Culture, Hierarchy and Freedom

Speaker A Let me introduce our next speaker, Arden Hoffman. She is the Vice President of People at Dropbox where she leads global HR and recruiting. She has a long career in HR with various positions at Google and Goldman Sachs as well as DeWitt Consulting. And actually she happens to also be a very good friend. We met at Ward in our MBA program and I've been following a very successful career since. So Arden.

Speaker B Thanks, everyone. It's great to be here. It's been a long time since I've heard so much academic research. So I feel like I'm going to go back to work on Monday. I'm much better person, probably much better at my job. One of the things that John mentioned, we met at Warden and we've always been discussing cultures and companies and I've always personally been fascinated by bringing tons of people together and having these successful companies grow and how that happens and how it's designed, how leaders are built. And so moving from places after business school that were quite traditional and have a lot of history to high tech has been quite an interesting challenge and quite interesting professionally, but also personally in terms of the values that people have moving from one industry to the next and how do you acclimate from one industry to another. And tech is very insular looking. It doesn't like to look at other areas or older companies because there's an assumption there's no innovation. And so it's really kind of bringing some scale and kind of maturity into these newer companies while at the same time embracing the creativity and the newness that happens. So I'm personally really interested in how you're creating, how we create these cultures of freedom and I'll get a little bit into that a little bit with the combination of yet informing and giving rules and building a culture. So I wanted to just give a little bit of context kind of what happens in the Valley and a little bit about Dropbox and then kind of highlight some of the paradoxes that happen and that we're managing through and I think a lot of new companies are managing through. So just to give you kind of a sense of the realities of the Valley, I think this is important context. These are all very early stage companies. They don't have a lot of history, very little tradition and they have very new values. And I say new because they may seem old to companies that have been around a long time, but people are spending time in room saying what's actually important to us, what are the symbols? We want to tell the company by which to live. People are obviously younger, but I think I wanted to kind of veer away in this presentation from just it's not actually an age thing, the newness of a company, you don't have the bigger change management issues that are going on in large scale companies of thousands and thousands of people either globally or nationally. Innovation and creativity is obviously on the forefront, but it also means not hearing no. So the idea that processes and policies that actually might make things move more smoothly or might kind of ensure equality are seen as kind of stifling and bureaucratic. The answer of an engineer will say, if I heard no or that wasn't possible, google Glass wouldn't exist. Self driving cars wouldn't exist. The cloud may not exist. There's all these innovations that are coming every day that would not exist. So when you're trying to talk about, well, hey, this is actually a place where we need to think about a rule actually makes sense. The immediate reaction is, Are you kidding me? Like, that old school is corporate, and I'm not really into that. And you're stifling innovation. Young leaders and managers who have an aversion to conflict have an aversion to saying no. These people grow up as friends. When they started these companies, it's very difficult to turn around five to ten years later and say, hey, you know what? That raise that you wanted or that job that you wanted or that opportunity that you wanted, I can't give it to you. Even though we were just having freaking whiskey together a year ago, now I can't actually deliver on that. So it's a very different people are very sensitive to treating people like human beings. Doesn't matter what you wear at work, it doesn't matter what matters what you do, doesn't matter how you present yourself. And so that is very much they kind of take the holistic person. When I'm on Wall Wall Street, I was talking to a friend of mine and I said, how's your job going? What's going on? And he know, I'd really like my job if I actually worked as human beings. And I was like, okay. So I've always kind of taken that with me. It's very much the opposite in the Valleys, I'm sure most of you can attest to or possibly had that relationship. The valley is about relationships. It's not about networking. So you hear a lot about bigger companies, oh, this person needs to network. They need to get exposure. The value is about relationships. What kind of relationships, kind of friendships do they have? And that's obviously because of the nascent nature of these companies, but also how people have connected over time. When you've started in a room of ten people and you grow to even 1000 people, you still know a lot of people, and then there is a war for talent. I didn't really understand war for talent. I have to say, no offense to McKinsey and all the academics talking about it in 2001, because everyone was crashing down and John and I were lucky to still have jobs after graduating from business