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OWNER'S MANUAL

How to Bulletproof Your Company Culture

Growth often comes at a cost: Acquisitions and fast hiring decisions can wreak havoc on your company culture. Here's how not to let it happen.
ExactTarget CEO Scott Dorsey

ExactTarget CEO Scott Dorsey

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Outstanding company culture: hard to build, even harder to maintain--especially when you grow rapidly through expansions and acquisitions.

Here's another in my series in which I pick a topic and connect with someone a lot smarter than me. (Check out some previous installments at the end of the article.)

This is the second part of a conversation (here's part one) with Scott Dorsey, the co-founder and CEO of ExactTarget, a digital marketing software company that went public earlier this year.

You've grown the company in two basic ways: through acquisitions that allow you to offer more services and features, and through new geographic opportunities. That's great, but both can also be a company culture killer.
We've done a number of acquisitions. Three were geographic expansions--we had reseller relationships in Brazil, U.K., and Australia, we'd already worked together, knew the teams, and had worked as partners. So we knew each was a great cultural fit. They slotted right in.

In our two most recent technology acquisitions both were a lot like young ExactTargets. Both were taking plays out of our playbook.

For years Adam Blitzer, the gifted entrepreneur and co-founder of Pardot, had been saying they wanted to be the next ET. When he announced the deal to his team he even included a slide that said, "We always wanted to be the next ExactTarget... so why not just be ExactTarget?" The same was true with the iGoDigital acquisition: They are passionate entrepreneurial founders who grew their businesses the way we had.

In both cases the cultural fit was outstanding.

Still, how did you know?
A major reason we were interested in those acquisitions was the entrepreneurs themselves: Adam at Pardot and Eric Tobias at iGoDigital. They want to grow and scale their business, and we can help. Eric and Adam were both resource-constrained and had self funded their businesses, so they were hungry for more resources, support, and growth.

It had to help that iGoDigital is Indianapolis-based, like you. Speaking of which, conventional wisdom says you should "go west, young man."
Maybe so, but Indianapolis has been extremely positive and an unbelievable advantage.

There's a lot of talent due to the outstanding universities in the region. Employees are hard working and incredibly loyal--those great Midwestern values--and employee turnover is very low.

In Silicon Valley recruiting tends to be difficult and retention poor. We have a base of employees that are unbelievably loyal and passionate. We have people who have almost spent a decade with us building the company, and that kind of loyalty becomes infectious.

Plus our overall costs of operations are lower. We work in fabulous buildings in downtown Indy that cost a half or a third of what they would on either coast. And we get amazing support from the city and the state.

That alone would be much tougher to come by in tech "hot spots."
The support we get from the city is amazing. It feels like the whole city is cheering for us. We love when we're able to pay that back through events like Connections that generate millions of dollars in economic impact for the city. It's like we're returning the favor, at least to a degree.

I would have never imagined that I would know the mayor, or the governor, or be so plugged into the business ecosystem. Indianapolis is big enough to be vibrant and interesting but small enough that you can really feel like you make a difference.

Tell me about the "power of orange."
We constantly get compliments about the energy of our employees: They're bright, ambitious, always seem happy, always seem in a good mood. Part of that is our Midwestern roots but it's also in the soul and DNA of the company.

When your core group is optimistic, passionate, and hard working, that becomes infectious. But still, we felt like we needed to brand our culture.

Our Chief Marketing Officer, Tim Kopp, said, "Why not call it the power of orange?" We created something like a brand book with brand guidelines. It was of those initiatives you hope will work but you're not sure. We put in the hands of our team and let them run with it, and it's one of the best things we've ever done.

The power of orange has taken on an identity of its own.

Do you think it worked because you started it and then let it go? When you try to force culture it usually fails.
We didn't try to engineer it. It's authentic, it's real, and our employees take it in lots of directions. It's kind of a rallying cry for the company.

We wanted the color orange to be a marker that identifies us in the market, but then to turn it inward and have it become a cultural goal is fantastic.

I'm sure it also helps that two of your original three founders are still with the company.
Peter McCormack runs our global business and strategic partnerships. Our other co-founder Chris Baggott left a few years ago. He's more of a serial entrepreneur. But he left on great terms and we remain on great terms.

After all, he's also my brother-in-law.

Here's also a fun story about Chris. Our father-in-law invested in his earlier start-up and that company unfortunately failed. When we started ExactTarget one of our original investors was... our father-in-law. Chris went back to the well one more time--successfully. How often does that happen?

I think that story says a lot about our culture, too. We've always tried to put family first and business second. That's an approach that has worked very well for us, as a family and a company.

More in this series:

Last updated: Nov 13, 2012

JEFF HADEN | Columnist

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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