Decoding the Contradictory Culture of Silicon Valley - By Jeanne G. Harris and Iris Junglas
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Decoding the Contradictory Culture of Silicon Valley By Jeanne G. Harris and Iris Junglas Research report June 2013
Decoding the Contradictory Culture of Silicon Valley It’s a geographical area of just a few hundred square miles, but Silicon Valley boasts achievements that are outsize. For example, it contains the highest concentration of high-tech workers, the most high-tech manufacturing activity and the largest number of millionaires and billionaires on a per-capita basis of any major metropolitan area in the United States. Indeed, Silicon Valley is home to a veritable “who’s who” of high-tech luminaries, including Apple, Cisco Systems, eBay, Google, Hewlett-Packard Co., Intuit, LinkedIn, Oracle, Sun Microsystems and Yahoo. But all this raises a crucial question: What makes Silicon Valley such an exceptional hothouse for innovative new businesses? 2 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley One key to the region’s success is the close ties among outstanding educational A culture of other half were scattered throughout the United States. The two populations were institutions, research organizations and businesses. But it’s not just the physical contradictions similar with respect to breakdowns in age group, sex, industry, size of company and proximity of a world-class university that job roles, which included corporate IT, has made Silicon Valley what it is. For To answer such questions, we conducted product or program managers and data example, Stanford University has long extensive interviews with dozens of scientists. But the results of the survey espoused a meritocratic culture, a strong academics, economists, executive showed significant differences between the entrepreneurial spirit, active engagement recruiters, HR executives, entrepreneurs, two groups in the way they approached with local companies and industry, and an venture capitalists, CIOs, and high-tech their work. affinity for technological innovation—all executives and professionals in Silicon of which has led to tremendous startup Valley. We also conducted a focus group Those differences were especially activity. A recent study found that the with Silicon Valley entrepreneurs to try pronounced for IT professionals younger alumni and faculty of Stanford University to identify the most important factors than 40. Although our survey focused on alone have created nearly 40,000 companies behind the region’s success. just a subset of those who work in Silicon and 5.4 million jobs since the 1930s, which Valley, our follow-up interviews with collectively generate annual revenues of In the course of these conversations, we entrepreneurs, venture capitalists, high-tech $2.7 trillion. If all that business activity began to hone in on the crucial role of executives and others confirmed that they were amassed into an independent nation, the Valley’s culture—which has stimulated represent the larger culture. that country would rank as the world’s entrepreneurial minds and companies in tenth-largest economy.1 a host of ways that have led to unique, We discovered that the culture in innovative businesses. “Silicon Valley is like Silicon Valley consists of five seemingly The region’s highly educated, diverse Tasmania or Madagascar. It’s developed contradictory characteristics. (See “Five workforce has also played a major role. In different life forms than anywhere apparent contradictions.”) It’s the complex Silicon Valley and the adjacent Bay Area, else,” notes Steven John, strategic chief mix of those characteristics that has 45 percent of the general population has information officer of Workday. enabled the region to flourish—and that at least an undergraduate university degree has made Silicon Valley so difficult to (compared to 28 percent for the United To develop a view informed by data, replicate. States as a whole). Nearly 20 percent hold we also probed Silicon Valley’s cultural a graduate or professional degree. More characteristics in a survey of more than In the sections that follow, we take a closer than 60 percent of the college graduates 600 full-time IT professionals. Roughly look at each of the five contradictions. working in science and engineering fields half were based in Silicon Valley; the in Silicon Valley were born outside of the United States.2 That diversity has led to an influx of novel ideas and fertile cross- pollination, all leading to higher innovation. “Silicon Valley is like Tasmania or But looking beyond those talented, diverse individuals, what role does the area’s Madagascar. It’s developed different overall workplace culture play? What are the different components of that culture? life forms than anywhere else,” What fosters those different cultural characteristics? notes Steven John, strategic chief information officer of Workday. 