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

by Ben Horowitz

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.

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.

No PowerPoint presentations in meetings. In an industry where presentations rule the day, this rule definitely counts as shocking. 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. Amazon executive Ariel Kelman explains that the rule makes meetings much more efficient: If you have to talk about something complicated, you want to load the data into people’s brains as quickly as possible so you can have an intelligent, facts-based conversation about the business decision you’re trying to make. So, say you’re meeting to figure out pricing for a new product, you’ve got to talk about the cost structure, how much is fixed, how much is variable, and then there might be three different pricing models, each with pros and cons. That’s a lot of information. Now, you can sit and listen to someone pitch all of this information, but most people don’t have the patience to pay attention long enough to be effective in absorbing all of this data and it typically takes too much time. 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...

Speed was the number one virtue he needed, so he created a shocking rule: Move fast and break things. Imagine you are an engineer hearing that for the first time: Break things? I thought the point was to make things. Why is Mark telling us to break things? Well, he’s telling you so that when you come up with an innovative product and you are not sure whether it’s worth potentially destabilizing the code base to push the product along, you already have your answer. Moving fast is the virtue; breaking things is the acceptable by-product. Zuckerberg later observed that the reason the rule was so powerful was that it stated not only what Facebook wanted, but what it would give up to get it.

When Mary Barra took over as the CEO of General Motors in 2014, she wanted to dismantle the company’s powerful bureaucracy. It stifled employees and disempowered managers: rather than communicating with employees and giving them guidance, the managers relied on the extensive system of rules to do the job for them. The ten-page dress code was the worst example. To shock the system and change the culture, Barra reduced ten pages to two words: dress appropriately.

The change sent a lasting visual message to GM’s entire management team. Every time a manager saw an employee, it would trigger the thought, Is he dressed appropriately? And, if not, What’s the best way for me to manage that? Do I have a good enough relationship with him to communicate effectively on this sensitive issue? The new code empowered—and required—managers to manage.

“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.”

I went up to one agent and said, ‘Nice outfit. Are you working on set today?’ And that rattled through our business.” Ovitz was giving him the hip-hop ultimatum: Are you a hustler or a customer? Are you a world-class agent or a wannabe actor? This steely but largely unspoken approach soon shifted CAA to nearly complete dress code compliance. “The only exception was our music department, because musicians don’t like guys in suits.”

Ovitz sums it up: “Cultures are shaped more by the invisible than the visible. They are willed.”

At LoudCloud, we began with unlimited demand and built a culture oriented around fulfilling it. So we were focused on empowerment, removing bottlenecks to growth, and being a great place to work. To succeed as an enterprise software company, selling our platform to big businesses, we would have to become a culture distinguished by urgency, competitiveness, and precision. I needed to bring in a leader with those attributes.

We got him in the nick of time. Not only did we lack an enterprise sales culture, but we lacked everything that underpinned it: a sales philosophy, methodology, and attitude. We needed an approach to winning deals, a method that would reliably make us stand out, and an attitude that we would refuse to lose.

He believed that you were either selling or being sold: if you weren’t selling a customer on your product then the customer was selling you on why she wasn’t going to buy it.

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 wh...

For him, selling was a team sport. That sounds like he made it fun and collegial, but no. 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. Quite rapidly, Cranney’s syst...

Equality was less important than the cultural virtues we needed to survive.

Before condemning Clinton for this catastrophic error, keep in mind that every leader will make decisions she later regrets. Nobody has ever been close to perfect. Furthermore, it is a common and understandable mistake to think of cyber security as an isolated function that, like processing payroll, has no bearing on the larger culture. In fact, the most important aspects of an organization’s performance—quality, design, security, fiscal discipline, customer care—are all culturally driven.

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.

