In this episode of Resources for Humans, Jack sits down with Stripe's Chief Operating Officer, Claire Hughes Johnson, who spent over a decade at Google before joining Stripe, to talk about her mindset when making organizational decisions, her hiring and onboarding practices, and the real source of power when it comes to leadership.
The need for payment has stayed the same for thousands of years; the only thing that's changed is the technology behind those payments. Enter, Stripe.
The economy and job creation are ever changing, so while Stripe's idea is on solid ground, its execution is constantly evolving. Hughes Johnson makes sure the company, which is known for its high retention rate, is finding people who are on board for that long-term change. People who care about economic infrastructure are the most important thing we look for at Stripe, she says.
When making changes and adapting to change, she often asks, "What are we going to optimize for and what price are we going to pay for optimizing that thing?" Every organizational decision has an externality. While Hughes Johnson is someone people look to to make the whole company better, she's constantly trying to "get herself out of a job."
Another vital component of Stripe is transparency. During onboarding, she runs a session that discusses how the company is evolving and how much autonomy employees will have -- how they should feel empowered, but that also means a lot of responsibilities. They're "anti-hierarchy." She mentions that their managers will not be with them all the time so the impact they make is driven by their own decisions. Furthermore, employees often work in teams, so effectively giving peer feedback is essential.
Hughes Johnson believes that some of the best decisions for a young company like Stripe involve preserving optionality; we cannot really predict what the world five years from now will look like and if a product will evolve with that world. An example of this is how Stripe employees don't have job titles. Growth is a large part of employee culture at Stripe, she says, and if you're growing quickly, you're going to have the wrong job titles with the wrong people quickly.
She also spends time thinking about the relationship amongst the leadership team — investing in relationships, understanding work styles, how they're going to make decisions together and who's in charge of what. Real power comes in vulnerability, she says, and knowing you can't do everything.
She and others at Stripe believe that ultimately, the work they do is helping to close an opportunity access gap where people may have ideas for a new business, for instance, but don't have the opportunity to realize it because of where they're based or who they are. The system is broken and wrong, and they've got big plans to fix it.
Welcome to another episode of Resources for Humans. I'm Jack, and I'm here today with Stripe's chief operating officer, Claire. Claire, thank you so much for being here with us today.
Thanks for having me.
Yeah. So I want to spend a lot of our time today talking about culture and company management, but can you first tell us just a little bit about your background and how you got here?
I am bad at doing the short version of my background, but I I think of my career kind of in couple of different phases. And phase one was the random phase, which was in my twenties. I did a lot of different things from running political campaigns, to working at a foundation, to going to business school, to working in consulting.
And then my second phase was Google phase, which was over ten and a half years at Google, in a lot of different roles, actually, which is good preparation for this phase, which is Stripe and doing I don't know. We don't like titles much at Stripe. So I do a lot of the things. Depends.
So okay. When you first got here, what did the company look like compared to how it looks today?
I mean, I think a lot of the fundamentals were here, but obviously much smaller.
We're about eight and a half times the size in just a few years. Wow.
And the concept of management was pretty new when I joined Stripe, and it's pretty established today. I think that's something I've actually worked on.
What did it our products were not as complex. Our user base was not as large and diverse.
So I think if there's anything that's really the complexity level is just much higher. But the fundamental structures and the DNA and, like, what we're about is still, pretty firm at the core, which is important.
So I guess what is that? What are those things that are sort of core and unchanged in in in sort of your estimation of it?
I think the most important thing about Stripe is, I think the people who join us care about infrastructure.
They care about kind of hard problems and long term meaningful change. So if you talk to people in the company, they'll say, we're increasing the GDP of the Internet is our mission.
And I think it's unfortunately become a little bit cliched in Silicon Valley to talk about, like, what's your big impact?
And actually, when you look at companies, and I got recruited by a bunch of companies, I don't think that there's that many companies doing really important work. There's There's probably more than people realize, but they're not the ones who are often in the news.
But Stripe is working on building the economic infrastructure for sort of the modern age. Right? If payments have been around for thousands of years, and in some ways, a lot has not changed.
