What You Do Is Who You Are: How to Create Your Business Culture

by Ben Horowitz

the point is that when you are a leader, even your accidental actions set the culture.

Resuscitating our culture afterward wasn’t easy. My approach was to admit all the sins of the past and reset us with a new level of transparency in the most memorable setting I could afford, which wasn’t much.

The next day, I opened the meeting by saying, “Okay, I am the one who drove the last business into a ditch, so why should you trust me this time?” Then I had my management team present every aspect of the business, including the financials—especially the financials, down to every penny we had in the bank and all the debt—and the complete product and business strategy. Full transparency again, after a period of necessary obfuscation.

Make Ethics Explicit Uber has received a ton of publicity for having a totally broken culture, so you may be surprised to learn that Travis Kalanick designed its culture with great intention and programmed it into his organization with meticulous care. Uber’s culture actually worked exactly as designed—only it had a serious design flaw.

If he put that much effort into Uber’s culture, where did it go wrong? The problem was that the mind-set implicit in such values as Meritocracy and Toe-Stepping, Winning: Champions Mindset, Always Be Hustlin’, and The Best Idea Wins elevated one value above all: competitiveness. Kalanick was one of the most competitive people in the world and he drove that ethos into his company in every way possible. And it worked: by 2016, the company was valued at $66 billion.

The trainers at Uberversity, where new employees underwent a three-day initiation, began schooling everyone on this scenario: a rival company is launching a carpooling service in four weeks. It’s impossible for Uber to beat them to market with a reliable carpool service of its own. What should the company do? The correct answer at Uberversity—and what Uber actually did when it learned about Lyft Line—was “Rig up a makeshift solution that we pretend is totally ready to go so we can beat the competitor to market.” (Andreessen Horowitz, the venture capital firm where I work, invested in Lyft and I am on its board, so I was keenly aware of the dynamic between the companies—and I am decidedly biased.) Those, including the company’s legal team, who proposed taking the time to come up with a workable product, one far better than Uber Pool 1.0, were told “That’s not the Uber way.” The underlying message was clear: if the choice is integrity or winning, at Uber we do whatever we have to do to win.

There is zero chance that Kalanick thought it was a good idea not to investigate an HR complaint from a promising engineer. That was not the culture he’d intended to construct. Nowhere in his set of values did it say that it was okay for managers to sexually harass their employees. Nowhere was it implied. In fact, by all accounts Kalanick was furious about the incident, which he saw as a woman being judged on issues other than performance. That, of course, was the opposite of “Best Idea Wins.” Somehow his culture was having a weird counterproductive side effect.

Once the heat came down, even his own board members turned on Kalanick. They were shocked, shocked that there was gambling in the casino. Was the board aware the entire time of the corporate value “Always Be Hustlin’”? One hundred percent they were. Did they know what it meant? If they did not, they were negligent. I doubt they were negligent. There were many stories over the years indicating which way the company would go if a law that it didn’t like hampered its competitiveness. Was the board furious at Kalanick for designing such an aggressive culture? On the contrary, they were thrilled as long as he was making them billions. They were only furious once he got caught—that is, once the flaws in the culture became widely known outside the company.

From Kalanick’s perspective, he had made his priorities crystal clear and the board had signed off on them for years. Openly proud of how he ran Uber, he loved its reputation for being the most competitive company in Silicon Valley. He believed and likely still believes that he did the right thing the entire way and furthermore exercised proper corporate governance as he made his beliefs clear to the board. Nobody can point to a decision that he made to enable sexual harassment, acquire medical records of rape victims, or any of the other transgressions. That’s the nature of culture. It’s not a single decision—it’s a code that manifests itself as a vast set of actions taken over time. No one person makes or takes all these actions. Cultural design is a way to program the actions of an organization, but, like computer programs, every culture has bugs. And cultures are significantly more difficult to debug than programs. Kalanick didn’t intend to build an unethical organization, just a hypercompetitive one. But he had bugs in his code.

In a 2015 corporate amnesty, thousands of Huawei employees admitted to transgressions ranging from bribery to fraud—perhaps, CEO Ren Zhengfei acknowledged, because the company used to evaluate staff solely according to how much business they won. Even after the seemingly shocking results of the amnesty program, Ren emailed everyone to say that adherence to ethical standards was important, of course, but “if it blocks the business from producing grain, then we all starve to death.” (You could argue, of course, that if Huawei was doing the bidding of the Chinese government—breaking the rules as a matter of national policy, the way an intelligence agency would—then its culture was doing exactly what it was supposed to.)

It’s impossible to design a bug-free culture. But it’s vital to understand that the most dangerous bugs are the ones that cause ethical breaches. This is why Louverture emphasized ethics so explicitly. Spelling out what your organization must never do is the best way to inoculate yourself against bugs that cause ethical breaches.