school. There actually really is a war for talent in the Valley. There is a definite fear of losing talent. There is a fear of losing the best. I mean, I have people coming to me all the time saying, oh my God, this person's going to quit. I'm like, well, are they really quitting or they're going to quit at some point? And what does that look like? Well, they're going to quit at some point, so we need to give them some more money. And I said, well, I'll give it. They're not leaving. I don't understand what the worry is. There's a tear that there's a Steve Jobs sitting out there and that he or she may go off and create something new. And then you look at a smaller company, and one hire can actually have a huge impact. That's been something a big learning with. Mine actually coming to a company like besides Dropbox, which is about now, what, 1400 people, it'd be 1600 by the end of the year. You hire one person, one the right senior leader, one expert, and it could completely change the direction of a team or group. And this is very similar across the Valley. You see. This is similar in Facebook. You've seen it at Google. So just to give you that context and talk a little bit about Dropbox, how many of you are Dropbox users? Okay, thank you. I'm done. So Dropbox was started about eight years ago with Drew Houston, and he was actually on the red tee in Boston coming from MIT, and he forgot a file. And he actually was like, oh my God. He didn't have his thumb drive, so he didn't have the documents he needed. So this became the beginning of the idea of the Dropbox. There's one place to house all of your materials. He goes to the Valley and he goes to Y Combinator, which many of you know is the incubator and helps startups get off the ground. He said, you need a co founder, go find someone. So he found Arash Friedoshi, who's a lovely guy, actually a good article about him at Forbes, if you're interested. In the last couple of weeks, they became very close friends and know the kind of heads of the company, and they drive a lot. Obviously. Drew's CEO now, and Arash is CTO, but Arash really drives all things culture, so he's seen as the culture guide. He will write me, just wrote me last night about something one person said. X, y or Z. Can you talk to them? How are we going to deal with this? Again, a smaller company really addressing things in a small way. We now have over 400 million users, and that's growing every day. And we're moving into the enterprise space, as many of you probably know. So keep referring to us. Our mission is really to build a home for everyone's most important information so we can free people from the pain of technology and they can do more with their lives. I'm not going to spend a ton of time on this, but I just wanted to give you a little bit of context that we want to do things in our own Dropboxy way as well. And so as the company started to grow and started to form, the question was, okay, what are our values? What are the things that we're going to tell the culture and the company that we want to be our cultural norms. So there were really five of them be worthy of trust. So that is being authentic think going to do and doing what you're going to say and saying what you're going to do and doing. It taking care of one another and our users. So obviously we are housing your data. It is very important that you all trust us with that, that you know that it's not being accessed, but it's also that we trust one another within the workplace. Sweat the details get to simple. If I had one more time, I'd write a shorter letter. That kind of concept is very much alive within our culture. That's why Dropbox is easy to use. It takes a long time to get that simple, as I'm sure most of you know. Aim higher audacious goals, pushing the envelope again, willing to make yourself uncomfortable. And that's something that's actually very consistent in the Valley. Google says very similar things, facebook says similar things. Square, twitter, et cetera. It's all about pushing boundaries. It's not about staying within structure. We not I very much putting the company first. This is an interesting one because Drugbug is kind of one of the first companies that I have found in the Valley that actually really emphasizes putting the company before. This is much more old school in my view. This is a Goldman, this is banking, this is like you come with us and we pay you to be there and so you follow our rules. And this is not that, it's not that prevalent in the Valley. You tend to see because of the war for talent, you see a lot of individuals like, well why can't I have this and why can't I have that? And we'll talk about that in a second. And then the last value is cupcake. And when I was interviewing at Dropbox, Drew was saying to me, well it's a cupcake. And I'm thinking what the hell is going on? Just shows me this cupcake. I'm like okay, but it really is more kind of what is the magic of Dropbox? How do we make the user experience for all of you fun and interesting and surprise you in some ways? How do we do that within the company while we're working together? So those are really kind of our values that we talk about, that we do. They are the communicated values. And obviously there are also other ones though that are not as communicated but are unofficial values is what I call them. But they're also the norms, the type of behaviors that are accepted which cause some kind of tension and I'll get to that in a second. Very emotionally intelligent, as we highlight. There's