Didier Elzinga is CEO and co-founder at Culture Amp. A software engineer by training, before founding Culture Amp he previously worked in Hollywood as CEO of visual effects company Rising Sun Pictures.
If you haven’t heard of Culture Amp already, it’s likely to be just a matter of time. Culture Amp is set to be one of the next big Australian technology success stories, as one of the leading global player in culture and engagement surveys.
Why Hollywood is not the future of work: Every year there’s an article that comes out that says, “The future of work is Hollywood,” and every year I groan and say, “It didn’t work in Hollywood and it’s not going to work anywhere else.” (Video from 2:25)
Didier’s “world’s most naive business plan”: “I wanted to build a business where tens of thousands of companies would spend tens of thousands of dollars and year with us and we’d have hundreds of millions of dollars in revenue.” (Video from 3:52)
Didier’s culture first management approach: “The macro view of why culture first is this idea that back in 1938 Henry Ford said, ‘Why is it when all I want is a pair of hands, I get a brain attached?'” (Video from 7:05)
How to get employees to dream with you: “A big part of this is how do you get somebody to dream with you? How do you get them to say, ‘This might not work but if it did, wow, this could be amazing.'” (Video from 17:46)
The importance of tolerating ambiguity: “The sort of people that become good entrepreneurs, the people that start and hopefully build great businesses, and often senior leaders, there’s a willingness to tolerate ambiguity and a willingness to understand that there are multiple ways that this could play out.” (Video from 27:05)
Steve Pell: I’m Steve Pell from Management Disrupted. I’m here with Didier Elzinga from Culture Amp. Didier, can I get you to introduce yourself and talk about what the company does?
Didier Elzinga: Sure. Thanks Steve. I’m Didier Elzinga and I’m the CEO and founder of Culture Amp. What is Culture Amp? Culture Amp is a software company and what we do is help people use data to put culture first. We have a unified employee feedback and analytics platform that’s used by some of the fastest growing companies all over the world.
Steve Pell: Fantastic. How many people are you leading today? How big is the company?
Didier Elzinga: We’re very, very close to 100 people.
Steve Pell: Let’s talk about your background because you do have a somewhat unconventional background to be leading a culture first software company. Can you tell me where you’ve come from?
Didier Elzinga: Yes, so my previous life as I used to call it, I used to work for Hollywood. I actually am a software engineer by training. I started just after university and worked for a company called Rising Sun Pictures. I was employee number five I think.
I started life as a software engineer and ended up working as an artist, a compositor. I worked on films, putting all the images together and ended up as the CEO for the last five years that I was there.
Rising Sun Pictures grew to become one of the world’s top visual effects companies. They’ve worked on Harry Potter, Lord of the Rings, Superman. Since I left, I noticed the other day that they’re working on the most recent season of Game of Thrones. An amazing company.
Steve Pell: Did you learn anything from the movie industry that you bring to your current leadership role?
Didier Elzinga: Lots. It’s actually really interesting. People say, “How did you go from Hollywood to Silicon Valley?” They’re actually very similar. They’re similar in the way they operate and the sort of interactions that go on in there. Probably the most powerful thing, and it’s really taken a couple of years of the Culture Amp journey to fully appreciate it, is the power of story. Obviously Hollywood and the movie industry is built upon this idea but that’s largely story for entertainment, story for education in some places.
What’s really stuck home to me now working at Culture Amp is the power of story in building culture and the power of story in building a business, building an organisation.
Steve Pell: Is there an interesting parallel as well … we’ve seen all this talk about talent clouds and freelancers recently, which are things that Hollywood’s been doing for 50 years?
Didier Elzinga: Yes, this is another pet conversation of mine. Every year there’s an article that comes out that says, “The future of work is Hollywood,” and every year I groan and say, “It didn’t work in Hollywood and it’s not going to work anywhere else.”
I call it the Hollywood myth. The Hollywood myth is that we’re going to make a film. We’re going to create a new project. What we’re going to do is we’re going to cherry pick the best people and we’re going to pull them together, have a super team and then they’re going to deliver this amazing project and then disband and build another bunch of super projects.
That’s great in theory. In practise it doesn’t work quite so well because what we find increasingly is a) that totally underestimates the time it takes for a group of people to learn to work together. I can’t remember who it was that said it but somebody said it takes roughly a year for a team to actually get to full effectiveness. There’s a year for a team to get used to working together.
