What exactly is company culture and how do you create it? Ben Horowitz, veteran entrepreneur and cofounder of Silicon Valley powerhouse venture capital firm Andreessen Horowitz mined history for some answers. He shared them on stage at 91自拍 on November 21, 2019, with anecdotes and practical takeaways from his new book, What You Do Is Who You Are: How to Create Your Business Culture. The title says it all: culture is about action, not words. It is not the mission statement. Instead, culture is the subtle, nearly invisible force that shapes behavior. It is the assumptions people in the company use to make decisions when the CEO is not there.聽
Ben Horowitz, cofounder and general partner, Andreessen Horowitz and moderator Sonal Chokshi, editor in chief, Andreessen Horowitz, at 91自拍, November 21, 2019.
How do you set these nearly invisible behaviors and how can you make them last? Despite his long experience with countless successful Silicon Valley companies, Horowitz chose lessons from unusual and extraordinarily effective leaders . . . even if the cultures they fostered were violent or problematic. His book explores Haiti鈥檚 Toussaint Louverture, leader of the only successful slave revolt in history; the Samurai, who ruled Japan for 700 years and shaped modern Japanese culture; Genghis Khan, who built the world鈥檚 largest empire; and Shaka Senghor, an ex-con who created a formidable prison gang and transformed prison culture.
As a CEO, how do you get people to act in the way that you want? The samurai鈥檚 bushido code鈥斺�渢he way of the warrior鈥濃�攍asted nearly 700 years and still infuses Japanese culture. It endured because it established clear requirements for behavior bounded by loyalty, respect, and sincerity and enforced them with severe consequences for misbehavior.聽
Horowitz describes how a strong culture based on a code of action like this can be translated into modern settings, like prison yards and companies.
Ben Horowitz describes Shaka Senghor鈥檚 orientation to prison culture.
To many CEO鈥檚 culture seems invisible because no one can really see their own culture, it鈥檚 鈥渏ust the way things are done.鈥� Company leaders, says Horowitz, must actively seek to understand their culture and then consciously promote it by defining specific actions that are acceptable as well as those that are not. The more memorable the better. Slave revolt leader Toussaint Louverture systematically transformed the culture of the French colony he governed to ensure its survival. He did so by creating and enforcing 鈥渟hocking rules鈥� that embodied the future he was trying to build. Netflix founder Reed Hastings used this concept to ensure that his management team fully absorbed a culture鈥攁nd product鈥攕hift that would keep them competitive in the rapidly changing landscape of video technology.
Ben Horowitz explains why it鈥檚 necessary to shock the system to change culture.
The 鈥渨hy鈥� matters more than the 鈥渨hat鈥� in conveying culture to employees in an effective way. Culture is slippery, and using ambiguous phrases like 鈥渄o the right thing鈥� or 鈥渄on鈥檛 be evil鈥� doesn鈥檛 help people know exactly how to behave in complex situations. Horowitz describes how he encoded respect for the entrepreneur into his venture capital firm鈥檚 culture through easy-to-understand rules, clear punishments, and reasons why.
Ben Horowitz explains how he enforces respect for the entrepreneur.
Like rules, ethics must also be made explicit. Uber founder Travis Kalanick crafted energizing rules for his company culture and indoctrinated employees on the importance of being competitive. But ethics were not explicitly stated, Horowitz notes, creating situations where ethical and even legal boundaries were crossed in service to the clear mandate to 鈥渨in.鈥�
With refreshing candor, Horowitz says that every company鈥檚 culture is broken in some way. And though a healthy culture is critical, it can鈥檛 ever be more important than the products that keep a company in business. The goal should be to make culture better within the business strategy, and there鈥檚 no magic set of rules on how to do that or what it should look like. For example, Amazon and Apple, appropriately, have very different cultures.
Ben Horowitz explains why culture must align with business strategy.
Because you are what you do, conforming to company culture can change you, warns Horowitz. Culture comes from the top, so if you are not in alignment with company leaders, you should leave a job before you become someone you don鈥檛 want to become. Those same leaders, however, should be careful not to equate someone鈥檚 鈥渃olor with their culture,鈥� assuming a person鈥檚 race or gender alone reveals if they will be a good 鈥渇it鈥� with the company. Instead, valuing the differing viewpoints, experiences, and strengths of diverse people within a shared culture allows people鈥檚 unique abilities to emerge and contribute to the company鈥檚 success.
Culture is the glue that holds people together when things go wrong as well as when they go right. It provides a sense of belonging and purpose鈥攁 reflection of the highest company mission, where success is measured by how well people treat each other during the time they spend working together.
鈥淲hat You Do Is Who You Are,鈥� Ben Horowitz in conversation with Sonal Chokshi, November 21, 2019.