Why Does the People Equation Matter?

We live in Silicon Valley, the innovation capital of the world, where the region’s greatest asset and secret sauce is its people and mindset. Deborah moved to Silicon Valley in 2006 after spending eighteen years in one of the most hierarchical environments in the world, Washington, DC. Working in the halls of Congress and the White House and serving as a television commentator for CNN and other national networks, Deborah learned how to do two things really well: put fear in people (because no one does that better than the people in Washington or in the news media), and divide people into “us” versus “them” so that trust is diminished. People were disposable, and no matter how talented you were, there seemed to be a younger, cheaper version of you.

Within six months of arriving in Silicon Valley, Deborah raised capital and inevitably built out four companies in ten years: BettyConfidential, a content leader in the women’s space; Alley to the Valley, a national network of accomplished women that fast-tracks professional opportunities; ChumpGenius, an educational gaming company to help kids learn about twenty-first century STEM skills; and Nobiyo Freshwear, a patent-pending undergarment that manages perspiration stains and odor. Convinced that raising money just by having an investor believe in you would not have happened had she stayed in Washington—given its culture and mindset—Deborah took a leave of absence from her entrepreneurial venture to write Secrets of Silicon Valley: What Everyone Else Can Learn from the Innovation Capital of the World. In that book, she scratched the surface of the history behind the value placed on people and why the collaborative mindset remains so rooted today. These were the brilliant foresights of people such as Leland Stanford Sr., founder of Stanford University, who came west from New York during the California Gold Rush in the 1850s. Stanford realized that these daring rist-takers who came from around the world didn’t have to speak the same language or share common cultures or traditions to have the desire to seek a single goal, figure out how to collaborate, and vastly succeed. Stanford knew extraordinary developments could happen—where anything is possible—once you are free from tradition and hierarchy.

When the Fairchild Semiconductor Corporation was founded in Silicon Valley 1957, the company’s eight cofounders believed that an organization’s people should be like family. Having great disdain for East Coast hierarchy, the “Traitorous Eight,” or the “Fairchildren,” as they were know, then promised that they would take the “family” culture to any subsequent company they founded. When times are tough, you don’t just lay people off, you figure out how to cut back and take care of your people. Collectively, the Fairchildren later founded new companies, creating more than 130 businesses in Silicon Valley, Intel and Advanced Micro Devices among them. In the late 1990s, Google cofounders Larry Page and Sergey Brin believed in creating a lifestyle workplace, where play and creativity are seminal and one’s physical, emotional, and spiritual needs are met at an unprecedented level. Firms such as Google, Netflix, Facebook, and Pixar all have lifestyle workplaces that make them tough to compete with.

Because of this mindset, it is Silicon Valley’s people who make the difference between an organization’s success and failure. This is why in Silicon Valley an equity stake in the company is awarded to those who participate. Often, people are willing or able to trade short-term compensation for the prospect of long-term wealth. It is the brainpower and mindset of Silicon Valley’s people that will continue to change the world’s expectations and behaviors—the way we think, interact, and evolve. If you can get the mindset right, most anything is possible.

When you launch an entrepreneurial venture in Silicon Valley, it is as if you have given birth to a baby. A majority of founders stay put long after the company has gone public or been acquired. They are the parents who help raise their baby into adulthood, often after gaining extreme wealth. The very notion of birthing a baby changes everything we know to be true about the context of what it means to lead an organization—it changes the mindset of who you hire to help raise your child and, more importantly, how you treat them.

In the start-up world, the entrepreneurial experience of work runs counter to the traditional firm. It is about acting with the unknowns and not necessarily working toward a planned goal. Even more, it is about fulfilling a passion or about being one’s authentic self. Most entrepreneurs begin with a problem they want to solve, an opportunity space to tackle, or an under-addressed need to be met. Sometimes, the drive is “let’s explore a really cool thing to do and see what comes out of it,” or “let’s throw up eight to ten things and see what sticks.” In this model, it is not about a job description (for anyone who has worked in a start-up, you know that you wear many, many hats). It is extremely improvisational, like a jazz band ready to change direction or add in new rhythms or beats at any time. Regardless, the idea is to get something out there as soon as possible (before it’s ideal for what most would consider ready to launch) and see how quickly the need arises to adjust, tweak, or pivot to what the market tells you. In this model, you are testing an entrepreneurial team’s thought process, passion, and authenticity, where things continuously develop and change over time. The strategic focus is an ongoing movement that is open-ended, and as far as people go, hinges on trust, collaboration, and being their best self. It is about creating the future together rather than operating in a dichotomy of “us versus them.”

Dr. David Crawley is a British citizen raised in Hong Kong during the 1980s, a semiconductor physicist who graduated from Oxford and Cambridge Universities, a former McKinsey consultant, and an athlete who competed in the Olympic trials in rowing for the 2004 Athens games. David witnessed the rise of Hong Kong to become one of the most (if not the most) dynamic cities of commerce on the earth. David saw firsthand the difference between the successful, free-flowing chaos of free market Hong Kong and the stifling and unsuccessful top-down organization of what was then “communist” China. David has worked for, worked in, and managed organizations of every type, from startups to military to large mission-driven not-for-profits to huge hierarchical companies. He was always struck by how easily hierarchies, if incorrectly implemented, could stifle the very creative humanity that we all share, and for years he sought to find a better way that more closely matched the world we will all enter into.

We collaborated on Improvisational Innovation, the methodology that came out of Deborah’s time observing Qualcomm’s ImpaQT innovation program. Over the years, we have been in numerous conversations with C-suite executives of multibillion-dollar companies who are kept up at night not knowing the future of their company or where the next big idea is. Very often, discussions of innovation with the C-suite devolved into a conversation about the products that the company will release soon, rather than addressing any underlying method by which new ideas get explored or, more importantly, a deep sense of who the people are that work for them. We’d inevitably ask about who in the organization were their great risk takers or entrepreneurial types, and we’d inevitably end up with blank stares. It confirmed our view—innovation and the growth that it brings are the greatest things that these executives lack. Meanwhile, despite the confidence they may or may not have in their team (no matter how large the organization is), they usually cannot clearly articulate who in the organization is there to generate ideas or what the process is by which it occurs.

We are often asked, “Who has done talent development well?” As you read ahead, the answers may not be what you’d typically expect. The stark reality is that we couldn’t find strong examples of people-centric organizations within traditional corporate America, and the Googles of the world have been exhaustively researched and documented. Therefore, you will find many case studies that we have gathered from outside corporate America that show what might be possible when a company focuses on the creative energies of its people rather than its hierarchical organizing structure.

We have seen what happens when you organize for control rather than for your people. We’ve worked in and witnessed other spheres of influence, where greed, money, politics, and control are the driving influences, and we understand that when you are surrounded and ingratiated into those cultures, that is your normal. Organizations are finding that they can’t sustain healthy revenues if they are not increasing the speed of innovation. Investments in new technologies or operations do not create innovations—people do.

What unfolds in the next eight chapters is what you need to do in order to adopt the People Equation. These will be the keys to how you transform your organization to put people first, enable them to innovate, and drive the business to success in a fluid economy. We will show you how to create a culture where risk taking is rewarded, mavericks are encouraged, collaboration between highly competent people is nurtured, and, when experiments and new initiatives are proposed, the response is to ask how rather than question why. We are convinced that orienting your organization around the creative energies of your people will enable you to grow and build value more effectively. Just watch how much faster the train can travel!