And yet the economy and the world and where job creation happens and where ideas come to reality is totally different, and yet payments infrastructure lives in sort of geographic boundaries. Right? And so if you think about what existed in the beginning of Stripe and existed and why people join the company is because you have a chance to build something that's really unfinished and needed, for future businesses to be built, in the Internet world.
And speaking of people joining, so I know it's been a few years that you've been here now, two and a half, three years since you joined?
Yeah. Over three years.
How did they recruit you? And can you give us any insight into what that looked like? Because, you know, you see, you know, when you when you joined, I remember reading the headline about it and, you know, a senior executive from Google joined Stripe. Like, how did how did they recruit you?
I think the way that a lot of really good recruiting happens, which is finding someone that whose advice and friendship frankly I valued, who convinced me to meet with the founders.
I I think you're really fortunate in your career if people are reaching out to you and wanna meet you.
But if you're like me and you had a pretty busy day job and I'm also a working mom and I'm pretty careful about how I spend my non work time, it's gonna be hard to get me to take the meeting. And so you have to get somebody I literally said no. And my friend said, have I ever introduced you to someone that was a mistake? And I was like, darn it, no. Okay, fine. So I took the meeting.
And I think but then ensued a very long process.
That on both sides has to be a really careful process. Because when you're bringing in new leaders, especially when you're pretty early and young as a company, they have a massive influence, and that can turn out really well and that can turn out not well, especially culturally. So getting to know sort of are we gonna work well together? Are we culturally aligned?
How is it gonna feel to make decisions together? And a lot of the time I spent with Patrick and Don and then other leaders at Stripe and and then eventually with the teams was let's actually jointly do some work together and see if we like it, because it was a big decision on both sides.
So there's the there's the front of the sort of funnel of employees Yeah.
Which is recruiting.
Yeah.
Stripe also seems to retain employees for a really long time and, you know, this is something that people talk about a lot in Silicon Valley. You know, people leave jobs after one to two years. That's super common. Do you think about employee retention, or is it just a byproduct of other work that you do? How do you think about employee retention here?
I think it's more I mean, if you're gonna frame it that way, I think it's more of a byproduct. I I once was chatting to, someone who worked in a people team at a large company that will remain nameless and they said that they changed their people team's goals to focus on retention.
And then she said to me, it was really alarming to her because she said, what am I supposed to do?
Bar the door as people are walking out? No. Because she was a member of, you know, a team that was facilitated but was not. And I said, yeah. That would be a hard goal to meet on a quarterly basis if if you're the last stop. And so you have to think about retention as a byproduct and you wanna we track it, we look at it, and we look at and we do exit conversations and we wanna understand why are people leaving.
But I don't think actually, I think if you if you build everything in your program around retaining people, you're probably gonna get some things wrong.
Interesting.
Yeah.
On a somewhat related topic, I you know, the it seems that one of the things that companies try to do to sort of drive down employee turnover is have programs for employees to grow. What are, like, the effective ways to do this? And maybe more specifically on that, how do you grow employees in a world where not everybody can become a manager?
So first part on programs for employees to grow, you know, there's a so we do an employee engagement survey, which I think is a good practice, which we started doing when I joined the company. And one of my favorite things is there's these two questions. And one of them is are you learning and growing at stripe, something like that. And it scores off the charts.
And it scores off the charts because look, stripe is learning and growing. And you're in an environment where everybody is doing something different and new every few months. You don't really realize it one week to the next. But then you look over the last few years, you think, wow.
And that's off the charts. And then there's there's one that's like about your career development. It's like, that's okay. And I think one, career development is often a code word for like, did I get promoted or am I a manager. Right? And it's not actually am I learning and developing and growing.
And I kinda wanna separate those conversations.
And I think programs for learning and growing are good, but if you are lucky enough to be in the kind of environment that Stripe operates in, people are getting it all day long.
And that's more it was more valuable for my career.
I was talking to Caitlin on this show who was the head of people at Reddit, and she said the best way to retain employees and to have employee growth is for the company to be succeeding.
Yeah. I mean, that's the I mean, Eric Schmidt like to say revenue solves all problems. But growth, well, growth can paper over some things, but it is certainly from an opportunity and a learning perspective really valuable to be just doing well.
