This post originally appeared on LinkedIn. Follow Brad on LinkedIn.
In 2006, as an executive at Yahoo! I wrote an internal memo outlining my observations about the state of the company and suggesting some dramatic remedies for getting it back on track. The primary point was that the company lacked a cohesive vision and I used the metaphor of spreading peanut butter to describe how Yahoo! was investing too thinly in too many different areas.
Some months later the memo was leaked to the Wall Street Journal and for better or worse, “the Peanut Butter Manifesto” has followed me ever since. Its essence even lives on at Yahoo! in new CEO Marissa Mayer’s PB&J program—one of the many important steps she’s taking to rebuild a great company.
Reflecting on what I wrote more than six years ago, it’s now painfully obvious to me that the issues I highlighted—lack of focus, accountability and decisiveness—were actually just symptoms of a deeper problem. Yahoo!’s strength had emanated from the passion and entrepreneurial zeal of its employees, but these muscles had atrophied. The company’s core culture no longer encouraged and celebrated innovation with the same zest and ardent ambition to change the world—too often this had been displaced by half-hearted maintenance of the status quo.
Marissa’s immediate focus on improving the company culture to make Yahoo! a great place to work again is evidence that this inertia endured. Though people can deride perks like free food and iPhones (or giving everyone an iPad mini for Christmas!) as buying loyalty with trinkets and toys, there is an underlying—and more fundamental—impact.
Whether you give people the latest gadget or deck your office space with beanbags and foosball tables, the point is to make work a fun, interesting and inspirational place to be. The Shower Principle (thank you, Jack Donaghy) states that great solutions are often conceived when your mind is not focused on the problem. Sometimes interactions need to happen beyond the ping of an email or the (god forbid) drone of a PowerPoint presentation.
There’s also the paradox of treating people like adults by providing them with toys. Just as freedom is always accompanied by responsibility, so permission to play comes with high expectations to deliver remarkable results. A vibrant culture provides people with real opportunities to instigate and benefit from success. They must also be accountable for failure, though all parties need to accept that attempts to innovate don’t always produce the wheel. This is the kind of place where creative, ambitious people want to play. When imaginations are encouraged to run free, it can result in amazing products.
In a recent blog post, venture capitalist Ben Horowitz relegated corporate culture to a second-class citizen behind creating a great product. I respectfully disagree. Great products don’t come out of thin air. They are an outcome of environments where innovation can thrive and talented people are encouraged to be bold.
Sure, one-hit wonders can happen anywhere, but companies that stand the test of time all recognize a fundamental truth: great people build great products and great people gravitate towards great company cultures. The startup culture that Steve Jobs created at Apple to transform a declining computer manufacturer into the creator of era-defining products is an obvious example.
So more than six years after the Peanut Butter Manifesto, what has experience taught me?
If a business has to be told that it needs more focus, accountability and decisiveness, there is a bigger problem at hand. Truly successful businesses encourage these qualities innately by creating and fostering a culture that inspires each individual to perform at their peak and rewards passion and results without peanut buttering the end of year bonus.
This is the mantra I have been repeating since I became CEO at YouSendIt in May 2012. Turning a good company with a good product into something great starts with cultural change and we’ve made remarkable progress over the past seven months. How this happens is something I will explore in future posts.
Oh, there’s one final lesson: you never know when something you write is going to unexpectedly be published in the Wall Street Journal. So watch those split infinitives.
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