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How HubSpot’s culture code and lack of policies delight

HubSpot has laid out for the public their roadmap for standing out and retaining quality team members, and let’s just say they’re not exactly running a traditional operation.

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culture

HubSpot stands out

HubSpot has released the above presentation on creating their company culture, proving how “uncomfortably transparent” they are as they offer their road map in public. Using traditional titles is about the only traditional move the company has made, and even that was hotly debated. To keep happy and productive employees, teams, and delighted customers, they offer unlimited vacation time, there are no offices, and everyone plays musical chairs every three months to keep things shaken up.

Their policies are almost non-existent, rather urging team members to use their best judgment – when everyone’s culture matches, judgment calls will typically be reflective of the company’s mission. This is why company culture is so important: “culture happens, whether we plan it or not.”

Presentation transcript

1. THE CULTURE CODE Creating a company we love.

2. WHAT’S CULTURE? A set of shared beliefs,values and practices.

3. WHY WORK ON CULTURE?

4. Culture is to recruiting as product is to marketing. Customers are more easily attracted with a great product. Amazing people are more easily attracted with a great culture.

5. THE INTEREST RATE ON CULTURE DEBT IS HIGH. Much higher than financial debtor technology debt. Often, crushingly high.

6. CULTURE HAPPENS. Whether we plan it or not, culture will happen. Why not create a culture we love?

7. Let’s make the company we always dreamed of. Let’s create a company that will be a great place to be from. REED HASTINGS & PATTY MCCORD NETFLIX.

8. Now, an observation…

9. PEOPLE HAVE DRAMATICALLY CHANGED HOW THEY LIVE AND WORK.

10. THEN / NOW. FOCUS Pension / Purpose, NEED Good Boss / Great Colleagues, HOURS 9-5 / Whenever, WORKPLACE Office / Wherever, TENURE Whole Career / Whatever

11. AND ALTHOUGH PEOPLE HAVE DRAMATICALLY CHANGED…

12. Many organizations operate as if they’re frozen in time.

13. They operate as if money is what matters most…

14. …as if the Internet hadn’t been invented…

15. … and as if amazing people are just happy to have a job.

16. We’re different.

17. We are HubSpot.

18. We’re creating a company we love.

19. This document is part manifesto,part employee handbook,and part diary of dreams.

20. When something is aspirational (not yet true) we try to call it out.

21. THE HUBSPOT CULTURE CODE. 1. We are as maniacal about our metrics as our mission. 2. We obsess over customers, not competitors. 3. We are radically and uncomfortably transparent. 4. We give ourselves the autonomy to be awesome. 5. We are unreasonably selective about our peers. 6. We invest in individual mastery and market value. 7. We defy conventional “wisdom” as it’s often unwise. 8. We speak the truth and face the facts. 9. We believe in work+life, not work vs. life. 10. We are a perpetual work in progress.

22. We are as maniacal about our metrics as our mission.

23. “Pursue something so important that even if you fail, the world is better off with you having tried.” TIM O’REILLY.Note: The O’Reilly Library at HubSpot is named after Tim.

24. OUR MISSION is to make the world INBOUND. We want to transform how organizations do marketing.

25. inbound is about empathy.I t’s about creating an experience people love.

26. WE BELIEVE OURS IS A NOBLE CAUSE.We help organizations grow.

27. We also reduce spam, junk mail and other unpleasantness.

28. We are passionate about our mission. It has earned us the love of thousands. We’re also maniacal about metrics and reaching our goals. It has earned us the resources to further our mission.

29. Balancing this dual personality of mission & metrics is challenging. But it’s also what makes us DIFFERENT.

30. And sometimes dysfunctional.

31. One way we balance these things is to have a guiding goal that serves the mission.

32. Our guiding goal is delighting customers.

33. We obsess over customers, not competitors.

34. Have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. ANDREW MASON. FORMER CEO OF GROUPON IN HIS DEPARTURE EMAIL

35. FOR EVERY DECISION WE SHOULD ASK OURSELVES: “Selves, what’s in it for the customers? Will this delight them?” In other words…

36. SFTC. Solve for the customer. Not just their happiness, but their success.

37. We sometimes often have SFTC to remind ourselves of this. Solve for the customer. Not just their happiness, but their success.

