[This was written in early ’20, and I had posted it as a Notion page. Now consolidating all of these reviews posted elsewhere into this site.]

2019, 273pgs, Read Feb’20.

The book looks at culture, what it means, and how to set it and sustain it. It does so through four historical examples and contrasts it with contemporary events and examples. The four historical examples are Toussaint Louverture’s slave revolt in Haiti, The Samurai’s Bushido code, Genghis Khan’s empire and finally Shaka Senghor, a prisoner turned transformer.

BH is Ben Horowitz, and SPW is Sajith Pai’s Words, essentially my comments and marginalia.

Notes on, and excerpts from the book

Chapter: Foreword

Henry Louis Gates Jr., in the foreword says: “The most robust, sustainable cultures are based on 

  • action, not words.
  • alignment of (leader’s) personality and (firm’s) strategy
  • honest awareness and assessment of the norms imbibed on the first day of work by new employees grasping at what it will take to make it
  • a commitment to explicit ethics and principled virtues that stand out and have meaning
  • a willingness to come up with ‘shocking rules’ that prompt others to ask why?”

Chapter: Introduction

SPW: There are many questions that a Blume colleague can ask himself or herself for which the answers can’t be found in an employee handbook, e.g., should i spend 1 minute on reviewing this pitch or 3 minutes? How much time should I spend on Taghash? Should I do 4 theses a year or 6? Should I type out the detailed notes of the conference I attended even though I am not sure others will be as interested in it? 

BH or Ben Horowitz: “There aren’t any right answers to these questions…In fact how your employees answer these kind of questions is your culture. Because your culture is how your company makes decisions when you are not there. It is how they behave when no one is looking. If you don’t methodically set your culture, then 2/3rds of it will end up being accidental, and the rest will be a mistake.”

BH: “Culture is not like a mission statement. You cant just set it up and have it last forever. There is a saying the military that if you see something below standard and do nothing, then you have set a new standard. Similarly – if you see something off-culture and ignore it, you have created a new culture. Meanwhile as business conditions shift and your strategy evolves, you have to keep changing your culture accordingly.”

BH: “Culture is the strong force.” In the short run product superiority trumps culture, but in the long-run culture can sustain or lead to a superior product org.

SPW: Interesting Horowitz refers to culture as a strong force (influenced by weak force / strong force moniker fm Physics). A better term may well be long-term (v short-term) force. Culture, strategy as long-term forces vs performance marketing, pricing, sales, product superiority as short-term forces.

BH: Breakthrough ideas are difficult to manage for two reasons – 1) innovative ideas fail more than they succeed 2) they are often misunderstood for a long time. A culture which cant tolerate failure will not let any innovative risky idea through.

BH: “Culture only works if the leader visibly participates in and vocally champions it….It is a system of behaviours that you hope most people will follow, most of the time.”

BH: “..who you are is how people talk about you when you are not around….Who you are is not the values you list on the wall. It is not what you say at an all-hands. It is not even what you believe. It is what you do. What you do is who you are. This book aims to help you do the things you need to do so you can be who you want to be.”

Chapter 1: The story of Toussaint Louverture

Per BH, “Louverture used 7 key tactics to transform slave culture into one respected around the world. These are

  • Keep what works.
  • Create shocking rules (Married officers were forbidden to have concubines. The explanation for this was that “…your word matters most, and if we cant expect you to keep your word to your wife, how can we trust you to keep your word to us?”)
  • Dress for success
  • Incorporate outside leadership
  • Make decisions that demonstrate culture priorities
  • Walk the talk
  • Make ethics explicit

BH: “In any human interaction, the required amount of communication is inversely proportional to the level of trust.”

BH: “ I often see companies that plan to go into new areas, but dont want to shift their cultures accordingly. Many consumer companies want to penetrate the enterprise market  – that is, selling to large companies – but resist having employees who walk around in fancy suits. They believe their original culture should suffice. But their results prove otherwise.” (SPW: Zuckerberg started wearing a tie daily in ’09)

BH: “For a culture to stick, it must reflect the leader’s actual values, not just those he thinks sounds inspiring. Because a leader creates culture chiefly by his actions.”

