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Live! Angela Ahrendts, Dara Khosrowshahi & Eric Schmidt talk culture at Masters of Scale Summit

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Three legendary culture-setters come together live at Masters of Scale Summit. In the first episode from this sold-out event, Angela Ahrendts, Dara Khosrowshahi, and Eric Schmidt reveal how they’ve built and rebuilt great cultures at Apple, Uber, Google and more. With host Bob Safian, they deliver surprising stories, counterintuitive anti-lessons, and live-show energy from the stage of San Francisco’s Presidio Theatre.

“You have to always start with the premise that there’s a reason why people are here, and you better validate it.”

— Eric Schmidt
About the guests:
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Angela Ahrendts is the former senior Vice President of retail at Apple, and the former CEO of Burberry. As CEO of Burberry Ahrendts brought back the luxury fashion and beauty brand, raising the company value from £2 billion to over £7 billion in seven years.

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Dara Khosrowshahi is the CEO of Uber, and as one of the original “Killer Dillers,” was previously the CEO of Expedia.

eric_schmidt

The co-founder of Schmidt Futures, Eric Schmidt was CEO of Google from 2001 to 2011, and served as executive chair of Google’s parent company, Alphabet. He was CEO of Novell and, before that, a longtime executive at Sun Microsystems.

About the host:
bob_safian

Bob Safian is the host of Masters of Scale: Rapid Response, and the editor-at-large for Masters of Scale. He’s the founder of The Flux Group, a media, insights, and strategic advisory firm. He was previously editor-in-chief of Fast Company, where he won the National Magazine Award for Magazine of the Year in 2014.

One of the fascinating things about culture is: Some of it’s articulated, some of it’s by design, some of it’s intentional, but some of it just evolves. And you don’t necessarily know where it comes from.

— Bob Safian
Transcript of Masters of Scale: Live! Angela Ahrendts, Dara Khosrowshahi & Eric Schmidt talk culture at Masters of Scale Summit


Angela Ahrendts:
The word culture. As humans we come up with these words, Metaverse, and not everybody knows exactly what they mean. But culture’s kind of one of those words. When you have a team whose values are aligned and they trust each other and it’s just natural handoffs. But then when you have that incredible foundation of trust, it just unlocks the creative thinking, it unlocks the innovation.

Eric Schmidt “Something’s strange.” These are the physicists. And I go, “Okay, this is why we have physicists.” And that was the beginning of that crisis. So I learned: Do not commit cultural faux pas. Bill Gates said, “Spend 80% of your time on 80% of your revenue.” I had five hours of note pages of advice of what to do.

So I’m sitting there and this guy, right, he’s brilliant. And I go, “Stop. Okay, give me the list of the 10 smartest people in the company.” The first gentleman comes in and he’s white as a sheet. I’ve never seen someone so upset. And I thought, “Well, maybe this culture.” 

The other thing I learned: “You only have six to nine months to change the culture of a company before you’re stuck with it.”

Dara Khosrowshahi: I didn’t know the company. I wanted to understand what the company thought. So we crowdsourced a good bit of our culture bottoms up. Because the company really wanted to separate itself from the past.

I’ll give a little bit of an anti-lesson, call it: Ultimately, don’t try to be someone else. Be authentic to yourself. I started booking walk-the-halls time. And I started walking the halls and it was so awkward. I’d be like, “What are you doing?”

Bob Safian: Hey listeners! This is Masters of Scale: Rapid Response host Bob Safian. 

Today we have a very special episode that’s straight from the inaugural Masters of Scale Summit that took place in San Francisco at the Presidio Theatre. I hosted a roundtable, coffee shop-style conversation around the question, “How do you build and rebuild a great culture?” We gathered three legendary culture setters for the first time to share their insights.

Angela Ahrendts revolutionized Burberry’s culture and reinvented Apple’s retail operations. Eric Schmidt, who was Google’s first outside CEO, scaled the company to new heights. And Uber’s current CEO, Dara Khosrowshahi, completely turned around Uber’s much-watched culture. 

This conversation was recorded in the morning in front of a live audience during a session titled, Move Fast. Pivot Faster. We hope you enjoy this first of what will be many lessons from the Masters of Scale Summit in the weeks and months to come.   