38. WAIT. Does “Solve For The Customer” mean just giving more away for free? Wouldn’t that delight customers? NO. To delight customers in the long-term, we have to survive in the short-term. Because…

39. Bankrupt companies don’t delight their customers.

40. All other goals should support our guiding goal.

41. We have a professional sales team. Does hitting our sales goals support our guiding goal?

42. YES. Having delighted customers requires having customers. (funny how that works) We’re on the path towards our Guiding Goal as long as we sell to customers that we expect to delight.

43. This is the key. We shouldn’t sell customers we’re not justifiably confident we can delight.

44. WE LOVE TO EDUCATE. We are enthusiastic teachers. We believe success comes through educating customers, not exploiting them.

45. We are radically and uncomfortably transparent.

46. THEN. (back in the 1900s) Power came from hoarding knowledge. Decisions were made behind closed doors. NOW…

47. Power is gained by sharing knowledge, not hoarding it.

48. “Sunlight is the best disinfectant.” -LOUIS BRANDEIS

49. WE SHARE (ALMOST)EVERYTHING. We make information available to everyone in the company.

50. We protect information only when: It is legally required. Example: Information covered under a Non-Disclosure Agreement (NDA) It is not completely ours to share. Example: Individual compensation data

51. WE HAVE THE MOST INTERESTING WIKI ON THE PLANET. *Examples of things we share and discuss:• Financials (cash balance, burn-rate, P&L, etc.) • Board meeting deck • Management meeting deck • “Strategic” topics • Lore & Mythology (the funniest page on the wiki) *Unverified claim

52. FROM

53. AND LIKE ANY MINDFUL COMPANY, WE HAVE:

54. We have open access to anyone in the company. No permission needed. Nobody has an office.

55. CULTURE HACK. A large part of the company goes through a random “seat shuffle” every 3 months. We’ve been doing this since the beginning. It reflects our “change is constant” credo. It also circumvents a lot of needless discussion.

56. The intent behind all this transparency is to support smarter behavior and better decisions. So…

57. We give ourselves the autonomy to be awesome.

58. THEN. Organizations tried to prevent mistakes with policies and procedures. NOW…

59. WE TRUST OURSELVES.

60. Just because someone made a mistake years ago doesn’t mean we need a policy. WE DON’T PENALIZE THE MANY FOR THE MISTAKES OF THE FEW. We only protect against really big stuff.

61. We don’t have pages of policies and procedures.

62. Instead we have a 3-word policy on just about everything: USE GOOD JUDGMENT.

63. Social media policy. Travel policy. Sick day policy. Buy a round of drinks at an event policy. Work from home during a blizzard policy. Our policy on all of these (and most other things): USE GOOD JUDGMENT.

64. WHAT’S GOOD JUDGMENT? Team > Self. Favor your team’s interest over your own. Company > Team. Favor the company’s interest over your team. Customer > Company. Favor the customer’s interest over the company.

65. We’re pretty good at the Company > Team first and second – but the third is tricky sometimes. Favor the company’s interest over your team. Remember, acting in our customers’ interest is in our Customer > Company long-term interest too. Favor the customer’s interest over the company.

66. Now, let’s talk about where and when we work. Generally…

67. Results matter more than the hours we work.

68. Results matter more than where we produce them.

69. Results matter more than how much vacation we take. (we have unlimited vacation time)

70. We believe in the freedom to work when,where and how we want. Remarkable results are what matter. This is what we believe.

71. But we also recognize that…

72. The biggest driver of performance in complex industries like software is serendipitous interaction. BEN WABER. VISITING SCIENTIST, MIT MEDIA LAB AUTHOR, “PEOPLE ANALYTICS”

73. So, we trust our leaders to use good judgment when guiding their teams.

74. And we try to create a work environment where we want to come in.

75. THEN. Influence based on hierarchy. Command & Control. NOW…

76. INFLUENCE IS INDEPENDENT OF HIERARCHY.

77. We want direction on where we are going… NOT detailed directions on how to get there. h/t Simon Sinek

78. We don’t want just “managers,” we want inspiring leaders. Passionate coaches. Tireless supporters. Managers exist to help individual stars make magic.

79. CEO, CTO, VP of This, Manager of That. Doesn’t matter what your title is. EVERYBODY DOES REAL WORK AND GETS THEIR HANDS DIRTY.

80. Oh, and speaking of job titles…

81. WE HAVE TRADITIONAL JOB TITLES AT HUBSPOT. It is a topic of intense debate. Options:1) No titles for anyone 2) Make up our own creative titles 3) Use traditional titles.