The future of work is not a gig economy where you’re just pulling people from all over the world. That works if you’ve got fairy simple tasks. When you’re trying to solve complex tasks, the future of work is bringing people together for longer periods of time. It’s using technology to access people, maybe from more than one location. But you’re actually trying to get a diverse bunch of people that can work together and can create something special at the team level not just the individual level.
Steve Pell: Didier, have you got a vision for Culture Amp?
Didier Elzinga: Yes, absolutely. I sort of subscribe to the idea that vision and values are often not created but discovered. They’re kind of already there. You go over time and chip away and realise what’s important and you see the heart of it.
I tell most people that when I started the company, I had the world’s most naïve business plan. 10,000 x 10,000 = 100,000,000. I wanted to build a business where tens of thousands of companies would spend tens of thousands of dollars and year with us and we’d have hundreds of millions of dollars in revenue. I didn’t even really know what that problem was or what I was going to solve. I just wanted a business to look like that.
Over time, what I’ve realised is that what actually sat behind that idea was that I was interested in business to business problems. I wasn’t interested in a business to consumer thing where I was going to create something which was of value but nobody was paying for it. I wasn’t going to build this huge economy, huge marketplace or whatever and then work out how to monetise it. I wanted to do something that was solving a problem that people would pay money for, that businesses would pay money for.
The second part of it though was a lot of what drove me was this concept of accessibility. The problem we solve, which is using data around culture, is not new. People have been doing this for decades but it’s largely been big companies with big consultants. There’s an existing market out there. I didn’t come out saying, “Great, what I’m going to go do is get the Fortune 100 to spend a million dollars a year on my cool technology platform so they can keep doing what they’ve always been doing.”
What I was interested in was how do we take those ideas and how do we make them accessible to everybody else? How do we get the power of organisational psychology into the hands of a 50-person company or a 500-person company or a 5,000-person company? Pricing is actually part of that. It’s how do we focus on making this accessible? How do we charge enough money to make it meaningful but not so much that it’s not accessible?
That’s a lot of our vision which is how do we take people analytics … I’m not a huge fan of the term but as a broad umbrella, how do we make people analytics accessible to everyone? That’s the mission for us at Culture Amp.
Steve Pell: Flash forward five or ten years. You’ve got 10,000 companies paying $10,000 a year. We’ve changed the way that the world sees culture in organisations. You’ve written a management book. It’s in airports everywhere. What’s the title on the front cover?
Didier Elzinga: Great question. It would probably have to have culture first in there somewhere because for me that’s a big part of our journey, which is if you want to be successful as a business, you need to be customer centric. If you want to be customer centric, you have to be culture first. The title would have to be something on that I think, that whole concept of putting culture first or how to put culture first.
But if I was going to do it properly, and going back to what I was saying earlier, there has to be a story there too. The title is often the last thing you write. You do the whole thing and then the title sums up the story and the narrative. It’ll be right at the last minute when I decide what the title will be.
Steve Pell: Let’s go with a working title of “Culture First”.
Didier Elzinga: Sure.
Steve Pell: What’s behind that management approach. Tell me how that management approach looks like for you on a day-to-day basis?
Didier Elzinga: The macro view of why culture first is this idea that back in 1938 Henry Ford said, “Why is it when all I want is a pair of hands, I get a brain attached?”
There was this whole wave of thinking which was this Taylorist reductionist model of we’ll break it all down. We don’t really want their brains. We just want them to move fast. There’s a whole school of motivation, performance pay, time and motion, all that sort of stuff. That’s appropriate for, in Dan Pink’s terms, low cognitive load work.
If you look at the problems we’re trying to solve as businesses today, they’re increasingly high cognitive load. Even work that might be considered junior or even “blue collar” work is not about moving stuff from here to there. It’s about solving problems that require creativity, complicated understanding synthesis. When you want to build a business that is based around that type of activity and that type of behaviour, you actually have to work out how to tap into their brain, not their hands. You have to motivate that part of the body.
Culture first is recognising that if we’re going to do that, we’re going to have to do it in a different way and that we have to do that to get the other outcome. Traditionally, I’m guessing where it happened but probably the ‘30s and ‘40s, we used management science to approach finance. Then we realised that’s a lag indicator. So we stepped back and said, “All right, what drives that?” It’s the customer. So we get really good at understanding the customer.
