The Secret to Thriving Company Culture

Joe: To be in a company where people are actually thinking about these things, they first have to think it's possible. People feel like, oh, I can build AGI. I can build a 10 billion company. And then you literally like, okay, so how can we build a culture that's 20 percent better? And they're like, yeah, no, I don't know if that's possible, it's people. 

Brett: Welcome to the art of accomplishment, where we explore living the life you want with enjoyment and ease. Today, we're going to do things a little bit differently. For those of you who are listening to the recording this is actually a live recording. We are, Joe and I are here at my home right now, and we have a live audience of about 20, 25, 30 ish people.

And we're going to do a live podcast in front of the audience with some people streaming, and then we're going to follow it with a Q and a. These days there's a lot of churn, there are a lot of brand new companies doing brand new things that weren't even possible a couple of years ago or a couple of months ago. And there's also a lot of companies going bankrupt, going out of business. There's a lot of people running around trying to make heads or tails of the markets, of AI, of the changing political landscape and companies live and die by the decisions they make, the speed they get to market, the tech they create, all of these things that could be seen as all downstream of culture. The culture in a company could be seen as the determinant of all these other factors that determine whether you thrive or close shop. So let's talk about culture. 

Joe: It's interesting. What's a hundred percent clear is that companies without good culture can survive and thrive. You can go into a completely toxic work environment and the company can be growing at unbounded speed. And I went into a company recently that is growing at that kind of speed, that $7 billion of revenue, like in the last year that wasn't there, just massive speed.

And I sat down with the technology group, the group that's basically creating the engine of this company. And we did this exercise where we just looked at how would we measure culture? What would be happening in the company, if the culture was right, and we just asked the question, how much better would your results be if the culture was improved by 100 percent or 200 percent? Without fail, every single person thought that the culture would change the company and, over 1.5 X to 10 X. It just depended on what we were measuring and who was guessing. What I know is that though you can get away without a great culture, what you can't get away with is or what you can't deny is reasonable is that culture helps you be successful. 

Brett: Yeah. Something that's interesting about that is that for all those people who said, absolutely culture would change everything. I'm curious internally in their head, what each of them thought that they meant. 

Joe: Yeah. So we clearly defined it in this particular case, it was creating the models and it was literally, it was clearly defined and how the thinking was happening, how the experiments are happening, et cetera, et cetera. So it was like a very clearly defined thing by the folks and they all agreed on the terms and the definitions, which I think is something that's really important. And what happens often when people go in and work on culture, they don't work on the measurements and really think about how do we measure this and how do we know if we're successful or not. Because you can say I'm successful because my revenues went up into the right. But there's a lot of reasons that your revenues go up into the right, but there are definite ways to measure culture that oftentimes people aren't thinking about.

Brett: Yeah. Something that's really interesting when we've gone into companies together. One of the first things that you'll often do is you'll have everybody say a couple of words or just one word about what kind of team they want to work in just to make sure everyone's on the same page. And what I've been surprised by is how on the same page everybody tends to be, how similar those answers are straight off the bat when people describe in a single word, what kind of team they want to be on.

Joe: Yeah, so that was the, I remember going to one of the first times I did this in a company, I was sitting in an executive team and I basically said, I want to hear one to three words of what you want in a company, in a team. And once they did it, I just asked, does everybody agree or disagree with that?

And there wasn't one thing that somebody said where there was disagreement. They disagreed maybe on the semantics of the word and then when we've defined the word correctly, so that everybody knew what the word meant, then they agreed. And I've done that now in dozens of companies and I haven't had anybody, not one time say, no, I don't want that. I want a supportive team. Someone's nah, I don't want a supportive team. I want an adversarial team. 

So we, all humans want to work and be a part of great teams, great families. We all want it. It doesn't mean that we can know how to get it and know how to create it, but we all want it. Which to me is one of the most fascinating things is that when I talk to CEOs and managers and leaders, their thought process is something to the effect of I have to figure out how to manage my team into greatness.