82. We ended up with the last option. Bummer. But, it does align with our desire to increase individual market value.

83. Back to having autonomy…

84. Awesome is as awesome does.

85. HAVING AUTONOMY DOESN’T MEAN CRAP IF YOU DON’T ACT. DON’T OVER-THINK IT. JFDI.(Just F*#king Do It)

86. With this kind of transparency and trust we can’t take chances when hiring. So…

87. We are unreasonably picky about our peers.

88. You become the average of the 5 people you hang out with. Drew Houston CEO, Dropbox Note: Drew’s a friend and on our advisory board.

89. What makes someone a great fit for HubSpot? What makes them awesome for us? What does it mean to be HUBSPOTTY?

90. There are 5 attributes that we value in people.

91. HUMBLE. Modest, despite being awesome. Self-aware and respectful.

92. Wait. Doesn’t being humble mean lacking confidence? No. The very best people are self-aware and self-critical – not arrogant. Examples: Bezos. Buffet. Berners-Lee.(and that’s just some of the Bs)

93. Humility is not thinking less of yourself; it is thinking of yourself less. -C.S. LEWIS.

94. When things go well, humble people tend to share the credit. When things go poorly, they tend to shoulder the responsibility.

95. EFFECTIVE. Gets sh*t done. Measurably moves the needle. Immeasurably adds value.

96. EFFECTIVE PEOPLE ARE: Predisposed to action. They just start doing. They have a sense of ownership. They’re resourceful and always looking for leverage.

97. Effective people find ways to have their cake and eat it too.

98. ADAPTABLE. Constantly changing. Life-long learner.

99. WAIT. What about good people that just want stability and predictability? They may do good work, but they likely won’t be happy here. Change is constant at HubSpot.

100. REMARK?ABLE. worthy of being remarked upon* Has a super-power that makes them stand out in some way. Remarkably smart. Remarkably creative. Remarkably resourceful. *h/t to Seth Godin

101. TRANSPARENT. Open and honest with others and with themselves.

102. HUMBLE EFFECTIVE ADAPTABLE REMARKABLE TRANSPARENT

103. We want people with heart. Those who will help HUMBLE us create an EFFECTIVE company we love. ADAPTABLE REMARKABLE TRANSPARENT

104. Yes, “heart” is a bit cheesy.We’re a bit cheesy sometimes.

105. WE DON’T JUST BELIEVE IN HEART,WE BET ON IT. We hire, reward, and release people based on the five attributes.

106. EXAMPLE 1: If you’re closed, arrogant and stuck in your ways, it doesn’t matter how effective you are. It’s not going to work out.

107. EXAMPLE 2: You can be remarkably smart, humble and open. But, if you’re not effectively moving us forward, it’s not going tow ork out.

108. Does this mean we only accept those that fit match the 5 attributes perfectly? No. Confucius has good advice here…

109. “Better a diamond with a flaw than a pebble without.” CONFUCIUS.

110. “We’re a team, not a family. We hire,develop and cut smartly so we have stars in every position.” +1 We couldn’t have said it better ourselves, so we didn’t.

111. Don’t just hire to delegate. It’s tempting to bring people in that you can push off work you don’t have time for. Hire to elevate. Bring people in that are better than you at something and you can learn from.

112. WITH GREAT PEOPLE COMES GREAT RESPONSIBILITY. Success is when a group of people achieve their collective potential. So…

113. We invest in individual mastery and market value.

114. We want to be as proud of the people we build as we are of the company we build.

115. We believe in investing to increase the individual market value of every HubSpotter.

116. We’re doing a few things already…

117. HubTalks: Learning From Leaders Clay Christensen Eric Ries Sheila Marcelo Colin Angle “Innovator’s “The Lean CEO, care.com CEO, iRobotDilemma” Startup” These are small informal talks given at HubSpot.

118. Unlimited Free Books Program. Post a comment on the HubSpot wiki requesting a book. It shows up in your Kindle account. No muss, no fuss. No expense sheets.

119. Unlimited Free Meals Program. Take someone smart out for a meal. Learn something. Expense it. No approval needed. No limits. No rules. Use good judgment.

120. THAT’S JUST THE BEGINNING. We believe in compensating fairly, but we want to invest generously in our learning and growth. We’re always looking for new ideas.

