Ben Horowitz Was Wrong - Culture DOES NOT Eat Strategy for Breakfast!

Once Peter Drucker famously said: “Culture eats strategy for breakfast”. It meant that screw what executive suits say, what matters is what people are actually doing. And that’s correct. However, the truth is that culture and strategy do not compete.

For either to be effective, they must cohere. And yes, there exists a formula to create a business culture that not only aligns with your strategy but something that could also be penned down in the history of great cultures. A culture every organization would want to emulate. A culture people would join you for. And Ben Horowitz has unleashed all of that wisdom in one book.

For the last many months, the power of a great culture has highly intrigued me. Culture is that aspect of our professional life which we breathe every day. It ends up shaping our attitude.

When thinking culture, do you come across questions like what is called a great culture? Is there any methodology to build a great culture or does it evolve on its own? Is the founder or CEO itself the culture? Did “20% time Friday policy” helped Google build a great culture?

Well, if such thoughts have bothered you too, you will have answers to some of them in this blog. It will also give you a perspective on how to think when thinking about culture.

In the next few mins, you are going to read the takeaways I had from one of the most profound books I read in 2019 — “What You Do Is Who You Are ” by Ben Horowitz. The author has taken orthogonal subjects or people to get inspiration on how to build a great culture.

It’s a classic first principle thinking.

There are lessons learned from Shaka Senghor, who was convicted of murder in his teenage and ended up creating one of the most transformative cultures in the prison. There is a narration of Genghis Khan, one of the greatest warriors of all time, on how his inclusion policies and attitude enabled him to build a vast empire.

What Is Your Culture?

When building great products, you understand who are the users, what’s the current offering and what problems are to be solved. Likewise, to build a great culture, it’s important to rationally understand what your culture is today and what‘s broken with it.

Well, the best way to understand the culture is not through what leaders tell you, but through your new employees. What they think will help them to fit in, survive and succeed in the organization. What behaviors they think will be rewarded and which ones will be discouraged. That is pretty much your company culture.

To further gauge whether your culture is broken or not, here are few proxies:

1. Your business is going well and still, good performers are quitting at higher than industry rate
2. You are repetitively failing to achieve your goals
3. Your employees do something that completely shocks you. People making/faking data or screwing company image over public forums are a few of the examples.

Great Culture ≠ Great Product

Before we learn how to establish a strong culture, here are few words of discouragement.

Great culture doesn’t ensure that you will have great products and lion’s market share. A great culture doesn’t necessarily guarantee a great company.

However, a great culture can ensure you are able to do something repetitively if you have done it before. It brings sustainability. It brings certainty in outcomes. If an athlete is talented enough, she’ll succeed despite poor nutrition and average training. If she lacks talent, even perfect nutrition and relentless training won’t make her a great athlete. However, perfect nutrition and training make every athlete better than what she is. It will elongate the lifespan for which she would continue winning.

Similarly, a great culture will ensure that if your company has the ability to build great products, it will be able to do that repetitively. It will ensure that the best talent would love to work with you.

Walk The Talk

Now let’s learn what it may take to design the culture which can act as perfect nutrition.

It may sound cliched, albeit the truth is, it all starts with “walking the talk”. Indeed, it’s one of the toughest aspects that leaders end up missing. For instance, when you have to choose between business survival against abiding by the culture of integrity, what would you choose?

When Dick Costolo took over as CEO of Twitter in 2010, his advisor joked that if you set off a bomb at 5 pm, only the cleaning people would get killed. Costolo wanted to change that culture to encourage hard work. After having dinner with his family every night, he’d go back to work and make himself available to anyone who was still there and wanted to get his help. Soon, a lot of people were working longer and getting more done. Since Costolo himself was a grinder, he enjoyed doing this.

— Quoted as is from the book

It is easier to walk the talk when the talk is your natural way of doing things.

Shocking Rules

While building a culture, the biggest challenge is how to ensure your employees live by those values. And this is where the concept of “Shocking Rules” as an innate part of the culture comes in.

One of the values Amazonians take pride in is “Dive Deep”. Did you ever wonder how this value got into the culture? The shocking rule “No PowerPoint presentations in meetings” helped Amazon imbibe this value widely in the organization. This rule went a long way to make Amazon widely known for writing 2-page to 6-page documents for setting up any discussion or initiatives and showcase their meticulousness.

To make your culture memorable, a shocking rule would go a long way.

These shocking rules, however, come with few pre-conditions:

1. Create a shocking rule is that people should encounter the rule almost daily.
2. The rule should be radical enough that everyone would question why this rule has been created.
3. Not all shocking rules may fit into all functions of your organization. Every function needs specific sub-cultural elements to strengthen itself. “We only care about results” as a culture may work in Sales but can be counter-productive in R&D. “Obligation to dissent with internal stakeholders” can be a great value for Product/Design while it can be counter-productive in Operations.

Stories — Anecdotes — Lores

The second set of levers to democratize cultural values in an organization are stories and anecdotes. The creation of stories is one of the most important aspects to ensure that culture goes deep down in every employee’s vein. Leaders should articulate stories and anecdotes which resonate with their culture.