When we get into the company management section, I'm going to ask you about sort of managing growth because I think that's a fascinating topic. But one thing you touched on that I wanted to dig into a little bit more was you said Stripe's not big on titles.
Can you tell me a little bit about the philosophy here at Stripe about titles?
Yeah. I mean, we just had I think that some people at Stripe consider that a sacred cow and, like, we're never gonna change our minds, but it was actually more of a decision. I think some of the best decisions you can make when you're a younger company is to preserve optionality and just say, you know, is this something we're gonna start introducing now and then live in a world five years from now that we can't really predict what it looks like and yet we've introduced a construct that may or may not evolve with that world. And both Patrick and I were in pretty violent agreement. Sorry. Patrick Carlson, the founder cofounder of Stripe. We're in a pretty violent agreement that, like, why would we introduce that?
And frankly, titles everything you do called like an organizational decisions has an externality.
So and I think that mostly their choice is between what are we gonna try to optimize for and then what price are we gonna pay for optimizing for that thing. And you wanna be really clear eyed about, well, this is important to us, so we're gonna optimize for it and we're we're gonna know that down the line, there's this price we're gonna pay. And I think that titles is just one of the examples of something that, can help you externally. Right? I mean, I think it's also kind of funny though.
You look at people with titles that they're using externally and you're like, you're not really the SVP Absolutely.
Of x.
There's people with a COO title like you at a three person company.
Well, that's Right.
Maybe. That sounds really out there. But yeah. So so there's also credibility, authenticity. Like, is this appropriate for the kind of company you are?
And sometimes it's valuable. I actually think not having strict titles is valuable because you can go to a meeting and represent what you happen to be doing that month. And, yeah, I'm the product expert on, you know, our on payments. And so let's talk about it.
And you're being authentic, but you're not relying on some LinkedIn thing. Anyway, titles get warped and they cause people to have strange behaviors and they're used to keep score and if you're actually growing very quickly you're gonna have the wrong titles but on the wrong people pretty quickly.
So that was the main reason.
So speaking of growing really quickly, there's there's one concept of titles which is where to put the individual. Yeah. And then there's this other concept of how to organize groups which is more like organizational design.
Yeah.
So how has the organizational design been changing as you've been growing? I mean you said you've grown eight times in the last three years. How do you how often do you change the organ design and how do you do that?
Yeah. So I think that organizational design, I love it. I can talk about it forever.
Let's talk about it.
Alright. No. Let's not.
Actually there's there's only a few organizational designs. And so when people think they're doing organizational design, you're not really. There's only a few. So one is are you functionally organized or are you organized in business units?
And so if you think you're you're not really. So when we do, we have restructured some things because what happens is you start you have people who are generalists doing a lot and then as your business grows, you start to specialize And someone whose job was maybe this big as a generalist is actually this big as a specialist. So you have to organize against that. Right? But it's not we we're fundamentally still functionally organized.
And that means we have to matrix in to our businesses. So our product areas and growing those product areas.
And so when we restructure so there's an externality just like of everything which is if you've created a matrix team of accountability, you have to mitigate the risk that there isn't enough of a single accountable person which is what a business unit leader might represent. Right? And so you're always, like, basically making what what trade off works for you at any given time.
Stripe's organizational structures have changed, but our fundamental approach has not. Got it.
But it might. So you guys have, you know, a structure where you're functionally organized, but there's cross. Is that right?
Yeah. So we have parts of our company, like, really product areas that require a cross functional team to come together and run the business.
So as you take on more and more initiatives and Stripe's product and offering is much broader than it was in the past, how do you, at your level, fight the battle between sort of scope creep of the company almost and lack of focus versus needing to take on more to address a larger market?
You're I mean the most important thing is to feel like okay we have a lot of opportunities and we are I love the expression your strategy should hurt and like we're actually saying no to things and I think when it's easy, another favorite expression of mine is, like, if after you get past a certain phase as a company, it's more likely you'll die of indigestion than starvation.
And so I think that's what you're getting at, which is, like, how do you keep consuming and running at speed, yet you're eating a lot more in that analogy? And the answer is really building strong, leaders, like, and empowering and starting to decentralize, in my opinion. I think you can run an incredibly central model. I think Steve Jobs is probably your best example of someone who centralized a lot of decision making on products and marketing and brand.
