I would further argue that executives are exactly who determine company culture. Anyone with experience in management knows this: culture starts at the top. The thing is, they determine it by what they do not what they say they do. If you have backstabbing mercenary executives - that's your culture. If you have a bootstrapped company where the founders own >50%, they get to determine the culture. Might not be what they want it to be or say it will be, but they certainly determine it with every decision they make.
They have decided to reset their culture - it might work out, it might not. But by doing it with a massive voluntary payout with no obligations, they have said huge amounts about their own personal integrity, which will trickle down. I have no doubt they are inundated with high quality applicants right now. No such thing as bad publicity and all that...
Yes, it was Jason and DHH who selected for the loud, intolerant, "politics is everything" Twitter personalities in the first place. Now they intentionally weeded them out. It could hardly be more clear that executives decide Basecamp's culture.
Agreed, which is why I think the court is still out whether it will work. Personally, I'd be more likely to work for them now. But I can certainly see why some people are shocked by the about face.
Is running an organization the only way to have expertise on subjects like “how decisions made by organizations affect their members?” I don’t think it’s a stretch to say that a person can collect a fair bit of policy-specific knowledge from being directly affected by said policy.
This is not a defense of punditry — I feel pretty icky anytime I see a climate denialist like Bret Stephens opining on climate change in The Paper of Record, for example — but I also don’t think we should necessarily conclude that a person’s relationship to power connotes an inherent level of expertise.
I have, and he’s certainly right about one thing: you won’t successfully influence company culture by just instructing the employees what culture to have.
In my experience, executives are usually so separate from the rest of the company (insulated by multiple layers of management) that to hear them talk about the company culture feels a lot like hearing Queen Elizabeth talk about the culture of Britain: how would she know? Executives are so zoomed out, and culture is so ground-level, that I don't think people in those high level roles really even know what the culture of their companies are most of the time.
I agree with this blog article insofar as you cannot define what a culture will be, the way you define OKRs or go to market strategies. A couple anecdotes:
At a former company, roughly the size of Basecamp, a VP of business development said this to me, essentially word for word: "The culture of ${companyName} is getting to $30 million ARR within the next 6 months." This was in the context of me telling him that developers were not happy with the direction of the company culture. His framing told me that he was talking about something definitionally different than I was when I talked about culture. Incidentally, that company imploded, though it does continue to limp on.
At another company, the CEO repeated at every all-hands meeting that our company had a "culture of performance". I always wondered how the hell he would know that, since the only time he interacted with anyone at the company outside the VP level was when lecturing at the all-hands meetings. He was no doubt qualified to discuss the culture of vice presidents and the c-suite, but how could he possibly describe what the other 99% of the company was like?
My point is that executives think they can define what a culture is, but they can't. Nobody can. You can only describe what a culture turns out to be. You can try to change it, but it's not ever going to be entirely in your control, ex officio, like it's a dress code or something.
That 1/3 of employees opted to leave the company is eye-popping, but any analysis that ignores just how generous the buyout was (like this article does) are probably going to come to some wrong conclusions.
You don’t have to be disgruntled at all to take a 6 mo or 3 mo salary buyout. (I read 6 mo for people at the company over three years, 3 mo otherwise.) Anything short of highly motivated to stay would have to think seriously about taking that.
Customers don’t have insight into the company culture which is why there are whistleblowers. Customers cannot give accurate assessments about corporate culture.
When a company is so large with so many mostly disconnected products/titles I’m not sure we can even start to talk about “a” homogeneous culture. I’m sure there’s a lot of cultures mixed in there, from at least decent to the most tyrannical and non-productive.
While I agree that in general a company should focus on customer, I strongly disagree with the phrase "the customer is always right".
The customer should be listen emphatically, while trying to identify their needs and see if your product fits or not, should have maybe a voice in saying what kind a direction a product should go, should have access to information regarding their own data and how we handle it, but I would not put such responsibility of figuring the "right" to the customer.
