363 | Operations Management for HyperGrowth at Hubspot with Michael Redbord

Operations Management is the process of streamlining the systems of the business. When you grow fast, you often have to change some of the outdayed operations management procedures to ensure that you can keep improving. In other words, you have to let go of the old and embrace the new. Today’s guest Michael Redbord with Hubspot. Michael shares some of the changes they made at Hubspot in operations management. Discover how you can look at your operations to manage for growth.

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Target Audience: Michael Redbord is the VP of Services and Support for HubSpot, where he helps companies shape their marketing plans and online strategies. Prior to this role, Michael was the VP of Customer Support and Implementation at HubSpot, managing the company’s industry-leading support team in providing the highest possible level of service to customers and partners. Before then, he worked directly with customers as an Inbound Marketing Consultant and pioneered the HubSpot Academy team, helping provide online education to HubSpot’s customer base.

 

How to Increase Trust Online: The Transcript

Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

This is Leaders in the trenches and your host today is Gene Hammett.

Gene Hammett: Hi my name is Gene Hammett. I’m the host of leaders in the trenches. My question for you today is what happens as your company grows so fast that you must really put some changes into operations? So in other words, How do you operate for more growth? I have not had that much experience in this area. I’ll be honest with you, because I was the leader of a fast growing company. We got to about 5 million. We only had like eight, nine employees the time we scaled up and down depending on seasonality. So we have to 15 at times. So I only lead, you know, a handful of people at one time, but companies that are running at this pace of change and the pace of growth, they really have to think differently about their operation. So I went up there to experts, the leaders in the trenches, so to speak, uh, to talk about this.

Gene Hammett: And I found someone very interesting. I love Hubspot. I am actually a client of theirs. I’ve used their tool for a little over a year now and love it. And I really loved the company. I’ve loved the company for a long time because of the content they create because I know how important it is. The funny thing about the way they operate and some of their, the way they actually connect with people is I know every time I fill out a form on hubspot for a white paper for something that I want to download, within about two hours, I’m going to get a call from one of their inside sales reps. just checking to see if I got it, see if I had any questions and seeing that they can further that relationship. I think it’s amazing. I love the company and so I wanted to have someone on that can really talk about how do you operate around hyper growth, so if you don’t know who hubspot is, there a software company, they create marketing and sales solutions in the marketplace.

Gene Hammett: 2011 there was second fastest software company, so that was many, many years ago and now they’ve gone public. They’ve continued to keep their culture really tight fit. They’re one of the best places to work and I wanted to talk to one of their inside leaders. Michael Redbord is someone that I had never heard of, but I was connected through my network. I’ve gotten to know this guy thinks differently about operations. So this interview is all about the operations for growth. All right, so here’s Michael.

Gene Hammett: Hey, how are you?

Michael Redbord: Hey Gene, I’m doing great. How are you?

Gene Hammett: Michael, Thanks for being here. Uh, I just asked you this amazing question, which was, uh, I’ve told the audience a little bit about you and your background, a little bit about the company you work for Hubspot, but I’d love for them to hear about your journey here and about who you serve right now.

Michael Redbord: Yeah. So hubspot works with small and medium sized businesses and really, you know, our mission is to help you grow better. Right? And what I do at Hubspot is I’m in charge of one of our product lines that has to do with growing better, really through service and serving your customers better. But I’ve been at Hubspot for awhile and I’ve seen a lot of growth here and I’m excited to talk about that journey with you today, John.

Gene Hammett: Well, you know, hubspot is a company that I’ve admired for a long time. They have a huge following work with a lot of corporate brands and they’re doing some great stuff on the marketing side. The sales side. I’m actually a customer on the sales side of the crm. Yep. And, um, when you think about the market today for let’s, let’s go with the marketing side because that’s what you’re mostly known for. Marketing software is pretty competitive when you say?

Michael Redbord: Yeah, it’s gotten to be a red ocean over the last decade for sure.