3 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Five apparent contradictions The workplace culture of Silicon Valley consists of five seemingly contradictory characteristics that have helped the region produce life-changing innovations and many of the world’s most successful companies. Contradiction Description Resulting benefits Supporting mechanisms Laid back— Congenial and laid-back, people will • High productivity • Company policies that favor taking yet driven for speed nevertheless work intensely for long • Relentless innovation a “done is better than perfect” hours for their companies. attitude, taking risks and “breaking” things and then quickly “pivoting” to fix those things to move on Committed— People are deeply committed to their • A mobile workforce that fosters • California laws that make it difficult yet independent work and their colleagues. Yet they a greater exchange of ideas and to enforce non-compete clauses in are essentially “free agents” with no information across company employment contracts strong allegiance to one company. borders • Strong venture capital community • Virtually no unemployment for IT skills. Competitive— Companies and individuals can • Information sharing across • Employee stock options yet cooperative be ruthless competitors. But they organizational borders, leading • Open-source projects also cooperate regularly toward to greater cross-fertilization • Personal professional networks larger goals. and innovation Pragmatic— People realize that failures are • Prudent risk-taking • Strong venture capital community yet optimistic inevitable. But they are also optimistic • Higher resilience • Company policies that don’t punish that any problem can eventually • Greater experimentation that leads reasonable mistakes be solved. to more innovation • Fluid employment market • More ‘shots on goal’ leads to increased chances of success Extrinsically People are motivated by money. • Best talent attracted to difficult • Stock options motivated— However, their fulfillment comes from problems because of the inherent • Company awards yet intrinsically being recognized for their creativity challenge • Work that is challenging, fulfilled and innovation. worthwhile and interesting 4 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Laid back—yet But it’s a certain kind of speed that drives Silicon Valley. High value is assigned to That philosophy also extends to decision- making. Quick, agile decision-making is driven for speed incremental experimentation and adoption rather than to figuring out everything at prized over slow, methodical consensus- building. Indeed, people have little tolerance the outset of a project. A common mantra for corporate bureaucracy, governmental One thing that a visitor to Silicon Valley is “Do it. Try it. Fix it.” And companies regulations or anything else that might notices is how polite people are, especially recognize that the road will inevitably slow them down. In the Accenture survey on the roads. Drivers won’t cut someone off contain bumps. Perhaps nowhere is of 600 IT professionals, almost 60 percent who’s trying to merge into traffic; instead, that mentality captured better than with of respondents in Silicon Valley said they they’ll wave that vehicle in. And the whole software. Nobody expects a perfect product; believe their company makes faster decisions culture can seem stereotypically laid-back instead, everyone assumes that major (and with less rigor) than other firms. Californian, from the casual attire to the software releases will contain bugs that Only a little over 33 percent of non-Silicon coffee-shop hangouts. the manufacturers will fix in future Valley professionals felt that way. updates and releases. Yet that laid-back attitude is just part of The high-tech industry thrives on—indeed, the story. Inside the office, workers are IT professionals in Silicon Valley sometimes it requires—relentless innovation. In such highly driven and routinely push themselves are even encouraged to break things in an environment, products are becoming outside their comfort zones to take on order to make them better. But they are obsolete faster and faster as they succumb increasing responsibilities, regardless of also expected to quickly repair what they to rapid disruption. And as the window of their age or experience. They are willing break. David Henke, a senior vice president opportunity for new offerings continues to work extremely long hours at a frenetic at LinkedIn, explains that philosophy: “The to narrow, companies and their employees pace, always rushing to complete projects rule of thumb here is, since we’re not running as well as their business ecosystems must with aggressive deadlines. Their product a bank, it’s okay to break something; you’ve move as swiftly as possible. Thus it’s development cycles typically span just weeks, just got to fix it fast. We care deeply about better to release an imperfect item quickly not months. They are like ducks that appear MTTR—mean time to repair.” enough to capture a market opportunity to be gliding serenely on the water and yet than to release a flawless gem too late. are paddling furiously beneath the surface. Companies in Silicon Valley have cultures that tend to emphasize getting things done quickly (however imperfectly) versus agonizing over every flaw or kink. A sign People have little