What were the three key elements of Walt Disney's approach to culture?

Walt Disney was explicit about his desired culture, he consistently walked the talk by embodying the company's values, and he implemented mechanisms like Disney University to scale culture effectively.

How did Amazon scale its culture with thousands of employees?

Amazon used explicitly written leadership principles and implemented mechanisms like the 'Just Do It Award' to reinforce values, encourage action, and combat bureaucracy across its large workforce.

What is the significance of Hulu's 'What Defines Hulu' document?

This document was intentionally challenging to act as a 'repellent' for those who wouldn't fit Hulu's values and principles, while simultaneously serving as a 'magnet' for the right talent.

What does 'Have Backbone' mean as an Amazon leadership principle?

This principle means leaders should respectfully challenge decisions they disagree with, even when uncomfortable, and commit fully once a decision is made, prioritizing conviction over compromising for social cohesion.

How can companies balance empowering employees with leader intervention?

Great leaders are right often because they hire well, meaning fewer interventions are needed. Interventions should be rare and for significant reasons, like the Echo team's response time issue addressed by Jeff Bezos.

What was Jason Kilar's biggest takeaway regarding cultural mechanisms?

Kilar advises being experimental with mechanisms, as some may fail or become bureaucratic. The core values should be stable, reflecting the founders, but the execution mechanisms can and should be adapted.

Key Moments

Scaling Culture | Jason Kilar, former Hulu CEO

Y Combinator

Science & Technology3 min read29 min video

Jun 1, 2017|18,111 views|238|5

YC Y Combinator

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Key Moments

TL;DR

Scaling culture requires explicit values, leader consistency, and repeatable mechanisms.

Key Insights

Culture is defined by how employees act when no one is observing.

Explicitly define company values and principles. Walt Disney was very clear about his.

Leaders must 'walk the talk' consistently, demonstrating values through their actions.

Develop 'mechanisms' – repeatable processes that scale culture beyond 'good intentions'.

Culture should act as both a magnet for the right people and a repellent for those who don't fit.

Experiment with and adapt cultural mechanisms, dropping what doesn't work while reinforcing successful ones.

DEFINING CULTURE: ACTION UNDER OBSERVATION

Jason Kilar defines corporate culture not by stated values but by actions taken when unobserved. This emphasizes authenticity and intrinsic motivation, suggesting that true culture is revealed during challenging times or late-night efforts. For leaders, this means consistently embodying the desired behaviors, as employees will model their actions, creating a self-perpetuating cultural norm.

EARLY INSPIRATION: THE DISNEY MODEL

Kilar's fascination with culture began in childhood with a visit to Walt Disney World, starkly contrasting with local parks. He observed Disney's exceptional scale and quality, attributing it to three key factors: explicit articulation of values, leaders walking the talk, and the implementation of effective mechanisms to scale these principles.

EXPLICIT VALUES AND LEADER EXEMPLIFICATION

Walt Disney was highly explicit about his desired culture, repeatedly emphasizing attention to detail and quality. This directness is crucial for founders and CEOs. Furthermore, Disney leaders, including Walt himself, consistently demonstrated these values through their actions, such as picking up litter in parks, reinforcing the importance of cleanliness and detail universally.

THE POWER OF SCALABLE MECHANISMS

As organizations grow, 'good intentions' become insufficient. Kilar stresses the need for 'mechanisms'—repeatable processes that deliver cultural values at scale. Disney University is cited as an example, providing dedicated training on company values. Similarly, Amazon's 'Just Do It Award' rewarded employees who proactively acted on ideas consistent with company principles without seeking permission.

AMAZON'S LEADERSHIP PRINCIPLES AND THE 'JUST DO IT' AWARD

Amazon's Jeff Bezos meticulously wrote 14 leadership principles to define the company's culture explicitly. These principles are demanding and specific, not universally appealing. This document serves as both a magnet for like-minded individuals and a repellent for those who wouldn't thrive, ensuring cultural alignment. The 'Just Do It Award' celebrated decisive action and adherence to these values, exemplified by saving electricity or challenging bureaucracy.

HULU'S CHALLENGING CULTURE AND REPELLENT EFFECT

At Hulu, Kilar co-created 'What Defines Hulu,' a document intentionally designed to be challenging rather than universally agreeable. This approach aimed to attract individuals strongly aligned with Hulu's specific mission and values, while deterring those who were not a good fit. Interviewing every early employee reinforced this value-based hiring.

THE BALANCING ACT: MAGNETS AND REPELLENTS

An effective culture acts as both a magnet and a repellent. The 'Disagree and Commit' principle at Amazon is highlighted as an example of a demanding cultural tenet that repels individuals seeking social cohesion over productive debate. This forthright approach, while unpopular, fosters innovation and ensures long-term success by attracting pioneers.

LIVING THE CULTURE AND NAVIGATING DIFFICULT DECISIONS

Maintaining culture at scale requires constant vigilance and difficult decisions. Kilar notes that even high-performing employees who don't align with core values may need to exit. Leaders also face the challenge of upholding cultural principles against board or ecosystem pressure. The prize, however, is a significantly higher chance of building a successful large-scale company.

TRANSFORMATIVE ADVICE: THE BRICK WALL

Drawing on advice from Michael Dell, Kilar warns about an unseen 'brick wall' that all scaling companies will eventually hit. This metaphor signifies the point where a company's current operating model and 'good intentions' are no longer sufficient. Preparing for this by developing robust mechanisms is essential to transition from a well-run small company to an exceptional large one.

ADAPTABILITY AND EXPERIMENTATION IN CULTURE MECHANISMS

While core values should be steadfast, the mechanisms used to instill them require experimentation. Kilar advises being thoughtfully stubborn with working principles but flexible enough to drop ineffective ones. He suggests being experimental with mechanisms, as some may become bureaucratic or simply fail to resonate, underscoring the need for continuous refinement.