But the truth is that everybody on their team wants it. So what's going on there? What's happening that makes it that people want, that there's this natural impulse, as natural as a kid's impulses to walk, is a team's impulse to do great work. I know everybody in this room right now, they want to do great work.

Nobody's saying you know s what would be great is if I had a life where I just did mediocre shit work for the rest of my life. Nobody says it. And yet somehow all this effort into management to try to get the results when the natural pull is there for every team. 

Brett: So given that everybody wants generally the same thing. Everyone wants to be on a functional team and enjoy themselves. Then the distance must be somewhere else. Where does bad culture come from? How does that come to be if everyone wants ultimately the same kind of a thing? 

Joe: Yeah, there's I hate where this quote comes from but I love this quote. So I'm not going to say where it comes from. I'll let everybody do the research on it. But the quote is, all disagreements, all arguments come from two questions. Who's in charge and how much do you love me? And the base of all cultural misunderstanding comes from those two things.

It's people feeling unseen and it's people trying to figure out how, who's in charge, how do we get it done? What's the mechanism? And when you see that clearly, when you see, oh, because if I was just sitting there on linkedin, I think it was like two or three days ago and I linkedin has this new thing where they're asking you, hey, you're invited to answer this question because you're somebody who should answer this question.

And it was about how to create good company culture and everybody's like great communication, easily defined roles, clearly defined roles, they were doing the thing that, which is they're not wrong by any stretch those are really important things. But all of those things, everything that was listed is really trying to answer those two core questions.

How much do you love me? And who's in charge. And what's fascinating to me is if I go into a typical business and by typical, 95 percent of the businesses I've been in and I say, okay, how do you make decisions here, they can't tell you the answer. Which is fascinating. When you think that all a company is really at the atomic level of a company, it's people's relationships and people's decisions.

You, maybe you have some like CapEx, you have some capital, you have some money, you have some technology, but that came from people's ideas and decisions and people's relationships. That's where it comes from. And most companies can't tell you how decisions are made in their company. And most companies have a meeting culture, which is a great measurement of relationship, how good the meetings are. And they have meeting cultures where everyone's fuck, I have to go to a meeting. So just think about that. If that's all that a company is just the relationships people are having and the decisions. And all of a sudden you find a 10 percent better way to make decisions or your meetings jump by, I don't want to go to the meeting to, Oh, that was a pretty good meeting to, Oh, I love my meetings. I can't wait to go to these meetings. What does that do to performance of a company? It's like a ridiculous multiplier.

Brett: One important variable there is how aware are we about the fact that everything that we're trying to do in managing the organization, it's actually trying to answer those two questions? To what extent are we aware that are we lost in the weeds around the way accountability processes are supposed to run and trying to get it right, or are we constantly reminded of what kind of a team do we want to be on? What's the end point here? So that we can all be aligned in the ways that we get there. 

Joe: I think there's something, there's a prerequisite to that to be in a company where people are actually thinking about these things, they first have to think it's possible. So the amazing thing is as one of the questions earlier, we were talking about is people feel like, oh, I can build AGI. I can build a 10 billion company. I can make printable rockets, 3d printable rockets go into space cheaper than NASA can. And then you literally like, okay, so how can we build a culture that's 20 percent better? And they're like, yeah, no, I don't know if that's possible. It's people. It's just like a mind blowing reality.

And the reason that is because most folks haven't really figured out often how to have a great marriage or raise their kids well, or be with themselves in a way that's great. It's very hard to create a great culture if the culture in your head is toxic, right? It's really hard to create a great culture if every relationship is a dramatic fireball of pain and suffering. And so oftentimes it's, the reality can't be created if you can't see the reality in yourself. 

Brett: Yeah. But we've talked about how a company is often, the culture of a company can be the reflection of its leadership, or is, generally. 

Joe: Yeah. I haven't seen it not be the case. Yeah. The consciousness of the leadership is seen throughout the company. Absolutely. 

Brett: Yeah. Though I've also heard you say before, like this is for a small company, the leader changes their consciousness and then the company quickly follows for a much larger organization. There's definitely some lag. 

Joe: Oh yeah. 

