HubSpot – Cultural Change

Cultivating a Culture
of Excellence

Madhuvanthi Raja
—
Organizational Change Management
Minor 1
Setting the Stage: HubSpot's Cultural Metamorphosis

HubSpot, renowned for its cutting-edge customer relationship management (CRM) platform, not only
revolutionizes the tech industry with its innovative tools but also sets a new standard for organizational culture.
With an unwavering commitment to transparency, employee empowerment, and customer-centricity,
HubSpot emerges as a beacon of exemplary culture in the corporate landscape.

Established by Dharmesh Shah and Brian Halligan, HubSpot places culture at the forefront of its operations,
recognizing it as a cornerstone of sustained success. The genesis of the HubSpot Culture Code, a
comprehensive manifesto delineating the company's values and operational principles, underscores the
pivotal role of culture in fostering organizational growth and fostering a highly engaged workforce.

In the nascent stages of HubSpot's journey, culture took a back seat to product development and market
expansion. However, a pivotal insight from a fellow CEO redirected Shah and Halligan's focus toward the
paramount importance of organizational culture. This epiphany sparked a meticulous examination of the
attributes underpinning HubSpot's thriving workforce, revealing qualities such as humility and transparency as
defining characteristics. Dedicated to sculpting a vibrant and inclusive workplace ethos, Dharmesh Shah
invested approximately 200 hours into crafting the Culture Code, epitomizing HubSpot's steadfast dedication to
nurturing a culture of excellence. The subsequent release of the HubSpot Culture Code slide deck, initially an
internal document, reflects the company's unwavering commitment to transparency and continuous
improvement. Since its inception, the Culture Code has undergone over 25 iterations, attesting to HubSpot's
dynamic approach to cultural evolution.

Today, HubSpot stands as a testament to the transformative power of culture, boasting over 73,400 customers,
a workforce exceeding 3,800 employees, and an annual revenue surpassing $674 million.

Culture Code Highlights

• Culture is to recruiting as product is to marketing.
• Whether you like it or not, you're going to have a culture. Why not make it one you love?
• Solve For The Customer (SFTC) - not just their happiness, but also their success.
• Power is now gained by sharing knowledge, not hoarding it.
• "Sunlight is the best disinfectant." -Louis Brandeis
• HubSpot has a no-door policy, where everyone has access to anyone in the company.
• You shouldn't penalize the many for the mistakes of the few.
• Results should matter more than when or where they are produced.
• Influence should be independent of hierarchy.

OCM -MINOR 1 PAGE 2

• Great people want direction on where they're going - not directions on how to get there.
• We'd rather be failing frequently than never trying.
The HubSpot Culture Code is not just a manifesto or handbook - it’s a product, built for HubSpot’s employees.
Since its release, the Culture Code has not only guided HubSpot's internal practices but has also inspired
businesses globally, amassing nearly 6 million views. It has been coveted by many start-ups as a template for
setting the organizational culture.
HubSpot culture is driven by a shared passion for our mission and metrics. It is a culture of amazing, growth-
minded people whose values include using good judgment and solving for the customer. Employees who work
at HubSpot have
HEART: Humble, Empathetic, Adaptable, Remarkable, Transparent.

Approaching Culture as a Dynamic Entity, A Product:

HubSpot adopts a forward-thinking stance towards culture, recognizing it as a dynamic and evolving entity
that requires constant refinement to align with the evolving needs of both employees and customers. The
company's unwavering commitment to fostering diversity, inclusion, and a sense of belonging permeates its
recruitment strategies, the establishment of employee resource groups, and the publication of annual reports
on Diversity, Inclusion, and Belonging (DI&B).

Central to HubSpot's culture is a feedback-driven ethos that fuels its ongoing quest for enhancement. Actively
seeking input from employees and stakeholders, HubSpot utilizes feedback as a guiding force to pinpoint areas
ripe for improvement and innovation. A notable example is the company's decision to substitute "Empathetic"
for "Effective" within the HEART acronym, a change inspired by internal feedback, showcasing HubSpot's
responsiveness to the perspectives of its workforce.

