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

by Ben Horowitz

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.

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 I 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?

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.

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.

“Coaching, and not direction, is the first quality of leadership now. Get the barriers out of the way to let people do the things they do well.” This created a new culture, a culture of empowerment: everyone was in charge and Noyce was there to help.

The problem is that obviously good ideas are not truly innovative, and truly innovative ideas often look like very bad ideas when they’re introduced.

The samurai called their principles “virtues” rather than “values”; virtues are what you do, while values are merely what you believe.

Companies—just like gangs, armies, and nations—are large organizations that rise or fall because of the daily microbehaviors of the human beings that compose them.

Creating a culture is more complex than just trying to get your people to behave the way you want them to when no one is looking. Remember that your employees are far from uniform. They come from different countries, races, genders, backgrounds, even eras. Each one brings to your organization a different cultural point of departure. To get all of them to conform to and be reasonably happy with a common set of norms is a challenging puzzle.

Culture is to a company as nutrition and training are to an aspiring professional athlete. If the athlete is talented enough, he’ll succeed despite relatively poor nutrition and a below-average training regimen. If he lacks talent, perfect nutrition and relentless training will not qualify him for the Olympics. But great nutrition and training make every athlete better.

Who you are is not the values you list on the wall. It’s not what you say at an all-hands. It’s not your marketing campaign. It’s not even what you believe. It’s what you do. What you do is who you are. This book aims to help you do the things you need to do so you can be who you want to be.

“A courageous chief only is wanted. Where is he, that great man whom Nature owes to her vexed, oppressed, and tormented children? Where is he?”

People don’t easily adopt new cultural norms and they simply can’t absorb an entirely new system all at once.

In any human interaction, the required amount of communication is inversely proportional to the level of trust. If I trust you completely, then I require no explanation or communication of your actions at all, because I know that whatever you are doing is in my best interests. On the other hand, if I don’t trust you in the slightest, then no amount of talking, explaining, or reasoning will have any effect on me, because I will never believe you are telling me the truth and acting in my best interests.

As an organization grows, communication becomes its biggest challenge.

When everyone wants to know “Why?” in an organization, the answer programs the culture, because it’s an answer everyone will remember. The explanation will be repeated to every new recruit and will embed itself into the cultural fabric. New officers would ask, “Tell me again why I can’t have a concubine?” And be told: “Because in this army, nothing is more important than your word. If we can’t trust you to keep your word to your wife, we definitely can’t trust you to keep your word to us.” (The matter is complicated by the fact that Louverture had illegitimate children, but no leader is perfect.)

The rebels were trying to build an army that could set them free and a culture that could sustain their independence. So they adopted the best practices from armies that had succeeded before them. As we will see in the next chapter, something as seemingly simple as a dress code can change behavior, and therefore culture, not only in war but in business.

Building a great culture means adapting it to circumstances. And that often means bringing in outside leadership from the culture you need to penetrate or master.

No culture can flourish without the enthusiastic participation of its leader. No matter how well designed, carefully programmed, and insistently enforced your cultural elements are, inconsistent or hypocritical behavior by the person in charge will blow the whole thing up.

He asked a great deal from his soldiers, but he was more than willing to embody his own standards.

For a culture to stick, it must reflect the leader’s actual values, not just those he thinks sound inspiring. Because a leader creates culture chiefly by his actions—by example.

Integrity, honesty, and decency are long-term cultural investments. Their purpose is not to make the quarter, beat a competitor, or attract a new employee. Their purpose is to create a better place to work and to make the company a better one to do business with in the long run.

One difficulty in implementing integrity is that it’s a concept without boundaries. You can’t pat yourself on the back for treating your employees ethically if you’re simultaneously lying to your customers, because your employees will pick up on the discrepancy and start lying to each other. The behaviors must be universal; you have to live up to them in every context.

“Learn, citizens, to appreciate the glory of your new political status. In acquiring the rights that the constitution affords all Frenchman, do not forget the duties it imposes on you.”

integrity is often at odds with other goals that it must be clearly and specifically inserted into the culture. If a company expects its people to behave ethically without giving them detailed instructions on what that behavior looks like and how to pursue it, the company will fall far short no matter whom it hires.

How could Louverture, genius of culture and human nature that he was, not perceive the brewing treachery? In a sense, he was like the Greek hero Oedipus, who solved the riddle of the Sphinx but who couldn’t clearly see those closest to him. Louverture’s optimistic view of human potential blinded him to certain home truths.