Brett: So what are some of the leverage points? Let's say somebody is running a 10, 000 person company and they've just done a whole lot of inner work and their consciousness has shifted and they're starting to see things very differently. What are the leverage points when you're working with an organization to change the culture in that organization and help it catch up to what is possible and what you, the reality that you're creating?

Joe: So there's so many leverage points to work with and so many levers to pull. The thing that I think people don't see typically is that there is two main forms. One is what I would call like a direct intervention. So that would be something where I'm going to hire somebody. I'm going to fire somebody. I'm going to coach somebody. I'm going to undress or talk down this team or something to that effect. I'm going to give a bonus. Those are direct interventions. Those are far less powerful than structural changes. This is how we do meetings. This is how we make decisions. This is what we put on the walls. This is how we communicate.

So an example of this in our company, one day I was reading emails and I was frustrated. And so anytime that I'm frustrated inside the company, I don't say, how do I change this? I say, how do I change this so it never happens again in the company? If I see incompetency somewhere, I don't say, how do I help that person not be incompetent? I say, how do I make it so that incompetency doesn't happen inside the company generally? So I was reading these emails and I noticed the following behavior, which was, we could do this or this, I don't know. And somebody else going, Oh, that's a cool idea, but there's also this thing and I call that faffing.

I don't know if that's the appropriate. And then, and so we just put one structural change in, which is at the end of every correspondence, you write action needed colon, what the action is, who's supposed to do it when they're supposed to do it by. And in doing that, almost all, maybe 90 percent of the faffing stopped, and that was the purpose of it.

And so that's structural. So every email written, we don't do email, but our correspondence, every one of them has action needed, and it just changes that behavior. It's just how we do things now. The way to think about how you make those tools, however, is how do I empower people? And how do I ensure quality?

If you can do those two things in a decentralized way then it works. And so, in our company now, I don't even, we don't even think about lower or higher, but say the least paid person, the person with the least responsibility in the company can tell me what to do and when to do it. And I can tell anybody they can tell anybody, and we can all say no.

And that we have a system for how we don't get overwhelmed, but everybody can do that and not only can they have to. It's not, you get to be empowered, you are empowered or you don't work here. And so you're constantly looking for these mechanisms that empower people. 

Brett: Yeah. Yeah. What you said in a decentralized way and what the email culture kind of example brings up is that by setting certain structures you basically decentralize the decision making, you decentralize autonomy, you decentralize authority. And in what examples would centralize, it's also a centralized decision though. There was a way that it's like from one place, you're just like, we're not doing faffy emails. We're doing emails with action items and clear deadlines. And there can be some pushback. There can be some, refactoring of that process as people try it out and try different things, experiment in what cases is a centralized intervention like a what are some classic examples of a centralized intervention working really well and going poorly and then the same with, say, a decentralized intervention, like a structural change. 

Joe: So if you look at this, as far as companies, generally, the more decentralized a company gets, usually they beat their competition. So GM was once the most decentralized car company. Toyota became the most decentralized car company. There was taxi cabs, then there was Uber.

So the more decentralized it gets, typically they win. That only happens if they can do two things. They can make sure quality stays and safety, so maybe quality, maybe safety and fairness, that those things happen. And if they can do those with some very elegant rules, then the decentralization works. If they can't do that, i.e. Napster then the decentralization fails to work. So there's, you can only decentralize to a point where you can control for those things. And that's where the central decision making needs to step in. 

The centralized decision making is how are we doing things? What are the principles we're living by? How do we get things done? What is the brand, the core stuff? And then how do we flow that into a company in a way that works? How do we make it lightweight? How do we make it elegant? How do we make it that people have been participating in it so that they actually want to do the thing. So they get to see the power of the thing.

I was just in one of the fortune 100 companies and there was a letter from the CEO and I was in a group one level down and they were reading the letter and they were laughing at this letter from the CEO. And they were just saying that has to be one of the most poorly written letters. And the letter was basically saying, Hey, we keep on doing these scores. We keep on measuring this thing. And one of the things we're measuring is that we are becoming more bureaucratic and less, we execute less. And so we needed that to change. If I was writing that letter to my folks, it would be like a marketing email.

