What You Do Is Who You Are: How to Create Your Business Culture. Ben Horowitz
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In the player-relations department, the reign of Giants Coach Tom Coughlin started poorly and is already showing signs of unraveling one game into the season.
On the heels of Sunday’s 31–17 loss to the Eagles, the N.F.L. Players Association confirmed that three Giants had filed a grievance against Coughlin for fining them for not being early enough for a meeting.
A few weeks ago, linebackers Carlos Emmons and Barrett Green and cornerback Terry Cousin, all free-agent acquisitions in the off-season, were fined $1,000 each after showing up several minutes early for a meeting, only to be told they needed to arrive earlier.
Coughlin’s response to the reporter didn’t make him seem more sympathetic, but it did solidify his rule: “Players ought to be there on time, period,” he said. “If they’re on time, they’re on time. Meetings start five minutes early.”
Was the rule memorable? Check. Did it beg the question “Why?” He had players asking everyone from the league to the New York Times “Why?” so, check. Did they encounter it daily? Yep, they ran into it every time they had to be somewhere. But what was he trying to achieve?
Eleven years and two Super Bowl wins later, backup quarterback Ryan Nassib explained the cultural intention to the Wall Street Journal:
Coughlin Time is more of a mindset, kind of a way for players to discipline themselves, making sure they’re on time, making sure they’re attentive and making sure they’re ready to work when it’s time to start meetings. It’s actually kind of nice because once you get out in the real world, you’re five minutes early to everything.
In business, creating partnerships that work is a difficult art. Success stories such as the partnership of Microsoft and Intel or of Siebel Systems and Accenture become legendary, but for every success there are a hundred failures. It’s difficult enough to align interests in your own organization, where everyone works for you, but doing it between companies is close to impossible.
In the 1980s, the business literature promoted the concept of win-win partnerships. Unfortunately, the idea was pretty abstract. How do you know if a deal is win-win? Can you actually determine when it’s fifty-fifty? The idea also failed to address the cultural adjustment required: if everything in a business culture is about winning, what behavior changes are necessary to achieve a win-win mindset? Finally, its meaning was easy to twist. Devious negotiators routinely said, “We want this to be a win-win.”
In 1998, Diane Greene cofounded a virtualized operating system company, VMware, whose success depended on her partnership strategy. But she was entering a field that had witnessed the biggest win-lose partnership ever—Microsoft winning total dominance by “partnering” with IBM on the desktop operating system. VMware’s potential partners would be extremely skeptical of any independent-operating-system company proposing a similar “win-win.”
So Greene came up with a shocking rule: Partnerships should be 49/51, with VMware getting the 49. Did she just tell her team to lose? That definitely begs the question “Why?”
Greene said, “I had to give our business development people permission to be good to the partners, because one-sided partnerships would not work.” Her rule was actually met not with resistance but with relief. Her people wanted to create mutually beneficial partnerships, and Greene’s rule gave them permission. It was of course no easier to measure an exact 49/51 split than a 50/50 “win-win,” but Greene’s employees understood her underlying point: “If you’re negotiating something on the margin, it’s okay to give it to our partner.” VMware went on to create a stunning set of partnerships with Intel, Dell, HP, and IBM that propelled the company to a market capitalization of more than $60 billion.
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.
That’s a nice definition, but how do you drive home that you mean it? Here’s how: desks at Amazon were built by buying cheap doors from Home Depot and nailing legs to them. These door desks weren’t great ergonomically, but when a shocked new employee asked why she had to work at a makeshift desk, the answer pinged back with illuminating consistency: “We look for every opportunity to save money so we can deliver the best products for the lowest cost.” (Amazon no longer gives everyone a door desk, as the culture has now been set—and as there are cheaper alternatives.)
Some of Amazon’s values are fairly abstract. 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.
Great idea—but how do you drive this kind of thoughtfulness into the culture? The shocking rule that helps is 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 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