HubSpot’s Yamini Rangan on the challenges of sudden power
In the past two years, Yamini Rangan, chief executive of software company HubSpot, has faced more upheaval and been forced to draw on a wider range of management techniques than many bosses face in a lifetime.
But nothing quite compared to the moment in March when Brian Halligan, 54, the company’s founder and, at the time, its chief executive, broke 20 bones in a snowmobile accident. Months of painful surgeries loomed. It led to a phone call in which he asked Rangan, out of the blue, to take charge for an indefinite period.
The risk of a “leadership vacuum” was real, Rangan, 48, says now. “You don’t have decisiveness, you don’t have someone to make a decision, to call what’s important.”
A little more than a year after joining the company as its first chief customer officer, the Indian-born executive says she realised a conscious change in style was needed. Sometimes, in the past, she had “just run from one job to the other, one transition to the other, not quite being reflective, thoughtful and deliberate”.
The key was to consciously fit the management style to the needs of the moment. “You cannot and should not assume whatever has worked for you in the past is going to continue to work for you in the future,” she says.
Coming in the midst of the pandemic and a boom in the software business, it has all been a lesson in “how adaptable and flexible you have to be in uncertain times,” she says. It has also been a lesson in the strains on both companies and individuals at such times.
“I felt, both personally and as a company, we’ve really flexed and flexed, there were points where it felt like you’re going to break,” she says. “And then we’ve been able to come back up.” That resilience she says, has been “sometimes draining, really draining”.
In September, when Halligan was ready to return, he opted for a position as full-time chair, confirming his stand-in as the permanent CEO. Rangan still expresses awe at that moment — something she never expected, she says, given her start in life in a small town in southern India that didn’t even have a high school.
The drive and determination it took to get to the top at a software company now valued at more than $30bn are evident in how she goes about the job — as are changes she has made to her personal approach along the way. While growing up in a conservative rural area, “you’re on mute, you’re not expected to speak up,” she says. So she threw herself into her studies, coming top in her engineering class before moving to the US for a masters degree in computer science.
The US, with its emphasis on participation in the classroom, forced “a huge cultural adaptation”. Learning to speak up “drove me nuts”, she says, recalling how she wrote down things that she could say in class the next day.
But fitting in with a new business culture also brought uncomfortable compromises. “I was always the different person in the room,” she says. Her first response was to copy what others were doing, before gaining the confidence in the past decade to set her own terms: “This is not authentic, this is not who I am. I don’t like golf. So I’m not going to learn golf.”
In the immediate crisis that followed Halligan’s accident, Rangan focused on two things: a united leadership group and decisiveness. It meant getting all the top executives to be open. “When you’re a new team, and you have a new kind of interim leader, the question is, what are you going to share? What are you not going to share?”
After that, it was about “making sure that we made decisions quickly, and then communicate the ‘why’. Those were the things that are needed in any leadership vacuum.”
Having two jobs also meant “a relentless pursuit of what you need to do, you’ve got to bring that energy to the team”, she says. “The last couple of years, we’ve all talked about burnout, because work is never-ending.”
It is all a stark contrast to the role Rangan was originally hired for. An engineer who had devoured the lessons from a decade spent at the more mature software companies Workday and Dropbox, she was brought in to instil some of the same disciplines at the fast-growing HubSpot.
She calls it “pattern recognition” — having the experience to recognise, from the data, how a company is running and what adjustments are needed for the next stage in its development. Fine-tuning data-driven businesses like this is both art and science, says Rangan.
It has meant introducing new metrics to force a greater focus on customer satisfaction. Instead of customer churn — a crucial indicator in any subscription business — the spotlight shifted to the revenue retention rate, a key measure in the software industry, of which she says: “It measures customers that join the company, that stay with the company, that get value with the company, and continue to buy from the company. It’s core.”
A second new metric — the company’s net promoter score — was also elevated to a central place. It is now measured weekly and has become “literally the first email of the week”.
But the pandemic, when it hit, brought the need for an altogether different management style. The company was thrown on to a “wartime” footing, she says, forcing it to react quickly to help customers who themselves were facing a crisis.
Three questions for Yamini Rangan
Who is your leadership hero?
Mike Stankey (vice-chair of Workday). He is an incredible mentor and one of the best operators in the industry. I learnt a lot from him about pattern recognition, connecting the dots and leveraging data, and then making decisions about where we need to go.
What would you be if you weren’t a CEO?
An architect. I had this little notebook, I sat outside drawing different buildings. When I was young I told my mom, I’m going to be an architect. She said no, you’re going to the US, I’ve heard it doesn’t pay you there. Engineering has worked out great.
What was your first leadership lesson?
You need to go slow to go far. My tendency was, just go fast — I get to the answers really quickly, that was my sprinter mentality. But as a manager, you look around and there’s no one following because they don’t feel like you empowered them. So you have to go slow and ask questions instead of giving answers, and to enrol instead of provide that vision directly.
That was followed by a boom, as many companies turned to software to maintain their operations. HubSpot, whose shares have risen six-fold since the start of the pandemic, has added 2,000 people in the past two years, taking the total to 5,000, and says it expects to triple its workforce by the end of 2024.
Through all of this, Rangan has had to invent a new style of working, both for the company and herself. Living in the San Francisco bay area when most of HubSpot’s operations are on the East Coast, she always expected to have to learn new techniques of remote management. The pandemic has made that much more complicated, forcing hybrid working on the whole company.
Her answer has been to set aside more time for regular meetings with workers at different levels in the organisation — something she claims to measure with characteristic rigour. With hybrid work, she says, “we’ve proven to ourselves that productivity is not the limiter. But human connection is the potential limiter.”
The strains of the pandemic, and of finding new ways to work, have also brought a recognition that deeper changes are needed. At the company level, Friday has become a day without any meetings, to encourage “reading and reflecting and making time for thoughtful decisions.”
At the personal level, it has meant setting aside specific times to spend with her husband and children. “It takes a certain amount of courage and conviction and thought to be who you are authentically,” she says — and for her, a big part of that is “actively being involved in raising two kids”. For other women earlier in their career to develop the same self-confidence will take “role models, and women to talk about the decisions that we’ve made in our careers”.
Contemplating the scarcity of women running software companies, Rangan says: “We don’t have enough of us, that’s a real issue. We need to have the floodgates open and have a pretty big shift in terms of the number of women — the number of people of colour — in leadership positions.”