Chapter 1: Welcome to the Masters of Scale Café

June Cohen: Please welcome them to the stage, make them feel like we know they’re welcome.

Angela: Hi, Bob. Thank you.

Bob: All right, so just so you know, during that exercise, they were the last ones to stop talking, so I’m pretty sure this is going to go pretty smoothly. Welcome to the Masters of Scale Cafe. We have our coffee here. It’s early in the day, it’s breakfast. And you know why we’re at a breakfast table, right? Because culture eats strategy for breakfast. We’ve heard this line.

Angela: I love it.

Dara: All right. Well done.

Bob: Peter Drucker is who it’s attributed to, although it’s not actually proven that it’s Peter Drucker that it came from. And I was actually at an event where there were two CEOs who got into an argument over which one of them came up with it. None of these three here, but so everyone wants a piece of this culture conversation. You all have been in, as June said, been in the center of culture. What we’re going to try to do here to keep it fluid is, over coffee, people usually tell stories. So we’re going to start with a story and ask each of you to tell a story and then talk about a little bit. And then we’ll each do stories in turns. We’ll do three rounds of this. Is that okay? So Angela, do you want to start? Do you have a story about culture at Burberry or at Apple that was particularly evocative for you, memorable?

Angela: I was leaving Burberry and going to Apple. And of course they left six months in between. And so, a lot of time for the 60,000 employees to really kind of figure out who I was and why this girl from fashion was coming in, etc. And a lot of comments on how I was going to flip everything and change everything. And so I literally started my first week, and the head of HR and the head of PR, they bring me this email and they’re like, “Would you sign this? And we’re going to translate it into 30 languages and send it out to all the employees.” It’s like we’re in a YouTube, Instagram, WeChat world, and I’m going to send an email.

And at Burberry, we had done videos every week. And so I said, “We’re going to do a video.” And they’re like, “Okay, well we have a studio over here, hair, make-…” I’m like, “No, no, no, no. YouTube videos don’t have studio lighting and hair and makeup. This has got to be authentic. We’ll do it in my office with an iPhone. It’s going to be three minutes, one take, three thoughts. Just a thank you. We’re going to turn ourselves inside out, because you need to tell us what Apple needs to be doing more of in your community. You have a voice and we want to hear you, but we didn’t have the mechanisms.” I’m shooting the video, halfway through my phone rings and it’s my youngest daughter. I just picked it up. “You okay?” “Yeah.” ” Great. I’ll call you back in two seconds.” Finish the video. Now, this is Apple. Everything has to be perfect. And I said, “No, send it out.” And it was a bit of a battle.

I said, one take. It has to be authentic. So they sent it out, and literally the next couple of days, thousands of emails thanking them for communicating on video because they could feel me, thanking me for taking my daughter’s call because it proved I was a human. But it helped set the culture, it helped make them realize, I’m just like they are. I’m just a part of the team. 

Bob: So as you guys hear this story, is there a thought, an insight, a question, whatever, that you…?

Dara: I think for me, it reminds me of a lot of conversations I’ve had with my leadership team, which is a distinction between management and leadership. Management’s about the head. I might be someone’s manager because of the org chart, but leadership can come from any place, right? Leadership is about the heart. And it reminds me of the authenticity that you bring. Was the leadership style one that was more about the head and then you had to bring the heart into it, or did that play into how you thought about culture change?

Angela: Yeah. It’s interesting. I always said that I thanked Steve for me turning around Burberry, because we were the first to buy the iPads and digitize everything in the stores, etc. So I was a pretty good student on the company and very quickly I learned that all of those retail employees, they just revered Steve. And he told them they weren’t allowed to sell, that their job was to enrich lives and they needed to do it through the lens of education, through his products. And so I knew that that culture already existed. And so I just honored it. I just said that I’m only going to pick up where he left off and take it to the next level because I want to make him proud. And so I think when you’re creating a culture, it’s different if you’re a founder, but when you walk into something so big and so perfect and so successful, it’s not about me. It’s about me becoming a part of it and just evolving it and making it better.

Bob: Awesome. Eric do you have any?

Eric: Have any, I wrote a book about Bill Campbell, my coach. You guys knew Bill both well.

Angela: Yes. Yes.

