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How to Design an Effective Culture


1. This is Floyd Marinescu at Culture Con here with Jim and Michele McCarthy; could you briefly introduce yourselves and what you’re passionate about?

Jim: Sure; yes, I’m Jim McCarthy and I’m passionate about designing culture and making the world on purpose.

Michele: I’m Michele McCarthy and I’m also really passionate about designing culture and making really true teams that have collaborative intimacy and solving really hard problems with great teams.

Floyd: Awesome.

Jim: Yes, me too that.


2. So what is culture?

Jim: Culture is a collection – the way we define it, it’s not the grand cultures of nation states that we’re talking about or the historical cultures of the nation; it’s the culture that’s in your local group and your local company and your family; it’s the collection of behaviors and values, beliefs and practices that both shape and express the culture of the local group.


3. And you guys are known for having created an amazing team the Visual C++ team that had an amazing culture; what made that culture amazing and I guess that motivated you to go into what you’re doing now, right?

Jim: Well I kind of covered that question by the way if you’re really interested in that particular topic in Dynamic Software Development in 1995 and 2006 we re-released it together; but to be perfectly honest, we didn’t know what made that culture great but we knew that it had to do with us, it had to do with the team, it had to do with a bunch of things; and we needed to figure it out though because we saw what a huge difference it made; it was a turnaround team so we saw it turn around and it was like whoa, it went from this really rank team to the greatest team ever as far as I can tell, you know, in terms of software development teams.

Michele: Two of the ideas, the main ideas that we came out of Microsoft with, that we were able to start our work now with, were shared vision; we really got that if the team was in a state, what we call a “state of shared vision”, they saw as one with what they were wanting to create that that made all the difference; compared to a team that didn’t have one the difference between joy and misery.

And then the other idea we came out in Microsoft with was “team equals product”; so if there was a problem in the product, then you could find its corollary in the team; you could find it in the team; so if the product is dead slow, there’s something slow going on in the team; if there’s no innovation in the product, there’s no creativity and innovation going on in the team members, in the teamwork; so those are kind of the two principles we started with when we started our own company.

Jim: And that includes that team equals product is kind of our “equals MC2“ of our work it’s the fundamental mathematical relation and that includes managers, right; so the mangers, team of managers their product is the team below them.

So anytime you see something in the product (and if the product is a team below you) it’s coming from you; it has a corollary in you; if you fix it in you it will be fine in them, it will be fine in the product; if you don’t have that correctly, address it reality.

So it gives you two places to play with problems and a way to balance it instead of just going “I wonder if this is it”, like just laying there looking at one thing; so it really changed our life at Microsoft – (Aside: I’m glad you remembered that).


4. So can you talk a bit more about that; what impact does a manager or a leader have on the culture?

Jim: More than they’re probably aware of.

Michele: Yes; much more than they’re aware of.

Jim: They probably feel – I mean when I was a manager, I kind of felt helpless some of the time because sometimes it just seemed like there’s so much to be done and so no matter how weary I was, I wouldn’t be able to do it all; however…

Michele: Well, this was another idea that came out of team equals product because if you think about it, the management team’s product is the teams that are working on the products; and then let’s say there’s a vice president that the management team works for, what’s his product or her product, that management team; so that leads you to some interesting things you can experiment, which we have experimented with, which is if you see a problem anywhere on the team or in the products you could go up as high as you want in the organization, you’ll find the problem starting there, the seeds of the problem.

And then to take it further, we both have studied Freudian psychology and we find it really useful in dealing with organizational problems and, you know, most of what humans do is unconscious; they’re not aware of most what’s going on; there’s very little, psychically, that’s going on that you’re conscious of; so that means what the boss is doing is largely unconscious and from our experience, experiments and observations, it is tremendously powerful on the people that work for them for whatever reason; it could be an evolutionary thing, you know, like the head of the pack has a lot of, you know, unconscious power over the people, the monkeys or the apes that are part of the pack; I don’t know where that comes from but it just happens to work out like that in humans.

