Culture and Revolution

We know that culture is important. We even think we know what it is. But culture isn’t perks like dogs and snacks in the workplace—nor is it a defining personality, like, say, “googleyness”. Culture is the collective behavior of an organization… and whether or not you go about creating one, you’re going to get one anyway.  

So how should founders building companies (or leaders trying to turn their company around, address disruption, beat competition, and so on) go about creating a true winning culture? Horowitz shares key takeaways from the only successful slave revolution in the history of humanity—the Haitian revolution led by Toussaint L’Ouverture in 1791—in this keynote given at a16z’s 2016 Summit. How did this 18th century leader essentially “re-program” an entire culture to win?

Episode notes:
What is culture? (1:27)
How does culture show up in a company? (5:29)
You can’t win a revolution with the wrong culture (7:48)
Four ways changing a culture won a revolution (13:38)
Applying revolutionary culture principles to your company (23:01)

Transcript

Today I’m going to talk about culture and revolution. Let’s start with culture. When I was an entrepreneur and I first started out, I asked every smart person I knew who had run a company or was a venture capitalist, “What did I need to focus on from a company building management perspective?” I got a wide variety of answers. A lot of VCs would say, “Hire A-players,” and that kind of thing, which was always great advice because I was going to hire a bunch of idiots and that cleared it right up for me. 

The advice that I got from the guys who really knew how to build companies was that culture is really important. They would all say, “Culture, you have to focus on the culture, Ben.” And I’d say, “Okay. Do you have anything beyond the platitude? Or is that just it? Could you explain to me what you mean by culture?” It was always very difficult for them to do that. Then, as I became a venture capitalist and I worked with companies and worked with CEOs, even for larger, really successful companies, culture is the main thing people get confused about and they don’t know where to begin. This is why I thought that culture would be a really good thing to talk about.

TABLE OF CONTENTS

What is culture?

It turns out that the best way to understand culture is through significant revolution. First of all, what is culture? Dogs at work, yoga, organic food—this is not culture, it’s perks. There’s a difference between culture and perks. This is not about perks. Corporate values, like going above and beyond, dependent, integrity—this isn’t culture either. These could be aspects of culture, but if you create corporate values and you put them on a wall, that’s not going to get you a culture. This is not a talk about corporate values and revolution, this is about culture. So, what is culture? 

This is a picture of me in the middle. You might recognize me. Left of me is Admiral John Richardson, a friend of mine who runs the Navy. When I say he runs the Navy, this isn’t the secretary of the Navy or the appointee. This is a CNO, the guy who spent 10 years underwater running nuclear subs, the guy who really runs the Navy. The guy on my right is my friend, Shaka Senghor, who spent 19 years in prison, and while in prison, ran one of the largest prisoner organizations. 

I thought I’d get them together to talk about culture because they were two of the best guys I knew with insights about running organizations. If you think that was just my crazy idea, you can see the admiral is holding Shaka’s book. They had a lot in common and we talked about culture. The reason I wanted to talk to them is they both had organizations where culture really mattered. If somebody comes into the Navy and they don’t become part of the culture and they don’t do things the way you need to do them in the Navy, they die. That’s the same thing in prison. You come into prison, you don’t do things the right way, you die. 

In talking to them, Admiral Richardson said, “Look, it starts with who comes into the organization.” He pointed out, “We have an advantage because we’re a volunteer service, we’re a volunteer navy. It turns out that nearly half of our people actually come from people who were also in the Navy or somewhere in the armed forces, and so they’re already in the culture as soon as we get them.” And he said, “I’ll take it even further. In the Navy SEALs program, anybody can try out and go through the training, and there’s a very high failure rate. I know who’s going to fail with 95% accuracy just based on a psychological exam that we give them going in. It’s not a physical thing. It’s a physical test, but it’s your psychology that determines it. Are you ready for that culture?”

