- The speaker, Jason, discusses his observations about culture and how to efficiently scale culture.
- He has worked at Disney, Amazon, Hulu, and Vessel, which have influenced his perspective on culture.
- Culture is defined as how people act when no one is looking, and it is important for CEOs and founders to set the example.
- Jason had an "aha" moment about culture when he visited Disney as a child and was impressed by their attention to detail and quality.
- Walt Disney was explicit about the culture he wanted for the company and backed it up with his actions.
- Disney had mechanisms in place, such as Disney University, to teach and reinforce the company's values and principles.
- Jason also discusses Amazon's explicit nature in defining their values and principles, as seen in their 14 leadership principles.
- The challenge is scaling these values and principles across a large organization like Amazon.

- The Just Do It Award was an effective mechanism at Amazon to promote values and principles within the company.
- The award was given to individuals who had ideas that aligned with Amazon's values and principles and took action without asking for permission.
- The award celebrated a bias for action and reinforced the importance of good judgment and values.
- Examples of award recipients included a person who saved money by turning off lights in vending machines and another person who fought against bureaucracy.
- Having a culture that acts as both a magnet and a repellent is important for attracting the right people and maintaining a strong culture.
- Amazon's culture promotes healthy debate and does not compromise for the sake of social cohesion.
- Living up to the company's culture is a daily challenge, but it is necessary to maintain a successful enterprise.

- The speaker discusses the importance of having a strong company culture and the challenges of maintaining it.
- They suggest that companies should be explicit about their values and write them down.
- It is important for leaders to "walk the talk" and be authentic in their actions.
- The speaker emphasizes the need for creating mechanisms that work for the company's culture as it scales.
- They mention a quote from Michael Dell about hitting a "brick wall" and the importance of preparing for scaling.
- The speaker shares their experience at Amazon and how few situations required them to overturn decisions made by their team.
- They talk about the values and principles they brought to Hulu and the influence of Disney on their approach.
- The speaker discusses the importance of experimenting with cultural mechanisms and being flexible to drop those that don't work.

Jason, a speaker who has worked at Disney, Amazon, Hulu, and Vessel, discusses the importance of culture and how to efficiently scale it. He emphasizes the need for CEOs and founders to set the example and defines culture as how people act when no one is looking. Jason shares his "aha" moment at Disney as a child and how Walt Disney backed up the desired culture with his actions. He also discusses Amazon's explicit nature in defining their values and principles, as well as the challenge of scaling them. Jason highlights the effectiveness of mechanisms like the Just Do It Award at Amazon in promoting values and principles. He emphasizes the importance of having a culture that acts as both a magnet and a repellent, promoting healthy debate, and not compromising for social cohesion. Jason suggests being explicit about values, "walking the talk," and creating scalable mechanisms. He mentions the importance of preparing for scaling and shares his experiences at Amazon, Hulu, and Disney. Lastly, he discusses the importance of experimenting with cultural mechanisms and being flexible to drop those that don't work.

Jason Kilar is the former CEO of Hulu and Vessel, and an early executive at Amazon. He joined us at The Scaleup Offsite to talk about establishing and scaling a company’s culture.

Key takeaways:

Culture starts with what you do when nobody is looking.

How a trip Disney World as a kid made Jason obsessed with companies and cultures that, at scale, stand above others. After he landed his first job at Disney, he came to observe the following cultural best practices:

- Be explicit about what you want the culture of your company to be.
- Walk the talk. Walt Disney would stop to pick up the smallest piece of litter at the theme park, which reinforced the message that attention to detail was super important.
- Embrace mechanisms Invent or use good processes that can be repeated and delivered at scale.
In Jason’s time at Amazon, the company had a “just do it” award, which served as mechanism for reinforcing great behaviors from employees. Everything from saving on electrical bills to pushing back on bureaucracy.

When you think about your culture, think of it as a repellent as much as a magnet. You want some people to feel like it’s not for you.

A challenge with great cultures is that you have to live up to them every day. You will be tested often, and you need to fight for things that are important to your value and principles.

