Decoding the Contradictory Culture of Silicon Valley - By Jeanne G. Harris and Iris Junglas

 
 
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?

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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.

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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.
Copyright © 2013 Accenture
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