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Simulating Silicon Valley

Companies can learn from the tech hub’s playbook by focusing on speed and risk-taking.

April 10, 2014
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Silicon Valley sim

If you’re a human resources manager working outside the area between San Jose and San Francisco, you may look upon Silicon Valley with a mixture of envy and suspicion.

Envy, because of the range of astronomically successful high-tech companies that dot the landscape. Suspicion, because of the sense that the region is populated by 20-somethings who make their own rules and can’t be corralled or tamed in the workplace. Talented, sure, but a headache for any HR manager to recruit and retain.

Increasingly, however, the ideal Silicon Valley employee is also the ideal employee anywhere. As the successful use of digital technologies becomes a necessity in every industry, not just the glamorous focus of consumer technology, every company will need employees who can thrive in situations where speed, experimentation and even failure are norms.

Recently, the Accenture Institute for High Performance carried out research to learn more about the attitudes that define employees in Silicon Valley. Are they really different from employees elsewhere, and if so, how? The research surveyed 600 information technology professionals, roughly half in Silicon Valley and half in other regions.

The results showed significant differences in the way the two groups approached their work.

Those differences were especially pronounced for IT professionals younger than 40. Although the survey focused on just a subset of those who work in Silicon Valley, follow-up interviews with respondents confirmed that they represent the larger culture. They certainly supported this claim from Steven John, chief information officer of software company Workday Inc., who said as part of the post-survey interviews, “Silicon Valley is like Tasmania or Madagascar. It’s developed different life forms than anywhere else.”

Scrubbing the Culture Not Just for High-Tech Firms

At Oakland, California-based Clorox Co., which has been making cleaning products and supplies for 100 years, the focus is on speed.

The company’s information technology department now uses a “scrum-style model” of software development — a form of agile management in which developers sit regularly with business-side colleagues to show how an application is progressing. According to Ralph Loura, the chief innovation officer of Clorox, “You put up something quick and dirty, learn from it, and in the next iteration improve on it.”

At Gap Inc., better collaboration is a priority. Tom Keiser, the company’s former chief information officer and current executive vice president of global product operations, has scrapped the fixed offices and high-walled cubicles for his IT department in favor of open space and closer seating for teams. This office design, intended to encourage collaboration and face-to-face communications, is becoming more common in many industries.

Throughout Silicon Valley in the non-high-tech firms, we found growing support for open collaboration, faster product development, support for consumer devices such as tablets and a more sophisticated use of videoconferencing. These decades-old companies are becoming “cooler” places to work, a welcome development for younger employees just starting out. “I think our embrace of this new working environment will appeal more directly to a coming generation of employees, millennials and beyond,” Loura said. “They’re looking for a different environment.”

Silicon Valley’s unique culture in the workplace isn’t easy to replicate. Over the course of many years — even dating back to the founding of iconic Hewlett-Packard — the diverse population, lifestyle and even the weather played roles in the region’s economic development.

HR leaders regardless of their location should begin to rethink what they should want when hiring employees, especially in light of the digital wave that is now transforming every industry.

—Jeanne G. Harris

Unlike the lemurs of Madagascar, however, Silicon Valley life forms are popping up in other hotbeds of technology and business. And that’s why HR managers in the rest of the country may want to consider hiring workers for three characteristics: getting things done is more important than making them perfect; loyalty is to one’s peer network, not to a particular company; and failure is not shameful, but a badge of honor.

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 on a wall at Facebook Inc. says: “Done is better than perfect.” According to the survey, technology workers in Silicon Valley are twice as likely as those elsewhere to agree with this approach.

But it’s a certain kind of speed that drives Silicon Valley. High value is assigned to incremental experimentation and adoption rather than figuring out everything at the outset of a project. A common mantra is “Do it. Try it. Fix it.” And companies recognize that the road will inevitably contain bumps.

Perhaps nowhere is that mentality captured better than with software. Few people expect a perfect product. Instead, most everyone assumes that major software releases will contain bugs that the manufacturers will eventually fix.

IT professionals in Silicon Valley sometimes are even encouraged to break things in order to make them better. But they are also expected to quickly repair what they break. David Henke, a senior vice president at LinkedIn Corp., said in our post-survey interviews, “The rule of thumb here is, since we’re not running a bank, it’s OK to break something; you’ve just got to fix it fast. We care deeply about MTTR — mean time to repair.”

That philosophy also extends to decision-making. Quick, agile decision-making is prized over slow, methodical consensus-building. People have little tolerance for corporate bureaucracy, government regulations or anything else that might slow them down. Almost 60 percent of the Silicon Valley respondents said they believe their company makes faster decisions than other firms. Slightly more than 33 percent of non-Silicon Valley professionals feel that way.

The high-tech industry thrives on relentless innovation. In such an environment, products quickly become obsolete as they succumb to rapid disruption. But this is also becoming true, thanks to the influence of digital technologies, of any industry. Often, an imperfect item released in time to capture a fleeting market opportunity will trump a flawless gem launched too late.

