In Good Company: How Company Culture can be a Competitive Advantage

corporate culture

By Katie Burke

Last year, HubSpot’s Culture Code went viral. The SlideShare, created by our CTO and co-founder Dharmesh Shah, inspired comments and compliments from partners, customers, industry experts, and competitors alike. The deck itself is remarkable, but to me what’s more important than the document is the degree to which we practice what we preach.

At the end of the day, a company’s culture isn’t about ping-pong tables, free snacks or perks. It’s about collective expectations for how you hire, fire, and work on a daily basis. People talk a lot about business plans as it relates to your P&L, cash flows, and strategy to beat your competitors, but invest very little time and energy into codified how they actually run and manage the business on a daily basis.

Businesses who ignore their company’s culture do so at their peril. In a recent study of 15,000 millennials, “people and culture fit” far outpaced any other option as their top consideration for employment. You can give out all the t-shirts and swag you want, but the next generation of world-class talent is cognizant of the fact that they’ll spend years of their lives at work.

HubSpot is different. Its founders were both committed from the beginning to build a company that matches how 21st-century employees live and work. From the outset, they saw culture for what it could be: a significant competitive advantage in building a company they wanted to be around for generations.

Below are five ways your culture can be a competitive advantage, regardless of your industry, geography, or company history:

1) Culture Defines What’s Possible: In a recent TechCrunch article on culture, MIT professor Bill Aulet quotes IBM’s legendary leader Lou Gerstner as saying: “in the end, an organization is nothing more than the collective capacity of its people to create value.” Steve Jobs was legendary for his reality distortion field, a series of expectations for his team that were described by most people (including employees) as delusional. Companies don’t make the impossible possible by following the playbook of everyone else before them. They succeed explicitly because their organization is defined by a different set of beliefs than others, and that they are bound to deliver upon that promise. Organizations that inspire their employees with a defined culture of ingenuity and innovation expect more of their team and achieve more collectively, and your products, marketing approach, and customers benefit from that commitment.

2) It’s A Powerful Weapon in the War for Talent: The very best employees in the world are often gainfully employed, not searching your website every day for job openings. As a result, companies need more than a boring job description to stand out from the pack in a highly competitive job market. Defining and codifying your culture sets a tone for the type of people you want to attract, and helps people at the very top of your recruiting funnel get a sense for what makes your company tick. Chipotle uses video to highlight how their company empowers employees to grow, a tactic that allows them to recruit team members who see them less as a fast food job and more as a potential avenue for a long-term career. Our neighbors at Wayfair in Boston talk about hiring “go-to people” so that driven people know it could be a great fit for them. An attractive company culture not only helps you recruit, but it also helps you recruit the right kind of person for your working environment.

3) A Strong Culture Empowers Employees To Make Good Decisions:  One of the best-known global leaders in company culture is Netflix. Their founder, Reed Hastings, codified the values they expect employees to exhibit in his wildly popular slide deck. But he also saw where traditional mission statements fall short: by outlining on without clarifying an expectation of how they should inform behavior. Next to each value in the Netflix deck is a series of examples of the type of behavior that personifies each trait. For example, “impact” is accompanied by “you focus on great results rather than process.” Remarkable cultures don’t just inform the C Suite; they empower employees at all levels of the business to follow guideposts for decision-making. Every single day, employees make thousands of decisions that can impact your business: giving them a roadmap for how to think about those decisions in a meaningful way saves time, energy, effort, and money.

4) It’s a Promise To Your Customers: Twenty years ago, what people knew about your company was largely controlled by your marketing team. Potential customers had to rely on written collateral and word of mouth to know what it was like to do business with your organization. Those days are long gone: the gap between the customer and your company is now 140 characters. Any prospect, at any time, can get real time information about your product or services, and people buy based not just on your product, but on your company and what it stands for. The percentage of prospects researching HubSpot who visit our management pages for more information on our team has increased dramatically over the last several years because our prospects want to know that our C-suite is committed to a great customer experience, really cares about transforming how business is done to be more inbound, and practice what they preach in terms of solving for the customer. In the post-Enron era, customers know that what companies believe informs how they operate, so culture helps inspire trust in potential buyers, which impacts not only your brand but also your bottom line.

5) Done Well, It Keeps You Honest: As you scale, grow, open new offices, and add more people, you can no longer rely upon a small handful of people or a weekly tradition to keep your company disciplined around your culture. Like it or not, one person can no longer be responsible for interviewing everyone, for checking references, and for holding people accountable to a “no assholes” rule (we have one of those, so does Eventbrite—I’m a huge fan). Culture was always a huge part of our business at HubSpot, but no one wanted to talk much about it because it wasn’t a discussion or a tactic; it was simply the way we were. Sadly, that approach erodes over time, so investing the time and energy before you lose sight of what makes your company and your team special is imperative. At HubSpot, we view the Culture Code not as a constitution of sorts, but rather like our software, which we are constantly refactoring to meet the needs of the customers we serve on a daily basis. Dharmesh frequently updates the Culture Code based on employee feedback, insights from trusted advisors, and his own self-reflection, and the company’s ongoing commitment to getting it right keeps us all honest about how well we are delivering upon our approach to culture at regular intervals throughout the year.

History is filled with companies who made excellence a habit with remarkable company cultures (IBM, GE, Netflix, and W.L Gore all come to mind), but it’s also ripe with companies whose entire businesses fell due to a lack of accountability and ethics in their organizational practice (like Enron, WorldComm, and Arthur Andersen). Company cultures are not about plaques on the wall or posters in the office. They are about setting a clear vision and expectation for the type of people, work, attitude, and output you expect from your team and holding everyone accountable to that standard. Truly effective company cultures don’t manifest themselves in one person, benefit, or tactic, but rather emulate the values and beliefs that make your company truly unique.

Culture gets a bad rap in the corporate world for being “soft” in comparison to say, your balance sheet or P&L. But the truth is that codifying, promoting, refactoring, and committing to a differentiated company culture is incredibly hard. However, when your company culture goes beyond jargon and marketing terminology and becomes the fabric of how your organization operates, it becomes a real competitive advantage.

Katie Burke is a Director on the Marketing team at HubSpot.