Recall Louverture’s speech to his soldiers: “Do not disappoint me . . . do not permit the desire for booty to turn you aside . . . it will be time enough to think of material things when we have driven the enemy from our shores.” Consider how strange this statement must have seemed. Louverture’s highest goal, like Uber’s, was winning. If he didn’t win the war, slavery would not be abolished. Nothing could be more important than this, could it? If it made his soldiers happy to pillage, why disallow it?

As Louverture explained, “We are fighting that liberty—the most precious of earthly possessions—may not perish.” When it comes to ethics, you have to explain the “why.” Why can’t you pillage? Because pillaging would corrupt the real goal, which isn’t winning, but liberty. In other words, if you win in the wrong way, what do you actually win? If you fight in a manner that strips liberty from bystanders, how will you ever build a free society? And if you don’t build a free society, what are you f...

Kalanick’s code was dangerous but unique—only Uber had it. The new values are safer—but they could be anyone’s. Look again at the new code’s ethical injunction: We do the right thing. Period. Khosrowshahi is a strong CEO and likely has a comprehensive plan to program his values into the culture. But when we compare his precept to Louverture’s, there’s a clear gap in precision. What, exactly, does “Do the right thing” mean? And how does “Period” clarify that? Does “Do the right thing” mean make the quarter or tell the truth? Does it mean use your judgment or obey the law? Does it mean you can excuse losses by claiming some moral imperative? Will employees who are hired from a culture like Facebook have a different view of “Do the right thing” than employees hired from Oracle? Louverture spelled out what “Do the right thing” meant: don’t pillage, don’t cheat on your wife, take responsibility for yourself, personal industry, social morality, public education, religious toleration, free trade, civic pride, racial equality, and on and on. His instructions were specific, emphatic, and unceasing. It’s also critical that leaders emphasize the “why” behind their values every chance they get, because the “why” is what gets remembered. The “what” is just another item in a giant stack of things you are supposed to do. So for Uber to merely say We do what’s right, period, means the company missed a big opportunity. Finally, “Do the right thing. Period,” makes the issue seem simple, and...

What Did Culture Mean to the Samurai? Bushido looks like a set of principles, but it’s a set of practices. The samurai defined culture as a code of action, a system not of values but of virtues. A value is merely a belief, but a virtue is a belief that you actively pursue or embody. The reason so many efforts to establish “corporate values” are basically worthless is that they emphasize beliefs instead of actions. Culturally, what you believe means nearly nothing. What you do is who you are.

Hagakure, the most famous collection of samurai wisdom, instructs: “The extent of one’s courage or cowardice cannot be measured in ordinary times. All is revealed when something happens.”

It began with death. The most famous line in Hagakure is “The way of the warrior is to be found in dying.” Another crucial text, Bushido Shoshinshu, opens with one of the most shocking rules in any culture: “Keep death in mind at all times.”

Bushido Shoshinshu explains the idea behind that contemplation: If you realize that the life that is here today is not certain on the morrow, then when you take your orders from your employer, and when you look in on your parents, you will have the sense that this may be the last time—so you cannot fail to become truly attentive to your employer and your parents.

The biggest threat to your company’s culture is a time of crisis, a period when you’re getting crushed by the competition or are nearing bankruptcy. How do you focus on the task at hand if you might be killed at any moment? The answer: they can’t kill you if you’re already dead. If you’ve already accepted the worst possible outcome, you have nothing to lose. Hagakure commands you to imagine and accept the worst in gory detail: Begin each day pondering death as its climax. Each morning, with a calm mind, conjure images in your head of your last moments. See yourself being pierced by bow and arrow, gun, sword, or spear, or being swept away by a giant wave, vaulting into a fiery inferno, taking a lightning strike, being shaken to death in a great earthquake, falling hundreds of feet from a high cliff top, succumbing to a terminal illness, or just dropping dead unexpectedly. Every morning, be sure to meditate yourself into a trance of death. Meditating on your company’s downfall will enable you to build your culture the right way. Imagine you’ve gone bankrupt. Were you a great place to work? What was it like to do business with you? Did your encounters with people leave them better off or worse off? Did the quality of your products make you proud? Modern companies tend to focus on metrics like goals, missions, and quarterly numbers. They rarely ask why all their employees come to work every day. Is it for the money? What’s more valuable, the money or the time? My mentor, Bill ...

Whether your aim is to keep death in mind, to do it for each other, or some analogous formulation, the glue that binds a company culture is that the work must be meaningful for its own sake.

But your individual reputation and honor should mean something within your company, and be at stake in everything you do. Does the integrity of that deal meet your standard? Does the quality of your team’s work measure up? Are you willing to put your name on it? If the customer or your competitor questions your behavior, are you comfortable knowing that you acted with honor?

