Company Culture Is Everything
An under-discussed topic in modern business
When you break it down, a company is just a group of people. How these groups of people are organized, how they are led, and how they self-manage is key to the success or failure of the company. The internal culture of the company is by far the strongest determiner of success - more so than most investors, leaders, and employees give it credit for.
Could this have been done by employees who just punch the clock for a check? Definitely not.
My sense is that corporate cultures follow a power law-esque curve – very few companies represent the strongest cultures whereas most companies, for lack of a better word, suck. Say you’re an engineer at the top of your class - are you going to go work in a gray office at Lockheed Martin where you might influence the size of a bolt in your first year, or Anduril where you might design a whole product and then deploy it into the real world in 6 months?
Corporate cultures follow a power law distribution: very few are excellent, and most suck.
What’s a “Good” Culture?
I’m fortunate to have worked at companies that have truly excellent cultures: SpaceX, Anduril, and now building Base Power. These cultures keep employees doing their best work, engaged, and often retained for longer (while working way harder) than counterparts at “normal cultures”. It's a self-reinforcing mechanism: top talent is attracted to companies because other top talent is there.
There’s certainly not a one-size fits all approach here for good culture. Although I’d argue that some key principles extend beyond the market, product, or service that a company is offering. A few key traits that I’ve seen:
Nvidia, one of the most successful companies in this generation, is known to have a low bureaucracy, high ownership, and meritocratic culture. A solid summary is here:
Role Models and Examples
Those looking to build, lead, or influence a company’s culture in a positive way luckily have many models to emulate.
An obvious first pick here are the companies of the Muskiverse - SpaceX, Tesla, Neuralink, X, XAI and Boring Co. Musk is a once-in-a generation entrepreneur obviously, but I’d argue that this is largely due to the cultures that he’s set up at his companies more than any specific technology or operations strategy move that he’s made himself. Literally hundreds of thousands of people across his companies are all rowing in the same direction, with minimal internal friction to get in their way.
Another great example is Frank Slootman, CEO of Snowflake. He recently published perhaps the best work on company culture, a book called Amp It Up. Slootman describes in detail how leaders who increase expectations just above the capability of their employees continually achieve meaningfully better results than the competition. His strategy? “Ratchet up expectations, energy, urgency, and intensity.” I couldn’t agree more.
The best book I’ve read on this subject
A less well-known role model of mine in the corporate culture world is founder of Rocket Mortgage/Quicken Loans (QL) Dan Gilbert. I had the good fortune to meet Dan back in high school while interning for QL in downtown Detroit. Dan started the now-giant mortgage originator in 1985 and has since grown it to the top three in the country - by what I’d argue is - primarily centered around their company culture. Day one for every employee at every level of the company is an indoctrination lesson on the company culture, called “ism’s”. Day two onward, these ism’s are repeated, celebrated, rewarded, and recognized in daily life at the company. The “ism’s” are little sayings that refer to various behaviors and ways of organizing that define how to be an employee at QL.
The Quicken Loans “Ism’s”
A favorite is “we are the they”. As of my time at QL (now 14 years ago, things could have changed), the word “they” is essentially banned. This isn’t some woke pronoun BS, it's way more practical than that. “They-ing” a group within the company often indicates that you’re assigning blame, abdicating responsibility, or just in general complaining. No good. Especially at a company like QL with 14,000 employees, it’s easy to “they” a group. Super smart.
Quicken Loans vs Bank of America offices
Implementation
There’s a myriad of leadership courses, books, and retreats that corporate leaders attend in an effort to implement these better culture principles at their companies. They basically all boil down to the following:
Repeat the sayings and culture phrases many more times than you think you should. Especially within large organizations when you’re espousing culture values to small portions of the organization at once, you’re going to need to say the message many more times than you’re comfortable.
Call out bad culture aggressively and publicly. Oftentimes this is uncomfortable for all involved, but important to get right. If an employee “they’s” another group in the company, immediately and forcefully demonstrate that that is not an acceptable way to behave at the company.
Hire for cultural alignment. It’s rare to find a candidate who has worked at a company with bad culture since the start of their career for more than 3-4 years that doesn’t come with a lot of bad corporate cultural tendencies. This doesn’t mean don’t hire experienced people - not at all. Just hire experienced people from companies with strong cultures.
Train early career hires. Aligned with the upward mobility comment above, it's imperative to train new grad hires the right way from the start. Especially assuming that this is their first job, they won’t understand or know what cultural norms to expect at a company. It is your job to show them.
Increase energy and intensity. Simple things like body language, responsiveness to emails, being in the office early and late; all contribute to a sense of urgency that permeates through the culture and inspires others.