Now we’re at that point where we’re saying, “We know what we want the customer to feel. We know the experience we want to deliver to the customer.” The people who are going to make that happen are our people and you can’t beat that into them. You’ve got to create an environment where that’s what they want to do too and they’re going to work out how to do that.
Culture first starts with accepting that you have to put culture first. It’s not the other way round. It’s not build a successful business that makes lots of money, then with that business you can create value for your customers and when your customers you can go find your people and make sure they’re okay.
It’s the reverse. It’s funny because it’s still somewhat up for grabs. I mean I saw a Harvard Business Review article six months ago, where they said, “They way to get engaged employees is to succeed. Stop worrying about trying to make them happy. Just go build a really great business.”
Yes but how do you build a really great business? How do you create successful outcomes financially? You do that by getting your people in a position where they can do things that other people can’t. That’s the first piece.
Culture comes first. How do you do that? That’s much harder. I think one of the things is to start the recognition that there’s no such thing as a perfect culture. That’s a cult. A great company is one that’s willing to be aware of its weaknesses and to talk about it and to work on it and to work on it as a group. For us, in terms of being culture first, it’s about moving that conversation into the middle and letting everybody talk about it and say, “Hey, we want to be culture first. Where are we falling short? What aren’t we doing? What could we do better?” And then marrying that with a desire to do something that other people don’t necessarily think is possible.
The legacy I want to leave, the impact that I want to leave, I want to build a very successful business. I want to build a business generating hundreds of millions of dollars in revenue. But they’re just milestones. At the end of the day, $150m, $200m, $500m, whatever, it’ll make my shareholders happy. But the real thing is we need to do that to tell people that culture first matters. To the extent that we can win, that creates the reason.
If you’re playing professional sports and you say, “We’ve come up with a new way of playing the game,” and you’re bottom of the ladder, no-one cares. If you come out and you win the premiership and you say, “The reason we won was because we thumbed our nose at the way you thought you had to play and we played with a totally new way,” which is when you saw what the Spanish did in soccer, what Brazil did in the World Cup back with Pele, that’s amazing.
That’s the legacy we want to leave is that people look at it and go, “That was successful but they were successful because they did it a different way. We’re inspired as much by how they did it as what they achieved.”
Steve Pell: What I think is really interesting in this is the stakeholder management from you as a CEO.
The employees are far from the only stakeholder you’ve got to manage. You’re a venture backed company. You’ve got a whole lot of other people who rightfully so think they are at the top of the tree as stakeholders, like customers. How do you balance that? How do you build a culture of culture first when you’ve got all of these stakeholder pressures?
Didier Elzinga: That’s a really great question and certainly one that I’m sure there are plenty of people with more experience than I struggle with too where they may choose to want to do something and feel they’re limited by the stakeholders they have. One is you try and be very careful with those people who you choose to work with.
Certainly for us, when we took on venture money, it was really important to us who those people were. We knew the expectations. We knew that when we took on their money, we needed to grow faster than most people think you can grow a company.
It was the people that responded to what we were saying. Rather than saying, “Oh, that’s nice. Let’s see if it works and if it doesn’t we’ll thump you and make you do it the old way.” They were people that went, “Yes, what you’re doing makes sense because that’s how we used to do it.”
Aydin Senkut who is the person that founded Felicis Ventures and led our series A round. He’s Turkish. He was CFO of a pharma company before he came to the US and ended up working at Google and ran a lot of their international operations. He’s still a numbers guy but he firmly believes that the biggest lever you have is culture. He was willing to back that horse. He said, “Yes, I believe in your philosophy. I believe in the way you want to build the business.”
It puts a lot of pressure on you though, because you have to achieve, you have to deliver and you have to find a way to get everybody together and make us all move forward. If we’re not winning, all of this is moot.
Steve Pell: Great point. How would you or how would your employees describe you as a manager?
Didier Elzinga: Ask them? Let me see. I would say that I have a fondness for change. People would say that.
I remember hearing a guy, a CEO actually, who was up on stage and he presents, he said, “As a CEO, one of your jobs is to see what’s coming and to work out how to get there and to change if necessary. What will happen if you’re doing your job right is people will come and say, “You change your mind too often.”” He said, “When you do that, when they say that, you should say, “Thank you,” because that’s part of what you have to do is be out there and try and work out where things are going.”