Though the specific rules may seem arbitrary, they were rooted in the belief that politeness is the most profound way to express love and respect for others. It wasn’t just rule-following, but a gateway to deeper intimacy.

In the United States today, we get on Twitter and decry the lack of empathy in our country—and then we wonder why empathy keeps diminishing. A culture is not the sum of its outrage; it’s a set of actions. In a competitive corporate world, politeness might seem like a throwaway virtue. In fact, the way the samurai took the action-oriented nature of politeness and used it to express the abstract concepts of love and respect is exceptionally instructive.

Veracity or Sincerity The samurai notion of sincerity was influenced by Confucius, who wrote: “Sincerity is the end and the beginning of all things; without Sincerity there would be nothing.” The culture of veracity was so strong that a samurai’s word was considered the truth and written agreements were deemed unnecessary. This was reinforced in parenting, where children were raised on stories of being put to death for lying. Words were seen as sacred.

We respect the intense struggle of the entrepreneurial process and we know that without the entrepreneurs we have no business. When dealing with entrepreneurs, we always show up on time and we always get back to them timely and with substantive feedback, even if it’s bad news (like a rejection). We have an optimistic view of the future and believe that entrepreneurs, whether they succeed or fail, are working to help us achieve a better future. As a result, we never publicly criticize any entrepreneur or startup (doing so is a fireable offense).

We tell the truth even if it hurts. When talking to an entrepreneur, an LP [limited partner], a partner, or each other, we strive to tell the truth. We are open and honest. We do not withhold material information or tell half truths. Even if the truth will be difficult to hear or to say, we err on the side of truth in the face of difficult consequences. We do not, however, dwell on trivial truths with the intention of hurting people’s feelings or making them look bad. We tell the truth to make people better not worse.

Other VCs as well as the people covering the industry misinterpreted the virtue and referred to it as “founder friendly,” a massive corruption of the concept that has delivered us a competitive advantage for years. Being “founder friendly” implies that you take the founder’s side even when he is mistaken. This kind of “virtue” helps nobody. In fact, it creates a culture of lies. Any time you decide one group is inherently good or bad regardless of their behavior, you program dishonesty into your organization.

The story makes no ultimate distinction between doing right for “the right reasons” or out of shame or guilt. Why you do right is not important. Doing right is all that counts. But the people who created the code understood that doing right is harder in some circumstances than others, so they provided case studies.

When Jim Barksdale became the company’s CEO in 1995, he knew he had to change that culture. But how? Create a cultural value telling people to disagree and commit? While disagree and commit is a great decision-making rule, as I’ll discuss later, it’s not easy to insert it into a culture accustomed to doing the opposite. Imagine being in a heated debate and hearing someone say, “Let’s disagree and commit.” You’d respond, “Commit to what? My idea or yours?” So what did Barksdale do? He created a piece of lore so memorable it outlived the company itself. At a company all-hands he said: We have three rules here at Netscape. The first rule is if you see a snake, don’t call committees, don’t call your buddies, don’t form a team, don’t get a meeting together, just kill the snake. The second rule is don’t go back and play with dead snakes. Too many people waste too much time on decisions that have already been made. And the third rule of snakes is: all opportunities start out looking like snakes.

Why did the bushido have such a profound impact on Japanese society? The complex answer is that the samurai developed and refined their culture continuously over a very long period of time, using a variety of psychologically sophisticated techniques to make it feel indelible, inescapable, and completely natural. The simple answer is that they kept death in mind at all times.

Another factor that made me want to write about Senghor is that people who end up in prison generally come from broken cultures. Their parents abandoned or beat them. Their friends sold them out. And they can’t rely on a common understanding of basic ideas like keeping your word. Prison provides culture’s hardest test case; to build culture there, you have to start from the very beginning, from first principles.

One Rock Boss asked me, “Where are you from?” It was more of a diagnostic than a question. When I replied “Brightmo”—the ’hood pronunciation of Brightmoor, a neighborhood in Detroit—I gained credibility. Had I been from the suburbs, it would have indicated vulnerability. The next question was, “What you in here for?” I replied “Murder.” Murder was a much more prestigious crime than, say, a sex offense, which would have made me a target. So I was safe for the moment, but I could see everything going forward would be a test. If people were playing basketball and you said, “I got next,” and then somebody else said they got next, you had to decide if you would let a motherfucker take your next or not. If not, you had to be willing to stand up for yourself and fight. It’s one integrated system from the streets to the jail to the prison. Your personal brand follows you. Do people know you from the streets as someone that’s got respect? Do you have dirt on your name for snitching? There was this whole predatory energy. If family put money on your books you can be robbed. You might be vulnerable sexually. It’s literally all in the first day that this is what it is. They called it the gladiator school, because it’s where you established your rank.