So if the leader does something, whether conscious or unconsciously, it will affect the entire organization and if you’re in an organization with let’s say a CEO and you know their personality, you can just see it everywhere; when you’re in it, you know you’re in it; you know, we worked for Bill Gates and like you know when I go to a meeting with them, he’d yell a lot, well there was a lot of yelling in Microsoft, you know, and in other companies I go to there’s very little yelling and you talk to the CEO, he’s not a yeller, you know, so it’s like things like that but it goes much deeper than that.

Jim: Yes, that’s kind of superficial.

Michele: That’s just a superficial thing; it goes much deeper than that.

Jim: Oftentimes people will walk around in the organization trying to do things and they can’t figure why doesn’t this work, how come that or that, it’s a mystery; and usually it’s the unconscious level of the people above them and if you go isolate it there, you can see why they’re banging into the unconscious foibles of the people above them as actual impediments to their wellbeing; and so it gives us a lot to talk about and a lot to do; I mean obviously the most leveraged point to fix something, let’s say you had buggy software four levels down, you know, would be to go up and say you know what there Mr. CTO or whatever or Mrs. CTO, why don’t you fix the obvious defects in your office space here and then make sure everybody knows who did that, boom, that will take care.

Floyd: Like broken window theory.

Jim: Or whatever yes, exactly or like one of our students told us in India that she has this team that lives in a place that wasn’t up to US cleanliness hygiene standards so she made the whole thing; she started personally cleaning the place up and then cleaned up and then all relations cleaned up everything cleaned up, the whole cleaned, right, and it’s that kind of idea; like address it metaphorically and the rest will work out.

Floyd: Wow; there was an interesting paradigm shift you said earlier that a manager or leader’s product is the team; I think most managers think their objectives are numbers or, you know, shipments and stuff like that.

Michele: Yes.


5. Can you give me some “Chicken Soup” for managers so something that can be told to a manager or our readers can forward this video to their manager to give them this reprogramming?

Michele: Well first of all how is that working because --

Jim: Ask the manager how they’re going.

Michele: -- it doesn’t seem to work very well; I mean most people are unhappy and they’re not getting great results when they – we call that the default culture, which is kind of in an implicit understanding between people what’s expected from a manager like that you meet numbers, that you, you know, give orders, that you resolve conflicts between people that work for you.

Jim: Do budgets on time.

Michele: And there’s a whole list of things I would say fall on that category that are completely off topic because they’re not addressing the real issue, which is getting at results and the results have to come out of human beings; and so if the results have to come out of human beings, you must address the problems of the interactions between the human beings, between you and them, between each other, the people on the teams, all the levels going up between the levels, like, you know, there’s lot of human interaction problems.

Jim: We wrote a paper which you can get at probably I think, it’s called “The Perfect Boss” and it’s what does the perfect boss do and there’s only five or six or seven things that we expect of a boss and if the boss does them, everything seems to work okay; and then we wrote a reciprocal paper called Your Boss is Your Customer, all right, that that’s how you view your boss; you’re supplying things to your boss and your boss occasionally gives you an action item; and it’s a customer relation, you want to provide them very great service; so one of the first things we do if we’re working with a company is like start taking care of the boss like he’s a treasure or she’s a treasured resource. That you must provide for and make sure that everything she needs is at her fingertips to be effective at being the perfect boss.

Michele: And that would include not waiting to be told what to do, right; I mean if you took the best care of your boss possible, you’d be coming up with ideas for your boss; it’s like, you know, we really thought about it and got together on this and we have this idea, you know, and like this could be a real winner for you.

Jim: Yes, as team the boss too by the way, it’s not one-offs like people curry a favor of the boss; in fact one of the big things, one of the big taboos in our culture is a boss will never talk about someone who’s not in the room; it’s just that simple; if you go to the boss to get a hearing against someone else, you’re tossed out.