The customer is sometimes wrong. The customer is sometimes influenced by bad press, publicity or lack of knowledge, or even lack of interest to put the effort to understand or articulate their own needs. Sometimes the customer asks for a feature that they will not use.
So we should see the customer emotions, expressions, complaints, praises as an effect which needs to be acknowledged and listen to and try to understand the cause.
Here is a simple example: televisions which are promoting useless debates, false claims or subjects which are blown out of proportion, you know what they say: It is what the public wants.
When I say "the customer is always right" I didn't mean they are right about everything in the observable universe.
Absolute words such as "always" are used for dramatic effect in most human-centric contexts. That's why the phrase is also generally accepted as banal: it does not convey much meaning without deeper analysis.
Customers are not "right" about everything and they will not determine the product direction in every sense. That's the job of the company leadership.
"The customer is always right" can also mean that "the market is always right". Ultimately, people will vote with their wallets. They will either buy your product, or they won't.
"Often, there are two company cultures. There’s the glossy, official, Comms Department-approved culture — and then there’s the real, lived experience of showing up every day and working at a place. If the difference between those two versions is large enough, the result is generally serious, sustained, employee-management resentment."
I worked at a company that started this yearly employee survey to measure things like engagement. We knew how to game the survey right away, making sure the first survey had low scores so there would be an MBO to improve the scores, and budget for things like go-karts, etc. Sure enough, the MBO came and the next year we improved the scores. We knocked that MBO out of the park 4 out of 5 years. The outlier was the year where we had two extra rounds of layoffs, so we got a pass for that one.
Companies are a means to an end. That end isn’t making employees lives endlessly blissful. Of course, miserable employees lead to lots of problems but nonetheless it is mistaking the proxy for the outcome to say that employees are the only relevant judges of company culture.
How do customers learn about the corporate culture? Do they have a complete enough picture to focus on their voice? Employees are often customers of their company and have a more wholistic view of the culture.
As a customer, I can tell a lot about a company's culture by:
- Their sales process. (Is it high pressure? Do they know what they're selling? How do they handle aspects of their product/service that is weak relative to competitors?)
- Who is actually targeted by the sales process. (Do they actively try to court technical individual contributors, or do they try to bypass them and pitch directly to leadership?)
- Their support process. (Do the support reps know the product? Are escalations handled quickly? Are conversations organic, or is it so scripted that you may as well be talking to a robot?)
- General product development. (Are product iterations delivered to market in a timely and consistent manner? Is it a quality product [i.e., does it work as advertised]? Does it seem like there's a consistent vision and design language for the product?)
- General employee sentiment? (Do you have a long-term company contact, or does it seem like your contact changes on a monthly basis? What's the general mood of the people you interact with [i.e., one person may just be having a bad day, but a consistent coldness suggests something more systemic]? Are high-level people generally leaving or joining the company?)
There’s no vote to determine whether or not a company’s culture is good. We have to look at outcomes and then work backwards. Customers play a key role in those outcomes, and therefore determining whether a culture is good or not, despite not knowing anything about it.
I personally don’t think such a system would be competitive over the long term. I look at the most totalitarian countries, that use widespread coercion to encourage productivity, and notice that they aren’t wildly successful from an economic output point of view.
Customers, shareholders, competitors. The goal of good culture, I think, is to create great products. If the employees are all ecstatic and the products suck for customers then I won’t buy them. Similarly if capital returns or poor then as a shareholder I won’t invest.
It seems to me like the goal of any particular culture -- by which I mean the effort of trying to create any particular culture -- will necessarily be in the eye of the beholder. Owners will be looking to maximize profit. Employees will be looking to enjoy their jobs. Customers will be looking for good service.
If the customers don’t buy anything eventually the company goes under and there’s no pie for owners, managers, and workers to divide up. Well, at least unless a government endlessly bails it out, but then the government is de facto the customer.
Who decided what the end is? It would seem that when society accepted the legal construct of the corporation, it was not because the man in the street felt that there had to be a way for capitalists to get even richer. And still to this day, if you ask the man in the street why we have corporations, I don’t think the answer will be that.