Recommended reading:

Amazon’s Leadership Principles - https://www.amazon.jobs/principles

This talk took place at The Scaleup Offsite, a private CEO gathering hosted by Y Combinator Continuity and Greylock Partners in April 2017.

I was asked to speak about culture, and I'm going to do it through 2 lenses, my observations about culture, and then really importantly for this day is my observations of how to efficiently scale culture.

And I wanted to share with you sort of the places that I've invested a lot of my professional time over the last 20 years and why that's influenced this talk today.

This is not changing, but this is changing down here.

So my career, first gig was at Disney just for a couple of years.

Jeff Bezos was my manager, I'll get into what I did when we get to that part.

Was the founding CEO of Hulu for its first 6 years, spent a lot of time on culture, scaling culture, et cetera, and then founded and ran a company called Vessel that we recently sold to Verizon.

So let's talk about culture, and I'll start with just a 15 second definition of what Webster considers culture.

This is the boring definition, which is the pervasive values, beliefs, and attitudes that characterize a company and guides its practices.

The way I think about culture is basically it's how we act when no 1 is looking.

In those late nights when you're working, slogging through something, and nobody's looking at you, what are the decisions that you make?

And to be very, very blunt for people in this crowd, which are CEOs and founders, it's really how you act when no 1 is looking.

The founding CEO of Hulu, it was very clear to me that the culture of Hulu really was going to be how I acted a lot when no 1 was looking, because people model that over time, and then it perpetuates.

And so it really is how you act when no one's looking.

So I had a bit of an aha moment when I was a kid as to what culture was and why the heck it actually mattered and could actually be very, very important for companies that scale and scale successfully.

And so here's just about 45 seconds of context.

1 of the things that was big for all Pittsburghers is this place called Kennywood Park.

And Kennywood Park is a local amusement park.

It's not much to look at, for those of you that have seen other theme parks or amusement parks, but this was everything to me when I was 789 years old.

And my family, when I was about 10 years old, actually went on its first vacation outside of the state of Pennsylvania.

And we hopped into our Chevy Bovill, 12 passenger van, which is what was needed to have 6 kids and 2 parents.

We drove all the way down to Orlando, Florida, and we went to the Magic Kingdom.

And I remember like it was yesterday that when we entered the Magic Kingdom, this is what I saw.

And for those of you that have been to Orlando and have been to the Magic Kingdom, you've seen this as well.

So this is the come out from under the train station and you see Cinderella's Castle, in this case Sleeping Beauty's Castle, and Main Street.

For a kid who had only had the context of Kennywood Park and the Jackrabbit roller coaster, to see this and to see the design and to see the forced perspective and to see the narrative and the storytelling, it changed my world.

And then to be able to see something so unbelievable at that quality, It literally, and this is no exaggeration, it kind of, for me, set off a bit of an adventure to find out how is it possible that 1 company, the Walt Disney Company, could perform at a level that is so incredibly high relative to others, like Kennywood Park and Cedar Point and all these other places that certainly had a business, but nowhere near as amazing as the Walt Disney Company.

So I did what most people would probably think is silly.

I did everything I possibly could to learn about Disney and then ultimately get a job at Disney.

So back then, they did annual reports that you had to request through the mail.

And I would request annual reports all the time, even though I wasn't a shareholder.

In college, I did all I could to get an internship at Disney.

What finally landed me an internship at Disney was sending a comic strip of myself to Michael Eisner and his direct reports.

And so this was the comic strip where back then there was a movie called Honey, I Shrunk the Kids, and I basically used that as a narrative, and I shrunk myself into the envelope and landed on Michael Eisner's desk, and I used all the different instruments on his desk to demonstrate my unique capabilities.

And thankfully it got their attention and I got an internship and that led to my first job after school.

So but I mention all this just because I was so obsessed with how the hell does Disney do it?

How the heck do they create something at scale that is so much better than everybody else?

And there's a lot of answers to that question, but I will say that a very, very important part of it in Disney's case was culture.

