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The Power of Positive Destruction by Carlye Adler, Seth Merrin

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Chapter 11 Culture by Design or Culture by Default

Another lesson I learned the hard way: Don’t wait to decide what kind of culture you wish to have in your company. Determine it at the beginning and then design it, implement it, teach it, and lead by example. If you don’t, your company will have a culture, but it will be a culture by default. That might be good or it might be bad, but it will not be of your making. A strong culture is critical to long-term success, but only in a crisis will you find out how important culture is in the short term.

The financial crisis, while brutal for our business, didn’t kill us. My family crisis, while personally devastating, didn’t destroy us. But something else almost did—a culture crisis that sharply divided the firm in two.

As we were entering the economic downturn, we hired a group of incredibly smart and hard-working people who had previously been at a large bulge bracket bank. They brought a lot of experience that we were lacking in many areas of our business—especially the algorithmic business—and we believed their skills would bring great value to our firm. As they got to work, it was clear they truly did possess talent and experience where we were lacking and they brought a new sense of urgency and work ethic to the firm.

However, about a year into the group’s tenure, I started hearing about some worrisome issues. As opposed to working as one Liquidnet team, this new unit was choosing to fiercely compete against other departments ...

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