Gene Hammett: And, uh, you guys have created a solution that’s got some unique elements to it and that has caused traction. And I’ll go ahead and kick this off. I was telling you this the other day and in a pre-call where we were getting to know each other, Michael, when I was looking at my research into hypergrowth companies, growth companies, him really fast. One of the core elements behind that discipline was radical transparency. And that could mean a lot of things, so a lot of people, but when I talked to the founder of hubspot in some exchange through email about this and how unique it was, he’s like, well, this is the core of our business. So how does radical transparency play out for you guys there in your, in your growth?

Michael Redbord: There’s a, there’s a few ways that I see it. I think first is we try to be as upfront as we possibly can be with our customers, right? And that actually has a lot of really positive network effects in the market when people perceive you as authentic, as honest, when you make a mistake and you apologize for it. For Real, I think that actually has a really nice positive effect, not just to your customer. So your top two, but you know, to uh, to the market as a whole. And I think that I’m also in our marketing, we try to share as much as we can. We give a ton away for free. Probably a lot of listeners, you know, if you’re familiar with hubspot through the content we give away and we just try to give as much as we can and as authentic as authentic tone as we can.

Michael Redbord: I think that’s really done a lot and that helps people see us as a company. That is how we are, I think, which is really a pretty radically a terrific company.

Gene Hammett: Well, that’s from a customer perspective, what happens internally for radical transparency is it is it drives growth.

Gene Hammett: Yeah. That’s an awesome question because I think anyone who’s really doing radical transparency, right, the answer to this question is that it’s a little scary internally because everybody knows everything. There’s no walls, there’s no doors, there’s complete a level playing field when it comes to data access, about the way the way things work in the business and what that means is that there is a, like there’s a very intense and sophisticated discussion happening amongst all the employees all at once, which you feel a little chaotic about this. Everything, a business strategy to the way we handled that one, support ticket and everything like that.

Michael Redbord: So for us, that manifests itself in like a massive proliferation of information on slack, real time and also our internal Wiki, which is almost like a kind of internal content machine where we talk about stuff to each other, but it’s there. I think anyone who’s doing it right has to answer that question to say it’s a little bit scary. It’s a little chaotic, but man, it wouldn’t have it any other way.

Gene Hammett: And I’ve talked about this from the stage a few times and it is really kind of goes back to the story of many years ago. You guys had a lot of core values that drove the business and to where it is today, but one of the things was kind of up for grabs or you know, in question, when we become a public company, how do we maintain radical transparency with some of this, this private data and private strategies. And you guys decided to make everyone a designated insider at the time.

Michael Redbord: Yeah. We made everybody an insider and that’s, um, that’s not something most companies do, right? Uh, what it means is that you can share as a public company, right, you’re subject to certain regulations obviously, but what it means when you make everybody in insider is you can share really some forward looking financial statements with everybody in the company. So a lot of times when a company goes public and I’ve lived through this, you go from having these company meetings where the CEO stands up and is able to have a very honest conversation about the business with the employee base. Right? And those are great. It’s part of what makes the company feel like a family feel small. Then suddenly one day happens and it’s just a random day in October or something and you go public and that all has to change.

Michael Redbord: And what happens when you’re an employee at a company like that. Um, and even, you know, if you’re in middle management or uh, you know, it doesn’t have to just be a line of point is you feel the sea change that suddenly this events happened. I didn’t quite understand it. And now I’m not privy to information. A wall just went up and what we really wanted to do at hubspot when we went public was avoid that. Right? And so what we did is we made everybody in insider and we’re able to keep the same tenor in all of our internal conversations on slack, on our internal Wiki and in our company meetings. And I think that that made the ipls seem like an event in time as opposed to a destination that we then had to start anew. New from.

Gene Hammett: Well, I love the fact that you have been able to do that because I think it’s a great story to tell because it does scare the hell out of some leaders. Um, and we’re probably not saying it’s easy and it’s all going to be a, uh, something that, uh, you know how as a leader you have to kind of question what do I say here. But I really appreciate you sharing that with us before.

