CEO and venture capitalist Ben Horowitz argues that culture is the way employees make decisions and act based on their perception of underlying premises and shared beliefs. Culture derives from what leaders state explicitly and also what they enforce implicitly by example and through the organization’s incentive structure. Leaders’ actions and messaging inform employees’ behavior. Therefore, Horowitz argues that it’s important to be intentional about the culture you’re designing. If you’re not intentional in shaping your culture, your employees will shape it in ways you might not like.
What You Do Is Who You Are cites four unique historical cultures to show how to translate your beliefs into action—that is, how to create the culture you want and sustain it over time. In addition, we’ll consider how Horowitz’s advice compares to that of other culture experts and how the real-life business examples he shares measure up in the years after publication.
(Shortform note: Experts argue that if a strong cultural identity flows down from the top, it’s easier to get the entire company aligned. If not, siloed departments each start creating their own competing cultures, and there is no coherent identity binding the organization together.)
Horowitz cites three reasons leaders should care about culture. First, an intentional culture serves the company’s vision by ensuring employees know what to do to move the company forward and consistently do it. (Shortform note: In Built to Last, Jim Collins and Jerry Porras argue that culture helps leaders ensure every element of the business reinforces the others, instead of competing.)
Second, the right culture boosts performance by giving employees a sense of purpose. (Shortform note: In Measure What Matters, John Doerr says culture is, most of all, a shared sense of purpose, and a cohesive company culture where everyone understands their purpose helps employees make decisions quickly and reliably.)
Finally, Horowitz says a great culture plus a great product or service is powerful—it can disrupt an industry and an entire system. If an organization develops effective new behaviors to deal with challenges, and the company is successful, other companies copy the culture in the hopes of being equally successful.
(Shortform note: One of Horowitz’s examples of a great culture plus a great product disrupting an industry is hip-hop. But while hip-hop culture disrupted the music world, its influence extended even further. It also disrupted the way companies in other industries did business. For example, executives at Cristal, a champagne brand hip-hop artists showcased in their music videos, openly rejected a connection to that community. Hip-hop artists responded by no longer using the brand in their videos, and Cristal’s market share dropped dramatically.)
Horowitz says all intentional cultures share two core elements. First, the culture you design should reflect who you are as a leader, your strengths, and beliefs, rather than emulate what other leaders do. If you start from your strengths, the culture you design will be sustainable because you’ll be implementing a style that comes naturally to you. However, your culture shouldn’t reflect your weaknesses, or characteristics that won’t serve the organization’s vision. As the leader, your example sets the tone for the organization, so your weaknesses can permeate the culture as employees emulate your behavior. To keep them from infecting your culture, the author says you first need to become aware of your weaknesses, then immunize your culture against them by building in checks and balances.
(Shortform note: Experts argue that the founder is 80% of a company’s culture. The qualities and strengths that set the founder apart become competitive advantages for the company, but only if the founder builds them into the culture. Also, being aware of your weaknesses is essential in those first rounds of hiring. If the founder has certain weaknesses, she needs to hire people who can complement them with the strengths she’s lacking.)
The second core element of a successful culture is that it supports the organization’s strategy. Horowitz says your cultural features, such as policies, must encourage employees to act in ways that bring the company closer to its vision. (Shortform note: If you’re looking to change your organization’s existing culture, making sure the new culture supports your strategy is key. Experts who studied the cultures of top-performing companies identified matching culture to strategy as the number one principle to follow.)
Horowitz examines four successful cultures in history for lessons that business leaders can apply to developing their own cultures. The first is the samurai culture, which illustrates the importance of establishing clear, actionable values, or virtues.
The samurai were a military class that ruled pre-modern Japan from 1186 until 1868. Their virtues, expressed in an honor code or bushido, were so effective that they kept the samurai in power for nearly 700 years, and they’re still echoed in modern-day Japan. (Shortform note: In The Book of Five Rings, written in the 17th century, samurai warrior Miyamoto Musashi reflects on bushido, “the way of the warrior,” emphasizing the importance of constant practice, achieving mental and physical equilibrium, and ways to defeat any enemy.)
From the samurai, Horowitz identifies two characteristics a virtue should have to be effective:
1) Effective virtues are practical and set you up for success. To create an effective virtue, Horowitz says you should specify what the belief would look like in practice, so you can determine whether it’s a virtue you can live up to. If you’d have a hard time applying the virtue consistently, it doesn’t belong in your culture, because you’ll constantly fall short. (Shortform note: In Dare to Lead, Brené Brown shares advice on how to make sure you regularly practice your values (virtues). She suggests listing behaviors that support the belief and regularly assessing whether you’re putting them into practice)
2) Effective virtues define who you are as an organization. You shouldn’t select virtues all other organizations in your industry are already espousing. Horowitz warns that industry cultural standards might not work for you, or you might adopt a cultural practice without adopting the belief underpinning it. (Shortform note: One way to choose virtues that define your organization is to identify the ones your star employees already have. In Traction, Gino Wickman suggests a way to determine your organization’s core values. First, identify your star performers. Then list the characteristics they embody, and decide which of those values define your company.)
Effective virtues have detailed definitions, instructions, and examples. Horowitz explains that bushido defined what each virtue was and what it wasn’t, and it explained what they looked like in action. The virtues complemented each other, preventing warriors from narrowly pursuing one to the detriment of another. After choosing your virtues, Horowitz prescribes taking these steps to follow the samurai approach for applying them:
Five Elements of Strong Cultures
In Multipliers, Liz Wiseman and Greg McKeown identify five elements of strong cultures that fit the samurai approach. The first three elements overlap with the steps Horowitz lays out: vocabulary (everyone uses the same definition for words and phrases), conduct (every member responds a certain way in a certain situation), and convictions (every member of a culture agrees on what is true and shares assumptions).
The final two elements Wiseman and McKeown identify complement the samurai approach:
Myths: Everyone admires the same people. You can achieve this by identifying employees that embody the virtue and highlighting them as role models.
Customs: Everyone adheres to the same customs and behaves the same way. You can achieve this by ensuring the virtue is applicable to all the areas of your business.
The second culture that Horowitz draws lessons from is the one created by Genghis Khan, in which inclusivity was the key to success. Genghis Khan, founder of the Mongol Empire and the most successful military conqueror in history, held over 11 million miles of land across Eurasia at the height of his power. He unified and reinvented Mongol culture to make it more meritocratic and inclusive—and from that new culture, he created a diverse army that allowed him to conquer immense territory. (Shortform note: Eleven million miles of land is difficult to imagine, so another way to visualize Genghis Khan’s conquests is in comparison to other rulers: His territory was more than twice that of any other conqueror.)
Horowitz says that to develop an inclusive military force, Gengis Khan identified unique strengths or skills in each community he conquered, absorbed them into Mongol culture, and taught these skills across his empire. Likewise, Horowitz argues that different groups of people often have different talents. It follows that if there’s a group you’re not hiring from, you’re missing out on the specific talents that group has.
Horowitz believes hiring managers often don’t understand the talents they don’t personally have, so they fail to look for people who have what‘s missing. To avoid this, Horowitz advises getting insight from people with backgrounds different from yours. Ask them to give you feedback on your hiring profiles, and let you know of any skills, communication styles, and customs people from their background have that you’re not taking into consideration. Add these skills to your hiring profile if they are relevant to the role, in order to reduce your blind spots in assessing candidates.
(Shortform note: Even as Horowitz argues in favor of inclusion, he is engaging in a type of stereotyping called essentialism—the idea that certain groups of people share certain innate qualities. Often, essentialism is deployed to attach negative characteristics to groups of people. While that’s not Horowitz’s purpose, he nevertheless associates genders and races with specific talents or skills they allegedly have by virtue of being part of that group.)
Genghis Khan challenged traditional hierarchies by making members of his army equal. While most armies had leaders on horseback and soldiers on foot carrying officers’ equipment, in his army, everyone rode horses and took care of his own belongings. Likewise, Horowitz recommends ensuring everyone who joins your company has an equal opportunity to succeed.
When companies begin seeing people as demographic statistics, they force employees to constantly prove they’re more than some element of their identity. To avoid doing that, Horowitz says you should let them know they were chosen because of the valuable skills and virtues they bring—and then give them opportunities to apply them. To check whether you’re on the right track, focus on attrition rates instead of hiring rates since low attrition rates will signal that the people you hired are happy at your company and choose to stay.
(Shortform note: Experts agree with Horowitz that true inclusion is only possible through the cultivation of a work environment where everyone can thrive. To cultivate it, examine how well your organization does on the four dimensions of inclusion:
Horowitz's third historical example is that of Toussaint Louverture, a revolutionary who shows how to model and reinforce a brand new culture through rules and by example. Louverture led the military and diplomatic campaign that liberated enslaved people in Haiti and set the stage for its independence from France. According to Horowitz, Louverture’s military and cultural leadership elevated the Haitian revolution from slave revolt to strategic military and diplomatic action. Under his leadership, they defeated Spain and England and improved their relationship with France. A decade after the insurrection began, Louverture became governor of the island. He proclaimed a new constitution that abolished slavery and ensured people of all races could have access to any job.
(Shortform note: Haiti didn’t declare its independence from France until after Louverture’s death, but his actions made independence possible. The revolution began in 1791, but it took 13 years of Louverture’s political and trade negotiations with France and the United States, as well as war with France, England, and Spain for Haiti to be able to declare its independence.)
Louverture continuously reinforced his cultural expectations for his soldiers. He spoke to his army regularly about ethics and kept them under strict discipline that didn’t allow for any of the usual acts of war, such as stealing and destroying property. In the same way, Horowitz says leaders must spell out what ethical behavior looks like in the organization and why it’s important to behave in that way. Ethical gray areas leave room for each individual to decide what to do, and they spell disaster if an individual makes a wrong choice.
(Shortform note: In The Infinite Game, Simon Sinek identifies three factors that encourage unethical behavior:
To emphasize the need to be trustworthy, Louverture forbade officers from having concubines, as was typical, since officers who cheated on their wives couldn’t be trusted. Horowitz emphasizes making rules that surprise people and force them to think about the principle behind the behavior, like Louverture’s rule for officers. To make a rule stick, make sure that people will remember the rule, apply it every day, and that the rule will make them ask “why?” with the answer pointing to the cultural tenet behind it.
(Shortform note: In Turn the Ship Around!, L. David Marquet shares an example of a rule that sticks. To improve morale among the crew of the submarine he led, he established a “three-name rule.” The rule required that when any crew member saw a visitor, he should greet the person using the visitor’s name, his own name, and the ship’s name. For example: “Good morning Commodore Kenny, my name is Petty Officer Smith. Welcome aboard Santa Fe.” The rule was easy to remember, and they applied it every day. Considering the “why” helped them actively embody the virtue Marquet wanted them to demonstrate: being proactive and asserting themselves as leaders of the submarine’s culture.)