But you are right, many executives tend to agree with your point of view. That’s probably the single largest problem in society today.
Right. We accept corporations because their entitlements (such as liability limitation) and some regulations enable investment in great ventures that make society more prosperous as a whole. That's the theory. Whether it happens or not is of course a worthy matter of ongoing debate.
In my view, the end of a business is whatever serves the self interests of the participants. A customer may want something different than an employee or an owner. A supplier is not obligated to offer a price that benefits the owner. Instead they are free to negotiate a price on behalf of their own interest. Likewise an employee, which is a kind of supplier. To the extent that the public are affected by the behavior of a corporation, they can demand regulations based on the public interest.
The people who are actually legally or contractually obligated to serve as fiduciaries for the owners can usually be counted on the fingers of one hand.
"It is not to the benevolence of the butcher, brewer, or baker, that we appeal for our supper, but to their regard for their own self interest." -- Adam Smith
Adam Smith tells you the exact opposite. Their self-interest is not the end, it’s the means. The end is to provide society with reasonably priced bread, beer and meat.
I guess we could dig deeper and ask "what is the purpose of gaining wealth?" and "what is the purpose of money?".
One answer to the first is that wealth can be used to change the world. Small scale wealth can change things for you alone, like buying a nicer house. Large scale wealth can change things for everyone around you, like supporting a political platform of your liking.
In the same vein, money as a means of transaction is supposed to capture the social good that is gained within every transaction and make it abstract so we don't have to specifically barter for what we want in the present.
If we accept for the sake of argument the above, then we can examine if corporations are really doing social good, because if they are not then the ought to be restructured. This line of thought is what lead to the anti-trust acts of previous eras, safety regulations, food and drug regulations, and general business regulation in the present day. We have previously acknowledged that businesses can gain wealth, and power, without adding social good and as corporations are an abstraction created by society, it's well within our rights to change them for societies betterment.
Society didn't accept, it was enacted by the government.
The thing that disheartens me is that most people today fail to realize that people have been organizing into large work entities since time immemorial to build products and offer services in the hope of making money as owners, workers, and investors. Many people in every culture have accumulated great wealth by enterprising means. Yet people act like working for someone else is some new construct that exists to oppress everyone and most of the common mans ills are because of capitalists. This to me is quite silly.
The only easy things in life are complaining, procrastinating, failing and dying. Most everything else that is worth having in life takes discipline, work, and self growth. Yes some people will get more of those good things, some for less effort, so what though? As long as they are not breaking laws to do so I am fine with it. If someone breaks the law then punish them.
> people have been organizing into large work entities since time immemorial
Mercantilism didn't appear until the 17th Century.
> Yet people act like working for someone else is some new construct that exists to oppress everyone and most of the common mans ills are because of capitalists. This to me is quite silly.
Criticism of capitalism is as old as capitalism itself. Organizing a hierarchy that replicates monarchy/aristocracy carries the same problems -- mostly incompetence hidden by birthright and social status.
Markets work and have existed since time immemorial. The problem is that modern capitalism is so corrupt that is has destroyed the market. All products are more or less terrible, because the executives running the company never use the products they produce, or have any real idea what their workers do on a daily basis. This reality was even recognized by Adam Smith:
"The trade of a joint-stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors. But the greater part of these proprietors seldom pretend to understand any thing of the business of the company... The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master’s honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. It is upon this account, that joint-stock companies for foreign trade have seldom been able to maintain the competition against private adventurers. They have, accordingly, very seldom succeeded without an exclusive privilege; and frequently have not succeeded with one. Without an exclusive privilege, they have commonly mismanaged the trade. With an exclusive privilege, they have both mismanaged and confined it."
> Most everything else that is worth having in life takes discipline, work, and self growth. Yes some people will get more of those good things, some for less effort, so what though? As long as they are not breaking laws to do so I am fine with it. If someone breaks the law then punish them.
The privatized natural gas company in your town hires a lobbyist to eliminate safety regulations. The gas seeps in your home and explodes when your partner goes to light the stove. You survived the explosion, but the hospital bills emptied your bank account. Your insurance doesn't cover negligence by a third party. No law was broken.