Mentioned in This Episode

●Products

●Software & Apps

●Companies

●Organizations

●Books

●Concepts

●People Referenced

Key Principles for Scaling Culture

Practical takeaways from this episode

Do This

Be explicit: Clearly define and communicate your company's values and desired culture.

Walk the talk: Consistently demonstrate the values through your actions, both publicly and privately.

Embrace mechanisms: Develop and implement repeatable processes (mechanisms) that support and scale your culture.

Be a magnet and a repellent: Create a culture that attracts the right people while deterring those who are not a good fit.

Live up to your culture: Consistently test and uphold your values, even when difficult decisions are required.

Be experimental with mechanisms: Be willing to test, adapt, and drop cultural mechanisms that don't work.

Be thoughtfully stubborn: Stick with what's working, scale it, and keep it fresh, but remain flexible.

Avoid This

Don't rely solely on good intentions, especially as a company scales.

Don't pursue social cohesion at the expense of healthy debate and conviction.

Don't compromise on core values and principles, even when it's uncomfortable.

Don't simply copy another company's culture; tailor it to your own mission and values.

Don't hesitate to make tough decisions, like parting ways with high performers who don't align with cultural values.

Common Questions

Jason Kilar defines company culture as 'how we act when no one is looking.' This emphasizes the importance of internal integrity and behavior over outward appearances or stated policies.

Topics

Business & Entrepreneurship Leadership & Management Mindset & Self-Improvement Company Culture Scaling Organizations Leadership Principles Employee Engagement Organizational Behavior Building Teams Startup Culture

Mentioned in this video

People

Jason Kilar

The speaker, former CEO of Hulu and founder of Vessel. He shares his observations on company culture and how to scale it.

Jeff Bezos

Former manager of Jason Kilar at Amazon and author of the 14 leadership principles. He is credited with establishing a strong cultural foundation at Amazon.

Michael Eisner

Former CEO of Disney, who received a creative comic strip submission from Jason Kilar, leading to an internship.

Walt Disney

Founder of The Walt Disney Company, whose explicit communication of values, consistent behavior (walking the talk), and creation of mechanisms like Disney University are highlighted as foundational to Disney's culture.

Michael Dell

Founder of Dell, who advised Jason Kilar and the Amazon team in 1997-1998 about the inevitable 'brick wall' of scaling, emphasizing the need for mechanisms beyond good intentions.

Companies

Vessel

A company founded and run by Jason Kilar, which was recently sold to Verizon.

Walt Disney Company

A benchmark for exceptional performance and quality, serving as a key inspiration for Jason Kilar's career and his understanding of culture at scale.

Coca-Cola

Mentioned in the context of vending machines in Amazon fulfillment centers, where an employee suggested turning off lights to save electricity, demonstrating frugality.

Amazon

The company where Jason Kilar spent nine years. He highlights Jeff Bezos's leadership in establishing 14 leadership principles and the 'Just Do It Award' as key mechanisms for scaling culture.

Nike

The brand of shoes given as the 'Just Do It Award' at Amazon. They were intentionally old and smelly to emphasize the spirit of the award over material value.

Disney

The company where Jason Kilar had his first job. He uses Disney as a prime example of how to build and scale a strong culture through explicit values, walking the talk, and implementing mechanisms like Disney University.

Locations

Magic Kingdom

The Disney theme park that profoundly impacted Jason Kilar as a child, showcasing a level of quality and storytelling far beyond his previous experiences.

Cedar Point

Another amusement park mentioned for comparison; while a business, it did not reach the same level of quality or impact as the Walt Disney Company.

Kennywood Park

An amusement park in Pittsburgh that served as Jason Kilar's childhood context for quality and entertainment, contrasting with the later experience of Disney's Magic Kingdom.

Software & Apps

"Just Do It" Award

An award at Amazon given to employees who acted on ideas consistent with company values without seeking permission. It reinforced bias for action and was a public celebration of cultural alignment.

Hulu

The streaming service where Jason Kilar served as founding CEO. He discusses developing Hulu's culture and its 'What Defines Hulu' document as a repellent as well as a magnet.

Products

Fulfillment by Amazon

A service developed by Amazon, mentioned as part of the company's innovative output during Jason Kilar's tenure.

Cinderella's castle

Iconic landmark at Magic Kingdom, representing Disney's attention to detail and immersive storytelling.

Verizon

The company that recently acquired Vessel.

Amazon Prime

A service developed by engineers at Amazon, mentioned as part of the company's innovative output during Jason Kilar's tenure.

Concepts

Have Backbone

One of Amazon's 14 leadership principles, emphasizing the importance of respectful disagreement, conviction, and not compromising for social cohesion. Kilar highlights it as a key factor in Amazon's success and its selective nature.

Organizations

Echo team

Amazon team working on the Echo device. Jeff Bezos famously intervened regarding response times, illustrating the principle of 'great leaders are right a lot' even when it's painful.

Webster

Mentioned for providing a formal, albeit 'boring,' definition of culture.

Disney University

A dedicated real estate and program established by Walt Disney to teach the company's values and principles, serving as a key mechanism for scaling culture.

New York Times

Publication that ran a critical article about Amazon's culture and workplace conditions, which Jason Kilar addresses by detailing the company's high employee tenure and the 'have backbone' principle.

Media

Honey, I Shrunk the Kids

A movie used by Jason Kilar in a creative comic strip to get an internship at Disney.

Books

"What Defines Hulu"

A document written by Jason Kilar to explicitly define Hulu's culture. It was designed to be challenging and act as both a magnet for the right people and a repellent for those who wouldn't fit.

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