What You Do Is Who You Are: How to Create Your Business Culture. Ben Horowitz
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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 to express their ideas with a deeper level of detail.
A culture is a set of actions. By requiring thoughtful action before every meeting, Amazon moves its culture in the right direction every day.
In the early days of Facebook, Mark Zuckerberg was keenly aware that the more people he got on his network, the better his product would be. As MySpace had far more users, Facebook had to outgrow them by building better software—software that had better features, was more user-friendly, and that excelled at identifying potential new Facebook users. Zuckerberg knew that he didn’t have much time: if MySpace got big enough, it might transform from an entertaining application into an invincible utility.
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.
After Facebook caught and passed MySpace, it had new missions to pursue, such as turning the social network into a platform. At that point, the move fast virtue became more liability than asset. When outside developers tried to build applications on Facebook, the underlying platform kept breaking, which jeopardized the businesses of Facebook’s partners. So in 2014 Zuckerberg replaced his by-now-famous rule with the boring but stage-appropriate motto Move fast with stable infrastructure. Cultures must evolve with the mission.
When Marissa Mayer became CEO of Yahoo! in 2012, its reputation was of a company whose workforce didn’t give its all. She knew that to compete with her old company, Google, she would need a better effort from the team. She began by trying to lead by example, working relentlessly long hours. Yet she kept arriving at work to see an empty parking lot.
So in 2013, Mayer created a rule so shocking that it created massive backlash not only inside but even outside the company: during work hours, you must be at work. Nobody is allowed to work from home. But this was the technology industry—the industry that had invented the tools that enabled people to work from home! As the world exploded in anger, Mayer calmly explained her position. She had examined the virtual private networking logs of employees who were working from home; they had to use the VPN to securely access their work files. The logs showed that most people “working from home” had in fact not been working at all.
She shocked people because she had to make a dramatic cultural change. It’s worth nothing that while Mayer succeeded in building assiduousness back into Yahoo!’s culture, she never quite turned the company around. That’s the nature of culture—it helps you do what you are doing better, but it can’t fix your strategy or thwart a dominant competitor.
DRESS FOR SUCCESS
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.
She told the story at the Wharton People Analytics Conference:
The HR department started arguing with me, saying, it can be “Dress appropriately” on the surface, but in the employee manual it needs to be a lot more detailed. They put in specifics like, “Don’t wear T-shirts that say inappropriate things, or statements that could be misinterpreted.”
Barra was perplexed.
“What does inappropriate, in the context of a T-shirt, even mean?” she asked the audience, half-jokingly.
So I finally had to say, “No, it’s two words, that’s what I want.” What followed was really a window into the company for me.
Barra promptly received an email from a senior-level director:
He said, “You need to put out a better dress policy, this is not enough.” So I called him—and of course that shook him a little bit. And I asked him to help me understand why the policy was inept.
The director explained that some people on his team occasionally had to deal with government officials on short notice, and they needed to be dressed appropriately for that.
“Okay, why don’t you talk to your team,” I replied. He was an established leader at GM, responsible for a pretty important part of the company, with a multimillion-dollar budget. He called me back a few minutes later, saying, “I talked to the team, we brainstormed, and we agreed that the four people who occasionally need to meet with government officials will keep a pair of dress pants in their locker.” Problem solved.
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.
When Michael Ovitz ran Creative Artists Agency, Hollywood’s leading talent agency, he, too, had no explicit dress code. But he absolutely had an implicit one. “In the mid-seventies, we lived in a world coming off sixties culture, where everyone wore jeans and T-shirts,” Ovitz recalled. “That’s what I needed to counter-program.” The dress code he landed on came from the culture of authority he sought: “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.”
Ovitz wore elegant dark suits every day, leading by example. He never explicitly asked anyone to follow his lead. That didn’t mean there weren’t consequences if you didn’t. “There was a downpour in LA, and some people came in in rain boots and jeans. 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