tolerance for painted on a wall at Facebook summarizes that attitude: “Done is better than perfect.” corporate bureaucracy, governmental Technology workers in Silicon Valley are twice as likely as those elsewhere to agree regulations or anything else that with this approach. might slow them down. 5 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Where loyalties lie IT professionals in Silicon Valley have a greater allegiance to their employers Committed—yet than do professionals elsewhere. My professional allegiance is with my company* independent In essence, Silicon Valley is a “company NSV 60.5% town,” with employees regularly logging in long hours at the office. More than two-thirds of the Silicon Valley professionals SV 71.2% surveyed said that their allegiance was to their company. That percentage was more than 10 points higher than for *Percentages are for those respondents who agreed or strongly agreed. professionals who work in other regions. (See “Where loyalties lie.”) Yet professionals in the Valley were also far more likely to quit their companies when they hit a rough When the going gets rough patch or when a better opportunity comes When they’re unhappy, IT professionals in Silicon Valley are much more along. (See “When the going gets rough.”) likely to quit their jobs. What explains that apparent contradiction? If I were to get upset with my company, I would walk out tomorrow* Through a deeper investigation, we found that although people in Silicon Valley might NSV 24% profess an allegiance to their employers, their true loyalties lie more toward their work and their colleagues. Eben Hewitt, SV 39.7% former CIO of O’Reilly Media and currently CTO at Choice Hotels, sums it up this way: *Percentages are for those respondents who agreed or strongly agreed. “In the Valley, you have people who don’t feel beholden to a company. They’re interested in their idea; they’re interested in working on what they perceive to be an interesting project, with people they like and think are smart.” Employees have numerous such opportunities. The strategy of many Silicon Valley companies is to bring together the best people for a particular project. This might entail hiring individuals or retaining them as contractors, rather than enlisting employees who just happen to work at the organization at that time—further contributing to the independent quality of the culture. 6 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Job hopping Many Bay Area companies also view the ongoing infusion of fresh talent as Since demand for their skills outstrips the supply, technology professionals a critical advantage. The fact that have a relatively easy time finding a new job, especially those located in California employment laws make it all Silicon Valley. but impossible to enforce non-compete It would be easy for me to find a new job within two months* clauses encourages this continual job hopping, as employees are not legally NSV 47.1% prevented from switching jobs within the industry. SV 54.5% For their part, companies have accepted— if not enthusiastically embraced—the fluid *Percentages are for those respondents who agreed or strongly agreed. movement of labor. Firms in Silicon Valley expect that employees will continually come and go, and that the churn rate will be higher than in other regions. As such, they rightly recognize the competitive importance of their HR activities. In addition, Silicon Valley professionals Whatever the answer, the result has have a deep commitment to the larger been the same: a cycle in which people Some 70 percent of Silicon Valley IT overall cause of “creating the future.” They switch companies often, which makes the professionals said that their company pays love what they do and they do what they employment market more fluid, which strong attention to recruiting, attracting love. The company they work for is more encourages people to hop companies, and and retaining the best talent (compared to of an ancillary detail. That’s why people so on. Silicon Valley professionals who less than half of employees outside Silicon are willing to move from one company to responded to our survey reported they Valley). Managers openly poach talented another, especially for an exciting project were significantly more likely to receive individuals from competitors, and there’s and the opportunity to work with top-notch employment opportunities frequently. little stigma attached to workers who leave colleagues. In that sense, people in Silicon Slightly more than half said that it would for greener pastures but then return to Valley behave more like independent be easy for them to find a new job within their former companies. contractors, or free agents, who move easily two months (see “Job hopping”). from job to job. The result is a highly mobile base of talent. The committed-yet-independent characteristic of Silicon Valley’s culture This raises the chicken-or-egg question: benefits the region enormously. A Do workers in Silicon Valley change jobs commitment to work leads to greater frequently because the employment market productivity and higher innovation, is so fluid? Or is the employment market while an independent (and thus mobile) so fluid because people in Silicon Valley workforce enables a greater exchange change jobs so frequently? of ideas and expertise throughout the region. 