The Criticality of Company Culture

Courtesy Andreas Nilsson

Courtesy Andreas Nilsson

Last month 1 to 1 magazine published my article “The 10 rules of Customer Centricity” that talked about how customer centricity needs to be a company strategy, not a motto for the marketing team.  My last post about Why I joined Bazaarvoice talks about the Bazaarvoice culture and how it was a key factor for me to join this company. Again, culture should not be something that is done by HR, framed and then ignored – its central to a company’s strategy.

The book The Discipline of Market Leaders is one of my favorite books on strategy, I encourage you to read it. It makes the case for three central disciplines that define a company and its primary operating model and its product strategy. The book talks about three main disciplines: Customer intimacy (think Nordstrom), Product Leadership (think Apple) and Operational Excellence (think Dell or McDonald’s). Companies can’t do all three, they need to pick one and run with it.

Culture = Strategy

Company culture is strategy. It defines your company. It defines who you hire. It defines what you value and reward as an organization. It defines how you create products and services. It defines who you are. It determines your success.

The Engineering Culture at Motorola

Motorola has been for many years one of the most innovative companies in the planet. While I was working there I had the opportunity to visit the Motorola Museum. I was amazed about the number of firsts: From the first car radio (did you know this is the origin of the name -as in Moto- Rola?), the first square TV to almost everything RF/radio related in the world including the system that provided communication to the Apollo XI Lunar Lander.  

Then it hit me: Motorola had invented so many markets yet it had been unsuccessful in maintaining market leadership. The company invented the cell phone and by then it had secondary market positions both on the cell phone business as in the infrastructure side. The answer, for me, was the company culture.

An interesting fact: Motorola employees wore badges of different colors based on the number of patents under each employee’s belt.  Engineers worked with pride with a silver or golden ID badge.  People knew you had to be an engineer to be successful at the company.  There were POPI (protecting our proprietary information) audits at every office ensuring nothing as trivial as an org chart or was left at your desk.

As much as Motorola excelled at creating products, it failed at bringing them to market.  I saw tons of technologies that should have been successful like the Canopy broad-range internet access network. But most of these failed because marketing was not a core competency.  The engineering -centric culture is killing the company. I really hope it can transform itself quickly enough and be a leader again.

The Product/Launch Culture at Microsoft

My four years at Microsoft were some of the most amazing of my career. Ultimately, I decided to leave because of culture. Everyone knows Microsoft hires type-A personalities. Many people know there is a performance grading curve for employees and that the performance measurement is exclusively focused on the fiscal year at hand.

All these factors result in a culture where there is no room – especially in a company this size- for long-term planning or for learning and optimizing a project. It is all about launching new stuff. From my first few weeks I was surprised by the number of emails that announced new things – new products, new initiatives, new marketing campaigns. There was no discussion about monitoring, learning, optimizing. Projects need runway to mature and become successful.

Marketers received a plaque with over a dozen slots for adding badges for each product they launched. I was part of the Visual Studio 2005 launch team. After the product was launched in November 2005, many people left the team starting with the GM. After all, they had a successful product launch under their belt. It was time to get promoted and move to another group. A former boss and one of the people I admire is John Smolucha who shared an analogy about the Columbia shuttle launching and immediately everyone in Houston command center going home.  How would you feel if you were an astronaut?  “Houston?….Houston?… we have a problem.” . This is how many projects felt at Microsoft.

A great example of this culture is Bing. Microsoft search engine became MSN Search which became Live Search and is now Bing Search – all over just a few years. Maybe next year a new GM will come on board and will re-launch it as something different.

The Culture at Bazaarvoice

It just makes sense: if you focus on making your employees happy, you will be able to attract (and retain) the best talent and everyone will be motivated to do their best job. Customer service experts know happy employees translate to happy customers. The rule applies equally to every area in the organization.

This is how Bazaarvoice defines its culture (from the website):  “To us, culture is more than perks and free sodas. It’s the way we work with each other and create a place where people want to work every day, have the opportunity to rapidly innovate, and foster an environment that brings out our best.”.  There are many blog posts about culture for you in the Bazaarblog.

In Brett’s words, “The importance of focusing on culture is greater than ever.  I spend around 15% of my time focused on culture, and I believe it is largely responsible for our success as a company.”

As I was finishing this post, I read Behind the Cloud, Marc Benioff’s book about building Salesforce.com which reinforces this idea:  “My summers at Apple had taught me that the secret to encouraging creativity and producing the best possible product was to keep  people fulfilled and happy. I wanted the people who built salesforce.com to be inspired and feel valued. “ (Page 11).

Kip Tindell, CEO of The Container Store, recently said in an interview ” It was Milton Friedman who said, “the only reason a corporation exists is to maximize return for the shareholders.” Well, no. Not really. We actually put the employee first. We don’t even put the customer first. Now, you know we love our customers. But we put our employees first. We believe that if you put the employee first and take better care of them than anybody else, they will take care of the customer better than anybody else. And if those two are happy, if you have the happiest employees and customers around, ultimately your shareholders are very, very happy as well.”

I’ll end this post by summarizing on one point: Culture is not a task for HR or for a marketing VP. It must come down from the top and lived by everyone in the organization:  your culture is your strategy.