obviously a ton of research on being emotionally intelligent, but this founders are very open to individual need. It's a very democratic culture. So if you have an issue, you raise it. You go to the CEO, you come to me, you write me an email. There's no boundary or hierarchy in that regard. We want to know how people are doing. We want to know how they're feeling. We're very open to feedback, introverted, so not being too forceful drew and are also quite introverted people. So you see kind of this interesting combination of bringing in more senior people who are very experienced in their roles and kind of know the answer and how do you navigate those relationships and inform one another and educate one another, but yet at the same time stay kind of humble and respectful. I already talked about the democracy piece. There's also a skepticism, a challenging of authority. So assuming worst intent is kind of something that kind of percolates a lot around. And some of these are not values. The title is The Unofficial values, but some of it is just like behaviors that happen. And so it causes this tension of I want to know how you're feeling. But actually if you're assuming the worst, maybe that's not the right thing. We want to encourage an unlimited vacation policy. And we have this on site internal bulletin board. It's called Secret Box. And people post all of these crazy comments and sometimes they'll post their salaries and literally everything. People post snarky comments and all this. And so anyway, people were posting all these posts like, oh my God, this is just because they want to save money. Because if you do unlimited, you actually don't have to pay people out when they leave the company. And everyone was convinced that we were doing it for financial reasons. So I had to answer a question at the all hands. But instead of actually just like embracing, oh my God, I have unlimited vacation, this means I can probably take more, it was, this is a nefarious thing that you're doing. And I'm like, well, you should actually care about the financial well being of the company. So we could start there. But again, it's just kind of a good example of like, I'm going to question authority and I want you to be transparent with me about everything. And so how do you kind of protect the company too, while you're transparent? So some of these how we build culture and reinforce our values while giving people a lot of freedom. And that's something that we kind of struggle with. Frankly, I think a lot of companies do every day taking care of one another. That's within our value set. But it also means but we can't meet every individual need. So how do we explain to individuals and this sounds probably very basic to a lot of you who've been in bigger companies, more historical companies, we're all older. It's like, just get on with it and move. But I get emails from people every day. They're like, hey, I actually really need you to I did get a request, or someone on my team got a request for their pet bring their cat and their pet snake to corporate housing. So I was like, well, we're not going to do that. Why? You don't care about me. And yes, we do, but we can't do that. There's some extremity, but that's not extreme. That's extreme to me because I'm in my 40s. It's not extreme to him. He who's 21 and an engineer and has connected to cat snake. So we're all a lot of our things, but there's also kind of an expectation that the immediate culture that we live in, if I have a job change, if you've given me someone to manage, I should get a promotion today. I should get a paid increase today. So there's less balancing of structure and less patience in that regard. Earning trust means being transparent. We try to be very transparent, as transparent as possible. We have all hands. Every week, people ask questions. They ask them anonymously or not. We're expected to answer them. There's nothing scripted being at older companies that certainly are companies with a lot of history. There's always planted questions, okay, we're going to ask this because they want to know about this. We know we're going to ask this, and you're going to ask it, and this is going to be the answer. That doesn't happen. It's just, hey, these are all the crazy questions we have, and someone's got to get up and answer all of these. So we take our time and we answer them. And sometimes we have the right answer, sometimes we don't. And sometimes we can't actually answer the questions. And that causes a certain level of tension as well, which is, I know you want to know how we decide pay for different people on the same team, and I'm going to give you a generic answer to that. But that's all I'm going to give you, right? I'm never going to share know I said I'd say to the company, compensation is actually confidential. I'm not going to share other people's comp. And was like, compensation is not confidential. You should tell us. And I was like, okay, I don't want you to know my pay. We're not working for the DMV. I don't know what planet we're on here. But so the expectation is that if we want to know information about the organization, that you're going to tell us. And so then how do we as a leadership team, keep the trust with people at the same time also protecting the company? One interesting story just in the Valley right now. Some of, you know, Twitter's being sued for gender discrimination, and part of the case that's being used is that they talked to them in all hands about the fact that they're investigating gender inequity