Horowitz's final cultural model is Detroit-native Shaka Senghor, whose path to cultural leadership began the day he arrived at prison for committing murder in a street conflict. Ultimately, Senghor became a force for good inside the prison system by continuously assessing and improving the culture of the Melanics—the squad, or gang, he belonged to. He did this by reading and educating himself and squad members on self-improvement and Black leadership. He also became a leading criminal justice reformer after his release.
(Shortform note: Senghor’s path is an example of servant leadership, a model in which the leader puts the well-being of followers first. To become a servant leader, you must make followers a priority and empower them to grow and succeed, and behave ethically to have a positive impact on the larger community.)
When a man convicted of killing a woman in a high-profile case arrived at their prison, Senghor’s men wanted to attack him because he had committed a senseless crime. Senghor realized that, to them, justice meant violence, and by condoning violence he would be enforcing a code of behavior that went against his own evolving principles. The squad then had a difficult conversation about the cycle of violence and how their actions perpetuated it.
Likewise, Horowitz encourages you to have a critical eye toward your culture. This will allow you to root out the problems and improve the culture. Specifically, leaders should observe certain vital signs of the organization:
How to Monitor and Measure Culture
In Measure What Matters, John Doerr advocates a systematic approach to monitoring your culture. He shares a study in which researchers found that high-motivation cultures depend on two elements:
Catalysts—elements of a company that support the work being done, including goal setting, learning from failure, transparency, and engaging in meaningful work
Nourishers—elements of a company that support the interpersonal needs of employees, such as positive feedback, professional development, and recognition
Doerr proposes a management system that helps keep tabs on catalysts and nourishers:
OKRs (objectives and key results)—by establishing and measuring OKRs, you can monitor the catalysts of a positive workplace culture.
CFRs (conversations, feedback, and recognition)—by implementing CFRs you ensure the culture has the nourishers it needs to sustain it.
In the same way that Senghor underwent a personal transformation before he could transform the Melanics, Horowitz argues that when something in the culture needs to shift, the change has to start with the leader. If you set the right example, people have a positive example to follow.
(Shortform note: In The Leadership Challenge, James Kouzes and Barry Posner lay out detailed guidelines to follow when setting an example for an organization:
In addition to applying the lessons of successful cultures, Horowitz says it's important for leaders to be aware of three inherent characteristics that make culture challenging.
The first challenging feature of culture is that you must balance acknowledgment that it’s an unattainable ideal with taking action to get as close as possible. Culture reflects what the organization hopes to become. But Horowitz makes it clear that you can’t expect perfect compliance, though you need to work toward it.
(Shortform note: In Start With Why Simon Sinek clarifies that you can prevent the split between aspirational and actionable by keeping the focus on the “why” of your organization. Some strategies he offers to keep your focus are: using the metrics that truly align with your “why,” or purpose, and ensuring your company is prepared to transition leadership to people who support the “why” as strongly as current leadership.)
The second challenging feature of culture is that it needs to continuously evolve to allow the organization to move forward. Hanging on to culture as dogma can keep an organization stuck in modes of behavior that served the original strategy but no longer move it in a direction of growth.
(Shortform note: This challenge also points to a balancing act that culture leaders must enact: Maintain the organization’s core cultural identity without letting it calcify into dogma. In Built to Last, Collins and Porras provide actionable steps for leaders to sustain that balance:
The final challenging feature of culture is that it must permeate every aspect and area of your organization, so there are no inconsistencies that lead to confusion or frustration. Horowitz notes that everyone has to be on board with the culture, from rank-and-file employees to investors, so they all pull in the same direction.
(Shortform note: Culture experts highlight that not fostering a cohesive identity throughout an organization can lead to compartmentalization and the creation of silos, which endangers the integration necessary in moments of major change, such as a digital transformation. They point out two challenges that must be tackled to bring cohesion to an organization:
In What You Do Is Who You Are, Ben Horowitz urges business leaders to take an intentional approach to designing and nurturing their organization’s culture. Because your culture is what you and your employees do, he argues that choosing and reinforcing the right beliefs and actions will allow employees to consistently behave in a way that aligns with what the company wants to be and achieve. He explores four unique historical models of leaders who designed successful cultures that supported their vision and strategy, and he extracts techniques that modern-day leaders can apply to their own culture-building.
Ben Horowitz is an entrepreneur, investor, and bestselling author. He co-founded Opsware (formerly known as LoudCloud), which he then sold to Hewlett-Packard. He later co-founded a venture capital firm, Andreessen Horowitz, with partner Marc Andreessen. In addition to What You Do Is Who You Are, he is the author of The Hard Thing About Hard Things, about his experience and advice on starting a business.
Connect with Ben Horowitz:
What You Do Is Who You Are was published in 2019 by HarperCollins Publishers.
What You Do Is Who You Are came out in the midst of a boom of technology-based startups, a period of strong interest in the role of startup founders as visionaries and leaders of both the company and its culture.
Horowitz’s book belongs to the fairly new field of organizational culture. Business leaders and academics began studying culture in the context of specific organizations in the 1950s with a focus on industrial productivity. But it wasn’t until the 1970s that they began to study organizational culture more holistically, with an understanding that it had a significant impact on the overall success of companies and the well-being of their employees.
Within this field, What You Do Is Who You Are is part of a particularly popular category of books written by business leaders themselves rather than scholars of organizational culture. This category includes books such as Leaders Eat Last (Simon Sinek, 2014), Delivering Happiness (Tony Hsieh, 2010), and No Rules Rules (Reed Hastings and Erin Meyer, 2020).
Horowitz’s book stands out in this category because it melds his own experiences as an entrepreneur and investor, the experiences of other business leaders he is close to, and four historical models of leadership from outside the business world. He also goes beyond describing successful cultures by prescribing steps to take and elements to consider when building your own culture.
Although the book received mostly positive reviews, in terms of copies sold it was not as successful as Horowitz’s first book, The Hard Thing About Hard Things, which landed on the New York Times best-seller list and is still one of the most sought-after books for entrepreneurs.
Reviewers who enjoyed the book appreciate Horowitz’s writing style, his use of real-life anecdotes and unusual historical examples, as well as the fact that he acknowledges there is no recipe for an ideal culture.
Critics point out that his use of the historical models, in particular Toussaint Louverture's story, does not consider the broader context of the time, or whether the lessons he extracts truly represent those leaders’ legacies. Specifically, readers question the usefulness of war as a metaphor for business, Horowitz’s apparent misunderstanding of slave culture, and what they view as simplistic comparisons of complex historical eras to corporate culture.
The book argues that intentionally designed, sustainable cultures are a key ingredient of successful organizations. Horowitz offers techniques that leaders can apply to create and nurture intentional cultures, and he pulls examples from history as well as modern-day businesses to support his arguments.
The book is divided into 10 chapters and begins by discussing four historical examples of intentional cultures along with modern-day examples that apply some of their principles. Horowitz then explains how to think about your own personality and your company’s strategy to understand what kind of culture you need to create. He discusses specific situations where culture might be especially challenging, and he identifies elements he thinks every culture should have. Finally, he suggests a checklist of principles.
Throughout the book, Horowitz defines culture in a few different ways, recalls personal anecdotes and stories of business leaders he knows, and even includes a few sections where other leaders speak in the first person, as though they were telling their stories themselves. In all, this makes the book engaging to read, but blurs the focus, so it may be hard for readers to extract the key takeaways they can apply to their own organizations.
To streamline the concepts and help the reader see how the techniques explored in each historical model build on each other, we have organized Horowitz’s tips into six chapters. The first chapter outlines the basic concepts that underpin Horowitz’s ideas. Chapters 2 through 5 discuss each of the historical models he explores, along with techniques he extracts from them. The models are in a different order from the book so that the reader can better understand how each model builds on the previous one. Finally, chapter 6 explores some of the challenges of culture-building. We don’t include Horowitz’s checklist since it repeats the main points discussed in each chapter.
Throughout the guide, we supplement Horowitz’s ideas with insights from other thinkers on organizational culture, as well as provide observations on the key examples he shares to help the reader see how the examples have held up since the publication of the book.
What You Do Is Who You Are offers lessons for leaders who want to design or improve their organization’s culture. Ben Horowitz wrote this book after learning as a CEO and venture capitalist how critical culture is to a business and how much leaders struggle to define and create it.
This guide organizes Horowitz’s lessons and examples, starting from understanding what culture is and why it matters, laying the foundations of your culture, making it inclusive, modeling and reinforcing it, and continuously improving it. Finally, we’ll explore Horowitz’s insights into why culture can be challenging.
To understand how to create an intentional culture, Horowitz studied four unique cultures in history and drew lessons from them:
The four models span widely different contexts, but each exemplifies a culture that served the vision and strategy of its leader and endured, in some cases even surviving the leader who designed and implemented it. (Shortform note: The use of historical examples of culture can create some cognitive dissonance when applied to a business context. This might explain why Horowitz sparked controversy for allegedly oversimplifying the social and historical topics included in the book to make them fit within the narrower framework of organizational culture.)
In this chapter, we’ll begin by discussing what culture is and why Horowitz believes intentionally designing and nurturing your culture is important. Then, we’ll look at two core elements of intentional cultures.
Horowitz doesn't give a conclusive definition of culture, but he makes clear what culture is not. Culture is not the perks some companies offer to employees, the corporate values that most companies claim to follow, the mission statement, or even the CEO’s leadership style. These can all reflect an organization’s culture, but on their own, they’re not the culture. (Shortform note: Experts agree with Horowitz that perks and other features are surface-level. Most experts say it’s culture’s deeper structure of beliefs and assumptions that define it. However, Horowitz believes values by themselves are surface-level, too—they must be linked to action.)
From the array of definitions Horowitz gives, we can understand culture as the way employees make decisions and act based on their perception of underlying premises and shared beliefs. The title of the book, What You Do Is Who You Are, stresses that it’s actions that truly define a culture. Further, because your actions, decisions, premises, and beliefs are unique to your organization, there is no perfect or ideal culture replicable by everyone.
(Shortform note: In Leading Change, John Kotter argues that culture is made up of behaviors, norms, priorities, and values that persist in a group over generations. Although Horowitz doesn’t explicitly say so, we might infer from his emphasis on the culture being sustainable that he agrees that the elements that make up culture are the ones that endure over time.)
Horowitz says culture derives from what leaders state explicitly and also what they enforce implicitly by example and through the organization’s incentive structure. Leaders’ actions and messaging inform employees’ behavior. Therefore, he argues that as a leader, you should be intentional about the culture you’re designing. If you’re not intentional in shaping your culture, your employees will shape it in ways you might not like. What You Do Is Who You Are is about how to translate your beliefs into action—that is, how to create the culture you want and sustain it over time.
