Chapter 7: Twelve Desks — On Culture

Sanjay’s coding productivity continues apace. Directly due to Sanjay’s efforts, for the first time, the entire CRM project is ahead of schedule. Joe and Farook in engineering and Vijaya (on the product side) work at a fast clip as well. But no one is more productive than Sanjay.

As Beatrice finalizes each segment of the workflow, Craig, who replaced Allison and is now Head of Design and an official member of the Tiger Team, works hard to complete the user experience design. You hired two more designers for the effort. They are more junior, but Craig took them under his wing and is working well with them. Craig provides consistent encouragement to the new designers, offering improvement tips along the way, and both of them make significant progress. The new designers work for Craig but are not directly a part of the Tiger Team.

Similarly, you hired two new junior engineers to work with Sanjay. They sit right next to him, and between bouts of his own coding, Sanjay takes time to review their code and provide improvement suggestions. These engineers are not on the Tiger Team but complete work for it as assigned. Sanjay also works closely with Vijaya, who provides the product requirements necessary to drive interactions between the application layer and the data layer. The already built components perform well in the development environment. The fast-growing code base seems fit and trim.

But everyone has been working very hard for a really long time. It’s time to let off some steam. You decide to hold a company party. You make a note to pull it together soon.

The four most recent team additions forced an office relocation. SparkLight Digital’s new office is now the large conference room at Fieldstone Ford, just a short walk from Fieldstone Toyota. The general manager at the Ford store didn’t want to lose his conference room, but Fess Fieldstone overruled him. Now, the store’s GM has to hold weekly sales meetings in the cafeteria. It’s a significant imposition on the dealership. You appreciate that you still have free rent, even though Sparklight Digital has grown back to 12 employees. What a difference that makes to your rate of cash burn. Just the other day you gave the Fieldstone Ford GM a nice bottle of wine and a thank you note. He grumbled his thanks.

While the Tiger Team continues its work, Bill has his hands full. Other than you, he’s the only senior employee not on the Tiger Team. His role is to support the legacy price quote customers, mostly with integration fixes and fielding of customer support questions. As his wife continues to struggle through cancer treatment, Bill remains a steady, if time-limited, contributor. He looks forward to the day he can do more and appreciates the company’s efforts to work within his constraints.

Meanwhile, with the feature details coming into focus for January’s 1.0 release of the sales CRM, you begin to lay the groundwork to sell the next thirty customers onto the platform. Your board’s guidance was to get a minimum of thirty full-priced, happy customers live on the platform for at least a couple of months before initiating the effort to raise a significant A round, say $8M — $10M. Given your cash burn, you need to raise that round by April of next year — meaning that these thirty customers must all be live immediately upon the platform’s post-beta launch in January. That’s a tall order.

But all those visits to dealers around the San Francisco Bay Area over the past few months now seem to be paying off. With feature clarity in hand, you revisit the dealer store GMs and talk specifics. In meeting after meeting, as you compare the feature functionality of their current CRM system against those of Sparklight Digital’s CRM, there is lean-forward interest. Most GMs are highly intrigued by the opportunity to have a price quote response fully integrated into a comprehensive CRM system, and all of them love the mobile-centric, text-capable, user-friendly design.

Things are looking up.

The Friday party at St. John’s Bar and Grill in Sunnyvale is well underway, and everyone is having a blast. You commandeered a large table in the corner of the bar, and now your company surrounds you. Everyone came. With each sip of beer, the noise rises a few decibels. Soon it seems like everyone is talking and laughing simultaneously. The party is turning out just as you had hoped.

Sanjay is especially amped. He’s already thrown back three beers and is working on his fourth. With much animation he engages everyone in a wild story; hearty laughter cascades around him. No one has seen this side of Sanjay before. Vijaya finds him particularly amusing, and as she pokes fun at him he makes a silly face that provokes a new burst of laughter. You laugh too, as you try to dispel a small cloud that has formed at the back of your mind. Let them have fun. They need it.

As the night wears on, people with glowing smiles drift in twos and threes onto the dance floor or out onto the street. You head home early and hit the sack by 11 PM, satisfied that come Monday everyone will return to work re-energized.

One employee codes for 12 hours straight to push out a key feature in advance of an impossible deadline. In negotiation to close a pivotal enterprise deal, another employee travels to Japan on Monday, back home on Friday and back to Japan on Sunday. Yet another employee visits the fellow work group member in the hospital, then participates in volunteer day, proudly wearing the company hoodie. With its company’s back against the wall, another group of employees accepts a 20% across-the-board pay cut to avoid a 20% layoff.

