Just as your strategy changes and your target client gets better, your culture shifts as the company grows. There are defined inflection points that will help you anticipate the culture shifts as your company grows. My guest today is Todd Olson, CEO of Pendo. His company was ranked #73 in the 2019 Inc 5000 list. We talk about the main inflection points as a company grows to 500 employees. In this episode, you will learn how to lead culture shifts as your company grows intentionally.
Don't miss an episode. Subscribe to Growth Think Tank.
Target Audience: Todd Olson is the CEO and Founder at Pendo. Pendo helps companies drive software adoption, leading to happier customers and more effective employees. Pendo customers include the world’s leading software companies and digital enterprises. Through its editorial site and community ProductCraft, sponsored events, and podcast, Pendo aims to support the success of product people everywhere. For more information, visit: www.pendo.io
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.
Such as things like the person who worked hard, the person super-competent, there are behaviors, there are norms expectations you have that are very often unwritten. And I think the sooner you document them, the sooner you understand them, the better. You know, because it influences future hires.
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs of the fastest-growing privately held companies. I am the host, my name is Gene Hammett, I hope leaders and their teams navigate the defining moments of their growth, are you ready to grow?
Gene Hammett [0:35]
Your business, but it changes over time. In fact, culture changes at certain inflection points, relative to the number of employees you have. For example, when you have 10 employees, it’s much easier to schedule a lunch than when you have 100. because not many restaurants would have been able to hold 100 people, but they’d be easily able to hold 10 your communication style will have to change as the company grows. Well, today we look at the inflection points of culture through a company that’s reached 500 employees give or take. And we have with us, Todd Olson of Pendo. Pendo is an incredible platform. It’s a cloud based business that allows increases and drives software adoption. Todd and I talk about some of the things he does inside a culture that is different now versus when he had 30 employees or when he had 150 employees and some of the different inflection points that are changing what we look at the specific things that he is doing that you can learn from that you can actually apply to your business, I go deep into some of those very tactical things that he measures and how he improves culture. You’ll learn from Todd, who’s been through many changes, as his culture has evolved over time. So tune in to today’s episode with Todd.
Gene Hammett [1:49]
Hey, Todd, how are you?
Todd Olson [1:50]
Great Gene, how you doing?
Gene Hammett [1:52]
Fantastic. Great to be here. Love your background.
Todd Olson [1:55]
Thank you. Thank you.
Gene Hammett [1:57]
You’ve been on the show before but I’d love for you to share with our audience again. Tell us a little bit about the piano. Yeah, yeah, absolutely.
Todd Olson [2:03]
So Pendo is a cloud platform that helps other companies producing digital software to drive more adoption of it. So if you think about software, either that our customers are using, or we’re using internally, we help measure all the behavior, how what people are using and not using. And then we combine that with the ability to educate nonbored and really drive usage of it. So it’s all about the adoption of software.
Gene Hammett [2:29]
Well, I remember that conversation before was about core values. And I’m sure that’s still a central part of your company as it’s grown to 500 employees. But a lot of things changes with culture. So today, we’re really going to focus on kind of the different milestones, or maybe the moments where you felt the tension, and you had to shift the way you saw culture, through your growth through to 500 employees. So I’m gonna let you kind of go back to where do you want to start? Where was it easiest, and culture?
Todd Olson [2:59]
Level easiest is really, really tiny. You know, I said, there’s, there’s an the first inflection points around 30. But before that, you know, look, when you’re below 20 or 30, people, you can make a lunchtime reservation, and you can all have lunch together. Now I’m going to never forget the time where we looked at the number of humans we had, and we’re like up, what restaurants gonna hold us right, there is a shift because it means that you’re going to have to do smaller groups, you’re going to start rethinking the way you build deep relationships. But now those original people, most of which are still at the company, by the way, six, seven years later, I have really strong bonds with them. Now one of the sadness is actually it’s not 500, those original people, I see a lot less. It’s just the makeup of change and things such as that. But yeah, I think that that first, the first inflection point was 30. ish.