and pay. So that's actually a key. So how do you talk about that with a company, but also not put yourself at risk if there is something in that case, sweating the details, speed and quality. To what end? Right? So there are certain things that you need to think about and sweat the details on. Other things you may not need to. I have a lot of conversations. It's taken me a good amount of time. It's not been that painful. But it's like, hey, this is actually you're hiring experts to come in. You're hiring a CFO. You have now head of people. You have people who can now actually make these decisions quickly because they've seen it before and they know but it's like, well, wait a second, maybe there's a better way to do it. Maybe there's a different way to do it, and should we think about that? And then, so there's that tension as well. And then aiming higher. There's a lot of extremes, and places like Google can afford to say, hey, we're going to give a chunk of cash over to this group, and they're going to be innovative, and they're going to work on glass or self driving cars or whatever it is that they want to work on. We're going to buy another company. But when you're a smaller company and you're actually in a different stage of your business, you also have to prioritize. And you can't have people who particularly engineers, who will go and say, I'm going to work on whatever I want to work on. Well, actually, you need to work on the things that we need you to work on so that we can actually be successful, so that tension is created as well, and how we think about bringing in and attracting talent and giving them freedom, but at the same time helping them focus on where we need them to focus from business. And then again, the we not I prioritizing the greater good. As I mentioned, it's not a typical behavior in the Valley. It is not something it is definitely someone will come in and say, uber's giving me an offer, and I want you to meet that offer. Most mature companies would say, don't let the door hit you on the way out. It's pretty rare that people, companies counter. It's rare that what they do in that regard. They don't go to extremes. The Valley doesn't go to extremes. There's a lot of countering. There's a lot of like, I'll give you what I can so I don't lose you. So again, this kind of setting expectations and the immediate gratification, how do you kind of meet that need while also telling people, hey, can you wait six months? We need to be more fair. We need to be more equitable. And you're going to be now in a process that feels bureaucratic and somewhat stifling. So this is just some of these things that we're struggling with. And I wouldn't say struggle. It's really more of the evolution of a company. We are, as I mentioned, 1400 people now will be 1600 by the year. We're 1000 this time last year, or 800. So again, you're bringing more people in. We're acclimating more people. Some are more experienced, there's more junior people. And so how do we kind of hold on to the values that I mentioned earlier and yet also be able to kind of respect the unwritten rules, the uncommunicated behaviors that we see that are important to people, that actually people think Dropbox is very special, and I think it is very special because of that. And it's different. We hear different stories about Airbnb and Uber down the street and Pinterest and Google and know Facebook has an approach of, hey, if you leave, go ahead, that's fine. We expect you four years and we're okay if you leave. Other companies have a very different approach to talent, how they think about that. So again, everyone has a piece of that and makes a decision on how they're going to manage their talent accordingly. So just a couple of ideas, and Willie actually touched on a little bit of these. This is a much more simple version, a more non academic version, but training leaders to be okay with conflict and disappointment, bringing people in and letting them acclimating them to the culture, the onboarding is big, actually. It is a big word and it's about educating people. How do you get leaders to be comfortable with conflict, particularly younger ones? Anchoring to equity and meritocracy is often something that works quite well in terms of, yes, you may want to raise today, but what about these other four people? Now, I did have someone say to me, well, you should just give it to those other four people. So that conversation pretty quickly. But I was like, well, that's not going to happen, so let's go back to the greater good and a lot of clearly defining problems in the final decision makers. When you have consensus oriented organizations, obviously it's like in these younger companies, you tend to see, well, who actually has to make the final decision? What does that look like? And unless you have an answer to that, it can quite create a lot of spin. I said to my CEO, reward loyalty and call the block. If someone's going to leave, let them leave. See if they leave. Usually the people who complain about leaving, my experience, actually don't leave. So it's not that risky. And then the detail piece, what's essential, what's not, where do you need to sweat the details, where do you not need to sweat the details, and where freedom is essential and where it's not and why and for whom, actually. So those are some things that we're looking at and how do we work through that within the company? Right now, I'll pause there. I'm getting the time, and I'm happy to answer any questions quickly. I know we're low on time.