121. We compensate based on fair market value. Reality: It’s hard to know what market value is. We think of it as VORP (Value Over Replacement Player)

122. THERE ARE TWO WAYS TO PROGRESS AT HUBSPOT. 1. Gain mastery as an individual contributor and make magic. 2. Provide spectacular support to those who are doing #1. Reality: This is mostly true, but we need a quant-based approach to measuring how true it is.

123. We defy conventional “wisdom” because it’s often unwise.

124. We’d rather be failing frequently than never trying new things. #inbound12

125. Why do we care so much about being daring?

126. We start out being exceptional. As we grow, there is a dark, powerful force that pulls us towards the average. If we regress to the mean, we fail. It’s that simple.

127. Remarkable outcomes rarely result from modest risk.

128. Simplicity is a competitive advantage.

129. Things start simple…

130. THEN COMPLEXITY QUIETLY CREEPS IN. ITS TOLL LIES BELOW THE SURFACE.

131. WHY DOES COMPLEXITY CREEP IN? It is often the easy, seductive answer to short-term issues. Fighting for simplicity takes courage and commitment to the long game.

132. WHY DOES COMPLEXITY ALWAYS INCREASE? Because everyone adds complexity and nobody takes it away. Ironically, adding complexity is easy and maintaining simplicity is hard.

133. COMPLEXITY AND THE TRAGEDY OF THE COMMONS. Example: “I need to hit my goals this month, so I’m going to push for this exception to our standard contract.” Result: You may make your goal now, but we all pay the price of the complexity forever. Focus on the long game. Team over self.

134. Like software, Organizations should be frequently refactored. Refactoring means to improve internal structure without changing external behavior.

135. REFACTOR. • Pull out unused features. • Remove unnecessary rules. • Stop generating useless reports. • Cancel unproductive meetings. • Prune extraneous process.

136. We speak the truth and face the facts.

137. NO SILENT DISAGREEMENT.If we disagree with a decision or direction, we have the responsibility to speak up. We trust our candor will not be used against us.

138. We have the right to clear, candid and constructive feedback. We can ask for this at anytime. We’re replacing the traditional annual review. Favoring more frequent feedback.

139. WE LOVE DATA. We like to think our decisions are not data driven but data powered. We like to think it, but it’s not true. We are obsessed with data.

140. DEBATES ARE WON WITH DATA. Job titles don’t win debates. We disfavor pulling rank.

141. BUT WE ALSO DISLIKE INDECISION

142. Data is collected. Debates are had. THEN SOMEONE JUST HAS TO DECIDE. An imperfect decision is better than no decision. A controversial decision is better than no decision.

143. WE BELIEVE IN WORK+LIFE, NOT WORK VS.LIFE.

144. Work-life “balance” is misguided.

145. We don’t think it’s possible to be unhappy at work and then happy in life. We believe in enjoying life. We also believe in enjoying work. We believe in work+life fit.

146. WE ARE A PERPETUAL WORK IN PROGRESS.

147. We believe it takes more than talent to succeed. GREATNESS REQUIRES INTENSE COMMITMENT.

148. WE WORK IMMENSELY HARD. It’s not for everyone, but it’s part of who we are. We are on a mission to transform marketing. That’s not easy to do.

149. WE ARE NEVER DONE. Never done iterating. Never done learning. Never done rethinking.

150. THE HUBSPOT CULTURE CODE. 1. We are as maniacal about our metrics as our mission. 2. We obsess over customers, not competitors. 3. We are radically and uncomfortably transparent. 4. We give ourselves the autonomy to be awesome. 5. We are unreasonably selective about our peers. 6. We invest in individual mastery and market value. 7. We defy conventional “wisdom” as it’s often unwise. 8. We speak the truth and face the facts. 9. We believe in work+life, not work vs. life. 10. We are a perpetual work in progress.

151. WE WERE INSPIRED BY • The Netflix Culture Deck (McCord & Hastings) • “Drive” (Daniel Pink) • The Valve Employee Handbook • “Rework” (Fried and Hansson) • Google’s People Ops Team …and countless others on the web.

152. PROPS TO OUR EXTERNAL BETA USERS. They helped out despite having better things to do. • Patty McCord, Netflix Culture Deck • Rand Fishkin, SEOmoz • Joel Gascoigne, Buffer • Leo Widrich, Buffer • Hiten Shah, KISSmetrics • Jason Fried, 37signals • Garry Tan, Y Combinator • Dan Martell, Clarity • Ziad Sultan, Marginize

153. THANK YOU. Congrats for making it this far. We would love feedback and discussion: CultureCode.com

HubSpot

Business News

What small business owners can learn from Starbucks’ new D&I strategy

(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?