6. So let’s look at the other side now teams, what does an amazing team look like, what are some attributes, which I guess leads into your work?

Michele: Well one of the main things we were trying to establish a team is collaborative intimacy, which at first glance is not maybe what you’re picturing; what we mean by that is that we’re able to get close enough to each other on the team that all my gifts are available to everyone on the team and I have available to me all of everyone else’s gifts and that we combine those so we create a multi-person; so we can bind all the IQs where IQ is a stand-in for all good things that each human possesses; we combine that.

And then also that we take care of each other in a way of we nullify neurosis; so when catch each other being neurotic like you can’t be neurotic on a great team; and mostly because other team members will be like, yes, you’re out of order, you know, that’s not how we do things; because all of us are neurotic and so the team can help each other by like just going no, like you can’t do that; like you need to go like calm down and then come back and we’ll start again.

Jim: We provide error-handling routines for teams.

Michele: Yes I mean these are some of the things that our technology takes care of; so the idea is like to create we call it head gap like whatever the cost is of giving his gifts to me and the cost of giving my gifts to him and combining them to create something great; and then that multiple like that just kind of exponentially multiplies the more people you get on the team, right; so you have to get good at making that gap zero; like there’s no cost to us combining our gifts.

Jim: You have to brave enough to be seen; so say if that means you have to be safe enough to be brave, you know; I mean you have to be – you know, you saw how close she was getting; like you get very close to people if you want them to say their best ideas but their best ideas are their most scary, most treasured possessions; but it’s scary to say what if you don’t like my best idea, what if you reject me, what if it’s crazy; that’s what most people are afraid of; this is crazy I can’t solve poverty, I can’t get rid of malaria, I can’t create an iPhone, whatever it is that you find a reach.

Michele: There are some kind of trends going on right now that has to do with like anti-manager, anti-boss and it’s kind of it’s missing the point really; it kind of goes like this; like you know it’s the boss’ fault and then you know then employees suffer and they’re kind of slaves to these bosses and these corporations.

Jim: Woe is us.

Michele: And then like the boss is you know by like the way they like incentivize you by paying you that like creates competition between each other instead of collaboration; like no you’re missing the point; like the point is that you get points for collaboration not hurting each other; and I guarantee you, unless you have like the dumbest boss ever, which is possible but then go get another job; but like a normal person if I’m on their team, I’m going to collaborate really well with the people around me and I’m going to get a great bonus for being a great collaborator; because any normal human being who’s managing me is going to appreciate that; so this kind of trend that I see in articles, in management magazines --

Jim: It’s demagoguery.

Michele: -- and blogs and stuff it’s like it’s not on the right track; the right track is collaboration and that that is valued and when you do it, it will be valued.

Jim: It will be valued because you’ll make everybody rich. It’s that simple; if you’re in a business, that’s what they measure; so if you collaborate really well, if your team is like unto a genius and it’s almost always right you will make everybody around you rich and that’s something that’s good to do and if they don’t pay you then that’s unjust and you have to leave; you don’t like burn the place to the ground.


7. So what’s the path to creating an amazing culture in our viewer’s workplaces?

Jim: You have to like design one or accept a design from someone else for starters; we have what’s called a core culture which is just a kernel of the culture; it’s not like our culture imposed on you but a way to invite people into this union of being, this union, this collaborative intimacy, this…; to be honest a way, a structured way to help you love one another sufficiently so that they can see you and you can see them and you can pull everything good and police against everything bad and become the most powerful entity in the group; and we call it “booting”, right; that’s the way you get a culture that’s been designed, you boot it; everybody makes the same set of commitments and then does the same behavior as needed.