Michael Redbord: I might just add that it means, it means you need to have an incredibly high level of trust between really every person in your organization. And I think you read the research about high performing teams, a lot of bit of is about trust and you know, psychological security and stuff like that. One way that we’ve been able to almost garner that honestly it’s kind of by accident, but it’s been a nice thing is by kind of sharing this information and knowing that we’re all privy to something that other folks don’t have. Right. And that creates a pretty high level of trust between every employee at the company. And it’s something I don’t think we would have otherwise.

Gene Hammett: Well that’s the way I use it inside my speeches. It’s really around trust. There’s many other values you guys have as a company and you’ve been growing so fast. I guess I kind of steered the conversation to radical transparency. Which of the values do you see playing out and how we have to keep in check to keep growth going.

Michael Redbord: So the, the document that I think a lot of people are familiar with that hubspot put out what’s called our culture code, right? That was, that was a document that when we’re founders, Dharmesh put out and it was Kinda just like the way that we think about ourselves and believe he put it out 2011 or so, and the most important slide in that deck has this acronym on it, SFTC solve for the customer. Right? And that to me is a way that you, it’s a, it’s a way you make decisions, right? You solve for the customer. If you think in terms of a math problem, you put, you know, the customer over on the left side, right? And it’s also a way that you sort of just run the business. And the more that we’ve grown, the more that we’ve learned that the better you do by your customers, the more that helps your growth.

Michael Redbord: And you know, I think a lot of people know hubspot as a, as an amazing sales and marketing machine. Uh, our marketing is amazing. If you ever talked to a salesperson, hopefully it was a good experience. But really it’s our customers that drive our growth. And more and more as we’ve gotten bigger, it’s about word of mouth. And the network effects, they create the reviews that they write us online, all that stuff. And so we found this solving for the customer started as this kind of like slightly fluffy, you know, kind of almost like corporate value. Right. But it really turned into a way of doing business. It’s driven our growth

Gene Hammett: And that’s the idea of values is for you to live them every day and you know, something like that. When it comes to customer service or it comes to marketing or sales, it’s real easy to go back to that and go, well, what would, what would solving for the customer mean in relation to this, this dilemma when you are looking at the growth of the company over time, you said that that hasn’t always been the customer has not always been important, but it hasn’t always been the most important thing. Um, do I have that right?

Michael Redbord: Yeah, I think. I think there’s an ebb and flow to that for any, for any value, for any driving principle. There’s some days where where it’s loud and clear and there’s other days where you really have to struggle to make it reality.

Gene Hammett: When you think about how spots journey to where they are today, it, it’s impressive. Um, you know, I don’t want to say. I know we talked about the revenues the other day. I don’t know what I can say publicly.

Michael Redbord: I think we can say check out the last earnings call and you’ll, you’ll see there’s probably some nice numbers we put up. Yeah.

Gene Hammett: But there’s lots of Zeros in there. Um, but when you think about growth going forward, Michael, what do you think that you’re going to keep doing as a company that makes you continue to grow in a very competitive red ocean space?

Michael Redbord: Yeah. So we’re going to keep doing a lot of the kind of tactics that I think I’ve gotten us here today, but there’s probably a few things we’re going to change too. So for instance, one thing we’re going to do is our blog is an amazing a traffic driver and acquisition vehicle for us. It gives us the ability to rank for new terms super quickly and it gives us the ability to pull in traffic on exists in terms really well. So when I think about kind of, uh, you know, the acquisition part of what we do in marketing, that’s just amazing and it’s almost table stakes today to have kind of good thought leadership as a business. I think we’ve done a great job. We’re gonna keep leaning in there.

Gene Hammett: Let me chime in here. I talked a lot of words sites and I look for content all the time and I would say that hubspot is one of the best at creating content that is useful is something I want to go to as a resource over and over again and not read once and toss.