Here are the rules for writing a rule so powerful it sets the culture for many years: It must be memorable. If people forget the rule, they forget the culture. It must raise the question “Why?” Your rule should be so bizarre and shocking that everybody who hears it is compelled to ask, “Are you serious?” Its cultural impact must be straightforward. The answer to the “Why?” must clearly explain the cultural concept. People must encounter the rule almost daily. If your incredibly memorable rule applies only to situations people face once a year, it’s irrelevant.

One of the most distinctive large-company cultures is Amazon’s. It promulgates its fourteen cultural values in a number of ways, but perhaps most effectively through a few shocking rules. One value, frugality, is defined as Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing head count, budget size, or fixed expenses.

Some of Amazon’s values are fairly abstract. Dive deep, for instance, encourages leaders to operate at all levels, stay connected to the details, audit frequently, and investigate more thoroughly when metrics and anecdotal evidence disagree.

To convene a meeting at Amazon, you must prepare a short written document explaining the issues to be discussed and your position on them. When the meeting begins everyone silently reads the document. Then the discussion starts, with everyone up to speed on a shared set of background information.

There’s been a lot of research done on this that shows that most people’s brains can absorb new information several times faster and more effectively by reading information versus listening to it. Also, asking people to present their plans in written format forces them to express their ideas with a deeper level of detail.

“If you walk into the room wearing an elegant dark suit, you pick up unbelievable positioning power. If you want respect, carry yourself in a way that commands it.”

It became part of our ethos: we were classy, elegant, conservative businesspeople. It spoke to everything we wanted to be without our having to say it out loud. Through our culture we built our business to a place where people respected it due to the culture itself.

How you dress, the most visible thing you do, can be the most important invisible force driving your organization’s behavior. Ovitz sums it up: “Cultures are shaped more by the invisible than the visible. They are willed.”

He instilled in our eight-person sales team the crucial four C’s. To sell, you had have 1) the competence—expert knowledge of the product you were selling and the process to demonstrate it (qualifying the buyer by validating their need and budget; helping define what their buying criteria are while setting traps for the competition; getting sign-off from the technical and the economic buyer at the customer, and so forth) so that you could have 2) the confidence to state your point of view, which would give you 3) the courage to have 4) the conviction not to be sold by the customer on why she wasn’t going to buy your product. Cranney was obsessed with training every salesperson, testing them, and holding them accountable on the four C’s.

He was fond of saying that most reps had a Wizard of Oz problem: they lacked either the courage, the brain, or the heart to be successful by themselves. That’s where the process and the team came into play. Every person on each sales team had a specific role to play—making the technical sale, navigating the organization, serving as the closer—and if he did not play his role to perfection, the sale was in jeopardy.

Every time Pure had a cultural problem, it aggressively put a process in place to fix it, just as though the company were maximizing semiconductor yield. The side effect of creating a massive set of rules that governed behavior—of optimizing for removing all errors rather than for encouraging exploration and free thinking—was to stifle creativity. Hastings vowed not to make that mistake again.

The talk said, “Secure your email”; the walk said, “Personal convenience is more important.” The walk almost always wins. That’s how culture works.

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

Kalanick also defined eight qualities he sought in his employees: Vision Quality Obsession Innovation Fierceness Execution Scale Communication Super Pumpedness

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.

What you measure is what you value.

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.

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 fighting for?

Finally, “Do the right thing. Period,” makes the issue seem simple, and therefore trivial. But ethics is not easy; it’s complex. That’s why Louverture spoke to his slave army as though they were philosophers. He needed them to understand that they would have to think deeply about their choices.

Some of bushido’s tenets, selected from Shintoism, Buddhism, and Confucianism, are thousands of years old, so portions of its playbook seem antiquated. Yet the culture persevered for so astonishingly long because it provided a framework for handling every situation or ethical dilemma you might come across. Bushido’s dictates were crisp, coherent, and comprehensive. The samurai’s meticulous approach to building a 360-degree culture is extraordinarily applicable today.

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.

I will never fall behind others in pursuing the way of the warrior. I will always be ready to serve my lord. I will honor my parents. I will serve compassionately for the benefit of others.

“The extent of one’s courage or cowardice cannot be measured in ordinary times. All is revealed when something happens.”

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.