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

by Ben Horowitz

As you think about bad news and how you might fear your people finding out and freaking out, remember Gettysburg. Be it a deal gone bad, a whiffed quarter, or a layoff, this is your chance to define not only the event, but the character of your company. And no matter how badly you screwed up, you didn’t send thousands of soldiers to their deaths.

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. Some of your managers know about the brewing disaster, but for reasons we’ll get into they haven’t told you—even though the mess is only going to grow the longer it stays hidden. I call these submerged issues kimchi problems, because the deeper you bury them, the hotter they get.

How do you build a culture that airs its problems without diluting the virtues of ownership and empowerment—and without making everyone feel defeated, or encouraging a culture of whining?

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.” People take their cues from the leader, so if you’re okay with bad news, they’ll be okay, too. Good CEOs run toward the pain and the darkness; eventually they even learn to enjoy it.

I’d say, “I know, with great certainty, that there are things that are completely broken in our company and I want to know what they are. If you don’t know what they are, then you are of no use to me in this meeting.” This technique got me deluged in bad news, but it also created a culture where surfacing and discussing problems was not just tolerated, but encouraged. We didn’t solve all the problems that came up, but at least we knew about most of them.

I did not convince everyone that I was right, but everyone understood that I was aware of the problems with the strategy and wanted to pursue it nonetheless. That made all the difference.

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. By getting to the root cause and addressing that, rather than playing the blame game with an employee or two, you create a culture that won’t be secretive or defensive—a culture open to bad news.

As you meet with people in your organization, either formally or casually, ask them questions that will help uncover bad news. Questions such as, “Is there anything that’s preventing you from getting your job done?” or “If you were me, what would you change in the company?” You may have to ask several times, but people will talk about the problems if you encourage them to. The more you demonstrate genuine eagerness to discover bad news, and genuine supportiveness once it’s discovered, the more open they’ll be to opening up.

Ali Ghodsi, CEO of Databricks, makes a more specific commitment to his executive staff. “I commit to them that there will be no surprises. The job might not work out, but they will hear that from me first and immediately and they will have time to land safely somewhere else. In exchange, they need to let me know early on if they are unhappy in any way.”

loyalty is about the quality of your relationships. People don’t leave companies, they leave managers. If there is no relationship between a manager and an employee or, worse, a bad relationship, you won’t get loyalty regardless of your cultural policy.

The leader of an organization can have meaningful relationships in the company that extend far beyond the people who report to her. If she takes a genuine interest in the people she meets, stays true to her word, and is known throughout the organization as someone you want to get behind, she can create deep bonds and loyalties even in the most dynamic industries.

Cultural design. Make sure your culture aligns with both your personality and your strategy. Anticipate how it might be weaponized and define it in a way that’s unambiguous.

Cultural orientation. An employee’s first day at work may not be as indelible as Shaka Senghor’s first day out of quarantine, but it always makes a lasting impression. People learn more about what it takes to succeed in your organization on that day than on any other. Don’t let that first impression be wrong or accidental.

Shocking rules. Any rule so surprising it makes people ask “Why do we have this rule?” will reinforce key cultural elements. Think about how you can shock ...

Incorporate outside leadership. Sometimes the culture you need is so far away from the culture you have that you need to get outside help. Rather than trying to move your company to a culture that you don’t know well...

Object lessons. What you say means far less than what you do. If you really want to cement a lesson, use an object lesson. It need not be a Sun Tzu–...

Make ethics explicit. One of the most common and devastating mistakes leaders make is to assume people will “Do the right thing” even when it conflicts with other obje...

Give cultural tenets deep meaning. Make them stand out from the norm, from the expected. If the ancient samurai had defined politeness the way we define it today, it would have had zero impact on the culture. Because they defined it as the best way to express love and respect,...

Walk the talk. “Do as I say, not as I do” never works. So refrain from choosing cultural virtues that...

Make decisions that demonstrate...

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. How is it affecting your culture? Are you being the person you want to be? This is what it means to create a great culture. This is what it means to be a leader.