Now, you don’t want to just flip flop because it frustrates everybody and doesn’t create any value. But it is really about being able to tolerate ambiguity and be comfortable making decisions where maybe you haven’t yet got all the data that would prove a definitive case.
I would hope that if you spoke to people on the floor they’d say that I’m tolerant of ambiguity, that I do care about people and culture, that it’s something that’s extremely important to me. That I’m willing to be vulnerable and talk about what’s working and what’s not working and accept stuff that maybe I don’t want to hear. I’m not perfect at that by any stretch of the imagination but I would hope that I’m probably more open than some people may be in my role.
Then also that I’m competitive and wanting to win. I know one of the phrases, which I borrowed from a VC called Brad Feld was “How do we add a zero to that?” We’d be talking about something and I’d say, “Yes but what does that look like if we add a zero to it?” John, my cofounder, said to me once, “That used to infuriate me when you said that.”
Then after we were on this journey, this was about a year ago, he said, “I know actually kind of like it and I do it too because that, in a ventured backed world, is what you’re talking about. Like that number comes screaming up. If you’re not adding a zero to it in 12-18 months then you’re not doing your job.”
Those are probably the four things I think people would say.
Steve Pell: If you had to write your role description today, what would it say?
Didier Elzinga: There’s lots of stuff written about CEOs. I think one of the things is that no CEO can be everything. You have to play to your strengths and then you have to make sure that you’ve built an organisation that’s good at what you’re not good at. The stuff that I would write for my job description may be different for a person that would still do really well, but just brings a different approach.
At a really high level, it’s about culture, leading from the front and actually living the values of the organisation and putting them front and centre and making them important to everybody.
It’s about nurturing the vision. Whether it’s your vision or the organisation’s vision actually doesn’t matter. I would hope that I contribute a fair bit to what we could be in the future but the thing is that the organisation has to have a vision and your job as CEO is to make sure it exists and that people understand it, not just deliver it.
For all CEOs but particularly in a venture capital environment, you’ve just got to make sure you don’t run out of cash. That’s your lifeblood in terms of running the business, so thinking about raising or not raising and how all of those things interplay. Probably your number one thing is to hire great people. That’s the most important thing. Can you convince people that are truly amazing to come and join your company? That’s what a CEO, I believe, has to be really good at. You can’t delegate that.
I mean you can hire people who are really good at it. But that needs to at least be some aspect of your super power which is you are someone that can get people, who otherwise would not join your company, to come and join your company because certainly early on, that’s critical.
Steve Pell: Let’s talk a little bit about that. Do you have a recruiting super power? How do you do it?
Didier Elzinga: I wouldn’t call it a super power. I think I’m good at that part. I enjoy it. I enjoy talking to people about where we’re going. One of the things that I get back as feedback when I talk to candidates is, “It was fantastic to hear the passion that you have for the problem that we’re trying to solve.” I think that’s really important.
Like I heard this great line from Alfred Lin, who was the CFO at Zappos, he’s had an amazing track record and he’s now at Sequoia. He was up on stage and somebody asked about why they passed on Uber. He said, “Well, Travis came and pitched us the idea but we thought it was just a black cabs model. We just didn’t think it could be big enough.” Somebody asked him from the audience, “Was that because Travis didn’t pitch that vision?” He said, “No, he pitched the vision. We just didn’t let ourselves dream with them.”
A big part of this is how do you get somebody to dream with you? How do you get them to say, “This might not work but if it did, wow, this could be amazing.”
Steve Pell: How do you get your employees to dream with you?
Didier Elzinga: You’ve got to create a safe space. That’s part of the challenge. One of the things you want to measure when you’re measuring innovation is are you able to try things even if they won’t succeed? You have to create a safe space for people to be willing to dream.
One of the things I learnt in Hollywood too from a storytelling point of view, part of it is jolting people out of the way they think. If you think about what works in comedy, what works in a great story is you’re kind of half listening and then something happens and you’re like, “Whoa, what just happened.” Now you’re paying attention.