But my view as the most successful model is that you have to create more decentralized decision making authority and understanding of, okay, what are we all trying to accomplish? What are our priorities? What do the results look like that we're trying to get to? And then who's in charge of it?
And what I was trying to explain to you on the matrix is you have to be even more careful with the accountability piece because you actually end up with multiple parties accountable for a lot. But if they know who they are, I think you can pull it off.
I don't know if you were talking about leaders when you said this, but I saw in maybe, like, a first round review article, you said that the best people are good at what they do, passionate about it, and they make a big impact basically. Yeah.
So we'd all love to have that. How do you identify those people in a big organization?
Yeah. I wasn't just talking about leaders. I think it's just generally true It's a good career advice that if you think of I love Venn diagrams. But if you think of like your career I mean, career in a in a Venn diagram, over time what you're seeking is like, what am I really good at?
And self awareness is number one, number two, and number three goal for anybody. Know what you're really good at. Know what you're not as good at. The second thing is, what do I love doing?
Like, I actually I'm really good at raising money, but I don't really like it. Right? So I know I could do it, but I don't love it. So it's like I'm not gonna be, you know, raising stripes next round or or or working for a non profit and raising money.
I know I can do it. But, like, what do you love? And then where I mean, this is I think the third is more of the wild card. For some people are very impact driven.
I'm very impact driven. But other people might be have other motivators and just wanna understand what is that motivator. But for me, the best substitute is where you're gonna have the biggest impact by deploying what you're good at and what you love. And I think how do you identify people that way?
I think it's a it's a great question.
I mean this is when I loved if you studied some of the eras at GE when they started to do some really thing interesting things in the HR space, it was when it was sort of like the beginning of people analytics, right? It's when they looked at the people who are the best interviewers over time by looking at the results from a performance perspective of the people they voted sort of yes to hire on. And it became clear that actually there weren't that many great ones, and that they should be celebrated, first of all, for that intuition and that power. But if I think about my own interviewing, so much of it is trying to get at, okay, what are you good at?
Do you know what you're good at? And are you actually motivated and passionate, one, about joining Stripe, and two, about the kind of work that you're gonna be doing at Stripe. Because if you don't get those ingredients right, eventually someone gets really demotivated. They're in the wrong job.
Google was also pretty good about looking at who is good at identifying candidates on the way in. Is that right?
Google did a ton around people analytics. I don't know that we ever really closed that loop, and that partly is because at Google and Stripe a little bit this the hiring committee really made the decision, and so you could argue, one person's feedback didn't always make the hiring decision.
Do you prefer managers or hiring committees making decisions?
I we we talk about this a lot. I think it's both it's a combination, but I think that the hiring manager should play a pretty big role in facilitating.
Like, view the committee as your advisory group and listen to them if they are advising you against.
But But the decision rests with the manager ultimately.
I think I mean, we have a we have an a kind of unwritten rule where if someone wants to block, they can.
Got it.
So the decision ultimately rests with the hiring manager unless someone is so opposed that they choose to block, and that happens very rarely. But I actually think it's important.
Yeah.
Because there's a reason you got you took all their time to interview that candidate, and if they have a very strong feeling, you wanna hear it. Yep.
One one of the themes to this conversation has been about, you know, not having strong titles, making sure that it's not just leaders that we're identifying. So Stripe clearly has a lot of focus and respect for the individual contributor.
How do you make that work? Like, how do you allow people to make good decisions at scale throughout the organization?
One of the things that I actually during our onboarding, I I run a session where I talk about how the company's evolving and what we expect from people joining.
And I talk about how much autonomy they're gonna have and how they should feel pretty empowered, but that actually has a lot of responsibility that goes with it. And I specifically say, you you are gonna have a manager. Your manager's important, but they're not with you all day long. Like, what you're doing is your choice with your time and the impact you have is driven by your decisions.
And one, I hope you're comfortable in that environment. Two, I hope you, are good at giving peers feedback because you're gonna be in working groups and teams where there's again, no manager hanging around watching what you're doing.
And and I think that's I hope that sets people up to to feel comfortable with, like, yeah, I've got abilities here and and I can make a decision and I can force decisions and I don't have to be a manager. I mean, when we we're pretty, like, anti hierarchy and we're anti hierarchy not in that we don't believe in management structure, but that we think the person most qualified to drive a decision should be one the one driving it.