Working Without Borders

Silicon Valley IT professionals profess allegiance to their companies. In fact, the survey shows they surpassed their counterparts elsewhere by more than 10 percentage points on this measure, 71 percent to 60 percent. But they are committed first and foremost to the overarching cause of “creating the future.”

Eben Hewitt, former CIO of O’Reilly Media and currently chief technology officer at Choice Hotels International Inc., said in his post-survey interview, “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.”

That’s why people are willing to move from one company to another, especially for an exciting project and the opportunity to work with top-notch colleagues. The fact that California employment laws make it all but impossible to enforce noncompete clauses encourages this job-hopping, as employees are not legally prevented from switching jobs within the industry.

For their part, companies have accepted — if not enthusiastically embraced — the fluid 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.

Some 70 percent of Silicon Valley IT professionals said that their company pays strong attention to recruiting, attracting and retaining the best talent (compared with less than half of employees outside Silicon Valley). Managers openly poach talented individuals from competitors, and there’s little stigma attached to workers who leave for greener pastures but then return to their former companies.

Within this competitive market for talent, Silicon Valley’s culture also emphasizes the importance of collaboration, and not just within individual companies. The existence of robust peer networks is one of the keys to this collaborative atmosphere. Such networks play a much larger role in people’s lives than elsewhere and create a set of unique subcultures. Each has its own value systems and priorities that might not align with the culture of a person’s employer.

As in any strong subculture, the acceptance and approval of others in a peer network can often matter more than that of a person’s boss or co-workers — or employer. More than 36 percent of the Silicon Valley professionals surveyed stated that they would be willing to help somebody in their peer network even if doing so went against their own company’s interest. Less than a quarter of IT professionals outside Silicon Valley would do the same.

For HR managers outside the Valley, the response to this fluid market for talent may need to be similar: acceptance, if not with enthusiasm. Doubling down on efforts to recruit and retain the best talent is one answer. Tapping into the power of peer networks is another.

People in Silicon Valley are pragmatic: They understand that successes are typically built on many failures. And they realize that failures, even repeated failures, are part of the process and should be viewed as opportunities to learn, grow and improve. At the annual FailCon conference in the San Francisco Bay area, hundreds of technology entrepreneurs, investors, developers and others get together to share and learn from their own and others’ mistakes.

Coupled with that realistic view of failure is an inherent optimism that any problem can eventually be solved with enough effort and the right tools and approach. This pragmatic-yet-optimistic characteristic has benefited the region in two important ways.

First, it has instilled a strong sense of resilience and reinvention. In Silicon Valley, people fail but pick themselves up and continue on. When Plan A doesn’t work, they pivot quickly to Plan B and then to C and D. That resilient mindset is coupled with a general appreciation for reinvention. The widespread belief is that everyone can (and perhaps should) reinvent everything, including themselves.

Second, this characteristic encourages a positive attitude toward risk-taking. More than half of Silicon Valley professionals who took the survey consider the company they work for to be a high risk-taker (compared with just a quarter of non-Silicon Valley professionals).

Survey Description

To develop a data-based view of Silicon Valley’s cultural characteristics, the Accenture Institute for High Performance conducted a Web-based survey in 2013 of more than 600 full-time information technology professionals. Roughly half were based in Silicon Valley; the other half were scattered throughout the United States. The two populations were similar with respect to breakdowns in age group, gender, industry, size of company and job roles, which included corporate IT, product or program managers, and data scientists. We followed up the survey with interviews (in person and via phone) of 65 academics, economists, executive recruiters, human resources executives, entrepreneurs, venture capitalists, high-tech executives and senior IT professionals in Silicon Valley. We also interviewed several IT executives outside Silicon Valley.

But this view of risk-taking — and the failure that is often associated with it — should not be misunderstood. It’s a calculated mindset that comes from a hard-nosed pragmatism. Call it prudent risk-taking.

Facebook CEO Mark Zuckerberg explained it this way in an interview at Y Combinator’s Startup School in 2011: “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

To be clear, no one is suggesting that HR managers should be looking for devil-may-care, fall-on-your-face failures. Failure caused by stupid mistakes, poor collaboration and not staying current on skills is not tolerated in Silicon Valley any more than it is elsewhere. But highly skilled people who take the right risks for the right reasons, even if things don’t always work out, should make any recruiter’s cut.

Replicating the Culture

At this point it may be objected that, despite the digital wave, we’re talking about very particular types of companies. In other words, “this won’t work here.” To test out this assumption, we also spoke with more than 30 technology executives in the Valley region — including organizations outside the high-tech industry. These perspectives provide insights into how companies from other industries and regions could evolve to attract and retain talent.

Is the distinctive workplace culture of Silicon Valley replicable? Not entirely, of course. It has developed over many decades and taps into elements that can’t easily be re-created. But HR leaders regardless of their location can begin to rethink what they are looking for in their hiring efforts, especially in light of the digital wave that is now transforming every industry.

Jeanne G. Harris is managing director of IT research at the Accenture Institute for High Performance. Parts of this article were originally published in Accenture’s June 2013 research report: “Decoding the Contradictory Culture of Silicon Valley.” Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

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