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Today Fortune Magazine ranked NetApp as the Number One Best Company To Work For.


To understand how this happened, you have to go back to 1994 when our CEO Dan Warmenhoven first joined. NetApp was a forty-person company that was running out of money and struggling to find enough customers to keep us afloat. As our new CEO, one of Dan’s early priorities was to develop a list of company values.


This did not go down well. At a meeting to present the idea, one woman asked, “How will these values be used against us?” Even those who kept quiet—I was one—were skeptical that this was the most valuable way to spend our time given the urgent issues we faced. The very idea of company values made me uncomfortable—like someone choosing my religion or my political party. Not their business!


Now I understand that Dan wasn’t talking about personal values. (I doubt that Dan and I have ever voted for the same presidential candidate and that’s okay!) His values were about the sort of company he wanted NetApp to become. He wanted us to value teams and teamwork over prima donnas. He wanted us to be honest with each other and with our customers. He wanted NetApp to be a company that people would look up to—that people would want to join as employees and want to do business with as customers or partners.


Dan does have an idealistic mindset, but he also believes that good values are good for business. In part, he feels this way because of his experience prior to NetApp: Dan joined Network Equipment Technology (NET) as the COO, and shortly after arriving he discovered that the company was riddled with fraud. There were forged purchase orders, customers receiving equipment they never ordered, and secret warehouses with still more equipment. In the end, the CEO, the VP of sales, and the CFO were all fired, there was an SEC investigation, a shareholder lawsuit, and the stock plummeted from $35 to $6. The board promoted Dan to CEO, and he was left to clean up the mess.


Given this experience, it was obvious to Dan that bad values are bad for business. In this post-meltdown era, the daily newspaper provides strong supporting evidence for this view. Dan resolved that things would be different at NetApp. The year he joined, NetApp had $14 million in revenue, and now we are a Fortune 1000 company with billions in revenue. Apparently, Dan was onto something.


To be honest, I have mixed feelings about being named “the number one great place to work.” Having good values and a good culture should always be an aspiration and never a completed accomplishment. NetApp is not perfect! (People remind me of this regularly.) To remain healthy, we must focus on our shortcomings and not on our awesomeness. That said, I intend to lift many glasses of champagne tomorrow in celebration of this honor. Dan, I salute you!


[Shameless plug: In my new book, How To Castrate a Bull, chapter five is all about culture and values and the lessons I got from Dan and others on this subject.]


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