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Podcast Transcript - Marketing
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Transcript - The View from the Top – September, 2015 - Marketing

Meredith: Welcome to The View from the Top podcast, a MassTLC series. My name is Meredith Haviland and I'm a partner at Foley Hoag, where I represent a number of companies from startup to exit, facing many issues in today's tech community. Joining me today is Jeanne Hopkins from Continuum Managed Services. Welcome Jeanne.

Jeanne: Thanks Meredith, it's good to be here.

Meredith: So Jeanne, we're going to talk marketing today, and I think one basic question is what is marketing?

Jeanne: Well, that's the elusive question, right? So I like to tell people that marketing is not just brand, it's not the P in the 4Ps of promotion. Most people think about marketing as advertising and brand. And it really is much more than that. Marketing should be the fuel that actually powers the engine of your sales team and if marketing is not able to make the contributions necessary for sales, then they're not really doing their job. In my honest opinion.

Meredith: So how do I, as a startup company? Let's just start there. Okay, so I have $10 in my budget and I'm trying to develop a product. Why do I care about marketing? Well, first of all that's a good question when you really think about marketing and you have $10, so people think "Well, I don't either have enough money to be able to spend it on advertising" for example. Because they say my $10 doesn't go very far, or they try to make the investment with the wrong type of person for their particular team. I get to talk to a lot of startups and they say "Jeanne, we would like you to be able to join our team." And I'm like, "You don't need somebody like me. What you need is get your feet under yourselves and figure out what is your value proposition? Who are you selling to? Do those people that you think you're selling to actually want to buy those product?"

So, when I think if I had $10, you know where I would spend it? Research. I'd want to figure out, are the people that we think are the customers, are they really the customers and what actually floats their boat and what are the things that make them want to buy from you. And then the second thing I would do is I would spend it on doing a pricing analysis. Because when you think about, you've got a product, you've got your price, you've got your promotion and you know how you're going to sell it through a place. So there's your 4Ps. Most marketers don't know deadly about pricing a product. They just think, "Well, heck, I paid $10 bucks for that so therefore let's put $10 price tag on that." And in reality you might be able to get 25, 250, 2500 for the product because you haven't done enough research to be able to figure what will the market bare and how important is your product to be able to sell the problem that your customer wants.

Meredith: And so if I'm going to undertake to do one of these products studies, do I this, do I hire the marketer internally? Do I look to an external resource?

Jeanne: Okay, so yes, if you're thinking about being a startup that's a good question. So you came up with the great idea, so if different stage startups, different people have different levels of funding. I've talked to these people that are starting up thinking "Oh, I've got a great idea" and that idea they think is going to translate it to revenue or else we have people that are on their second or third or fourth start up, and those people usually have degree of funding and they've known where they've actually failed, and so they usually make their initial investments and the development of the actual product. So they usually have better handle on, they've brought in some product experts, they socialize it through their ecosystem.

It's the real start up startups that say, "Hey, I've got a great idea." And usually that idea maybe a good idea, but nobody wants to buy it. So what they should be doing is not just talking to their mom and their dad and their uncles and aunts and grandparent. They probably want to go out into the open market and be able to do some way of a stand-up comedian would do. Go out and try out your material. Who exactly do you think is going to buy this product and then figure it out? Sometimes it's a painful exercise to realize that there really isn't the market for that, it's too nascent at this particular point. I've worked for a couple of companies that the product was way ahead of its time, it's probably still away ahead of its time, say 15 years later. But you understand that you thought that it feed the need, but nobody wanted to pay for it. So marketing, looking at your end user customer.

Meredith: And so if it turns out that you targeted the wrong customer, how difficult is it to market to the right customer or to figure out who that should be?

Jeanne: There it is. That's a good question. Because very often what the founders think.

Meredith: All that they've solved the world's problems?

Jeanne: And they're always right, right? I mean have you ever met a founder that was wrong? Have you ever met? Honestly, goodness me, have you ever met a founder that said, "Yea, maybe I didn't come up with the right idea, on maybe this idea needs to evolve and maybe I need to adapt to the market places that were in right now." Have you ever had met any founders do that?

Meredith: Willingly on their own?

Jeanne: Willingly on their own without the board forcing them into. You know, into backing them into a corner and they go kicking and screaming in a little bit of passive aggressiveness goes on with that. So, what my point is that there's lots of great ideas out there, there's lots of very very good ideas out there, but really what you're doing in any company is you want to be able to market a product that people want and you want to be able to have a value proposition that people can assign a dollar value to. Because it is ultimately your business model, right?

So again, is someone wanted to change their opinion, is somebody wanted to say, "Well, maybe I was wrong. I know your laughing at me because you're like... can't see very many people saying maybe I was wrong." But sometimes you're force into a pivot and sometimes when you're force into a pivot, it doesn't work well for the organization. Because you've hired people that are of your similar mindset. So getting more information going into it is probably a better idea.

Meredith: I've actually seen a lot of situations as well where in particular, again, startups who haven't yet found their niche actually seem to think they have a lot of different opportunities out there and try and market to many different... take a lot of different strategies and market to a lot of different customers or businesses and what's your thought on that? Can you have too many strategies?