7 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley To operate in this mobile (and competitive) talent market, companies have developed Competitive—yet This competitive-yet-cooperative characteristic is true on the company as creative approaches to fill positions. For instance, Andreessen Horowitz, a cooperative well as individual level. Employees are ambitious and will work harder and longer venture capital firm co-founded by Marc to do what it takes to get ahead, even Andreessen, does much more than just Companies in Silicon Valley can be ruthless if that means sometimes stepping on fund and provide advice to startups. It has competitors, with many adopting a “take colleagues’ toes. developed a database of top managerial no prisoners” approach to business. and technical talent and has assembled Yet there’s also a pervasive attitude of And yet Valley denizens are not ruthless a small in-house group to help startup cooperation and a sense that firms should loners. Most have a healthy appreciation businesses recruit the staff they need. be working together toward a larger goal: for the importance of good teamwork. developing technologies that will improve In the Accenture survey, Silicon Valley Additionally, many companies complement people’s lives. As such, companies don’t professionals were more likely to choose their workforce with contract workers always compete head-on, and “coopetition” their jobs based on the people they’d be for added flexibility. The IRS indirectly has become a popular strategy. That working with, as compared to non-Silicon encourages Silicon Valley’s mobile mindset is reinforced in many markets Valley professionals. (See “No worker is workforce, since federal tax regulations in which competitors can also be one an island.”) limit the time that contractors can work another’s customers. for a company before they have to be hired as employees. So firms take care to keep rotating their temporary outside help. Setting up shop The continued high demand for technology More than four out of 10 IT professionals in Silicon Valley said they would skills has created a large, highly mobile, prefer being their own bosses. in-demand workforce of tech workers who Deep down, I would rather be running my own company* see themselves as freelancers, migrating from one project to another. NSV 33.8% The independent characteristic of the Silicon Valley culture also shows up in SV 41.3% people’s desire to be their own bosses. In the Accenture survey, more than 40 percent *Percentages are for those respondents who agreed or strongly agreed. of the IT professionals in Silicon Valley said that they would rather be running their own company (see “Setting up shop”). That desire is fully supported by a strong venture capital presence as well as a No worker is an island vigorous community of entrepreneurs who Co-workers are more of a deciding factor in employment decisions for support each other. In the Valley, people IT professionals in Silicon Valley than elsewhere. always seem to be working on business startups, and funding is readily available to I chose my job because of the people I’m working with* those with good ideas and the wherewithal to start their own companies. In fact, NSV 34.5% firms in the area received 41 percent of the United States’ venture capital investments.3 SV 45.9% *Percentages are for those respondents who agreed or strongly agreed. 8 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Moreover, people in Silicon Valley tend Extracurricular activities to believe in helping others through the free exchange of information. Venture IT professionals in Silicon Valley are more than twice as likely to actively participate capitalists and serial entrepreneurs are in crowdsourcing or open-source projects than their counterparts elsewhere. often more than happy to provide free I participate in crowdsourcing** I contribute to open source projects** guidance and support, all in the general belief of “paying it forward.” That is, NSV 11.7% NSV 19.0% people feel an obligation to help others succeed, just as they themselves might have received help in the past. The overall SV 25.3% SV 41.6% philosophy is that success is not a zero- sum game. **Percentages indicate those who responded with “often” or “very often.” Such beliefs easily transcend any company loyalties, as people regularly cooperate across organizational borders. More than Working remotely twice as many IT professionals in Silicon IT professionals in Silicon Valley are slightly less inclined to telecommute than Valley report that they actively participate their counterparts elsewhere, despite their strong streak of independence and in crowdsourcing than do their non-Silicon access to state-of-the-art communication and collaboration tools. Valley counterparts. And more than twice as many contribute often to open source Theoretically, I can do my job from anywhere* projects. (See “Extracurricular activities.”) NSV 