He struggled with company culture as a CEO

He wanted to explore the relationship between culture and values

He wanted to provide a guide for new CEOs

He wanted to challenge existing management literature

To provide diverse perspectives on culture

To challenge traditional tech and leadership examples

To highlight the influence of historical leaders

To demonstrate the universality of culture

They determine the effectiveness of cultural cohesion

They provide insights into cultural mechanics

They measure the impact of cultural values

By explicitly defining ethical boundaries

By promoting competitiveness as the primary value

By prioritizing values based on their impact

By balancing conflicting values through examples

Winning the war is more important than fighting for a higher purpose

Fighting for a higher purpose is more important than winning the war

Fighting for a higher purpose and winning the war are equally important

Winning the war is the only important thing

Take the deal and promise to deliver the feature later

Take the deal and not deliver the feature

Miss the quarter and not inform the client

In "What You Do Is Who You Are," Ben Horowitz, a leading venture capitalist, modern management expert, and New York Times bestselling author, combines lessons both from history and from modern organizational practice with practical and often surprising advice to help executives build cultures that can weather both good and bad times. Join this session to hear Ben advise leaders on how to build and sustain the cultures they want.

Speakers:
- Ben Horowitz, Cofounder and General Partner, Andreessen Horowitz
- Ryan Carlson, Chief Marketing Officer, Okta
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I'm here with Ben Horowitz, co-founder and general partner of Andreessen Horowitz.

For that, founder and CEO of Opsware, somebody who doesn't need much of an introduction.

But he's also a two-time best-selling author.

His most recent book is What You Do Is Who You Are, How to Create Your Business Culture.

We're gonna spend a couple of minutes talking with Ben about this book and about company culture.

So Ben, I know you've talked about this before, but I think for the viewers a good question up front is why write this book in particular?

What is it about company culture, organization culture, that interests you, that made you wanna write this book in the first place?

Yeah, well, it was the thing that I struggled with most when I was CEO.

When I became CEO the first time, I asked all the veteran CEOs, what should I focus on to be a great CEO?

And they pretty consistently said, Ben, pay attention to the culture.

And that's kind of where the advice stopped.

And most of the things written on it have been relatively trivial, based on 1 organizational behavior kind of experiment or something like that.

And so, but when you look at it, it turns out to be a really important thing.

So if you go, well, how does your company behave?

You know, particularly how does it behave when you're not looking?

If somebody calls them, do they return the call?

If it's a person who's a lower rank than them, do they return it?

If they Do a deal, is it for the price or for the partnership?

And so all those things, which are not in your goals and objectives, they're not in your mission statement, they're not in your OKRs, they're how you behave on a daily basis, how people experience your company, what you're like to do business with, what you're like to work at, all that stuff is your culture.

But the amount of attention it's paid to in the management literature is like close to 0 or close to 0 usefully.

So I thought it was an important thing to try and get out, well how do you move that?

Because you can't just do the simple thing.

You can't say, oh well we'll put in your performance review, did you follow the cultural values?

Well you don't know if they received that phone call, so you definitely don't know if they returned it.

So that's not going to be the thing that drives the culture.

What's going to drive the culture are all these little behaviors, all these little cues that people take about, this is what I have to do to succeed in this company.

You make the point that I think a lot of people would confuse a company's values with their culture and you're saying that culture is different than values.

Yes, and I go to the Bushido, which is the way of the warrior, kind of the code of the samurai.

And what the samurai said was a culture is not a set of beliefs.

It's a set of actions, which is hence the name of the book.

It's not the values on the wall, it's what you do, that's who you are.

And that's why we don't call them values, or they didn't call them values, they called them virtues.

Because it's only a thing if you manifest it.

If you actually do it, and everybody does it, and you have cultural cohesion, then it's a virtue.

I think it's been said that, you know, in tech startups and startups in general, first time founders focus on product, second time founders focus on distribution, sales and marketing.

As a, when you were CEO and you were reaching out.

You kind of have to focus on both, brother.

But where the focus ends up being if you're new to it.

How many times do you have to be a founder before you realize that culture is that important?

Did you take the advice of the CEOs that you talked to as seriously as you probably should, or did it take a while to learn that lesson?

Well, I think, you know, it always seems important, but then what do you do about it, right?