Michele: I also think you have to be able to run qualitative experiments and that’s what we’ve been doing for the last 16 years; so we actually put teams in simulations and then we see what works and what doesn’t work or what’s mediocre and then we give the best ideas so the next team will rerun the simulation; and we do that hundreds of times and we do that in the laboratory situation and we do that in an actual corporate setting to see how it works there too; we just do that over and over and over and over and that’s how we have built kind of a core designed culture that can be used to create this collaborative intimacy, a state of shared vision, and other good things that you would want in a designed culture; so now you could go run this experiment yourself and you’d probably end up with something similar or you could just use our results that we have so far--

Jim: Which are free and available to all.

Michele: And build upon, them, which I think would be a wiser thing to do.


8. So can you give us a quick rundown of say some of maybe the first protocols or principles that someone should try and bring into an organization?

Jim: Well okay sure, yes; we have the set of commitments that everybody agrees to and that’s what you boot, all right; so we agree to these commitments; they are things like I agree to engage when present and leave when I’m not engaged, I agree to support the best idea regardless of the source, when I think I have a better idea, I will propose it immediately for acceptance, rejection, or improvement; three or four more others; the final one being I commit to attempt to never do anything dumb on purpose; if we could just get rid of the stuff that we do that’s dumb and we do it in purpose that would be a huge savings for the world; so that’s, you know, you’re going to do dumb stuff some percentage of the time because you’re sort of dumb; but stuff you know that’s dumb, like people go well why would I use anything dumb on purpose, I go try not to, just come here and trust me on this; I do dumb stuff all day long on purpose I’m sorry to say; but my value is not to and so I can be checked on it by my friend; so there’s that.

Then when you introduce this kind of freedom structure into the company, or into your immediate environment company, which is that people come and go as they please, the team is who’s there, etc., right, people are free, you’re free to participate, you’re free to pass, you’re a free adult, you know what’s best for you and you’re willing to contribute to the team as you are able and not any more than that; so, you know, that’s kind of a principle a first principle is freedom.

I guess second principle would be safety; if you say your ideas, we have ways of treating them with great respect; we have ways of accepting them we have ways of rejecting them, we have ways of improving them that won’t hurt your feelings.

Michele: This is not the same as there are no bad ideas; there are lots of bad ideas.

Jim: Quite a few.

Michele: This is different; this is creating an ecology of ideas which means an environment where you get the best ideas out because a lot of times people will hold those in because they’re so dear and close to their hearts and they’re afraid that if they were to say it out loud someone would criticize them; and when you’re running our designed culture that’s not allowed and that creates this safety that he’s talking about.

Jim: Right, and everybody’s committed to say their ideas so you never end up going, oh, I should have said that, you know, I should have said that last Tuesday, Bill said it Wednesday everybody liked it and--

Michele: Or I did say it but nobody listened to me.

Jim: Right, it’s nobody listened because you didn’t --

Michele: Right; like you’re not allowed to say that in our culture because if you say it and no one listens to you, you’re obligated to keep saying it until they do listen to you if it’s the best idea.

Jim: They have that obligation and you do too; so you know, they’re kind of fleshing out some of these issues right; and then it’s a very free place and it’s radically democratic, that is to say the team doesn’t do anything until it decides explicitly and unanimously; now unanimity is a funny thing, you know, like people just give up on it and never reenact and that’s just, what’s the word for that; if you’re playing a game, that’s a trick that’s meant to make you fail at the game; unanimity is the easiest most effective and most powerful decision making tool that we were able to discover in 16 years of laboratory teams; once they started going unanimous, everything worked because they stopped saying no all the time, they stopped carrying their outliers with them. Like the majority rule, it doesn’t really make sense to take 50% of the people and put them in charge of doing the thing they’re against; no; get the conflict done in the voting stage.


9. So what do you do if there’s two out of ten people in team that just don’t like what’s --

Jim: Well you say well what it takes to get you in; that’s the protocol and if you say nothing, you go okay, your turn to get all of us in.

Michele: Yes; what’s your better idea.

Jim: You have to have a better idea; you can’t just be against stuff; right.

