Ben Horowitz recently published a great blog post titled “Programming Your Culture,” where he discusses how a CEO can and should design for the culture he wants: “Designing a proper company culture will help you get your company to do what you want in certain important areas for a very long time.”
Just like the parents in a family, the CEO sets the tone and what he rewards and allows will drive the culture. In my opinion the most critical word in the definition of culture is values (core values that drive the business, according to Horowitz). Of all the possible actions in the business, what has the highest merit, or said another way, what behaviors get most rewarded? Everyone will say they want a high performance culture, but the test is when high performance is in conflict with other positive values such as team harmony.
You’ve got to stand for something….
The late Steve Jobs was famous for being brutally honest with people when their work didn’t measure up. At times that created tremendous tension in the workplace that was uncomfortable for many people, but it was clear to anyone who worked at Apple that high performance was the number one value. It doesn’t mean that high-performance cultures must be a constant combat zone, but there will be times when you will have to choose one or the other. Everything can’t be equally important or nothing is important. You must also be consistent. You can’t one day reward high performance and the next day prefer harmony.
In his blog Horowitz states that, “When you start implementing your culture, keep in mind that most of what will be retrospectively referred to as your company’s culture will not be designed in, but will evolve over time based on the behavior of you and your early employees. As a result, you will want to focus on a small number of cultural design points that will influence a large number of behaviors over a long period of time.” Check out the three interesting examples of cultural design points he provides from Jeff Bezos, Mark Zuckerberg, and Andreessen Horowitz.
Being true to your values even in tough times
One of these design points occurred early on at NetQoS where I was CEO and co-founder. Our first stated value was, “We attract, cultivate and retain exceptional talent.” We were clear with employees that we would always seek out exceptional talent. This value was tested when in late 2002, as sales remained slow due to the recession, we had to lay off seven employees to get our expenses in line with revenue.
Earlier in the year, before we realized how badly things were going, we had made an offer to a college student to start in January 2003. We thought she was an exceptional candidate and were excited when she accepted our offer over a competing one from IBM. When it later became obvious that we were going to have to fire some employees, many people assumed we would rescind our offer to this college student and save an existing employee. It was clear to me that this was not consistent with our first value. The existing employee who would be saved had been with us for a couple of years and, while a competent worker, had not proved to be an exceptional talent. Though it was harder to fire the existing employee because of the stronger emotional connection we had to him, the right answer was to keep the college student and let the existing employee go.
It is often easy to be consistent with your culture and values when things are going well; however, when things are tough is when your true values come out. It is the CEO’s job to ensure that those values are consistent across the company from top to bottom. In case you are wondering, the college student turned out to be an exceptional talent and was instrumental in the success of the company.