And I think titles and things like that start to undermine individual knowledge as being sort of a currency of the right kind of power, and that's something that we make pretty primary.
Like, how do you equip how do you equip everybody then? Is it radical transparency about information?
We do have a lot of transparent information.
Yeah. Like, I know you have strong values in operating principles.
Like, what are the tools that other companies need to sort of deploy in order to do this?
Like, we have So so the thing that, I think is really important is to build a strong organizational system. Right? And systems that scale are flexible actually, but they have some core elements or you can use the architecture analogy if you want. You have some steel beams, they're holding up the whole structure, but then what you do around it is gonna change, as your needs change for the structure.
So my general, way of thinking about our system is there is, one, why do we exist as an organization, as an entity? And we talked a little bit about that, increasing the GDP of the Internet. And then two, what are our operating principles or and also our what I call our founding documents. Right?
So what are our long term goals and do we all agree on those and then how? So that's the what. And then the how is the operating principles or the values. And we have aided them and we talk about them a lot, and we didn't when the company was younger because everyone kinda just knew them.
But eventually, you have to write them and you have to start talking about them. And then if you think of that mission and those principles or values as two anchor tenants on what is like a steel core that should run through your whole company, then the operating system around it is going to, organically change. Your organization's gonna change, your structures are gonna change, who you have around the table is gonna change, but if you're tilting on that axis, you're not gonna lose the center of gravity. Right? And I think that, things like how you feel about titles or how like, those things might that's why I say they're not a sacred cow. We might change some of those things as long as people get this is the way we wanna operate together.
Does Stripe have any sacred cows? Would you say, like, are there things that will for sure never change or does Stripe sort of take every year as it comes?
Well, I I think that I mean, one of the favorite things I do in that session I run is I show an early document of people try of early stripes trying to describe Stripe's culture, and it reads a lot like Stripe today. And so I actually hope some of those things never change. And that's what makes it special and different and and, yeah, quirky. I mean, every company like every person I feel like companies are kind of a person ultimately and and and they should have quirks.
We also really like plants. I think we're always gonna have plants in the office. But what are the things that What are the things that more things will change than people realize?
But there's this there's this great article. I really love reading about, sports especially because I think that when you're really in a position where you very it's a binary win or lose. Right? It's a and so I love reading about amazing players and amazing coaches and team environments.
Like, how do they create, like, that amazing will to win, Especially when they didn't actually have the talent. Or you take the NBA All Stars who went to the Olympics and they lost. Right? You had all the talent in the world, but you didn't have a team.
So I'm obsessed with this stuff. And there's this great article from a million years ago about Bill Purcells and he, and it starts with there's this elemental thing about the relationship between coaches and players and a game.
And and the thing that this coach is looking for is when the center will hold. And I think that when you think about great companies, it's like all of these things happen that you didn't predict. The game I mean, maybe the rules change while you're playing the game, but mostly, like, you don't know what's gonna happen on the other side, on the external to you piece, but you've but a really great company, the center holds. And the thing that's hard is you can't predict what are those things, those decisions you made, those elements of your culture that didn't change that are the center.
And so I think being really intentional and conscious when you are changing your mind about some things that might actually be elemental is the most important thing you can do. But you also don't wanna be so rigid that you can't recognize that the thing around you is different. Right? And so that's like the art of leadership. That is the art of everything. And I think it's that combination of self awareness and external market and business sort of awareness. Right?
Yeah. One of the things I've been wanting to ask you about is how do you make the relationship between the CEO and the COO successful?
I think this is like one of these black boxes in companies where people don't know what the COO does and how they split relationships, you know, and and responsibilities.
What advice do you have to other people sort of navigating this relationship?
I think this is hard to answer because the COO job is sort of a non job. And I proudly say that as a card carrying member of that club. And it's a non job because, I think actually it was pretty critical to Stripe at a time when you're scaling up and you don't have leaders for a lot of important functions. And you need someone who kind of has enough general business athleticism that they can scale up pieces of your company and are trusted by the founder or the CEO, to do so. But over time, if I'm doing my job well, I don't think Stripe will need me in the same way. And maybe an ingredient to success is to just know that.