At the core of HubSpot's approach to cultural evolution lies the concept of treating culture as a product. This
perspective advocates for the intentional design, development, and iteration of culture, mirroring the iterative
process of software product development. Embracing this mindset, HubSpot underscores the imperative of
continuous improvement and adaptation to effectively address the evolving dynamics within the organization
and among its members.

Key Initiatives & Their Impact

HubTalks: Renowned speakers such as Patty McCord and Clay Christensen regularly captivate HubSpot
employees through engaging talks in the format of internal TEDTalks.
Master Classes: Providing employees with opportunities for continuous learning, these complimentary master
classes cover a wide array of subjects ranging from Photoshop to presentation skills, fostering personal and
professional development in a classroom setting.

OCM -MINOR 1 PAGE 3

Free Books Program: Empowering employees to fuel their intellectual curiosity, this initiative enables them to
request access to any business book without the need for approval, promoting a culture of learning and
knowledge sharing.
Tuition Reimbursement: Embracing the ethos of "Always Be Learning," HubSpot allocates $5,000 annually to
support employees in pursuing further education, be it in areas such as Java programming or Japanese
language studies, beyond what is offered in Master Classes.
5-Year Sabbatical: Recognizing the value of rest and rejuvenation, HubSpot grants employees a month-long
sabbatical after five years of service, allowing them the freedom to pursue personal interests such as travel or
skill acquisition.
Unlimited Vacation: Shifting focus from hours worked to results achieved, HubSpot offers unlimited vacation,
emphasizing the importance of employee productivity and impact over arbitrary work hours.
The "Use Good Judgment" Policy: Simplifying governance with a three-word policy, HubSpot encourages
employees to exercise sound judgment in their decision-making, prioritizing customer satisfaction and team
well-being over rigid rules and procedures.

Insights from HubSpot’s 2022 DI&B Report Highlighting Culture Code’s Efficacy:
• Asian employees constitute 13.7%, Black or African American employees 8.8%, Hispanic or Latino
employees 7.5%, while Native Hawaiian or Pacific Islander and American Indian or Alaska Native
employees each represent 0.1% of the workforce.
• 13.3% of HubSpot employees identify as members of the LGBTQ+ community.
• 9.8% of employees self-identify as persons with disabilities.
• Nearly half (44.9%) of HubSpot employees are first-generation.
• The retention rate for Black, Indigenous, and People of Color employees in the U.S. is 2.2% lower than
the overall U.S. employee retention rate at HubSpot.

At HubSpot, embracing diversity yields advantages for both its clientele and its organizational culture. An
integral aspect of fostering a more diverse workforce involves embracing remote work, thereby broadening the
pool of talent beyond the confines of its geographic headquarters.

Type - Transformational Cultural Change

This change is a clear illustration of cultural change that has been implemented through a top-down Radical
approach. Transformational cultural change requires an organization to be agile and adaptive in response to
evolving internal and external dynamics. HubSpot's iterative approach to culture, treating it as a product that
requires continuous refinement and adaptation, reflects this mindset. By soliciting feedback from employees
and stakeholders and actively incorporating it into its cultural initiatives, HubSpot ensures that its culture remains
relevant and responsive to the needs of its members.

OCM -MINOR 1 PAGE 4

Overall, cultural change is essential for organizations seeking to evolve, grow, and thrive in today's fast-paced
and complex business environment. Transformational cultural change at HubSpot is characterized by a
commitment to transparency, empowerment, diversity, and adaptability. By embracing these principles,
HubSpot has created a culture that not only drives organizational success but also fosters a sense of purpose,
belonging, and fulfillment among its employees.