Michael Redbord: I mean that, that’s been the aim from from day one. It’s sort of one of the core tenants of inbound marketing is just be be helpful, provide value, right. And like, you know, don’t, don’t just write blog posts to rank the ranking is a, is a nice side effect of creating actual valley for your readership. Right? And so I think we’re absolutely going to keep doing that. I think about the way that our, as we kind of moved through the process from acquisition to activation there, and we think about the way that our salespeople interact with folks that, you know, kind of enter the ecosystem, right? More and more what we’re seeing is that the values that we took to make that website great about giving something away that had value, right? And then the positive side effect was a business one. We’re thinking about that more and more in a sales strategy.

Michael Redbord: So as you think about moving from marketing to sales, what we’re starting to do with our sales team is giveaway more software for free, right? And we’re arming our sales folks with more free tools and we’re giving away more stuff or tools for free. We’re breaking off little pieces of our suite that we think of great value on the market place and our salespeople are now able to walk that walk that we had in marketing. So it’s a nice alignment if you’re the person that’s actually moving from reading our blog to talking to our salesperson to using our software for our customers, you know, we’re thinking a lot more just we’re reading through like our terms of service and we’re thinking about the parts that you don’t like, right? Where are the sharp edges in there that as you move through our experience, you know, you’re getting your sleeve caught on and, and you know, that are unpleasant and we’re trying our hardest around those off. And I think as, as you grow the business, it’s very, very tempting to extract value from your customers. And a lot of times that happens through contractual means, um, you know, through of the revenue mechanics, especially in sas that drive your growth. I think we’ve done a pretty good job at Hubspot, but we’re certainly not perfect and I want to make those a lot better as we, um, as we move forward in time.

Gene Hammett: Well, I, I, I love the fact that you’re honest with us in there where you’re moving to, and I’m not that I expect you to shine me on, but I, you know, knowing that you have even more things to do in the area of serving customers and that’s leading to growth. I love the fact that you, we talked about that today. When you think about trust inside of the company and you’re looking at growing fast, what are some of the other areas besides radical transparencies that that’s really driving your success in your market?

Michael Redbord: Yeah, so I mentioned, I mentioned solving for the customer. I think that’s like a massive, massive second one. Um, and I think that as we, as we grow as businesses, we have a tendency to put process over people. And so we’ve tried very, very hard. Uh, I’ll use a word here. It’s not perfect, but it hopefully gets at what I’m trying to communicate. We tried very, very hard to remain human right. And in the way that you interact with our individual people at the company, you don’t feel like you’re talking to a Mega Corp, hopefully. Right. You feel as though you’re getting kind of the straight dope from a person that you don’t feel like that person is cut off at the knees where every other word out of their mouth is like, well, I have to go talk to finance. I have talked to my manager, right. We basically empowered folks and gotten the process out of the way so that our people can be as human as possible when they’re working with customers who by the way are also human. Right? And so it’s kind of part of solving for the customer, but to me it’s more of, it’s more of a tonal thing and how you sort of message how you speak, how you think about your interactions with the external world. We want to be as directed human as we possibly can be.

Gene Hammett: When we talked earlier, we talked about, you know, kind of how do you think about operating a company for growth? And I know you speak about this as a brand ambassador for hubspot. Um, you talked about what you get for speeches. Here’s something…

Michael Redbord: That’s going to be a busy week next week. I’m very excited. Yeah, it’s gonna be fun.

Gene Hammett: What are the core elements of operating a company for Growth? Yeah, so that there’s a lot of kind of cultural and tonal stuff. We’ve, we’ve touched on that actually so far. Women, let me give you one more sort of, um, business mechanic type type thing we talked to before about, you know, there’s marketing, there’s sales and there’s customers, right? And that’s, those are kind of three key constituencies of your business and as, as your prospects from prospect to customer, they’re on that. They’re on that journey. What we’ve found is that, you know, 10 years ago when we started hubspot, the way that you grew was you built an awesome sales and marketing machine, basically this big ole megaphone, right? And you poorly or money into it and it works because out popped customers, right?