Employees are real people, engaging in life and work. In the midst of the storm, employees want to trust in a leader’s decisions, and when they do, most will step up when called — even under difficult circumstances. Committed people will rise to meet threats, and collaborate to spark incandescent innovation. People who buy in will celebrate diversity in function, thinking, background, and style because they share a common mission, a way of working together, and similar motivations. People can retain stout independence while simultaneously standing together to defend and nurture company values.

Culture influences human behavior. Culture is an ever-evolving dynamic interaction: the follower’s response to the leader’s words and actions, and the leader’s response to the follower’s insights and needs. A CEO influences culture most powerfully by deeds. However, culture can’t be mandated. It is always crowdsourced. Employees observe a leader’s actions in three areas — human dignity, human development, and business performance — and react in ways that shape the culture.

Research shows that employees are motivated when the work is so fulfilling it’s like play, promotes curiosity, has a purpose that aligns with their values, and advances their career potential. Culture’s role is to unlock these motivations. Redpoint Ventures partner Tomasz Tunguz notes that a healthy culture depends on interaction among values, attitudes, beliefs, and customs. Values impact attitudes. Attitudes impact beliefs. And beliefs impact customs.¹

Take, for instance, the example of Asana, a highly successful next-generation project management platform company. Asana’s co-founders decided to treat culture as they would a new product. Dustin Moskovitz and Justin Rosenstein engaged in an employee-involved process to design, test, iterate, and debug their culture. They articulated a clear set of values, something most companies do. But at Asana, leaders went further, creating employee-involved teams to evaluate the company’s progress towards living the values. Asana conducts regular employee surveys to discover “culture bugs.” When one is detected, the leadership team takes quick action to address it.²

Company culture can be healthy and continuously improved, or unhealthy and degrading. Occasionally, company culture can be toxic. At worst, bad cultures can crush the human spirit. Backstabbing, distrust, greed, fear, mutual contempt, and alienation reign. Leaders pursue power and money, tolerating all forms of wrong behavior with no concern for the fellow human beings around them. The expedient thing always trumps the right thing. Employees routinely fall victim to stress-based illnesses. The gap yawns wide between the leader’s words and behavior.

Take a pulse check. If your company growth grinds to a halt, or you start losing employees or customers, or you have a broken business model, it’s time for a significant cultural overhaul. It will take a lot of work, but it is perhaps the most critical and impactful expression of your directional, executional, and moral voice.

No matter the current state of your culture — healthy or unhealthy — your mission is to improve it. To build and sustain a vibrant and robust culture takes intentionality and hard work.

A healthy culture springs from three dimensions: human dignity, human development, and business performance. The first, human dignity, honors the right of every individual to be respected in word and deed. The second, human development, acknowledges the right of every individual to be challenged and encouraged in personal growth. And the third, business performance, concerns the behaviors that will create happy customers and a successful business model, given your product and business.

Stated values are the beacons that help guide attitudes, beliefs, and customs. As CEO, you are chief culture officer. It is on you. As human behavior plays out inside your company, you must take regular actions to reinforce these values. Your actions signal to followers that words have meaning and consequence.

Culture emanates first from the moral voice of your authentic leadership. Do you genuinely care about the people you brought together inside your company? Will you defend them when they are disrespected in any way? Do you proactively support their personal growth? Are you willing to delegate power deep into the company, and challenge people to rise up to high expectations? Do you seek truth in all things? Do you want to share equitably with them in the fruits of success? Caring, quality, temperance, prudence, courage, and justice — these leadership virtues are the foundations of a healthy culture.

Respect for human dignity and human development are essential. But so too are the aspects of culture tied to business performance. Your effectiveness in the process of role design, organizational identity, career ladders, community, workforce and resource planning, and compensation has a direct impact on employee motivation. It’s hard to have a healthy culture when employees must work inside broken workflows or work for incompetent supervisors. The research consistently shows this. For cultural values to yield a flourishing, healthy culture, both your directional and executional voice must speak with quality.

How is culture customized to a company’s unique needs? For instance, you may determine that the product you deliver and the market you serve will require a flexible customer engagement approach. You might further conclude that you need to delegate authority to front-line employees so that they can make the necessary judgment calls to serve your customer effectively. This might lead you to foster values such as “customer delight” and “employee empowerment.” Or you may be in a highly dynamic environment, where a team-based approach to problem solving is required. The value of “team thinking” may be elevated.