Alignment with Kotter’s framework

The change model used in the HubSpot case study aligns closely with Kotter's 8-Step Change Model. the key
steps of Kotter's mode that correspond to the transformation efforts undertaken by HubSpot:

Establishing a Sense of Urgency: HubSpot recognized the need for cultural evolution to support its growth and
innovation goals. The company's leadership, including co-founders Dharmesh Shah and Brian Halligan,
emphasized the importance of culture and its impact on organizational performance, fostering a sense of
urgency among employees to embrace change.
Creating a Guiding Coalition: HubSpot's leadership played a central role in driving cultural change by
articulating a clear vision, values, and goals for the organization. The Culture Code, developed by co-founder
Dharmesh Shah, served as a manifesto that outlined HubSpot's ethos, values, and operational blueprint,
providing a rallying point for employees to align around.
Creating a VIision: HubSpot developed a compelling vision for its culture, centered around the concept of
"solving for the customer" and fostering a workplace environment characterized by autonomy, accountability,
flexibility, and inclusivity. The company's Culture Code and associated initiatives served as a roadmap for
translating this vision into actionable strategies and behaviors.
Communicating the Vision: HubSpot prioritized transparent communication to ensure that all employees
understood the rationale behind cultural changes and their role in achieving the desired outcomes. The Culture
Code, along with regular company-wide meetings, internal talks, and feedback mechanisms, facilitated open
dialogue and alignment around the vision and values.
Empowering Broad-Based Action: HubSpot empowered employees at all levels of the organization to drive
cultural change by providing opportunities for learning, development, and collaboration. Initiatives such as
HubTalks, Master Classes, and the Free Books Program enabled employees to acquire new skills, share
knowledge, and contribute to the company's success.
Generating Short-Term Wins: HubSpot celebrated early successes and milestones in its cultural transformation
journey to build momentum and demonstrate the tangible benefits of change. Examples include the annual
Week of Rest, the Connect4 initiative, and positive feedback from employees and customers, which reinforced
the effectiveness of cultural initiatives.
Consolidating Improvements: HubSpot took deliberate steps to institutionalize cultural changes and embed
them into everyday practices and processes. The iterative nature of the Culture Code, along with ongoing
feedback mechanisms and learning opportunities, ensured that cultural evolution remained a continuous and
adaptive process.
Anchoring New Approaches in the Culture: Finally, HubSpot worked to reinforce cultural changes by aligning
them with the organization's values, norms, and identity. The emphasis on empathy, transparency, diversity, and
remote work reflected HubSpot's commitment to fostering a culture of innovation, collaboration, and inclusion
that would endure over time.

In conclusion, HubSpot's remarkable journey of success stands as a testament to the transformative power of
organizational culture. Through a steadfast commitment to transparency, employee empowerment, and
unwavering customer-centricity, HubSpot has not only fostered an environment where employees thrive and
innovation flourishes but has also elevated customer satisfaction to new heights. As HubSpot continues to
navigate its trajectory of growth and expansion, its enduring dedication to cultivating a culture of excellence
serves as an inspiring blueprint for organizations worldwide, reaffirming the pivotal role of culture in driving
sustainable success and enduring impact.

OCM -MINOR 1 PAGE 5

References
https://www.forbes.com/sites/kevinkruse/2023/09/05/how-hubspot-sustains-a-customer-centric-culture-across-
7k-hybrid-employees/?sh=5faa97414efa
https://blog.hubspot.com/blog/tabid/6307/bid/34234/the-hubspot-culture-code-creating-a-company-we-
love.aspx
https://karenborchert.medium.com/the-hubspot-culture-code-is-an-incredible-product-f06e1bc69e8c
https://www.roionline.com/blog/5-company-culture-practices-from-hubspot-you-should-steal-for-your-business
https://underscore.vc/startupsecrets/culture-as-product-hubspot-culture/
https://www.psohub.com/blog/the-evolution-of-hubspots-company-culture
https://amazingworkplaces.co/hubspot-adopting-the-new-age-work-culture-for-your-business/
https://www.vesume.net/blog/how-does-hubspot-make-company-culture-a-product

OCM -MINOR 1 PAGE 6