Oh, what's the thing that's going to make them read this. What's the thing that they care about? What's the problem I'm solving for them? This is these are the customers. These are the people, these are the users. How do I look at what their objections are? How do I respect them the same way I would respect a customer instead of, Oh I've told them we are now going to be less bureaucratic and therefore it shall be less bureaucratic.

And the email itself was like the most bureaucratic email because it wasn't like showing that respect. It was I've said it, therefore it shall be. And obviously it's not going to work that way. 

Brett: Yeah. Another relevant thing here is you just described a situation where the CEO's direct reports are laughing at the CEO behind the CEO's back. Like, how does that come to be? And this is another thing that is very common out there where CEOs feel alone and everybody else, but the CEO, but the leader, or at least, but the top brass, sees them as like evil or bad, or like just, there can just be some kind of tension between leadership and even the people who are directly supporting them. How does that happen? 

Joe: Yeah. So let me tell you a story and I'll explain. So the story is I was working with a brilliant woman and she was working in one of these big companies and doing some big tech project and one of the like quintessential Silicon Valley narcissistic leaders was there and yelling at the team. With some coaching, one day she looks at this person while he is yelling at her team and she says to him I really see how much you care and I see how frustrated you are that it's not happening the way you want it to happen.

And I want you to know that everybody in this room wants to help you get your vision met. It's just hard for us to do it when you're yelling at us. And this guy was a known yeller everywhere. And as I understand it, that was the last time this guy yelled at her team. What's happening there is there's many levels to it.

The first is that many CEOs, what they grew up in was they had to be self sufficient. They learned somewhere that they had to get it done. They felt to some degree abandoned as a child. So they're recreating that story in their life of, Oh, I have to do this. I'm the one that has to get this done. People don't see me. So there's that happening. 

On the other side, the followers are expecting some sort of perfection from the leadership. Particularly because the leadership is not saying I need help. Like they're not being vulnerable, right? Because they're self sufficient. That's just what they've learned. And they are also looking at the CEOs in this way of you need to be perfect and you can make me happy. And if you approve of me, then I will be good enough and you can make my dreams come true and that whole thing. If you look at, if you could just measure how much talk is happening in an organization, the CEO is the most talked about human in that organization, just generally, right?

So there is a way in which people don't treat the CEO with the kind of respect that they treat their friends. They don't ask the questions. They don't show up as human with the CEO, which amplifies this feeling of aloneness from them. 

Brett: And this also seems to filter down through companies too like regional managers treat corporate the same way. And they're like, 

Joe: yes. 

Brett: Why did they cut these people? They didn't even ask me. 

Joe: There's one other piece that happens there. Most companies, they'll do this thing where they say, oh, we're going to make significant decisions about you without talking to you. About your org without talking to you because we can sit here around the table and map out everything and we know what's best. We're not going to actually take a listen to the people on the ground and get their knowledge before we make the decision. And it's funny. This is where people don't feel heard. If you just give a moment to hear the objections and make the same decision, people will understand the decision you make much better than if you don't listen at all. And so this is another thing that amplifies this over and over again. 

Brett: I think in a lot of cases, people are afraid of actually doing that. If you're about to lay off somebody in your team and you talk to the team first to gather advice and information, then you might have very challenging conversations and make even harder decisions. So sometimes it's even easier just to make a decision that you don't have the context for, because getting the context would evoke emotions that are not comfortable. 

Joe: It's easier in the way it's easier not to potty train a dog. 

Brett: Yeah. 

Joe: Like that day it's much easier than training the dog, but the rest of your life, you're going to have like poop on your rug. Yeah, I was, so I was recently in another company and I don't know, it was something like two hours into the meeting. I said, basically, I can't trust this team to actually do the work that you all are saying you're going to do. And so I would like to address that before we continue, because I don't want to waste my time working with a team that I can't trust. And so the reason I was doing it was because there was some emails that were sent and they were supposed to respond. Some responded late, some responded with a whole bunch of justification. So we went around the room and we asked each one, what made you do it late? What made you justify what, what was going on? And they talked about one. And each time they talked about the thing that made them do that, I was like, oh, how does that happen in the whole company?

