There's good stuff in this post, but I think a lot of a company's culture surfaces at moments that are thrust on you when you least expect it.
At Google, I can think of a few points that influenced my perceptions:
- the first DMCA request we got, from the Church of Scientology
- the day that we turned on Netscape. It turns out we didn't have enough server capacity, so we turned down Google so that we could serve the traffic from Netscape.
- when the Department of Justice tried to subpoena two months worth of all user queries
- when John Battelle grilled Eric Schmidt on stage at a Web 2.0 conference and Eric declared "We would never trap user data."
All of those situations were thrust on us from the outside, and someone had to make a call. I think those kinds of decisions are critical culture-defining moments.
The decisions a company makes when everything is fine--or when you have plenty of time to plan--can set some of the company's culture. But to me, how your organization responds to a crisis is one of the best indicators of its culture.
> the day that we turned on Netscape. It turns out we didn't have enough server capacity, so we turned down Google so that we could serve the traffic from Netscape.
Google started providing search results for the Netscape browser. Google didn't have enough server capacity to provide fast search results for normal www.google.com traffic and the new Netscape browser search traffic, so they started dropping queries to www.google.com until they could increase performance.
i.e. they put their customer, Netscape, ahead of their own website's performance.
Those are all great and very interesting examples where senior leaders create a culture by taking tough and visible decisions. I wonder if they worked in the same sort of way that the post describes where new people talk about them and it makes them engage with the issues around the culture? That is, did they have a long-lived effect on culture or were they one-off boosts to it? I think you've got a culture when all employees are reinforcing it rather than just the top leaders.
Actually, I think for half of the examples I mentioned it was rank-and-file Google employees who forged Google's response. I've seen a bunch of examples of regular colleagues galvanizing Google to do the right thing. Often regular Googlers drag execs to the answer we think is right. :)
I think each of the four examples I mentioned did have a long-lasting effect on the company as well, e.g. the Data Liberation Front ( http://www.dataliberation.org/ ) is a natural result of the pledge not to trap users' data.
It is good to read this, in light of some current concerns and/or generalized "feeling" about the status and direction of things.
I continue to have concerns about Google, but at the same time I continue to perceive a culture where people stand up and advocate for, insist upon, or just quietly do "the right thing".
(Now, where's my green energy flying car. ;-)
P.S. I guess I felt this worthy of a comment, in that I continue to struggle with my own interpretation of this dichotomy. And I don't think I'm alone.
> we instituted a ruthlessly enforced $10/minute fine for being late to a meeting with an entrepreneur. So, you are on a really important call and will be 10 minutes late? No problem, just bring $100 to the meeting and pay your fine. When new employees come on, they find this shocking, which gives us a great opportunity to explain in detail why we respect entrepreneurs.
> The economists decided to test their solution by conducting a study of ten day-care centers in Haifa, Israel. The study lasted twenty weeks, but the fine was not introduced immediately. For the first four weeks, the economists simply kept track of the number of parents who came late; there were, on average, eight late pickups per week per day-care center. In the fifth week, the fine was enacted. It was announced that any parent arriving more than ten minutes late would pay $3 per child for each incident. The fee would be added to the parents' monthly bill, which was roughly $380.
> After the fine was enacted, the number of late pickups promptly went ... up. Before long there were twenty late pickups per week, more than double the original average. The incentive had plainly backfired.
$3 for ten minutes is way smaller than $10 for 1 minute.
When you think about how people respond to incentives, first consider the size of the incentive. Otherwise you'd be forced to conclude that, say, a $10,000 fine wouldn't work either, which is plainly absurd.
Exactly, that is comparing apples to oranges. In one of the companies I was in we started charging $5 for being late to a huddle or $20 if you were an exec - people took cabs to get to the huddle on time, because it was the fact that you had to pay, not the amount that motivated you. Cab was more than a fine.
I imagine that the fine at Andreesen Horowitz isn't so much a financial incentive but instead signaling and shock value that respecting entrepreneurs is important, in the same way that book budgets at startups aren't so much a financial incentive but signaling how the company treats engineers.
There's also the matter of who's imposing the fine. For the day care, imposing a fine negated the social incentive not to be late because the parents saw themselves as adhering to the contract the day-care set up. Conversely, the entrepreneur didn't set up such a 'contract' between him or herself and AH, so there's no understanding that it's ok to be late if you pay the fine.
I was late to a VC meeting today. Because I am a dumbass and did not plan my travel well.
Should I, or anyone else, be fined for that?
I apologized when I arrived (and e-mailed as I could beforehand) because it's rude to be late for a meeting with people you are in business with, regardless of whatever monetary incentives someone wants to arbitrarily hang on that.
