drawn to places of work that engage and stimulate them, and they enjoy the freedom to be choosy. As a group, they are adaptive and innovative by nature and prefer their employer to be so, as well. They aren’t attracted to traditional hierarchical structures, and they want to work for businesses that support innovation and thrive on change. In fact, according to Deloitte’s third annual Millennial Survey, 78 percent of Millennials are influenced by how innovative a company is when deciding whether they want to work there, and most say their current employer does not encourage them to think creatively.12
Millennials also care about company purpose and culture like no other generation before them. Forbes reports that 60 percent of Millennials leave their companies in less than three years, with the primary reason tied to the lack of a good cultural fit.13 And they consume products with the values of the companies making those products in mind. All of this points, once again, to the importance of “how” over what. Can twentieth-century culture evolve to meet the demands and pressures of the twenty-first century VUCA reality?
The difference between old-era culture and new-era culture is striking. A winning culture in the twentieth century was methodical, efficient, and hierarchical. It was built with industrial needs in mind to cohere around simple processes that could be scaled. It benefited from squeezing out variation as a way of reducing noise and controlling chaos. It won by focusing relentlessly on the what, and doing that same what over and over again. It changed when it had to, but only after long deliberation, exhaustive analysis, and as little course correction as possible.
Indeed, that description is one of the reasons why culture—so vaunted in the 1990s by the likes of Jim Collins and Tom Peters, among others—is under attack today as a force actually holding companies back. UC Berkeley’s Jennifer Chatman, a thought leader in research on organizational culture, acknowledges this when she writes, “Conventionally, researchers have argued that strong cultures that align employee behavior with organizational objectives should boost performance. More recently, research has shown that a strong culture can actually stifle creativity and innovation in dynamic environments because people are adhering too closely to routines creating behavioral uniformity, inertia, and an inward focus.”14
In other words, in a VUCA world, some believe that a strong culture can limit or hamstring an organization rather than bolster and protect it. And certainly this holds true when we think of a Blockbuster or similar behemoth. But Chatman’s research actually shows that a strong culture, in and of itself, is not disadvantageous today if—and it’s a big IF—that culture prizes adaptability and innovation over stability and process while also relying on strong alignment with values to direct people, rather than enforced adherence to rigid policies and rules. In fact, such companies—the ones with strong, cohesive, adaptive, innovative cultures—are performing better financially today and growing faster over time in spite of the turbulence of a VUCA world.
In essence, Chatman is saying that a strong culture reinforces a vigorous company’s direction because that company can successfully adapt or change depending on strategic needs or market forces. If the culture is too weak, people will not know what to do or how to act in tumultuous circumstances, and the organization will lose its way. But companies can go too far. If the culture is too calcified and inflexible, the company will be unable to adapt and innovate effectively.
I think of culture as the guide and the glue of an organization. When culture provides the kind of clarity and intentionality that support its “why” or purpose and the characteristics of its “how,” it helps people see and understand where they need to go. At the same time, when cultural values and characteristics are fully integrated into the fabric of how the organization operates, culture serves as the glue that binds everyone together around norms, expectations, mindsets, and behaviors. In the best organizations, this sense of cohesion and direction is aligned with programs, practices, and processes that reinforce a sense of rightness and shared passion in directing energies toward common goals.
When culture provides the kind of clarity and intentionality that support its “why” or purpose and the characteristics of its “how,” it helps people see and understand where they need to go.
Chatman describes companies that are highly adaptable, innovative, and values-driven as characterized by “risk-taking, willingness to experiment, initiative-taking, along with the ability to be fast-moving and quick to take advantage of opportunities.”
NIMBLE, FOCUSED, AND FEISTY
When I consider Chatman’s research through the lens of my own and add my experience working directly with organizations that thrive or struggle, I see the types of companies she’s talking about as ones that have a very particular type of culture: one that is “nimble, focused, and feisty.” These are the companies that win in the twenty-first century.
Let’s look at each of these traits in turn.
Nimble
Companies that are nimble have structures and processes to guide them, but they encourage and foster adaptability, innovation, and risk-taking rather than impede it. This flexibility allows them to respond quickly to new developments, market shifts, opportunities, learnings, or customer demands.
Focused
Companies that are focused are not free-for-alls without limits. Instead, they work hard to build consensus and alignment around the culture as a way of binding employees together in the pursuit of common goals and mutual passions. That shared mission is reinforced by how the members of the culture communicate, work together, make decisions, and plan, among other activities. The unified sense of purpose that results helps people focus like a laser on the customer and understand how their individual contributions make a difference.
Feisty
And companies that are feisty have leaders and team members who are oriented toward making a major difference in the world and are eager to act bold and play big. They hire, promote, and reward accordingly, and they reject people who are not exceptional, creative, or driven enough to meet those expectations or who do not fit the culture and play well with others.
Throughout the chapters of part one of the book, I will share how these companies bring these characteristics to life through each of these three lenses.
SHARING PASSION
Brian Chesky, the CEO and co-founder of Airbnb, published a famous memo in 2013 that he sent to all the employees of his firm as a reminder to keep culture front and center. The memo was titled “Don’t Fuck Up the Culture” and it was based on advice given to the senior team by noted venture capitalist Peter Thiel. Thiel had just given Airbnb $150 million in additional funding, and Chesky asked him for his single most important piece of advice for their continued success. Chesky was surprised that Thiel would emphasize culture, but Thiel knew that culture had been critical in Airbnb’s success so far and would continue to be in the future so long as that culture did not become stale, bureaucratic, and stifling. Airbnb, after all, had a nifty idea and a good approach, but it owned no tangible assets, just like Uber, Facebook, and Alibaba, some of the biggest companies in the world today. What Airbnb did have that would be more difficult to replicate or compete against was its culture or its how.
Chesky did a nice job summing up why that was important. “Culture,” he wrote, “is simply a shared way of doing something with passion.” Airbnb has very deliberately established a particular culture—one that supports creativity, individual decision-making, problem-solving, customer closeness, collaboration across fluid teams, and fun.15 The danger, according to Thiel, is that as Airbnb continues to grow and reaches a certain size, the need to develop processes that “control the chaos” and help achieve short-term outcomes that meet growth