(Shortform note: Leaders struggle with designing their culture intentionally, and they often delegate culture to the Human Resources department since HR works closely with all employees, training them and receiving their direct feedback. However, when leaders leave culture in the hands of HR, they’re forgetting that it’s their example that sets the culture most clearly. If a strong cultural identity flows down from the top, it’s easier to get the entire company aligned. If not, siloed departments each start creating their own competing cultures, and there is no coherent identity binding the organization together.)
As we’ve seen, Horowitz sees culture as encompassing the actions and decisions of the employees of an organization. All those actions and decisions add up to the organization’s success or failure, which is why culture matters. Horowitz cites three ways culture boosts a business. First, an intentional culture serves the company’s vision by ensuring that employees know what to do to move the company forward, and they consistently do it.
(Shortform note: While Horowitz argues that a strong culture ensures employees know what to do to move the company forward, culture can also help leaders do the same by aligning everything the company does. Guided by their culture, leaders can create alignment within a company, ensuring that every element reinforces every other element within a company, instead of creating competing forces that slow down progress toward the organization’s vision. In Built to Last, Jim Collins and Jerry Porras argue that to create alignment, you must be able to look at both the big picture and the details to ensure cohesion among all the company’s features.)
Second, Horowitz argues that the right culture can boost individual and company performance by giving employees a common purpose. Successful cultures help employees see that their work matters to the overall mission and that they all direct their daily actions and decisions toward the same goal.
(Shortform note: In Measure What Matters, John Doerr takes this argument further and says that culture is, most of all, a shared sense of purpose. He cites research showing that companies with positive cultures outperform those without them. According to Doerr, this is because a cohesive company culture where everyone understands their purpose helps employees make decisions quickly and reliably.)
Third, Horowitz believes a great culture plus a great product or service is powerful—it can make an impact beyond a single organization and disrupt an industry and an entire system, changing the business landscape forever. He explains that industries develop default modes of behavior that replicate in every new company that comes up in the industry, and they become that industry’s culture. If an organization develops effective new behaviors to deal with the industry’s or system’s challenges, and the product or service the company provides is successful, other companies begin copying the culture in the hopes of being equally successful.
How Hip-Hop Disrupted the Music and Business Worlds
While Horowitz credits hip-hop culture as disrupting the music world, its influence extended even further. Besides spreading the hustler's mentality in the music industry, it also disrupted the business world by forcing brands and companies from other industries to grapple with hip-hop and with the cultural shifts it brought to the fore.
Steve Stoute, the author of The Tanning of America, describes how some companies were able to grow their businesses by embracing the emerging culture while others were less successful. For instance, Adidas was a struggling company in the eighties until hip-hop group RUN DMC put out their song “My Adidas.” Adidas executives took advantage of the opportunity and signed deals with RUN DMC, starting a decades-long relationship between the brand and the hip-hop community.
Other brands were less successful. Stoute mentions Cristal, a champagne brand that rappers and hip-hop artists showcased in their music videos to signal their affluent lifestyle. Cristal executives didn’t appreciate the connection to hip-hop, though, and the company said their product wasn’t for that community. The hip-hop community responded by no longer referencing the brand in their music, and Cristal’s market share dropped dramatically, becoming irrelevant to the generations that came after.
Horowitz cites Intel as an example of a culture that disrupted an industry. Bob Noyce, one of Intel’s co-founders, set the tone for Silicon Valley’s culture of innovation. At the time, companies emphasized hierarchy, which stifled innovation because employees only had decision-making power if they climbed the ladder high enough.
Instead, Noyce created a horizontal culture that empowered employees and gave them the freedom to explore new ideas. He got rid of vice presidents and empowered middle managers whom founders would oversee directly. He also made ownership of the company horizontal by giving engineers stock options. This allowed engineers to feel invested enough to nurture and iterate products so they remained innovative. Noyce also emphasized Intel’s horizontal culture through a relaxed dress code and an open office organization. To support the messages implicit in those cultural features, Intel had mandatory meetings on company culture to make their beliefs explicit and ensure that everyone understood them.
Intel’s culture is now a standard in Silicon Valley and beyond. After seeing Intel’s success, companies in other industries and regions adopted its cultural features, from open offices to stock options.
(Shortform note: While Intel defined the culture for Silicon Valley, features of Silicon Valley's innovation culture then spread beyond the tech industry to businesses in general. Some of those features, such as employee ownership and horizontal structures have generally been positive shifts in the business world. Other features, such as open-floor offices and perks, blurred the line between work life and personal life and have become double-edged swords for companies and employees.)
Horowitz emphasizes there is no perfect, one-size-fits-all culture because the behaviors and beliefs that work for one company may not work for another. However, he says all intentional cultures share two core elements: They reflect the leader’s strengths, and they support the organization’s strategy.
(Shortform note: Silicon Valley culture, for all its innovation and value-creating power, is an example of a culture that doesn’t fit everywhere, even though many businesses and even countries have tried to emulate it. Some of the downsides of emulating Silicon Valley are the high percentage of failed ventures that are inevitable when favoring fast-paced innovation and the litany of scandals and unethical behavior that can result from its rule-book-ripping culture.)
First, Horowitz argues the culture you design should reflect who you are as a leader, your strengths, and beliefs, rather than emulate what other leaders do. If you start from your strengths, the culture you design will be sustainable because you’ll be implementing a style that comes naturally to you.
The flip side is that your culture shouldn’t reflect your weaknesses, or characteristics that won’t serve the organization’s vision. Because your example as the leader sets the tone for the organization, your weaknesses can permeate the culture as employees emulate your behavior. To keep your weaknesses from infecting your culture, the author says you first need to become aware of them, then immunize your culture against them by establishing checks and balances. For example, if your weakness is conflict avoidance, hire assertive people, and set up policies that encourage dealing with conflict head-on.
The Founder is 80% of the Culture
Molly Graham, former head of Culture and Employment Branding at Facebook, has said that the founder is 80% of a company’s culture. The founder’s qualities and strengths become competitive advantages for the company, but only if the founder consciously builds them into the culture. She also says being aware of your weaknesses is essential, especially in those first rounds of hiring. She needs to hire people who can complement her weaknesses with the strengths that she’s lacking. To deepen their self-awareness, Graham recommends founders ask themselves these questions: What sets me apart from the people around me? How do I make my best decisions? What am I bad at?
The second core element of a successful culture is that it supports the organization’s strategy. Horowitz says your cultural features, such as policies, must encourage employees to act in ways that bring the company closer to its vision.
For example, flexibility and the opportunity to be creative are important features of Google’s culture. They support the company’s strategy of constant innovation and staying open to new lines of work by encouraging employees to explore new ideas, even if they’re outside of the scope of their current projects.
(Shortform note: If you’re looking to change your organization’s existing culture, making sure the new culture supports your strategy is key. Experts who studied the cultures of top-performing companies identified matching culture to strategy as the number one principle to follow.)
Culture is the way employees make decisions and act based on their perception of underlying premises and shared beliefs.
Consider the way employees make decisions and act at your company or organization. List some behaviors that characterize your organization and what each behavior says about the culture.
Reflect on your company’s vision, and ask an employee or colleague to express that vision in their own words. Are your ideas aligned? How has the organization’s culture helped or hindered that alignment?
Do you self-identify with your organization’s purpose? Can you see how your own role within the company contributes to that purpose? Ask an employee or colleague the same questions and consider whether your responses are aligned.
Now that we’ve discussed what culture is and why it matters, we’ll explore Horowitz’s advice for developing the core values of your culture. He draws lessons on how to develop your values from the first historical model he examines: samurai warriors.
The samurai were a military class that ruled pre-modern Japan from 1186 until 1868. Their virtues, expressed in an honor code or bushido, were so effective that they kept the samurai in power for nearly 700 years, and they’re still echoed in modern-day Japan. (Shortform note: In The Book of Five Rings, written in the 17th century, samurai warrior Miyamoto Musashi reflects on bushido, emphasizing the importance of constant practice, achieving mental and physical equilibrium, and ways to defeat any enemy.)
Horowitz explains that the honor code established a common foundation for warriors consisting not only of values but also instructions for applying them in every situation. Bushido refers to these actionable values as “virtues.”
(Shortform note: As with the term culture, Horowitz applies to business another word we’re used to seeing in other contexts. Virtue is a concept more commonly discussed in ethics or philosophy, and when the samurai talked about virtues, they were in fact talking about the ethical and philosophical foundation of their culture. Nowadays, virtue is often defined as the moral excellence of a person, but other, more expansive definitions refer to virtue as an attitude, disposition, or character trait that enables us to be and to act in ways that develop our human potential. This latter definition is closer to the one Horowitz gives of beliefs that are consistently translated into action.)
Horowitz believes business leaders should follow the samurai’s example of intentionally defining foundational beliefs coupled with instructions for everyday behavior. In this chapter, we’ll explore Horowitz’s four lessons from the samurai honor code, as well as examples from the business world. (Shortform note: In Daring Greatly, Brené Brown argues that the gap between aspirational and actional values—what we believe in versus how we actually act—leads to disengagement at work and in society at large.)
Many of bushido’s virtues are recognizable in Japanese culture today, such as in their commitment to the highest standards of quality. Horowitz argues that this commitment to quality stems from the samurai virtue of honor, which they expressed as: Always be ready for death. To the samurai, this meant ensuring an honorable legacy regardless of when they died by constantly performing to high standards.
(Shortform note: While modern Japanese culture’s admirable commitment to quality echoes the bushido principle of behaving with your legacy in mind, the same principle can be twisted in a harmful and unhealthy way. Psychologists worry that a drive for perfection and the safeguarding of honor, both rooted in centuries-long tradition, contribute to high rates of suicide in Japan—the highest in all of Asia.)
In the same way the Samurai prepared for death, Horowitz encourages business leaders to consider their company’s death. If your company went out of business today, would you be proud of its legacy? Horowitz argues this mindset helps you look beyond the usual ways to measure success, such as profit, and consider the organization’s purpose and impact. (Shortform note: In his book Who Will Cry When You Die?, Robin Sharma also advocates contemplating the end of your life to determine the values that actually matter to you. Sharma argues that to live a life you won’t regret, you must take control of your life today, beginning by identifying your purpose and using that to craft a life you will be proud of.)
To apply the samurai approach, you must begin by choosing your culture’s virtues carefully. Horowitz advises you to reflect on the behaviors that will translate your virtues into the culture you want. Remember, culture is created through the actions of your employees. Additionally, Horowitz identifies two characteristics a virtue should have to be effective:
Effective virtues are practical and set you up for success, not failure. To create an effective virtue, Horowitz says you should specify what the belief would look like in practice, so you can determine whether it’s a virtue you can live up to. If you’d have a hard time applying the virtue consistently, it doesn’t belong in your culture, because you’ll constantly fall short. For example, accountability is a popular corporate value. A cultural virtue for accountability might be, “See our actions and decisions through, even when the outcome is not favorable.” You would only incorporate this virtue into your culture if you can commit to that level of accountability.