Uber Mission Celebrate Cities Meritocracy and Toe-Stepping Principled Confrontation Winning: Champion’s Mindset Let Builders Build Always Be Hustlin’ Customer Obsession Make Big, Bold Bets Make Magic Be an Owner, not a Renter Be Yourself Optimistic Leadership The Best Idea Wins Kalanick also defined eight qualities he sought in his employees: Vision Quality Obsession Innovation Fierceness Execution Scale Communication Super Pumpedness

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.

The underlying message was clear: if the choice is integrity or winning, at Uber we do whatever we have to do to win.

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.

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.

Khosrowshahi immediately replaced the offending cultural values with the following new ones: We build globally, we live locally. We are customer obsessed. We celebrate differences. We act like owners. We persevere. We value ideas over hierarchy. We make big bold bets. We do the right thing. Period.

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.

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.

samurai oath is oriented toward action: 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.

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.”

Hagakure is “The way of the warrior is to be found in dying.”

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.

Hagakure: Every morning, samurai would diligently groom themselves by bathing in the open air, shaving their foreheads, putting fragrant oil in their hair, cutting their fingernails and filing them with pumice stone, then polishing them with wood sorrel. Of course, military equipment was kept neat, dusted, and oiled to be free of rust. Although paying so much attention to personal appearance may seem vain, it is because of the samurai’s resolve to die at any moment that he makes preparations so meticulously. If slain with an unkempt appearance, he will be scorned by his enemy as being unclean.

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?

My mentor, Bill Campbell, used to say, “We are doing it for each other. How much do you care about the people you’re working with? Do you want to let them down?” 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.

Defining the Virtues The samurai code rested on eight virtues: Rectitude or justice, courage, honor, loyalty, benevolence, politeness, self-control, and veracity or sincerity.

They all worked together as a system, balancing one another in a way that made it very difficult for any individual virtue to be misunderstood or misused.

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.

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.

The samurai combined the virtue of politeness with the virtue of veracity or sincerity. Specifically, they defined politeness without veracity as an empty gesture. Lying to be polite is politeness without form and has no value.

Hiko’uemon, a samurai in the 1600s, illustrates the virtue: When Moro’oka Hiko’uemon was summoned, he was told to sign an oath to the deities that his testimony was true. “A samurai’s word is harder than metal. Once I have decided something, not even the gods can change it.” Consequently, he did not have to make an oath.

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). This does not mean that we leave CEOs in place forever. Our obligation is to the company not the founder. If the founder is no longer capable of running the company, the founder will not remain as CEO.

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.

Any time you decide one group is inherently good or bad regardless of their behavior, you program dishonesty into your organization.

How did the entire country of Japan embrace politeness for more than ten centuries? It helped that the samurai required everyone to study the code, commit it to memory, and live it every day—but other cultures have required that kind of study, and they didn’t last nearly as long. The samurai endured because of two additional techniques. First, they detailed every permutation of potential cultural or ethical dilemmas to prevent the code from being misinterpreted or deliberately misused. Second, they stamped their code deep with vivid stories.

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.

Will you do the right thing only if you risk getting caught for not doing it? How about if you don’t really risk getting caught? How about if you know nobody will know, nobody will miss getting the money, you don’t have a relationship with the person, and you really need the money? That last scenario is particularly challenging. If you don’t clarify exactly what “the right thing” is for a tough call like that, it won’t be totally clear what your employees should do when they come to one—and tough calls are what define a company and a culture.

Morgridge walked the talk by staying at the Red Roof Inn, but even his example didn’t prove truly contagious. So he came up with a pithy axiom: “If you cannot see your car from your hotel room, then you are paying too much.” When his top executives heard that, they understood that business-class tickets and fancy dinners were out of the question. More subtly—but even more crucially—they understood that the point of business travel was to meet customer needs, not to enjoy perks.

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.

We told the story over and over again and the company changed. Once people realized that killing the snake was much more important than how we killed it, our new culture unleashed a flurry of creative energy. As the company bringing the Internet to life, we faced many snakes.