65.9% Our findings indicate that technologists in Silicon Valley may be more loyal to SV 53.7% their open-source projects than to their employers. Jim Stogdill, general manager *Percentages are for those respondents who agreed or strong agreed. at O’Reilly Media, explains it this way: “The connective tissue for a lot of folks inside of these companies is the open-source software projects they’re involved in.” The cooperative and collaborative nature The Silicon Valley culture emphasizes of Silicon Valley shows up in people’s views cooperation. Our research suggests that toward telecommuting. Although they have workers are aware of the importance of a strong independent streak and are likely face-to-face collaboration with their peers to use state-of-the-art communication and the value of informal, serendipitous tools, they are also less inclined to conversations that frequently take telecommute (see “Working remotely”). place in the office. As such, Yahoo’s recent controversial decree to curtail telecommuting for all employees might not go as much against the grain as many initially thought. 9 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Several mechanisms help foster the Peer networks constitute an additional key cutthroat-yet-cooperative culture in Silicon to the cooperative atmosphere. In Silicon Valley. The first is the prevalent use of Valley, such networks play a much larger stock options in employee compensation role in people’s lives and create a set of packages—not just for a few executives, unique subcultures. Each has its own value but for every employee. On one hand, systems and priorities that might not align the potentially lucrative options fuel a with the culture of a person’s employer. As competitive workplace environment, as in any strong subculture, the acceptance employees vie for promotions and raises and approval of others in a peer network that contain the options as incentives. Yet can often matter more than that of a stock options also encourage cooperation person’s boss or co-workers. because people realize that their options will be worthless if they don’t work well More than one-third of the Silicon Valley together and their business fails as a result. professionals surveyed stated that they would be willing to help somebody in their Companies also foster a cooperative peer network even if doing so went against atmosphere in Silicon Valley by actively their own company’s interest (see “When supporting the open-source community. peers come first”). Many rely on their LinkedIn, for example, contributes to 10 networks and not on headhunters when such projects, while Facebook, Yahoo and looking for a new job. People regularly Google are active in Apache’s Hadoop, share ideas, meet people and make which develops open-source software for connections through their peer networks. distributed computing. And IT organizations And the open atmosphere is based on the have become increasingly comfortable conviction that everyone has something using open-source technology in their valuable to contribute, whether it’s elegant infrastructures. code or an insight from an interesting hobby. A majority of survey respondents Obviously, encouraging employees to believe that more than anywhere else, participate in open-source projects networking with colleagues inside and could expose them to tempting job outside the organization is absolutely opportunities elsewhere. But the benefits essential for success in Silicon Valley. far outweigh that risk. For instance, by sharing technology with the open-source community, companies can in order to increase the speed at which it matures. When peers come first In addition, open source provides an Loyalty to one’s peers is stronger in Silicon Valley than elsewhere. alternative form of worker training. It’s a relatively safe place for employees to make I am willing to help somebody in my peer network, even if it is against mistakes while reinforcing their confidence my company’s interest* that others will quickly find and eliminate errors. Many open-source projects also NSV 24.4% become the enablers of informal joint ventures, and support for open source SV 36.4% generally makes companies more desirable places to work. *Percentages are for those respondents who agreed or strongly agreed. 10 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley In the Valley, people can easily build their own peer networks, thanks to the Pragmatic—yet That pragmatic-yet-optimistic characteristic has benefited the region in two important abundance of “meet ups.” These are a multitude of formal and informal forums, optimistic ways. First, it has instilled a strong sense of resilience and reinvention. In Silicon Valley, academic workshops, social gatherings and people fail but pick themselves up, dust other get-togethers sponsored by university People in Silicon Valley are very pragmatic: themselves off and continue on. When Plan and company alumni organizations, special they understand that successes are typically A doesn’t work, they pivot quickly to Plan B interest groups and business consortia. built on many failures. And they realize and then to C, D