(Shortform note: In Dare to Lead, Brené Brown shares advice on how to make sure you regularly practice your values (virtues). She suggests creating a list of behaviors with which to regularly assess whether you’re putting your beliefs into practice. Consider what kinds of behaviors support the belief and what kinds of behaviors would be outside of it, and go back to the list often to see if you’re practicing your beliefs.)
Effective virtues define who you are as an organization, so they point to what makes your company unique.
You shouldn’t select virtues that all other organizations in your industry are already espousing. If they are industry givens, your employees practice those virtues by default, and there’s no need to enforce them specifically. What’s more, Horowitz warns not to take cultural industry standards for granted. They might not work for you, or you might adopt the cultural practice without adopting the belief that underpins it. For example, fun office perks such as games and nap pods became popular thanks to Google’s emphasis on encouraging creativity. But flooding an office with perks without the underlying commitment to creativity doesn’t accomplish much. If employees can play ping-pong between meetings but don’t have opportunities to pitch new projects, the virtue of fostering creativity with play becomes meaningless.
(Shortform note: One way to choose virtues that define your organization is to identify the ones that your star employees already have. In Traction, Gino Wickman advocates determining your organization’s core values by listing the characteristics of your star performers and deciding which of those define your company.)
Effective virtues incorporate definitions, instructions, and examples. Horowitz explains that bushido contained all the information warriors needed to apply the virtues, starting with precise definitions. It defined what each virtue was and what it wasn’t, and explained what each looked like in action. The virtues complemented each other, preventing warriors from narrowly pursuing one to the detriment of another. For example, a warrior should have the courage to fight, but should also be benevolent and not harm anyone unnecessarily.
(Shortform note: Horowitz’s description of bushido might make it seem like the code is a single, coherent book. However, it’s actually a collection of texts written throughout the reign of the samurai, and it evolved and changed over time, sometimes contradicting itself. But despite having different authors through different eras, it maintains a coherent overall ethos and approach to the way of the warrior.)
Besides instructions, bushido gave concrete examples of how to apply each virtue, using storytelling to make them easy to understand and remember. The stories tried to foresee every possible scenario in which a samurai would have to apply a specific virtue. The stories also anticipated different reactions a warrior might have and explained how well each reaction fulfilled the code’s expectations. Finally, to keep the virtues alive, the samurai taught these stories to every new generation, thus cementing them in the psyche of all warriors across centuries.
(Shortform note: The samurai approach to communicating virtues through storytelling is one companies might already be familiar with, but in other contexts. For instance, in Building a StoryBrand, marketing expert Donald Miller explains how to use stories to create the most effective marketing campaigns by casting customers as the heroes of a story about your brand. He also explains how to foster engagement from employees by sharing the same customer-centered story with them and then creating an employee-centered story that casts them as heroes and aligns their purpose with the company’s mission.)
After choosing your virtues, Horowitz recommends taking these steps to follow the samurai approach for applying them:
1) Define the virtue explicitly. Explain it in unambiguous terms and address as many scenarios as possible to help people understand and apply it in all situations.
2) Make the purpose of the virtue clear. Having a compelling “why” will make the virtue easier to apply, so make clear why you’ve chosen the virtue and what it will accomplish.
3) Set up rules that force people to put the virtue into action. Following a rule rooted in a cultural virtue will help employees acquire the virtue through muscle memory. The rule will force them to engage in the specific behaviors that the virtue calls for, and help them internalize the virtue by acting on it. For example, if the virtue is efficiency, you might set up a rule to “Get it done now, improve on it later.”
4) Make virtues complement each other. Balancing your culture’s virtues will prevent people from fixating on one behavior to the detriment of other equally important ones.
5) Integrate the virtue into the hiring and onboarding processes. Using the definition of the virtue and the actionables you have established, develop a cultural interview to assess whether candidates can put the virtue into practice. Once they’re in, the onboarding process should teach them the right cultural lessons from day one.
Five Elements of Strong Cultures
In Multipliers, Liz Wiseman and Greg McKeown identify five elements of strong cultures that fit the samurai approach. Some of them overlap with the steps Horowitz lays out:
Vocabulary: Everyone uses the same definition for words and phrases, such as the definitions of virtues.
Conduct: Everyone responds a certain way in a certain situation, such as following rules to put the virtue into action.
Convictions: Everyone agrees on what is true and shares assumptions, such as the purpose of the virtue.
The final two elements complement the samurai approach:
Myths: Everyone admires the same people based on their accomplishments, behavior, or traits. You can do this by identifying employees who embody the virtue and highlighting them as role models.
Customs: Everyone adheres to the same customs and behaves the same way. You can do this by ensuring that every employee will have the opportunity to put the virtue you’ve selected into practice.
When Horowitz co-founded Andreessen Horowitz, a venture capital firm, he wanted the central virtue of the firm’s culture to be respecting the entrepreneur. To establish the virtue, he applied the samurai approach:
(Shortform note: Horowitz’s rule for employees might seem harsh, but it’s designed to help the firm stand out in a context where entrepreneurs hoping to get funding are typically expected to wait for venture capitalists for as long as it takes. In addition, Horowitz says the rule works as a way to measure culture fit in the hiring interview process. When managers explain the rule during interviews, a conversation ensues about why the firm has taken that stance. By the end of that conversation, if the candidate doesn’t agree, it’s clear they’re not a good fit with Andreessen Horowitz.)
While Horowitz argues that you should choose virtues specific to your company and its strategy, as the samurai created an honor code specific to being a warrior, he also believes there are three foundational virtues essential to every organization: trust, freedom to speak up, and loyalty. (Shortform note: Some experts agree that there are certain values all companies should have, but in Built to Last, Collins and Porras argue that visionary companies have different philosophies and all they agree on is on consistently adhering to whatever philosophy or values they claim as their own.)
According to Horowitz, trust is essential because organizations can’t succeed unless employees trust that their leaders and peers are furthering the mission. But trust can only come from being consistently truthful, and in high-stakes environments, that’s easier said than done. Horowitz points out that sharing inconvenient truths can create uncomfortable situations and make a company vulnerable. Giving people inside or outside of the organization access to information that puts your company in a negative light, or reveals your weaknesses, can prevent immediate gains.
For instance, if a company is closing a low-performing branch, being truthful about what’s happening would get negative attention and might even cost it some business. The leader wouldn’t want people to think the company’s in crisis and worry that it might close other branches, or stop fulfilling its commitments to customers. Being less transparent about what’s happening might be appealing—but Horowitz says this would be a mistake because it would undermine the trust employees, clients, and partners have in the company.
(Shortform note: Dare to Lead (Brené Brown) discusses the consequences of not building trust into your organization’s culture. She says that when there’s no culture of trust in a workplace, team members hold back from expressing new ideas, they have a harder time recovering from failure, and they develop toxic defensive behaviors.)
Horowitz outlines the following steps for sharing an uncomfortable truth without letting it take over the narrative:
Actionables for Trust
In Carrots and Sticks Don’t Work, Paul Marciano lists actionables you can apply to foster a culture of trust in your organization. Besides admitting mistakes and keeping your word, some actionables include:
Providing autonomy and decision-making authority.
Giving bad news directly to an employee without sugarcoating.
Letting employees spend company money within certain limits.
Avoiding micromanagement or intense monitoring programs.
The second virtue Horowitz argues all organizations need is the freedom to communicate concerns. If team members don’t talk about the problems they notice, the problems become much harder to solve because, by the time you find out about them, they’ve grown exponentially.
(Shortform note: Acknowledging problems is a characteristic of adaptive organizations—those that can adjust and thrive when faced with novel challenges. In The Practice of Adaptive Leadership, Ronald Heifetz explains that freely acknowledging problems means encouraging everyone to bring up problems and ask uncomfortable questions. To foster this characteristic, he suggests not shying away from uncomfortable problems and encouraging contrarians who aren’t afraid to speak up.)
Horowitz outlines several reasons employees might hesitate to share their concerns:
(Shortform note: In Dare to Lead, Brené Brown argues that many work cultures are characterized by self-interested and self-protecting behaviors like the ones listed above, including avoidance of tough conversations and the refusal to take risks. These behaviors stifle a work culture’s creativity and learning, and they’re toxic to the potential for innovation. The antidote is practicing four courage-building skills: being vulnerable, choosing and practicing values, building trust, and developing failure resilience.)
To counteract employees’ reluctance to speak up about their concerns, Horowitz says leaders should explicitly ask employees to bring problems to their attention. For instance, when he was CEO, Horowitz required that everyone who attended executive meetings bring at least one problem.
(Shortform note: In Good to Great, Jim Collins shares four steps to follow to foster a culture where facts can come to light:
The final virtue Horowitz believes all companies should incorporate is loyalty. Loyalty sets off a virtuous circle that makes work relationships productive and sustainable. Ideally, when leaders are loyal to employees, employees want to stay in the company and therefore strive to do their best work. In turn, leaders know they have a workforce they can rely on, and they do their best to keep them happy.
However, to foster the virtuous circle of loyalty in a dynamic labor market where people change jobs often, Horowitz says you must define and communicate how you will show loyalty to your employees so they know what they can expect from you.
Commitment Cultures
Another way to understand loyalty in the workplace is through the framework of commitment cultures. In Smarter Faster Better, Charles Duhigg explains that in a commitment culture the employer is committed to each employee’s growth and success. While planning what loyalty (or commitment) will look like in your organization, consider some of the steps companies with commitment cultures take:
Invest in employee training to make it clear that you want to retain your employees.
Offer benefits such as flexible working and generous maternity leave packages.
Hesitate to lay off employees unless absolutely necessary.
Horowitz argues that organizations need a foundation of common virtues similar to that of the samurai.
Choose one of your organization’s virtues. Define it explicitly and clearly state its purpose. Identify which other virtue in your organization’s culture balances it out.
Come up with a rule that will force people to put the virtue into action. Explain how the rule would work.
Finally, consider how you might assess a job candidate’s openness to the virtue during the hiring process, and how you might reinforce it during onboarding.
We’ve discussed Horowitz’s lessons from bushido for designing the foundations of your culture. Now, we’ll zoom in on one specific aspect to consider when designing your culture: including people different from you.
This chapter will explore Horowitz’s insights from the second of the four historical models in which he finds cultural lessons: Genghis Khan, founder of the Mongol Empire and the most successful military conqueror in history. At the height of his power, he held over 11 million miles of land across Eurasia with an army of only 100,000. He unified and reinvented Mongol culture to make it more meritocratic and inclusive—and from that new culture, he created a diverse army with a range of skills that allowed him to conquer immense territory while syncretizing additional cultures across Asia and Europe.
(Shortform note: Eleven million miles of land might be difficult to imagine, so another way to visualize Genghis Khan’s conquests is in comparison to other rulers: His territory was more than twice that of any other conqueror—wide enough to bring Eastern and Western civilizations together under one mostly peaceful empire.)