During early Intel days, Andy Grove played a critical role in defining the engineering and ownership driven culture. What he did to Intel culture was pretty much adopted by the entire silicon valley. At Intel all hands meet, Grove would ask “How would you sum up the Intel approach?” Someone might answer, “At Intel, you don’t wait for someone else to do it. You take the ball yourself and run with it.” Grove would reply, “Wrong. At Intel, you take the ball yourself and you let the air out and you fold the ball up and put it in your pocket. Then you take another ball and run with it and when you’ve crossed the goal you take the second ball out of your pocket and reinflate it and score twelve points instead of six.”

— Quoted as is from the book

Netscape in its early days had a culture of debate club because of which people couldn’t get the work done swiftly. The new CEO, Jim Barksdale, realized this and wanted to create a cultural value telling people that it’s okay to disagree. But once something has been discussed, it’s important to commit to one decision as a team. Disagree & Commit. It was not easy. People questioned “Commit to what? My idea or yours?”

So Barksdale created a piece of lore and presented it in the company’s all-hands:

“We have three rules here at Netscape. The first rule is if you see a snake, don’t call committees, don’t call your buddies, don’t form a team, don’t get a meeting together, just kill the snake.

The second rule is don’t go back and play with dead snakes. Too many people waste too much time on decisions that have already been made.

And the third rule is: all opportunities start out looking like snakes.”

— Quoted as is from the book

The story was funny and clear and everyone got the point. Netscape was able to unleash the creative energy of its people. Many people won’t know but it was in the leadership of Barksdale, Netscape invented SSL, cookies & javascript. Today, we can’t imagine the world of the internet without these technologies.

Cultures Must Evolve. Continuously!

Cultures, like the organizations that create them, must evolve to meet new challenges. Building culture is like a Kaizen process. The point is not to be perfect, just better than what you were yesterday.

Culture design is like a system design. Culture design programs the actions in your organization, but, like computer programs, culture has bugs too. In fact, it’s impossible to design a bug-free culture. And cultures are significantly more difficult to debug than programs. How would a CEO debug that one of her leaders is continuously lying and portraying a rosy picture to her? If a founder is optimizing culture to build hyper-competitiveness, how she would ensure that people are not toe-stepping each other.

For your culture to be vibrant and sustainable, it must come from its soul.

Drawing inspiration from other organization cultures is fine but don’t adapt their ways.

Your Culture Is Who You Hire or Promote

The kind of people being hired or promoted has a deep-subtle impact in the mind of the wider organization to demonstrate what kind of cultural traits are being encouraged within the company.

Patrick Collison, co-founder, and CEO of Stripe, once said: “Honestly, most of what ultimately defined us happened in the hiring of the first twenty people. So the question of what do you want the culture to be and who do you want to hire is in some sense the same question.”

— Quoted as is from the book

We Are Building An Inclusive Culture. Oh Really?

“Building inclusive culture” is often the most used tactic CEOs / founders use in the context of getting their culture right. And you will find companies end up doing diversity hiring as a part of their inclusive culture strategy. And this is where the biggest mistake happens. Despite good intentions, this leads to a catastrophe.

If you are hiring women because of gender and not for what they would contribute to the organization, there is a problem. This may seem obvious but it’s way more tricky and subtle. What values of women you believe can help make your culture better.

The key to inclusion lies in deeply understanding why you want inclusion.

Let’s say you are building a culture of collaboration and you are aware that women, in general, are more helpful and collaborative. In this case, you should measure these traits during the hiring process. Also ensure that people, who are the epitome of collaboration, are being represented in the interview panel. Optimizing for these attributes will automatically ensure you may end up having more women representation. You will hire someone for who they are and not because of their gender.

Culture doesn’t eat strategy for breakfast

Once Peter Drucker famously said: “Culture eats strategy for breakfast”. It meant that screw what executive suite says, what matters is what people are actually doing. And that’s correct. However, the truth is that culture and strategy do not compete. For either to be effective, they must cohere. Also, as strategies evolve you learn new things. For culture and strategy to cohere with each other, it’s important that you change your culture with an evolving strategy.

Culture and strategy must cohere with each other to be effective

When Jeff Bezos created Amazon’s long term strategy, a key element was a lower cost structure. So a cultural attentiveness to frugality made perfect sense.

For a B2B SaaS business like Atlassian, having a high retention rate is core to its strategy. Atlassian established a bold value “Don’t #@!% the customer” to drive retention. They ensured employees deeply care about what they commit to their clients vis-a-vis what they deliver. They made sure employees maintain high transparency with their customers. Today their products JIRA and Confluence have market leadership. Their pricing is 100% transparent to all customers, be it big or small, and they don’t build products that cannot be sold on its own.

Concluding Words

Well if you are still reading this, don’t end your journey of decoding the perfect culture formula just here. The book “What you do is who you are by Ben Horowitz” elaborates on all aspects of shocking rules, anecdotes, inclusion, etc in much more detail.

Start the journey of influencing your organization’s culture to create a workplace something that people would love to be a part of.

You can buy the book here from Amazon India: https://www.amazon.in/What-You-Do-Who-Are-ebook/dp/B07NVN4QCM

Or here from Amazon US: https://www.amazon.com/What-You-Do-Who-Are/dp/B07X36GGQ7

Happy reading!