You are now bankrupt, homeless, alone, and unable to work. How is discipline, hard work, and self growth going to help you?
The purpose of a business is to make money. Corporations are a type of business with basically the same goal. I think this is pretty well understood by the general public.
I don't know enough Grustaf to comment, but strangely many common people that I know believe this, further they believe that the company has to make a profit ( often at the expense of a poor man ) as generally defined by the textbook definition.
So has anyone asked DHH and Jason whether the result was the catastrophic disaster portrayed here? My job consists of talking to people who own, buy, and sell companies, and in my experience on 50+ transactions, there are many, many cases where "non-regrettable attrition" (as they call it) is exactly what they want. In a well run company (technically I mean), people should not be all that hard to swap out. Personally, and guessing, I doubt they wanted it to quite this high, just based on the size of the payout. But I'd bet dollars to donuts they were hoping for 20-25% to take the money and leave, or they would not have made it so attractive.
Correct. This was amazingly handled, in my opinion. No one loses face in this story, yet the company has successfully managed to eject -in a very short time and a controlled way- the people it considers the worst.
And the company has advertised for free, thanks to mass media, that it will readily pay top dollar for people who seek to spend their workhours... you know, actually working.
Reflecting on this, I realized when I was CTO at a company that needed a culture reset when I arrived (not of happiness, but of accountability for software that actually worked), I had 20% non-regrettable attrition on the eng. team, so not too far off 1/3 really. 3 months later quality was better and the rest of the team were happier too, because putting out bug fires in production every day is very stressful. Sure people are your company, but that means people are your company problems too....
Why should we give any credit to a "company culture" where employees freely shared lists of customers' PII in order to ridicule them, while proclaiming their supposed commitment to privacy? If that's the outcome of "employees deciding if the company culture is good", I'd much rather trust the CEO.
Note that I'm not invoking a slippery-slope argument here - we know that privacy was being violated here, we're not merely predicting that this could happen in the future.
I'm very confused by this thought process. It wasn't the CEO who initially said this was wrong. It was employees who did, and the CEO initially pushed back and said it was fine.
The employees were the ones to change that negative aspect of the culture after the CEO had failed to do so for years. What about that gives you confidence that the CEO values privacy?
The employees were also the ones to create that negative aspect of culture, and maintain it through out the last decades.
It is unclear currently if the employees leaving are the same ones who supported the old culture or those who lobbied for the new, or if both groups are the same. I've seen one report that a person called Basecamp culture akin to 'genocide' when that person had been an active supporter in the 'genocidal' culture themselves. It may have been a genuine change of heart, but their hyperbolic language couldn't have lead to good discussion making nor made it clear what kind of punishment that person should get for their past admitted misdeeds.
> The employees were also the ones to create that negative
Yes and? This doesn't explain why you should then trust the CEO, who took longer to come around, more than the employees. Yes they both did a bad thing. One group began addressing it first. Why trust the other group more?
> I've seen one report that a person called Basecamp culture akin to 'genocide' when that person had been an active supporter in the 'genocidal' culture themselves.
Right so this isn't what was said. They posted a diagram that contained the word genocide as a potential (very) long term outcome of not taking more minor forms of racism seriously.
The CEO took this as this person accusing him of genocide, when that isn't what happened.
Yeah, that diagram is problematic. It’s like the anti drug ads that said if you smoke pot, you find gangsters who pay out to Colombian drug lords, who also finance other parties who handle the money for terrorists so at the end of a long chain of events college stoners fund terrorism.
Even if such a tenuous connection is true, it’s unhelpful to point it out.
A company's job is to extract value from employees to give to shareholders. An employees job is to extract value from a company to give to their own life/family.
They have decided to reset their culture - it might work out, it might not. But by doing it with a massive voluntary payout with no obligations, they have said huge amounts about their own personal integrity, which will trickle down. I have no doubt they are inundated with high quality applicants right now. No such thing as bad publicity and all that...