Ben Horowitz of venture capital firm Andreesen Horowitz has outlined four ways to change culture.
The topic of ‘digital’ culture is currently en vogue. As more companies are formalising their digital-led transformations, they want to know how to ensure that change sticks. This is an effort that involves leadership and, increasingly, HR.
There is a certain consensus on company culture. Most agree it affects the ability to compete (more so than strategy, perhaps), it is difficult to change, and it is chiefly about people.
But, further than that, what is it?
In a recent talk, Ben Horowitz of venture capital firm Andreesen Horowitz gave some examples of how culture more generally is displayed. Ask yourself as a company: Do you get back to people? Do you use your own products? Does job title impact who is right and who is wrong? Do you show up on time? Does craftsmanship matter?
The list goes on.
Horowitz is adamant that corporate values (words written on a wall) do not represent culture. Culture is more pragmatic and pervasive – it is ‘how we do things round here’.
Nevertheless, there are certain characteristics evident within a digital culture.
What describes a digital culture?
- Collaboration and relationships: Internally, the need for collaboration is a bit of a trite statement (we all know that siloed thinking is an anathema to digital processes). More importantly, product and service development should be rooted in user research. Further than that, a company may allow its customers to participate in the entire process.
- Diversity: This gives the company the best chance of properly representing its users, but also enables productive and creative working relationships.
- Accountability and independence: Employees know what decisions they are empowered to take and what rationale is required of them. This relates directly to an organisation’s ability to combine data analysis (predictive and historical) with design. Fjord refers to organisational ‘instinct’ – the way in which your organisation takes decisions and adapts to change.
- Transparency: There are different levels of openness, culminating in a blogging culture seen within progressive, large organisations or in open platforms allowing third parties to access data or use services. The visibility of leadership and their decision-making is important.
- Customer-centricity: At a recent Oystercatchers event on digital transformation, attendees were asked to choose the most important characteristic of a digital culture: 58% said customer-centricity, with collaboration trailing in second on 15%. What this necessitates is a balance between meeting customer needs and organisational needs. Customer needs should be considered regardless of their particular touchpoint and with an understanding of long-term customer value.
- Craft and development: How employee contributions are valued and their skills are developed.
How to change your culture
Once you have identified what cultures you want to change, Ben Horowitz suggests four ways in which to do so.
1. Keep what works
Steve Jobs was urged to be more like Microsoft (concentrate on software) when he returned to Apple. But he stuck it out, going even more vertical with integrated tech and creating a music player and a phone.
2. Create shocking rules
Rules have to be shocking enough to be noticed and questioned by your staff. Mark Zuckerberg’s ‘move fast and break things’ rule was important to establish innovation as a priority, sometimes even over quality.
3. Incorporate people from other cultures at high levels
Google did not have a history of selling to large enterprises (case in point: Google Apps, despite a big head start on Microsoft 365, did not get cut-through). So, former VMware CEO Diane Green was named senior vice-president of cloud services in November 2015, to try to address this.
4. Make decisions that demonstrate priorities
Founder Reed Hastings stopped the DVD teams at Netflix (then responsible for 100% of revenue) from coming to staff meetings as he decided to prioritise the streaming business.
HR must now transform too to adapt to digital culture. The onus is on HR to collaborate; to behave more like marketing, with data analysis, branding and processes; and to integrate the right technology with the rest of the organisation.