Horowitz argues that cultural leaders in the business world should follow Genghis Khan’s example of fostering inclusivity. To Horowitz, Genghis Khan’s success shows that inclusion—seeking out people different from you to join your team—is a competitive advantage. Inclusivity allows you to make use of talents, worldviews, and approaches you might not find if you limit yourself to working with people like you. Importantly, when Horowitz talks about diversity, he is referring to people with different educational and social backgrounds, in addition to ethnic, racial, and gender diversity.
(Shortform note: In Ego Is the Enemy, Ryan Holiday cites Genghis Khan as an example of a lifelong learner—someone who was able to maintain his success by being open to new ideas and people. According to Holiday, the Mongol empire sustained itself by absorbing the technologies, political systems, arts, and innovations of each culture it invaded. The Mongols traveled with translators and demanded to consult with advisers in each land they conquered. Further, they worked with the royal families of conquered lands to maintain control where no other dynasties could. In doing so, they opened their culture to influences from all parts of the world, which allowed them to develop their own long-lasting influence on the world.)
In this chapter, we’ll explore three lessons Horowitz draws from Genghis Khan, as well as examples from the business world.
Genghis Khan reorganized Mongol society, which had consisted of independent family clans that fought constantly for supremacy. Genghis Khan brought together 31 Mongol tribes encompassing two million people through a common mission: to capture as much wealth as possible. In addition, he united men from diverse clans through bonds of companionship rather than blood by organizing his army in brigades that replaced the old familial clans. (Shortform note: Genghis Khan spent five years reorganizing Mongol society before beginning his campaigns of expansion into neighboring lands. During that time, he reorganized the entire population into diverse military units, moving society away from tribal organization.)
Much like Genghis Khan took the lead in making Mongol culture more inclusive, Horowitz argues you should take the lead in developing and implementing a plan to make your organization inclusive. Horowitz warns against delegating inclusion efforts to a single department tasked with reaching certain demographic targets, such as a designated diversity team. When this happens, he says the goal of being inclusive becomes disconnected from the goal of attracting the best talent to ensure the company achieves its vision. Diversity teams narrowly focus on demographic targets and start seeing people as items on an identity checklist, rather than complete humans with valuable skills and virtues.
How to Make Inclusion Everyone’s Business
Experts agree with Horowitz’s advice to take the lead on diversity and inclusion initiatives. If the CEO is not also the chief inclusion officer and evangelist, the rest of the organization’s efforts will fall flat. However, taking the lead is not enough. Experts offer four other ways you can infuse the entire business with the goal of inclusion:
Make diversity and inclusion an integral part of your overall strategy.
Encourage other leaders to become personally invested in inclusion efforts.
Identify and reduce implicit bias in your company’s processes.
Coach leaders to be able to work with everyone on their team.
According to Horowitz, Gengis Khan identified strengths in each community he conquered, absorbed them into Mongol culture, and taught them across his empire. He allowed soldiers from defeated armies to join him, and he sought out skilled workers in every community he conquered to see if they had any skills that his army lacked.
(Shortform note: This process of acculturation isn’t unique to the Mongols, but rather a characteristic of empires. As Yuval Noah Harari notes in Sapiens, one of the ways in which empires dissolved cultural divides was through their inclusivity and tolerance of conquered cultures. Rulers often adopted and spread norms, beliefs, and traditions from the people they conquered. In this way, empires became hybrids of the civilizations they conquered. For example, imperial Roman culture “was Greek almost as much as Roman,” and the Abbasid culture was a hybrid of Greek, Arab, and Persian cultures.)
Horowitz argues that different groups of people often have different talents—something Genghis Khan recognized. It follows that if there’s a group you’re not hiring from, you’re missing out on the specific talents, communication styles, and customs that group has. Horowitz believes companies miss out because hiring managers often don’t understand or value the talents they don’t personally have. Since they’re not used to seeing those talents, they end up in their blindspot, which prevents them from seeking out people who have them.
Do Certain Groups of People Share Certain Qualities?
Although Horowitz argues in favor of inclusion, he is unwittingly engaging in a type of stereotyping called essentialism—the idea that certain groups of people share certain innate qualities. Often, essentialism is deployed to attach negative characteristics to groups of people. While that’s not Horowitz’s purpose, he nevertheless associates genders and races with specific talents or skills that they allegedly have by virtue of being part of that group.
However, it’s possible that the characteristics Horowitz mentions in his book—women being more helpful than men, Black people being more adept at forming relationships than other races—are not essential characteristics of these demographics, but learned traits. Women might be more helpful because they are socialized to be useful, Black people might be more adept at creating relationships because they have learned ways to counteract negative stereotypes about them. So, before attaching certain characteristics to specific groups of people, it’s worth considering why we have concluded that they share them.
If there's a specific group of people you don’t seem to be hiring from, you need to identify what talents are in your blindspot. To do so, Horowitz advises getting insight from people with a different background than yours. Ask them to give you feedback on your hiring profiles and let you know of any skills, communication styles, and customs that people from their background have that you’re not taking into consideration. Add the skills to your hiring profile if they are relevant to the role and reduce any blind spots you might have while assessing candidates.
(Shortform note: In Multipliers, Wiseman and McKeown suggest ways to look for talent beyond the usual places. First, acknowledge that there are different kinds of intelligence, not all of which can be measured by standardized tests. Second, look for talent inside and outside your organization, among people with no experience, and people who work for competitors.)
Genghis Khan challenged traditional hierarchies by making members of his army equal. While most armies had leaders on horseback and soldiers on foot, in his army, everyone rode horses. Similarly, while it was customary for officers to have others carrying their equipment and preparing their food, in Genghis Khan’s army each man took care of his own belongings and prepared his own food.
(Shortform note: Many Mongols resented Genghis Khan’s idea of equality because it went against their traditions. To keep naysayers in check, he hired the sons of officers to be part of the keshik, a force that worked primarily as his private security. Thus, he made it difficult for officers to revolt against him since they appreciated their family’s close connection to the emperor.)
In the same way that Genghis Khan made all his soldiers equal, Horowitz recommends ensuring that everyone who joins your company has an equal opportunity to succeed. As we saw in lesson #1, when companies begin seeing people as demographic statistics, they place an unnecessary burden on those they hire: Employees have to constantly prove themselves to be more than some element of their identity. To avoid creating an uncomfortable culture for your new employees, Horowitz says you should let them know they were chosen because of the valuable skills and virtues they bring—and then give them opportunities to apply them.
Horowitz says the best way to check whether you’re on the right track is to focus on attrition rates instead of hiring rates. Hiring rates show people coming in, but not whether your company offers the right environment for them to thrive. Low attrition rates signal that the people you hired are happy at your company and choose to stay.
Progressing From Diversity to Inclusion
Experts agree with Horowitz that true inclusion is only possible through the cultivation of a work environment where all those people have the possibility to thrive. To move beyond numerical diversity, you can examine how well your organization does on the four dimensions of inclusion:
Social inclusion—employees feel accepted and part of the community.
Relatedness—employees feel that colleagues care about them.
Affective commitment—employees find a sense of meaning in being part of the organization.
Organizational identification—employees self-identify with the organization.
To diversify the talent pool across his company, Horowitz applied the lessons he learned from studying Genghis Khan. First, instead of hiring consultants or designating a head of inclusion, company leaders built relationships with leaders and organizations with connections to the talent pools they hadn’t been hiring from. Next, they made it a policy that when a manager is developing a hiring profile, people from different backgrounds review it to give input on the skills and virtues to look for. Also, the hiring committee that interviews candidates is composed of people from a variety of backgrounds.
(Shortform note: One way to diversify your talent pool is by adopting a skills-based rather than credentials-based approach to hiring. This approach levels the playing field for people who might not have had access to the same educational or professional opportunities in the past and allows you to tap into new talent. In a skills-based approach, you figure out what you need your future employee to be able to do and list those skills on the job posting instead of listing the degrees or certifications you think would signal that a candidate has what it takes. Then, during the interview process you assess those skills through tests, auditions, or other practical means.)
Horowitz believes that most companies begin to mirror the characteristics of their leaders, which leads to a lack of diversity and inclusion.
Observe your organization with a critical eye. What words would you use to describe the backgrounds and demographics of leaders and managers? What words would you use to describe the backgrounds and demographics of the employees who work for them? Is there significant overlap between both descriptions?
Consider your descriptions of your organization’s leaders and employees. What backgrounds and demographics seem to be missing? List them below.
Consider your peers in other organizations and the professional networks you’re a part of. Who can you reach out to to gather input on how to hire more people from the backgrounds and demographics you’ve noticed are missing? List as many people as you can and make a plan to reach out.
After laying down strong foundational virtues for your culture and incorporating inclusive practices, you must model and reinforce them so they become ingrained in your organization’s culture. This chapter will explore Horowitz’s insights from the third of the four historical models he examines—Toussaint Louverture, who led the military and diplomatic campaign that liberated enslaved people in Haiti and set the stage for its independence from France.
According to Horowitz, Louverture’s military and cultural leadership elevated the Haitian revolution from slave revolt to strategic military and diplomatic action. Under his leadership, they defeated Spain and England and improved their relationship with France. A decade after the insurrection began, he became governor of the island. He proclaimed a new constitution that abolished slavery and ensured people of all races could have access to any job.
(Shortform note: Although Haiti didn’t declare its independence from France until 1804, almost a year after Louverture’s death, his actions made independence possible. The revolution began in 1791, but it took 13 years of Louverture’s political and trade negotiations with France and the United States, as well as warfare with France, England, and Spain for Haiti to finally be able to declare its independence.)
Louverture elevated the global standing of his army by constantly teaching and reinforcing the behaviors soldiers needed to practice. His leadership showed slave-trading colonial nations that the behavior they criticized in enslaved people was a result of the dehumanizing conditions in which they were forced to subsist, not their nature. Slavery had created an environment where enslaved people had to focus on day-to-day survival, but Louverture created a visionary culture using the virtues he valued most in African and European cultures.
The Dehumanizing Effects of Slavery
Although some critics have taken issue with Horowitz’s depiction of enslaved people as a group without culture, this might not be a fair assessment. Horowitz argues that Louverture took what he considered to be the best characteristics of their native cultures as well as European cultures to build a new identity for Haiti. While his emphasis on the difficulty of establishing this new cultural identity and attending behaviors might seem callous, it’s founded on the excruciating reality of enslaved people.
In her book Creating Black Americans: African American History and Its Meanings, 1619 to the Present, Nell Irvin Painter offers a detailed account of the dehumanizing environment enslaved people subsisted in. Besides the physical and psychological trauma of constant abuse, neglect, and overwork, they had no access to education and no right to wages or property. All of this, she argues, led to them developing “habits of deceit and anger” that further damaged them and the bonds among them. Thus, although enslaved people were never without a culture, elements of it were likely not conducive to the kind of society Louverture wanted to establish.
