life and typing speed and been more flexible.
An object lesson might have assisted RIM in making the essential improvements required to compete with Apple. They should have noticed the unexpected negative effect of their virtue and reevaluated it immediately. If they had done this, perhaps BlackBerry would still be a leading phone manufacturer today.
Comment below and let others know what you have learned or if you have any other thoughts.
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