Jeanne: I think civil, right? It's kind of I do what I think of. Because what ends of happening to most marketing people, most marketing leaders, they get hired into an environment where there's consistent pivots or lack of focus and many marketers are force into this highly reactive modes so they're reacting to "Oh, the CEO thinks this is a good idea. The Chairman of the Board thinks this is a good idea or does the does the VC thinks this is a good idea." So you're doing this, you're doing this, you're doing this and in reality, a good marketing person is proactive. And a good marketing person is able to say this is what we're doing this month. This is what we're doing next month. This is what we're doing the month after that. Like right now, we're looking at planning our next year where I've got the whole team thinking about we're getting... we're barely halfway through 2015, but in order to start planning for 2016, we have to start thinking about it now.

What are the budget implications? What do we want to achieve? Where do we want to go? What kind of people do we need in order to be able to be successful? So, in December of 2016 when the board says, "Did you make your revenue target?" I need to be able to say, "Well, I came out of the gate and we were able to achieve those revenue targets during the course of the year. Marketing people don't think forward, they're always looking in their rare view mirror, for the most part. For the most part.

Meredith: What about later stage companies? You see companies ever saw off and try and take on a new marketing strategy or for example at social media to an old company that maybe isn't necessarily one that you would think of as being online and so show. How can that either help or hurt your marketing strategy?

Jeanne: It doesn't really matter what kind of a company that you're in. I think that the world has changed from a marketing view of the world. So let's just pretend you had to buy a car recently so you thought about buying a car, right? Now, did you go to the yellow pages? Did you look at a bunch of newspaper ads, did you go and get the auto trader book at your nearest 7-Eleven? No. What did you do? You went online and used the Google machine in order to try to find. You wanted Alexis, a 2012, full boat kind of a car and this is what you are willing to spend and you found seven cars that were within the 250 mile radius that you could buy.

That's what you figured out then. This is how people buy now a days. Whether you're B to B and A. Let's call it a boring industry. I have to say that most marketers are not in fun industries, most marketers are in businesses that they may be like "Oh, my God. This is so dull, how am I going to make this exciting?" Every person in the planet needs to have a digital foot print. I don't care if you're 15 years old or 55 years old. You need a digital foot print. So getting yourself expose to social media figuring out what's important to sharing on Twitter. Every person in your company should be linked in to your company. Should be linked in to the Twitter fridge to be able to share, micro publish your content collectively as an organization. Because that's how you get that critical mask that you're amplifying. You're messaging.

And you have to learn how to do this because if you can't do something with something as free and simple, as say Twitter or Linked. I'm not talking about the page stuff, I'm just talking about sharing it on a very micro level. What's going to happen because I guarantee in two years there's going to be some sort of an awesome marketing technology that came out and the team that is unable to use something as simple as a free tool, like a Hootsuite for example. And to be able to understand their feeds and understand how people are sharing and what makes really good content.

They're not going to be effective marketers or business people, because ultimately marketers are in the business of sales. Marketers are in the business of generating revenue, and so you are ultimately... it impacts your business.

Meredith: So a notion of putting something up online and getting your Twitter account setup is not enough. You need somebody who's monitoring it, who's updating it, who's refreshing it?

Jeanne: No, I don't think so. I think you could spend five to ten minutes a day. My personal one, I have 21,000-22,000 followers and it is all auto. It's all automatically, it's an auto feed where I pulled in some RSS feeds from people that I like to follow or companies that I follow, so it automatically post for me, and periodically I will share something on a personal level very rarely. This is what... you don't have to spend a ton of time or money being able to do that. You can just set these things up auto magically and it gives you that visibility that you need, just organizationally. I'm not saying that you have to tell people like what you have for lunch today, or that you're going to go get your haircut tomorrow, but I use Twitter and I think most people use the social media networks.

You separate your personal from your professional. And then your professional aspect is as you get to a more senior level in an organization, it's important for you to be able to share socially on behalf of your company. That's an expectation that I think many organizations have.

Meredith: And you mention that the outset how marketing is more than creating your brand, how does the brand fit into that? And how do you develop that? And how do you do it to more of the brand and get your name out there and get that exposure especially as a new company to the scene?

Jeanne: So that's a good question, because I think that most people of brand and they associate it with business to consumer-type products, but many of us are in business-to-business things. And so this is where it becomes important if you could just think of yourself as having a mental style guide and often times I talk to some of our small business partners and I talk about optimizing their marketing, and I will suggest to them that if I look at their website and I look at their Twitter profile and I look at their Linked profile and I look at a couple of other things, none of it looks like it goes together, none of it.

They're not using the same image, they're not reinforcing whether it's your logo, whatever your logo is. It could be a cat on a hat. You need to be able to reinforce that on your business card, on your website, on your office stores, on your t-shirts that you have people wearing. There is nothing better than seeing a 20 employees out there with your t-shirts out in a boat, and creating that critical mask, getting that, sharing that socially, that just amplifies the entire reference. So I say, take a logo, pick a color scheme and just reinforce it in your office, individually, on your business cards, every single piece of marketing material. Every time you produce something you should put it up on some sort of a face wall just to make sure that everything is looking very similar.

Meredith: And this seem like pretty low budget items to be considering, so as a start up with limited resources, seems like pretty easy things to be keeping in mind.

Jeanne: I would like it if some companies wouldn't spend $7,000 designing a logo because there are some great resources like 99 designs out there that you could spend $99 and get a decent logo created for your particular business. Take that, the rest of the money, the $6980 and be able to build something that has lasting value. Invest it in your website. Invest it in content that you can actually share. Look at building out a blog or some form of content to a series of podcast like we're doing right now. This is so easy and such a low cost yet effective way to be able to get your messaging out.