On the other side, Shaka said, “One thing that really shapes the culture is the decisions that you make.” I said, “Well, give me an example of that.” He said, “If a guy comes in and steals one of my guy’s toothpaste, what I decide to do there is going to matter a lot.” And I said, “Well, if he steals toothpaste, he’s just very concerned with dental hygiene. Aren’t you going to let him go on that? He wants clean teeth.” He’s like, “No, no, no. You don’t steal toothpaste in prison because you care about your teeth. That’s a diagnostic. That’s to determine if I can rape you, if I can kill you, and if I can hurt you or anybody associated with you. How I react determines the safety of all my guys. The easy thing to do is kill the guy. It’s not easy, but it’s the easy decision. If you kill him, you protect your crew. But if I make the decision to be that violent my culture is that violent. Everybody making their own decision is just that violent. This is how culture grows.”

How does culture show up in a company?

When we talk about culture, we’re talking about important decisions. How you recruit, how you run the organization, and decisions you make. In a company, it ends up manifesting itself in a lot of different ways. What it really comes down to is the collective behavior of your organization. This is who you are. It’s funny to read because CEOs go, “Well, that’s not us.” But that’s how you act. That’s what you do. It is you. It’s your collective behavior; it’s your culture that creates that environment. It’s what your people do when you’re not giving direction. Anybody who’s run anything, 99% of the time, you’re not telling people what to do. They’re doing it on their own. They’re making their own decisions. What do they do when you’re not looking? If you don’t make that explicit, it will just create itself and grow that way. If people want to harass each other, they’ll harass each other. If people want to lie to customers, they’ll lie to customers. Unless you set the culture, it will just be what it is.

Here are some examples of how this shows up in a company. Does your company get back to people when they call or do they just drop them on the floor because “We’re great and we don’t need to call you back?” Are you open to new ideas? Is data more important or is intuition more important? Does the job title impact who’s right and wrong? Do you show up on time or do people wait half an hour for your meetings? This is all your culture. Do you use your own products? Does craftsmanship matter? Is it okay to take risks? Is watching what you spend important? Do you even tell the truth? If you’re the CEO and you go, “Oh, I’ll tell you one thing and I’ll tell you something else.” You think that doesn’t run downhill? You think that doesn’t matter and everybody from your HR person to your managers feels totally comfortable just making stuff up? Well, they will if that’s the culture you set. I know if you were like me and you’re an entrepreneur, you’re going, “This is great, Ben. You’re telling us all about culture and how important it is. But guess what? I already missed half of this stuff. I’ve made a lot of decisions where I didn’t even know what I was getting into. Is it possible to change?” The good news is it is, and I’m going to take you through a historical example.

You can’t win a revolution with the wrong culture

This brings me to Toussaint. In the entire history of humanity, there’s been exactly one successful slave revolution, one. Think about that. Slavery’s been around a long time—basically for all of written history. It’s endorsed by the Bible and the Koran. If you don’t believe me, you don’t know your Bible, because not only is it endorsed, they have special rules about it. Around 1600, nearly half the world’s population was enslaved. Yet there’s only been one successful revolution. Why? There’s plenty of motivation. Why didn’t the slaves of the Han dynasty rise up and win? Why didn’t the Gauls rise up and defeat the Romans? Why didn’t the Christians rise up and take down the Ottoman Empire? Why did Nat Turner fail so fast? What is it that stopped every revolution but one from winning? Culture.

Turns out, slave culture is absolutely detrimental to winning a revolution. What is it about slave culture? Well, one, when you’re a slave your life isn’t worth much. You don’t own anything. Your relationships are nothing. Your family can be taken away from you at any point. You can’t invest in your future. You’re not even allowed to learn to read. What does that mean? Well, you have a culture that has real challenges. You’ve got low trust. You’ve got no long-term planning. The population’s generally ignorant and superstitious—and there’s very low loyalty. None of this is conducive to winning a war. So how did an ex-slave, a person who was a slave most of his life, well into his middle age, reprogram his culture, reprogram himself, reprogram an entire slave culture, and lead the only successful slave revolution ever? How did that happen?

A lot of you are probably engineers, and you’re going, “Well, maybe the circumstances of that slavery weren’t as bad as the slavery we’ve read about.” I thought I would read to you a little bit about the slavery that Toussaint came up in. 