One of the things I like to do if somebody joins the company is sit down and say, “Okay, you’ve joined the company. Thank you for joining Culture Amp Steve. How can I help you get your next job? How can I use my personal networks, anybody I know, anything I have to help you do what you’re going to do when you leave Culture Amp?” You say this to people and they look at you and they’re like, “Aren’t we meant to pretend we’re going to work together forever?” “No, I want you to be here as long as it’s taking you in the direction you want to go and I want this to be your dream job or at the very least be the place that gets you your dream job.”
By having that conversation … our research shows that when people believe they’re moving towards their future career, they’re much more motivated. They’ll stay longer. So it’s good for the company. But just asking that question gets people to step back and think, “Well, actually, I want to start my own start-up.” I’m like, “Great, you might be joining us as a developer. If you want somebody to have a look at an idea or you want me to help you pitch to a VC, I’m more than happy to do it.” Now you’ve got people dreaming with you because you’ve actually managed to get beyond what everybody thinks is in the box.
Steve Pell: Let’s go back a little bit to you talking about your current job description. What were you? 20 people last year, 100 people this year, maybe 200 next year? Your job description must be changing at a rate faster than or equal to the company. How are you dealing with that change on a personal level?
Didier Elzinga: That’s a really good question. I guess I was lucky in a sense that when I left Rising Sun, we were 150 people. None of this journey is new and we went through a similar process where we grew from 30 to 150 in 18 months.
At the time I thought I’d done an awesome job and then over the next couple of years I realised all the things I hadn’t done and all the mistakes I’d made and they all came home. I learnt a tonne. The line is ‘good judgement comes experience and a lot of experience comes from bad judgement’. I learnt the hard way.
Now, it’s at the point where I actually have to think really carefully about how to leverage my time. We’re in a situation where I could go away for a week or a month, it’s not going to affect how the business runs. We’ve got great people doing all the things that the business does. I would like to think they’d miss me but it’s not that suddenly there’s a skill that the business doesn’t have.
I don’t have that obligation to have to do anything, which actually creates a different obligation because now I have to be much more thoughtful, much more intentional about where I do spend my time because it’s not immediately obvious if it’s this or that but over time, that pattern will lead to future value.
Steve Pell: Is there some thinking there about what you’re better at and what you’re worse at?
The big thing is really trying to work out ‘and then what’? If I go and do something, like I could see a customer ticket, I could jump in and possibly I could do as good a job as somebody else, and then what? What happens after that? Where am I adding value after that point? Whereas there are other things like meeting a potential investor where the ‘and then what’ makes a lot more sense because potentially this is a person who is going to be a big part of our journey.
Or helping somebody close a candidate, that’s one of the highest leverage things I can do anywhere in the company. If you’ve got somebody you really want to bring into the company, if I can spend 45 minutes with that person and help give them a reason to join, that’s good use of my time. It’s just finding those places which a) I’m good at, and b) are valuable, and c) have a trajectory that makes sense.
Steve Pell: On the opposite side of the scale, what part of management are you worst at?
Didier Elzinga: I’m not a micro optimiser. I hate it when people say they’re a big picture person. I hate that concept. It’s such a copout. Ideas are cheap. Taking ideas and executing on them and making them successful, that’s the work, and doing that over a period of time and not burning people out while you do it, that’s the real work. I hate it to say that I’m a big picture person.
What I’m strongest at is synthesizing, looking at ideas, looking at lots of information and getting a sense of what’s the path through that. “Okay, I think here if we did this and this, that narrative makes sense and if we did this then we could choose not to do that, which is actually an interesting way of looking at it.”
Where I’m probably weakest is then saying, “Okay, now we’ve looked at that and worked through that together and decided that’s where we want to go. Let’s break that down to here and then let’s break that down to here and then let’s break that down to here. What’s this step here? Actually, if we improve that step there by 0.5%, that’ll flow through here and we can make this …” I’m just not good at that part.
That’s where I rely on other people who get the equal thing where they get uncomfortable when you pull all the pieces apart and just throw them out on the table and just sit and look at it and say, “In here somewhere is something other people can’t see yet.” They’re uncomfortable when you do that.
Where they’re amazing though is when you kind of have the sketch and the things there and they can see stuff I don’t even see. They’re like, “Yes but if we push this back by 30 days and we change this by that, this will add up and over time that’s a cumulative thing.” It’s like, “Wow, that’s incredible.”