Eric: And he spent half of his time working with us. But what he really did is he fulfilled the human mission that we as executives kept forgetting. And it’s what I learned from Bill is you have to actually spend some time on this. So now what has happened is there’s been this view that you should bring your whole self to work, and now we’re being forced to crawl that back because your whole self is maybe not what we want in work. And so I think that the story you told is exactly correct. But you could imagine variants of it, which would be not correct. And we’re navigating a new world of that perception.

Bob: Did you struggle with that? About how far you go, how much you bring or show of yourself?

Angela: No, because again, I took the job at an older stage in life. I wasn’t a kid. And luckily I had done a couple of things before Apple that turned out pretty good. And so you learn, and my thing is, I always say the higher up you go, the more authentic and the more human you need to be. Where I think it’s often the opposite and ego kicks in. And it’s like you said, it’s not about managing, it’s about inspiring and encouraging. And I’ve always said I’m just the enabler. I’m the connector. I just bring in incredible people. We build a trusting relationship and then they’re empowered to go. I’m not the smartest tool in the shed.

Dara: And the universal law of management I’ve seen is, the higher up you are in the organization, the less you really know about what’s going on.

Angela: Absolutely. Absolutely.

Dara: Everyone talks to you in paragraphs, and there’s a beginning and a middle and an end, and they prep. There are prep sessions for the prep sessions. So I think you’re absolutely right, which is: The only way to get an organization to be authentic with you is if you take the first step and be completely authentic and transparent. Because everyone’s got a good BS meter. And if you as a leader are BSing your team, they’re going to BS you right back. So I think that authentic leadership and really opening up to them, it’s hugely important.

Angela: And especially when you’re doing it with 60,000 people around the world. This was long before this hybrid thing we talk about — we were already hybrid, any global business, right?

Chapter 2: How to lead a cultural turnaround

Bob: So Dara, I’m curious about whether you have a story, because you’re mentioning whether you get all the information you need. You came in to Uber and there were cultural challenges. Is there a story that you have for us?

Dara: Yes. This is only for half an hour.

Eric: Let’s make the list.

Dara: We’ll see. Yeah. Exactly. For me, one is that we’re still going through that cultural journey. So we’re not done by a long shot. And I think that you can never say, “Hey, put a pin in it, we’re done.” The minute you’re done, you’re done. You’re in a really bad spot, actually I think. But for me, one story that stands out was weekly all-hands. We do weekly all-hands in front of all employees and we answer a bunch of questions. And Uber of course was this enormously successful company that ran into real cultural issues and I was trying to relate to that — because when I met the team, it’s a group of people who really want to have terrific impact. These were not bad people by any means. And there was a lot of the culture that was great, but then some issues that were problematic. And at this all-hands, a question that was voted up was, “what are we going to do about our PR problem?”

We were in the news constantly about an issue, one issue after the other. And I got up in front of the company and I said, “Listen, we don’t have a PR problem. We’ve got an us problem. First we have to fix ourselves, how we act, who we promote, etc. Then the PR can follow.” Because ultimately, especially in this world, the substance always comes out. You can’t pretend anymore. So I think that was a pretty important moment where I said those words in front of the company, and that allowed me, that opened the door for us to start making some significant changes. But we are still on the journey. We got a long way to go.

Bob: Eric, what are you thinking? Hearing this story from Dara?

Eric: The problem that you were doing is a turnaround, whether you called it a turnaround or not. And turnarounds are just different. And you have to get everyone’s attention on the short term. You need to make clear what the goals are, and you need to deal with all the people issues which you undoubtedly inherited. And I think that your example is just one of the 20 things you got to get right, which of course you did. Boom, boom, boom, boom. Right? It’s a real test of leadership.

Dara: Yeah.

Bob: Yeah. Well, it’s a question sometimes too about what are the culture changes and what are the people change? Are there people you have to move or do you just have to adjust the environment so those people operate in a different area? And I don’t know how you answer that question.

Dara: It’s actually funny. One of my favorite pieces of advice, and this is going to sound pretty twisted, from one of my mentors, when I got a new job. I said, “What’s the first thing I should do?” He said, “Fire someone.” And what he meant was, that’s when people start taking you seriously.

