Velocity Memo #1: How DoorDash Builds Performance and Accountability - An Interview with Tony Xu
Our Velocity Memo dives deeply into various topics with leading thought leaders and experts in the industry.
Join in our conversation with Tony Xu, CEO and co-founder of DoorDash. In the interview, led by Velocity Group's John Baird, you’ll learn how Xu built a company culture that embraces accountability and performance.
John Baird: Good morning, Tony. I've so enjoyed coaching you over the last year, and I know how busy you are, so thank you for making time for this interview. Given how successful you’ve been at driving high performance at DoorDash, a lot of people are curious about your secret sauce. So, I'd like to ask you to talk a little bit about what accountability means to you, and what your system is for holding people accountable at DoorDash?
Tony Xu: Thanks, John. I think with accountability there are several important ingredients. But before we get into the tactics, I’d like to talk first about how we’ve created a great environment for accountability, which is the real foundation of a culture of performance.
First and foremost, you have to start with hiring people that hold themselves to high standards, and I think it's way easier to get a group of folks who are already very results-oriented to achieve high outcomes if they've been wired that way.
For example, at DoorDash, of the first hundred people, almost half of them played Division 1 college sports. We also hired former NAVY Seals. These are people who hold themselves to high standards. They have “grit.” Sure, we hired folks who went to good schools, but that wasn't the part that made them special -- it was the circumstances that they had to overcome in achieving that status.
John Baird: It's almost like they have an accountability mindset to begin with.
Tony Xu: That’s right. The second part of creating an environment of accountability is you have to inspire people towards a bigger goal, and a bigger vision, because people have to feel, not just understand, the “why.” They have to connect to something bigger than themselves -- bigger than their career, or what they can learn on the job, or the company’s success. It has to be something very, very inspiring.
John Baird: How did you do that at DoorDash, Tony?
Tony Xu: It starts with the MISSION, John. At DoorDash, our mission is to grow local economies, and to do that we believe that you must start with local merchants. Local businesses on the streets produce 60%+ of the GDP in every city. And helping to grow those businesses is very inspiring – it’s important not just for the success of the company, but for the success of the economy at large.
John Baird: Why is that mission important to you personally?
Tony Xu: I have a deep, personal connection to this mission because of my mom, who came to this country as an immigrant from China. She came here wanting to continue practicing medicine, as she had in China, but she wasn't able to do that because the U.S. did not recognize her license. So, she had to work three jobs a day for 12 years to save up enough money to get the schooling here to go back into medicine. Each of those three jobs were with local businesses. She wanted to live the American dream. She was trying to make something of herself, and that's what we see in the local businesses. That inspiration is what draws a lot of the people into DoorDash, not just in the early days, but even today.
John Baird: What an inspiring story, Tony. Tell me more about creating an environment of accountability …
Tony Xu: The third part of building an environment of accountability is having very high standards. It starts with wanting to be excellent. Even when DoorDash was a very young company, working out of my apartment, we had a saying, that we want to build “championship habits” early, because champions are not born, they are made. Humans are creatures of habit. Setting high goals, unreasonable goals some might say, we thought that that was a championship habit. So, setting that really high bar early on is very important, and that's true of us as we reinvent ourselves in our core business as well as we enter new industries.
John Baird: Is there any other part of your framework for creating an environment of accountability that has been critical to your success?
Tony Xu: There's one final part, which is you have to create a culture where it's okay to make mistakes. When you're shooting big, when you're going after something audacious with a talented team, when you're setting unreasonable goals, whether they be in the goal itself or the timeline in which you achieve the goal, you need to allow people to be able to try new things, and to make mistakes.
And so, those are some of the starting blocks to build the right environment for accountability, before we start getting into all the tactics of how to hold people accountable.
You start with great people who have an accountability mindset, you rally them around an important goal that's much bigger than financial success, you give them the space to try new things and build great habits, and when those things don't work out, you move on to the next thing, instead of dwelling on the past.
John Baird: Now, thinking a little bit about when you're finding that things are not in sync, and goals are not being met… How do you manage that? What happens when things are not happening with the leader or the individual?
Tony Xu: One of the keys in building a culture of accountability is making the bad news as easy to talk about as the good news. Nobody likes the bad news, and it's easier to sell it with the good news, but if you can make the environment equally safe to communicate both, that is the start of fixing the problem.
When a team outcome is not being met, we call it out quickly. One tactic that we use to do this is, when teams write out their report outs in these meetings, we make sure that they start by presenting the low-lights, the things that are missing, and then we finish talking about the highlights.
