April 30, 2018 / LIVE & WORK JOYFULLY
April 30, 2018
Once upon a time, like many startups, HubSpot turned its nose up at human resources. We thought, compared to business priorities like product-market fit, it just wasn’t that important. We viewed HR as the very bureaucracy we were trying so hard to resist. In time, we changed our minds.
Over the years, HubSpot has steadily increased its investment in culture. And as I’ve watched other companies do the same, I’ve started to observe some common milestones on the path to making people a priority.
Milestone #1: Recognize that culture matters
The first version of a company’s culture emerges organically. It will be some blend of your company’s mission, the personality and working style of of your founder(s), and the first 5–10 hires. Often, in the early days of a new, growing company, the excitement about the mission you’re on and the product you’re building will be enough to power a good culture. But that culture has a shelf life.
In 2012, our CEO, Brian Halligan, attended a CEO support group, and the topic of culture came up. A fellow CEO told him HubSpot should get more thoughtful about culture, so he asked the most thoughtful person he knew to tackle it: his co-founder, Dharmesh.
Milestone #2: Codify what makes you tick
Dharmesh took the challenge head-on and became the architect of what would eventually become HubSpot’s Culture Code. The document Dharmesh created has garnered more than three million views to-date.
Warning here, the better your culture is, the harder it will be to codify. In a crappy company culture, employees will likely ignore your attempts to clarify your values and mission or nod along in bored agreement. In a great company culture, the opposite is likely to happen (it did for us).
For us, employees were vocal about feeling like the entire effort was “corporatey.” In addition, our employees were (and are) fiercely protective of the culture they had helped build at HubSpot. The thought of releasing the “secret sauce” of that culture to the public elicited some strong responses.
In spite of this negative feedback, Dharmesh decided to move head with publishing the culture code in 2012. We felt it was important for two reasons:
While we didn’t wait for consensus to ship the culture code, we did get input. Dharmesh solicited three rounds of company-wide input and asked for specific guidance on a few key concepts from people whose opinion he really valued, then shipped it. He called it “code” for a reason–like the code we ship to customers, he wanted us to regularly refactor the document to match the needs of our customers and our company.
To this day, Dharmesh personally refactors the Culture Code (often designing the slides himself) on a quarterly basis with input from our employees.
Milestone #3: Market what matters
Here is where you’ll start to feel the first return on your culture investment. Once you’re clear about what makes your culture special, and once you share that with the world, you’ll start to attract more and more people who are excited about what you’re doing.
When we launched the Culture Code, we knew it would resonate with employees and prospective employees. We drastically underestimated was how much the Culture Code would resonate with our customers.
Your prospects have thousands of options for companies to do business with–it’s your job to give them a compelling reason why they should choose yours. Particularly in the world of software as a service, your customers are buying a long-term relationship with your team, they want to understand what type of business you’re building.
Milestone #4: Scale culture
In 2014, HubSpot went public, a milestone for the company, but often a negative milestone for organizational cultures. We had heard time and time again that the year after your IPO is when you should anticipate the highest attrition and expect your culture to go sideways.
Dharmesh, Brian, and our COO, JD Sherman, wanted to defy these odds–and they asked me to lead the charge on this front as the VP of culture. Up to this point, I had worked closely with Dharmesh on the launch of the Culture Code, and spent long hours debating what autonomy means, how we structure unlimited vacation at scale, and how we describe our culture to potential investors on the IPO Roadshow. I figured there was a high chance that I would be unemployed in six months, but I took the role one month after our IPO.
That was two years ago.
We made plenty of mistakes during the scale-up stage, but I think there are three things we got right. And for anyone in scale mode—whether that’s expanding post-IPO or going from 10–50 employees—these will likely pay off for you as well:
We doubled-down on what was working. Transparency was always a core part of our culture, so we decided to double down on it. In addition to providing company-wide access to management team decks and materials, every executive began taking turns writing a summary of our meeting and his or her impressions of it, then circulating these notes to the entire company. As you scale, double-down on the parts of your culture your employees care about most.
