The April 9, 2016 issue of The New York Times contained an opinion piece severely critical of various “new technology” firms that claim to give workers autonomy (what firm doesn’t?) and boast of their flexibiity and employee-friendliness, but in fact often turn out to be a “digital sweatshop.” (Dan Lyons, “Congratulations, You’ve Been Fired”). The surroundings are pleasant: plenty of light, comfortable lounges, exercise rooms, even bean bag chairs in some cases, and a mode of operation that is casual in a business casual sort-of-way: few or no suits, first names for every one, open office spaces. What is not highlighted in these companies’ portrayal of their happy workers is that “flexible” hours often mean being on call 24 hours a day, that liberal vacation policies are meaningless because in the internet-driven 24/7 global economy vacations can at any moment become work if your smart phone is anywhere within 100 miles of you, and that beneath the pseudo-casual exterior lie the same basic power relations that exist in most employer-employee relationships: the boss may dress like you or even worse and he (especially he in many of these companies) may be called by his first name, but he still has the power to make your life very miserable in any number of ways. The high tech company that has recently been in the spotlight is the appropriately named HubSpot, where among other indignities, “graduation” ceremonies were held for employees who were being terminated.
What I find interesting about HubSpot is not its bad behavior (for some of which, by the way, it was smart enough to apologize) but its faith in corporate culture as the key to success. HubSpot has published its “Culture Code,” where of course it values employee “autonomy and ownership,” but the code also makes it clear that the work hours are “Whenever,” the workplace “Wherever,” and the job tenure “Whatever.” HubSpot may see this flexibility as liberating; others could see it as something closer to the world of arbitrary authority described so carefully by Franz Kafka. HubSpot wants employees to “commit maniacally” to its mission and metrics. HubSpot also admits that when it hires it is looking for “culture fit” over skills and experience, since it believes that “Compromising on culture fit is mortgaging the culture.” The problem with “culture fit,” however, is that it is very often used an excuse to exclude anyone who does not look or act exactly like the current employees. HubSpot even admits it has a problem with diversity. I wonder why.
But whatever we think about HubSpot’s culture and however many business gurus preach the importance of corporate culture, is it true that culture is the key to success? If you read biographies of business leaders or books on the history of American business, such as Ricard S. Tedlow’s excellent Giants of Enterprise: Seven Business Innovators and the Empires They Built, you find that success can be produced by very different firms, from the traditionally hierarchical (IBM in the days of Big Blue))to the supposedly flat (Apple), from the closed and secretive (Apple can fit this category) to the more open and apparently transparent such as Microsoft, from the employee-friendly such as Eastman Kodak in its heyday to the awful such as Revlon under the leadership of Charles Revsen.
Management fashions come and go. Today being flat, flexible, and open-structured is in vogue, while being hierarchical with fairly structured planning mechanisms and a stress on corporate decorum is consigned to the trash along with last year’s calendars. But is the failure rate of these contemporary firms with their open office/blue jean/bean bag culture any lower than it has ever been for new firms? From what I know, the failure rate is still incredbly high–at least 80%. The office culture guarantees nothing; indeed it may even hinder success if you spend so much time networking with your co-workers that you don’t have time to think for yourself. And are there firms that remain successful by running more-or-less as they always have? Judging by the continuity of brand names in the supermarket and elsewhere, one would assume there are.
Culture is not the magic wand that its proponents claim it is. The keys to success in business are having the right product at the right price at the right time. The intelligence and diligence of the firm’s leaders count for a great deal, more than our gurus are sometimes willing to admit. No culture can shield an organization from bad decisions and no culture can magically produce good ones. All around the country there are attempts to reproduce the success of North Carolina’s Research Triangle or California’s Silicon Valley. None have really worked in the way their proponents have hoped, in part because the momentum of being first really does make a difference. Sorry HubSpot. There seems to be no magic recipe we can all follow to organizational success. If HubSpot eventually becomes a profitable success (it claims to be on the way), it may be despite its somewhat goofy “culture” and because some group in the firm made smart decisions and had the discipline to carry them out.