Todd Olson [3:51]
That’s when we’re hiring enough people, where we actually had to really write down our values. Like when you’re original. We had what I call aspirational values. Those are things that we thought we wanted to be like, after a couple of years, and we had 3040 people, we started hiring a bunch, we started noticing, oh, this person wasn’t values fit, or Oh, this person is values fit. So and after the two-year mark, we sat down as a leadership team and revamped our entire values. we rewrote them, reworded them add new ones remove one, all based on how we were behaving. And that’s kind of our set since then. But yeah, I think that’s been an interesting dynamic. I think that’s carried I carried us that 32 Well, over 150 200 You know, I think there is a gap there where we’re doing a lot of things right when it came to values, but now at 400 to 500. I think we’re starting to see new challenges emerge, I think I think international is played a big part in that. And we are now we’ve got now offices in Israel, UK, two offices in UK and now Japan. I mean, I guess Very, very different, you know, and those countries culturally, so we’re kind of fully international lots of big change that we’re working on absorbing.
Gene Hammett [5:10]
What time? Let’s go back to 30. Again.
Todd Olson [5:13]
Gene Hammett [5:14]
A lot of people would think but less than 30. You don’t need to focus on the culture that much. But I think you feel differently about that. What would you go back and tell your younger self about 30? Under 30 employees.
Todd Olson [5:25]
Start to understand what behaviors are right and which behaviors are wrong. We had people leave the company under 30 people why didn’t it work? That’s the question you understand, or why is someone like oh, my gosh, that person feels like they belonged here since day one, like, write it down, look for the common characteristics, such as things like the person worked hard, or the person super-competent, there are behaviors, there’s norms, expectations, you have that are very often unwritten. And I think the sooner you document them, the sooner you understand them, the better. You know, because it influences future hires,
Gene Hammett [5:59]
Your solid leadership. Was it different than it is today at 30?
Todd Olson [6:03]
Ah, I mean, my actions are, of course, incredibly different. My style, a little different. Yeah, look, I think that’s one of the greatest things about my job is I get changes frequently, you know, so I’m always learning new things, you know, I can’t behave the way it was five or 10, I was much more hands-on than I am now. I think the thing is, I have to assume our size and scale. But a lot of the things are happening, the company that I had no idea what they actually are. And sooner I accepted that the better I felt because I like trying to know everything going on and will want it’s near impossible task. Now, I still describe my style as hands-on. But that’s probably a misnomer, because like when people think hands-on, they probably think I do, or I know everything that’s going on, and I definitely do not. And I’m totally okay with it.
Todd Olson [6:52]
I’m assuming that the people beneath me know when to get me involved in things and when not to, you know, that that that every once in a while, I’ll discover Hmm, maybe I should be involved in this I was in or you don’t really need to tell me those things going forward. Because I you know, you sound like you guys had it covered. So I have to, you know, inspect and adapt every once in a while and tweak. But that’s part of growth, you know, and then every once in a while, like I was in a meeting this morning, we’re talking about something I was like, I had to get involved in it. And in the future, I don’t want to get involved in it. I think you should be able to handle it.
Todd Olson [7:24]
And look, I didn’t get involved a lot in I spent a couple of hours working on something. But that’s a couple of hours I in the future want the team to figure out ways in which to get what did I do? And how would you do that before I would have so I don’t do anything, you know, so I try to ask those types of questions. Yeah, I think so if I’m doing something, something’s wrong, right? Yeah. It’s a great way of thinking of a CEO.
Gene Hammett [7:44]
When you have 500 employees, it’s hard for you to help everyone with their individual problems.
Todd Olson [7:50]
Yeah. And I’m hiring people that are honestly better at their jobs than I am as experts. So if I’m doing something, something’s wrong. You know, I should be not having to do people’s job for them.
Gene Hammett [8:03]
I want to kind of go into this inflection point, you sit around 150 200. I typically see around 100 employees. I don’t know if that’s just a round number. But it was a little bit later for you. Why do you think that that inflection point was so deep into your growth?
Todd Olson [8:17]
I think because we were investing so much in values, we had been very fortunate to set up key recognition systems pretty early in the company’s history, we have a ton of feedback loops around weekly pulses, or people saying a one through five scales how they feel quarterly ends. We’ve been doing that for years and our company’s history. So I think we’ve been so deliberate about and so intentional, I think it’s helped. I also do a one on one with every employee after the first 90 days, that’s helped. I still do that, by the way.
Gene Hammett [8:49]
Let me put a spotlight on a couple of those things. The peer recognition, we’ve talked about that before. But let’s just give us the brief you’re the way you use peer recognition inside your companies.