Chapter 2: Toussaint Louverture applied

On creating shocking rules, BH shares some principles

  • It must be memorable. If people forget the rule, they forget the culture.
  • It must raise the question ‘why?’
  • Its cultural impact must be straightforward – the answer to why must explain the cultural context
  • People must encounter the rule daily or frequently.

He gives examples of such rules at VMWare – “Partnerships should be 49/51 with VMWare getting the 49.”, Amazon – “No powerpoint presentations.”, Facebook – “Move fast and break things.”

SPW: One rule that comes to mind for me at Blume is “We love all our children equally.” That we dont differentiate between our winners and also-rans unlike many other VC funds.

Covers examples of how Reed Hastings turned the Netflix culture around, prioritizing the streaming team, and how Hilary’s team didnt walk the talk on IT security.

BH: “When you inevitably take an action that is inconsistent with your culture, the best fix is to admit it, then move to overcorrect the error. The admission and the self-correction have to be public enough and vehement enough to erase the earlier decision and become the new lesson.”

BH: describes how Kalanick’s values for Uber led to an intensely competitive “take no prisoners” toxic culture that was also unethical in many ways. “That is the nature of culture. It is not a single decision – it is a code that manifests itself as a vast set of actions taken over time. No one person makes or takes all these actions.”

BH: “It is critical that leaders emphasize the ‘why’ behind their values every chance they get because the ‘why’ is what gets remembered. The ‘what’ is just another item in a giant stack of things you are supposed to do.”

Chapter 3: The way of the warrior

This chapter discusses Samurai culture and how it can be applied to modern day. Interesting set of passages about how the Samurais were obsessed with death and sought to keep it in their consciousness throughout. BH draws parallels from that to keeping your company’s potential downfall in mind at all times, and using that to draw lessons to put in place the right culture.

BH: “…the glue that binds a company culture is that the work must be meaningful for its own sake.”

Interesting snippets about how stories are used to make culture more vivid – John Morgridge at CISCO about frugality “If you cannot see your car from our hotel room, then you are paying too much.”; Jim Barksdale about killing snakes (metaphor for problems) at Netscape.

Chapter 5: Shaka Senghor applied

BH: Senior management perspective on what they think culture is, is not that relevant. That is rarely what the rank and file experience. Culture is best understood from seeing “what must employees do to survive and succeed in your organization? What behaviours get them included in, or excluded from the power base? What gets them ahead?” This is the best way to understand what you culture is – what behaviour do they perceive will help them (new employees) fit in, survive and succeed.

BH: “First impressions of a culture are very hard to reverse. If your company’s process for recruiting, interviewing, orienting, training, and integrating new employees is intentional and systematic, great. If any part of it is accidental, then so is your culture.”

BH: Start from first principles. Every ecosystem has a default culture. Dont just blindly adopt it.  Like adopting a casual dress culture because you are in Silicon Valley without the meritocracy that comes with it. Cultural elements are all part of a whole. Picking and chosing creates contradictions. 

BH: “What people do at the office, where they spend most of their waking hours, becomes who they are. If the CEO has an affair with an employee, there will be many affairs throughout the company. If profanity is rampant, most employees will take that home too.”

“So trying to screen for good people or screen out bad people doesnt necessarily get you a high integrity culture. A person may come in with high integrity but have to compromise it to succeed in your environment…people become the culture they live in and do what they have to do to survive and thrive.”

BH: “To change a culture, you can’t just give lip service what you want, Your people must feel the urgency of it.” You have got to signal how important it is with your time.

Chapter 8: Be yourself, design your culture

BH: “Step one in designing a successful culture is to be yourself. This is the first rule of leadership – be yourself. Other people will have always ideas of what you should be (as a leader), but if you try to integrate all those ideas in a way that’s inconsistent with your own beliefs and personality, you will lose your mojo.” 

BH: “If you follow the first rule of leadership (be yourself), not everybody will like you. But trying to get everybbody to like you will make things even worse.”

