As companies get bigger, most founders see culture as their main job. Culture is vision, values and tone, and what you end up with is a framework for making decisions and taking action.
There are lots of things that are written on culture. In fact, a lot of CEOs as their companies get big see this as their main job. It’s vision, it’s values, it’s tone. Really what you end up with is a framework for making decisions and taking action. The best way for me to make culture come alive for you is to give you an example. Reed Hastings, he’s the CEO and founder of Netflix, he took it from the very start to the $50 billion company it is today. He has famously published 129-page slide deck, you can find it on Google, called “Freedom and Responsibility.” It’s a message to his company, and his message to his managers, and his message to all of us about what he believes it takes to build a company going forward. I suggest you read it.
The focus of the slide deck is all about communications and trust. He’s all about hiring adults, empowering them to do their job, giving them the responsibility, measuring their success, and rewarding them if they do it. Each company’s culture is going to be different. But let’s start where Reed leads us. The three core elements of culture the way I think about it are communications, trust, and alignment. In communications, you need to do two things. One, be consistent. Avoid that flavor of the week. Your employees will mistake that for a change of direction. Be consistent in how you talk about the business, and you talk about the goals. Be clear. Provide clarity for your team about what you want out of them, how you want to measure it, and be focused. If you give them 50 goals, it’s hard to sort out what’s most important. If you give me three, and you tell me how to measure it, I want to make you happy, I want to succeed in my job; I’ll figure out how to meet demands. That’s how culture can be so important.
Secondly, trust. Be honest. Be honest about the good things, be open when you have success. It’s probably equally if not more important to be open about mistakes—by you, by the company. They’ll trust you more and they’ll be honest back with you when things aren’t working, and that’s what you want when you’re in a high rate of change. But [inaudible] you’ll have things that aren’t, and you’ll need that feedback.
Last, think about alignment. And that’s really something you have to practice. You want me aligned with your goals as CEO. So you want to build my incentive programs to match those objectives you’ve laid out for me. You want me to be aligned with that team you’re putting together. Make sure that when I win, the team’s winning. When the team’s winning, I’m winning. That way you’ll get more out of me, and you’ll get more out of us, and you’ll get that scaling company you’re looking for.
One of the interesting things to think about with respect to culture is how easy it is to have a culture when there are five of you. It’s a bit more challenging when there’s 15. It’s really challenging when there’s 1,500 in five different locations or 50 different locations. How do you propagate that sense of culture when you may not even see these people every day? Well, there are a couple of different ways I’ve watched people do it that are successful. One I saw in a company called Exact Target. Scott Dorsey, a founder in Indianapolis, as his company grew, started referring to the culture as almost another thing. It was “Team Orange.” Everything was orange in the company, their logo was orange, and they really fed on this whole concept in all of his managers, and all of his employees really thought in terms of Team Orange. It was something they all fed into and all understand. I’m also on the board of Silicon Valley Bank, and the CEO there, Greg Becker, really misses not being able to speak to all of his employees directly. He has a video that he often gives to employees so they can see him speaking, they can see him joke. So there are different ways that you can speak to employees, even when you don’t see them every day, even when you may not know their names. They want to be with you, they want to be part of your team, and you can spread that out as you grow.