If everybody starts with the low-lights, you level the playing field and put everyone in problem solving mode, rather than problem hiding mode.
Sometimes the low-lights outweigh the highlights. Sometimes the highlights outweigh the low-lights, but, look, when you balance it out, it's about 50/50. You make it safe enough to talk about both, because what you're trying to do is “truth-seek.” You're trying to get to the best answer. And if you’ve got a great team, you don't really care who gets the credit.
John Baird: That’s a good foundation. How else do you hold people accountable?
Tony Xu: Once you can identify the problem, and make it safe enough to report it as soon as possible, you have to put one person on it, and we call that the Directly Responsible Individual, a DRI. Most of these challenges, especially the difficult ones, they're not some simple fix, because it's typically a set of breakdowns. It's easy to fix the stuff that's obvious. It's very difficult to fix most problems because they're a lot of small things put together that make a big problem, and they are often cross-functional.
Cross-functional work only gets done if you have a single DRI, Directly Responsible Individual. That person then has to be empowered by the leaders of the company to be the owner of that problem. We make that very public, and as a result people know that if the DRI is asking for your help fixing this problem is a company priority, and you're going to make time to help them.
And then, of course, with that you also have to give a deadline. I think a lot of times people just say, "Go achieve the goal," or "Go fix the problem." Give people a deadline, and you can hold them accountable.
John Baird: Something concrete.
Tony Xu: Again, it's not about right or wrong, it's about seeking the truth by calling all these elephants out. Then it's really easy to talk about the elephant in the room, because by X date it’s either done or it’s not. And if it’s not why?
John Baird: As you think about DoorDash and its accountability management system, as a CEO what's your biggest challenge in keeping this where it needs to be?
Tony Xu: Yeah. I think the biggest challenge is myself. Grow the quantity of anything, whether that's measured in your business metrics, or in your organizational headcount, puts a lot of stress on the quality of decision-making, and the speed of decision-making. For us, the challenge is how do we make sure every one of these conversations and meetings, in which I am a part of a very small number of, that the same level of rigor or quality, and the same level of urgency or speed, get applied. And when they do, typically great things happen.
We've learned that the root challenge in making this work is, finding enough of those leaders. When people say they have a “bandwidth” problem, we've learned that means you don't have enough leaders in the right spots. You don't have enough DRIs. And when I say “Leaders,” that does not necessarily imply a title. A leader is someone that others will follow with or without a title.
John Baird: Even informal leaders.
Tony Xu: Yeah, yeah. They could be a line-level contributor, a salesperson, an engineer, a marketing analyst. It does not have the be a person with a big reporting structure that becomes the leader. But almost always our greatest challenge is we don't have enough leaders. That doesn't mean that we don't have enough executives or something. It means we don't have enough DRIs.
The challenge is, how do you create enough of these DRIs, because what you're going to realize is, you never have enough for all the problems you have. And number two, you have to home grow these leaders as much as you recruit them. Because you can't home grow fast enough, so you have to recruit, but if you don't home grow then you don't have a strong enough culture to allow you to build something that will outlast you.
John Baird: Any parting thoughts about this topic? Anything you haven't said that you would want to say to anybody reading this around building a culture of accountability?
Tony Xu: Sure, one last thing. I think what was most difficult for me to learn was how to communicate bad news or bring up conflict. A lot of people are conflict-averse by nature. Here at DoorDash we learned how to get out of that bad habit when we made it about getting to the best answer, and not about a person. The answer is sometimes bad, and sometimes the answer is good, but making it about the answer and not about who gets the credit or blame, and that was what was able to undo our fear of conflict.
John Baird: That's a great way to conclude. Thank you, Tony. Really appreciate it.
Tony Xu: Thanks, John.
1. Establish an Environment of Accountability
Recruit “Accountability Mindset” People (i.e. D1 atheletes, ex-military, etc)
Inspire Excellence with Purpose and Mission
Establish “Championship Habits” from Day 1
Make it safe to Make Mistakes
Bi-Weekly All Hands for Culture & Inspiration
2. Make Bad News as Easy to Share as Good News
Always lead with the Bad News
3. Make it about the problem, and not the person
When people feel unsafe to share problems, they fester
The sooner a problem is surfaced, the sooner it is solved
4. Establish a DRI – Directly Responsible Person
Each DRI can pull resources from across the organization
Everyone knows to support the DRIs because they are running with the ball
Give them a deadline for delivering a solution
5. Build out your bench of leaders
Leaders can be at any level and any title
Home-grow leaders from within to preserve culture
Recruit new leaders to drive growth