and so on. Indeed, many entrepreneurs and tech employees that failures, even repeated failures, are in Silicon Valley are inveterate networkers, part of the process and should be viewed as That resilient mindset is coupled with a even though they might be introverted by opportunities to learn, grow and improve. general appreciation for reinvention. The nature. Chris DiGiorgio, vice chair of the On the other hand, stupid mistakes—such widespread belief is that everyone can Bay Area Economic Institute, describes such as doing the same thing twice but hoping (and perhaps should) reinvent everything, individuals as “exhibitionist introverts.” for different results—are an entirely including themselves. The resilience and different matter and should be avoided. At reinvention characterizing Silicon Valley are The friendly, casual lifestyle in Silicon the annual FailCon conference in the San built on a foundation of tough pragmatism. Valley also lends itself to networking, a Francisco Bay Area, hundreds of technology Whining isn’t tolerated, and people believe freer exchange of information and more entrepreneurs, investors, developers and that “if you don’t like something, fix it by opportunities for potential collaborations. others get together to share and learn from creating something better.” They also view One executive of an online game company their own and others’ mistakes. failures as temporary setbacks on the road explains that aspect of the culture in this to success. way: “I’m sitting in a coffee shop at the Coupled with that pragmatism is an university café and I just happen to be inherent optimism that any problem can Second, the pragmatic-yet-optimistic sitting next to a guy and he’s working on eventually be solved with enough effort characteristic has encouraged prudent something and I ask, ‘Hey, what are you and the right tools and approach. Critics risk-taking. More than half of Silicon Valley working on?’ And suddenly we’re in this might deride such beliefs as naive, but professionals who took the Accenture conversation. And that just never happens they reflect an unwavering “Apollo 13” survey consider their company to be a high to me back east.” faith that human ingenuity can overcome risk-taker (compared to just a quarter of almost any obstacle. Such optimism non-Silicon Valley professionals). pervades Silicon Valley. Some contractors, for example, will offer their expertise Onlookers have frequently celebrated in finance, HR or technical matters in the Valley’s risk-taking culture, but many exchange for stock options only, forgoing have misunderstood its true roots. The any fees. Some lawyers will work for free risk-taking is not risky per se; it’s more at the launch of a startup. a calculated mindset that comes from a hard-nosed pragmatism. Mark Zuckerberg, CEO of Facebook, explains it this way: “The biggest risk is not taking any risk. In a world that’s changing really quickly, the Failure and failing fast are a huge only strategy that is guaranteed to fail is not taking risks.”4 That view is echoed by part of the culture. Tom Perkins, the noted venture capitalist. “If there is no risk,” he states, “you have already missed the boat.”5 11 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley The pragmatic-yet-optimistic dynamic of The demand for IT talent Silicon Valley is supported through various means. The venture capital community, for More than half the IT professionals in Silicon Valley say they regularly receive job opportunities. example, often backs entrepreneurs who have a history of failed businesses. In other I receive job opportunities all the time* regions, those individuals would have great difficulty getting a loan to finance another NSV 35.7% startup. Moreover, thanks to the region’s fluid employment market, people in Silicon Valley aren’t overly concerned about failing SV 52.7% at work and losing their jobs. The reality is that those with degrees and experience in *Percentages are for those respondents who agreed or strongly agreed. science, technology, engineering and math (STEM) are in great demand, especially in Silicon Valley, so there’s little fear of being unemployed. In our survey, more than one-half of the Silicon Valley professionals said Does money really talk? they receive job opportunities all the time, Most IT professionals in Silicon Valley say that money is very important to them, compared with only about one-third outside yet nearly half would work for less money. the Valley (see “The demand for IT talent”). Making a lot of money is very important to me in life* NSV 49% Extrinsically 64.6% motivated—yet SV intrinsically Money is important, but I would do what I do for less money* fulfilled NSV 25.9% In Silicon Valley, people are powerfully SV 46.3% motivated by extrinsic rewards (namely, money), but they’re deeply fulfilled by intrinsic rewards. That characteristic was *Percentages are for those respondents who agreed or strongly agreed. reflected in one of the most interesting results from the Accenture survey. Most of the IT professionals in Silicon Valley said that making a lot of money was very important to them, and yet many of them