Creating a great company culture is hard.
Changing a poor company culture is even harder: norms are in place, agendas are well established, key employees have sufficient power to influence the people around them... and that's especially true in larger companies. (Speedboats change direction quickly; aircraft carriers take a long time to turn.)
But if you need to dramatically change your company's culture, don't despair. It can be done.
Case in point, Art Papas. Art is the founder and CEO of Bullhorn, a company that provides cloud-based CRM solutions for relationship-driven businesses by automating data capture and customer insight technology to help companies win customers and keep them engaged.
And this year Bullhorn ranked 29th on Glassdoor's Employee's Choice Best Small and Medium Companies to Work For list.
As Art says, "If you had told me a couple years ago that we could change the culture of the company so radically, I wouldn't have believed you."
Give me some background. Why did you need to change your culture so dramatically?
We went through hyper-growth after we hit the $5 million mark. Before that we grew by working with customers, being incredibly responsive to customers... and I was personally involved.
At that time our culture was "Whatever the customer wants. We bend over backwards because we love our customers." Customers were telling other customers to go buy Bullhorn, and that fueled our growth.
Every year we we would do great. Naturally we would look at how to do better next year, for ways to increase sales, for ways generate more revenue--and hmm, should we raise prices, should we should restructure our contracts, should we do this acquisition because it will make us grow even faster...
Slowly but surely our customer focus drifted out of focus.
How did that impact your culture?
As we moved into hyper-growth our cultural focus shifted from our customers to the growth of the company. We started to look inwardly for success rather than outwardly. We started focusing a little less on making sure our customers were amazed by our product, our service, and their relationship with us.
That's totally on me.
The first thing that started to slip was the product, because we were shifted our R & D to creating new products we could sell to our existing customers. Our R & D efforts went to new inventions rather than the thing that our customers loved. It's like if Apple stopped developing the iPhone; in time no one would like it.
In time our product got really long in the tooth. In 2012 it still only worked on Internet Explorer.
Imagine being told you have to use IE. You can't use a Mac, an iPhone, a tablet... naturally our customers got really frustrated.
How did that frustration manifest itself? Surely they told you.
The product wasn't keeping pace so most of our support calls came from disgruntled customers. They were frustrated with our product, and since nothing was being done about it that made our support people feel that the organization didn't care... so why should I care? Maybe I won't be quite as responsive... and that hurt our sales efforts because existing customers were telling people, "Yeah, it was a great product, but now it's not as good as it used to be."
It became this vicious circle.
What's crazy is that at first all those problems didn't affect our growth. When you're the market leader, you can ride your own wave for a long time.
But it definitely affected the culture.
So what made you realize you had a major problem?
My first customer, Leslie McIntyre of the McIntyre Group, called me. She said, "I love you, I've been your customer for 13 years, it's been an amazing ride... but I have to tell you, you guys have lost it and it's not a fit anymore and I need to go with a competitor. They're small, they're scrappy, they're hungry, and they remind me of you 13 years ago."
I asked her to let me visit her to talk about it. We had a long discussion. She told me her experience. At the end I said, "I don't want to run a company that can be described this way. I can't do it."
So I went through a lot of soul searching. It was a terrible summer.
Where did you start?
I talked to our teams about doing a better job of getting back to customers. The support team would say, "We do our best, but the product isn't what it used to be and the customers are frustrated."
I didn't have an answer to that because I knew they were right. We had poured all our money into other ventures.
So I realized I needed to do something radical.
Weren't you still growing at a really rapid rate, though?
We were. That didn't make it easy.
Still, I went to our board and said I planned to change the mission and change all our goals for 2013. I told them we were going back to the roots of how we started. Our mission was, and would again be, to create an incredible customer experience. Our goal is to help our customers create an incredible customer experience for their customers.
I told them we were changing revenue goals. I said all bonuses would be tied to customer satisfaction and employee satisfaction.
Their first response was what you would expect. "Where are the revenue goals? Where are the profit goals? Look at our growth, why does this matter?
The last objection was that we were not known for a great customer experience, we were known for being the leader in the market--and I wanted to change who we are?
I said, "No, but that is who we were. Ten years ago this is who we were. We've drifted, but we're going back to that."
That can't have been an easy discussion.
It wasn't, but we have a great board.
So how did it go? People don't instantly change, especially when they've been doing what they thought you wanted them to do.
We did lose a few people who didn't fit the new mission, but tons of people really rose to the occasion.
Our CTO killed every R & D project that didn't involve the core product. His team rewrote the entire flagship product and I started getting love letters from customers again. Some even said, "I can't believe what you guys have done with this product. Now I know why it hadn't advanced for so long; you were working on something incredible."
Improving our product was always within our reach. We just didn't do it.
Our CTO led the way, and the support team was next. They started auditing the board rep's interactions with and used them as coaching moments. They started recognizing support employees who were doing a great job. I started praising our support team at town hall meetings, I started sharing the great feedback customers gave us...
Our customers had a short memory for how bad we were. They fell back in love with us really quickly. All we had to do was remove the stone in their shoe.
If you're really good and you falter and you become really good again, people will remember why they loved you in the first place. Sometimes winning back customer affection isn't as hard as you think.
That sounds easy... but it could have gone the other way.
Absolutely. If I had gone to our R & D team and just said "rebuild it," that wouldn't have been enough. Our support team had to shift. Our sales team had to shift because they were convinced we didn't care about customers; they thought they got their deals done in spite of the company. Now they could go to customers and say, "Our mission is to create an awesome customer experience."
As a mission, "We want to be the dominant global player," doesn't sit well with customers.
As a mission that's also not the only thing employees want to hear. I want my legacy to be how people talk about the experience of working here. I hope they say they worked at an amazing company and it set them up for an incredible career. I hope they talk about things they learned and people they worked with.
When people leave to start their own companies, I'm proud. It's like we helped create entrepreneurs. That's amazing.
You shifted away from growth and back to customer experience... but revenue still matters. If you don't have revenue you don't have a company.
Many CEOs will say, "Great culture is important...but what are the business results?"
Our growth rate has doubled even though the law of large numbers should be catching up to us. We've had hugely accelerated growth. Currently we're at just over 600 employees; this time last year we had around 400.
But the cultural transformation is just as important to me. When we had our last sales kickoff, we asked everyone to create a video about what working at Bullhorn means to them. If you had shown me those awesome videos three years ago I would have said, "What company do these people work for, because it's certainly not mine."
It's been an incredible journey. It really was a lesson in leadership. The CEO needs to set the agenda--if you don't, someone else will.
So how has all this changed the way you operate now?
The focus of our IT team used to be 80% innovation, 20% on the flagship product. We've flipped it: For the last few years, 80% of our R & D is focused on the flagship product. There's a lot you can do to expand your core platform.
We do have teams working on "out there" initiatives that could be really exciting, but we definitely make the right investment on our flagship.
Our board is definitely behind us as well. At the time they worried that if we took our eyes off revenues and profits our "experiment" with customer satisfaction could be disastrous. They were concerned but they supported me.
The underlying theory was that if we changed the customer experience, our NPS (Net Promoter Score) would go up. If our NPS is up, then more people will make referrals, and that will impact our revenue.
A lot of entrepreneurs bring in outside capital and assume those investors know what is best for their business. That's true at a fundamental level, but when it comes to culture, product, and customer experience, those are not their domain. As a CEO you have to lead your investors like you lead your employees.
You have to show--and prove--what is important for your business and help them see why what you want to do makes sense.