Michele: You can’t just bring everything to a halt --

Jim: It’s an ecology of ideas, right; if you have no better idea --

Michele: --where nothing is getting done.

Jim: - then you’re out of order and you’re vote doesn’t count.

Michele: Because even if you work, even if you --

Floyd: But isn’t that –okay.

Jim: Not if you don’t have a better idea; if you can’t do a proposal immediately that gets at least four or five other --

Floyd: Isn’t that sort of like an abstention if your vote doesn’t count?

Jim: No, your vote doesn’t count; I’ve never actually seen anybody do that to be honest but that would be the way out of that dilemma; people love to talk about that dilemma, what if they don’t fit in; they do. Right?

Michele: Right.

Jim: If they don’t and they don’t have a better idea, kick them right out of the voting.

Floyd: Yes, nobody wants to be kicked out so.

Jim: Right.

Michele: When people first come across this idea of unanimous decision making, most people go well it won’t work because of this, this, this, this, and this; well you haven’t tried it; because when you try it, those things don’t happen; you just think they’re going to happen because you’ve been trained to think that way mostly.

Jim: You’d be amazed when you give someone the freedom to stop the show, they don’t really want it very often and when they do it’s because they have a way better thing; so it’s like treating people like adults, you know, like yes of course you stop the show; it’s the constitutional congress of the United States; when we created constitution it was unanimously done; it was the last time we saw unanimity on this sort of but we’re seeing it now; and the teams that are unanimous; they’ll have meetings where all they do is make decisions; I propose this, boom everybody agrees; I propose this, boom everybody agrees, I propose this, boom, everybody agrees meeting over.

Michele: That’s a great meeting by the way. You know, that’s a lot different than everyone is distracted on their little electronic devices either that or everyone’s giving staff’s reports that they could have just sent in an email anyway that didn’t – you know, we didn’t need to all meet up to hear staffs reports like; a meeting where like we’re all like unanimously like agreeing to take action over and over and over and then it’s quickly done; now that’s a great meeting and people that experience that go wow, that’s how a meeting should go.

Jim: That’s almost frightening is usually what they say that we decided so much; one thing we found out is discuss later, vote first; vote because you’re usually aligned.


10. So how do you get teams aligned and gets this level of intimacy?

Jim: So we have a technique that works very beautifully with that which is the way you align a team is you get them to tell you what they want, each person what do I want, what do I want, the deepest part of my soul, what is it I want; and once they say what they want, they ask you to help them get it then you make a web of contracts around helping everybody get what they want, which may or may not have anything to do with supposedly what the job at hand.

In fact usually people will want a virtue, I want courage, I want passion, I want love, I want self-care, it’s this whatever is blocking me is usually fixed by a virtue; so boy when I find out that that guy that avoids me so much, he actually wants faith, it just melts me and so I’m attracted to him; and so he asked will I help him get faith, of course I would help him get faith what kind of a barbarian would be opposed of that; and so they put plans in place, they acquire faith throughout the course of our working together and they report in throughout the weeks and months of our work that faith has arrived typically in the following ways and they end up becoming the holder of faith for the whole organization; and it’s very beautiful and so that’s how the team falls in love.

Michele: Yes, that’s really the key to the intimacy.

Jim: And that’s called personal alignment and web of commitment; they all commit to help each other out.


11. What happens when some of these needs people have maybe conflicts with the product’s release schedule; like how do you prioritize these things or what if someone wants doesn’t quite align with what they’re supposed – what they have to build?

Jim: Well usually what they want is something personal and has little to do with what they’re building so that hasn’t come up as an issue; but it is possible to believe that a given person coming and going is costing the team something; but it really isn’t because (a) the team is who’s there so any decisions that are made without them, they’re responsible for getting caught up on; (b) the team is in a state that’s unlike any team that they’ve ever been on so achieving things is almost zero time events, right I mean it ships software in 1/10th of the time compared to other teams so they have plenty of budget for freedom, for one hour a day keeping where you do your program management job at Microsoft which is the 80 hours for the other guy; there’s so much available surplus it’s almost unbelievable.