And specifically, there was 3 things, and this really is sort of what I hope to impart on you today during these 20 minutes, which is, Walt Disney was explicit about what he wanted the culture of the company to be.

It didn't happen by accident, he was very, very explicit.

So not only did he talk about the values and principles of the Walt Disney Company, he backed it up each and every day when people were looking and when people were not looking.

And then finally, and this is probably the most important element for today's conversation given the theme of the day is Disney got mechanisms.

And I'll explain what I mean by that in just a second.

So what do I mean by saying that Disney was explicit?

He said this kind of thing probably 10,000 different ways again and again and again and again.

And this is as Reid was saying just now, the repetitive nature of communication is so bloody important as an operator, as a CEO, as a founder, and he got this.

And so basically a thousand different ways to say attention to detail and quality matters.

So he was very, very explicit about that.

Second thing is, boy did this guy walk the walk.

So it was legend that Walt Disney would pick up pieces of paper in the theme park any time he saw it, and it didn't take long for everybody in the company to realize, wow, it sounds like cleanliness is really important for the Walt Disney theme parks, and understanding that attention to detail is a big part of that.

And I want to stop by helping people understand what mechanisms are, which is, you know, the way that I define it is good processes that can be repeated and deliver for and at scale.

Because when you're, as Sam and Reid were saying, when you're a team of 30, good intentions are good enough.

But when you're a team of 1,000 or 10,000 or 300 plus thousand as the case is with Amazon right now, good intentions are a recipe for disaster and certainly failure.

And so I'm going to just mention 1 mechanism that Walt Disney created, which is Disney University.

And Disney University is dedicated real estate, you know, both on the east and west coast for Disney, and in fact in all the theme parks around the world, where anybody who works in the company goes to Disney University to learn the values and principles of the Walt Disney Company.

There's a whole lot of lore about Walt, there's a whole lot of things about quality and intention and detail, but it's just 1 of many mechanisms that scale, whether Disney was a 5,000 person company or a several hundred thousand person company as it is today.

That is and will remain, I believe, a very, very important mechanism for culture for Disney.

I thought I'd talk about something that's probably a little bit more relevant to everybody in this room today, which is Amazon.

For a period of time I ran the books, music, and video businesses and then ran what was called Worldwide Application Software.

So did a lot of interesting things like the marketplace business.

There was incredibly smart engineers inside the shopping cart organization that created and launched Amazon Prime, fulfillment by Amazon, just a whole lot of fun stuff.

But in 1997, Amazon was quite small, relatively speaking, and it was just a bookstore.

And this is a picture from 1997 of Jeff at that stage.

So I wanted to talk about the explicit nature that Jeff took to be very clear as to what were the values and principles of Amazon.

And So he took the lead on writing 14 leadership principles.

And if you haven't had a chance to read the 14 leadership principles of Amazon, I strongly encourage everybody to do so.

I think it's quite inspirational and it's a very good exercise in very precise writing and very economical writing.

Jeff is an incredible writer, and he's very, very good at kind of communicating just enough, but not too much.

And I think those 14 leadership principles are probably the best example you'll find.

Now, The 14 leadership principles are very explicit.

They talk about what Amazon cares about, what they don't care about.

And as Reid and Sam were saying earlier, a lot of companies do this.

They put them up on the wall in the lobby.

But the challenge is you have to live up to them each and every day, and you have to figure out how to scale that across an organization.

And at Amazon from 97 through to obviously today, a tremendous challenge has been scaling, which is how do you go from a situation where good intentions is good enough to knowing that you're going to hit a wall because there's no way good intentions are going to scale to tens of thousands, hundreds of thousands of people.

This is just 1 of well over 100 fulfillment centers, and these are filled with team members.

Just imagine those all over the world, and needing to have a common sense of values, common principles, how do you do that?

The short answer is that you can't do it with good intentions, and you absolutely need to invent and leverage mechanisms to do it.

And so I thought I would just share with you 1 that was particularly effective for Amazon for many, many years, which is the Just Do It Award.