But what do you do when it's off, or how do you design it, or what's important in the culture, or how many things can you have, all that, I didn't know any of that.

And that's really what the book is about and what I try and explain is, okay, when you're off culture, how do you move it to a better place?

It's gonna, it happens, it's amazing, Even the companies with the very best cultures drift often, but the really great leaders can help move it back to the place where it should be.

So that leads to my next question, and looking for examples of people who did that, 1 of my favorite parts of aspects of the book and how you created it is you found examples that were way outside of traditional tech or leadership examples, you know, that you mentioned in the Shido Code.

Genghis Khan, Shaka Senghor, I just have to ask how on earth did you find all these examples?

Well, it's funny, you know, I've been a student of leadership and culture for many years, and I, you know, I end up reading a lot of things on it, you know, everything from, you know, the art of war, the Hagukari, the, you know, I've read a lot about the Haitian Revolution and so forth, just various leaders in history.

And I always found those 4 to be the ones that kind of taught me the most.

And there's things that you can figure out on your own if you're a CEO and like, okay, that worked or this worked or I behave this way and it moves things that way.

But I wanted to look to the people who did things where I would never have thought of those things and they were super effective for them.

They just happen to be the people who most influenced me and they are, you know, it's funny, I get asked that a lot, it's in a way a weird set of examples.

And, you know, in my mind, it's an obvious set of examples.

When being a student of leadership, is that mostly to be a better leader yourself and an officer at Andrews and Horowitz, or for you to evaluate leaders as an investor, or both?

Well, it's just been something that I've been interested in.

Culture's a very powerful thing, but very few people understand how it works or why it's so powerful.

It turns out to be a much stronger force than a lot of the things that people end up focusing on either in a company or in society.

And so explaining and understanding how that worked has always just been a deep interest of mine.

And you know, it's funny, when I met Shaka, you know, he was 19 years in prison, you know, 7 years in solitary confinement and all that kind of thing, and led a prison gang and so forth.

And most people read his book, and it was a story for them of redemption, how this guy who went to prison for murder came out and became a best-selling author and an activist for anti-recidivism and so forth.

But for me it was a story of leadership and somebody who really understood culture and how to develop it, control it, change it and so forth.

He's probably the most striking example of a culture that you wouldn't know much about.

I love the story about how you met him as well, how your wife invited him to dinner.

You already talked about why he's a good example.

But the use of diagnostics that he talks about, 1 gang does something to 1 of your members, how you respond to that really is a diagnostic for them to figure out.

Understanding culture, truly understanding is difficult.

How much of a role do diagnostics play in that in your mind?

Well, you know, there's always I think it's very important because there's always, you know, what is on the surface and then what's underneath in the actual kind of motivation.

And I think that when you look at that Chaka story where basically he says, okay Ben, imagine somebody in a rival gang steals 1 of your members' toothbrush, you know, what do you do?

And if you take it on the surface, it's like okay, maybe they're interested in dental hygiene and great, you know, let them brush their teeth.

But of course, that was a diagnostic to say, OK, are you weak?

And so how you react is going to, you know, the 1 thing it does is that, well, you have to do something to protect your group.

But on the other hand, if you have too harsh a response, then you've set a very kind of violent tone, a violent culture for yourself.

And I think that, you know, that kind of idea happens in business a lot where somebody will do something, and this is 1 of the most important things about managing the culture, is somebody will do something, and if you're looking at it through an individual lens, And you say, okay, yeah, that person, he kind of took some credit for her work, you know, but like it wasn't that clear, and he's really good and does good work himself, so, you know, maybe I ought to let that go because if I confront him on it, maybe I'll quit and go to Facebook or whatever and then I'll lose a really good employee.

But if you look at that same incident through a cultural lens, that's a little bit of a test for everybody to say, oh, you can just take credit for somebody's work and get yourself a promotion or a pat on the back or a this or that.

And so everybody's gonna go play that game if you let that go.

So, you know, part of being good at managing culture is being able to recognize what it is.

And so that's, you know, a lot of what Shaq ended up doing in prison, which is, you know, it's leadership compared to leadership, not prison compared to business.

But a lot of what he did is easier to see, it's easier to see in somebody else's culture how the mechanics work than in your own where you think of it as just, oh that's how we do things around here.

Yeah, so in looking at those things, diagnostics, there's small things and there are big things.