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Hands of all different skin colors on green background representing Starbucks' D&I.

Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.

How It Started

They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.

How It’s Going

Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030.  As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.

As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.

At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.

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Business News

Peloton is back-pedaling: Reports of price increases, layoffs, and cost cuts

(BUSINESS) After a recording of layoffs leaks, ‘supply chain’ issues cause shipping increases, and they consult for cost-cutting, Peloton is doomed.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Is Peloton in Trouble?

According to many reports, Peloton had success early in the pandemic when gyms shut down. Offering consumers a way to connect with a community for fitness along with varying financing options allowed the company to see growth when many other industries were being shuttered.

After two years, CNBC reports that the company is “being impacted by …supply chain challenges” and rising inflation costs. According to the report, customers will be paying an additional $250 for its bike and $350 for its tread for delivery and setup.

As demand has decreased, Peloton is also considering layoffs in their sales and marketing departments, overheard in a leaked audio call. The recording details executives discussing “Project Fuel” where they plan to cut 41% of the sales and marketing teams, as well as letting go of eCommerce employees and frontline workers at 15 retail stores.

Nasdaq reported that the stock fell 75% last year, after a year where it soared over 400%.

Peloton reviewing its overall structure

According to another report from CNBC, Peloton is working with McKinsey & Company, a management consulting firm, to lower costs as revenue has dropped and the growth of new subscriptions has slowed since the pandemic. Last November, according to NPR, Peloton had “its worst day as a publicly-traded company.” It also anticipates greater losses in 2022 than originally predicted. It makes sense that the company would reexamine their strategy as the economy changes. They aren’t the only one that is raising prices amid supply chain issues.

It will be interesting to watch how Peloton fares

Peloton has a large community that pays a monthly fee for connected fitness. While growth has slowed, the company still has a strong share of consumers. Although it is facing more competition in the home fitness market and more gyms are reopening, as Peloton adjusts to the new normal, it should remain a viable company.

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Business News

CEO is offering folks thousands to *quit* their jobs, with one catch

(BUSINESS) A CEO out of Arizona is challenging employment norms by offering a sort of “sign-off” bonus upfront, but this method has one fatal flaw.

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Man counting cash in his hand representing the CEO offering money to employees who quit.

Chris Ronzio, the CEO of Trainual, a software company in Arizona that aims to systemize and scale your small business, is offering cold hard cash to quit your job in an unconventional ploy to bypass the effects of the Great Resignation.

Before you rush to turn in your notice and make some extra cash, you should know that this offer is dependent on being selected as a hirable candidate and making it through the hiring process for Trainual. This option is also offered to new hires after 2 weeks of employment.

This model of employment gives the employee the ability to fire the company and walk away with a little sum of money. The thought process of the CEO was outlined in an article by the Insider, saying it is a strategic move to retain top talent and maintain a strong company culture. While this is a unique approach…it has a glaring flaw. The offer is only good for the initial two-week period. However, it can take some time to recognize the shortcomings of any company when you begin employment. We can all recognize the long-term financial potential of reoccurring income and while $5,000 is not anything to shake your finger at, it will eventually be gone. I think we can all agree that constructive criticism can be difficult to swallow at times, however, if Trainual was truly invested in this model they would extend the offer at other key times during employment. What if this offer was again available at the 1-year mark? If the offer reappeared at a one-year review, the turnover may increase.

Per the Insider article, Ronzio was quoted as saying, “With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said. The CEO added, “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”

These statements detail another dimension to consider which is the employment hiring process and timeline. If top candidates are in such high demand that the process has to be sped up to secure a workforce, this monetary compensation can help to ensure the hiring decision. Although, when the offer was implemented in May of 2020, the offer was $2500, half of what it is now. Ronzio reasoned that they could stay while they looked for another job so they increased the amount to compensate for those with a higher salary range.

Let me preface this by saying that yes, accountability should exist, but I would be interested to know the turnover rate for the hiring team. The cost to the company from this unique approach adds extra weight for those making the decisions on who to hire. The stress the hiring team faces has to be factored into the candidate decisions. How many times can the hiring team get it wrong before they’re let go? While the pressure to hire the right candidate should always factor in, one has to wonder about the effects of this model.

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