Traditional business leadership is broken. Here's what we’re doing differently

January 17, 2019 by David Darmanin

By the time my co-founders and I started Hotjar five years ago, we’d had enough experience to know that the traditional approach to business leadership wasn’t working anymore.

Micro-managing, distrusting your team members, and basically creating an environment where people hated to go to work were all things we knew were the exact opposite of what we wanted to create, and would actually prevent us from building an amazing product.

So, in the beginning, we talked a lot about the role work played in our lives. And one thing we felt very passionate about was that work needed to better adapt to our lives, rather than our lives adapting to work.

Since then, we managed to lay the foundations of a company that has grown to 72 team members and over €16 million in annual revenue in just a few years.

In this article, I want to share a few of those principles so that hopefully other teams out there can also change the way they approach business leadership and create companies where people love to work.

Table of Contents

1. Trust from day zero: showing our team we care

A lot of people see work as just the place you go to and come back from to make money so that you can (hopefully) live the life you want outside of it.

But in my experience, this typically leads to people feeling disengaged from their jobs and lacking a sense of purpose. They’re just doing it for the money and because they have to do it. But what do you end up with, as a business owner? Workers who can’t wait for the day to end or for their next holiday break, because they just want to escape from work.

That’s just not an environment where you’ll get amazing results from your team.

So, from the beginning, we knew that taking care of the team and making sure they cared was critical to the success of Hotjar. And one of the most important ways we show we care is by creating a sense of trust in our team members from day zero.

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Hotjar team members listening to a presentation at our recent company-wide meetup in Tenerife

At many companies I’ve worked at, I often felt like I had to prove myself in order to earn trust. The starting point was doubt, and only after a few months of showing that one was capable would one be granted access to the company financials or some key data. Maybe after a year we’d be given a company credit card, and we had to earn our holidays.

At Hotjar, we knew that if we wanted our team members to believe in the company, we’d have to believe in them right from the start. So the moment someone joins the company, we don’t start with doubt. We start with complete trust.

From day zero, every team member has full access to all of our company financials and data. They can go in and see exactly how much revenue we’re making, how many active users we have, how much cash we have in our bank account, and much, much more.

We do this because we believe that if we want the team to own what they are doing and feel like they are a part of something, transparency is key.

We also give each team member a company credit card right away that they can use to buy equipment with a €4,000 home office budget that gets a €500 top-up each year, buy any course or book they want with a €1,000 a year personal development budget, and book the holidays they want with a €2,000 a year holiday budget. We also give each team member €200 a month for a working space allowance and €200 a month for wellbeing-related expenses.

They are free to spend each budget as they like without needing any approval. We let people make those decisions. There isn't some training course that is pre-chosen for them: they have the freedom to go spend the money on their own and decide on that.

The same goes for managing holiday and sick leave. When you join Hotjar, you decide when you want to take time off and simply let your team know. You don’t need permission or approval. Of course, there are processes to make sure we're not creating a mess, but as much as possible we empower each team member to make these decisions and self-organize.

The key to making this work is to carefully vet the people we bring on board—by making sure they instantly feel that they're part of Hotjar and we believe in them, they believe in Hotjar back.

For people coming from a traditional corporate background who never felt personally invested in the company they worked for, that’s powerful.

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The team at OUR COMPANY MEETUP IN Tenerife

2. Treating our team the way we want them to treat our customers

If you want to succeed in today's world, you have to be customer-centric. There’s no other choice.

Everyone is so connected that word of mouth has become more powerful than ever. It can make or break a company. It can determine how fast you grow or how quickly you fail.

But being customer-centric isn’t me as the CEO or founder telling everyone else, "Let's be customer-centric."

That doesn’t work.

Yes, there are tools and methodologies that can help you become more customer-centric, but in the end, it comes back to two things: mindset and attitude. And while a customer-centric mindset needs to start with the people running the company, it has to be shared by everyone in the company for it to work.

For us, the place we start creating a customer-centric mindset is by treating each team member the way we would want them to treat our customers. So, if we want our team to listen to our customers and empathize with them, we need to start by listening and empathizing with our team first.

For example: last year, we hired an outside consultant to help us rework our values. But when we surveyed our entire team, we learned that people felt these new values were too... ‘wishy-washy’. So we went back to the drawing board and came up with a set of values that the team would really stand behind.

Another example: after we had the entire team go through a Radical Candor workshop, we made it a habit to regularly give each other no-bullshit feedback to help each other improve.

That’s also why I regularly set aside a few hours in my schedule every Wednesday afternoon for CEO 1-on-1 time, where anyone in the company is free to share with me anything about how they feel things are going.

