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The most important factor in the success or demise of your company is its culture. This is a lesson I learned over the last fifteen years from my experience working at Google, the 2008 Obama campaign, and now as the co-founder of Optimizely. 

We recently had the opportunity to showcase our culture as part of Nasdaq’s Cultural Capital program:

 

After my interview for this program I spent some time reflecting on company culture, and the role it has played in every organization I’ve worked at. One pattern became very clear: culture matters. This may seem obvious to some of you, but it still surprises me how many people I meet, including startup entrepreneurs and Fortune 100 executives, who still don’t embrace the importance of this truism. 

Why does culture matter and why is it so closely linked to the success or demise of your organization? Because the culture of your organization determines how decisions are made. It determines which ideas see the light of day or die in committee. I’m going to share three examples that illustrate this point and they all share the same pattern:

1. Person low in the organizational hierarchy has a non-obvious but good idea.
2. Person develops that idea until it is obvious.
3. Organization accepts the idea and adapts to a changing world.

Organizations thrive when they can do #3 over and over again, and die if they can’t (e.g. Kodak and Xerox). #3 only happens when #1 and #2 are possible.

A good culture attracts smart people, provides them with enough context to have good ideas, and protects them from peers and leaders when those ideas aren’t obvious.

A good culture makes #1 and #2 possible, and that’s why it matters.

Google’s Culture of Transparency, Trust, and Ownership 

My first formative experience of company culture was at Google in 2004, where I worked as a software engineer intern. At the time, Google had a strong culture of transparency. We had an internal forum for sharing product ideas that anyone could participate in. One idea kept popping up around helping Google search users improve their queries by giving them suggestions as to  what to search for. There was endless debate about the best way to solve this problem and several naysayers who poo-pooed the idea entirely. 

My cubemate at the time, Kevin Gibbs, a brilliant software engineer, became frustrated with all the hot air and naysayers. Google’s culture of transparency enabled him to see the opportunity, and the culture of trust and ownership enabled him to do what he did next. He stopped doing his day job entirely. In fact, for two weeks straight he completely put on hold his work on Borg, Google’s internal cluster management technology, and dedicated himself to proving the naysayers wrong. He built Google Suggest. In two weeks. By himself. 

What is Google Suggest? It’s the feature that automatically completes your query based on the first few letters you type. Here is an example of the suggestions after starting to type ‘why culture’:

Not only is this feature sometimes hilarious (see ‘why culture urine’ above), but it is also incredibly useful and now ubiquitous. Now it seems obvious. At the time, it didn’t. My favorite part of the story was when Kevin ended the debate on the ideas forum by simply posting a link to the internal version of the product he built. Once other Googlers saw and experienced the feature it quickly became obvious that not only was it possible to build, it was also a very good idea.

The Obama Campaign’s Culture of Fearlessness, Passion, and Experimentation

In November 2007, Barack Obama came to Google to give a speech. He was a Senator from Illinois at the time and third in the polls for the democratic nomination behind Hiliary Clinton and John Edwards. Here is what he said:

I was lucky enough to be in the audience for this talk and I was blown away. I was inspired by his vision to use data, evidence, science, and feedback to make government work better. At the end of his talk he said, “I want you to be involved,” which was probably a euphemistic way to say “donate to my campaign,” but I took him literally. Two weeks later I flew to Chicago to join his campaign as a volunteer. Eventually that turned into a job as the Director of Analytics where I was tasked with using data to help the campaign make better decisions.

The biggest asset we had at the time was our culture. David Plouff, our campaign manager, described it as our “risk/reward mentality.” We knew that if we did things like every other campaign, we would end up just like everyone else expected: third behind Hillary Clinton and John Edwards. Being an underdog enabled us to embrace a culture of fearlessness because the worst case scenario was ending up exactly where everyone else expected us to end up.

The second cultural benefit of being an underdog was passion. When I first met the campaign staff in November 2007, I was surprised at how many of them were there for no other reason than being passionate about Barack Obama. No one was a political opportunist trying to position themselves for a fancy-sounding job in the White House. 

The reason passion helped us win was because it meant everyone was deeply committed to the ultimate outcome we were all striving for, electing Barack Obama as President. No one was playing politics to help themselves, which meant the organization was willing to embrace a culture of experimentation. We focused on asking the right questions, as opposed to having all the right answers.

This culture of experimentation was fueled by the first multivariate test I ran for the campaign in December 2007. We experimented with the splash page, the first page visitors see when they came to barackobama.com. 

