What You Do Is Who You Are: An expert guide to building your company’s culture

by Ben Horowitz

Heisenberg Uncertainty Principle of Management.

The best way to understand your culture is not through what managers tell you, but through how new employees behave. What behaviors do they perceive will help them fit in, survive, and succeed? That’s your company’s culture.

CULTURE IS UNIVERSAL You might think you can build a ruthlessly competitive culture that your employees use only to deal with outside forces but set aside when dealing with each other. You might think you can build an abusive, shame-you-for-your-failures culture that people participate in at work, but relinquish at quitting time. But that’s not how it works. Cultural behaviors, once absorbed, get deployed everywhere.

virtues are superior to values,

had to change in order for us to change our culture from telling the truth to making sure people heard the truth.

Genghis Khan was the most effective military leader in history. He conquered more than twice as much land as anyone else, and he did it in a series of astonishing campaigns. He subdued some twelve million square miles—an area roughly the size of Africa,

The aim was to ensure loyalty to the khan, not to tribe or clan, and this loyalty could be secured if the rewards were big enough To keep his superstate in being, Genghis needed constant influxes of wealth, and that meant permanent conquest and war; too long a period of peace would encourage the powerful and frustrated custodians of his commonwealth to turn in on, and eventually against, themselves.

Because they had no system of their own to impose upon their subjects, they were willing to adopt and combine systems from everywhere. Without deep cultural preferences in these areas, the Mongols implemented pragmatic rather than ideological solutions. They searched for what worked best; and when they found it, they spread it to other countries.

The self-help guru Tony Robbins says the quality of your life is a function of the quality of questions you ask yourself.

Don’t turn down anything except your collar. Opportunities can come from anywhere.

Don Thompson

Jack Welch’s “rank and yank” process, where he ranked all the General Electric employees and eliminated the lowest performers.

brings the idea to his managers, one says, “But we have this super-intense hiring process where we’re only allowed to hire the very top people in the industry. Our bottom ten percent is pretty darned good.”

In tech, the most pronounced difference is between sales and engineering.

In sales, if you take what you’re told at face value, you won’t last.

When you ask an engineer a question, her instinct is to answer it with great precision. When you ask a salesperson a question, she’ll try to figure out the question behind the question.

Great salespeople are more like boxers. They may enjoy what they do, but nobody sells software on the weekends for fun. Like prizefighting, selling is done for the money and the competition—no prize, no fight. So sales organizations focus on commissions, sales contests, president’s clubs, and other prize-oriented forms of compensation. Salespeople represent the company to the outside world, so they need to dress accordingly and show up early, when their customers punch in. Great sales cultures are competitive, aggressive, and highly compensated—but only for results.

Patrick Collison, cofounder and CEO of Stripe, told me: Honestly, most of what ultimately defined us happened in the hiring of the first twenty people. So the question of what do you want the culture to be and who do you want to hire are in some sense the same question.

smart, humble, hardworking, and collaborative.

Those four are especially valuable in combination, because if you have just two of the four it can be a disaster. If I tell you someone is smart and hardworking, but neither humble nor collaborative, that’s going to bring an archetype to mind and it’s not a good one.

Smart. It doesn’t mean high IQ (although that’s great), it means disposed toward learning.

A good interview question for this is: “Tell me about the last significant thing you learned about how to do your job better.”

If you’re humble, people want you to succeed. If you’re selfish, they want you to fail. It also gives you the capacity for self-awareness, so you can actually learn and be smart.

when you’re here, you’re disciplined, professional, and focused. You should also be competitive, determined, resourceful, resilient, and gritty. Take this job as an opportunity to do the best work of your life.

being collaborative means providing leadership from everywhere.

The most important element of any corporate culture is that people care. They care about the quality of their work, they care about the mission, they care about being good citizens, they care about the company winning.

Every time an employee works hard to make a change or to propose a new idea only to be met with bureaucracy, indecision, or apathy, the culture suffers.

If your organization can’t make decisions, can’t approve initiatives quickly, or has voids where leadership should be, it doesn’t matter how many great people you hire or how much work you spend defining your culture. Your culture will be defined by indifference, because that’s what you’re rewarding. If I work hard and my neighbor does nothing and we both have the same impact at the company, then her behavior is obviously the way to go.

Is your virtue actionable? According to bushido, a culture is not a set of beliefs, but a set of actions.

Research In Motion (RIM), which created the BlackBerry in 1999, built a powerful product-based culture in Waterloo, Canada, far from Silicon Valley. It knew its customers better than anyone and it knew that mobile customers valued battery life and keyboard speed above all. RIM also knew that the corporate IT departments that made the buying decisions valued security and integration with existing IT systems.

Cultural rules can often become bloated sacred cows. Everyone tiptoes around them, trying to respect the culture—and then the cows topple and crush you.

Promising an exec compensation that involves diluting all the other shareholders without consulting the board is bad governance.

So 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.

The finance department then incorrectly accounts for the sale as revenue, thereby committing accounting fraud (for a sale to be booked as revenue, it cannot be reversible).

The Flake Some brilliant people can be totally unreliable.

I’d argue that being dramatically impolite can improve clarity or emphasize an important lesson

There are three keys to managing PORs: Don’t give feedback on their behaviors, give feedback on their behaviors’ counterproductive effect.

For example, if your prophet is a great salesperson who is constantly fighting his peers, challenge him to sell them on his ideas instead of overpowering them.

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.

So it’s critical to a healthy culture that whatever your decision-making process, you insist on a strict rule of disagree and commit.

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.

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

“Do you favor speed or accuracy and by how much?” The answer depends on the nature and size of your business.

In many cases, it will often be faster to make the wrong decision, discover that it’s wrong, and pivot to the right decision,

The final consideration in the empowerment-versus-control question is whether you are in peacetime or wartime.

Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to win. Peacetime CEO focuses on the big picture and empowers her people to make detailed decisions. Wartime CEO cares about a speck of dust on a gnat’s ass if it interferes with the prime directive.

Peacetime CEO spends time defining the culture. Wartime CEO lets the war define the culture.

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.

corollary point is that executives who like working for peacetime CEOs often don’t like working for wartime CEOs, and vice versa.

Your company’s culture should be an idiosyncratic expression of your personality, beliefs, and strategy

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.