Not only does this show we care to the team, but it sets the tone for how we want each team member to treat our customers.

3. Creating a place where everyone thrives

I’ve often seen founders or execs create a company they are happy to run because it’s comfortable for them, but they would never want to work there themselves.

That’s because they’re used to taking the old corporate way of basically telling people what to do. But in a 100% remote company like Hotjar, that doesn’t work. You just can’t micro-manage a remote team, not to mention the fact that people instinctively want to be trusted.

They want to be given challenges and be put in a position to succeed—not be told what to do.

So, for us, the challenge has been to create a company where the execs and leadership would be happy to report to themselves.

We do this in three main ways…

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A Hotjar mission team figuring out the way forward

We strive to let the team lead the way

We’ve seen over and over that success comes from the team, not some rockstar CEO or founder.

Our team members are the ones on the frontlines delivering results. In most cases, they have more information than the exec team does regarding what’s going on and what to do next.

That’s why right now, the exec team is experimenting with determining the North Star, or the main objectives we’d like to achieve as a company, but then stepping out of the way to allow the individual teams to decide how they’ll get there. It’s up to the teams to decide the specific goals they’ll try to hit, the metrics they’ll use to measure success, and the exact actions they’ll take to reach the main objective.

And when the teams come up against a blocker, it’s on the exec team to make sure it gets cleared so that everybody can continue to move forward.

We have team leads, not managers

Many of us have reported to managers in the past who had no clue what they were talking about, didn’t understand the team dynamics, or didn’t understand the nature of the work.

So, at Hotjar, we made some very deliberate decisions about how to ‘manage’ frontline teams.

First, everyone within a team reports to a lead within the team itself.

That way, the leads are on the frontlines as part of the team. They understand exactly what’s going on and can immediately communicate to the exec team should any obstacles arise. Most importantly, they’re not a manager removed from the team.

In remote, this is critical, because a typical manager wouldn’t be sitting in on calls. They’re not usually present, so they don’t have a connection to the challenges the team is facing.

Second, in order to make sure that the lead can effectively support everyone on the team, we set a limit across the whole company of no more than five direct reports to one lead.

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Bernard (center), one of Hotjar’s team leads, with two of our co-founders, Marc (left) and Jonathan (right)

We don’t mix up leadership with seniority

At Hotjar, we are very careful not to forget about another type of leadership—technical leadership or domain expertise leadership. We call that seniority.

This is really, really important because in most companies these two things get mixed up. Usually, the most senior person tends to become the manager, which is not a good way of doing things.

Not everyone with domain expertise is great at managing people, and doing so actually keeps them from focusing on what they do best.

Typically, a team lead is someone who is very good with people and is good at understanding how to bring the team together to get things done. This doesn’t mean that the lead is the senior-most person on a team or has the most technical or domain expertise, or even that they are the ones making the decisions.

Within each team, there might be more senior people who can help with that. In fact, we’re happy if the people with the most domain expertise choose not to become leads so that they can focus on contributing their strengths to the team.

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4. Create company-wide missions

Company-wide missions is something new we’re trying, and it’s really what ties together everything I’ve already covered.

Usually, as a company grows past a certain point, it’s inevitable that lines start forming between departments and the company starts to move slower.

Now that we’re at 72 people and moving towards 100, we’ve started to see early signs of this happening. So, to make sure that we can continue to be bold and move fast, we’ve introduced the concept of company-wide missions.

Basically, we’re bringing people from across different departments and different disciplines to work on a high-level initiative that is essential to Hotjar’s success.

One of our missions, for example, has to do with activating more people that sign up for Hotjar. We’ve called this our ‘onboarding mission’, with team members from product, engineering, customer support, and operations all working together toward one common objective.

This is where we really bring together all the leadership principles I’ve mentioned.

Our goal here is to let the team members own the work they are doing and set them up to succeed.

Building a culture that lasts

Of course, none of this would work without the right team in place. And at the heart of that is a really rigorous hiring process that focuses on hiring for our values (more on this in an upcoming blog post!).

And while we’re still relatively small and young compared to other companies, our hope is that with this approach to leadership, we’ll be able to create a product that people continue to love for years and build a company and culture that lasts.

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A big thanks to my colleagues David Peralta, who interviewed me for this piece, helped me to structure it, and wrote it, and Fio Dossetto, who edited it. 

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David Darmanin

Founder / CEO at Hotjar - David is an entrepreneur and consultant that has generated hundreds of millions of dollars for small to large businesses over the last 12 years. He has run hundreds of tests for his clients… across 19 languages, 12 currencies and 13 industries. In one of his most recent projects he generated $16 Million in life time value for an e-Commerce SaaS.

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