BH: “Once you are comfortable with who you are, you can begin to map that identity onto the culture you want.” “It is much easier to walk the talk when the talk is your natural chatter.” SPW: If the CEO hates writing, a writing culture will never take hold! Bezos likes writing clearly,

BH: “ A company’s culture needs to reflect the leader’s sensibilities. No matter how much you want a learning environment or frugal company, you will not get one unless that is what you instinctively do yourself. If the expressed culture goes one way but you walk in the oppsite direction, the company will follow you, not your so-called culture.”

Culture and strategy are yin and yang. Amazon’s low-cost strategy needs a culture of frugality. Facebook’s culture of move fast and break things wont work for Airbus’s safety-first approach.

Subculture emerge such as between sales and engineering. This is inevitable.

BH: “One way to think about designing your culture is to conceive it as a way to specify the kind of employees you want. What virtues do you value most in employees?…making your hiring profile. big part of how you define your culture makes enormouse sense – because who you hire deterines your culture more than anything else.”

Patrick Collison, Stripe: “…most of what ultimately defined us happened in the hiring of the 1st 20 people. So the question of what do you want the culture to be and who do you want to hire are in some sense the same question.”

Amazon uses bar-raisers to ensure that the incoming employee fits with the company’s culture.

Stewart Butterfield, Slack: look for a combination of smart, humble, hard-working and collaborative. All four have to exist in combination.

BH: All employees want their work to matter. A universal element of strong cultures is that what a person does matters in the larger scheme of things.

BH: “The following attributes make cultural values / virtues effective –

  • is the value actionable?
  • does the value distinguish your culture?
  • if you are tested on this virtue, will it pass the test? e.g., if perfection / product excellence is a core value are you willing to tolerate a delayed shipping date if the product isnt perfect? Especially if a delayed quarter will impact market valuation?

Chapter 9: Edge cases and object lessons

BH: “Cultural rules can become sacred cows.” When the environment is changing, and the org needs to change, you should be ready to revisit them.

BH: “Telltale signs that your culture is messed up.

  • the wrong people are quitting too often.
  • you are failing at your top priorities.e.g., you want to improve customer service but despite frequent interventions it isnt improving. This is possibly because you arent according importance to this internally or not rewarding / incentivizing the people employed in this function.

Object lessons are examples you make of something. A strong signal that you provide.

BH shares how to work with a brilliant jerk. He calls such people a Prophet of Rage or POR. Two useful points

  • dont give feedback on their behaviours but their behaviours’ counterproductive feedback
  • dont give only negative feedback, but focus your coaching on what the POR can do.

You can either have a zero tolerance culture, or one that tolerates a bit of diversity and idiosyncrasy. Either is fine so long as it is consistent with other values.

Disagree and commit is a rule that must be followed by the reportees to the decision-maker. You can disagree in the meeting, but afterward you must not only support the final decision but also be able to compellingly articulate the reasons the decision was made.

Chapter 10: Final thoughts

BH: “Encourage bad news. The more you make it seem that bad news can be shared openly, the more you will get to know what is going wrong. It leads to a culture where surfacing and discussing problems are not just tolerared, but encouraged.”

BH: “Here is a checklist of points to keep in mind

  • Cultural design: Make sure your culture aligns with both your (CEO’s) personality and firm’s strategy.
  • Cultural orientation: The first day of an employee is vital in their perception of a firm’s culture. Make sure it isnt wrong or accidental.
  • Shocking rules: Any rule so surprising it makes people ask “Why do we have this rule?” will reinforce key cultural elements.
  • Incorporate outside leadership: Bring in an old pro from the culture you aspire to have.
  • Create an object lesson: Cement a value or virtue with a dramatic act.
  • Make ethics explicit: Dont assume people will do what is said or have truly internalized what it means. Clarify, communicate, again and again.
  • Walk the talk. Refrain from chosing cultural values you dont practice yourself.
  • Make decisions that demonstrate priorities.

BH: “There is no perfect culture. Your goal is to have the best possible culture for your company, so it stays aimed at its target.”

BH: “Culture begins with deciding what you value most. Then you must help everyone in the org practice behaviours that reflect those values.” And make sure those behaviours are indeed taking your org towards its goals.