Now this might sound a little silly, and to be very clear, what the Just Do It Award was is at a very kind of big event, which is the all-hands meetings, people were given old, smelly Nikes.

That was the extent of the physical aspect of this award.

It was called the Just Do It Award, and you were given an old, smelly Nike, typically a former basketball player's shoe to make it nice and big.

Everybody in Amazon wanted desperately to have this old, an old smelly shoe on their door desk.

The Just Do It Award was given to anyone in the company.

It could be a new team member, a long-tenured team member, senior person, somebody right out of college.

And it was given to somebody who basically had an idea that could move the company forward in a way that was consistent with the values and principles of Amazon, and they did not ask permission, and they just did it.

It did not have to be a successful effort, but it had to exhibit good judgment, values and principles that were consistent with Amazon, and the notion of just doing it.

This reinforces a bias for action, which is 1 of the very important leadership principles of Amazon.

It's a public celebration of people who are living up to the principles and the values of Amazon each and every day.

It might sound silly when you look at this old ugly shoe.

1 of the most effective mechanisms to grow and nourish the culture of Amazon.

I'll give you 1 example of, 2 examples of the awards that were given out.

So 1 was given out to somebody in a fulfillment center, I think it was in Campbellsville, Kentucky, and it was a woman who had an idea to, in the spirit of frugality, all the fulfillment centers always had Coca-Cola machines, so during break you could go and get a Coke.

She basically opened up the vending machines in Campbellsville, Kentucky, and basically turned the fluorescent light bulbs just a little bit so they were out.

And because by her way of thinking, we don't really need to have lighted Coca-Cola signs.

It's just fine if they're not lit, because it's still going to be cold.

And so if we do that, we can save some money every year on electricity, and we can use that savings to maybe lower prices for consumers.

And this was rolled out across the world, and she was given an old shoe, and it was like a really important moment for the company.

And when you go through something like that, it is the stuff of legend.

Here I am talking about it 10 years later.

That's how important something like that was.

So, and then There was another fun award that was given out to somebody who basically said, listen, I don't think we should allow, at headquarters we were leasing a big hospital called the PacMed building, And having dogs in the office was very important.

But somebody who was well-intentioned started a process of having the dogs sign in.

Not the dogs, but the owners of the dog had to sign in when the dogs came in.

And this person basically said, this is ridiculous, We have to abolish this, et cetera.

And I raise this 1 because this was as important because it elevated great action to basically fight bureaucracy.

And when you're scaling a company, bureaucracy, which is bad process, creeps in each and every day.

And to be able to have mechanisms that celebrate the destruction of bureaucracy, that's just as important as things that celebrate frugality.

And so the Just Do It award was something that was incredibly effective for Amazon.

And I just bring it up, perhaps, to spur some ideas in your companies for how to think about scaling culture.

Lisa and I actually spent time at Hulu together.

And 1 of the first things that we did at Hulu was to sit down and actually be explicit about our culture.

And so I sat down and wrote a document called What Defines Hulu?

And you can actually search for this online.

There's an original version, it's since changed, but there's an original version that's posted on the internet if you search for this title.

This is Hulu's version of the cultural document.

And I mention it because it's 1 of those things where this is a narrative that's not very easy for most people to fall in love with.

Most people read this document and have read this document and basically say, good for you, not for me.

And that's exactly what we wanted to do with this document and with our culture, which is if a culture is motherhood and apple pie, it really isn't effective I'd argue.

This is basically a very challenging narrative, a very challenging document, and it act as a magnet for the people that we wanted, and just as importantly, it act as a repellent to make sure that people who would not be a good fit for our values and principles never even bothered knocking on our door.

And Reid and Sam talked about the things that you need to do through interviewing, which we absolutely did at Hulu as well in terms of, I think probably for the first 500 team members I interviewed everybody as well, is you obviously need to interview for values and principles in terms of alignment with who you are.

But it's very, very important when you think about your cultures to make sure that they're a repellent as much as they are a magnet, because then you know you actually stand for something and you're actually probably gonna be effective so long as you marry it with mechanisms and you walk the talk.

