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 guys in suits.”
The results of the code on the culture were profound:
It became part of our ethos: we were classy, elegant, conservative businesspeople. It spoke to everything we wanted to be without our having to say it out loud. Through our culture we built our business to a place where people respected it due to the culture itself.
How you dress, the most visible thing you do, can be the most important invisible force driving your organization’s behavior. Ovitz sums it up: “Cultures are shaped more by the invisible than the visible. They are willed.”
INCORPORATE OUTSIDE LEADERSHIP—HEY, MOTHERFUCKER!
When I was CEO of LoudCloud, I had to shift the company from a high-flying cloud services company into a grind-’em-out enterprise software company so we could survive. After the dot-com and telecom crashes of the early 2000s, the market for cloud services had gone from nearly infinite to nearly zero overnight. After we squeaked through the transition as a new company called Opsware, we found ourselves getting killed in the software market by a competitor named BladeLogic. I knew that to compete with them we needed a major cultural change.
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.
The person I hired as our head of sales, Mark Cranney, was not a cultural fit with the rest of us. In fact, he was a complete cultural misfit. Our employees were mostly irreligious Democrats from the west coast who dressed casually and who were cordial and easygoing. We assumed that everyone had the best intentions. Cranney was a Mormon Republican from Boston who wore a suit and tie, was deeply suspicious of everyone, and was one of the most competitive people on earth. But over the next four years he not only saved the company, but got us to an outcome nobody would have believed.
