You’ve probably read Peter Drucker’s quote: “Culture eats strategy for breakfast.”
My personal favorite is from Lou Gerstner Jr, who said, “Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success — along with vision, strategy, marketing, financials, and the like… I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”
Every company seems to talk about culture, but only the most successful organizations seem to have strong ones…and usually not indefinitely. Culture is that essential yet mercurial element in every organization, like terroir in winemaking.
Having helped grow companies big and small, across several industries, and even on a variety of continents, here are the three books on culture that have proven to be most helpful.
This book is the gold standard for culture. It’s an extension of the Netflix Culture Deck that shook up the startup world in 2009 and has now proliferated the entire business world. The central theme is that in order for any company to have a strong culture, it must have “talent density” because “talented people make one another more effective.” In the book, Reed Hastings details how a talent-dense workforce, from the receptionist to the top executive team, is comprised of “stunning colleagues — highly talented people, of diverse backgrounds and perspectives, who are exceptionally creative, accomplish significant amounts of important work, and collaborate effectively.” He stresses that none of the other cultural pillars, like freedom and responsibility, will work if you don’t have talent density. For example, here’s what will happen:
“If you have a team of five stunning employees and two adequate ones, the adequate ones will sap managers’ energy, so they have less time for the top performers, reduce the quality of group discussions, lowering the team’s overall IQ, force others to develop ways to work around them, reducing efficiency, drive staff who seek excellence to quit, and show the team you accept mediocrity, thus multiplying the problem.”
This book is great because it’s all about helping the leaders set the tone, for a great culture must start at the top. It’s based on the teachings of legendary Silicon Valley figure, Bill Campbell, who was actually an NCAA Division-1 football coach before going into business. Campbell served on the boards of both Apple and Google, working closely with both Steve Jobs and Eric Schmidt. Ironically, Schmidt initially rejected the notion of a coach but went onto work closely with Campbell and later co-authored this book after his passing in 2016.
Among the dozens of notable CEOs and other senior executives that he mentored, Campbell showed that in business, as in sports and music, the best talent needs the best coaching. However, he was highly selective, saying, “Only coach the coachable, the traits that make a person coachable, include honesty and humility, the willingness to persevere and work hard, and a constant openness to learning.”
3. Peak: How Great Companies Get Their Mojo from Maslow by Chip Conley
This book weaves everything together, showing how a strong culture also benefits customers and investors. It’s written by a hotelier named Chip Conley, whom Airbnb hired as its Head of Global Hospitality and Strategy in 2013, after its CEO, Brian Chesky, read this book. In order to grow and truly scale, the entire team needs to be aligned on culture, from senior management to the most junior personnel. Hotels provide vivid examples because one person can’t possibly do all of the work (front desk, room service, cleaning, etc.); therefore, the entire team needs have the same values, mission, and standard of excellence. Conley discusses fostering a strong culture by having employees regularly stay at the hotels where they work to experience it firsthand, and, most important, he strives to ensure that employees are on a path toward self-actualization through their work at the company (see Maslow’s Hierarchy of Needs).
Conley describes how both customers and investors benefit when leadership and employees are culturally aligned, in the following sequence:
a. The leaders set and maintain company culture
b. The big leap is getting talented employees aligned with the culture
c. When aligned, employees take care of customers
d. Happy customers support the company which rewards its investors
In practice, none of this is easy. A strong culture is difficult to establish and even harder to maintain as organizations evolve. This is why extremely pronounced cultures, like those of Netflix and Amazon, are almost cultish. You’re either a fit or you aren’t, and the company must hire people and also fire them by that standard.
A final example worth careful review is Workday CEO Aneel Bhusri’s podcast with Reid Hoffman for Masters of Scale. Also a cofounder of Workday, he shares how he personally interviewed his first 500 employees, in order to ensure that they were a cultural fit. These were true believers in the company, which later showed in their customer interactions.
Kai Sato is the founder of Kaizen Reserve, Inc., a venture capital advisory firm for corporations and family offices, helping align their existing assets with synergistic startups. He is currently the co-president & chief marketing officer of Crown Electrokinetics, a smart glass technology that combats climate change and is publicly-traded on Nasdaq. He is the author of “Marketing Architecture: How to Attract Customers, Hires, and Investors for Any Company Under 50 Employees.” He is also a fund advisor and the former entrepreneur-in-residence of Hatch, a global startup accelerator focused on helping feed the world through sustainable aquaculture technologies. He is the creator of Caddyshack to Corner Office, a media platform that profiles successful people whose lives were transformed by caddying. Previously, he was the chief innovation officer of Rubicon Resources, which was acquired by High Liner Foods. Prior to that, he spent several years as a co-founder and board member of FieldLevel, where he was recognized in the Los Angeles Business Journal’s “Twenty in their 20s.” He has been a contributor to publications like Inc., Entrepreneur, and HuffPost; he has also spoken at an array of industry conferences, including SXSW. Kai was an independent board member of SportTechie, advises a range of startups, and serves as a mentor to various accelerators, including Techstars. He is also the board chairman of the University of Southern California’s John H. Mitchell Business of Cinematic Arts Program.
For more diatribes and propaganda, follow him on LinkedIn or Twitter, where he’s reluctantly tweeting more because he lost a bet to his wife…