If you need a fine system to make that work, I'd argue you have deeper problems, problems that money isn't going to do much to solve.
If you had been made aware, in advance, that there was a fine, then sure, you should be fined for being tardy.
Are you pattern-matching on "VC", "lateness", "fine", and your own negative feelings regarding having been late to a VC meeting?
Your reaction to this story (VC firm trying to show that it values potential investment targets' time) is like someone worrying that, since a pizzeria has a policy of not charging customers for a pizza if it's delivered late, you're going to have to provide the delivery person with a free sandwich if you don't get to the door quickly enough after he rings the bell.
The idea that it's all about the monetary penalty to get the "right" behavior is not just the wrong incentive, as the research shows, but also reinforcing negative stereotypes of VCs.
I don't think you really understood the research. The research was talking about the difference between social and market norms, not directly about what is the appropriate cost for lateness.
It was social norms that kept the parents picking up the kids on time consistently. Adding a small cost switched the parents from social norms mode to market norms mode. Instead of the parents thinking "oh no, I better hurry now, because it's wrong to be late" as was the case when lateness was free, it became a "is it worth $3 to be 10 minutes late?" calculation.
Replacing social norms with a poorly chosen market rate is dangerous and can potentially backfire. Essentially, there is a discontinuity in people's behavior between a cost of $0, where you benefit from social norms, and a cost of epsilon, where the social norms go out the window. If you actually charge people the cost they are inflicting on you for lateness, then it's again a different story.
Correct, so we would be replacing "let's be on time for meetings with our business partners because we respect them" social norms, with "is it worth $50 to be 5 minutes late for this meeting with a company we invested in?" for ... a venture capitalist. People who have, er, lots of money. That's why they're in the room.
I'm not clear what you thought I misunderstood here.
I don't mean to hold a position that Andreesen Horowitz's fine is effective, so I can't answer that -- I just think that the situation of the daycare and Andreesen Horowitz differs enough that we can't draw conclusions about one by looking at the other.
What do people working at VC firms (as opposed to partners at VC firms) make? I don't think anywhere near enough to make paying a couple of hundred dollars per week just for showing up late negligible.
A fine high enough to hurt financially the person breaking the rules is one option (that's what governments usually do). Other good option is public embarrassment. I used the $1 fine for people late to meetings, but we also counted the number of times each one was fined, so there was an extra incentive to avoid.
Ideally, a cultural design point will be trivial to implement, but will have far reaching behavioral consequences. Key to this kind of mechanism is shock value. If you put something into your culture that is so disturbing that it always creates a conversation, it will change behavior.
Thought-provoking. In hindsight, many of the things I've done that have impacted on culture have had this sort of 'shock value'. I'm currently working on changing an established culture and a shock/conversation-creating initiative is just what is needed to help the other processes along.
... but when a shocked new employee asks why she must work on a makeshift desk constructed out of random Home Depot parts, the answer comes back with withering consistency: “We look for every opportunity to save money so that we can deliver the best products for the lowest cost.”
It's probably not a good idea to hold up the "cheap door desk" as a good example; from what I've read it seems like it's turned into more of a cargo-cult-of-frugality thing: http://news.ycombinator.com/item?id=3102401
Some companies need to kill the college dorm culture they are trying to emulate.
How about a culture that says 'I put college behind me and I'm worth a few extra square feet and a place to hang a picture or two.' Where can I find that culture?
Culture just happens. If you go out of your way to foster some kind of fake "culture" you're only doing your business a disservice. The company I worked for with the best culture did nothing to try to create a "culture".
Cultures don't just "happen". Culture is a deliberate act of founder instilling company values in early employees, so the culture then scales from there. Best cultures always feel natural, because founders and early employees spend a boat load of time working on it and enforcing it.
15 years and 9 startups, I walk into the company and immediately can tell if I want to be there. Companies without culture are usually those in a Fortune500 list - numb, bland, like Hondas and Toyotas.
At Google, I can think of a few points that influenced my perceptions:
- the first DMCA request we got, from the Church of Scientology
- the day that we turned on Netscape. It turns out we didn't have enough server capacity, so we turned down Google so that we could serve the traffic from Netscape.
- when the Department of Justice tried to subpoena two months worth of all user queries
- when John Battelle grilled Eric Schmidt on stage at a Web 2.0 conference and Eric declared "We would never trap user data."
All of those situations were thrust on us from the outside, and someone had to make a call. I think those kinds of decisions are critical culture-defining moments.
The decisions a company makes when everything is fine--or when you have plenty of time to plan--can set some of the company's culture. But to me, how your organization responds to a crisis is one of the best indicators of its culture.