Horowitz believes that cultural leaders in the business world should follow Louverture’s example of building existing strengths into the culture and constantly reinforcing the behavior they want. Doing so will allow members of their organizations to internalize the culture and outsiders to acknowledge its strengths. In this chapter, we’ll explore four key lessons Horowitz gleaned from Louverture, as well as discuss examples from the business world.
(Shortform note: One of the key criticisms Horowitz received over his handling of Louverture’s history was that he used it to promote corporate lessons that are alien to Louverture’s reality. Horowitz is not alone in this appropriation of Louverture’s story, though. Although he has been the subject of several books, Louverture remains a sort of mystery, even for his biographers. The lack of documents to certify details of his life story prior to the revolution, as well as conflicting documents from his time as military leader, has led to Louverture’s story being appropriated in all sorts of ways—even as business advice.)
Louverture leveraged his soldiers’ guerrilla warfare experience and encouraged his army to use voodoo songs to communicate over long distances without the Europeans understanding.
(Shortform note: Louverture’s leveraging of the cultural characteristics of his people was short-lived. As Horowitz himself notes in the book, after having taken advantage of it to win several battles, Louverture outlawed voodoo in the constitution, making Catholicism the official religion of the island. In their book Toussaint Louverture: A Black Jacobin in the Age of Revolutions, Charles Forsdick and Christian Hogsbjerg argue that this decision, along with mandatory work requirements, served to alienate the Black people of Haiti from his leadership.)
In the same way, Horowitz says you should take advantage of the existing strengths of the culture you’re working with. Allowing employees to practice strengths they already have will help lower the cognitive load that comes with incorporating new behaviors. Identify virtues your employees have that support your vision for the organization and its culture and build them into the new culture you’re creating.
(Shortform note: This advice highlights the flexibility of Horowitz’s approach to culture. He sees culture as a top-down and bottom-up process where both leaders and employees have a role. Experts warn that by only taking a top-down approach in which leaders design the culture and filter it down to their employees they are disregarding the fact that culture is taking shape every day as employees interact with each other. To supplement top-down interventions such as choosing virtues and implementing mechanisms to bring those virtues to life, leaders should study their cultures as they develop bottom-up, identifying their strengths and noticing how they evolve over time.)
Louverture continuously reinforced his cultural expectations for his soldiers. He spoke to his army regularly about ethics and kept them under strict discipline that didn’t allow for any of the usual acts of war, such as stealing and destroying property.
(Shortform note: There might have been a darker side to Louverture’s strict discipline. For example, in Toussaint Louverture: A Black Jacobin in the Age of Revolutions, Forsdick and Hogsbjerg explain that he didn’t allow peasants to buy plots of land. This meant that they were forced to continue working for plantation owners instead of working their own lands. Louverture believed peasants wanted to own their lands so they could be idle, and he worried their ideas would challenge his economic plan for the island.)
In the same way, Horowitz says leaders must spell out what ethical behavior looks like in the organization and why it’s important to behave in that way. Ethical gray areas where the correct course of action is unclear leave room for each individual to decide. This can spell disaster for an organization if an individual makes a wrong choice.
Factors That Encourage Unethical Behavior
In The Infinite Game, Simon Sinek also warns that if ethics are not properly established in an organization it can fall into a process he calls ethical fading: People engage in increasingly unethical behavior while convincing themselves that they are acting fairly and properly. Besides stating your ethical expectations, Sinek suggests looking out for three factors that encourage unethical behavior:
1) Poorly designed incentives: If employees who cut corners are then rewarded with bonuses and promotions, other employees get the message that the organization prioritizes winning over ethics.
2) Use of rationalizations: Euphemisms that disguise the true nature of people’s actions, system-blaming, or even blaming the customer for enabling their behavior justify unethical behavior.
3) Symptom fixes that overlook the bigger picture: If leaders try to fix behavioral problems by implementing new rules and regulations instead of addressing the underlying reason for the issues, they create more hoops that employees will avoid having to jump through.
Although Uber founder Travis Kalanick thoughtfully designed the company’s culture, he left ethical gray areas that employees filled in with the company’s other values: a hustler’s mentality and an emphasis on competition. The culture didn’t clarify ethical boundaries, and it encouraged finding a way to “win” in every situation, which made ethical breaches commonplace. According to Horowitz, this led to Uber employees committing acts that exposed the company to liability while harming employees and customers.
(Shortform note: Some experts see Uber’s problem as running deeper than culture, and they point to the business model itself. They argue that the economic model on which Uber is built doesn’t allow for the company to properly care for its customers and drivers—one major source of its ethical scandals. The company cannot afford to make necessary improvements without a substantial increase in its fees, which it cannot enforce without losing market share. Uber is then, as critics see it, trapped in a cycle of companywide unethical behavior.)
To emphasize the need to be trustworthy, Louverture forbade officers from cheating on their wives or having concubines, although it had been common practice in times of war. The rule prompted questions, and Louverture explained that officers who cheated on their wives couldn’t be trusted in other matters either. Horowitz emphasizes making rules that surprise people and force them to think about the principle behind the behavior, like Louverture’s rule for officers.
(Shortform note: Horowitz’s assessment of the rule’s purpose might be incorrect. As CLR James explained in The Black Jacobins, this rule was part of Louverture’s plan for building a respectable Catholic society. Forbidding concubines was a way for Haitians to simultaneously recall customs from their native cultures, such as the faithful keeping of wives, and emulate virtues of French society.)
Horowitz says that to make a rule stick, make sure that:
A Rule That Helps Embody the Virtue
In his book Turn the Ship Around!, L. David Marquet shares an example of a rule that sticks. To improve morale among the crew of the submarine he led, he established a “three-name rule.” The rule required that when any crew member saw a visitor, he would greet the person using three names: the visitor’s name, his name, and the ship’s name. For example: “Good morning Commodore Kenny, my name is Petty Officer Smith. Welcome aboard Santa Fe.”
The rule was catchy and hence easy to remember, and it was one they would apply several times a day. But instead of making crew members ask why the rule was instituted, it made them actively embody the virtue Marquet wanted them to demonstrate: being proactive.
Horowitz highlights Amazon’s emphasis on frugality as a memorable rule in modern-day business culture. At its founding, Amazon made a rule that everyone should “accomplish more with less.” Employees remembered the rule and applied it every day because their desks were frugally made out of cheap doors nailed to legs. If someone asked why they couldn’t have regular desks, managers reiterated the rule to accomplish more with less.
(Shortform note: Through their culture of frugality, Amazon has been able to reduce costs and offer low prices in a way that forces competitors to play according to their rules—an example of a culture disrupting entire industries. Some argue, however, that Amazon’s frugality can turn into not giving their employees the time and resources necessary to do their jobs safely and ignoring their needs by not giving them enough time for bathroom breaks.)
Louverture enforced a forward-looking culture that focused on the long-term sustainability of their freedom. Rather than exacting revenge on plantation owners (and former slave masters), he allowed them to live and continue farming their lands to sustain the economy. However, he made them share the profits with the workers and pay wages.
(Shortform note: Toussaint Louverture: A Black Jacobin in the Age of Revolutions (Forsdick and Hogsbjerg) argues that this move turned the former chattel slaves into wage slaves. By making work mandatory and not allowing peasants to buy their own pieces of land, Louverture gave the Black peasants of Haiti no choice but to continue working for the same plantation owners. They now received wages, but were still treated unfairly and couldn’t choose where to work.)
Louverture’s decision not to kill the former slave owners shocked his army, but it made clear that their culture was in service of the bigger mission of keeping Haiti free—which required being economically sustainable. Horowitz says decisions such as Louverture’s send clear messages because the leader’s actions to enforce culture communicate the priorities of the organization to the rest of the team.
To set the right example for his soldiers, who were eager to take revenge on their former masters, Louverture refrained from exacting revenge on his rival, André Rigaud, a mulatto who believed Blacks should remain at the bottom of the system, with mulattoes above them. Louverture defeated Rigaud but didn’t kill him or his supporters, publicly forgiving them at the end of their civil war. (Haiti and Louverture experienced civil war as well as wars against colonizers.) As the leader, you must be the first to follow the rules and embody the virtues. Horowitz stresses that if you don't follow the cultural rules you’re setting for everyone else, employees will follow your example rather than the rule.
One of the toughest decisions Netflix CEO Reed Hastings made during his company’s pivot from DVDs to streaming was no longer letting top executives from the DVD division attend leadership meetings. It was especially hard to do so because the DVD business had sustained the company until then, but Hastings needed to steer Netflix toward the future. This decision signaled to everyone in the company that Netflix was on a new path.
Focus on the Future Instead of the Past
Aligning choices with priorities and Netflix’s pivot to streaming echo Peter Drucker’s advice in The Effective Executive to focus on only a few key things and do them one at a time. For Drucker, it comes down to the simple fact that focusing allows you to do better work, faster. The way to decide what to focus on is by having clear priorities which he says requires courage more than analysis. In his view, courage requires that you:
Focus on the future instead of the past.
Focus on opportunities, instead of on problems.
By focusing on the future and on opportunities, companies can avoid a common pitfall: preserving legacy products (such as DVDs) while failing to develop products that will sustain the business in the future. To assess whether legacy products are worth keeping, Drucker recommends regularly asking, “If we weren’t already doing this, would it make any sense to start doing it?” If the answer is “no,” drop it.
Horowitz argues that Louverture’s cultural leadership elevated the Haitian revolution from revolt to strategic action, and that business leaders can assert their own cultural leadership to elevate their organizations.
List at least three of your employees’ or colleagues’ strengths. Next to each, write down whether those strengths are already recognized as part of the organization’s culture. If they’re not, consider how they might be incorporated.
Think of a behavior you’d like your employees or colleagues to internalize. Then, create a rule that sticks, making sure that it will be memorable (perhaps using a catchy name), it will be applicable every day, and it will point employees to the cultural tenet behind it.
Think of a cultural virtue or rule your employees or colleagues are struggling with. List at least three ways in which you can lead by example in the implementation of the virtue or rule.
After designing and teaching your culture, Horowitz says you must keep assessing and improving it to ensure that it continues to serve your organization’s vision. This chapter will explore Horowitz’s insights from the last of the four historical models he examines—Shaka Senghor’s story.
Detroit-native Senghor’s path to cultural leadership began the day he arrived at prison for committing murder in a street conflict. Ultimately, he became a force for good inside the prison system by continuously assessing and improving the culture of the squad, or gang, he belonged to. He did this by reading and educating himself and squad members on self-improvement and Black leadership. He also became a leading criminal justice reformer after his release.
(Shortform note: Senghor’s path is an example of servant leadership, a model in which the leader puts the well-being of followers first. To become a servant leader, there are several critical behaviors to apply:
Horowitz believes that cultural leaders in the business world should follow Senghor’s example of critically analyzing their own culture so they can improve it over time. To be sustainable, cultures must adapt, let go of rules or virtues that no longer serve the organization, and incorporate new ones that do. In this chapter, we’ll discuss five lessons Horowitz learned from Senghor, as well as examples from the business world.
