Today's Reading

INTRODUCTION: What You Do Is Who You Are

Revel in being discarded, or having all your energies exhausted in vain; only those who have endured hardship will be of use. Samurai who have never erred before will never have what it takes.

When I first founded a company, one called LoudCloud, I sought advice from CEOs and industry leaders. They all told me, "Pay attention to your culture. Culture is the most important thing."

But when I asked these leaders, "What exactly is culture, and how can I affect mine?" they became extremely vague. I spent the next eighteen years trying to figure this question out. Is culture dogs at work and yoga in the break room? No, those are perks. Is it your corporate values? No, those are aspirations. Is it the personality and priorities of the CEO? That helps shape the culture, but it is far from the thing itself.

When I was the CEO of LoudCloud, I figured that our company culture would be just a reflection of my values, behaviors, and personality. So I focused all my energy on "leading by example." To my bewilderment and horror, that method did not scale as the company grew and diversified. Our culture became a hodgepodge of different cultures fostered under different managers, and most of these cultures were unintentional. Some managers were screamers who intimidated their people, others neglected to give any feedback, some didn't bother returning emails—it was a big mess.

I had a middle manager—I'll call him Thorston—who I thought was pretty good. He worked in marketing and was a great storyteller (an essential marketing skill). I was shocked to find out, from overhearing casual conversations, that he was taking storytelling to another level by constantly lying about everything. Thorston was soon working elsewhere, but I knew I had to deal with a much deeper problem: because it had taken me years to find out that he was a compulsive liar, during which time he'd been promoted, it had become culturally okay to lie at LoudCloud. The object lesson had been learned. It did not matter that I never endorsed it: his getting away with it made it seem okay. How could I undo that lesson and restore our culture? I hadn't the first clue.

To really understand how this stuff works, I knew I had to dig deeper. So I asked myself, How many of the following questions can be resolved by turning to your corporate goals or mission statement?

* Is that phone call so important I need to return it today, or can it wait till tomorrow?

* Can I ask for a raise before my annual review?

* Is the quality of this document good enough or should I keep working on it?

* Do I have to be on time for that meeting?

* Should I stay at the Four Seasons or the Red Roof Inn?

* When I negotiate this contract, what's more important: the price or the partnership?

* Should I point out what my peers do wrong, or what they do right? Should I go home at 5 p.m. or 8 p.m.?

* How hard do I need to study the competition?

* Should we discuss the color of this new product for five minutes or thirty hours?

* If I know something is badly broken in the company, should I say something? Whom should I tell?

* Is winning more important than ethics?

The answer is zero.

There aren't any "right answers" to those questions. The right answers for your company depend on what your company is, what it does, and what it wants to be. In fact, how your employees answer these kinds of questions 'is' your culture. Because your culture is how your company makes decisions when you're not there. It's the set of assumptions your employees use to resolve the problems they face every day. It's how they behave when no one is looking. If you don't methodically set your culture, then two-thirds of it will end up being accidental, and the rest will be a mistake.

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