Whipping was interrupted in order to pass a piece of hot wood on the buttocks of the victim. Salt, pepper, citron, cinders, aloes, and hot ashes were poured on bleeding wounds. Mutilations were common, limbs, ears, and sometimes private parts, to deprive them of the pleasures which they could indulge in without expense. Their masters poured burning wax on their arms, hands, and shoulders, emptied boiling cane sugar over their heads, burned them alive, roasted them on slow fires, filled them with gunpowder and blew them up with a match. 

I’m not going to go on. It’s hard to read. 

These were some of the worst slave conditions in the history of humankind. I’ll quantify it. U.S. slavery is known to be pretty brutal. During the slave trade, a million slaves were brought to the U.S. At the end of slavery, there were 4 million slaves. People had babies, the population grew. In the Caribbean, 2 million slaves were brought in during the course of slavery. At the end of slavery in the Caribbean, 700,000 slaves were left. That’s how many people got killed. That’s how bad it was. That’s how brutal it was. 

This was the environment in which he changed the culture. But it went beyond that. The advantages of being white were so obvious that race prejudice against negroes permeated the minds of the mulattos who so bitterly represented the same thing from the whites. Black slaves and mulattos hated each other. The man of color who was nearly white despised the man of color who was only half white who, in turn, despised the man of color who is only a quarter white—and so on through the shades. This is the environment we’re talking about. It was not an easy environment to change the culture.

There were many previous attempts in the region. I’ll talk quickly about two of them. The first was led by a gentleman named Francois Makandal in 1758. Makandal was a super charismatic guy, tall—much taller than Toussaint—very good-looking, a great warrior, but not at all focused on culture. He was so not focused on culture that when they would win, they’d rape and pillage. Then if somebody did something wrong to him, he would poison them. He would poison his own guys if they did something he didn’t like. Now, think about how deceptive that is. He wouldn’t confront them; he would not deal with them and poison them. Some people know corporate cultures like that. Now, the way this ended for him was that his own people turned him over to slave masters who burned him alive. He was actually defeated by the culture he set.

The second example is a guy by the name of Vincent Ogé. He tried to run the revolution and to finesse it. He said, “Look, we’re going to have a revolution to get equal rights for freed black people, but we’re not going to end slavery. That way maybe I can get enough white people supporting me that I can split the baby. I don’t have to take an ethical stand. I don’t have to take a moral stand. I’ll just try and walk down the middle.” It turned out that white people didn’t really vibe with that, so that didn’t work.

Four ways changing a culture won a revolution

I’m about to get into how Toussaint actually did it, but I want to set the tone because I think this is really important. In 1797, at this point, Toussaint was already basically running Haiti. It’s still a French colony and he’s already freed the slaves. Another guy, Vincent de Vaublanc, was lobbying the French government. De Vaublanc said, “I need to lobby the government because we can’t let black people run this colony.” Then he writes basically the most racist attack you could ever imagine. He’s like, “These guys are ignorant and brutish negroes. They’re savages. You can’t have savages running the island. They’re going to destroy the economy. We’re going to lose the colony.” 

Toussaint’s response was key because it’s indicative of all the things that he did. He said, “Look, blacks are not lazy and ignorant savages. Slavery makes them so.” He separated the color from the culture. The culture was driving the behavior. Then he goes on to show the Haitian revolution has been less brutal and less savage than the French revolution. The Haitian economy was actually booming. He proved that it was a culture. 

How did he change the culture? I’m going to highlight four keys. The first is he kept what worked. We’ll get into that. The second is he created very shocking rules that caused people to change their behavior. Third, he incorporated people from other cultures and adopted their way of doing things. Finally, his decisions demonstrated his priorities.

First, he kept what worked. When they started the revolution, everybody wanted to join. Toussant was a very charismatic, well-connected guy. He knew everybody. They all knew he was super smart, and so everybody wanted to join. He said, “Look, I’m only going to take a small group at first. We can win with just a small group of people because we’re going to introduce a communication technology that the opposition doesn’t have.” That technology came from one of the strengths of slave culture, which was music. Toussaint set up with the women on the outside and had them sing certain songs that all his guys knew. Those songs were encoded with orders; the exact maneuvers and attacks he wanted. He was fighting the British and the Spanish early on and they were passing messages and walking stuff around. They had to be all together because they didn’t have any other way of communicating with each other. Toussaint had long-range communication because he had more advanced technology based out of slave culture.