This was the original page:

And this was the winner: 

This experiment ultimately led to an incremental increase of $60 million in donations to the campaign. Not only that, but the results flew in the face of traditional thinking at the time. Of course the more “presidential” looking photo would win, right? Or maybe the compelling videos we had put our heart and soul into? Nope. The winner was the black and white photo of Barack Obama and his family. No one picked this one as the winner before the experiment so it showed us how important it was to use data to make these decisions, as opposed to solely listening to the HiPPO (Highest Paid Person’s Opinion).

Optimizely’s Culture of Ownership, Passion, Trust, Integrity, Fearlessness, and transparencY (OPTIFY)

After my experience on the Obama campaign in 2008, I co-founded Optimizely to build the product I wish we had back then to make it easy for any organization to build a culture of experimentation. 

Today, we are the #1 Experimentation Platform in the world. We have hundreds of employees around the globe enabling our customers to build a culture of experimentation. Our platform delivers billions of experiences every day. 

The most critical ingredient to our success has been our culture. My co-founder, Pete Koomen, and I were very purposeful about building our culture. Our culture is how we do things. Our culture is defined by our values and the behaviors that embody those values. 

The reason why we focus on being explicit about our culture is because building a successful company is hard, so everything we do must be in service of maximizing our chances of success. These values and behaviors define what that looks like.

To hold ourselves accountable to these values and behaviors, we use them to determine how we hire, fire, develop, and promote people. In addition to that, I use our cultural values as the basis for every major decision I’ve made. I do this to ensure I am walking the walk, and not just talking the talk when it comes to culture.

Here is how we articulate our high-level OPTIFY values:

And for each of these high-level values, we are explicit about what behaviors embody those values. For example, here is Passion:

A recent example of how our culture has helped us win is the rapid growth of our latest product, Optimizely Full Stack. Optimizely Full Stack enables product teams to experiment in any application and make every new feature an opportunity to learn. 

Full Stack is a major innovation in the market. It is not just the future of Optimizely, but the future of experimentation more broadly. Software is eating the world, and more businesses today view themselves as technology companies, even if their roots are more traditional. Businesses like Google, Facebook, and Netflix embrace technology like Full Stack as the most effective way to ship software. The best software companies have stopped launching and started rolling out.

How did Full Stack come about? It is a direct outgrowth of our culture. The values of Ownership, Passion, Trust, Integrity, Fearlessness, and transparencY (OPTIFY) were all critical. 

The original inspiration for Full Stack came from the transparency we have internally. As a SaaS company understanding why a customer churns is vitally important, and equally vital that we share this candidly with the entire company. Prior to Full Stack, one reason customers would churn was client-side performance. If you want to run thousands of concurrent experiments a client-side JavaScript solution just doesn’t scale. 

This realization fueled the passion of a few Optimizely employees who were deeply customer-centric and saw the challenges with client-side experimentation at scale. They built a prototype of a server-side solution, named Full Stack, as part of one of our regular Hack Weeks where we enable any employee to build anything they want and communicate through code

After seeing the demo of Full Stack, it took integrity to be honest with ourselves that our existing client-side solution wasn’t enough and fearlessness to admit it publicly. The original team who built the Hack Week demo was given trust by the company to run with it and took true ownership of the product. They did everything they could to make it wildly successful, even if it meant going above and beyond the call of duty or doing work that didn’t necessarily fit their job description. Without OPTIFY, Full Stack would not exist.

Culture is a Living, Breathing Organism

Cultural values and behaviors should adapt and change over time as needed to best help the company succeed. Over time, we’ve been very open to tweaking and amending our culture using an internally shared document we call our Culture Doc. Anyone at our company can add comments to or suggest changes. Most recently, we created greater emphasis on urgency, OKRs, and enabling our customers to win.

The criteria for the changes to our Culture Doc are always about maximizing our chances of success as a company. We are relentless in aligning our cultural values and behaviors to those that help us win. 

How does your company nurture its culture? Is it purposeful about codifying its values and behaviors? Do the leaders in your company walk the walk and not just talk the talk? If so, great! If not, take ownership of your culture. The culture is not just defined by the founders or the executive team. It is a living, breathing organism that can be fed and nurtured by any employee. For example, Google’s famous “Don’t Be Evil” cultural mantra was not the invention of the founders. It was coined by an employee, Paul Buchheit.

Why care about culture? The success or demise of your company depends on it.

 

 

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