After he transferred to state prison, White faced an even more intense version of orientation. The new men were kept in quarantine for two weeks to make sure we didn’t have any diseases or other issues that would keep us out of the general population. The day we got out, we saw a guy get stabbed in the neck. People get stabbed in areas of the prison where there are no officers—on the back staircase; in the recreation center where one officer watches three hundred men; in the corridor to the chow hall or to the law library. So we’re in the recreation center and this guy gets stabbed and the guy stabbing him does it so calmly and casually, discards the knife, and goes to the chow hall. Guys were visibly shaken, like, “Where the fuck are we at?” I remember thinking, So this is the extreme end of what happens in prison. And then asking myself, If you get into a conflict with somebody, could you stab them and just keep it moving? I had never stabbed anybody. I had shot someone, but that was a reaction to a conflict on the streets. It was very different from premeditating, “Okay, I am going to stab this person. Where am I going to stab this person at? Do I want to scare him, wound him, get him to leave the yard I’m on, or kill him?” In prison you stab with many different intentions. It takes callousness to do that, and I didn’t have that yet. So I had to ask myself, If this is about survival, can you make that call? You don’t know who the fuck you are in prison until you face so...

If you’re not honoring the culture yourself, nobody fucking believes you. The principles were my natural principles. I believed in them. I was also willing to defend them. This shifted the culture to a better place.

Poor leadership would say, “Let’s get a couple of soldiers and go fuck these guys up,” and then we’ll deal with our guy internally. That was the culture when I came in. But that way of operating gives the other organization moral high ground—they can say we let our members do random bullshit. So I shifted our way so there was a consequence for Cartheu, not for the guy he robbed. Cartheu should apologize to him and pay restitution. If you handle external matters this way, people in your organization will look at that as a model. If you don’t, then the way you treat outsiders will leak back into your own organization.

I based our system in the Melanics on belonging and loyalty. It started with selection. I would be very clear that there were two requirements. You either had to be willing to serve a life sentence for whatever we asked you to do, or be willing to die. Once in, in order to stay in, you had to carry yourself in a certain way. You couldn’t use the N-word, or profanity. If you smoked, you couldn’t smoke while wearing your membership badge. You couldn’t get caught by the guards smoking weed or drinking prison wine, because this showed a lack of intelligence and self-control. You couldn’t do anything that would be perceived as weak or disrespectful. Your shoes had to be clean and your prison blues had to be neat and pressed. In addition, you had to work out every day and dine with us in the chow hall. I emphasized discipline and bonding.

As soon as Stoney entered the prison, he began attending the services of the Nation of Islam. New prisoners often did this to get protection. The Nation was powerful, not just in our prison, but in prisons nationwide. It provided the highest form of safety. I called a meeting with Money Man, the head of the Nation of Islam. I explained that I had no choice but to take Stoney out. However, out of respect, I wanted to give him the chance to turn the guy over to me. Money Man took my request seriously, but replied, “Okay, you can have him—but one of your members killed one of my members’ cousins. I need that guy in exchange.” Turning over one of my guys in a hostage exchange would violate our loyalty principle. So I came back with, “My guy is a member. The guy I want is your guest, not your member. That’s not an exchange I’m willing to make.” We continued negotiating for three weeks with no progress. I had to make a choice: take Stoney out and risk war with the Nation of Islam or leave him alone and risk undermining my entire culture. I chose the former. I talked to two of my most loyal members who were both doing life sentences and never getting out. I told them what needed to be done, and they did it without hesitation. Then we waited for the repercussions. The repercussions never came. Our culture was so strong that not even the Nation of Islam wanted to go to war with us over a guest. Money Man ultimately respected our logic, backed by our strength. My decision solidified...

Senghor had studied the culture, assimilated it, and meticulously improved it as he rose through the ranks. Once he reached the top of a gang, he was faced with a new set of choices—which prompted a profound realization. All those life-risking decisions he’d made, all those moments of serial integrity, had added up to a culture he didn’t want.

Culture is weird like that. Because it’s a consequence of actions rather than beliefs, it almost never ends up exactly as you intend it. This is why it’s not a “set it and forget it” endeavor. You must constantly examine and reshape your culture or it won’t be your culture at all. Senghor was beginning to confront that classic problem.

Once he realized he had to make significant changes, Senghor knew that he had to align his team more tightly. He used one of the best techniques for changing a culture—constant contact. By requiring his team to eat together, work out together, and study together, he made them constantly aware of the cultural changes he was making. Nothing signals the importance of an issue like daily meetings about it.

Two lessons for leaders jump out from Senghor’s experience: 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.

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?”

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?

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.

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.

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.

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. As Senghor points out, culture travels.

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.