But I also think it's really unique to to the founder and to the company. One thing that that I I don't think actually a lot about is it me and the CEO. I think more about the leadership team. And if there's anything I think we've done pretty intentionally and that maybe I've brought to Stripe is we invest a ton in the leadership team relationships, understanding each other's work styles, understanding how we're gonna make decisions together, who is in charge of what, like and and I think that I facilitate a lot of that because we're not gonna operate well.
Like, if you think of me as a meta, like, how do we operate the system better? That's how I invest. But there's a lot of collaboration, and I think that comes from the CEO. I think where the relationship between a leadership team or a COO and a CEO goes wrong is when there is frankly kind of a lack of confidence or a lack of self awareness and comfort in saying, wow, you're really good at this and you should do more of this and you're really great at that.
Can you do more of that? And, like, sharing with one another and dividing up, because ultimately we're all humans and we're all flawed, but I worry particularly for younger companies and founding teams that they feel so much pressure to know everything and also to do like the classic founder model of like, I have all the you know, I have this vision and we're all gonna like scale that mountain in this vision. And that's actually like really fatally weak.
Real power and real strength comes from vulnerability.
And it comes from knowing you don't know everything. And knowing that there are probably people who are better than you at certain things. And then what you're doing as the CEO or founder is, like, how do I find those people and put them in the right environment so the best of them shows up around me? And so that's what we we invest more in, but it really starts with frankly, Patrick and John are incredibly open.
We have a very strong, like learning oriented culture and it comes from them is like, what do we not know? Let's be curious about this. Let's figure out what other people are doing. Let's ask for opinions and that is a great foundation to start with. Don't ever feel like you have to know everything.
When you think about sort of your functional leaders that you work with, is that is that the same relationship where you're almost trying to hire and get yourself out of a job and area for you?
I am constantly trying to get myself out of a job.
And I, you know, Molly Graham had the great giveaway your Legos talk she did or you can read the article.
From early in my career, I actually think that might have been one of the things that that elevated me, which is like I was delegating and empower yeah. I was delegating and empowering, which meant then I had time to do the additional stuff and to do the other thing. But it's not like I have superpowers. It's because there are other people around me.
And I think I'm pretty collaborative. Right? So I share the credit. It's not it it's about being the kind of person that people wanna help make the whole better.
And so, yeah, I'm constantly trying to get out of the job.
That was a great answer.
The I guess the last question I have is to the extent that you're able to tell us, like, what does the future hold for Stripe? And you can answer that in whatever way means the most to you or you prefer to talk about, but whether it's organizationally, product, the impact, like, where where will this company be as time goes on?
You know, my I'll talk about my my aspiration, and I think, we have a long way to go. But, I met with a reporter who was doing a story on stripe and he said that he was having trouble capturing in his article that stripe had some quality as what he imagined the tech companies that got founded in the nineteen seventy's had which was a real curiosity about a hard problem space that was very infrastructural. Right?
Fundamentally, how we do this thing should be different in five years and ten years and we're in it for the long haul and it's not gonna be easy, but it could be incredibly meaningful.
And what I really believe in the end matters to me and matters to a lot of people at Stripe is there's an an opportunity access gap in the world where there are people who have ideas and skills.
Maybe it's for new businesses, maybe it's for other things, but in this case, I'm talking about, like, really new business models that are allowable by the fact that we have the technology we have today, yet they don't have the opportunity to realize those things because of where they're based, because of who they are. It's like fundamentally wrong.
And the system is broken, like, why wouldn't you give a bank account to that person, right, if you think about it. And so my aspiration is that we're closing the opportunity gap, the economic access gap, in such a way that there are new things that we wouldn't have predicted in the world enabled by Stripe's infrastructure in some way combined with that amazing entrepreneur or that amazing person.
And that's super motivating. And And what I hope it ends up in is a lot of new and different kinds of jobs for people all over the world. Because if you look at any economic study, it's like people having a good job really matters.
And if we play a small role in that, wow, that's infrastructure you wanna build.
Awesome. Well, Claire, this was this was fascinating. Thank you so much for taking time to do this.
Thanks. I really appreciated it.