stated that they would work for less money. (See “Does money really talk?”) 12 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley To understand that apparent contradiction, Mixing business with pleasure consider that people in Silicon Valley greatly value intellectual stimulation and For nearly half of the IT professionals in Silicon Valley, business and pleasure are closely intertwined. the challenge of solving difficult problems. Nearly half of the Valley professionals in For fun, I work on tech projects in my free time* our survey said that, for fun, they work on tech projects in their free time (see “Mixing NSV 32.3% business with pleasure”). Moreover, peer recognition is especially SV 48.6% important in the Valley. People want to prove themselves among the best and play *Percentages are for those responding “often” or “very often.”. an important role in the region’s success. Almost two-thirds of the Silicon Valley professionals in our survey said that being recognized by their peer network for their Seeking peer approval creativity and innovation was important For almost two-thirds of IT professionals in Silicon Valley, peer approval to them (see “Seeking peer approval”). So is important. although they might be more motivated by money than IT professionals elsewhere, Being recognized by my peer network for my creativity and innovation they also find greater fulfillment in non- is important to me* monetary rewards. NSV 57% Companies have implemented various mechanisms that support the extrinsic- SV 64.3% yet-intrinsic characteristic of the Silicon Valley culture. On the extrinsic side, stock *Percentages are for those responding “often” or “very often.”. grants and options play a huge role, particularly nearly every employee receives stock or options. People in Silicon Valley may be greatly motivated by money but they tend to avoid flaunting their wealth. Singing employees’ praises Money is viewed as a measuring stick that IT professionals in Silicon Valley feel more appreciated in their jobs than do points to the power of the companies that their counterparts elsewhere. entrepreneurs have built. Conspicuous consumption is a matter for ridicule rather I feel recognized by my company* than praise.6 NSV 48.1% On the intrinsic side, companies are careful to avoid taking employees for SV 63.6% granted. In our survey, almost two-thirds of Silicon Valley professionals said they *Percentages are for those respondents who agreed or strongly agreed. felt recognized by their companies, compared to slightly less than half of the professionals elsewhere. (See “Singing employees’ praises.”) Showing appreciation for workers can make a big difference in the competitive market for top talent in Silicon Valley,. 13 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Some firms have made clever use of corporate awards to provide both extrinsic Return of the Like craftsmen during medieval times, Valley employees might prefer to bring and intrinsic motivation. Google’s “Founders’ Award,” for instance, recognizes guild? their own IT tools to the worktable when joining a new project. And near the exceptional entrepreneurial achievement conclusion of that work, their “guild” would at the company. The award comes in the Organizational cultures are not static; provide them with a list of other projects form of stock grants, which can be worth they evolve as the business environment for their consideration. In this vision of the millions of dollars.7 According to Sergey changes. They also influence how that future, companies would need to overhaul Brin, Google co-founder, the award was environment changes. We found intriguing their recruitment and retention approaches created in part to attract talented new clues as to how that might happen. to attract top talent. employees who might have been more interested in working for a private startup The importance of peer networks and Skeptics might question whether a guild because of the huge potential upside of the independent and cooperative model could emerge in Silicon Valley, but an initial public offering. (Google had its characteristics of the Silicon Valley culture consider the increasing importance of IPO in 2004.) suggest the possibility of a new means peer networks. Technology professionals of organizing workers and the tasks they already live in an intensely connected and But the stock grants are just part of the perform. We foresee a system similar to social world, and that trend will gather prize. The Founders’ Award is Google’s the guild model of the Middle Ages, in momentum as Gen Y’ers and millennials highest employee award, and its recipients which associations of artisans controlled form an increasingly large percentage of are accorded considerable peer recognition the practice of a craft. the workforce. Furthermore, reaching out throughout the company. Underlying such to fellow peers in the same profession will awards is a strong belief in meritocracy. In the future, workers in Silicon Valley become even easier as new technologies The general feeling in Silicon Valley is might be more strongly associated with that mimic and support human interactions