I think 1 of the examples that you had in the book was a head of marketing at 1 of your companies was great at storytelling, which is helpful in marketing, but also it turns out he was lying.

The 1 you just mentioned, maybe taking somebody's credit for somebody's work is not as big a 1.

How do you decide or how do you think about looking at major examples of culture, the major actions that everybody's going to pay attention to versus the small ones which may have outsized impact?

Well look, I mean I think that a lot of it comes back to, okay, who you are.

So on the 1 hand, like so if you look at, well who's Amazon?

Amazon wanted to be like they came out wanting to be.

You're never going to have to comparison shop because it's always going to be cheapest at Amazon.

So part of the culture necessarily was we're not going to waste money.

And they did all kinds of things to set that.

And so if you see somebody wasting money at Amazon, that's a big deal.

Apple doesn't have that culture, doesn't have that product positioning.

They're building the most beautifully designed product.

And so, look, they spend a lot of money, and if you waste money at Apple, well, you know, that's probably not as big a cultural violation because it's not fundamental to what they want to be in the strategy of the business.

So you really have to start with, okay, who are we?

And then if there's something that takes you off of that, even if it's little, it's important.

You know, here, 1 of the things we want to be, we want to be very respectful and empathetic to the entrepreneurial journey.

So here, in a normal place, if you're late for a meeting, it's probably not that big a deal.

Here, if you're late, it's a very bad problem if it's with an entrepreneur.

Because we do not want to be under any circumstances disrespectful in that regard, because that's off culture for us, not for everybody.

And you have actually even created what I think in the book you would call a shocking rule to demonstrate that if you're late for a meeting here with an entrepreneur, you have to pay, what is it, $10 a minute?

You know, it's funny, because it's a little bit borrowed from Tom Coughlin, who used to coach the New York Giants, and he had this saying, if you're on time you're late.

Here that doesn't quite work as you know it's a pretty neat idea for a football team.

Might need to make a little adjustment to make it work in venture capital.

And I think if I remember correctly in the book it was a thousand dollar fine if you were you were late.

Yeah yeah and people were furious they complained to New York Times so forth but it ended up setting the culture that won them 2 Super Bowls.

Yeah let's come back to the Bushido in the samurai the code of the warrior 1 of the things that I thought was noteworthy and how you described it was just its longevity, you know, hundreds and hundreds of years.

What do you, you know, maybe talk a little bit about the Bushido code for the viewers, but maybe talk also about why you think it lasted so long.

There's a lot that, you know, went into it lasting, you know, for so many years.

You know, part of it was, you know, the fact that the code itself sat above the hierarchy.

So you had the samurai and you had lords and you had all these kinds of things.

But the code was above, like when it came to the behavior of the samurai, the code was above everything.

And because the code outlasts any person, you know, a CEO goes, maybe the culture changes.

Tucson got captured by Napoleon, That changed the culture of Haiti.

But the samurai, the code was always above everything.

And then that code was super meticulously constructed.

So it wasn't just the elaboration of all the points.

So for example, they were an honor culture, which many had were honor cultures.

But the reason for this is similar to in Shaka's situation.

If you're threatened in the samurai, there's no uniformed police or anything.

So if somebody insults you, that could be a diagnostic that they're going to stab you in the head or cut your head off or whatever.

So insults were not tolerated in honor culture.

It got to the point where there's a famous samurai story where a flea jumped on the back of a samurai and another guy said, hey there's a flea on your back and the samurai cut his head off.

And he said, you know, why'd you cut his head off?

You know, he just told you there was a flea in your bag.

He said, I'm not an animal, I don't have fleas.

And so you can't just have that, you know, people cutting people's heads off for such, you know, small slights.

So they had another part of the culture that's super elaborate around politeness.

And politeness was really the best way to show love and appreciation for somebody else by following strictly the rules of politeness, be it how you bow or how you do serve tea or any kind of thing.

And even now, if you go to Japan, it's amazing how much more polite everybody is.

But then they had to design it so that that didn't go too far.

So they had this part of the politeness code, which is without veracity, politeness is an empty gesture.

So not only did you have to show respect, you had to mean it.

And so those kinds of elements really made it last a long time.

They also had great stories and other elements to it.

But it's a very, very well-designed code.

Like a lot of people disagree with some of the virtues that they had.

I don't think we should live in an honor culture today in that same way.