Todd Olson [8:58]
Yeah, so we have seven core values. And we encourage people to tell stories when they witness those core values being lived. They have a kind of a process for where they can call someone out publicly get posted to our slack messages. People can pile on it, they see it’s all the same thing and kind of add up and then each person can recognize one person per value per month. At the end of every quarter, we tally all the numbers up again that award people that were the most honest that quarter are the most transparent that corner is the most customer-focused that quarter. So it’s a way to just kind of highlight and tell stories. I also take a story per town hall, which is every other week, and spotlight it and it’s not just spotlighting the person who lived the value. It’s spotlighting the person who recognizes the person for living the value because recognition is so important. But for me, it’s it this is critical because it helps scale appreciation and everyone wants to be appreciated for what they do.
Gene Hammett [10:00]
I have shared with you a story before I cut on the recording. And it’s absolutely free because no money that to encourage recognition across the peer network, you may give awards that may have some monetary value to it. But that’s just your kind of reinforcing what you want more of this peer-to-peer recognitions absolutely free. When you also mentioned a weekly pulse, give us an idea of what that looks like.
Todd Olson [10:23]
Yeah, I feel every week one through five. And as a management team for four years, we used to talk in length about people that were below three, just kind of searching for pockets of Hey, maybe his department feels unhappy, or maybe they’re all stressed, or maybe like there’s more pressure than they want. That’s been a really, really useful guidepost. I will say it’s something from fast-forwarding today, it is harder to maintain past 450 than it was it like, one 150 I think it helped us get through that time for 50. It’s hard again, for some reason, I don’t exactly know why. But we’re actually just diving into it. But we’ve seen the usage of that system go down in there also. I yeah, I think it’s Yeah, there’s a lot of new people. I think it’s hard.
Gene Hammett [11:12]
And then you also mentioned the quarterly, I said NPS but is it really NPS, NPS?
Todd Olson [11:18]
Yeah, employee NPS? Yeah.
Gene Hammett [11:20]
You might need to explain that to some people because not everyone knows what NPS is. So guess Yes.
Todd Olson [11:24]
It definitely is a zero through 10 scale question, which asks, how likely are you going to recommend and the MPs question is specifically for us would be how likely would you recommend pendo as an employer, and the way it works is that nines and 10s are promoters. Seven and eights are neutral, and then six and lower our detractors and take the percentage of promoters minus the percentage of detractors and we have a number. So the neutrals all fall out. And yeah, we’ve been measuring that on a quarterly basis for four years now. The overall number kind of meaningless. Me, I know what it is, of course, and we do look at it. But what we really use is the department by department numbers, the office by office numbers.
Todd Olson [12:15]
I mean, I can tell you, Gene, I’ve seen some turnarounds that are exciting. Like Israel, we bought a company in Israel, and we bought the company, the NPS was somewhere in the 30s. We need some leadership changes. And honestly, I was pretty confident making those changes, so I’m not gonna lie. And then the MPs dropped, we started losing people attrition went up NPS down and went like minus 20 to one from positive 30 to minus one, it means more people in the office would not recommend and recommend that’s not a good thing. And I did some troubling, like trips, they’re like really, really was debating what to do and then but then it just took some conviction that, hey, we did hire the right leader. And I liked what he’s saying. And he’s got to give him some time and happy to report. As of our most recent NPS survey and the end of the quarter a few weeks ago, they’re positive at 550 points higher than the original. And like that, you know, that’s measurable. It’s It feels like and I can tell you, I felt every peak and Valley on that one. So like these numbers reflect reality like and that’s just one office story that has a positive outcome. But yeah, we use these scores, pretty religiously in our company so.
Gene Hammett [13:25]
I love to talk to my own clients about how they make something intangible like culture and make it actionable. And what you’re actually talking about is you’re identifying which teams are performing, you know, in this in this, would they recommend others to work there, and, and even the pulse things. So this is something you really believe helps you to be a better leader to give you insight across numbers of teams, right?