Speaker A Thank you. Take some questions.

Speaker C Rips, could you help us think through what would be the implications if Dropbox were to adopt a NASA online sort of approach? What would happen within dropbox.

Speaker B What would happen within dropbox. I think no one would probably end up doing their jobs. No, I do think it was interesting. I was thinking about that while speaking. Obviously, there is a huge curiosity to work together. We have a lot of those open systems within our company, and I think people would love that. We actually in the valley. The kind of solution to that right now is things called hack weeks. So we run one, facebook runs one, google runs one. And what it is, is people go offline for a week and they actually do collaborative. People come up with hundreds of ideas, and then everyone can join teams and they just work together on those things for an entire week, and they come up with solutions. And it could be things like that are cultural in nature, and it could be things that are technical in nature. Some of our products have come out of half week. We actually have it coming up in a couple of weeks. So we do try to create those systems for people beyond their role. But we have to kind of carve out that time as opposed to having it in such a large number.

Speaker C Your own people.

Speaker B Our own people, yeah. So I think because we have such I'd have to think about it more, but my initial reaction would be, given that our focus on privacy and security, it would be a scary concept to be working with other people outside the company on things that are so proprietary. Not that NASA isn't, but I think that would be a little jarring. And I think from a news perspective, like Dropbox is sharing secrets with other people outside. And how are people going to feel about their data then if people are accessing that question.

Speaker D So really quickly started with sort of this industry level or value level of analysis where you said there was this aversion to conflict. And then when you talked about some of the unofficial values of your company, a lot of them seem to embrace conflict. Right. Challenge authority, skeptical. I would argue emotional intelligence requires an appreciation for conflict. So I'm wondering going back to what Dr. Kazi represented at the beginning, was selection onboarding. Which of those do you think have been used the most in your tenure there to accomplish that sort of embrace of conflict, given that I imagine not selection, since your story about the snake and the hat. So interesting to see if you saw anything in that that you see working at Dropbox.

Speaker B Yeah, this is also what's interesting to be a smaller company. We're so new that my responsibility is actually creating a lot of those new sound systems. What does our onboarding look like that's not just like, hi, here's your laptop. Right? So we are really trying to think about we do presentation on the culture, on the values, but then it's like, well, what does actually that mean from a behavioral standpoint? And what's interesting is people are comfortable with group conflict. They're not comfortable with individual conflict. So sorry if that was not clear. So it's very much the one on one and the kind of holding accountable and the direct feedback. Everyone's really nice and we're great and we have a nice lunch and everything's good. And it is very difficult for people to hear feedback that's different from like, I am challenging the larger institution to think in a different way and that we just see through it happening and I think people see it, it continues to go and then it grows from there. I actually don't think that would be something that we would not that we would discourage people, but I don't know if we would encourage people to do. But we would say things like we want to be as transparent as possible. We want to tell you all the information, which obviously creates a lot of questions. But we're in the process of having to define along that the selection onboarding, the accountability piece, what actually that is going to look like. Can dropbox teach people to be better programmers or do you just try to find the best programmers? Both. Yes. So we do have a pretty rigorous training program, but our hiring bar is quite stunningly high. So we hire some of the best engineers in the world. So it's both just a follow up question. Do you think there's something about software development as a technical process that requires.

Speaker C This approach to freedom?

Speaker B I do, actually, and I think it's quite difficult to one. I mean, a lot of people are drawn to tech because you ask them and a lot of people, I want to solve problems. I want to create new things. I want to create solutions. I want to change the way that people look and view and work in the world or just are in the world. And I think you can't have a restricted culture and invite those people in. They don't want to be there. Right. And you can see that there's a war for talent within the Valley. There's not a war for talent for the best engineers leaving the Valley and going to companies that wouldn't offer that opportunity. Right. We're not losing people to engineers, to regular, larger companies that are doing more kind of maintenance mode things. Sure.

