Corner Office: Ryan Smith of Qualtrics, on Building a Transparent Culture

Q. What were some early leadership lessons for you?

A. I definitely had an interesting upbringing. There are five children, and everyone’s been pretty successful. My parents are both Ph.D.’s — they were in academia until the late stages of their careers, when they decided to go into entrepreneurial ventures.

They raised us with the mentality of “if you want it, you’ve got to go out and get it.” I remember when I was 13, my mother dropped us off in downtown Provo one summer, about two miles from where we lived, and said, “You guys are all paying for your clothes this year. Don’t come home till you have jobs.” They instilled in us the idea that “you can be anything you want to be, but you’re going to have to go do it.”

Q. How did you start Qualtrics?

A. I was a sophomore in college and working in L.A. for Hewlett-Packard on a summer program. My father was diagnosed with throat cancer, so I took a semester off school to be with him. He was always tinkering with technology to make the research world better. And when he would come home from his radiation treatments, he couldn’t speak. I bonded with him by helping him with his work. The cancer was very severe, and he needed something to look forward to. So we would work together, and by the time he recovered from the cancer, I had signed up 20 clients and we had formed a business. We’re 290 employees now, and we’ll probably double in size in the next 18 months.

Q. Tell me about the culture you’re trying to foster.

A. We’ve been extremely transparent, but not so that we can be cool. And it’s not about an open environment, because that’s not what makes a company transparent. It’s more around the fact that everyone needs to know where we are going and how we are going to get there.

So we want everyone to understand our objectives and make that available to everyone as we’re evolving, so people aren’t guessing and they’re not internally focused. That’s one obstacle a lot of companies fall into. I believe most companies fail because they’re not focused — they either get focused on other things in the market that aren’t important, so they’re thrashing around without a clear objective, or they’re focused internally on things like politics and bureaucracy. It’s not that these companies aren’t smart companies or lack good businesses. It’s just that there’s a lot of noise.

We want to be transparent because we want to encourage our people to have all the information to keep them focused on what really matters — our objectives and how they’re going to contribute.

Q. Can you give more details about how that works?

A. We took our best product guy and some of our best engineers and built a system internally to help scale our organization by knowing everyone’s objectives in the company. We have five objectives annually for our company, and everyone goes into the system each quarter to put in their objectives that play into those broader goals.

For one of the broader objectives, you might have 230 specific objectives. The reason we’re making all this available is, especially nowadays, you’re hiring individuals to think. We can’t control the way they think. All we can control or have an effect on is the environment around them.

We have another system that sends everyone an e-mail on Monday that says: “What are you going to get done this week? And what did you get done last week that you said you were going to do?” Then that rolls up into one e-mail that the entire organization gets. So if someone’s got a question, they can look at that for an explanation. We share other information, too — every time we have a meeting, we release meeting notes to the organization. When we have a board meeting, we write a letter about it afterward and send it to the organization.

When everyone’s rowing together toward the same objective, it’s extremely powerful. We’re trying to execute at a very high level, and we need to make sure everyone knows where we’re going.

The point is that it’s not like we just said, “Hey, we’re going to be transparent.”  We look at every decision and then say, “Why shouldn’t we share this with everyone?” And we do that instead of the default reaction of saying, “We’re not going to share anything.” It might make some people uncomfortable, but that’s not a good-enough argument. 

Q. Let’s shift to hiring. How does the conversation go? What are you looking for? What questions do you ask?

A. We definitely want someone with a high trajectory. The organization is going to change quickly — we’re not perfect, and we make mistakes. We want to find individuals who align with that, who will add value to the company in whatever role they’re in. Part of that is the disposition to be willing to do whatever it’s going to take, because we feel that if we win as a team, we’re going to win together.

Q. Tell me more about how you get at those qualities.

A. From my standpoint, I’m looking to see if someone’s a “gamer” — that’s what I call it. I want to know the hardest thing they’ve ever done. So if you were in Korea, traveling by yourself, did you go home when things got tough? That’s what I’m trying to figure out because when the ship’s going well, everyone’s good. But when obstacles come up, we’ve got to sit back and rethink, how are we going to navigate these? Will some people want to jump off the ship? Or are they going to be a gamer and want to come in, roll up their sleeves and say, “Hey, this is part of it.”

That’s what I’m looking for. I want someone who’s going to roll up their sleeves when a little bit of challenge comes their way.

I think you can pick that up by looking at someone’s career. When times get tough, do they stick in? Because most good things happen after you hit a rough patch. If things are too easy, we probably didn’t learn enough.

The interview has been edited and condensed.

Article source: http://www.nytimes.com/2013/03/03/business/ryan-smith-of-qualtrics-on-building-a-transparent-culture.html?partner=rss&emc=rss