Some lessons creep up on you gradually; others hit you over the head like an anvil.
At
the outset of 2008, VMware was flying high. We were a Silicon Valley
rocket ship; we’d doubled revenue and headcount for four years in a row.
We were an upstart disrupting the datacenter, we were thriving despite
every effort of powerful incumbents determined to stop us. We had lots
of growing pains, but they were all “good problems to have.”
Our
CEO collected a few dozen of her senior-most staff and rising young
leaders, and took us to Half Moon Bay for an offsite to discuss the
future of the company.
Charles
O’Reilly of Stanford GSB came for a workshop and gave us a simple
exercise: “Here you all are, VMware’s best and brightest. You’ve built
this incredibly successful company, what an achievement! Now, imagine
I’m a new hire, a protégé of yours, and I show up in your office on my
first day of work, and I ask you ‘So what should I do to get ahead at
VMware? What makes people successful here? What made you successful?’”
We
filled his whiteboard, at first with the expected: “innovate!” “work
hard!” “be open and collaborative!” “work with quality” “attention to
detail!” “VMware first — don’t be personally selfish.” With more
prompting, and we copped to some of the less self-valorizing truths: “be
available on email 24x7!” “sound smart” and “get consensus on your
decisions.”
Before you read onwards you might want to try this exercise for yourself, about your own company. Go ahead, I’ll wait.
When we finished, O’Reilly pointed at the whiteboard with a magician’s flourish: “That’s your culture. Your culture is the behaviors you reward and punish.”
At
first, I was stunned. When I thought of culture, I thought of big
mission statements and values, like our emphasis on innovation. Or our
social traditions — like Friday afternoon beer bash, or tossing the
newly affianced into the campus fishpond. I didn’t think of
responsiveness to email.
My
second reaction was embarrassment. There was a glaring omission on the
whiteboard: none of us had brought up customers. If O’Reilly had asked
us about culture, we’d certainly have said “customer oriented.” But he’d
asked how to succeed at VMware, and so we gave the true answer of what
our culture actually was, not what we thought it should be.
New
hires don’t walk into your company already knowing your culture. They
walk in anxious — hoping for success and fearing failure. They look
around them to figure out how they are supposed to behave. They see
who’s succeeding, and they imitate what they’re doing as best they can.
They figure out who’s failing, and they try to avoid being like them.
Compensation
helps very little when it comes to aligning culture, because it’s
private. Public rewards are much more influential. Who gets promoted, or
hangs out socially with the founders? Who gets the plum project, or a
shout-out at the company all-hands? Who gets marginalized on low-value
projects, or worse, fired? What earns or derails the job offer when
interview panels debrief? These are powerful signals to our teammates,
and they’re imprinting on every bit of it.
When
all the “successful” people behave in the same way, culture is made. At
Facebook, “data driven” was a critical value, and across the board,
Facebook leaders uniformly make decisions informed by data and listen
and respect dissenting arguments when they are presented with data.
When
role models are consistent, everyone gets the message, and they align
towards that expectation even if it wasn’t a significant part of their
values system before joining the company. That’s how culture gets
reproduced, and how we assimilate new co-workers who don’t already
possess our values.
People
stop taking values seriously when the public rewards (and consequences)
don’t match up. We can say that our culture requires treating each
other with respect, but all too often, the openly rude high performer is
privately disciplined, but keeps getting more and better projects. It
doesn’t matter if you docked his bonus or yelled at him in private. When
your team sees unkind people get ahead, they understand that the real
culture is not one of kindness.
It
ends up being asymmetrical: it takes unanimity to establish a positive
norm in your culture, but it only takes a little inconsistency to lose
it. When successful people diverge from one another (for example, a mix
of rude and kind people), then there is no clear pattern established for
others to follow. Your culture is simply mute on the topic, and it’s up
to individuals to choose based on their own inclinations or perhaps the
most influential leader in their area.
This
is why CEOs can seem so sincere making statements like “There’s no
place for arrogance in our culture” while individuals in their company
continue to exhibit lots of arrogant behavior. Your role models may not
uniformly be arrogant. You may not role model arrogance yourself, as
CEO. The starting point may very well have been “a few bad apples.” But if you didn’t build a consistent culture of humility, you failed to build an immune system against arrogance.
If
you try the Charles O’Reilly exercise on your teammates, like VMware’s
execs, you’ll probably find some discrepancies between the culture you
have and the culture you want. That learning is a gift; you can use it
to change for the better, no matter where you fit in your company.
Team members:
even without a formal leadership role, you can affect your company’s
culture. You might not control compensation or promotions, but you have a
powerful incentive at your fingertips: praise, criticism, and
story-telling. Wield them thoughtfully and you can be a culture carrier
who transmits and strengthens company values.
Managers:
Most day-to-day incentives are controlled by team leads and managers,
making you the central nervous system of company culture. Managers need
to realize that your decisions are getting absorbed by everyone around
you: Laura got a stretch project. Shawn got transferred. Jing attended
the Director’s meeting in your place when you were traveling. The
decisions may be nuanced, but perceptions won’t be. Be judicious about
the tradeoffs you’re making.
Founders/CEOs:
Once a company scales, founders and CEOs have little control over
day-to-day incentives — but you still have disproportionate cultural
impact. Your company sees you as the embodiment of company values.
That’s high stakes: if you dither over decision making, you can expect
your team to have trouble getting things done. It’s also a super power.
If a CEO spends an hour on the phone taking customer support calls, then
everyone gets the message that making things right for customers is
everyone’s job.
Culture
is powerful. It makes teams highly functional and gives meaning to our
work. It’s essential for organizational scale because culture enables
people to make good decisions without a lot of oversight. But
ironically, culture is particularly vulnerable when you are growing
quickly. If newcomers get guidance from teammates and leaders who aren’t
assimilated themselves, your company norms don’t have a chance to
reproduce. If rewards like stretch projects and promotions are handed
out through battlefield triage, there’s no consistency to your value
system.
Times
of high growth are when you need to be most deliberate about your
culture, but if you start early and stay relentless, you’ll be able to
depend on it when you need it the most.
No comments:
Post a Comment