Michael Redbord: And nowadays I think that there’s been changes in the way that people think about, um, you know, their lives as consumers and their shopping habits and in particular, you know, we trust less, right? We don’t, we no longer look at companies as sources of truth were very skeptical and we talked to a salesperson. We tend to have already googled everything about that company and we’re pretty well informed and so trust over the last decade has changed. We’re also much less patients, which is culture of immediacy that we have nowadays and so what we found in all of that is that no longer just pouring money in sales and marketing and being a big megaphone work. What you need is you need to have your customers the additive to your growth. So the business mechanic here, that’s different. There’s no longer thinking about customers as an output of the growth machine, but thinking about them as an input to some kind of flywheel.

Michael Redbord: Right? So every time you add a customer to your business, it actually spins faster and your customers somehow create network effects that that basically positively impact your ability to acquire that next customer. And that’s really, really been a big focus of us, I would say for the last few years, and I think you can expect over the next decade, this is where we’re going to invest a ton of, a ton of our energy really making our business work like a flywheel, not like a phone.

Gene Hammett: So when I think about that in the first two, things that come to mind are delivery of results and the customer service. It doesn’t work the way I expected it to work. I can’t get it to work. And I’m sure maybe there’s some other components behind that. Do you see how do you see that? The full components of making that work like a fly wheel.

Michael Redbord: I think a pretty bang on their gene. I mean the first things you need to do or deliver value, right? And what that means is you need to communicate your value clearly before somebody actually signs on the dotted line. Right? And then you need to match that expectation and your delivery and your service and your process. Customer service is a big part of that, especially when things don’t go wrong. I think that, excuse me, don’t go right. That’s when a lot of people think about customer service. We’re thinking about customer service as more of almost a set of guidance. How can we ensure that we can take this walk hand in hand so things never go wrong. It’s more proactive approach, right, and I think if you can kind of solve problems when they crop up and then you can get focused on the path to success and your product does sort of what you set expectations to do, you’re actually way ahead of your competition in the marketplace, right?

Michael Redbord: Because most people don’t kind of do all of those very well. There’s kind of ringing the last inch out of expectation setting. They’re not doing a great job of service. They’re not really helping their customers. So if we can do that pretty well, you can differentiate yourself and in the differentiation lies the real value because what’s your customers see you as a good company? It was different from the competition. Now they actually want to help you grow, right? And then you can activate their advocacy. You can turn your promoters into brand ambassadors. Amazing thing happened when your customers are actually happy with your service.

Gene Hammett: Yes. Now as we start to land the plane here, we’ve been talking about operational growth for a company and we’re looking at things that are going on with hubspot. I would imagine that you have developed some frameworks or some tools inside this that, that might be able to give someone that’s leading a fast growth company. Some insight is something come to mind that you could share with us, Michael.

Michael Redbord: I talked about a Flywheel, right? Which is kind of a physics device. Right? And so let me extend that analogy a little bit more. I think if you want to build a company that operates in the way that we’re talking about here, you need to basically two things. One, you need an instruction manual for how to build the Flywheel, right? And that’s a lot of the stuff that we put out on hubspot academy from our perspective, right? We put out frameworks and sort of in depth education about all stuff. And really it’s the instruction manual as to how to, uh, to do this stuff. And it’s pretty tactical sometimes. And it goes all the way down, how to, how to execute this. And two, you need those tools to build a flywheel because we don’t have the right tools, you can’t build the right thing. And for our tools, that’s our software products. And we give a lot of the kind of academy education stuff away for free. Then of course, you know, we’re a software business. That’s what we actually sell. And so when we, when we try to help folks grow and help them make this all happen, we say, look, go get educated, figuring out if this is a fit for you. And if it is, then we have the tool set and make it happen. Put the two together. That’s where the magic is.

Gene Hammett: Well, I love the tools that you guys have created the content. Um, and, and one of the best things about what you guys have created, I think I’ve even shared this with you, is I know for a fact if I signed up for something to get a white paper or to get some kind of in some level of access to a report that you guys have created within about two to three hours, I’m going to get a phone call. Not with the pressure, not with anything other than, hey, did you get it to hit a candidate, a chance to read it? Did you get a chance? You know, what do you think about that? How does that apply to your business? And they’re asking me questions and it happens not once, not twice every time you guys. And I guess I’m curious like what’s the ruler that you guys put around this? I know it goes into your, you’re using your own dog food, right? You’re using your own system to do it.

