Creating a culture

Whether you lead one team or 100 teams, you no doubt want to create and reinforce an excellent culture. When companies are competing for the top talent, and when they all offer compensation and perks that would make your parents blush, culture may be the last true differentiator.

But building a culture, and preserving it through years of growth and change, is incredibly hard. I know, because I’ve worked at start-ups that failed to build a coherent culture at all, and I’ve worked at scale-ups who had a great culture and lost it.

So, what’s the secret to creating and defending an awesome culture?

Before you can build and maintain an awesome culture for your team or company, you have to understand what culture even is. In the sense that we mean it, the dictionary says it’s:

The values, typical practices, and goals of a business or other organization, especially a large corporation.

The key thing to observe in this definition is that culture comprises three components:

1. Values,
2. Typical practices, and
3. Goals.

Looking more closely at these, we can come up with some examples. A “value” is something like “integrity”; it’s a stated source of pride for the organization, an ambition. A “typical practice,” then, might be “standing by your word and doing what you say you’ll do.” Finally, a “goal” could be “to build the strongest teams.”

Among these three components of culture, only one has incentive value, and it’s probably obvious which one. A value is just a statement, and a goal is a target that might not be achieved. Only typical practices can be managed in the present moment.

Culture is the sum of behavior.

Some behaviors will align to the stated values and help move the team or company toward its stated goals. Others may not.

To achieve the awesome and durable culture that you want, you must control the behaviors, and your incentives must reward behaviors that align to the stated values and goals, and they must discourage or even punish behaviors that do not.

People don’t do what you expect but what you inspect.

—Lou Gerstner, CEO of IBM

This might sound quite rudimentary. It is. The fact remains that many companies take the first step of writing down the things they value, and carefully defining their goals, and then fail to align the day-to-day incentives to encourage the behaviors that will get them there.

Netflix made a big deal of this in the preamble of their famous “culture deck,” where they point out that “integrity,” “communication,” “respect,” and “excellence” were proudly written on the lobby walls at Enron.

Either Enron actually had different values, or they simply rewarded behaviors that were not aligned to their stated values.

Your incentives must align to your values.

What’s worse, sometimes a company’s observable incentive behaviors are directly in conflict with its stated values. For instance, a company might have a value like “respect,” and expect that all employees treat one another with kindness in spite of differences of opinion, team loyalties, or personal traits.

That same company might be observed to promote that one engineer who is an absolute savant and could write a breadth-first binary tree search in Brainfuck with one hand while solving a Rubik’s cube with the other, but who generally treats everyone around them like human garbage.

Guess what? If you promote assholes, you are not incentivizing respect. People notice things like who gets promoted, who gets a call-out in the all-hands meeting, who gets to flex the rules around work-from-home schedules with impunity, and so on.

Creating an amazing culture means knowing your values, creating incentives for values-aligned behaviors, and living those behavioral guidelines as an organization (team, or department, or company).

It’s as simple as that.

Here are some questions for you:

1. What are your values, as a leader?

2. What behaviors demonstrate your values to others?

3. What behaviors contradict your values, that you should reconsider?

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