Todd Olson [13:50]
Yeah, yeah, look, I mean, one of our core values is transparency. And, you know, I was looking through the verbatims for me MPs, they’re all anonymous. So I can’t see who’s writing what, but I see the ones tagged as transparency. And you know, there’ll be some example, you know, this thing happened in the company didn’t quite understand why. And I’m reading it. It’s like, Huh, that’s interesting. Yeah, it’s interesting to help me understand, we should have like, communicate these things a little better. We should have been crisper on this we should go out of this is I mean, it’s good feedback. You know, I mean, a lot of it takes to heart helps shape the future things like compensation. You know you’ll see certain teams and more questions around compensation. Now there’s Okay, well, maybe our benchmarks are off for that department. That’s something we can take to our people team. And like, Hey, we’re seeing as it can’t be random. Can we look at this in more detail and do something about it? These are the kinds of things that we use all this data for, but I mean, I think it makes a stronger.
Hold on for a second. Todd just talked about transparency. He actually mentioned it a few times. It’s one of the core values. Let me give you a little insight into transparency. Everybody has a transparency line. That is where you believe you should be transparent and where you shouldn’t and When I talk to the fast-growth company, that transparency line is way far skewed to the other side of what most company feels like is right. What I mean by this is fast-growth companies are very transparent. They actually love to be able to share their numbers, their financials, they share openly, strategies, they really do want people to understand and feel included inside of what’s going on in the organization and not excluded. And if you’re not transparent, you really do run the risk of excluding people. And that really damages their sense of ownership, and they’re feeling connected to the overall vision and mission of the company, I bring this up because you want to make sure that you are as transparent as you can be. And if you’re not transparent, you won’t be able to create that working environment that people love and perform well in. So with that, back to Todd.
Gene Hammett [15:49]
Todd, we’ve gone through the inflection points of 30 and 150. Now that at 450, you said you’re feeling you feeling that inflection point again? And that’s coupled with what you’ve seen through COVID? And what everything that’s changed here. So what do you focus on now as it relates to culture?
Todd Olson [16:05]
Well, I think we’re revisiting our values, not wholesale, we’re going to get rid of them. But we’re being kicked off a process a few weeks ago, where we’re going to take a hard look at each and every value serving us are there some unwritten values that we should add, or maybe codified more strongly, I think COVID, you know, you go back to the beginning when we’re all able to go to lunch. Now, no one’s going to lunch anywhere ever, right. So like, like, I find that what such translating into is just the relationships we have as a team is, are more strained, they’re weaker, they’re being challenged more than they ever have been before. And it concerns me and we also you don’t need anyone, it’s kind of hard to hard to really understand the intent behind some of the behaviors like you’re not getting the passion of feeling through and zoom as much as you are face to face.
Todd Olson [17:00]
So it’s a challenge, you know, and this world is this last 12 months, I’ve also seen an increase in devices in this new world around us and it’s started to affect the company. You know, I’m you know, politics coming in that actual politics is one of our top items of synergy NPS survey, you know, some people don’t like it at all, some people like it, some people think it’s one-sided. Everything you’ve ever imagined, like in the history of the company, I’ve never had anyone complain or even comment on it. And now it’s a theme, like an active theme. So that’s an area we’re trying to wade through understand how to how to. And we’ve been around you what the source seven years of more than one election year. So like, this is not the only time we’ve been through this. So let’s do that’s an interesting dynamic.
Todd Olson [17:44]
Now, we’re a lot smaller. When we went through the prior election years, maybe we’re trying to see if that’s the phenomenon that we’re now seeing. And that is, that’s a very us-centric view, of course, because the rest of the world is on a different cadence. But that’s one thing we’re considering. But yeah, I’m we’re seeing people have argued and bicker specifically over mediums like slack and other chat channels, much more so than before about non-work stuff, mostly non-work things. Yeah. And it’s one thing to like, share news, like, Hey, I saw this article, it’s another thing to kind of take a little step further, little steps to the negative side. And yeah, I think it’s also symptoms of the world around us. I think we’re relatively quick, quick to judge these days. It’s quick to judge everything from politics to your opinions on COVID. And like, like how often you wear a mask? Or where you go? And do you go to a grocery store, you go to a grocery if you have almost religious opinions about this. And they differ. And yet, we’re all part of one team. So I think I’ve been stressing this notion of we’re a team and that doesn’t mean we need to, like be best friends or religiously believe in everything. But it means that we have to operate together to achieve goals. And I think there’s something missing in our values I got I just, that’s my belief, our values must be missing something or we wouldn’t have these issues. You know, that’s my bet.
Gene Hammett [19:07]
I can see. Cuz I know how important the values are to you and the organization and the impact it’s had on you as you’ve grown. One last question here. Todd, your measure seems like a lot of stuff. Do you measure anything within your own leadership and how you’re expanding as a leader?