Meredith: So going back to the marketer, okay. If you're going to hire your first marketer, what skill should that person have?

Jeanne: I think they need to be able to jog out. I think that they need to have strong enough sense of self because if you hire two junior of a person, they're going to end up doing whatever you told them to do instead of being able to have their own voice. You need to have someone that has a strong enough sense of what the next logical step is in the interaction of your particular team. And really what you want is you want somebody that can build a team, you want someone that's kind of network in the organization.

Whether they'd going to Search Results HubSpot user groups, or they're attending other types of MassTLC advance, you want somebody that's senior enough. That has a few years under their belt that it's not the first time that they've seen something, but they're able to help grow your overall business.

Meredith: And what about the timing of that? When does it make sense to get your first marketing person?

Jeanne: I think you need your first marketing person before you go to market.

Meredith: That's very well said. And it sounds like companies now are going to market so soon. That really needs to be some of your initial thinking.

Jeanne: Yeah. I think a lot of people make a lot of company's investors make the investment, the Dev team and they really have and identify a customer, a price, how they're going to promote it, how they're going to generate leads. They often times think about the revenue target without figuring out like how am I going to get the gasoline and the engine to be able to get to that revenue number.

Meredith: Is there one thing that you see as you work with companies as the common mistake that people are making?

Jeanne: Yeah, on their website, on their home page. I looked at 15 different calls to action and my personal pet peeve is when I see a page title on their homepage which is the most important Google sign post that says "Home" instead of the business that you're in, and sometimes physically where you're located.

Meredith: This is been great Jeanne. Lots of great input and lots of great tips on a shoe string budget or otherwise, so thank you so much for joining us today.

Jeanne: Thanks for having me Meredith.

 

 

Transcript - The View from the Top – May 19, 2015 - Company Culture

Meredith:  We got such great positive feedback from the audience that we wanted to continue our discussion through a series of podcasts.  My name is Meredith Haviland.  I’m a partner at Foley Hoag, and I do a lot of work with companies from start-up phase through their exits.  And I’m joined today by Marina Hatsopoulos, who’s a director, Angel investor, and entrepreneur.  

Marina, one of the topics that people keep talking about it corporate culture, why it’s important, what it means, and what we should all be thinking about.  In your role as a former CEO, what’s your view on corporate culture? 

Marina:  I think corporate culture is extremely important.  It’s something that can really help a company to be successful and help it to make very good hires.  And as a company grows, it becomes increasingly important for the CEO not just to behave in a way that’s consistent with the culture that it wants to pervade, but also to articulate that culture.  And that’s important because in the early days, you have direct interaction with all your employees pretty much on a day-to-day basis.  But then as the company grows, you may not be directly interfacing with each employee every day or even at all.  And so it becomes very important to articulate the culture and the values of the company. 

Meredith:  So I know that Diane Hessan of the Startup Institute has referenced the CEO as the chief culture officer and, in fact, has made the point that it’s not something that you should or can delegate to the HR department.  And obviously when we’re talking about new hires and developing a reputation and bringing more people on board, especially as the company grows, a lot of people think of that as an HR function.  How do you think a company should approach that, and how do you make sure that the people who are interfacing with your new hires are, in fact, aware of your corporate culture? 

Marina:  Yeah.  I don’t think it’s something you can delegate.  I think this is one of those things that have to come from the top down from the CEO, and it comes down in the CEO’s behavior in every interaction.  And so sometimes those are difficult.  And so these can be things like, in our organization it was really important to delegate and to give decision-making authority to the lowest possible level because those are the people who have are - - have their feet on the street, who have the most information to make decisions.  

But then you have to live by that, and sometimes that’s difficult because if you’re a control freak, as many CEOs are, then you may want to jump in and actually make a decision yourself.  And so it means really living by those articulated values.  And in terms of how to articulate it, one thing I did is whenever we brought in new employees, I sat with them, and I had some PowerPoints on the company, and included in that were points about our culture.  And so we made sure actually before we hire them even to talk about some of the points.  Like in our case everyone was in a cubicle.  You weren’t going to earn your way up to a fancy corner office.  That was just against our culture.  Things like that.  We were kind of scrappy, so people had a large ownership in equity, but we weren’t paying out huge cash bonuses.  That was sort of a financial philosophical decision, but it really pervades the culture in every aspect. 

Meredith:  So a lot of companies start with maybe not just one founder.  They might have cofounders.  And obviously as things grow, you might have more than one person at the top so to speak.  Have you had any instances or experience either in your role as CEO or maybe as an investor or a director on a board where you’ve seen founders or cofounders that have competing corporate cultures?  

Marina:  Yeah.  And that’s tricky.  And at the end of the day, it kind of depends on who has the stronger way to make things happen or also who has more interaction with people.  So if you have a sort of absentee CEO or whatever role, where they’re not interacting with people a lot, they’re going to have much less impact on the culture than somebody who might even be at a lower level but who is there all the time and really actively making their belief system part of the ethos of the group.  But, yeah, it is - - it’s tricky.  And as a director that’s something that I think is really important.  And so when I’m working with young CEOs who may not have thought that much about it, or they may think of culture slightly differently, I really work hard to articulate what I think are important values to get them to buy into it. 

So, for example, a start-up might say, yeah, we are very supportive, like they view that as being a part of the culture, which is great, very positive, very supportive.  But I as a director may come in and say, that’s great and that’s good, but you also want accountability.  And so we can’t always be positive rah-rah-rah if somebody’s not delivering results.  And so there has to be a way to reconcile.  They’re not necessarily diametrically opposing, but a more enriched culture, I would say. 

And so to that particular perspective, one thing I’ve talked a lot with start-up CEOs about is this issue of results versus activity because you can get into this loop of like extraordinary activity, but not really delivering results.  And you can - - activity makes you feel because you feel like you’re doing something.  But then when you stand back, you may realize you’re not actually pushing the ball forward necessarily. 

Meredith:  Interesting.  And it sounds like from your perspective, since it’s something you can’t delegate, that a CEO that has a strong vision of corporate culture, it’s really important that he or she maintain the connection with the employees and others.  

Marina:  Yes.

Meredith:  How about - - how do you make sure that your corporate culture is - - kind of permeates the business including to outside people, maybe your customer base or otherwise? 

Marina:  Yeah.  That’s really, really tough.  One thing I did as CEO is I talked to our customers.  So every Friday afternoon I would just get the names of ten customers and just call them up randomly and have a direct interaction with them.  And that gave me a little bit of insight as to their interactions with the company.  Maybe a service tech had just visited there that week or whatever.  And so it would give me a little bit of a triangulation as to whether we were living by our culture.  But that’s tough.  It’s really touch, and yet you see it.  It works. 

I’m sure you’ve had this experience that I’ve had where certain organizations, they can be profits or nonprofits or small or large, but it does pervade an organization to every level.  And it’s not even like the companies that pay the most get the best.  It’s not like that.  It’s something - - something that you can feel in every interaction you have with the company. 

Meredith:  It’s interesting that you bring up the point about it not being necessarily - - the places that someone might want to work may not be the place where they will receive the highest pay.  I know that there’s been a lot of talk recently about millennials and how they’re facing corporate culture, whether it’s from a branding perspective and potentially you want to brand to them and bring them in as a customer of your business, but maybe it’s even somebody that you want to hire in, and you want to attract millennials into your workplace.  

And I know that Maia Heymann of CommonAngels has said that corporate culture and values that resonate with millennials are considered a competitive advantage in attracting and hiring talent.  Have you had any experience again in one of your multiple roles with companies that are struggling with that, with trying to be able to attract millennials, recognizing that they may not be looking for the biggest paycheck, but they’re really looking for the best place to work? 

Marina:  No, I’ve definitely experienced that.  And it’s actually so refreshing.  I really appreciate that, that the millennials are looking for something more.  And generally there’s - - you can - - depending on what the business is, there’s an angle there to be pushed ideally to make that argument to make something look attractive.  And generally, and I found this even with an older generation, the start-up culture in and of itself involves risk taking.  It involves being a little bit of a pioneer.  It involves being a little bit of a rebel.  And there are people for whom that resonates, and there are people for whom it doesn’t.  

And I’ve had it where even millennials - - there was a millennial I worked with who was at a very high level of a start-up.  And she was just really struggling because she said, well, I just don’t know if this is going to be successful.  And if it’s not successful, I’m getting paid below market.  And she had a huge equity stake in the company.  And she was just really uncomfortable grappling with it because she was very marketable.  She could make a lot more cash salary somewhere else.  And I said to her, you have to buy into this.  It’s not for everyone.  And if it’s not for you, that’s fine.  There’s nothing wrong with that, and you should definitely go and get your cash salary.  And she did.  She left.

Meredith:  How do you find - - thinking of a start-up and sort of the life cycle of a start-up, there’s a lot of changes.  Sometimes there may be founders who leave, maybe a new CEO.  I think one common change is frequently through various stages of financing, you do bring on different directors.  And again just curious what your view is or what your experience has been with those changing personnel.  Have you seen corporate cultures change?  Have you seen them try and maintain what the initial founder set out to do?  And have you seen good experiences with changing corporate cultures?

Marina:  Yeah, I have.  And it’s kind of ugly in the transition when two people are butting heads.  But ultimately I think that can often be a great growth experience for an organization and can lead to a much richer culture.  And so ultimately, ideally, you’re kind of getting the best of both worlds.  So I’ve seen it on a board level where you’ll have a new director come on board who might want to take control or be very authoritarian or try to be more visionary.  But there may be - - and that may rub everyone the wrong way, but then at the end of the day there’s a piece of that that stays on that was needed.  And so ultimately after you get through the difficult transition, I think that can often be a very positive factor.

Meredith:  And I hear a lot today about this notion of being real and how important it is to be real both for your employees and for your customer base and how if you’re not real, people will see right through it, and in today’s’ market that just doesn’t cut it.  I’m curious your experiences with that.  Have you - - do you feel the same way?  Have you seen companies who are trying to do something that just doesn’t fit their corporate culture and, therefore, that real factor just isn’t there, and it’s the negative to their business?

Marina:  Yeah.  So here’s the tricky part is being real is incredibly important to a brand, and the question becomes how you translate that.  It’s all in the details, right.  And so I have worked with a company where for one of the individuals being real meant never paying for advertising.  You either got it for free or you didn’t get it at all.  But you can’t grow a business that way.  And so that involved some transition to kind of say, yes, we want to be real.  However, we also want to build the business.  And so how can we reconcile what this initial individual saw as two opposing concepts and reconcile them into one?  We can be real and advertise.  And so it’s tricky.  It does all get to the details and into kind of changing people’s perspective over things.

Meredith:  And what would you view - - obviously companies have different corporate cultures.  It doesn’t make one better than the other necessarily.  There may be different reasons for those different cultures and attract different customer bases, different employees.  What - - do you think there are common traits to a healthy corporate culture?

Marina:  I do.  I have - - I think there are a few.  So one is - - and this is a really tough one, but it’s this sense of excellence and quality, but not perfection.  And that’s a tough line to not cross over.  So it means not being sloppy.  It means not sort of doing things without adequate effort and that sort of thing.  But it also means knowing when it’s time to move on and go to the next step because ultimately perfection can really hamper a company’s ability to grow.  So it’s - - it’s very tough to articulate, and again it’s all in the details, and it’s all in the behavior on those day-to-day decisions.  But the sense of excellence is something that you see in an organization.  And you’ll see it in every interaction you have with them, whether it’s on their software, whether it’s having a problem, a customer service issue.  At every level of the organization when you’re dealing with them, you’ll be treated respectfully.  They won’t let things fall through the cracks, and - - but that doesn’t mean it’s perfection, meaning like the whole company comes to a standstill to solve your one problem.  It may mean that they say, we’re on it, and we’ll get back to you in 48 hours to solve it.  That kind of thing.  It’s this balance. 

And then another, I think, very important part of culture, but - - at least this was very important to us at Z Corporation, and I think it’s somewhat personality driven, so I don’t think this is necessarily for everyone.  But as CEO I really objected to people kissing up and just agreeing with whatever I said because to me if you’re just going to agree with what I say, you’re not adding any value, and I don’t need you.  And so we had a tremendous amount of healthy debate, and that didn’t mean it was dysfunctional.  It didn’t mean we were angry at each other. 

But it meant if someone had a position on something, they would fight for it, and we would argue and argue and argue our points, and so that we would try to convince the other one why we were right.  And it’s that argument that ultimately, I believe, led to much better decision-making than any one of us could have done on our own.  And it’s tough with - - depending on the personalities, that is not always easy to make it work.  You need people with a little bit of a thick skin who are going to let it fall off when the meeting’s over, and you also need very clear decision-making authority. 

So you need to know at the end of the day, I’m going to fight, fight, fight this point, but this is a sales issue, not a strategic issue, so the VP of sales is going to make it.  I’m not going to make it as CEO.  I’m going to fight with him about it.  I’m going to argue with him, but at the end of the day we’re going to walk out of this meeting, and we’re going to be arm in arm agreed with whatever he decides to do.

Meredith:  So it sounds like it’s really important, especially in the leadership ranks of a company, that everyone in the room understands and appreciates the way that the others work and approach these types of issues.

Marina:  Exactly.  Another one that a CEO will have many opportunities to display is admitting mistakes.  And that’s extremely important, and I think all good organizations know how to do that well.  And that’s everything from the smallest mistake to the largest mistake, and we all know.  We’ve all experienced this in the real world where a company does something wrong, and it could be something pretty bad.  But if they are forthcoming about it, and they admit it, and they take responsibility, people will cut them slack.  They just want to be dealt with respectfully and honestly.

Meredith:  And in this day and age of social media, you had sort of mentioned before sort of immediately or semi-immediately making sure you respond to customers or others.  How do you view social media as playing into that and kind of the way that things can blow up before someone even has a chance to respond?

Marina:  Yeah.  Well, first of all, with social media it just blows my mind how willing people are to behave so poorly in this day and age when everybody has a camera on their phone.  So just a little bit of awareness, and this is something that we also made a big deal about at Z Corp., which is any email you write, it’s - -  imagine it plastered on a billboard on the Mass Pike.  So anything you write, imagine it plastered on a billboard.  And so just having some awareness ahead of time that anything you do can and will be held against you. 

But then also social media is a great opportunity, though, to admit your mistakes, to get right on it immediately, and address the audience directly.  And so I think being on top of it is really important and not letting time go by, not being silent.  I think this notion that, well, I’m just playing into it if I engage.  No, no.  If you did something wrong, you need to get right in there and settle it and be done with it.  And so I think too often people hope that if they’re silent, it’ll go away, and generally I don’t think that’s a winning strategy.

Meredith:  We talked a lot about start-ups, and I think it’s safe to say that any company that’s forming in this day and age would be on top of social media and understand its implications.  I think we’ve also seen situations of well-established companies that have been in existence for a long time try and enter the social media market and maybe not pay as much attention to what’s actually happening there.  How do you think kind of a half-entry into social media can impact a corporate culture?

Marina:  Yeah.  It depends - - I guess it depends on how much the senior management is really plugged into that, and that’s tough.  It depends also on whether their customers are really plugged into social media as to whether that’s worth that investment because it is - - it’s a big investment in time and resources to really stay on it, and it can become a little bit of a time sink.  That can become something that feeds this frenzy of activity, but isn’t necessarily delivering results.  And so it - - that’s very business specific.

Meredith:  And what would be - - if you had to kind of boil down everything we’ve been talking about into one or two tidbits for a new CEO, someone who’s coming into a company, maybe they didn’t found it, but they’re about to start as CEO, do you have any tips that you would pass along as far as ways to both understand the corporate culture, maybe suggest changes to the corporate culture, or how to really get that assimilation?

Marina:  Well, I think one important thing to do very early on entering an organization at any level is to talk to everybody within the organization at all levels and just listen, listening in to what they think about the organization, what they think could be done better, what they think is already being done well, so really understanding the lay of the land before going in with any preconceived notions, because a lot of times things can be working really well, and it may be very different than what you might think or expect.  And then getting advice from mentors, I’m a huge believer in talking to people who have already done it before and getting their thoughts and ideas.  But I think you can only bring in your own new ideas and new ways of thinking about it after you understand what’s already there.

Meredith:  Well, great.  Well, thank you very much, Marina.  This has been extremely useful, and I think we’ve talked about a lot of impact on corporate culture that one could have in a leadership position and a lot of other things to think about.

Marina:  Well, it’s my pleasure.  It’s a great topic.

 

[END]

 

Transcript - The View from the Top – May 19, 2015 - Company Culture

Meredith:  We got such great positive feedback from the audience that we wanted to continue our discussion through a series of podcasts.  My name is Meredith Haviland.  I’m a partner at Foley Hoag, and I do a lot of work with companies from start-up phase through their exits.  And I’m joined today by Marina Hatsopoulos, who’s a director, Angel investor, and entrepreneur.  

Marina, one of the topics that people keep talking about it corporate culture, why it’s important, what it means, and what we should all be thinking about.  In your role as a former CEO, what’s your view on corporate culture? 

Marina:  I think corporate culture is extremely important.  It’s something that can really help a company to be successful and help it to make very good hires.  And as a company grows, it becomes increasingly important for the CEO not just to behave in a way that’s consistent with the culture that it wants to pervade, but also to articulate that culture.  And that’s important because in the early days, you have direct interaction with all your employees pretty much on a day-to-day basis.  But then as the company grows, you may not be directly interfacing with each employee every day or even at all.  And so it becomes very important to articulate the culture and the values of the company. 

Meredith:  So I know that Diane Hessan of the Startup Institute has referenced the CEO as the chief culture officer and, in fact, has made the point that it’s not something that you should or can delegate to the HR department.  And obviously when we’re talking about new hires and developing a reputation and bringing more people on board, especially as the company grows, a lot of people think of that as an HR function.  How do you think a company should approach that, and how do you make sure that the people who are interfacing with your new hires are, in fact, aware of your corporate culture? 

Marina:  Yeah.  I don’t think it’s something you can delegate.  I think this is one of those things that have to come from the top down from the CEO, and it comes down in the CEO’s behavior in every interaction.  And so sometimes those are difficult.  And so these can be things like, in our organization it was really important to delegate and to give decision-making authority to the lowest possible level because those are the people who have are - - have their feet on the street, who have the most information to make decisions.  

But then you have to live by that, and sometimes that’s difficult because if you’re a control freak, as many CEOs are, then you may want to jump in and actually make a decision yourself.  And so it means really living by those articulated values.  And in terms of how to articulate it, one thing I did is whenever we brought in new employees, I sat with them, and I had some PowerPoints on the company, and included in that were points about our culture.  And so we made sure actually before we hire them even to talk about some of the points.  Like in our case everyone was in a cubicle.  You weren’t going to earn your way up to a fancy corner office.  That was just against our culture.  Things like that.  We were kind of scrappy, so people had a large ownership in equity, but we weren’t paying out huge cash bonuses.  That was sort of a financial philosophical decision, but it really pervades the culture in every aspect. 

Meredith:  So a lot of companies start with maybe not just one founder.  They might have cofounders.  And obviously as things grow, you might have more than one person at the top so to speak.  Have you had any instances or experience either in your role as CEO or maybe as an investor or a director on a board where you’ve seen founders or cofounders that have competing corporate cultures?  

Marina:  Yeah.  And that’s tricky.  And at the end of the day, it kind of depends on who has the stronger way to make things happen or also who has more interaction with people.  So if you have a sort of absentee CEO or whatever role, where they’re not interacting with people a lot, they’re going to have much less impact on the culture than somebody who might even be at a lower level but who is there all the time and really actively making their belief system part of the ethos of the group.  But, yeah, it is - - it’s tricky.  And as a director that’s something that I think is really important.  And so when I’m working with young CEOs who may not have thought that much about it, or they may think of culture slightly differently, I really work hard to articulate what I think are important values to get them to buy into it. 

So, for example, a start-up might say, yeah, we are very supportive, like they view that as being a part of the culture, which is great, very positive, very supportive.  But I as a director may come in and say, that’s great and that’s good, but you also want accountability.  And so we can’t always be positive rah-rah-rah if somebody’s not delivering results.  And so there has to be a way to reconcile.  They’re not necessarily diametrically opposing, but a more enriched culture, I would say. 

And so to that particular perspective, one thing I’ve talked a lot with start-up CEOs about is this issue of results versus activity because you can get into this loop of like extraordinary activity, but not really delivering results.  And you can - - activity makes you feel because you feel like you’re doing something.  But then when you stand back, you may realize you’re not actually pushing the ball forward necessarily. 

Meredith:  Interesting.  And it sounds like from your perspective, since it’s something you can’t delegate, that a CEO that has a strong vision of corporate culture, it’s really important that he or she maintain the connection with the employees and others.  

Marina:  Yes.

Meredith:  How about - - how do you make sure that your corporate culture is - - kind of permeates the business including to outside people, maybe your customer base or otherwise? 

Marina:  Yeah.  That’s really, really tough.  One thing I did as CEO is I talked to our customers.  So every Friday afternoon I would just get the names of ten customers and just call them up randomly and have a direct interaction with them.  And that gave me a little bit of insight as to their interactions with the company.  Maybe a service tech had just visited there that week or whatever.  And so it would give me a little bit of a triangulation as to whether we were living by our culture.  But that’s tough.  It’s really touch, and yet you see it.  It works. 

I’m sure you’ve had this experience that I’ve had where certain organizations, they can be profits or nonprofits or small or large, but it does pervade an organization to every level.  And it’s not even like the companies that pay the most get the best.  It’s not like that.  It’s something - - something that you can feel in every interaction you have with the company. 

Meredith:  It’s interesting that you bring up the point about it not being necessarily - - the places that someone might want to work may not be the place where they will receive the highest pay.  I know that there’s been a lot of talk recently about millennials and how they’re facing corporate culture, whether it’s from a branding perspective and potentially you want to brand to them and bring them in as a customer of your business, but maybe it’s even somebody that you want to hire in, and you want to attract millennials into your workplace.  

And I know that Maia Heymann of CommonAngels has said that corporate culture and values that resonate with millennials are considered a competitive advantage in attracting and hiring talent.  Have you had any experience again in one of your multiple roles with companies that are struggling with that, with trying to be able to attract millennials, recognizing that they may not be looking for the biggest paycheck, but they’re really looking for the best place to work? 

Marina:  No, I’ve definitely experienced that.  And it’s actually so refreshing.  I really appreciate that, that the millennials are looking for something more.  And generally there’s - - you can - - depending on what the business is, there’s an angle there to be pushed ideally to make that argument to make something look attractive.  And generally, and I found this even with an older generation, the start-up culture in and of itself involves risk taking.  It involves being a little bit of a pioneer.  It involves being a little bit of a rebel.  And there are people for whom that resonates, and there are people for whom it doesn’t.  

And I’ve had it where even millennials - - there was a millennial I worked with who was at a very high level of a start-up.  And she was just really struggling because she said, well, I just don’t know if this is going to be successful.  And if it’s not successful, I’m getting paid below market.  And she had a huge equity stake in the company.  And she was just really uncomfortable grappling with it because she was very marketable.  She could make a lot more cash salary somewhere else.  And I said to her, you have to buy into this.  It’s not for everyone.  And if it’s not for you, that’s fine.  There’s nothing wrong with that, and you should definitely go and get your cash salary.  And she did.  She left.

Meredith:  How do you find - - thinking of a start-up and sort of the life cycle of a start-up, there’s a lot of changes.  Sometimes there may be founders who leave, maybe a new CEO.  I think one common change is frequently through various stages of financing, you do bring on different directors.  And again just curious what your view is or what your experience has been with those changing personnel.  Have you seen corporate cultures change?  Have you seen them try and maintain what the initial founder set out to do?  And have you seen good experiences with changing corporate cultures?

Marina:  Yeah, I have.  And it’s kind of ugly in the transition when two people are butting heads.  But ultimately I think that can often be a great growth experience for an organization and can lead to a much richer culture.  And so ultimately, ideally, you’re kind of getting the best of both worlds.  So I’ve seen it on a board level where you’ll have a new director come on board who might want to take control or be very authoritarian or try to be more visionary.  But there may be - - and that may rub everyone the wrong way, but then at the end of the day there’s a piece of that that stays on that was needed.  And so ultimately after you get through the difficult transition, I think that can often be a very positive factor.

Meredith:  And I hear a lot today about this notion of being real and how important it is to be real both for your employees and for your customer base and how if you’re not real, people will see right through it, and in today’s’ market that just doesn’t cut it.  I’m curious your experiences with that.  Have you - - do you feel the same way?  Have you seen companies who are trying to do something that just doesn’t fit their corporate culture and, therefore, that real factor just isn’t there, and it’s the negative to their business?

Marina:  Yeah.  So here’s the tricky part is being real is incredibly important to a brand, and the question becomes how you translate that.  It’s all in the details, right.  And so I have worked with a company where for one of the individuals being real meant never paying for advertising.  You either got it for free or you didn’t get it at all.  But you can’t grow a business that way.  And so that involved some transition to kind of say, yes, we want to be real.  However, we also want to build the business.  And so how can we reconcile what this initial individual saw as two opposing concepts and reconcile them into one?  We can be real and advertise.  And so it’s tricky.  It does all get to the details and into kind of changing people’s perspective over things.

Meredith:  And what would you view - - obviously companies have different corporate cultures.  It doesn’t make one better than the other necessarily.  There may be different reasons for those different cultures and attract different customer bases, different employees.  What - - do you think there are common traits to a healthy corporate culture?