We started to close the gap between what we say and what we do. We always said we were an environment that welcomed everyone, but for years, our social events centered around after-hours happy hours–an activity that excludes parents, non-drinkers, or just health-conscious people who would rather hit the gym than a bar after work. This caused a lot of frustration for employees who saw the gap between what we said mattered and what we did. We’ve started to close this gap. Today, we offer more networking events during the workday and also offer wellness coaching and fitness classes on premise.
Innovating to avoid disruption. People talk a lot about products getting disrupted and not enough about how culture is the root cause of innovation (or lack of it). Some ways we solved for this as we scaled was by building programs to help front line employees pitch ideas for new products to our senior leadership meetings, launching a Failure Forum to highlight and incentivize trying new things, and bringing in speakers to help us learn from the mistakes others have made as it relates to complacency. The bigger you are, the harder innovation becomes, you need to build your culture for this.
Milestone #5: Measure culture
If you’re a data-driven company, eventually you’re going to want to start measuring your culture efforts.
On the employee experience side, we conduct a quarterly survey using employee Net Promoter Score to ask employees how likely they are to recommend HubSpot to a friend. We use a consumer marketing technique very intentionally here: if you’re not happy enough at work that you would actively recommend joining our team to a friend, then you’re not that happy.
Don’t wait for people to leave your organization en masse before you find out what’s broken in your organization—create a regular, public, and painless opportunity for employees to tell you what’s going on in their world, and be radically transparent with the results even when they are terrible. It’s hard to read what isn’t working at your company, but it’s a lot harder to fix when things are horribly broken than when you can proactively address issues before they become toxic.
On the candidate experience, we monitor every stage of the candidate journey—from candidate NPS scores to acceptance rates. Our approach to data within our people operations team is to use full-funnel employee data points as leading indicators rather than wait for lagging ones to emerge.
One other note: companies love to use internal data as a form of self-congratulations, ignoring platforms like Glassdoor or InHerSight because they include data points that are hard to hear about your organization. You can ignore external data and employee review sites for as long as you’d like, but you do so at your peril—the scores your candidates and employees leave on review sites are seen by thousands of people each year and have a far greater impact on your acceptance rates and brand than you realize.
Milestone #6: Test culture
Unlike software code, a company’s culture code can’t be tested in a testing environment. These tests will appear at random, and likely when you least expect them. But being passing these tests is an important milestone. This is when it becomes clear to everyone whether or not your culture is some random ideals you tacked on a wall, or a true reflection of your company.
This past year, HubSpot went through one our biggest tests yet. It’s no secret that a former employee wrote a book about his negative experience at HubSpot, and the ensuing fallout led to a series of articles with accusations about our culture, our team, and our business.
During that time, it would have been easy to just send out a brief comment to employees asking them not to talk about it internally or externally, and even better just to ignore it altogether. We decided to do the opposite. We used this opportunity to build trust by over-communicating with employees, taking tough questions in executive Q&As, and even publishing an honest LinkedIn response to the book.
Your employees are smart and intuitive, and they talk to each other, their significant others, their families, and candidates. Don’t let the most interesting conversations happen in whispers. Create meaningful dialogue about what matters and what’s broken even when (especially when) it’s hard to do so.
Milestone #7: Give people an (actual) seat at the table
For all the talk about culture, it’s still rare to find someone at the c-level who is representing the voice of employees. In 2015, HubSpot created its first “Chief People Officer” role, filled by Jim O’Neill. (And as of yesterday, I’m stepping into that role)
Investment in people at the highest level of the company has allowed us to achieve some important things like having a global culture team with a presence in each of our six offices, and building out programs dedicated to make diversity and inclusion a priority. Most importantly, it keeps our entire leadership focused on making HR a business priority.
Today we have a recipe for what works here, but that recipe is changing. Over the next 1–2 years, we expect HubSpot to continue to grow globally. Each of these employees will bring not just “fit”, but also new additions to our culture. What will that mean for HubSpot in 1,2,5 years from now? Who knows. But I’m excited about finding the next milestone on our path.
Read more from Katie.
Original post on ThinkGrowth.