Michele: The default culture right now, the belief is it’s my job or me like it’s a tradeoff; that’s why you get like people talk about work- life balance because they’re thinking everything is a tradeoff, it’s one or the other; and what we’ve found through all this experimentation is that it’s not; it’s additive when the individuals on the team get what they want, the team gets what it wants, the company will get what it wants; it’s not --

Jim: That’s why it’s alignment.

Michele: It’s not a competition between the two; that is what is causing a lot of the problems we see in teams and corporations right now; so when a team can move past that belief that it’s not true and then experience this thing of like when I get what I want, the team gets what it wants; then like that’s very freeing and then the team starts to live in a world of abundance; there’s plenty of time, there’s plenty of people, there’s enough time for you to take a rest and go on vacation, there’s enough time to get this done on time, you know, there’s enough time to start talking about the future of this product line.

Jim: Enough time for joy; you know, enough time; we live in paradise and we believe we live in hell and that’s a problem, you know, because we’re wrong; it’s paradisiacal where we live and I want to just invite people to step in to a designed culture, try it out a little bit and then tell me, you know, I’m a dreamer, because it’s happening; it’s happening, it’s available to all, no one is turned away and come on aboard; you know, like right now in the most high tech industries, there’s this absolute rock solid commitment to the fact that we are suffering from a time famine; that there’s not enough time right; if there’s enough time, there’s not enough people; if there’s not enough – there’s not enough skills and it’s just this whole commitment to insufficiency and that’s how we explain our mediocrity; I’m sorry, don’t explain your mediocrity by false beliefs; there’s plenty of time; you’re choosing mediocre; mediocre is more expensive and takes more time and greatness is zero time.

Michele: All you have to do is compare the results of some small great teams to the results of some huge mediocre teams to see that time is not a limitation and the number of resources is not a limitation.

Floyd: What about when people are just too busy?

Jim: Right; too busy is also a false illness; well it’s a true illness but a false belief; people that are too busy it’s just crazy; I mean we see too busy, you know, I mean here would you like immortality and they’re no, I’m too busy, too busy to talk to you.

Michele: Too busy, when we say too busy, we mean a diagnosis. We go that guy has too busy and it’s a diagnosis, right, it means he has a neurotic problem.

Jim: Right, right.

Michele: He’s telling himself and then others that he’s too busy.

Jim: He’s avoiding not only getting what he wants or she wants but he’s avoiding the magnificence he could create with less effort and less money and less anxiety and less everything and he’s lost in too busy.

Floyd: This is very exciting.

Jim: It is.


12. Let’s say your average reader who’s on a team where they don’t feel they have any control, how can they believe in themselves as a culture change agent and how could the begin trying to bring this stuff in to their groups?

Jim: I think probably the best thing to take, maybe you got better ideas but my best idea is to come see the culture and experience it for yourself online at, people who have booted.

Michele: Or if you search in Facebook for Welcome to the Booted, you’ll go there also.

Jim: Right; and then when you get there, it’ll tell you what’s going on in this community we call the booted and the booted is not called that to make the world, divide it into two groups booted and not booted, it just means that some of the people in there are committed to the core commitments.

Michele: So you can go in there and experience what it’s like either by observing what’s going on or by trying it out, it’s up to you; and the other thing a lot of people really find useful are there about 130 podcasts, short like 20-minute podcasts on

Jim: Great; thank you very much for having a listen.

Michele: Yes, thanks.


13. Can you give us a good Dr. McCoy impersonation?

Jim: Yes, I can; you know, I can “because damn your Vulcan eyes Spock, I feel, I don’t think all the time; logic is not what you think it is; a person feels.”

Nov 28, 2012