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

by Ben Horowitz

The questions employees everywhere ask themselves all the time are “Will what I do make a difference? Will it matter? Will it move the company forward? Will anybody notice?” A huge part of management’s job is to make sure the answer to all those questions is “Yes!”

Many potential cultural elements are too abstract to be effective. If you define “integrity” as a virtue, will that clarify exactly how people should behave? If there’s a conflict, does integrity mean meeting your product schedule as promised or delivering the quality that your customers expect?

But Todd’s decision could just as easily have finished the company. And then nobody would even remember Okta or the courage he showed.

A disappointing outcome, but for Fred it was instructive. He learned that he needed the right culture on his board as well as in his company. The fact that the new investor cared nothing about the culture of the company—the culture that would to a huge extent determine the fate of his own investment—and cared only about looking like a tough guy would continue to be problematic. Fred ejected the investor. His company continues to grow, bruised but stronger.

The naive diagnosis is that customer support is broken and you should fire the leader. But customer satisfaction starts with the product, runs through the expectations set by sales and marketing, and finally lands in customer support. So your problem is very likely cultural: your culture does not reward people for delighting customers. Why? Most likely, because it rewards people for making product schedules, hitting the sales number, or producing acclaimed marketing campaigns. You will not be able to fix your customer happiness problem without fixing your culture.

If you don’t change the culture, this type of behavior might kill your company, as few companies survive multiple bouts of fraud.

The cultural best practice is to take Sun Tzu’s approach: you should fire not only the salesperson, but the entire chain of command he reports to. Though managers in sales understand that they’re legally responsible for their subordinates’ actions, the mass firing will still be wildly unfair to at least some of them. Yet in this situation a CEO must take a Confucian approach, as the needs of the many outweigh the needs of the few. The object lesson will be universally understood: at this company, we never do anything illegal.

But 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.

Flaky behavior often has a seriously problematic cause, from self-destructive streaks to drug habits to moonlighting for other employers. The cultural problem is that 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.

They are so self-righteous it’s difficult to even have a conversation with them about the right way to do things, because they believe that if they are doing it, it must perforce be right. Everyone else is always wrong.

While a POR won’t hesitate to viciously attack his peers, the slightest criticism causes him to go into a deep funk. Most managers find such behavior ridiculous and give up when they see it. Most managers therefore forfeit the opportunity for greatness.

Before Lincoln’s speech most people did not think of the United States as a country “dedicated to the proposition that all men are created equal”; after it, it was hard to believe anything less. Lincoln acknowledged the terrible cost in lives of a war he’d conducted, but he assigned that loss significance. He not only gave purpose to the event, he gave meaning to the country itself.

Good CEOs run toward the pain and the darkness; eventually they even learn to enjoy it.

“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 obviously can’t offer lifetime employment. I hope what we can deliver is that in fifteen years, when people look back, they will think that they were able to do the most meaningful work of their careers here. In exchange, I expect two things: first, ethical integrity. Second, that they optimize for the company rather than for themselves. If they satisfy those two expectations, then they have our appreciation, respect, and loyalty.

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.”

Being explicit in the way Ghodsi is can enhance the relationship, because he makes a verbal commitment on top of the evident interest that he has already taken in his executives. If he simply stated that commitment without working to establish the relationships that would support it, he would fail.

If you want people to treat every corporate nickel like it’s their own, then having them stay at the Red Roof Inn sends a better cultural signal than having them stay at the Four Seasons—but if you want them to have the confidence to ask for a $5 million order, the opposite might be true. If you don’t know what you want, there is no chance that you will get it.