Courtesy Andreas Nilsson

Courtesy Andreas Nilsson

Last month 1 to 1 magazine published my article “The 10 rules of Customer Centricity” that talked about how customer centricity needs to be a company strategy, not a motto for the marketing team.  My last post about Why I joined Bazaarvoice talks about the Bazaarvoice culture and how it was a key factor for me to join this company. Again, culture should not be something that is done by HR, framed and then ignored – its central to a company’s strategy.

The book The Discipline of Market Leaders is one of my favorite books on strategy, I encourage you to read it. It makes the case for three central disciplines that define a company and its primary operating model and its product strategy. The book talks about three main disciplines: Customer intimacy (think Nordstrom), Product Leadership (think Apple) and Operational Excellence (think Dell or McDonald’s). Companies can’t do all three, they need to pick one and run with it.

Culture = Strategy

Company culture is strategy. It defines your company. It defines who you hire. It defines what you value and reward as an organization. It defines how you create products and services. It defines who you are. It determines your success.

The Engineering Culture at Motorola

Motorola has been for many years one of the most innovative companies in the planet. While I was working there I had the opportunity to visit the Motorola Museum. I was amazed about the number of firsts: From the first car radio (did you know this is the origin of the name -as in Moto- Rola?), the first square TV to almost everything RF/radio related in the world including the system that provided communication to the Apollo XI Lunar Lander.  

Then it hit me: Motorola had invented so many markets yet it had been unsuccessful in maintaining market leadership. The company invented the cell phone and by then it had secondary market positions both on the cell phone business as in the infrastructure side. The answer, for me, was the company culture.

An interesting fact: Motorola employees wore badges of different colors based on the number of patents under each employee’s belt.  Engineers worked with pride with a silver or golden ID badge.  People knew you had to be an engineer to be successful at the company.  There were POPI (protecting our proprietary information) audits at every office ensuring nothing as trivial as an org chart or was left at your desk.

As much as Motorola excelled at creating products, it failed at bringing them to market.  I saw tons of technologies that should have been successful like the Canopy broad-range internet access network. But most of these failed because marketing was not a core competency.  The engineering -centric culture is killing the company. I really hope it can transform itself quickly enough and be a leader again.

The Product/Launch Culture at Microsoft

My four years at Microsoft were some of the most amazing of my career. Ultimately, I decided to leave because of culture. Everyone knows Microsoft hires type-A personalities. Many people know there is a performance grading curve for employees and that the performance measurement is exclusively focused on the fiscal year at hand.

All these factors result in a culture where there is no room – especially in a company this size- for long-term planning or for learning and optimizing a project. It is all about launching new stuff. From my first few weeks I was surprised by the number of emails that announced new things – new products, new initiatives, new marketing campaigns. There was no discussion about monitoring, learning, optimizing. Projects need runway to mature and become successful.

Marketers received a plaque with over a dozen slots for adding badges for each product they launched. I was part of the Visual Studio 2005 launch team. After the product was launched in November 2005, many people left the team starting with the GM. After all, they had a successful product launch under their belt. It was time to get promoted and move to another group. A former boss and one of the people I admire is John Smolucha who shared an analogy about the Columbia shuttle launching and immediately everyone in Houston command center going home.  How would you feel if you were an astronaut?  “Houston?….Houston?… we have a problem.” . This is how many projects felt at Microsoft.

A great example of this culture is Bing. Microsoft search engine became MSN Search which became Live Search and is now Bing Search – all over just a few years. Maybe next year a new GM will come on board and will re-launch it as something different.

The Culture at Bazaarvoice

It just makes sense: if you focus on making your employees happy, you will be able to attract (and retain) the best talent and everyone will be motivated to do their best job. Customer service experts know happy employees translate to happy customers. The rule applies equally to every area in the organization.

This is how Bazaarvoice defines its culture (from the website):  “To us, culture is more than perks and free sodas. It’s the way we work with each other and create a place where people want to work every day, have the opportunity to rapidly innovate, and foster an environment that brings out our best.”.  There are many blog posts about culture for you in the Bazaarblog.

In Brett’s words, “The importance of focusing on culture is greater than ever.  I spend around 15% of my time focused on culture, and I believe it is largely responsible for our success as a company.”

As I was finishing this post, I read Behind the Cloud, Marc Benioff’s book about building Salesforce.com which reinforces this idea:  “My summers at Apple had taught me that the secret to encouraging creativity and producing the best possible product was to keep  people fulfilled and happy. I wanted the people who built salesforce.com to be inspired and feel valued. “ (Page 11).

Kip Tindell, CEO of The Container Store, recently said in an interview ” It was Milton Friedman who said, “the only reason a corporation exists is to maximize return for the shareholders.” Well, no. Not really. We actually put the employee first. We don’t even put the customer first. Now, you know we love our customers. But we put our employees first. We believe that if you put the employee first and take better care of them than anybody else, they will take care of the customer better than anybody else. And if those two are happy, if you have the happiest employees and customers around, ultimately your shareholders are very, very happy as well.”

I’ll end this post by summarizing on one point: Culture is not a task for HR or for a marketing VP. It must come down from the top and lived by everyone in the organization:  your culture is your strategy.

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