Like I said, it’s a huge copout. I would hate to say that I’m not good at execution. It’s something I spend a lot of my time on but the area I’m not as strong as in other areas is in that detail, “Okay, let’s work out exactly how this, that, there is going to happen.”
Steve Pell: Very interesting. Who’s had the biggest impact on the way that you manage or lead today?
Didier Elzinga: That’s a really good question. I don’t know if I could say who the biggest one is. People often ask me can I suggest a good book on management.
The book I always quote is Peter Drucker’s, The Effective Executive. In about 70 pages, he covers what you have two shelves in a bookstore to do these days. I think his ability to get to the heart of what it actually means to be a manager is phenomenal and unrivalled.
Probably the strongest impact on me as a leader today is all the people that I failed along the way. You do something and it doesn’t work out. There was one person at Rising Sun Pictures who ended up resigning who I really wanted us to be able to keep. It was the first time I’d ever lost somebody. He sort of provided some really useful feedback on why he didn’t feel it was the right place for him.
So learning from those sorts of experiences where you did what you thought was the right thing and you realised, actually I needed to have been tougher or I needed to have pushed. Oftentimes, in my heart, I knew that I should have done that but I didn’t because I let other things get in the way.
So reminding yourself that these things really matter and have impact and you need to trust yourself and when it comes, you need to make the hard decision and do it. That’s affected me probably the most.
Steve Pell: A lot of what comes through in these interviews is awareness… Knowing what you don’t know in management is a key characteristic that differentiates leaders from the managers that level below them. Do you see a lot of that?
Oftentimes it is I think that the sort of people that become good entrepreneurs, the people that start and hopefully build great businesses, and often senior leaders, there’s a willingness to tolerate ambiguity and a willingness to understand that there are multiple ways that this could play out.
I think that’s actually something that I’m pretty good at and I’m pretty emotionally stable in that sense in that I hopefully don’t let that impact too much. That’s actually going back to one of your earlier questions. I would hope that’s something … in fact, I know that’s something people would say is that I’m pretty calm most of the time. But it’s this idea that there’s not just one truth.
At any point in time, I should have in my head six or seven equally valid worlds that could play out. If I’m sitting down talking to you about a performance issue, that there are six equally possible worlds, one in which you’re incompetent, another in which there is stuff going on in your home life, one in which I’m actually wrong and you are performing well and I totally read it the wrong way round. Allowing those all to sit and not in my mind forcing them to collapse and go, “No but it has to be one, that there is a truth here. The way you are right now is the way you’re going to be forever.”
I think that’s probably the hallmark. So being good at that has to go with a fair bit of humbleness and a fair bit of openness to what’s going on. If you believe in six different mutually compatible worlds, then in many of those you don’t know what’s going on.
Steve Pell: I think there’s a lot of people that do that but probably unconsciously.
Didier Elzinga: Yes, absolutely. You see it play out in different ways too. For example, you hear great sports people talk about this at the highest level of their sport. People like Wayne Gretzky used to talk about he knew where the puck was going to be before anybody else did. But you explore even further, in his mind it’s going to be here or it’s going to be here. At any time, they can see all the permutations.
It’s like a chess grandmaster. Up until the point where the computers got good enough to beat us, they used to say that the computer had a 12 to 20 move event horizon where once they go within 20 moves of checkmate, they’ll get it. What was interesting was humans couldn’t see all of the permutations but what they could often see was five or six or seven ways the game could go, up to 150 moves out. It’s that ability to see these different things that actually helps.
One of the things I’ve learnt about all of this is that it’s not that, “Hey, I’ve got some inherent ability that I could use in any environment. I happen to be good at doing it in this environment. Stick me on a football field and it’s totally useless. It’s not relevant. It’s not applicable. I can’t make it work. There will be somebody else who is brilliant at this and has that mind set in that mode. It doesn’t mean they can use it over here.”
Steve Pell: Fascinating. Didier, one last question, what do you wish that you knew on day one of your management career?
Didier Elzinga: I don’t know if it would have changed my journey but there’s a line that I think of from time to time from a Cold Play song which I think is a great line. It says ‘nobody said it would be easy but nobody said it would be this damn hard’. That’s probably useful to keep in mind along the way.
Steve Pell: Didier, thank you so much.
Didier Elzinga: Thank you.
— This transcript has been modified slightly for readability —