Michael Redbord: Yeah. Yeah. Uh, so the, I think that actually to tie bow tie this back into the culture conversation, we don’t have a rule, right? But what we’ve done is we’ve educated our salesforce that when somebody comes to the website and they download an ebook or something, if you don’t follow up with them, I think it’s within five hours, like we showed them a chart of sort of decreasing the warmth over time and the sales team is maniacal about that as a result. So what we don’t have as managers walking around, the reps being like, you’ve got 20 minutes to make this call, but we have as an incentive structure and a set of knowledge for the reps to reps to do that. And I’m glad to hear that it’s actually been helpful. Um, you know, another one of the things that we’ve really encouraged them to do is it’s not always be closing anymore. It’s Glen, Gary, Glen Ross anymore. It’s always be helping, right? And really try to get out front and help build the relationship and through that relationship building, eventually, you know, the sales will come, you’ll make your quota and that’s the right way to do it.

Gene Hammett: So one last question for you in this really just comes back to some of the research I’ve been doing and I love the company. It’s one reason why you’re here. Michael is a growth culture where as a lot of companies are focused on performance measure, the numbers live up to this or not. When I say performance culture versus growth culture, what do you think comes to mind is the most important factors for the success of hubspot?

Michael Redbord: I think this is actually a super interesting distinction. The performance culture versus a growth culture because a lot of companies say, oh, we got a high performance culture. Right? Right. Well what does it actually mean to me? Like a, a culture that’s centered around performance is a culture, a company, and a culture that centered around hitting goals, getting to 100 percent attainment, right? I as a rep need to sell this much, so I’m going to do that much, right? I as a service person need to have this many customer calls. I’m going to do that much. And typically performance oriented cultures are pretty quantity oriented, right? It’s like, you know, make this thing happen. So I have the spreadsheet in the skyworks I think, uh, I think that the growth oriented culture, you have goals, right? But it’s more about uncapped performance and so it’s not just about like, right, as a sales rep I need to hit my number. It’s like how much can I sell? Right. In a maximum sense. And there’s all sorts of ways to engineer that type of mentality will sort of incentive structures that you can use. But I think when you look at your culture and a company, do you think about or people just trying to do what they need to do to keep their jobs and get that extra motion where they’re really incented and organized to have an uncapped amount of execution on captain the upside.

Gene Hammett: Well, I love that distinction because I think it’s something that I’ve been working with and researching in my own work and as I work with companies that are growing as fast as you guys have grown and get to the place where you are in your market. Well, I love to wrap this up with the audience. Wanted to stay in touch with you or or how would you suggest them actually stay in touch with you or hubspot.

Michael Redbord: Yeah, Product nowadays, but I’m a marketer by heart so you can always find me on Linkedin, twitter. I’m happy to kind of have today be the start of a conversation and to have more chats with all you guys off into the future. It’d be lovely if you want to learn more about what hubspot actually does. You can check out hubspot.com/service. There’s a whole lot more right there.

Gene Hammett: Perfect. Thanks for being here. Leaders in the trenches.

Michael Redbord: Thanks so much, Gene. Have a great time.

Gene Hammett: Fantastic interview, right? Hopefully you enjoy all this content. I enjoy making it. I enjoy connecting with you. I enjoy creating the experience so that you can learn something new. I’m always learning something new, what I have on my guest, and then I love sharing the individual hypergrowth tips each Wednesday, so make sure you keep tuning into leaders in the trenches. As always, lead with courage and I’ll see you next time.

Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

In this episode we’ll cover:

  • Creating Good Content
  • Fast-Growing Company Leaders
  • Market
  • An honest conversation about the Business with Employee
  • High-Level of Trust between every Employee at the Company

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