Photo: Sandvine CEO Dave Caputo says a consistent, repeatable culture is key to the kind of employee engagement that drives a company’s success.

The worst day of Dave Caputo’s life came in 2000, when Cisco Systems shut down Waterloo-based PixStream months after acquiring it, forcing him to lay off an entire team of talented people.

Caputo also looks back on that day as one of his best, because 12 hours later, he started the process to build what is now Sandvine, where he remains CEO.

At Communitech’s Tech Leadership Conference on May 29, Caputo led a packed breakout room through the story of Cisco’s shutdown of PixStream, the digital video distribution startup where he had worked, and passed along wisdom to future tech leaders of Waterloo Region.

Aside from being a publicly traded company since 2006 and a global leader in network traffic management, Sandvine has been nominated as one of the top 50 places to work in Canada every year since 2007.

Caputo talked about some of the ways that Sandvine – from Day 1 – has engineered its culture to help achieve strategic goals, including hitting $100 million in revenue.

The Everest climb to $100 million was easier said than done, especially given the big debate in 2008 around network traffic and the legal implications of even installing Sandvine’s equipment. Revenue fell off a cliff as Sandvine had made the common mistake of putting all its revenue generating eggs in one basket.

Having a culture that is engineered to be consistent and repeatable is part of the magic behind Sandvine. The Leader’s 10 Commandments and the Sandvine Way, a manifesto of company values, are just two examples Caputo highlighted during his talk.

We had a chance to chat with him further about the importance of leveraging culture as a strategic objective in tech companies.

Q – When revenue took a dive in 2008, how big a factor was culture in Sandvine’s ability to get back on the horse?

A – I was amazed – because we had already been on [the] great places to work [list] for two years – that our employee satisfaction scores weren’t lower, but they actually went up that year.

I was amazed by that because I would have bet any amount of money that they would have gone down. I think it was because we were very transparent on what was happening there, and there was a sense that everyone was in it together, and everyone said, “We’re going to get through this. We’re going to figure it out.”

I think if we didn’t have a resilient culture when we had that happen, we would have continued to go down, but instead everyone just rallied together to rebuild the company.

Q – You mentioned talking to Vidyard CEO Michael Litt about his goal to hit $100 million in revenue. What should young companies like Vidyard be keeping in mind in terms of culture when trying to hit a goal like that?

I would just try and hang on to as many of those things that they love about their organization as they grow.

What I was trying to emphasize [in my talk] is that you can actually engineer it, and decide what you want in your culture. And if you put it on a PowerPoint and in everyone’s lab books, or you put it on posters and you talk about it, then you will get it. If you’re just not sure of “Hey, I think this used to be good,” you need to articulate what you want to be good and keep reinforcing it.

Q – You say that being CEO at Sandvine is the easiest job in the world and you keep on reinforcing that. Why is it the easiest job in the world?

A – It’s because I do really little as CEO. I slap together some PowerPoints and the team is the magic that makes it happen, and it’s just a great bunch of people. And when you work with your friends it hardly feels like work at all.

Q – You talked about risk, that you would rather have people make four decisions and get only three right than only make two and get both right. Why is risk-taking so important for technology companies?

A – Technology companies wouldn’t exist if they didn’t take the risk to start it. The most likely thing to fail in this world is to build a technology company, so if they are not thinking about taking risks, they’re not going to be successful. And I think that translates all the way down to the individual team members that you have hired, because they are very smart and have great judgment, so you need them taking risks, because chances are what they think is the right thing to do, is the right thing to do.

Q – You talked about how important it is to have good people managers and that bad ones are the number 1 reason why people leave their previous employment. What can companies do to create better people managers?

A – I really liked our concept of the Leader’s 10 Commandments, in the sense that most young engineers becoming managers for the first time really don’t know what they are going to do. When I was a manager for the first time, I made every mistake: I micromanaged, I tried to show people how smart I was, I gave them the solutions to their problems and I was just a terrible manager.

Anything that you can do to help [young managers] learn and internalize [what they experienced] when they had a bad manager [is good]. And when they have had a great manager, [they should] try to do as many things that they did. The quicker you can shorten that learning process, the better the manager will become.

Q – Why do you think Sandvine made it onto the list of great places to work eight years in a row?

I think it’s because of the Sandvine way; we have been doing it like this from Day 1. We had no expectations. I thought we were a great place to work, but I was surprised to see the scores that we get on that, and it’s completely independently administered. And I think that it has everything to do with our articulation and re-articulation, and support of the Sandvine way.