Your team’s going to kind of listen and they’re going to go right back to what they were doing. The minute when you actually make painful changes is when the organization in a turnaround knows you’re dead serious.

Eric: By the way, the number, it’s 80% of the management team will turn over in a turnaround. It’s just a question of what the rate is.

Bob: How soon it happens.

Eric: Yeah.

Dara: Yeah. We’re at about 50/50. So we’re good. And everyone’s staying. No one else is going. So this is not a threat.

Bob: I mean, Angela, you had to do a turnaround at Burberry and had some difficult kinds of conversations, not unlike Dara’s talking about.

Angela: Yeah. And I think, like you said, you pull everybody together, you got to be transparent. And you can tell by looking in the audience at your top 100, who’s going to be on your team and who’s aligned to your strategy and vision. And not mine by the way, the one the team had put together. And funny, my first offsite at Burberry, literally three days in and I looked out in the audience and I said, “I can tell you right now who’s not on board, and I am very happy to give you an incredible package, will be a great reference for you, but everybody needs to be 100% in or we’re not going to win.”

Dara: I’m curious as to what Eric said. For Uber, it was pretty clear as a turnaround; for coming into Apple from Burberry, it wasn’t. Did you have to state whether this was a turnaround or keep going the way you’re going, etc? Did you have to put that down?

Angela: Yeah, no, no. I said the opposite.

Dara: Okay.

Angela: I said again, the most successful retailer on the planet, five times the productivity of any of its closest peers. And so no, I had to honor and respect what was built. And say, “Might sound odd, but I don’t know what to do. So together, you know, you’re on the front line and that’s why we’re going to put all these communications in place so you can tell us and you can problem solve.” And so almost the opposite. And I said, “I know there’s things we can do better inside of the store. So what are those? And I know that…” Well, we actually did a huge crowdsourcing exercise, and the teams kept growing as we were rolling out more stores. And we said, in order to inform the new in-store experience, we asked them over the course of six months: What did they feel Apple should be doing more of in their community? And that’s when, what informed the whole experience. But it involved them. So then when you launched it, I mean you could ramp up to 20, 30,000 sessions a week and they owned it because they were part of creating it.

[Ad Break]

Bob: Before the break, we heard highlights from  the first ever Masters of Scale Summit about what it takes to build and rebuild a culture. 

Uber’s current CEO, Dara Khosrowshahi, Google’s former CEO Eric Schmidt, Burberry’s former CEO and Apple retail chief Angela Ahrendts swapped stories and insights about key culture-creation moments.

Now we dig a layer deeper, as Eric shares a culture faux pas he made with one of his earlier companies, Dara shares what he calls an anti-lesson, and Angela talks about understanding the personality of your company. 

Chapter 3: Learn a culture before you try to change it

Bob: Eric, you asked Dara a question and sort of identifying that this is, as a turnaround, it’s different. So what’s different when you’re building? Yeah, I don’t know if there’s a story you have or just a…

Eric Schmidt: Well let me tell a turnaround story because I think it’s very much consistent with this. So a long time ago I was recruited to be CEO of Novell, and Novell was headquartered in Utah. Culturally extremely different from where we are today. I mean, trust me, very different. And I was sort of naive, but well meaning. So I show up and I sort of meet everybody and I ask for advice and everyone’s very generous. Bill Gates said, “Spend 80% of your time on 80% of your revenue.” Good advice. Jim Barksdale said, “If it’s a snake, kill it.” He had a whole bunch of Texas sayings that were very funny. And what I did is I took a notebook and I wrote everything down. And I found myself on one of these United flights in coach next to somebody who wanted to give me lots of advice. I had five hours of note pages of advice of what to do. People were really helpful.

So here I am, and I start meeting people and so forth, all sorts of problems in the company. And the company at the time had a little shuttle, knee-to-knee seats going from Utah to San Jose. And I find myself … I had said, “I can’t quite figure out who the really smart people are.” I’m just casually saying this because I’m an elitist. And my friend says, “Find one and they’ll know the others.”

Okay, good advice. So I’m sitting there and this guy, right, he’s brilliant. And I go, “Stop. Okay, give me the list of the 10 smartest people in the company.” Write down, and I put it in my little briefcase, go to the meeting and I give it to my assistant and I said, “I want all of these people to come to my office each for half an hour, and I just want to listen to them.”