This is something I do wanna highlight about Amazon.

There's 1 other thing I wanna mention before I get to Q&A, which is Amazon took a bit of a hit in the New York Times about a year ago, maybe a year and a half ago, about its culture or its workplace conditions.

And I feel very, very strongly about this that, and Sam mentioned this about how do you build a company where people want to be there for a long period of time.

So I was at Amazon for 9 years of my life, and by the way, I easily could have been there my entire career.

I had a lot of desires and goals about starting my own things, but it is an incredibly special place.

My peers, 3 of my peers who are there today, they are there 19 years, 19 years, and 20 years in terms of other direct reports of Jeff.

You do not get that kind of tenure unless you have a very special culture that works for the people that are there.

And I wanna highlight this 1 element because this is a good example of the right kinds of cultures being both magnets and repellents.

This is 1 of the leadership principles of Amazon.

It says, have backbone, disagree, and commit.

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting.

Leaders have conviction and are tenacious.

They do not compromise for the sake of social cohesion.

Once a decision is determined, they commit wholly.

So I want to highlight 1 sentence, which I think is very unpopular in Silicon Valley.

I have been sort of, you know, kind of able to interact with a lot of companies, both down in Los Angeles with Hollywood and Hulu, both here in terms of founding and starting a company here in the Valley, and then also in Seattle, of course.

Not many companies insist that there be healthy debate even when it's awkward in terms of not seeking social cohesion.

It's something that I bet 90% of humans out on the sidewalk would absolutely not be comfortable doing.

And therefore, they should never apply and go work at a place like Amazon.

But I will say that having lived it for 9 years This is 1 of the you know Can reasons why Amazon is such a successful enterprise?

And and it's such a special culture and I think will continue to be a special cultural enterprise Which is you know taking those hard hard moments to say this is what we stand for And it might not be for 90% of the people out there, but it is for the right types of people that wanna be innovators and pioneers at a place like Amazon.

So the last thing I'm gonna say before Q&A is that 1 of the other challenges with great cultures is that you have to live up to them every day.

And I'll mention, because Elisa's here at Hulu, there wasn't probably a week that went by during the first 6 years of Hulu's life, where it obviously started at 0 and went to a billion dollars in revenue in the first 6 years of its life, where we were not tested in terms of how we behaved and the decisions we made, and making sure that they were consistent with the values and principles of who we aspire to be.

And that's hard, because there's a lot of times where you feel like, oh, if I just did this, it'd be a whole lot easier.

But it turns out, taking that moment to let someone who is beloved and a high performer exit the company because they don't have the values and principles that you hold dear, those are tough moments as a leadership team.

To be able to fight for something that is incredibly important for your values and principles But maybe members of your board or members of the ecosystem aren't in favor of.

But I do think the prize is worth it, which is when you have a great culture, your chances of creating a company at scale go up so much.

But it is a real challenge, and I wanted to be very, very honest about it.

So the takeaway for me, in terms of my observations of culture, and I hope they're helpful for you before we get to Q&A, is to be explicit, and I think a lot of companies in the Valley and founders and CEOs are explicit.

They take the time to write down what their cultures are and who they want to be.

It sounds simple, but really, really hard.

And then finally, embrace the mechanisms.

It means inventing mechanisms that work for your companies.

They have to be authentic and genuine in terms of the types of personalities that your companies are.

But our experience, and on this 1 I'm specifically referring to Amazon, there was a funny quote that Michael Dell gave us where It was 1997, 1998, and we sought counsel from Michael Dell, who had scaled Dell back in the day, and said, what advice would you have for us?

And he said, well, the only advice I'd give you is that there's a brick wall in front of you, and you can't see it.

And we were like, well, what do you mean by that?

Like, just trust me, there's a brick wall and you're going to hit it and it's going to hurt.

And so I would start thinking now about what you're going to do after you hit that brick wall.

And it got a lot of us thinking about what we needed to do to prepare for scaling.

And so thinking about mechanisms and going from a well-operating company with good intentions, which can be done under 50 people, and thinking about what you have to do to become an incredible company operating with 5,000 people, 50,000, 500,000 people, that's what mechanisms are all about.

