A Culture of Innovation at IPO-Bound Etsy – and Five Lessons It Inspires
“Culture eats strategy for breakfast,” management guru Peter Drucker famously said. Etsy, the peer-to-peer e-commerce site for handcrafted and vintage items, is a compelling case in point. The company is reportedly preparing for an IPO this year, aiming to raise $300 million. The key to Etsy’s remarkable growth strategy is its distinctive culture, attracting and retaining devoted employees and customers. Here are lessons any organization can learn from Etsy:
1. Make culture everybody’s and somebody’s business
Every single employee should feel responsible for a company’s culture. And yet, one strong anchor person who “owns it” can make all the difference. At Etsy, Matthew Stinchcomb, VP of Values and Impact, is this person. As the founders’ first hire, his extensive inside knowledge helps him serve as the quarterback of culture. His designated role signals that, for Etsy, culture is not just a means to an end, it is an end.
2. Have a clear, distinctive purpose
Etsy’s mission is clear, concrete, and actionable: “Reimagine commerce in ways that build a more fulfilling and lasting world.” Etsy is a certified B-Corp, it runs Etsy Labs which offers open crafting classes, and has established a powerful community of passionate buyers and sellers who identify with the company’s values. Dreaming of an “Etsy Economy,” it stands for more than making money, more than just being a business. Whereas many other companies strive to be all-inclusive in their values, Etsy clearly conveys what it is against: soulless commerce, a purely transactional culture, a world without human touch.
3. Be kind, not nice
A strong purpose alone is not enough. And neither are employee-friendly policies and perks. There is a third dimension that matters: intimacy and emotional intensity, moments of surprise and thrill, a sustained sense of adventure in the daily fight against the inevitable routine that creeps into even the most purpose-driven enterprise. Etsy had its own share of controversies and tensions—and that’s a good thing! Etsy is built on the power of evangelistic users, and it knows that passion is a force, not a feature. If you want to create a business that people truly love (not just like), then you need to be ok with such extreme emotions.
4. Keep it real, always
The last of Etsy’s five values demands “Keep it real, always.” Yes, Etsy pursues a noble mission and wants employees to embrace its values, but Stinchcomb is the first to admit that this is not always easy: “If you’re working in customer relations, answering one hundred e-mails a day from frustrated people, it’s a lot harder to connect with Etsy’s core values. That’s why we also need to create a culture that gives employees other outlets for experiencing creativity and connection.” He refers to one of the company’s core projects—Etsy School—which offers employees time and space to share their talent and passions with other colleagues at work and an atypical curriculum: classes range from tango to nail art to city biking. By folding outside passions into the daily rhythms of the workday, Etsy commits to opportunities for self-expression within the workplace, beyond the usual professional development programs that are expected to yield immediate returns.
5. Don’t be afraid of romance
Etsy exemplifies the three pillars of romantic organizations: 1) making an experience memorable and personal; 2) using it to connect with others; 3) and linking it to a greater purpose.
The excellent business does things right, the purpose-driven business does the right thing, and the romantic business does something that feels good and links it to an essential human truth. Companies with a strong culture connect all three aspects. With its celebration of craft, Etsy aims to overcome the alienation between maker and product, and restores the romantic aura of traded items in an age of always-on availability and infinite digital reproduction. It uses peer-to-peer commerce to foster a deeply romantic quest: that a more humane economy is possible.
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Tim Leberecht is the author of the book The Business Romantic: Give Everything, Quantify Nothing, and Create Something Greater Than Yourself (HarperCollins) and the chief marketing officer of architecture and design firm NBBJ. His TED Talk “3 Ways to (Usefully) Lose Control of Your Brand” has been viewed by nearly one million people. He serves on the Values Council of the World Economic Forum.
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