When it comes to your company values, the first decision is how to decide. The way you choose to select your company values speaks volumes about them. Are they conceived, iterated, and finalized inside an executive retreat and then presented as a “fait accompli” at the next all-hands meeting? Or do you open the door for other employees in the company — perhaps all employees — to help shape their development? A leader-driven approach may lend you more control. But an employee-involved approach yields more employee buy-in.

Buy-in matters. In the development, tracking, and management of your culture, it’s best to draw individual contributor employees into the center of the action.

Distillation is a primary step in values-crafting. The end goal is a set of stated values that capture the essence of your aspirational culture regarding human dignity, human development, and business performance. From the many proposed ideas, you will need to render them down to your company’s most essential truths.

Choose carefully. As CEO, you must internalize the values you select. Each value needs to be backed up with relentless focus and subsequent reinforcing actions. Your reinforcing efforts will not only be proactive and positive. At times they will also be reactive and corrective. Invariably, the most difficult corrective actions are required at the most inconvenient times, and often spark disruptive consequences — at least in the short term. So it is of utmost importance to carefully discern what matters most.

Stated values must be incessantly articulated and reinforced in symbols and actions.

Recognize employees for actions that exemplify the values. At every all-hands meeting, speak to the importance of one or more values. In 1:1’s with your exec group members, enforce strong accountability for values advocacy, and critique performance accordingly. Performance assessment tools must include assessments of an employee’s conformance to stated values. Search diligently for unstated and unhealthy values that creep into your culture, call them out, and work to extinguish them. As you scale, you might charter a culture team to provide comprehensive feedback on your culture’s health along with recommendations for improvement. A monthly or annual survey allows for anonymous input as to the health of your culture. And keep an eye on the postings that show up on Glassdoor.com as they are often sources of unvarnished truth.

Here’s another thing. Brand and culture are closely aligned. The image you convey to the outside world must be consistent with the company you really are.

Just as followers anoint leaders, employees determine the culture and whether or not it is consistent with your stated intent. If your words and actions are clear and steady, they will resonate and create followership. Unequivocally stated values, aligned with strong moral, directional, and executional voice, always yield a healthy culture.

No Monday morning could ever be worse than this one.

As you walk into the office at about 8 AM, you notice Vijaya already at her desk. That’s not normal. She usually arrives around 9, and then works later in the evening. When she sees you come in, she immediately gets up and comes over. The walk you have with her down Sunnyvale Avenue breaks your heart. Upon your return to the office, Vijaya goes home for the day.

Sanjay arrives at around 9, as usual. You immediately ask him to join you in the dealership General Manager’s office. You arranged to borrow it for the morning. The conversation is excruciatingly hard. You ask some precise and painful questions. Sanjay, mortified, answers truthfully. You then send him home.

Later, a conversation with your lawyer confirms it. The facts point to a clear case of sexual harassment. Whether it was also sexual assault — a crime — is for others to decide.

There are some things for which second chances don’t apply. That day, you say goodbye to Sanjay. You then reach back out to Vijaya and alert her of your decision. You share with her the contact information for an external counseling resource, for which the company will pay if she wishes to avail herself of it. You encourage her to take whatever other actions she feels are necessary — legal or otherwise. You assure her that if she needs time off, it’s OK. You express your sorrow that this terrible thing happened. She doesn’t respond.

As weeks go by and these painful events slowly recede into the past, you find yourself pondering what you could have done differently. You know that you took the right actions in a legal sense. So what. Any leader under such circumstances would have done the same.

A dilemma nags at your soul. You recognize that Sanjay’s state of mind at the party was at least partially the result of many months of relentless overwork. In that sense — as the one pushing everyone to work crazy hours and produce at an unforgiving pace — you feel complicit. This thought weighs heavily on your mind. A part of you wants to shift gears — reduce the pressure — find a more sustainable pace. But you realize the cold truth that if you do, the company may well not survive. Stuck on the horns of your dilemma, you proceed forward, only committing that you will back off and slow things down once a significant A round financing is secured.

It can’t come quickly enough.

Notes:

1. Tomasz Tunguz, “The Intense Power of A Strong Company Culture,” tomtunguz.com (blog), June 14, 2017, http://tomtunguz.com/company-culture-at-scale/.
2. Taylor Lorenz, “How Asana Built the Best Company Culture in Tech,” Fast Company, March 29, 2017, https://www.fastcompany.com/3069240/how-asana-built-the-best-company-culture-in-tech.

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Next up Chapter 8: Fifteen Desks — On Followership.