Ben Horowitz is best known at this point for being half of Andreessen Horowitz, a leading Silicon Valley venture capital firm. He wrote this book to answer the question: How do you as an organizational leader create and sustain the culture you want?
As his book site summarizes,
“To Horowitz, culture is how a company makes decisions, and he explains how to make your culture purposeful by examining four intriguing models of leadership and culture-building well outside the usual business case studies: Haiti’s Toussaint Louverture, who was the leader of the only successful slave revolt in history; the Samurai, who ruled Japan for seven hundred years and shaped modern Japanese culture; Genghis Khan, who built the world’s largest empire; and Shaka Senghor, an American ex-con who created the most formidable prison gang in the yard and ultimately transformed prison culture.”
He opens the book by sharing an anecdote from his time as CEO of LoudCloud, where he discovered that somebody on his marketing team was a compulsive liar…and he hadn’t discovered it for years. Because this person had delivered the metrics he had chosen as a leader, a large part of the organization had accepted that lying was acceptable as long as you delivered the metrics. He was mortified. As he puts it, “your culture is how your company makes decisions when you’re not there. It’s how they behave when no one is looking.”
Organizations look to their leaders for how to behave. It does not work for a leader to say “Do as I say, not as I do”. They have to consistently live their values, _especially_ when it is hard, for their team to embody those values. Horowitz suggests that every critical decision you make as a leader will be watched and interpreted by your team, so it’s up to you to explain your decisions in terms that people can internalize.
One way to do this is via a “shocking” rule that makes organizational newcomers ask “Why would we ever do that?” and object lessons for those that fail to live up to that “shocking” rule. For instance, he shares how Genghis Khan rose to power by emphasizing loyalty and competence over kinship or closeness. His initial set of commanders came from nine different tribes and multiple religions, but he only cared that they swore lifelong loyalty to him and he was clear that “you must never betray your khan”. This rule was so important to him that when opposing forces turned over their khan to Genghis Khan, he executed them even though their disloyalty helped him. A “shocking rule” is a chance to tell a story to reinforce the culture you want – a well-known example is Jeff Bezos saving money at Amazon by using doors as desks, which is a practice that continues today because it’s a constant reminder that frugality is a core value of Amazon.
Horowitz structures the book around profiles of the four leaders he admires, and then follows up with stories to illustrate the principles of culture design from his own experience and from his observations of other leaders. The different organizational cultures from Japanese samurai to the Michigan prison culture of Shaka Senghor reinforced Horowitz’s thesis that an organization’s culture must be specific to its leaders and its values. And to be effective, the culture has to guide tough decisions – everybody says they want to be honest and act with integrity, but if you know that fudging the accounts a bit will let you hit your quarterly numbers and be rewarded financially, what will you do?
He offers three questions to help define your organization’s virtues:
- “Is your virtue actionable? According to bushido, a culture is not a set of beliefs, but a set of actions.”
- “Does your virtue distinguish your culture?” How does it make you different from the default in your area or industry?
- “If you are tested on this virtue, will you pass the test?” How do you as a leader exemplify this virtue in your decisions and actions? Will you sacrifice success metrics like sales or customer acquisition to maintain this virtue?
Choosing unique, actionable virtues that you are willing to be held to at all times is difficult. And choosing those virtues is not enough; you must also make the organizational experience coherent with those virtues, as Patrick Lencioni shares in The Advantage. From the first day of work, an employee is looking for signs of “how things are done here”, and if they see people acting at odds with the organization’s stated values, they will believe the actions, not the words. If your leadership team is not living the values, you may even need to bring in outside leaders from the culture you aspire to have. And as described above, you may need to use “shocking rules” and object lessons to reinforce the organizational values.
The book’s closing paragraph is an outstanding summary of the book’s thesis:
Culture begins with deciding what you value most. Then you must help everyone in your organization practice behaviors that reflect those virtues. If the virtues prove ambiguous or just plain counterproductive, you have to change them. When your culture turns out to lack crucial elements, you have to add them. Finally, you have to pay close attention to your people’s behavior, but even closer attention to your own. How is it affecting your culture? Are you being the person you want to be? This is what it means to create a great culture. This is what it means to be a leader.
Since finishing this book, I have been regularly referring my clients to the book’s title, as it’s a great reminder for leaders to act with integrity. You can claim to be a leader who values honesty or people or disruptive innovation, but how do you behave when those values might put the company’s success metrics at risk? As Horowitz related in his opening story, people believe your actions, not your words, so what values and principles will you model that your team can use to consistently make organizational decisions?