And I think we have a couple of minutes for some questions if there are any.

When it comes to disagreeing to bit, it's something I personally struggle with.

With regards to how do you balance empowering the folks you hire with then yourself stepping in and disagreeing with the decisions they've made or stopping those decisions?

So my, I'll go back to the Amazon 1 because that's where that principle originally came from, is that 1 of the other principles which I didn't highlight here is, great leaders are right a lot.

And so, and the reason why I mention it is that, you know, I think when a company is operating well, a lot of the best decisions are already made and never get to you.

And so there isn't a lot of stepping in and basically kind of overturning or vetoing, et cetera.

Because you've invested so much time and energy hiring people of great judgment, and obviously the other values and principles that you stand for, that my experience at Amazon was that there were relatively few situations where I was literally having to go and completely turn something upside down because it was a 180 versus what the group thought versus what I thought, or quite frankly, I think Jeff would say the same about how often he would come in and completely eviscerate a lot of work that a team had done on certain things.

Now when it happens, it's for a really good reason.

And 1 public 1 that has been covered already in the press is the Echo team was working so hard and was so excited about the technology that they had invented.

And they thought that a certain response time was good enough.

And Jeff, you know, kind of somewhat famously came in and said, I'm going to give you the bad news right now and it's best to have the medicine, but the response times have to be sub 750 milliseconds or something like that.

And yet everybody was dejected and it was an incredibly painful meeting, but it turned out that was a very important moment and that judgment obviously carried the day.

But the short answer to your question is that I don't think it should happen a lot.

And if it's happening a lot, I would ask if you've got the right person in the role, if there's a certain person that you're constantly disagreeing with.

So you talked a lot about the Amazon values, and I worked at Amazon for a while too and pretty familiar with them.

When you went to Hulu, were there any values or any sort of, let's say, iterations, or did you kind of look at the values from Amazon and say, here's the 1 that was missing, or here's the 1 I want to add or kind of build upon.

Yeah, it's funny, I took more from Disney than I took from Amazon when it came to Hulu.

And by the way, I think this has been written about publicly as well.

Jeff, I think, has taken a lot of inspiration from Walt Disney as well.

I think There's so much that leaders can take from Walt Disney.

I'd say that I tried to start with a clean sheet of paper and like a sponge, you want to basically do everything you can to be inspired by all the things that you've been exposed to, and Amazon clearly has had a massive influence on me and how I think.

But I also look back at Disney and broad things there.

Like probably 1 of the manifestations of that, just to kind of give you sort of an output, I think that a lot of people would look at Hulu just from the service and say, wow, there's a design there.

There's an appreciation for aesthetics that is unusual.

And I think that was quite different from Amazon, for example, where I think Amazon is more of a utilitarian design as opposed to an aesthetic design.

And so we did think quite a bit about what we wanted people to say about us when we weren't in the room and how that would be different from Amazon and so So they're nuanced and it's probably longer than than is allowed given the time But but I very much was careful not to do a cut and paste because I thought that Given the mission of Hulu it really deserved its own culture and different things which were not going to be identical to Amazon.

So in a lot of aspects of well-run startups today, there are themes like on the business model you test things and see if they're right and you change if they turn out not to be right, similarly with engineering.

Are there ways in terms of culture development where maybe a concise version of the question would be, are there cases where you've had to, you've tried something with culture, it actually hasn't worked that well and you've changed it based on the experiments?

So I think that, make no mistake, I'll just talk about mechanisms.

I've seen a lot of mechanisms that actually are quite horrible, and they end up being bureaucratic.

Because bad process is bureaucracy, good process is a mechanism.

You're thinking, you're creating, you try something and sometimes it works fantastic and other times it doesn't.

Probably a mechanism that all of you use is a weekly meeting or a monthly meeting with everybody in the company.

That's a mechanism and I've seen those executed really, really well and I've seen them horrible.

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Scaling Culture | Jason Kilar, former Hulu CEO