How do we structurally change that for the whole company? Cause you can't be the only one doing it. And so we found all these solutions in that conversation. A little bit later, we're talking about how to have great meetings. And one of the people said not all meetings can be five star. What if you have to really give people a talking to?

I was like I just gave you a talking to an hour and a half ago. How was that? And they all just laughed because they knew, oh we made that productive. The thing, nobody minds being called out if they're not being shamed, if they're not being told they're bad. And so again, if you're running a culture and you have a lot of self shame, you have a hard time creating a company that isn't full of shame.

Brett: It'll be easy to create politics, poopy rugs. 

Joe: Exactly. Exactly. 

Brett: So yeah, politics is a good thing to bring that points to politics in a company. If you're, if you can just say the thing and say it, tactfully, which to say tactfully is not to say politically, but is actually just direct and vulnerably.

Joe: The thing is to like, to do it with an open heart. 

Brett: Yeah. 

Joe: It's hey I know you all want to do a good job. You didn't become vice presidents of this $10 billion company 'cause you wanted to do shit work. So I got you. It's coming at it with that open-heartedness. 

Brett: Yeah. And as, as you cut through the politics, as that culture changes, then what happens with transparency? What happens with how much easier it feels to ask advice of the people who your decisions are going to affect in the company and be able to have those conversations and have them quickly, efficiently, and still make the decision? 

Joe: Yeah. Transparency is the best antidote to politics for sure. The best example of this, and you can say a lot of good and bad things about their culture, but Bridgewater, which at least at one point was the largest hedge fund in the world. They videotaped every single meeting. So if you and I had a meeting, we'd videotape it. And if I talked about cat in that meeting, he would get a copy of the videotape. So it was complete transparency. And the principle that they were working on was transparent markets are efficient markets. And of course the lawyers were like, no, you can't do that. Like that, the evidence that this is going to create.

And what it turned out to be was that there was less lawsuits. Because everybody knew they were being recorded. So they didn't do that dubious stuff. They thought about everything they're doing because there was that deep transparency and the politics in the office were an interesting thing with the way that this culture ended up working was that from what I heard from some insiders was that it was like 66 percent of the people who got employed there were gone inside of 18 months.

But the people who stayed and stayed and stayed for the company, with the company. So they had this very solid core team. But it was not a team that you would want to be in if you were not, if you were defensive when people gave you criticism, because if you ran a meeting there and it was filmed, you'd have three people saying, oh, here's three ways you could have made done better in that meeting.

And if you want to win and you can drop the ego, that's a culture you want to be a part of. I don't think it has to be that harsh. I think every culture needs to be a little bit different given what they're doing. I think a culture of AI researchers is going to need to be run a little bit differently than a culture of cleaning people who are doing cleaning for high rise buildings, is going to need to be a little different than somebody who's doing farm equipment.

But I think there's a lot of things, there's a lot of nuances there, which I think is also one of the challenges for culture is you have to meet people where they are the same way you would coaching or in friendship. 

Brett: So this is something we were talking about earlier also was how for a lot of people, a lot of people in leadership, they're hesitant to talk about culture and the way that they're happy to talk about anything else, profits.

Joe: Yeah. 

Brett: Yeah. I want to talk a little bit more about that. 

Joe: It's the same thing these days. There's some idea that, oh, wow, that we're on this front edge of not wanting toxic cultures. Nobody wants them. It's just, they're scared of being judged for saying it because then you don't, then you're not really business, then you're not really, don't, you don't really care about the bottom line.

And the example of this recently was that I was, I've been told from the team to get on LinkedIn and do LinkedIn stuff every once in a while. And so I'm doing that and I came across this post and recently, there was the healthcare CEO who, who got shot. And somebody responded with what a great human being he was that he rose through the ranks, that he came from a small town, that he was the American dream.