Speaker E I have questions because you're in an organization that's growing but started off as an entrepreneurial firm. So very often when we talk to executives, there's this comment that structure and structure doesn't exist in small companies. And so I'm curious, from your experience there, as Dropbox has grown, how you've seen the design of Dropbox internally change and how that's affected the cultural change.

Speaker B Yeah, so we've definitely started to put a lot more structure in place. I'd say that's less in the engineering side, but definitely in things like, obviously finance, HR, people used to not track their expenses. Now we have them track their expenses. There's all these kind of small there's smaller things that are kind of you take for granted when you're in a bigger company. But there were a lot of like, oh my God, why are you doing this? This is process bureaucratic. It's a waste of my time, which it kind of is a waste of people's time. It's kind of a boring thing to do, but we have to do it for a lot of reasons, for a lot of business reasons. But I think people understand that this is how you run a more mature company and this is how you scale. And so we spend a lot of time talking about scaling the business and growing the business and being able to be equitable and have the right information about what's happening in the company. And so when we rolled out the unlimited vacation, we said, look, I still want you all to record when you go, because that's going to allow me to find more data about who's taking vacation and who isn't. And what if I see a team that actually isn't taking vacation, we can do something about that. Right. We'll have that data. So I think when people understand that we're using data in the right way, I think that's made it more useful. But I think it's changing the sensitivities of people in terms of how they need to think about how they spend money, how they spend their time, how they work with one another. Sure. I've been there eight months, so I haven't seen a huge I'm sure someone here who's been there four years would probably have a different answer as well. But I think it was just kind of do whatever you need to do to get the job done, and the company is growing so quickly, it was just like, just go. Right. So it definitely flows things, for sure. Yeah.

Speaker C Kind of building on this earlier question, and that is the startup company usually has a culture, if you will, that reflects the values of the founders. Dropbox, of course, is still much in the startup phase. So I have a two part question. One is to what extent the culture that you just described is a reflection of the two founders versus of course, it's more of an emergent culture. Let me ask the second question so we can answer both questions together. The second question is that you refer to this as more of the Silicon Valleys culture. You also mentioned that it's more common among the software programming sector. So the question is to what extent is this really a Silicon Valley culture, or to what extent is this basically reflection of that particular industry?

Speaker B Yeah. So in terms of the first question, I think the company very much is driven or has a lot of I think Drew and you know, who they are as people is very much influenced the company. As I mentioned, they're both somewhat introverted. They're very kind of gentle in how they communicate. They're not out there pounding. We don't have those kind of and those people tend to come off as arrogant to us. We may not hire them. There's a certain selection. This is my own observation. I don't say it's not anything that's intentional. They also are connected to pretty much everyone in the company because they've hired almost everyone in the company. So there's also that kind of, oh, how do people operate problems? How do they think about problems? When we go into come up with solutions in a room, people are quiet. It's not about grandstanding. So it's a different approach. So I would say it's very much aligned with who they are. Want to learn a lot. They want to be pushed. They want to be challenged. And that also comes out in the culture as well. And then your second question in terms of the sorry, silicon Valley versus software. Thank you. Honestly, I haven't worked in other regions of the country to say what that would look like. But I do know that when I talk to other engineers that are at more traditional companies and they're not the dominant culture of that, they definitely don't have as much power and there's not as much kind of freedom, and they accept that. So I do think it's probably a confluence of both being in the Valley and having incredible job opportunities at every time you turn around getting phone calls every 20 minutes. And with companies that are frankly more Western in nature. Right. They're more casual. They want to treat people well. They're about well being. They want you to work out. They want to provide services for you on site. They care about. So I think it's a combination, but I would definitely say it's a Valley and software engineer. But I go to Chicago.

Speaker A I'm going to call it there.

Speaker E Thank you very much. Ram.