The People Factor: Darren Huston Explains How Executives Influence Culture

Company leaders have spent decades searching for the answers to the everchanging equations of optimum productivity, morale, and performance.

According to seasoned executive and chairman Darren Huston, the secret is deceptively simple: improving corporate culture. “A lot of consultants and investors can cut costs and make things more efficient and take a particular business and tighten it up, but learning how to profitably grow businesses is more of an art than a science, and it has a lot to do with culture,” he explains. 

Huston doesn’t believe that the answer is corporate amenities and activities such as ping-pong tables or margarita Fridays. If anything, Huston believes that culture is ultimately determined by quality leadership, effective communication, and intentional hiring. Here are his thoughts on culture; extracted from his experience serving on the transformative leadership teams at Starbucks and Microsoft, and his advice on how executives can turn bad cultures around.

Darren Huston Explains the Importance of Company Culture

Darren Huston previously served as the president and CEO of Microsoft Japan and Booking.com, and was the senior vice president in charge of New Ventures at Starbucks. Huston now lives a plural investment career, serving as the Executive Chairman of GameAddik and Operto, and as the Chairman of Allegro, Skyscanner, and The Knot Worldwide.  In all of these roles, his primary and enthusiastic desire has always been to help business leaders optimize for growth by facilitating an improvement in company culture. 

While many consultants recommend cost-cutting measures for quick but impermanent victories in expansion, Huston believes culture is the ultimate answer to tangible and sustainable advancement — but not everyone can pull it off. “It is one of the most difficult things in business. It’s building repeatable growth.  That is the challenge with growth.  If all growth was just one-offs, then every year you’d need to replace each one-off with a new but bigger one-off.  Eventually, if you do that, you will hit a wall.”  he explains. “There’s very few true practitioners of this view of growth. People talk about it, but there’s thousands and thousands of people who make things more cost-efficient. Growth is a more amorphous concept, and it takes a certain level of experience and skill to know how to foster a growth culture.”

In Huston’s experience, culture-building isn’t solely about building a productive workplace, but taking an intelligent, strategic, and practical approach to everything from hiring to employee engagement. “How do you hire and make sure that you're not over-hiring? How do you manage understanding where investments actually return themselves to the top line?” he asks. While it’s difficult for business leaders to comprehend the natural non-economic value of something as intangible as culture-building, Huston shares how Starbucks and Microsoft Japan's differing cultures both led to exponentially improved business outcomes. 

Starbucks: A Culture of Heart

Darren Huston’s background in econometrics, consists of a highly mathematical field that doesn’t leave much room for out-of-the-box thinking. And yet, Huston’s foundation brought integral structure to Starbucks. “Where I was at Starbucks was a culture of the heart,” he says. “They were more about, ‘Where does your passion take you?’ and ‘What’s your gut? What does the customer need? What are they saying?’ I was always frustrated that they didn’t use enough data, but it was fascinating because it worked.”

Famous for its creative and forward-thinking approach, Huston saw firsthand just how well Starbucks’ culture supported industry-changing ideas. As head of New Ventures, Huston spearheaded the leadership of a cross-company group that developed multiple industrially innovative company facets including the Starbucks card, in-store Wi-Fi, and the Starbucks app. Huston implemented these ideas before they held any mainstream application.

“It was the culmination of seeing a lot of things, listening to a lot of people. We brought connectivity to the store, which actually opened up the possibility to do our own transactions,” Huston explains. “This then spawned a whole industry of stored-value cards. Even the credit card companies started lowering their fees on small transactions. They changed these because the Starbucks card, and the cards that followed, were such a threat.”

Microsoft: A Culture of the Brain

Driven by his successes at Starbucks, Huston embraced the challenge of migrating into Microsoft and taking on a series of increasingly intellectually complex assignments.

“I went over to Microsoft, which is a culture of the brain and, at least at the time, really lacked customer intuition and sentimentality. And there, no one ever accused me of being too smart, because the room was filled with some of the very smartest, including at the top with Steve Ballmer and Bill Gates,” Huston recalls. “I was known as a guy that understood consumers and end users and had a passion and an understanding of the front line and the people, which was bizarre because I was the same guy who had been far too intellectual and data-driven at Starbucks.”

As intellectually driven as Microsoft was, the company still harbored its share of cultural problems. “When I was running Microsoft Japan, they had a pretty low engagement score. We got it up to a world-class one, eventually being recognized as the best place to work in Japan. It just shows that you can take something from being quite moribund to exciting,” Huston adds.  “With improved culture came growth.  Very bottom-up at first but spurring bigger and bigger ideas.”

Darren Huston’s Advice for Communication and Culture Change

Starbucks and Microsoft have prominent polarized ventures and thus cultures, but Darren Huston soon realized his success at both companies ultimately came down to effective and two-sided communication. “It’s being really good at communication. You can’t communicate enough,” he explains. “You’re setting a North Star and a vision for the company that young people find compelling, and that then they’re able to see themselves inside that vision.”

In addition to motivating employees, a leader must demonstrate expertise and clarify processes, roles, and preliminary expectations. “Then it’s setting up a process for the way work gets done that basically makes sure everyone understands the boundaries of their sandbox and what their contribution is meant to be for the company. That gives them enough room to play within those boundaries and innovate,” Darren Huston says.

“If you can strike that balance, which is about bottom-up empowerment, but in a rigorously structured system, that’s the magic. It can light up the innovation that happens at the ground level of a business.”

Leveraging Culture To Cultivate Success

Every corporate culture is different, but Darren Huston’s journey and successes show how important it is for leaders to prioritize company culture in order to facilitate sustainable growth and innovation. For organizations to succeed in future endeavors, Huston believes that cultures steered by effective communication, ambitious clarity, and directional purpose will go far. 

“There are studies out there that suggest only 50% of employees in white collar jobs are engaged in the work they do.  I always found that fascinating.  Just think, and I believe this is true.  if you can create a company where 90% of people actually enjoy doing what they’re doing, you can have a huge impact, because you could almost double productivity just because of culture,”  he says.  “And, with a strong process and the harvesting of great bottom-up ideas, the skies are the limit!”