So a week later I’m in my office in Utah and the first gentleman comes in and he’s white as a sheet. I’ve never seen someone so upset. And I thought, “Well, maybe this is Utah culture.” They’re just … it’s not a normal place. And he’s nervous, he’s really nervous. He’s one of the smartest people. And I said, “Well, okay, I’m sorry to ask you but why are you so upset?” And he says, “You’re firing me.” And I go, “What?” And he goes, “In Novell, the way you’re fired is, it’s a 30-minute appointment with no agenda.” And I realized that I had notified the top 10 smartest people in the company, right? And I have a hundred examples of Eric’s stupidity of that nature. But here’s what I learned. What I learned is that culture does trump everything else. Excuse the pun … the Trump part, not the culture part. You think you understand how people work, and you don’t. And you have to take the time to listen. So at that point I decided I would go get Utah training, and this is code for Mormon. And so I would sit down and I would listen and I would learn and so forth and actually work with them. And that produced a good outcome.

The other thing I learned, and this is from Lou Gerstner who had written the whole book on this and his IBM turnaround, he said, “You only have six to nine months to change the culture of a company before you’re stuck with it.” And when you and I met, when you took over the job, I told you that.

Dara: Yes.

Eric: And you executed against that, whether you knew it or not, what was originally a Lou Gerstner principle.

Dara: Once in a while, I listen.

Eric: Thank you. Thank you, Dara.

Chapter 4: How to learn about company culture? Crowdsource it

Bob: But I’m curious, Dara, because culture comes from the bottom. But also you’re put in place to kind of change it from the top. How do you balance those two things?

Dara: Yeah. Yeah. It’s a tough balance. You were talking about crowdsourcing. We originally crowdsourced the new culture of the company because I had to move fast. Once in a while I listen to Eric. And we wanted it to be, I was a bit of a foreigner there. I didn’t know the company. I wanted to understand what the company thought. So we crowdsourced a good bit of our culture bottoms-up. And for me there was a great outcome, which is the culture very importantly stated what we weren’t. Because the company really wanted to separate itself from the past. There were some parts of the culture — we make big bold bets, etc. — that we retained. But at the same time, because it was crowdsourced, it didn’t have a strong enough point of view in my opinion. Because if you crowdsource, if you get the average of 20,000 people what their opinions are, you kind of get to the average opinion.

Bob: You’re not getting the top 10.

Dara: You’re not getting the really juicy stuff, what makes you different? So we’ve actually now revisited our cultural norms, and some of them we’ve kept. But I found that as a combination of bottoms-up, but then it does have to come top-down as well. You’ve got to put your own stamp on the organization. I didn’t have the permission to, early on, because Uber had such a strong culture, etc. Once I got there, after a couple of years, I had the permission with my team. And now I think we’re in a pretty good spot. But the journey keeps going.

Bob: As you’re talking about… I’m reminded. So there’s a book that Ed Catmull, the founder of Pixar, wrote called Creativity Inc. I don’t know if you guys have read it. Terrific book. And I’ve read it. And then when I was the editor of Fast Company, I was like, “This is what I want to follow.” And I try to create this culture flywheel, and then it would drift back. And so I met Ed at one point and I said, “So Ed, what am I doing wrong? Why?” And he starts laughing at me. He’s like, “No, you got to muck out the stalls over and over. People go back.” And so I’m curious for you guys, how much of a culture is something that can be a flywheel? And how much do you have to keep just… You said you’re only part of the way through, just keep at it.

Eric: Well, remember that people opt in. So you have selection bias. So you have the people who chose to come, and the people who didn’t like your culture are not there. So you have to always start with a premise that there’s a reason why people are here, and you better validate it. And then you need to figure out how you want it. And this is exactly what you said, both of you actually said. Then you have to figure out what the touchpoints are. One way to say this is to say, “We like to win. And what is it going to take to win?” And one of the things I learned from Larry and Sergey is to be impatient about that. Whatever idea I had was not good enough. Whatever idea anybody else had was not good enough. It was always not good enough. And that drive for excellence is what leadership really is about.

Bob: I mean… Go head.