The second thing he did was create shocking rules. Shocking rules, particularly when you get into a company, end up being the important thing because people have to question. They have to ask themselves, “why does this rule even exist?” in order to change their behavior. The really crazy shocking rule he created was that officers could not cheat on their wives. Remember, everybody is raping and pillaging in those days. If you win, you get to rape and pillage. How do you go from that to I’m not even allowed to cheat on my wife? The reason he did that is because one of the big problems with slavery is there’s no loyalty because you’re in an environment where tomorrow doesn’t matter. So how do you build loyalty? You say, “You gave your word when you got married. If you’re not keeping that word, how can we trust you to keep any word? You can’t be part of this if you can’t keep your word.” He famously said, “I’d rather relinquish my command than break my word.” By saying, “Officers cannot be officers if they cheat on their wives,” he made it clear to everybody in his organization that keeping your word was one of our corporate values. It was part of our culture and you couldn’t play in this culture without keeping your word.

The third thing he did was incorporate other cultures. This was very unusual because you have to remember he’s running a slave army. He’s been terribly oppressed by the white people on the island. Although he was a slave, Toussaint knew how to read. Not only did he know how to read, but he had read “The Complete Works of Julius Caesar.” One of the things he got from Caesar was that as Caesar built the Roman empire, he wouldn’t kill the people he conquered. He’d leave them in place. The reason he left them in place is they were going to be part of the empire and he needed somebody who knew that culture running that region. He did not do what we did when we went into Iraq and cut the top off of the country and then it went crazy in chaos. He knew better. It’s funny, Julius Caesar knew that, we didn’t know how to do that. He knew to leave those guys in place so that they could succeed and go on. Toussaint also wanted to do something culturally, but he didn’t want to preserve the culture, he wanted to change his culture. When he defeated the Spanish or the British, he incorporated them and made those guys officers in his army. That moved the culture much, much faster than it otherwise would’ve moved because they had much more advanced cultures. They came from cultures who had a lot of the elements that he needed to build a winning army.

Finally, he made decisions that demonstrated his priorities. What was the big decision he had to make? He abolished slavery and defeated his enemies. What are you going to do with the slave masters? That’s a big thing. What would your instinct be? Kill those guys, right? Well, he said, “We need them for the economy because they’re the ones who know how to run these plantations. We’re not only not going to kill them, we’re going to say you can’t have slaves but you have to pay your labor. We’ll lower your taxes to make that possible.” He completely changed the past and said, “We’re going forward together, this is going to be one country.”

What were the results? The first result was something called the Toussaint Clause. Just to demonstrate how powerful this is, in 1799, the French and U.S. were in the Quasi-War. They didn’t call it a war, so that’d be fake news. It’s the Quasi-War. They were just shooting each other over stupid stuff. As part of that, the U.S. put an embargo on all the French colonies, including Haiti. Now, Haiti was already kind of breaking from France and Toussaint needed that trade to continue the prosperity of the island. So he sends a white diplomat to the United States to meet with President John Adams and Secretary of State Timothy Pickering and convinces them to exempt only Haiti. They had to do it in a secret language because they didn’t want France to get mad, but it was so transparent that in the U.S., in Congress, in all the documentation, they call it the Toussaint Clause. You have to understand that this is a Black ex-slave cutting a deal with the United States who didn’t outlaw slavery for another 65 years in 1799. As a footnote to that, Timothy Pickering sends Toussaint a note telling him this and signs it, ”your obedient servant,” which is the way they signed a lot of stuff. Imagine that, the United States signing that to an ex-slave, “I’m your servant.” How about that? That’s a result of culture. 

It’s still the only successful slaves’ revolt in human history and it created a booming economy and a world-class culture. Under Toussaint, Haiti had more export income to the United States. He defeated the Spanish, the French, and ultimately, they defeated Napoleon. After Toussaint got captured his successor abandoned the cultural thing. Once they defeated Napoleon, he killed all of the white people in Haiti and the economy fell apart and all those things that you would expect. Culture really mattered.

