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

by Ben Horowitz

how do you know when you’re off track? Here are a few signs: The wrong people are quitting too often. People quit all the time, but when the wrong people quit for the wrong reasons, it’s likely time to make a change.

When people selected for their cultural fit don’t feel at home it’s a particularly bad omen—you picked them for a culture you don’t have.

An object lesson, by contrast, is a dramatic warning you put into effect after something bad has happened and you need to correct it in a way that will reset the culture and make sure the bad thing never happens again.

some employees look for faults not so they can fix them, but so they can build a case. Specifically, a case that the company is hopeless and run by a bunch of morons. The smarter the employee, the more destructive this type of behavior can be—because people are that much more likely to listen to him.

He is immature and naive. He cannot comprehend that the people running the company do not know every minute detail of its operations. He therefore believes they are complicit in everything that’s broken.

if a team is counting on the flake, and she’s allowed to flake without explanation, then everyone else on the team believes that he should be able to flake, too.

being dramatically impolite can improve clarity or emphasize an important lesson—and

If whenever anyone brings up a marketing issue the VP of marketing jumps down her throat, guess what topic will never come up?

If one of your big dogs destroys communication on your staff, you need to send him to the pound.

CEOs are judged on the efficiency of their process and the acuity of their decisions, and Everyone has input, then I decide tends to balance informed decision making with speed.

It also acknowledges that not everyone in the organization has enough information to make a given decision, so someone has to be in charge of becoming knowledgeable and then deciding how to proceed.

So it’s critical to a healthy culture that whatever your decision-making process, you insist on a strict rule of disagree and commit. If you are a manager, at any level, you have a fundamental responsibility to support every decision that gets made. You can disagree in the meeting, but afterward you must not only support the final decision, you must be able to compellingly articulate the reasons the decision was made.

I was definitely zero-tolerance on managers who undermined decisions, because that led to cultural chaos.

The final vital component of the decision-making process is “Do you favor speed or accuracy and by how much?”

Even if you generally favor speed, it is often important culturally to favor accuracy in certain situations. If “great design” or “great taste” is a key part of your value proposition and your culture, then it might be useful to spend dozens of hours debating the exact shade of black of your product’s packaging. Taking such pains might not materially improve your sales, but it will absolutely reinforce the cultural message that you don’t take shortcuts about design.

In the speed-versus-accuracy calibration, the cultural question of empowerment plays an important role. How far down the org chart can a decision get made? Do you trust lower-level employees to decide important matters, and do they have enough information to do so with accuracy?

If employees have a real say in the business, they will be far more engaged and productive. It’s also often the case that sending the question up the hierarchy not only slows things down but results in a less accurate decision.

On the other hand, pushing decision making too far down the organization can ...

Switching to wartime mode is easier. As soon as the CEO becomes intensely interested in certain details—beginning to hold daily meetings on production delays, for instance—the company will react quickly and everyone will pick up the wartime mentality.

Peacetime CEOs tend to be diplomatic, patient, exceptionally sensitive to the needs of their teams, and comfortable giving them lots of autonomy.

Wartime CEOs tend to be far more comfortable with conflict, obsessed with their own ideas about the direction of the organization, and almost unbearably impatient and intolerant of anything other than perfection.

Telling the truth requires courage. Less remarked on—but equally important, for our purposes—is that it requires judgment and skill.

The trick—and it’s tricky—is to tell the truth without thereby destroying the company. To do this, you must accept that you can’t change reality, but you can assign it a new meaning.

If you manage a reasonably large organization, you can be absolutely sure of one thing: at any given moment, something somewhere has gone terribly wrong.

How do you build a culture that enables you to discover these problems sooner rather than later? It’s surprisingly difficult. There are several reasons employees don’t naturally tend to volunteer bad news:

If you encourage bad news, you must be careful not to disempower people in doing so.

If you know about a problem, there’s a reasonable chance that you caused it and have no idea how to fix it. Revealing it to your superiors means admitting guilt, and who likes to do that?

When I heard about a problem, I tried to seem ecstatic. I’d say, “Isn’t it great we found out about this before it killed us?” Or, “This is going to make the company so much stronger once we solve it.”

If you find a problem, do a root-cause analysis and figure out what caused it. You will almost always find that the underlying issue was communication or prioritization or some other soluble problem rather than a particularly lazy or idiotic employee.

“Is there anything that’s preventing you from getting your job done?” or “If you were me, what would you change in the company?”

Rather than trying to move your company to a culture that you don’t know well, bring in an old pro from the culture you aspire to have.

Make decisions that demonstrate priorities. It was not enough for Louverture to say his culture was not about revenge. He had to demonstrate it by forgiving the slave owners.

If you don’t know what you want, there is no chance that you will get it.

Culture begins with deciding what you value most. Then you must help everyone in your organization practice behaviors that reflect those virtues. If the virtues prove ambiguous or just plain counterproductive, you have to change them. When your culture turns out to lack crucial elements, you have to add them. Finally, you have to pay close attention to your people’s behavior, but even closer attention to your own.