What Works in Corporate Culture?

Robert Hohman is co-founder and CEO of Glassdoor, an online community where employees and job-seekers post anonymous information on salaries, company reviews, interview questions, and more, providing a valuable insider's glimpse of what it's like to work at a company. Hohman was on Expedia's  (NASDAQ: EXPE  )  original team, and helped take it public in 1999. He most recently served as president of Expedia's discount division, Hotwire.

Glassdoor data can be used in many ways; at five years old, the company will soon be able to provide information on trends over time. Even now, there are lessons to be learned if you know where to look. In this video segment Hohman shares the case of Caterpillar (NYSE: CAT  ) , which saw its rating rise even in the midst of recession-driven layoffs.

A full transcript follows the video.

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Tom Gardner: Do you ever publish or keep internally data on the direction of ratings? "They were at 3.2. They're now at 3.5." Or, "They're at 4.1 but last year they were at 4.7, that looks concerning."

Robert Hohman: We are on the cusp of having a long enough history of that data and having enough liquidity of that data to be able to make it something that's available on the website. It's something that we think a lot about also, because we know it would be valuable to the community to see how things are changing over time -- both for a CEO and for a company.

We certainly have it. We keep it. We make it available upon request, and it is something we think would be valuable for the community.

Gardner: We did a study with Brendan Byrnes, studying the ratings of public companies -- the most highly rated companies and how they had performed over the last one, three, five and 10 years.

Obviously, the data doesn't go back that far, but as we've said, one of the things we love to find are data sets that haven't been perfectly scrubbed and managed and analyzed by everyone else, and therefore all the value has been wrung out of them. We like to find them early -- that the people are still struggling -- and you have to use some artistry and intuition to try to figure out what's happening.

I guess I'll ask you, Glassdoor has a 4.5 rating -- an awesome rating. We're going meta here. Glassdoor's Glassdoor rating is a 4.5. What level of commercial value creation do you think is coming at Glassdoor because of the culture that's feeding such a high rating?

Hohman: I'm a strong believer that culture and vision are probably the two most important things that have got to be nailed at a company, especially when it's at that very young phase, but even when it's large. The Glassdoor rating is a reflection of what I deeply believe, which is that we have to have a clearly defined culture. We need to lead in a transparent way, because I think it leads to better decision-making, it leads to a better workplace.

We believe that what we're doing is making people's lives better and helping them to make better career decisions, and so we practice what we preach here at the office. We're very, very transparent, and all of that manifests itself, then, in the rating. I don't think of it quite so much as having a high rating helps that, but having culture and all those things is why we have a rating.

Gardner: Are there things that you have learned from studying other companies on Glassdoor, that you have deployed inside of Glassdoor? What are you doing differently as a CEO because of the tool you've created?

Hohman: Communicating -- especially in bad times. I'm flashing back now to the recession. We watched Caterpillar go through a really tough layoff at a time when a lot of big companies were having to lay off, as we were going deep into the recession. Caterpillar did such a great job communicating why they were laying off, how many, where they were going to be, that their rating actually went up through it all, believe it or not. It was unbelievable. They stood out among a bunch of different companies.

As we looked again at this, and we saw it a couple of different times at a couple of companies, it became crystal clear to me that even -- especially -- during difficult times, that is the time to be really transparent with employees.


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