What You Do Is Who You Are

1. Culture is shaped by actions, not just beliefs

What you do is who you are.

Actions define culture. Organizations often focus on articulating values, but it's the day-to-day behaviors and decisions that truly shape culture. The samurai, for instance, defined culture as a code of action rather than just beliefs. This principle applies equally to modern companies - cultural values must be translated into concrete practices and behaviors to have real impact.

Virtues over values. The book emphasizes the importance of virtues (beliefs actively pursued or embodied) over values (merely held beliefs). For example, Amazon's frugality virtue is demonstrated through practices like makeshift desks, while Netflix's streaming-first culture was reinforced by excluding DVD executives from key meetings. Leaders should focus on instilling and rewarding specific behaviors that align with desired cultural traits.

Examples of action-oriented cultural elements:

• Dress codes
• Decision-making processes
• How meetings are run
• How feedback is given
• How conflicts are resolved

2. Leaders must embody and reinforce cultural values

If you aren't yourself, even you won't follow you.

Authenticity is key. Leaders must genuinely believe in and practice the cultural values they espouse. Attempting to implement values that don't align with a leader's own beliefs or behaviors will likely fail. The book cites examples of leaders like Reed Hastings at Netflix and Jeff Bezos at Amazon who shaped their company cultures around their own authentic values and working styles.

Walking the talk. Leaders reinforce culture through their own actions, decisions, and priorities. This goes beyond just following rules - it means embodying the spirit of cultural values in how they lead. For instance, Toussaint Louverture demonstrated his commitment to loyalty by executing allies who betrayed their previous leaders, even when it benefited him. Leaders should be prepared to make difficult decisions that align with cultural values, even at a personal or short-term cost.

Ways leaders reinforce culture:

• Modeling desired behaviors
• Making decisions that demonstrate priorities
• Addressing cultural violations swiftly
• Telling stories that reinforce cultural values
• Recognizing and rewarding alignment with culture

3. Inclusion requires seeing people for who they are

If you only listen to music from one race then you probably do not understand music. If you only hire talented people from one race or gender, then you probably do not understand talent.

Look beyond surface diversity. True inclusion means valuing cognitive and cultural diversity, not just demographic diversity. This requires actively seeking out and appreciating different perspectives, experiences, and ways of thinking. Genghis Khan's success stemmed in part from his ability to recognize and utilize talent regardless of background.

Meritocracy and equal opportunity. Creating an inclusive culture involves dismantling hierarchies based on arbitrary factors and focusing on merit. This means providing equal opportunities for growth and contribution, and judging people based on their actions and abilities rather than preconceived notions. Companies should examine their hiring, promotion, and decision-making processes to ensure they aren't inadvertently excluding valuable talent.

Strategies for fostering inclusion:

• Diverse interview panels
• Blind resume screening
• Mentorship programs
• Cross-functional collaboration
• Regular culture and inclusion training

4. Trust and openness to bad news are crucial cultural elements

Good CEOs run toward the pain and the darkness; eventually they even learn to enjoy it.

Cultivate transparency. A culture of trust requires open communication, especially about problems and failures. Leaders should actively encourage the surfacing of bad news, treating it as valuable information rather than cause for punishment. This involves creating psychological safety for employees to speak up without fear of repercussions.

Assign meaning to setbacks. When faced with bad news or failures, leaders have the opportunity to shape how these events are interpreted. By framing setbacks in the context of larger goals and learning opportunities, leaders can maintain motivation and trust even in difficult times. The book draws a parallel to Lincoln's Gettysburg Address, which reframed the Civil War's purpose in a way that gave new meaning to the sacrifices made.

Techniques for fostering openness to bad news:

• Celebrate the discovery of problems
• Implement no-blame post-mortems
• Create formal channels for raising concerns
• Reward those who surface issues early
• Share lessons learned from failures broadly

5. Effective cultures align with strategy and personality

Pick the virtues that will help your company accomplish its mission.

Strategic alignment. A company's culture should support its business strategy and goals. For example, a company focused on rapid innovation might prioritize risk-taking and experimentation, while one in a highly regulated industry might emphasize compliance and caution. The culture should enable and reinforce the behaviors needed to succeed in the company's specific context.

Authentic to leadership. Equally important is that the culture aligns with the genuine values and working style of the leadership team. Attempting to force a culture that doesn't fit the leaders' personalities is likely to fail. This doesn't mean leaders can't grow or change, but the core cultural elements should feel natural and sustainable for those at the top.

Questions to consider in aligning culture and strategy:

• What behaviors are critical for our success?
• What are our key competitive advantages?
• What are the biggest risks we face?
• What type of talent do we need to attract and retain?
• How do our leaders naturally work and communicate?