The point of the book was what works in getting to cultural cohesion.

They had, the system was comprised of 8 virtues, is that correct?

Arguably 14, depending how you count them.

1 of the things I thought you made really clear in the book are the examples of you have 8 or 14 virtues that may conflict with each other, 1 of the ways that they helped resolve those conflicts is be very specific with examples of what you should do, how some of those virtues are offsetting as you mentioned.

So that kind of leads into my next question about cultures that go awry.

1 of the cultures that you talked about in the book where they had a lot of different values, whether they lived up to them or whether they were just words, was separate from the fact that it seemed like 1 value was above all else, competitiveness.

And a company that valued competitiveness over anything would do anything that it took to win.

And so I wonder if you talk about, you know, how do companies who have multiple different values that may compete with each other, how do you make sure that 1 doesn't accidentally override the others?

Yeah, I think that, you know, the big, and then the place where Uber went astray, and I think the mistake that's most often made on this is basically the ethical line.

So we need to make the, why do you violate ethics?

We need to, like there's some business imperative that's driving you.

You know, something in your mission and your goals, in your ethos that will, if not, if you don't make very explicit what the ethics are, then you're gonna cross that line.

And that's kind of what happened at Uber, where they were so good at being competitive that where that line was got very fuzzy, and they had quite a few violations.

Probably the great counter example to this, which I use in the book, was Toussaint Louverture, the leader of the Haitian Revolution.

And he did, you know, maybe the most important thing he did, the most important rule he put in place in winning the only successful slave revolt in human history, was this idea that his slave army went pillage.

And you go, well, okay, they don't pillage, that doesn't seem like that big a deal.

And you have all the European superpowers, the Spanish, the British, the French, fighting for control of the sugar.

They're all basically paying their mercenary military forces through pillaging and the perks, the spoils of war, so to speak.

But Toussaint gained this tremendous advantage by being very, very explicit about not pillaging.

He outlawed pillaging and he said, look, we're fighting for liberty.

You can't achieve liberty by taking people's liberty.

And the stories of the time are just incredible, where you see the reports of the Spanish Army moving in, you know, setting the plantations on fire, killing all the animals, stealing all the stuff, and then this slave army moves through, they're half naked, they're starving, and they literally touch nothing and go right through.

And it was through that culture of liberty that they actually gained the support these African slaves of the white Europeans on the colony where they supported Toussaint's forces over the European armies which you know quite remarkable but it was the thing that really created cohesion around the loyalty of the Army, which was amazing, the discipline of the Army, all came out of this idea that we're fighting for a higher purpose.

And so, yes, winning the war is important, just like being competitive is important for a business, but not as important as what we're fighting for.

And that ends up being a really, I think, important cultural lesson.

Yeah, I think you make the point in that regard that the why, when you're talking about ethics, is important, and It sounds like Tucson did a great job explaining the why.

We're not trying to win the war, we're trying to win our freedom.

At Okta, 1 of our core values is integrity and when we talk about it, you know, you don't talk about why do you have a value called integrity for obvious reasons.

we say, what we're trying to do is a decades-long vision.

Our customers need to trust us for what we do for them.

And integrity is an integral part of that.

Yeah, well, and there's a great story of that, which is it.

And the samurai has a great saying on ethics, which is, in ordinary times you can't even tell.

But when something happens, all is revealed.

So, look, it makes sense for, you know, integrity, honesty, can you trust Okta is a big element of what the business is about because, hey, if we've got all your credentials, that's a heck of a problem if you can't trust us, if we slip in any way against that promise of protecting your credentials.

And so early, very early on the business, when the business was not going as well as it is today.

And we were trying, we were running up against the B round of fundraising, which was the first round, you know, after we invested.

And like the company was missing their quarters and so forth and really needed to make the quarter.

And there was a deal, I think it was with Sony, and the sales representative had promised a feature, not that we were never planning on building, but we weren't planning on building that fast.

And we had to decide, OK, we're going to take that deal, make the quarter, and not tell them when the future was really coming or were we going to tell them.

And it ended up being really important to The way everybody behaved for the rest of the time at Okta, what Todd did, which is he said, look, we're going to go ahead and miss the quarter.

And thankfully, we were able to raise money from Coastal Ventures.

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A Conversation With Ben Horowitz, Author of "What You Do Is Who You Are"