Applying revolutionary culture principles to your company

How does it apply to me? What about me, Ben? First, keep what works. Some of you guys know Steve Jobs. When Steve Jobs came back to Apple, they were about three weeks away from bankruptcy. The conventional wisdom across the board—everybody said this, every financial analyst, every industry analyst—the problem with Apple is they need to be more like Microsoft. Anybody old enough would remember this. You have to be more like Microsoft, you have to separate Mac OS off of the Mac and you have to get clone makers to go into the operating system market because PC economics wiped it out. Actually, Jobs’ predecessor, Gil Amelio, was doing just that. Jobs comes in and he says, “What are you talking about? That’s not who we are. Let me tell you what we’re good at. We’re good at building integrated stuff. Not only am I going to kill all the clone manufacturers, I’m going to make it more vertical. I’m going to build more hardware. I’m going to add a music player. I’m going to build stores. I’m going to go completely vertical because we’re good at design and we’re good at the end-to-end experience. That’s our culture.” You have to keep what’s working. You want to change the culture but you have to keep what’s good about your culture.

Second, create shocking rules. Mark Zuckerberg has this great rule: move fast and break things. Now, he could have said, “We are innovative, we’ve got a company value of innovation. Put that on the wall: “innovative.” Everybody would’ve looked at it and said, “Oh, yeah, we’re ‘innovative’.” But when you say move fast and break things, and you’re like, “You want me to break things? I’m an engineer, I help fix things. You don’t break things.” Why do you have that rule? That’s the key. If you get your employees asking themselves, “Why are we doing it this way?” then they’re going to think about that answer. The answer is that innovation is even more important than breaking things, getting into trouble, or even quality at times. Move fast and break things creates that shock value that actually makes them an innovative culture. If you look at them today, one of the things they do is they move fast. The innovation and new products coming out of Facebook is astounding because that is their culture.

Third, incorporate outside leadership. This is a funny one. Google built Google apps maybe five years before Microsoft really got going with Office 365—and Microsoft ran right by them. Why? Because there was no enterprise culture in Google. None. Nobody would do it. Steve Ballmer used to go see CIOs and say, “Are you going to buy from me or from Google?” Well, why don’t you see if Larry Page will come visit you? Guess what? Larry Page never visited any of those guys because enterprise wasn’t their culture. They went out and got Diane Greene, one of the greatest enterprise people ever. This was an impossible thing to do because she was on the board of Alphabet; she is still on the board of Alphabet. How do you take a board member and put them under Sundar, under Google, under Larry and have her run this? Well, you have to be very convincing and you have to be committed.

The final thing is you have to make decisions that demonstrate your priorities. Reed Hastings, CEO of Netflix, was at our tech summit and my partner, Marc, asked Reed, “Reed, you started out in the DVD delivery business and then you went to streaming. How did you make that transition? How did you do it culturally?” And Reed said, “It’s interesting because we started out with the metaphor that DVD delivery was like a network. It was high bandwidth. We could deliver a lot of big payloads, but it was really high latency—like three days. We knew streaming was going to happen at some point, we just didn’t know when. We really wanted to be a first-class streaming company and we couldn’t do that if we were totally focused on DVD delivery logistics.” When asked how he handled it, Reed said, “Well, it all happened one day. On that day, DVDs were 100% of our revenue and we had a whole giant team running that business. I said, ‘You guys aren’t allowed to come to staff meetings anymore.’ It was a really hard day, they were really sad.” 

Can you imagine that? The team running all of your revenue is no longer allowed in the executive staff meeting where you’re talking about the future and the strategy of the company. That’s an extreme decision. Why would you do that? Well, if you’re really going to be number one in streaming and you’re going to beat every startup that’s going into it, you really have to make it clear to the company that’s the future. We’re not messing around here. And he did just that.

I know that culture sounds abstract and I know it sounds hard. But I’m telling you, just like the old guys told me, it’s really important. When you build a company, there’s almost nothing that’s more important than culture. If this guy could overcome being a slave for 40 years and completely change a slave culture and defeat the French, the British, and the Spanish, and free the slaves of Haiti 65 years before they were freed in the United States, then you can change your company and make it great.