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September 18, 2018

Building the Right Tech Culture

Explore the principles that define the cultures of highly successful tech companies like Amazon, Google, and Netflix.

Tech Culture

By Charlie Turri, CTO, Denim

Note: This article first appeared in Carrier Management on August 24, 2018.

Technology, at the end of the day, is created by humans for humans. For that reason, one of a technology leader’s top priorities should be to assemble the right team and create the right culture. If you look at highly successful tech companies like Amazon, Google and Netflix, one of the things they got right early on was their culture and people.

What principles define these companies’ cultures? How can insurance companies apply these same concepts to their organizations and, specifically, their tech teams? Let’s take a look.

1. Culture must be scalable (Amazon).

Amazon is a good example of a company that has successfully scaled its culture and received buy-in across the entire organization. Much of this success can be attributed to Jeff Bezos’ infamous “Two Pizza Rule” that says every team needs to be small enough to be fed by two pizzas.

Here’s what Auren Hoffman, CEO of SafeGraph, has to say about the Two Pizza Rule: “Every team, especially in product and engineering, owns what it does from end to end. Every team interacts with other teams as an API, getting specific inputs and outputs (that can change over time). By interacting with others as an API, it means teams can move really fast, innovate and eventually automate themselves so they can move to more interesting projects.”

Having recently moved from the role of VP of IT for a big insurance company to become chief technology officer for Denim, a tech startup company, I can certainly get behind the Two Pizza concept. Sure, it’s much easier when your entire company can be fed by two pizzas. (Well, with me on the team, that might be a bit of a stretch.) But I believe the principles can be applied to big insurance companies just like they have been at Amazon.

The key is finding ways to help employees see that what they’re doing matters right here, right now. They need to understand the mission and be empowered and trusted to do their part in advancing that mission. If your organization would like to adopt principles from the Two Pizza Rule, technology and product teams are a great place to start because they already understand and operate most like APIs.

2. Hire based on character and embrace transparency (Google).

In his book “Work Rules,” Laszlo Bock, Google’s former senior vice president of people operations, explains the kind of people Google seeks to hire—people who embody a quality he calls “Googleyness.”

This is how Bock describes the quality: “Attributes like enjoying fun (who doesn’t), a certain dose of intellectual humility (it’s hard to learn if you can’t admit that you might be wrong), a strong measure of conscientiousness (we want owners, not employees), comfort with ambiguity (we don’t know how our business will evolve, and navigating Google internally requires dealing with a lot of ambiguity) and evidence that you’ve taken some courageous or interesting paths in your life.”

Google also looks for work ethic more than IQ level and doesn’t really care about GPAs. It operates under the belief that skills can be taught. Character, generally, cannot.

The first step is to define (or revisit) your core values as an organization. Then find employees who embody the characteristics and values that are most important to your company.

As we’ve been working on Denim’s values and solidifying what we stand for as a company, one word comes up over and over again: transparency. This is also an important part of Google’s culture. Google employees are encouraged to ask questions and speak their minds.

Here’s what one former software engineering intern at Google had to say about his experience: “My mentor created psychological safety for me on my first day when he said, ‘Don’t be afraid to ask questions—you don’t have to impress me. You already have, and that’s why I hired you.’”

3. Connect employee experience to customer and product experience (Netflix).

When you think about the experience of watching your favorite show on Netflix, what comes to mind? Words like flexible (you can watch it anytime, anywhere), fast (the show will start instantly and won’t stop for commercials) and performance (it better work every time) may come to mind. These same words could likely be used to describe Netflix’s culture.

For example, in terms of flexibility, Netflix has eliminated a formal vacation policy. Instead, salaried employees can take time off whenever. The company has also eliminated a formal expense and travel policy and instead tells employees to act in Netflix’s best interests.

Netflix’s general mentality is to have very clear strategies and goals across the company and within teams. They give greater trust to teams and departments so there are fewer cross-department meetings and less micromanagement. They understand the importance of high performers and don’t tolerate anything less. The ultimate goal is to be big, fast and flexible and to deliver a high-performing product.

The culture and the tech companies build are inextricably linked. They have to be. At Denim, we are building both a culture and a product that are bold and awesome. We’d struggle if our product and tech stack didn’t reflect our culture. We want people who are curious and passionate, who will build a great product. It would be tough to have those types of people working in a tech stack that doesn’t support that type of culture.

4. Get outside your four walls—and your comfort zone (Walmart).

Much has been written and said about the cultures of the companies mentioned above. One that you may not be as familiar with is Walmart and, specifically, Walmart Labs. In April 2011, Walmart acquired Kosmix, a social media data and analysis firm, and formed a research division, Walmart Labs, out of it. From a culture perspective, it seems Walmart saw the advantage of having a separate entity work on innovative ideas.

It’s a good strategy, considering it’s really hard or next to impossible to disrupt yourself. A lot of firms, including insurance companies, can learn from Walmart. It’s common to see insurance companies create innovation or venture arms within their organizations. However, using that approach, it will be hard to go as far as Walmart has with Walmart Labs and actively try to disrupt what currently pays the bills.

Walmart’s strategy appears to be working. In 2017, the company posted an impressive 60 percent year-over-year e-commerce growth for several quarters. It now ranks among the five largest online marketplaces in the U.S. and is growing total online sales faster than Amazon and eBay.

Why not insurance?

Technology is becoming increasingly important to an insurance company’s success. The companies noted above—Amazon, Google, Netflix and Walmart—have created an expectation for how things should work for consumers regardless of the industry. Insurance companies in particular are going to have to adjust to this if they’re going to remain relevant to today’s digital consumers. Building or solidifying a strong tech culture will be an imperative step.

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