And there was 3000 responses. I did not get through all of them, but there wasn't one where people didn't care about the ethics. There wasn't one where people said, hey, it's okay to kill people for money. There wasn't one where anybody justified every single one was, hey, we have a responsibility to the people we serve. We have a responsibility. 

Brett: CEOs, professionals. 

Joe: Oh yeah. There was like comments of I had to stop using this person's health care because I couldn't agree with their thing. And I spent $150,000 in health care every month for my employees.

Brett: An example of a CEO caring about their employees health care.

Joe: And and I couldn't scan, I couldn't find any that was just like, no, it was a totally justified thing. There was none of that. And it was such this realization for me of, oh, wait, no. Everybody cares. Everybody wants to, every CEO wants to be of service. Maybe not. I'm sure there's some psychotic folks out there or some, I'm not saying that they know how to do it. I'm not saying that they don't get lost, but there is a deep desire in all of us. And it's just a scary thing to admit. It's like in the 1970s, you couldn't say I'm an environmentalist and a businessman. You either had to be an environmentalist or a businessman.

And then somewhere in the nineties, somebody was like, oh, look, I can make a lot of money being an environmentalist and you could be both. You could be a climate investor. All these things could happen and nobody looks at you and goes, oh, you want to save climate. You must think about the bottom line.

Everybody understands now you can do both. And I think it's the same thing, except we're just not admitting it yet. It's just hard for people to admit that this is the reality on the ground is that if you're going to attract great talent, if you are going to win in a race where great ideas and great relationships matter, you need to care about, you have no choice, but to care about culture.

Brett: Yeah. I think that really points to a fundamental inversion in the perspective of our society, which is, that if I optimize for short term profits, then later on, I'll be able to optimize for culture. Cause honestly, if you look at any human activity, anything anybody ever does, what are we making all the tech for? What are we making the AI for? What are we doing garbage collection for? What are we doing art for? All of it is ultimately, for almost anybody, I think they would agree so that they can have a better life, with the people that they love. And that is sometimes an endpoint that seems like a long term goal and you have to do all these short term sacrifices to get there and you can flip the entire thing on its head, where if you have, if you're focusing on the culture of a company, you can, in principle, have faith that you're going to make better decisions. You're going to navigate the market better. You're going to be communicating better. You're going to have less politics. You're going to have. 

Joe: I don't think you have to have faith, even. You can just measure it, see if it's working. I don't need to have faith that, I don't have to be a billionaire to start exercising. Culture is in everything you do. You have to do this stuff anyways. It's how you do it that matters. It doesn't even particularly take more time. It doesn't require more resources. It's just, are you being thoughtful in how you're doing it? Are you giving people what they want, which is autonomy and recognition? Are you being clear about who's in charge and how decisions are made? Those don't take time. Those just take consciousness. Those just take intention. 

Brett: Rather than doing all this business in a way that sucks to get to the point where maybe in the future I'll have the life that I want with the people that I love.

Joe: With my second company that I'll spend half of my fortune on so I feel relevant I'll create a culture that's really good for everybody. That yeah. 

Brett: And rather than that, the invitation is to live the life that you want with the people that you love and do that today. The way that you work together and then let everything else.

Joe: Yeah. And if you're listening to this the great place to start is just sit down with your team and ask them, how do they want to be a team together? And then ask them, okay, so this is the team we want to be. What's stopping us? What can we do to change that? It's not complicated. 

Brett: Do you want to add anything about the council or anything?

Joe: Oh yeah, the council. Yeah, so what I would just say, one of the things for any of you who are in the room, it's an invite only, but Mark is the person who's creating this thing. And one of the things we noticed is that leadership in general needs to have a community of support. Usually when you're doing leadership, your situation is such that you can't be completely transparent and obvious with the people below you or above you, or at least it takes a while to learn how to do that. And so we really wanted to create a community of practice for people who are interested in leadership being a form of self discovery and creating environments where it's really healthy for people and to learn from one another. And so we have that happen. And if you're interested, Mark is the guy to talk to.

Brett: That's it. That's it. 

Joe: Yay 

Brett: Thank you everybody.