Senghor’s first teachable moment in prison was seeing a man casually stab another in the neck on his way to the cafeteria—the incident taught him the cultural rules he needed to know to survive in his new environment. He understood he needed to be decisive and courageous, and he also realized that he was willing to use violence to defend himself if necessary. (Shortform note: That teachable moment was also illustrative of what life in prison is like in the US. According to data from the Bureau of Justice Statistics, state prison deaths rose 44% from 2001 to 2018, while prison population has only increased by 1%.)
Similarly, to make sure employees internalize a cultural rule or virtue, Horowitz advises that you find a concrete—but nonviolent—way to bring it to life. Especially after someone has broken a rule or disregarded a cultural virtue, breaches can become teachable moments that make it clear why a certain behavior is unacceptable and what the consequences of that breach will be. But Horowitz says your approach to these moments must be cold-blooded to work so that the message is loud and clear.
(Shortform note: Clay Christensen, author of How Will You Measure Your Life, agrees that it’s important to respond decisively when a breach happens. He argues that it’s easier to maintain your standards 100% of the time than 98% of the time, because once you’ve committed a minor transgression, you fall down a slippery slope of ever-increasing rule-bending and breaking.)
In prison, Senghor joined the Melanics, a gang-like religious organization, for protection. He quickly noticed that the organization didn’t live up to its mission of protecting members because they were taking advantage of one of the most vulnerable members by forcing him to pay to be part of the squad. After pointing out the lack of coherence in leadership, Senghor became an enforcer of the code and cultural leader. He focused on helping members learn positive lessons about self-improvement from Black leaders and how to support each other. He eventually rose to leadership, and the Melanics became known for being a small but effective squad, which consistently followed a code of conduct.
When a man convicted of killing a woman in a high-profile case arrived at their prison, Senghor’s men wanted to attack him because he had committed a senseless crime. Senghor realized that, to his men, justice meant violence. Although he had been educating them on self-improvement and Black leadership, by condoning violence, he would be enforcing a code of behavior that went against his own evolving principles. The squad then had a difficult conversation about the cycle of violence, and how their actions perpetuated it instead of creating a better future for themselves and others.
(Shortform note: Senghor’s experience highlights how prisons are often not effective at breaking the cycle of violence. According to research, incarceration can increase violent behavior instead of reducing it. Scientists have suggested other alternatives to break the cycle of violence, such as studying the brains of people who show violent reactions in order to understand them better and design biomedical interventions based on that research to reduce those reactions.)
Just as Senghor continuously diagnosed the culture of the Melanics, Horowitz encourages you to also have a critical eye toward your culture. This will allow you to root out the problems and improve the culture.
Seven Signs of a Toxic Culture in Need of Change
Experts note that critically evaluating your culture can help you assess risks and prevent scandals. Scandals don’t happen overnight—they’re the result of unchecked bad behavior that becomes prevalent in an organization. By keeping an eye on your culture, you can spot these seven toxic elements that are often noticeable before a scandal erupts:
Unrealistic goals that steer employees toward unethical means of achieving them
Unwillingness to bring up problems because of fear of punishment
Normalization of rule-breaking thanks to infringements not being punished
Blaming individuals for culture-wide issues
Lessening the responsibility of the organization and avoiding accountability
Highly scattered or highly centralized decision-making with little oversight
A disconnect between the values promoted by the organization and its practices
Horowitz says that, instead of asking employees what they think about the culture, leaders should pay attention to how they’re interacting with it. Specifically, leaders should observe certain vital signs of the organization:
Vital Sign #1: Who is quitting and how often. If people who are good cultural fits are quitting, that means the culture is broken. If employees are quitting at a higher than average rate for your industry, and they’re doing so while the business is doing well, they’re not searching for better jobs—they’re looking for better companies.
Vital Sign #2: How new employees behave. New employees have a heightened culture radar because they’re actively trying to fit into the organization. In this case, Horowitz advises asking them what they learned about the culture after they’ve been there for a few days. Their observations won’t be biased by tenure, and they’ll point out behaviors other employees take for granted.
Vital Sign #3: What key goals you aren’t meeting. If your company is not meeting key goals, the culture might be implicitly encouraging people to engage in behaviors that aren’t supportive of your strategy. Horowitz advises looking at the incentives structure in the organization and making sure it rewards the behavior you want to see.
Vital Sign #4: How it looks from the bottom. Leaders experience culture differently than others in the organization do. Horowitz advises stepping into regular employees’ shoes and figuring out what rules they’re applying to climb up the ranks, and whether people are practicing the virtues you hired for as they get ahead.
Vital Sign #5: What has become acceptable. The final vital sign to observe is whether employees engage in unacceptable behavior. Horowitz warns that, if your employees behave in a way you cannot accept, like engaging in unethical behavior, something in the culture has given them the message that they can do so.
How to Monitor and Measure Culture
John Doerr (Measure What Matters) shares a systematic approach to monitoring your culture. He shares a study in which researchers found that high-motivation cultures depend on two elements:
Catalysts—elements of a company that support the work being done, including goal setting, learning from failure, transparency, and engaging in meaningful work.
Nourishers—elements of a company that support the interpersonal needs of employees, such as positive feedback, professional development, and recognition.
Doerr proposes a management system that helps keep tabs on catalysts and nourishers:
OKRs (objectives and key results)—by establishing and measuring OKRs, you can monitor the catalysts of a positive workplace culture.
CFRs (conversations, feedback, and recognition)—by implementing CFRs you ensure the culture has the nourishers it needs to sustain it.
When Senghor realized his squad valued violence over any other method of conflict resolution, he acknowledged his own double standards. He had been educating himself on alternatives to violence, but he still encouraged his squad to follow the regular rules of prison culture. He realized his approach to leadership needed to change, because his members would take that violence with them when they left prison. So he shifted the culture of the squad in a more positive direction, and after leaving prison, he became a prison reformer, author, and a cultural leader for a broader population.
(Shortform note: Senghor’s experience highlights the complex role of gangs in the prison ecosystem. While gangs use violence to exercise their power, they can also contribute to the decrease of violence by exercising control over their members.)
In the same way that Senghor underwent a personal transformation before he was able to transform the Melanics, Horowitz argues that when something in the culture needs to shift, the change needs to start with the leader. You set the tone for the culture, even if your example doesn’t reach every one of the organization’s members. If you set the right example, people have a concrete example to follow, and both your words and deeds communicate the organization’s priorities.
(Shortform note: In The Leadership Challenge, James Kouzes and Barry Posner lay out detailed guidelines for creating and setting a new example for an organization:
When Horowitz was CEO of LoudCloud, he had to acknowledge his own faults to improve the culture. As the company prepared reports on the quarter’s revenue and contracts, they found that, although revenue was good, they didn’t have many contracts signed for the next quarter. They worried their lack of contracts would get bad press coverage, which would lead to customers not signing contracts, and finally to having to lay people off as a result of the reduced revenue.
Someone on the team suggested reporting revenue and contracts together so the low number of contracts wouldn’t be obvious. Horowitz was considering the suggestion until their legal counsel spoke up against it, arguing that making the report purposely confusing might have been legal, but the move was still dishonest. It was a wake-up call for Horowitz, who had been willing to engage in the behavior. To keep himself and his team from treading into murky waters in the future, he redefined an existing company virtue from “telling the truth” to “making sure people hear the truth.”
(Shortform note: This anecdote shows the importance of nurturing virtues that are achievable and that will steer an organization through difficult times. In his first book, The Hard Thing About Hard Things, Horowitz shares more details on the challenges he was facing. The company started at the cusp of the dotcom bubble, and it was investing heavily on growth right as the bubble burst. Overnight, customers were strapped for cash, which put LoudCloud in the difficult position of having few contracts despite optimistic earlier projections. Eventually, the company rode out the crisis and became Opsware, but not without significant difficulties along the way.)
To change his squad’s culture, Senghor made sure they all had lunch together every day and used that time to discuss books he had assigned for them to read. They worked out and studied together, and Senghor used every opportunity to reflect on the values he hoped to instill in them. He organized group classes on emotional intelligence so they could understand the trauma that had led them to their current situations.
(Shortform note: Constant interaction is perhaps all the more important in the prison context since squad members can be taken to solitary confinement and be completely isolated for extended periods of time. Senghor himself was in solitary confinement for months and likely understood the importance of human contact in improving individual outcomes since he relied on letters from his family members to make it through those periods of isolation.)
Constant interaction gave him opportunities to discuss and reinforce the cultural changes he wanted to see. According to Horowitz, one way to ensure a team understands the importance of a culture change you’re trying to implement is by getting together every day to discuss the change, model the new expected behavior, and ask for updates on implementation. If you, as the leader, are willing to take time out of your day every day to talk about the change and model the new behavior, it signals to employees that it’s a top priority and they need to get on board with the change.
(Shortform note: Daily interaction on its own might not be enough to support a change in the culture. Experts argue that leaders also need to be intentional in how they communicate during times of organizational change. They can do so by expressing the results they’re after in terms of outcomes and not just tasks, adjusting the way they spend their time to show they are themselves committed to the change, and making sure they assign enough resources to support the change they’re looking for.)
Horowitz believes that simply asking employees how they feel about the culture won’t give you useful insights. Instead, he argues you should keep an eye on certain vital signs.
Reflect on the last three employees or colleagues who quit the team. Were they good cultural fits? Why wasn’t the organization able to keep them?
Look up your industry’s attrition rate and compare it to your organization’s. Are your employees or colleagues quitting at the same rate as the industry or lower? If your organization’s rate is higher, what can the organization do to reverse that trend?
Find the employee or colleague who has joined your organization most recently. Ask them what they have learned about the culture so far. Make a note of any comment that surprises or worries you, and make a plan to address it in the near future.
In this final chapter, we’ll explore some of the factors that Horowitz believes make it challenging for leaders to leverage culture to support their organization’s vision and make it an attractive place to work.
Horowitz describes three characteristics inherent in culture that will challenge you as you design and implement your culture:
The first challenging feature of culture is that you must balance acknowledgment that it’s an unattainable ideal with taking action to get as close as possible. Culture reflects what the organization hopes to become. But Horowitz makes clear that you can’t expect complete compliance with the culture. To get as close as possible to that ideal culture you’ve designed, you must consistently take actions that are in line with the culture. At the same time, the needs of the business will sometimes take precedence over culture, and you might find yourself temporarily breaking a cultural rule because it’s not helpful to the organization’s short-term objectives.