Marina:  I do.  I have - - I think there are a few.  So one is - - and this is a really tough one, but it’s this sense of excellence and quality, but not perfection.  And that’s a tough line to not cross over.  So it means not being sloppy.  It means not sort of doing things without adequate effort and that sort of thing.  But it also means knowing when it’s time to move on and go to the next step because ultimately perfection can really hamper a company’s ability to grow.  So it’s - - it’s very tough to articulate, and again it’s all in the details, and it’s all in the behavior on those day-to-day decisions.  But the sense of excellence is something that you see in an organization.  And you’ll see it in every interaction you have with them, whether it’s on their software, whether it’s having a problem, a customer service issue.  At every level of the organization when you’re dealing with them, you’ll be treated respectfully.  They won’t let things fall through the cracks, and - - but that doesn’t mean it’s perfection, meaning like the whole company comes to a standstill to solve your one problem.  It may mean that they say, we’re on it, and we’ll get back to you in 48 hours to solve it.  That kind of thing.  It’s this balance. 

And then another, I think, very important part of culture, but - - at least this was very important to us at Z Corporation, and I think it’s somewhat personality driven, so I don’t think this is necessarily for everyone.  But as CEO I really objected to people kissing up and just agreeing with whatever I said because to me if you’re just going to agree with what I say, you’re not adding any value, and I don’t need you.  And so we had a tremendous amount of healthy debate, and that didn’t mean it was dysfunctional.  It didn’t mean we were angry at each other. 

But it meant if someone had a position on something, they would fight for it, and we would argue and argue and argue our points, and so that we would try to convince the other one why we were right.  And it’s that argument that ultimately, I believe, led to much better decision-making than any one of us could have done on our own.  And it’s tough with - - depending on the personalities, that is not always easy to make it work.  You need people with a little bit of a thick skin who are going to let it fall off when the meeting’s over, and you also need very clear decision-making authority. 

So you need to know at the end of the day, I’m going to fight, fight, fight this point, but this is a sales issue, not a strategic issue, so the VP of sales is going to make it.  I’m not going to make it as CEO.  I’m going to fight with him about it.  I’m going to argue with him, but at the end of the day we’re going to walk out of this meeting, and we’re going to be arm in arm agreed with whatever he decides to do.

Meredith:  So it sounds like it’s really important, especially in the leadership ranks of a company, that everyone in the room understands and appreciates the way that the others work and approach these types of issues.

Marina:  Exactly.  Another one that a CEO will have many opportunities to display is admitting mistakes.  And that’s extremely important, and I think all good organizations know how to do that well.  And that’s everything from the smallest mistake to the largest mistake, and we all know.  We’ve all experienced this in the real world where a company does something wrong, and it could be something pretty bad.  But if they are forthcoming about it, and they admit it, and they take responsibility, people will cut them slack.  They just want to be dealt with respectfully and honestly.

Meredith:  And in this day and age of social media, you had sort of mentioned before sort of immediately or semi-immediately making sure you respond to customers or others.  How do you view social media as playing into that and kind of the way that things can blow up before someone even has a chance to respond?

Marina:  Yeah.  Well, first of all, with social media it just blows my mind how willing people are to behave so poorly in this day and age when everybody has a camera on their phone.  So just a little bit of awareness, and this is something that we also made a big deal about at Z Corp., which is any email you write, it’s - -  imagine it plastered on a billboard on the Mass Pike.  So anything you write, imagine it plastered on a billboard.  And so just having some awareness ahead of time that anything you do can and will be held against you. 

But then also social media is a great opportunity, though, to admit your mistakes, to get right on it immediately, and address the audience directly.  And so I think being on top of it is really important and not letting time go by, not being silent.  I think this notion that, well, I’m just playing into it if I engage.  No, no.  If you did something wrong, you need to get right in there and settle it and be done with it.  And so I think too often people hope that if they’re silent, it’ll go away, and generally I don’t think that’s a winning strategy.

Meredith:  We talked a lot about start-ups, and I think it’s safe to say that any company that’s forming in this day and age would be on top of social media and understand its implications.  I think we’ve also seen situations of well-established companies that have been in existence for a long time try and enter the social media market and maybe not pay as much attention to what’s actually happening there.  How do you think kind of a half-entry into social media can impact a corporate culture?

Marina:  Yeah.  It depends - - I guess it depends on how much the senior management is really plugged into that, and that’s tough.  It depends also on whether their customers are really plugged into social media as to whether that’s worth that investment because it is - - it’s a big investment in time and resources to really stay on it, and it can become a little bit of a time sink.  That can become something that feeds this frenzy of activity, but isn’t necessarily delivering results.  And so it - - that’s very business specific.

Meredith:  And what would be - - if you had to kind of boil down everything we’ve been talking about into one or two tidbits for a new CEO, someone who’s coming into a company, maybe they didn’t found it, but they’re about to start as CEO, do you have any tips that you would pass along as far as ways to both understand the corporate culture, maybe suggest changes to the corporate culture, or how to really get that assimilation?

Marina:  Well, I think one important thing to do very early on entering an organization at any level is to talk to everybody within the organization at all levels and just listen, listening in to what they think about the organization, what they think could be done better, what they think is already being done well, so really understanding the lay of the land before going in with any preconceived notions, because a lot of times things can be working really well, and it may be very different than what you might think or expect.  And then getting advice from mentors, I’m a huge believer in talking to people who have already done it before and getting their thoughts and ideas.  But I think you can only bring in your own new ideas and new ways of thinking about it after you understand what’s already there.

Meredith:  Well, great.  Well, thank you very much, Marina.  This has been extremely useful, and I think we’ve talked about a lot of impact on corporate culture that one could have in a leadership position and a lot of other things to think about.

Marina:  Well, it’s my pleasure.  It’s a great topic.

 

[END]

 

 

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