Dharmesh Shah (HubSpot Co-founder) – Build your culture like a product (Jul 2023)

Chapters

Abstract

Engaging with Culture: HubSpot’s Transformation into a Culture-Centric Organization

At the heart of HubSpot’s transformation lies a profound realization: culture is not just an HR footnote but a core business strategy. This paradigm shift, initiated by co-founders’ epiphany and driven by CTO Dharmesh Shah, underscores the evolution of HubSpot’s culture from an overlooked aspect to a central pillar. Initially, co-founders Dharmesh Shah and Brian Halligan did not prioritize culture building in the early years of the company. It was only after Halligan attended a CEO group meeting, where the theme was culture, that he realized the importance of culture on a company’s destiny. Halligan tasked Shah with taking responsibility for culture building at HubSpot, a challenge Shah accepted despite his initial reservations. Through iterative development, extreme transparency, and a focus on diversity, HubSpot crafted a dynamic culture code, serving as a blueprint for businesses aiming to intertwine employee well-being with customer satisfaction. This article delves into this journey, highlighting the pivotal role of culture in shaping a company’s identity and success.

1. Awakening to the Importance of Culture

HubSpot’s journey towards recognizing the importance of a strong, intentional company culture began with its co-founders’ realization during a CEO group meeting. Dharmesh Shah, initially skeptical, embarked on a mission to build a robust culture, understanding its significance in the broader business landscape.

2. The Role of Market Research in Culture Crafting

Treating employees as the primary consumers of their culture, Shah employed market research techniques. A company-wide email survey was launched, aiming to collect honest feedback and insights directly from the employees, a step crucial for shaping a responsive and inclusive culture.

3. Anticipating Employee Feedback

With the survey deployed, Shah anticipated valuable insights, understanding that employee feedback would be pivotal in defining and iterating the company’s culture.

4. Defining and Iterating on Culture

Shah’s efforts culminated in the creation of the HubSpot Culture Code, a document that went beyond traditional corporate values. This living document, inspired by other successful models like Netflix’s culture deck, became a testament to the importance of evolving and adapting company culture. This culture code has inspired many entrepreneurs to think deeply about building their company culture. Dharmesh authored the HubSpot Culture Code, which has become a popular resource for companies looking to build strong cultures.

5. The Art of Selling Company Culture

Understanding that culture needs to be as much ‘sold’ to employees as products are to customers, Shah emphasized effective communication of cultural values. This approach ensured employees not only understood the culture but actively embraced and lived it.

6. Building a Strong and Adaptable Culture

A strong and adaptable culture, Shah argued, rests on the pillars of exceptional talent and resilience. He emphasized that a robust culture could navigate challenges and setbacks, adapting to changing circumstances. A product approach can be used to build a strong and adaptable culture at a business. The same dedication to outlining, collaborating, addressing user feedback, and ongoing iteration that goes into creating a successful product can be applied to building a great company culture.

7. Components of HubSpot’s Culture

HubSpot’s culture centers around several key components: solving for the customer, being a product of the product, doing remarkable marketing, and hiring and retaining ‘A’ players. Each component is designed to reinforce the company’s commitment to both its customers and employees.

– Solving for the Customer: HubSpot’s culture code prioritizes understanding and addressing customer needs. Dharmesh Shah experienced poor customer service from his internet provider, emphasizing the importance of empathy and resolution. The executive team and engineers engage directly with customers to understand their pain points. This approach fosters a deep understanding of the customer viewpoint, leading to stronger products and team motivation. The focus is on solving for the collective customer base, not individual cases.

– Transparency and Risk-Taking: HubSpot values transparency to empower all individuals to make informed decisions. Transparency grew from the early days of HubSpot when the founders shared everything with their employees. The decision to designate every HubSpot employee as a designated insider during the IPO was made to uphold the transparency value. HubSpot encourages employees to take appropriate risks to drive innovation. Risk-taking is woven into the culture by setting expectations for a percentage of time to be spent on risky ventures. A culture of support is necessary to ensure employees feel backed by the company when risks don’t pay off. Not all risks are expected to succeed, but failures are seen as valuable learning opportunities. The responsibility for greenlighting and overseeing risky ventures is clearly defined.

– Leadership, Accountability, and Diversity: Clear leadership and accountability ensure effective decision-making, while fostering a culture of aligned support and trust. HubSpot also recognized the value of diversity, actively working to create more inclusive teams that resonate with a broader customer base.

– Continuous Iteration and Adaptation: Constantly iterating and adapting its culture, HubSpot demonstrates that a culture code is not static but a living, evolving entity. This approach ensures that the culture remains relevant and responsive to the needs of the company, its employees, and customers. The first version of the HubSpot culture code was just 16 slides and documented the culture that had naturally emerged at the company. As a seasoned product developer, Dharmesh knew that the work on the culture code was never done. The culture code continues to be iterated upon based on feedback from employees and the public.

8. Culture as a Product

In summary, HubSpot’s journey illustrates the power of viewing company culture not as a static set of rules, but as an evolving product. Just as products are developed, tested, and refined, so too should culture be iteratively improved to reflect the changing dynamics of the business world. This perspective empowers employees to contribute to the culture, ensuring it remains a perfect fit for the company, its team, and its customers. For businesses looking to thrive in today’s competitive landscape, the message is clear: invest in your culture, and it will pay dividends.

Notes by: QuantumQuest