(Shortform note: In Start With Why Simon Sinek clarifies that you can prevent the split between aspirational and actionable by keeping the focus on the “why” or purpose of your organization. Some strategies he offers to keep your focus are:
The second challenging feature of culture is that it needs to continuously evolve to allow the organization to move forward. As we’ve seen in Senghor’s lessons, hanging on to culture as dogma can keep an organization stuck in modes of behavior that served the original strategy but no longer move it in a direction of growth. In addition, Horowitz warns that cultural strengths can become weaknesses. If the organization leans too heavily on a particular characteristic, it can go to a detrimental extreme. For instance, overemphasizing horizontal organization caused a crisis at Zappos in which people chose to leave the company rather than try to get their jobs done in a confusing flat structure.
(Shortform note: This challenge also points to a balancing act that culture leaders must enact: maintaining the organization’s core cultural identity without letting it calcify into dogma. In Built to Last, Collins and Porras provide actionable steps for leaders to sustain that balance, including maintaining a core ideology by fostering a cult-like workplace centered on its values and promoting from within, and stimulating progress by committing to challenging goals, experimenting, and never settling for “good enough.”)
The final challenging feature of culture is that it must permeate every aspect and area of your organization, so there are no inconsistencies that lead to confusion or frustration. Horowitz notes that everyone has to be on board with the culture, from rank-and-file employees to investors, so that they all pull in the same direction.
(Shortform note: Culture experts highlight that not fostering a cohesive identity throughout an organization can lead to compartmentalization and the creation of silos, which endangers the integration necessary in moments of major change, such as a digital transformation. They point out two challenges that must be tackled in order to bring cohesion to an organization:
The exception to the universality of culture is the organic development of subcultures that reflect the characteristics of specific teams, such as marketing or accounting. Horowitz explains that an organization’s core characteristics are relevant to the entire culture, but some of its characteristics apply only to specific subcultures. For example, Facebook’s early motto, which encouraged employees to “move fast and break things,” was important guidance for engineers and designers, but probably less useful to the legal or accounting departments.
(Shortform note: Beyond pragmatic reasons, subcultures can help companies be more flexible and inclusive without losing their dominant cultural traits. By allowing subcultures to emerge, companies can keep their internal coherence and still be able to deploy specific teams to respond to fast-paced developments in their environment, such as disruptive technologies or unforeseen competition. On the other hand, subcultures that form around demographics rather than teams can help employees from diverse backgrounds find a group in which to feel at home without losing their ties to the organization’s broader culture.)
Horowitz offers an example from his own experience that illustrates the three challenging characteristics of culture. When he co-founded the venture capital firm Andreessen Horowitz, their culture served their strategy: being an entrepreneur-focused venture capital firm. They were in business to support visionary entrepreneurs, and their mission was to give them the necessary support to bring their visions to life.
Their culture was actionable: They supported entrepreneurs by having only experienced former founders or CEOs sit on their boards. They also provided founders with an extensive network of press, talent, and resources through the firm’s junior employees.
Their culture was aspirational: Although the ethos of the firm was to make the entrepreneur the focus, the experienced founders and CEOs that sat on the boards of the firms they funded enjoyed being in charge and didn’t always go along with Andreessen Horowitz’s belief of showing the utmost respect to the entrepreneur.
Their culture was universal: Their culture affected every aspect of the firm’s operations and not always for the best. Because of the rule that only experienced founders or CEOs sat on the boards of the companies they funded, Andreessen Horowitz never promoted their junior employees to general partnership. Thus, junior employees left the company quickly and often—taking with them the culture, skills, and network insight entrepreneurs needed.
Their culture was continuously evolving: Horowitz realized that to continue being an entrepreneur-focused firm, Andreessen Horowitz had to break their rule and start promoting their best junior employees to general partnership. This allowed them to keep their best cultural advocates, support their entrepreneurs, and continue growing beyond their initial strategy.
(Shortform note: This example also showcases other challenges that experts on organizational culture have highlighted:
A final challenge pertaining to culture is decision-making. How you make important decisions is shaped by your culture because it is an expression of your leadership style. At the same time, it shapes your culture because it determines your priorities and how employees and leaders interact with each other. According to Horowitz, leaders make three choices that set the tone for the organization’s culture of decision-making: autocracy versus democracy, speed versus accuracy, and top-down versus bottom-up.
The first choice Horowitz believes a leader has to make is how much power she will ultimately have—a choice among autocracy, consensus-building, and democracy.
In this first decision-making style, you make the decision on your own. Horowitz argues that this style fosters a culture of efficiency because it doesn’t waste any time, but it doesn’t take advantage of the insight other people have so it disempowers everyone other than you. Taken to an extreme, it can become inefficient as everyone needs to wait for you to make a decision.
This second decision-making style has you trying to get everyone on the team to agree on a decision. According to Horowitz, it fosters empowerment at the expense of efficiency because it requires a major time commitment, but ensures that everyone participates in the decision. Taken to an extreme, this style can become disempowering because no one can move forward until everyone has had a say and reached a consensus.
In this final decision-making style, you hear from everyone on the team who has something to say about the decision, but ultimately make the final call yourself. Horowitz argues that this style fosters a culture that balances efficiency with empowerment because it takes advantage of the insights others have, but ultimately the buck stops with you.
Deciding How to Decide
Each style has its set of advantages and disadvantages, so it might be best to choose an approach according to the specific decision you have in front of you. In Crucial Conversations, Kerry Patterson et al. provide guidelines to choose the right decision-making method for every situation. They suggest considering these four questions before deciding how to decide:
Who wants to participate and who will be affected by the decision?
Who has information or expertise you might need to make the decision?
Who needs to be on board with the final outcome and should therefore be included from the beginning?
How many people need to be involved (the fewer, the better)?
The second choice Horowitz says a leader has to make in regard to decision-making is whether to prioritize speed—making the decision quickly—or accuracy—making sure you arrive at the right final outcome.
According to Horowitz, companies that favor speed over accuracy in decision-making often make a large volume of decisions. Large companies favor speed because their employees make hundreds of similar decisions each day, and the outcome of one decision impacts the workflow of hundreds of people. In these cases, the potential time lost in protracted decision-making is a greater liability than the potential mistake. If you make a mistake, it’s better to make it quickly, realize it’s a mistake, and then fix it armed with the valuable information the mistake has given you. The alternative would be to spend a lot of time figuring out the right course of action—while hundreds of people wait for you to decide—and even then there’s no guarantee that you’ll make the right decision.
Horowitz argues that companies that favor accuracy over speed in decision-making often face a small number of significant decisions. Small companies where the relative impact of each decision is greater favor accuracy. A company with few resources or opportunities to make its business work must ensure every decision brings it closer to its vision. It’s better to spend significant time making sure you make the right decision than to rush because—unlike a large company—you don’t have many chances.
Horowitz clarifies that both large and small companies favor accuracy in situations that involve financial or reputational risk. Whenever the outcome of the decision will determine the success of a venture, the wrong decision would put the company in danger. Similarly, if the decision affects important elements of the brand’s promise—the value the brand has committed itself to delivering—the wrong decision could negatively affect clients’ perception of the brand and company, potentially leading to financial loss.
(Shortform note: The choice between speed and accuracy might remind leaders of the choice between waterfall and agile project management methodologies. While waterfall’s rigid approach to projects can stifle speed, its focus on documentation and clear requirements helps keep a tighter rein on outcomes. On the other hand, agile’s focus on flexibility helps projects deliver value more quickly but doesn’t always ensure the final outcome is what was intended at the beginning. Similarly, feeling that your company’s culture of decision-making has to choose between either accuracy or speed is a false choice. In practice, organizations decide which to favor depending on the decision at hand, much like choosing between waterfall and agile depends on the nature of the specific project to be executed.)
The final choice Horowitz says a leader has to make in regard to her organization’s culture of decision-making is how much decision-making power to give her employees—a choice between making decisions top-down or bottom-up.
When decision-making is top-down, leaders make decisions with a bird’s-eye view of the organization. They are able to see how the decision’s effect ripples across the company, and they can ensure that all teams receive information about the decision and that it is in line with the company’s strategy. However, Horowitz cautions that they might disregard important information that lower-level employees have. Also, they can create bottlenecks because employees whose work depends on the decision need to wait for them to decide.
When decision-making is bottom-up, Horowitz says lower-ranking employees make decisions considering the insight they have on aspects of the business that they work closely with. This empowers employees, which in turn motivates them to be more involved and take ownership of the company’s success. However, this type of decision-making might mean that different teams make decisions independently and don’t communicate them to each other because they don’t have the view from the top to see how their decisions affect other teams.
Dispersed Decision-Making
In No Rules Rules, Reed Hastings and Erin Meyer describe the decision-making process at Netflix: a dispersed decision-making system that alleviates some of the shortcomings of bottom-up decision-making without reverting to top-down. To achieve that balance, the system outlines four steps for employees to follow:
Step 1: Get feedback. Employees share their idea with managers and colleagues, gathering input and making adjustments based on that input. If employees get feedback from managers and colleagues outside of their area or department, they can avoid working in silos.
Step 2: Test it out. Employees bring their idea down to a smaller scale in order to test it out before committing large amounts of resources and time into a full-blown version.
Step 3: Take the lead. Employees who come up with an idea become its project managers.
Step 4: Share successes and failures. After the process has been executed, project leads share the success or failure with the rest of the organization. If the project fails, they write an open memo detailing what happened and what they learned from the experience. This step also aids communication by ensuring the entire company gets to learn from each others’ mistakes.
Regardless of how you arrive at a decision, Horowitz says the moment that makes or breaks your organization’s culture is right after having made the decision. How leaders communicate the decision to employees and how leaders manage their reactions can strengthen or debilitate the culture. If a leader below the CEO level, such as a manager, lets employees know that they personally disagree with the decision, they create an opening for employees to question or challenge decisions.
According to Horowitz, everyone below the CEO must be unwavering in their adherence to the decision from the moment it’s made—even if they disagree with it. This prevents giving employees the opportunity to doubt the leaders’ decision-making and disrupt cultural cohesion. To do so, middle managers should accept the decisions leadership has made, vocally support them, and be able to explain the reasoning to anyone who questions them.
(Shortform note: The behavior Horowitz is advocating here contradicts his advice to foster the freedom to speak up about problems. Other experts also hold a different opinion, such as Ronald Heifetz (The Practice of Adaptive Leadership) who argues that leaders should let employees come to their own conclusions rather than always do whatever the leader will like best. This will allow the organization to harness the intelligence of all of its members, rather than rely on a select group of people to make decisions for everyone else.)
Horowitz argues that leaders make several choices regarding how to make decisions: autocracy versus democracy, speed versus accuracy, and top-down versus bottom-up.
Think of the last major decision that your organization made. Which approach did you take: autocracy, democracy, or consensus-building? How did the approach affect the outcome of the decision? For example, maybe not enough people were involved so some key information was unavailable.
In that same decision, was there an emphasis on speed or accuracy? Why was either speed or accuracy favored? Did it have the desired effect on the outcome of the decision?
Finally, was the decision made top-down or bottom-up? Why was that approach favored? Did it have the desired effect on the outcome of the decision?