3 Things Mature Companies Do to Drive Innovation

Insights from the latest guest on my Office Hours podcast:

Christa Quarles, CEO of OpenTable

• CEO of OpenTable, founded nearly 20 years ago
• Previously CFO of Playdom, acquired by Disney in 2010
• Left “armchair quarterbacking” on Wall Street for the gaming industry

Topics covered:

• Broadening the scope of possibilities through technology
• Leading with honesty and transparency
• Balancing a simultaneously mature and entrepreneurial environment
• What to look for when hiring and growing teams
• Being an innovator in a traditional industry

You can listen (and read) the full interview with Christa, as well as others in the Office Hours series, here. If you like what we’re doing, please write a review on iTunes.

In February this year, the Zillow brand celebrated its 10th birthday. I remember looking around amidst the blue and white balloons and the smiling faces of hundreds of employees who’ve helped us build this brand in the past decade, and I was proud of how much innovation we’d driven and eager to tackle the runway in front of us. But I also knew we’d have an uphill battle.

You see, if you look around at the tech landscape, very few companies in their second or third decades are considered highly innovative. Most companies lose a step at the end of their first decade, and they lose two or three steps in their second decade. There are very few category leaders that are 10+ years old and still paving the way for their peers.

As the CEO of a 10-year-old company, maybe it’s too vulnerable of me to admit that I worry about staying innovative. Or maybe it shows that, like a proud parent, I’m already thinking about the life I want our young company to have over the next decade. Lucky for me, I had the opportunity in my Office Hours podcast to sit with Christa Quarles, CEO of OpenTable, to learn what mature tech companies do to keep their A-game: 

1. Obsess over the alchemy of the team

When Christa took on the role of CEO, she was also handling the role of CFO and head of product. Clearly, this was unsustainable, so hiring became an additional full-time job as she sought to attract the right mix of individuals. “Each person you add and subtract to the leadership team changes the alchemy of that group,” says Christa. We talked at length about the importance of culture fit, something we hold above all else at Zillow Group. Even if you have a rock star on the team, if that individual doesn’t understand respect the norms of the group the entire team is worse off because of their addition. Behaviors that aren’t advantageous to the group should be addressed quickly, but beyond that, if you know in your gut the person isn’t a good fit, you get rid of them quickly for the sake of the team.

Another key to achieving the right team is understanding that your people are, well, people. They have ambitions, but they are also coming from different stages in their careers and have families and personal lives that affect how they feel about their jobs. “All those factors weigh into what person they are bringing into the office that day,” says Christa.

2. Embrace radical candor

Radical candor is a favorite term of Christa’s, coined by her friend and best-selling author Kim Scott. When Christa joined OpenTable, she knew she wanted to shake things up by helping create a culture where people felt encouraged – compelled, even – to speak up with their ideas. But it didn’t happen right away. “My first week taking over the team, I said, ‘Okay, now disagree with me!’” she says. “Everyone was silent.” Fast forward a few months, and Christa now feels like her culture is one where people feel like they can speak up. The key to this change was making them feel safe in doing so, knowing they wouldn’t be penalized for disagreeing with the CEO.

But radical candor isn’t just outward; it’s inward, too. Christa always asks people what they hate doing in their job, followed by what their strategies are to mitigate it. After years in management, I’ve found that when people aren’t doing their jobs effectively, it’s usually not because they don’t have the skill set. It’s because they don’t like what they’re doing. Ensuring people – leaders in particular – feel they can acknowledge and speak up when they’re burned out, bored or find themselves doing something they don’t want to do, is often crucial to retaining talent.

3. Equip the business to move fast

Once you have the right people, you need to enable them to ideate, innovate and execute at the pace of an industry leader. Sometimes that means communication tools like Slack, but other times that means weightier investments like an overhaul in technical infrastructure. “Open Table was on a monolithic code base up until 2012,” says Christa. “Now, we can ship every day. If you start thinking about rapid, iterative, A/B testing culture, that was something that wasn’t even possible for us technically just a handful of years ago.” No matter the quality of your people, if they are operating on suboptimal systems, their ability to compete is limited because the technology landscape is changing too quickly.

What’s unsurprising to me is the first two of these points are all about people. Technology should be a focus in that it empowers your people to be more creative and effective, but at the end of the day it’s your people who drive innovation. We’re close to 2,800 employees at Zillow Group now; heading into our second decade and enabled by accelerating technological change, I can’t wait to see what they – and the others who will join them – achieve.