6. Shocking rules and object lessons cement cultural principles

Because culture is a consequence of actions rather than beliefs, it almost never ends up exactly as you intend it.

Create memorable moments. Shocking rules - those that are unexpected or seemingly extreme - serve to highlight and reinforce key cultural principles. These rules prompt people to question why they exist, leading to deeper understanding of the underlying values. For example, Amazon's no PowerPoint rule reinforces their focus on deep, thoughtful analysis.

Dramatic reinforcement. Object lessons - vivid examples or incidents that demonstrate cultural principles in action - can have a lasting impact on organizational behavior. These might involve public recognition of employees who embody cultural values, or decisive action against those who violate them. The goal is to create stories and precedents that clearly communicate what the culture truly values.

Examples of shocking rules and object lessons:

• Netflix's unlimited vacation policy
• Zappos offering new hires money to quit
• Steve Jobs firing an executive for refusing to sign Apple's secrecy agreement
• IBM's early dress code requiring suits (to differentiate from competitors)
• A CEO taking a pay cut during layoffs

7. Cultural design must anticipate potential misuse

Cultural rules can often become bloated sacred cows. Everyone tiptoes around them, trying to respect the culture—and then the cows topple and crush you.

Unintended consequences. When designing cultural elements, leaders must consider how they might be misinterpreted or used in ways that undermine the original intent. For instance, a culture of "customer obsession" could lead to ignoring long-term strategy in favor of short-term customer demands. Regularly reassess cultural rules to ensure they're still serving their purpose.

Prevent weaponization. Some employees may attempt to use cultural values as shields for poor performance or to attack others. Leaders need to be prepared to clarify and enforce the true spirit of cultural principles. This might involve creating more specific guidelines or providing examples of how values should (and shouldn't) be applied in practice.

Strategies for preventing cultural misuse:

• Regular culture audits
• Clear escalation paths for cultural conflicts
• Training on applying cultural values in practice
• Mechanisms for evolving cultural rules
• Balancing cultural values against each other

8. Subcultures can coexist within an overarching culture

While every company needs core common cultural elements, trying to make all aspects of your culture identical across functions means weakening some functions in favor of others.

Functional differentiation. Different parts of an organization may require distinct cultural elements to perform optimally. For example, a sales team might need a more competitive, results-driven culture than an engineering team focused on innovation and collaboration. Recognize where these differences are necessary and beneficial.

Unifying principles. While allowing for subcultures, maintain core cultural elements that apply across the entire organization. These might include ethical standards, communication norms, or high-level company values. The challenge is balancing consistency with the flexibility needed for different functions to excel.

Approaches to managing subcultures:

• Clearly define which cultural elements are universal vs. function-specific
• Encourage cross-functional understanding and collaboration
• Ensure leadership alignment on core cultural principles
• Regularly assess subcultures for alignment with overall company goals
• Create forums for sharing best practices across subcultures

9. Cultures must evolve to meet new challenges

Strategies evolve, circumstances change, and you learn new things. When that happens, you must change your culture or you will end up pinned beneath it.

Continuous adaptation. Successful cultures are not static - they must evolve as the company grows, markets change, and new challenges arise. This requires regular reassessment of cultural elements to ensure they still serve the company's needs. Leaders should be prepared to modify or even abandon cultural practices that no longer fit.

Balancing stability and change. While culture needs to evolve, too much change can lead to confusion and loss of identity. The key is to maintain core cultural principles while adapting specific practices and behaviors. This might involve reinterpreting existing values for new contexts or introducing new cultural elements that build on the existing foundation.

Methods for evolving culture:

• Regular culture surveys and feedback sessions
• Cross-industry benchmarking
• Pilot programs for new cultural initiatives
• Involving employees in cultural evolution discussions
• Clear communication about why and how culture is changing

10. Ethical principles should be made explicit

If you don't methodically set your culture, then two-thirds of it will end up being accidental, and the rest will be a mistake.

Clear ethical guidelines. Vague statements about "doing the right thing" are insufficient. Organizations need to clearly articulate their ethical principles and how they apply in practice. This includes addressing potential conflicts between ethical behavior and other goals (e.g., profitability, growth).

Reinforcement and accountability. Once ethical principles are established, they must be consistently reinforced and enforced. This means recognizing and rewarding ethical behavior, as well as swiftly addressing violations. Leaders play a crucial role in demonstrating the importance of ethics through their own actions and decisions.

Components of strong ethical culture:

• Detailed code of conduct
• Ethics training programs
• Anonymous reporting mechanisms
• Regular ethical dilemma discussions
• Clear consequences for ethical violations
• Recognition for ethical leadership

Last updated: August 27, 2024