A long time ago I was up for a job, and the CEO was quietly making reference calls. He hired me, but afterward he told me, with a chuckle, what had come back from his Cisco connections. Solid guy, technology leader, one deficiency. Too loyal. I had stayed loyal to a business partner who had picked up a bit of a negative reputation, and in the Valley that goes in the minus column.
Too loyal. He thought it was funny enough to repeat to me. He still hired me. The reference still said it, like a thing worth flagging.
Loyalty here carries a strange negative connotation. It gets blamed for nepotism, undeserved promotions, cronyism, protecting your friends. It attaches itself to most of what a meritocracy is supposed to despise. So people learned to treat it as a liability, and being able to fire your friend became almost a virtue. I’ve done this myself, and still hate the memory.
I think the Valley got this wrong. Let me back up to where culture comes from.
The standard wisdom here is that culture makes the company, and the culture is a continuation of the founder’s values. That part I think is true. Which is exactly why it matters what makes it onto the values slide, and what does not.
At one of my companies there was a lot of talk about this. We were all required to read Patrick Lencioni’s The Five Dysfunctions of a Team. The book is interesting. It is also way too eager to turn every problem into an interpersonal one, at least as I remember it. Its central idea is vulnerability trust. You expose yourself to your peers, you make yourself vulnerable first, and you trust that in a good company nobody will use it against you. Don’t be afraid to get stabbed in the back. Yeah, right.
Then came the values slide. A wall of feel-good lines. Be nice to each other, more or less. Again, all of it about how people talk to people. And two values that matter were not on it. Intellectual honesty and loyalty.
Intellectual honesty first. It is the principled position of telling the truth about the work. Yours and everyone else’s, no matter how uncomfortable it is. It is orthogonal to how people get along, because it is about ideas, not people. In a good company you yell at each other at the whiteboard and then go have a beer. When I raised it, I got blank stares. Intellectual honesty, what is that?!
Now loyalty, and the line I keep coming back to. Loyalty is trust crystallized. It is what trust becomes once it has accumulated long enough to act on.
None of this is permanent. Trust runs on credits. You earn them by pulling your oars, and they expire when you stop. Even crystallized, loyalty is not inert. Leave the account untended and it thins.
And the credits do not only expire. They can be lost. You earn them slowly, one at a time, and a single breach clears the balance. So loyalty is a running balance, and a fragile one. Keep paying in or it runs down. Break faith once and the whole thing goes over. A company that forgets this earns trust for years and burns it in a night, then acts surprised when nobody stays.
The two only work as a pair. Loyalty without intellectual honesty is cronyism, because the relationship matters more than the truth. Intellectual honesty without loyalty is serial harshness, hard truths landing on people with no relationship underneath to carry them. Put them together and you get something else. I am committed to you over time, and I will tell you the truth. The truth becomes safe to tell, and the loyalty is not blind.
Loyalty should not protect incompetence. It should cover good-faith mistakes. If one does not make mistakes, he is not trying hard.
This is the right angle, not Lencioni’s. And the disagreement is not about whether trust matters. It is about order. Lencioni asks you to be vulnerable first, to hand trust over up front and hope it is honored. I think trust is the output. It is what loyalty and intellectual honesty produce after they have been paid into the relationship for a while. You do not start by making yourself vulnerable. You earn the place where it is safe to.
The other camp has its own playbook, and it deserves a fair hearing. We are a team, not a family. Hire slow, fire fast. The keeper test, would you fight to keep this person, and if not, let him go today. That ethos did not come from nowhere. Real loyalty did real damage. It kept bad fits on the payroll for years. It protected the founder’s roommate, and became the cronyism I already admitted to. The Valley looked at that and decided loyalty was the problem.
It was not. The Valley threw out the good loyalty along with the abusive kind and kept neither. The fix was never zero loyalty. It was loyalty paired with intellectual honesty, so it stops shielding incompetence without turning everyone disposable.
And the loyalty I am defending runs both ways. One-directional loyalty is just exploitation with a smile. A company that demands it and returns nothing, that guilts people into staying through bad pay and bad quarters while keeping the right to cut them loose whenever it suits, has no standing to ask. Fire freely and you cannot expect loyalty back. The deal is mutual or it is not a deal.
Strip the loyalty out and everything goes transactional. People price the absence in. They turn mercenary, and the moment the company hits trouble or a better offer shows up, they are gone, exactly as the arrangement trained them to be. Strip the intellectual honesty out and you grow sinecures. Everyone is pleasant, nobody says the hard thing, and not much gets done. Since little is attempted, nothing ever visibly fails. The company stays comfortable and completely stuck.
The damage goes past a stuck company. I argued in an earlier piece that AI has stripped the old software moats. The artifact is copyable now, the clever feature reproduced in a weekend. What survives is trust built over time, the brand and the relationships nobody clones in a quarter. That is the last durable moat.
Loyalty is the same thing one level down, between people instead of between a company and its market. Trust that accumulated long enough to act on. A company that treats it as a liability is destroying what its only moat is made of.
The Valley discarded one of these and forgot the other. The slide had room for neither. I think that is backwards. The two of them together are most of what a good culture actually runs on.
Shouting at the whiteboard, and then going out for beers. Those are some of my favorite experiences. Not everyone has the ability to separate the intellectual passion from the emotional.