Angela: No, I was just going to say, and I think too, I agree 100%. But I think also as you are scaling… So Burberry was relatively small. And so as you scale and you’re bringing in thousands of people a year, how do they know what that… Of course you want to hire for it, but there’s so many new people coming in. So we discovered at Burberry and at Apple that you actually had to document it. We brought in a cultural anthropologist to study everything that we had done. We doubled the business, we said we were going to do it again. What did we learn? What did we want to make sure gets embedded in onboarding, etc? So kind of the same thing at Apple, I mean we did the same thing. But there’s a financial report, there’s a supply report, there’s an environmental report. So we actually created the first human responsibility report to share what we were doing with this culture, how we were keeping this momentum. And that way there was no ambiguity in terms of expectations, performance or otherwise.

Chapter 5: A cultural lesson from early days at Google

Eric: Let me give you a Google example in my first year. So at the time, the company was in one building. And I had an 8×12 office and I had a little desk and a door to the office. And one day I walk in and someone has moved into my office with me. And I said, “Hello.” And he goes, “Hello.” And I said, “Who are you?” And he goes, “I’m Amit.” And I said, “What are you doing here?” In a nice way. And he said, “Well, I was one of the five people in the office across the hallway and you’re never here, so I just move myself.”

Now, because of my previous errors at Novell, I knew that this was a test, okay? And when you’re being tested, it’s like… “I’m being tested. Think Eric, think.” Okay. So I said, “Did anyone authorize…” in a nice way, “Did anyone authorize…” He said, “Sure.” Wayne Rosing who was the VP of engineering said, “Sure, move into the CEO’s office.” And I said, “Okay, I’m screwed.” So anyway, so he puts his headphones on and he’s typing away doing whatever. He’s an engineer, he doesn’t say anything. Perfectly fine roommate. Works all the time.

So I’m sitting there and I’m on the phone with Omid, who is the VP of sales at the time. And I’m having this conversation and Omid is saying, and I think that the revenue numbers at the time were about a hundred million a quarter. And he said, “I think we can get to 120.” And I said, “I think you’re sandbagging, Omid.” I think you can… You know what the technical term sandbagging. We ultimately gave Omid a sandbag to stand on to make his presentations, which I have a picture of, which is hilarious. But in any case, I’m sitting there talking to him and he said, “Yeah.” And so it’s an unsuccessful phone call. So I hang up the phone and Amit next to me takes off his headphones and says, “Oh, I know the revenue numbers.” And I go, “I knew you were listening in to my phone calls.” So I said, “What’s the revenue number?” And he goes, “It’s 142 million.” And I said, “Well, how do you know?” He said, “I do revenue analytics.” And I thought maybe I should have talked to my officemate.

So I call Omid, the sales guy, and I say, “Omid, you’re sandbagging. You have another 12 million in the bag, you just haven’t found it yet.” And he said, “How do you know?” And I said, “I’m not telling you.” So all of a sudden… And by the way, the revenue number really was 142 million. I discovered having the chief revenue analytics guy in my office at all times is a great idea, right? Running a small company.

Dara: Note to self.

Eric: Note to self. So the interesting story is that we stayed, we actually liked each other so much, that he stayed as my office mate until we were a public company where I couldn’t violate the various SEC laws. So then I thought, how can I get the same thing? And so I had a small office and I had a larger office, and I put four physicists next to me. And I said, “Your job is to notice something strange and run into my office.” So in 2008, whatever it is, the May of 2008 or ’09, whichever the month and year was, they run in and they say, “Something’s strange.” These are the physicists. And I go, “Okay, this is why we have physicists.” And that was the beginning of that crisis.

So I learned something, which was keeping these kinds of people around and close to you is really helpful. And plus, if he moves in, don’t say, “What the **** are you doing?” I’m sorry. Do not commit cultural faux pas.

Dara: Yeah. Yeah.

Chapter 6: Dara’s anti-lesson from the Uber turnaround

Bob: I mean, I think one of the fascinating things about culture is every organization has a culture. Some of it’s articulated, some of it’s by design, some of it’s intentional, but some of it just evolves. And you don’t necessarily know where it comes from. I know we only have a few minutes left, but I wanted to ask each of you, do you have a lesson for the folks out here, the folks who are watching, about something that when they get back to their office, that they should do that will improve their organization’s culture. Something they should keep in mind, something they should act on now?