Todd Olson [19:21]
I’m measure I can’t say that I have a quantitative measure. And I can say that I invest in myself. So I’m part of a CEO coaching group. It’s a group of half a dozen other CEOs we meet quarterly. I have a coach as part of that as well. I think within that process, it’s pretty disciplined over me listing out my top priorities, things like that. I mean, is there a metric for me, I rate myself on a quarter of how I think I’m doing you know, I typically have myself kind of in a there’s like, green is excellent. Blue is solid. I mean like typically I consider myself doing a fairly solid job. I mean, I always feel like I could do better. But I don’t. I don’t think we’re like, I think we’re hanging in there. Like, that definitely measures me. But it’s self-graded. Yeah, so I don’t I haven’t surfaced anything from our employees that could be an interesting measure of how well they think I’m doing so we asked about leadership in general and not about me personally.
Gene Hammett [20:24]
Well, I appreciate you sharing this with us one last question. You mentioned the CEO coaching group, and we don’t need to plug any specific groups. But what is the real value that you’ve got for investing your time and money probably into being a better leader through a peer-to-peer group?
Todd Olson [20:39]
Well, there’s there are two facets. Of course, it’s independent perspectives on your business. And this one, because there are like six other peers, they all have a different perspective, different backgrounds, different ideas, what works doesn’t work. So being a CEO is very, very lonely. Like, unless you’ve actually sat in the seat, it’s kind of hard to understand and have empathy for what it means so so being surrounded by people who have empathy like it’s easy to give advice when you’re not doing it. It’s much harder when you’re new to doing it because you realize the various challenges I got to one foot one helpful. The second thing actually, just as much as me getting advice on my business, and when I’m doing giving advice helps me grow as a person. Because, you know, as I’m forced to say, Okay, what advice would I give this person? I have to be intellectually honest and saying, am I doing the same thing? It’s one of the Caribbean it’s told, you know, someone else, hey, I do this. But the question is, am I doing it?
Todd Olson [21:39]
I think that that two-way, style is very, very useful. So look, it’s like, you know, it’s like anything to like, checking into. The nice thing is, you were having some consistency, people know what I did three, three months ago, so they can check it, how did that thing go? and Todd, like, keep me out. It’s almost like your New Year’s resolutions that people post on social media because they want to make sure they’re held accountable. Yeah, it’s a way to be held accountable in a safe way, not like your board holding you accountable, are investors holding you accountable. And that, of course, they’re gonna hold you accountable at their job, my job, but this is another way to hold accountable. independent of that.
Gene Hammett [22:18]
Todd, thank you so much for sharing all of your insights on culture and leadership here with us today.
Todd Olson [22:24]
Awesome. Thank you, Gene.
Gene Hammett [22:26]
Fantastic conversation with Todd. I really love him talking about culture and those inflection points. Hopefully, you took notes, hopefully, you really understand how you could measure culture. And you can make some very specific changes just by doing a few different things differently. Well, we also talked about his group coaching that he’s receiving through being a CEO of a fast-growing company. But we didn’t get into the specifics of what that group was. But I do have a group. If you’re considering joining a peer-to-peer group with other CEOs or founders of fast-growth companies, their love for you to take a look at fast growth boardroom is something I really excited about bringing to you exactly the same reasons that Todd said that they’re valuable.
Gene Hammett [23:06]
I’ll share with you some of the real key points of this. When you have a peer-to-peer group, they will challenge you to see different perspectives, they will challenge your own thinking so that you grow beyond just what is first comes to your mind. What really does work and other companies will also see where you could actually let go of some beliefs and things that have to be reframed and shifted so that you can actually continue growth, you’ll see your blind spots, the places where you sabotage yourself through these conversations. But gathering with others that are like-minded and that you can trust is really a viable way for you to spend your time and to grow as a person, as a leader, and as a CEO of your company. We create these moments really grow faster. You get private coaching inside our groups, fast report. All of this combined. You will get back if you want to find out more about it just going to fast reporting com to find more details. As always lead with courage will 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.
A QUICK FAVOR
And lastly, please leave a rating and review for the Growth Think Tank on iTunes (or Stitcher) – it will help us in many ways, but it also inspires us to keep doing what we are doing here. Thank you in advance!
If you want more from us check out more interviews: