CHAPTER NINE
CRAFTING YOUR COMPANY'S CULTURE
Return Path has a very distinct culture, and I'm not going to prescribe it as the culture you should build for your own company. Any number of cultures can lead to success. The essential point is to realize that every company has a culture, whether it's a deliberate enactment of the company's values or an accidental accretion of behaviors and vibes. Don't let the latter creep up on you. Whatever you do, be deliberate!
INTRODUCING FIG WASP 879
I always draw on great business books to become a better CEO, but it was in a book on evolutionary biology, Climbing Mount Improbable by Richard Dawkins, that I found a rich metaphor that is applicable to business in many ways.
There are over 900 kinds of fig trees in the world. Who knew? I was dimly aware there was such a thing as a fig tree, although quite frankly I'm most familiar with the fig in its Newton format.
Some species reproduce wildly inefficiently—like wild grasses, whose pollen is spread through the air; with a lot of luck, one in a billion (with a “b”) lands in the right place at the right time and propagates. At the opposite end of the spectrum stands the fig tree. Not only do fig trees reproduce by relying on the collaboration of fig wasps to transport their pollen from one to the next, but there are over 900 different kinds of fig wasps—one per tree species. Only the right kind of fig wasp can successfully help pollinate a given fig tree (fig wasp 879 is a distinct species: somewhere between Acophila mikii and Wiebesia vidua.) The two have evolved together over thousands of millennia, and while we humans might take the uninformed view that a fig tree is a fig tree, fig wasps have clearly figured out how to differentiate one species from another, all in the name of propagation.
So what the heck does this have to do with business? Plenty, but I want to focus on the lessons about business culture first.
I assume that not only would most of us not be able to discern one tree or wasp type from another, but that we also wouldn't be able to discern any of the 900+ types of trees or wasps from thousands or hundreds of thousands or millions of types of trees or bugs in general! Here's the thing: I know hundreds of Internet companies. I know dozens of email companies. And I can tell you within five minutes of walking around the place or meeting an executive which ones I'd be able to work for, and which ones I wouldn't. The older and bigger the company, the more distinct and deeply rooted its culture becomes. The lesson: cultivate your company's culture with same level of care and attention to detail that you would your family—regardless of your role or level in the company!
Return Path SVP of People Angela Baldonero on Saying No to Status Quo
Every startup lives or dies by its team. Products are important, but people come first. Below, Angela Baldonero, my long-time business partner as our Senior Vice President of People, talks about some of the things she believes define a great “people-first” company.
This is an exciting time to start a company, and it's an even more exciting time to build an incredible culture and workplace where people can create, connect, and contribute.
It's relatively easy to create a standard, if better-than-average, company, with fun perks and all the systems and programs that you're supposed to implement as you grow. As you hire more people in more locations and set them to work on increasingly complex problems, you will want to create some level of structure to maintain efficiency and avoid duplication of effort. In order to create something extraordinary, CEOs must resist the average, common-sense policies, systems, and procedures.
A new world of work is being born around us. In this new world, most traditional HR practices are ineffective and irrelevant. Instead, there are four key areas you should focus on:
- Say no to useless brilliance. We've all worked with that brilliant person whom an organization thinks it cannot live without. Unfortunately, that brilliant person can't communicate or work on a team. So, most organizations put them in a box in an attempt to minimize the damage they inflict. It never works: the boxes pile up, and so do the silos. And no matter how well constructed the box is, that brilliant person can demotivate 20 co-workers—without contributing much in their silo. It's not worth it.
- Say no to policy paralysis. Policies and rules are created to guard against people doing stupid things to control time and resources. Examples: paid time off, sick time, expense policies, specified work hours, social media guidelines, dress codes, and—my favorite—“the code of ethics.” The reality is that 99 percent of your people will make great decisions every day as long as they have clear direction. Misses can be resolved quickly with a clarifying conversation. Instead of locking things down, set them free: say no to creating a policy for every situation you might encounter. Instead, experiment with trusting people to use their judgment.
- Say no to values dilution. This is the toughest category and the one that requires the most courage. Saying no to things that conflict with your organization's values is essential to ensuring that your culture lives and thrives. For example, if you value transparency, then you need to commit to sharing the good, the bad, and the ugly openly (and often). Making endless exceptions will quickly lead to meaningless values posted on the wall.
- Say no to executive dysfunction. We've all seen the all-important and all-knowing executive team—the team that has all the answers but somehow isn't able to execute. I've seen too many executive teams where personal relationships and politics are the real behind-the-scenes drivers. Business is done after hours, over cocktails, and not in broad daylight. Personal agendas trump team goals. People smile and nod politely in meetings, then leave and tell you what they “really think.” Don't allow this. Be fiercely committed to the health of the executive team. Check in with each other on individual and team development, and be rigorous about giving each other feedback and holding each other accountable. Be brutally honest with one another and exhaustive about looking in the mirror. Say no to executive dysfunction, personal agendas, and being too busy to live your values. It will be the best team you've ever worked with.
As your company grows and scales, you have a critical choice to make. The temptation is to lock things down—to create guidelines that will ensure that bad decisions are averted. Don't get caught up in the “What if someone screws up or makes a bad decision?” discussion. Turn the conversation around and focus on your best people. What if everything you do is focused on your top performers? The people you trust? The people who make great decisions? The people who can think critically and creatively and can handle a bit of ambiguity?'
Set your people free to focus on important, high-impact work and solve challenging business problems. That's how companies will win now.
Angela Baldonero, SVP of People, Return Path
SIX LEGS AND A PAIR OF WINGS
I opened this section by claiming that I wouldn't insist on one type of culture over another. You can be fig wasp 328, 236, or 812. Just choose the one that matches your tree.
It's time to qualify that statement somewhat. There are certain values that every company should have—just like every fig wasp has six legs and a pair of wings. If you want your company to be a world-class organization, there are two things you absolutely need: respect for your people and an environment of trust. You can succeed financially without those things to some degree, especially if your business is taking off due to market forces and timing. But why would you want to merely succeed when you could be great?
LET PEOPLE BE PEOPLE
I strongly believe that work-life balance is critical. (For complementary viewpoints, see Danny Meyer's contribution to Part Five on self-management, and Startup Life by Brad Feld and Amy Batchelor.) I've worked in a grind-it-out 100-hour-per-week environment. Quite frankly, it sucks. One week I actually filled in 121 on my hourly time sheet as a consultant. If you've never calculated the denominator, it's only 168. Even being well paid as a first-year analyst out of college, the hourly rate was dreadful. Thinking about that 121 gives me the shivers today—and it certainly puts those 40, 50, 60, even 70-hour work weeks in perspective. All of those still let you have a life. An average week of 40 hours probably doesn't make sense for a high-growth company of relatively well-paid knowledge workers. At 121, you barely get to shower and sleep.
While you may get a lot done working like a dog, you don't get a lot more done hour for hour relative to productive people do in a 50-hour-per-week environment. Certainly not twice as much. People who say they thrive on that kind of pressure are simply lying—or, to be fair, not lying but rationalizing the amount of time they spend at work. Your productivity simply diminishes after some number of hours. As a CEO, even a hard-charging one, I think it's better to focus on creating a productive environment than an environment of sustained long hours.
Work has ebbs and flows just like life has ebbs and flows. As long as the work generally gets done well and when you need it, you have to assume that sometimes people will work long hours in bursts, and sometimes people will work fewer hours. Work-life balance is not measured in days or even weeks, but over the long term. To that end, I've always believed in “letting people be people” as a means of trading off freedom and flexibility for high levels of performance and accountability. At Return Path, we have always tried to create an environment where people can be people by:
- Giving generous maternity leave and paternity leave, at least relative to norms in the United States.
- Having a flexible “work from home” policy.
- Allowing even more flexible work conditions for anyone, and especially new parents: three or four days per week if we can make it work (with salaries reduced pro rata).
- Letting people take a six-week paid sabbatical after seven years, then every five years after that.
- Having an “open vacation” policy where people can take as much vacation as they want, as long as they get their jobs done.
The result of this philosophy is that we have an incredibly productive environment where people have fun, lead their lives, and still get their jobs done well and on time. The details of your own policies can vary, as long as they reflect an essential respect for your team members' lives.
BUILD AN ENVIRONMENT OF TRUST
Trust is the bedrock of relationships. Relationships are the bedrock of an organization. Anything you can do to foster trust strengthens your organization. At the end of the day, transparency, authenticity, and caring create an environment of trust.
What are some examples of that?
- Go over the actual board slides after every board meeting, letting everyone in the company know what was discussed.
- Communicate bad news early and often. People are less freaked out, and the rumor mill won't take over.
- Manage like a hawk. It's important to get rid of poor performers or cultural misfits early, even if it's painful. You can never fire someone too soon.
- Follow all the rules yourself. For example, have relatively modest offices and constantly demonstrate that no task or chore is beneath you—filling the Coke machine, changing the water bottle, cleaning up after a group lunch, packing a box, carrying something heavy.
- When a team has to work a weekend, we're there, too—in person or virtually—even if it's just to show our appreciation.
- When something really goes wrong, you as CEO need to take all the blame.
- When something really goes right, you as CEO need to give all the credit away.
This needs to apply to all your managers, not just the CEO. Your job? Manage everyone to these standards.
Return Path Board Member and IronPort Systems Founder and CEO Scott Weiss on Being a Strong Yet Approachable Leader
Some CEOs run command-and-control startups with strict hierarchies and very little in the way of CEO sociability. Return Path isn't like that. I work hard to be approachable, but, as one leader put it, “the buck stops here.” Scott Weiss, founder and CEO of IronPort (acquired by Cisco in 2007) offers his advice about how CEOs can strike that balance.
The best leaders I know are not only smart and decisive; they create an environment where everyone feels comfortable challenging them. This is really hard because it is often assumed that the CEO is the smartest person in the room. However, if he acts that way, he'll never get the feedback necessary to make great decisions. So how does one balance being a strong and approachable leader? Here are a number of practical things that I've found helpful:
- Be self-aware. All leaders need feedback. Having an understanding of how others perceive you—through a solid 360-review process—is the crucial first step toward being real. Learn and accept your foibles and faults. Poke fun and work on them out in the open. “I'll try to keep this short, I know I can be long-winded…” etc.
- Talk about failures. At IronPort, we used to go through exhaustive postmortems—on everything from customer losses to engineering slips to misplaced strategies—and nothing helps make a leader more approachable than admitting their struggles, screw-ups, and behind-the-scenes thinking on hard calls. If leaders make this a priority, the whole company will be more open to learning from failure.
- Make it clear that no chore is beneath you. Naturally and quietly demonstrate this, on a regular basis: clean up after a conference room lunch, carry the heavy crap to a trade show, replace the water cooler, wipe up a spill. When everyone pitches in a little, you can strip out 5 percent in overhead.
- Learn everybody's name, and something about them. Up to 500 people with no excuses. This was really hard for me because I have always had a terrible memory. Get creative: when I inherited 900 employees at Cisco, we printed out flashcards from the badge database.
- Show up to socialize. Have a beer bust on Friday afternoons. Take a team to lunch. Drop in on a late-night networked video game war. (As a newbie, I was slaughtered pretty quickly.) You must go out of your way to socialize with your team, especially if you're naturally an introvert.
- Embrace “professional intimacy.” I love this phrase: it describes a leader's willingness to get personal and talk about life at home or their own career struggles. (“My wife once threw my blackberry in the toilet.”) Nothing builds more trust than being open and vulnerable with the people you lead.
- Nix multitask listening. It's one thing to ask someone what they are working on, and another to really tune in, give them your full attention and ask follow up questions. I constantly see executives checking their watches or smartphones, or looking over a shoulder to see who else is in the room. That's just phony crap.
- Loosen up! This is really about speaking to others as though you really trust them with your thoughts versus reverting to canned responses or the “company line.” Leaders that can explore the poles of an issue with employees—in their own words and off the cuff—will gain real trust. This is especially true during all hands company meetings.
- Improve your speaking skills. As a CEO, if you are a nervous public speaker, you need to practice. Find a coach; do some videotaping; try Toastmasters. The goal is to have a marathoner's heartbeat when speaking to a crowd so as to be as natural and comfortable as possible.
- Finally, embrace different views. Encourage employees to challenge your approach and decisions. Let everyone know that you aren't perfect and that you don't always have the best answer. Sometimes, they have better answers! You are obviously the decision maker but embracing different views will improve openness.”
Scott Weiss, Return Path Board Member and IronPort Systems Founder and CEO
Management Moment
Admit Mistakes
At a presidential debate with John Kerry in 2004, George W. Bush stunned viewers by refusing to admit that he had ever made any big mistakes in life other than trading Sammy Sosa when he owned the Texas Rangers. This was well after it had been settled that the decision to go to war with Iraq was based on faulty intelligence information about the imminent danger posed by weapons of mass destruction!
Today's highly polarized political environment discourages politicians from admitting mistakes, and it will take an exceptionally courageous leader to do so. Publicly admitting a mistake as CEO, along with a careful distillation of lessons learned, can go a long way toward strengthening the bond between leader and team, regardless of the size of the company. It encourages risk taking and learning, two skills you want everyone in your organization to have.