Dara: I’ll give a little bit of an anti-lesson, call it, which is… It goes to all the advice that you took. You can take all the advice, but ultimately don’t try to be someone else. Be authentic to yourself. I still remember, I think it was a Forbes article about this manager who walked the halls. He managed by walking the halls. And that’s how he found out what was really going on at the company. I’m like, “I’m going to walk the halls.” So I started and I’m pretty structured. I started booking walk-the-halls time. And I started walking the halls and it was so awkward. I’d be like, “What are you doing?”

Eric: Exactly.

Dara: “I’m working. Get out of here.” Or go into a conference room and dead silence. “How’s it going, everyone?” So I just started hating walking the halls. And my assistant, she saw how much I hated it. So she took glee, she’s like “Dara, it’s time to walk the halls.” And so eventually, listening, it profoundly didn’t work for me. Now I’m sure I would say “walk the halls” is good advice, but I do think it goes to what you started with. Which is ultimately whatever you do, whatever advice you choose to take, whatever fits in with you, you’ve got to be authentic. And only if you’re authentic, can you then affect authentic change with an organization.

Angela: Yeah. And I think it’s funny because it’s often the word culture. As humans we come up with these words — “metaverse” — and not everybody knows exactly what they mean. But culture’s kind of one of those words. And so I just used to always say, “Everybody has an individual personality, and it’s simply the personality of the company.” And to me, it’s no different than the Warriors winning or a great rock band. When you have a team whose values are aligned and they trust each other and it’s just natural handoffs. But then when you have that incredible foundation of trust, it just unlocks the creative thinking, it unlocks the innovation.

And that’s that old adage, success breeds success. So to me it’s just: Understand that the culture is, it is a giant personality and it’s living, and breathing, and goes up and down. But it is just constant, consistent, authentic communication and listening. And it’s not your culture, even if you’re a founder. This thing will take on a life of its own, and hold on for the ride, and keep pace as things change. I mean not just with technology, with everything. Because they can’t go home and live one way and come into your culture and live another way. 

Eric: You said, if a person in our audience goes back to the office, whatever. Let’s say they’re doing a startup, the answer is simple. Hire the smartest people you possibly can and put up with them. And we all understand what that means. But you really need them for competitive advantage. But let’s say you have an established organization that you’re managing, doing the best you can. The best way to do it is to say, “Are we at the state of the art? Are we using best practices?” And then let them answer that question. What you discover is that your employees are all part of a network of people that you don’t know. They actually know what else is going on, even if you don’t. So if you just listen to them and say, “Okay, how do we get there?” you end up with roughly the right outcome.

Angela: Yeah.

Dara: I do think on surrounding yourself with the smartest people, that is absolutely no regrets. And like you said, the smartest people in organization have followership.

Eric: Yes, exactly. Well said.

Dara: So anything that you do with them, etc., has echo effects. And I think on the cultural side, that can turn, if the smartest person in the organization isn’t aligned with you culturally, that can actually be pretty dangerous. And so as an organization grows, you make allowances certainly for your most talented people. But if from a cultural standpoint they’re not aligned with you, that can be quite destructive.

Bob: And at a certain point you —

Eric: Exactly. He’s exactly right.

Angela: Yeah.

Bob: Well guys, I have a whole bunch of other questions to ask you, and I’ve loved being here at the Masters of Scale Cafe with you, but they have not brought us our breakfast food yet. And so I think maybe we should go eat somewhere else. This has been great. I’m sorry that we’re out of time. Thanks so much for doing this.

Eric: Thank you, Bob.

Bob: Thank you guys.

Dara: Thank you.

Eric: Thanks everybody.

Masters of Scale’s mission is to democratize entrepreneurship. Launched in 2017 as a weekly podcast featuring Reid Hoffman, we’re now two weekly podcasts — Masters of Scale with Reid Hoffman, and Masters of Scale: Rapid Response, hosted by Bob Safian — as well as an award-winning daily learning app, a best-selling book, virtual and live events, and more, serving a global community of founders, funders, and leaders looking to innovate at scale.
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