that people who are smart, talented, professional guilds. They may seek approval, and exchanges help people find communities and work insanely hard will get ahead, recognition and advancement from that of interest and link up to them. unencumbered by any societal constraints source rather than from the company that or disadvantages that might have blocked writes their paycheck. In such a world, Self-actualization is important to high-tech their progress elsewhere. Chris DiGiorgio each technology professional would be workers, and peer networks are an important notes that “in the Valley, your pedigree— a “workforce of one,”8 with their work vehicle toward this end. For those and other family status, university or socio-economic experiences customized to their individual reasons, we believe that the guild model class—matters a lot less than your abilities, talents, interests and circumstances. And for tech professionals is a distinct possibility accomplishments and what you can they would participate in projects on an for Silicon Valley. Whether that model might contribute to the company. Hierarchies and as-needed basis. also emerge in other areas is an entirely favoritism have no place in a meritocracy.” different question. The workplace culture of Silicon Valley is a complex mix of Perhaps the most effective way that seemingly contradictory characteristics that companies fulfill the intrinsic needs of would be difficult to replicate elsewhere. their employees is by providing challenging and rewarding work. As one tech industry executive sums it up: “The number-one task is to be able to say to your people, ‘Folks, I’ve got good work for you to do, Silicon Valley professionals are something that is purpose-worthy of who you are.’” deeply committed to “creating the future.” 14 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
Decoding the Contradictory Culture of Silicon Valley Acknowledgements About Accenture Note 1 http://news.stanford.edu/news/2012/october/innovation- economic-impact-102412.html The authors wish to thank the business Accenture is a global management 2 Jointventure. Silicon Valley Index 2013, p.12. leaders, technology professionals, consulting, technology services and 3 National Venture Capital Association http://www.nvca. org/index.php?option=com_content&view=article&id=3 academics, subject matter experts, outsourcing company, with 257,000 44&Itemid=103 economic researchers and entrepreneurs people serving clients in more than 4 http://www.cbsnews.com/8301-505125_162-28248860/ who generously shared their expertise and 120 countries. Combining unparalleled facebooks-mark-zuckerberg-insights-for-entrepreneurs/ perspectives for this report. We particularly experience, comprehensive capabilities 5 http://knowledge.wharton.upenn.edu/article. cfm?articleid=3121 want to thank Christopher DiGiorgio, across all industries and business functions, 6 S. Sengupta, “Preferred Style: Don’t Flaunt It in Silicon executive research fellow, Accenture and extensive research on the world’s Valley,” New York Times, May 17, 2012. http://www.nytimes. Institute for High Performance and vice most successful companies, Accenture com/2012/05/18/technology/a-start-up-is-gold-for-face- books-new-millionaires.html?pagewanted=all&_r=1& chair, Bay Area Council Economic Institute collaborates with clients to help them 7 http://www.nytimes.com/2005/02/01/ for his encouragement, suggestions, support, become high-performance businesses technology/01google.html?_r=0 expertise and unique insights into the and governments. The company generated 8 Susan M. Cantrell and David Smith, Workforce of One: Revolutionizing Talent Management through Customiza- workings of Silicon Valley. Finally, we wish net revenues of US$27.9 billion for the tion (Boston: Harvard Business Review Press, 2010). to thank Alden Hayashi, David Light and fiscal year ended Aug. 31, 2012. Its home Craig Mindrum for their outstanding writing page is www.accenture.com. and editorial contributions. About the Accenture Institute About the Authors for High Performance Jeanne G. Harris is managing director, Information Technology Research at the The Accenture Institute for High Accenture Institute for High Performance Performance creates strategic insights in Chicago. Jeanne is also on the faculty into key management issues and of Columbia University in New York. She is macroeconomic and political trends the co-author of Competing on Analytics: through original research and analysis. The New Science of Winning and Analytics Its management researchers combine at Work: Smarter Decisions, Better Results. world-class reputations with Accenture’s extensive consulting, technology and Iris Junglas is an Assistant Professor at outsourcing experience to conduct Florida State University and a research innovative research and analysis into fellow at the Accenture Institute for how organizations become and remain High Performance. high-performance businesses. Please visit us at www.accenture.com/institute. 15 | Accenture Institute for High Performance | Copyright © 2013 Accenture. All rights reserved.
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