Bill Kerr: Podcasting is having a cultural and business moment, and Spotify has emerged as a leader in this multibillion-dollar industry. As the world’s largest paid music service doubles its global footprint, it’s also ramping up production and distribution of podcasts. The streaming audio company already boasts a catalog of more than 2 million shows. Spotify’s ambitious expansion has seen its head count shoot up. The Stockholm-based company started 2021 with 6,500 employees in more than 70 countries, having increased by over a third in just the last year. Hard enough in the best of times, managing this level of growth in the midst of a pandemic represents a daunting challenge. How is the company adjusting to the new normal of work as it plunges into new markets and competes for top talent?

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Bill Kerr. I’m joined today by Katarina Berg, Spotify’s chief human resources officer. Katarina is overseeing the company’s new work-from-anywhere initiative for its roughly 60 offices and studios. We’ll talk about the logistical details of this model and how Spotify aims to foster connection, inclusion, work-life balance, and autonomy while bolstering productivity and teamwork. We’ll also talk about changes in the nature of HR and the role of the CHRO, and what we can learn from the Swedish model. Welcome to the podcast, Katarina.

Katarina Berg: Thank you very much.

Kerr: Katarina, maybe give us a little bit of background in how you came to be the CHRO of Spotify.

Berg: I’m a behaviorist, so this is what I’ve been doing since I got out of university. And every time I got a new job, it’s actually happened to be in a new industry. Daniel Ek, our founder and also CEO, pinged me and asked me if this could be a job that I was interested in. I kind of knew immediately that this might be the best job in Sweden, for sure, Europe, yes, and maybe also in the world.

Kerr: Katarina, Spotify is a virtual household name, but give us a little bit of the company’s history, structure, and what’s been its growth trajectory.

Berg: I would say that we are 15 years young still. We left the toddler phase, left the teenager phase, and [are] now becoming a bit more mature. And every six months to 12 months, we kind of change the structure, but we have left the function set up and are more organized as a business unit now. So we have the business unit of R&D, where obviously we started off as a tech product and design-heavy company. Then we have the business unit of “freemium,” where all the subscribers are handled, all the new markets, and all the markets. Then, of course, we have the content business unit that is overseeing music and podcasts—music being our first child and podcasts being our second child and a bit younger child. Then we have the typical G&A (general and administrative) functions. So that is the setup of the company now.

Kerr: What’s the geographic span of Spotify at this point?

Berg: We are in all time zones that you can think of. So we have offices all the way from Sydney to San Francisco/LA, I guess, if you think of it like that. Headquarters is still in Stockholm. The biggest office today, if we talk about offices when everybody is working from home, is New York.

Kerr: Okay. And as you think about trying to compete for talent—and clearly for a company like Spotify, talent is the premium resource—how are you going about doing that—recruiting, kind of luring the people into the company, and also then the management of the workers?

Berg: I think it starts with a couple of different angles. One, of course, is employee branding. The second thing is, with all the data that you have, you know what talent density looks like, especially in the groups of talent that you need to both do cluster kind of recruitment, but also when you have to hand pick a couple of skill sets. So then we go into checking and also screening both the world proactively, but also, obviously, getting a lot of applications every month. So right now, I think it is close to 65,000 applications a month, to more than 150 openings every month. And then we screen, we recruit, we hopefully sign, and then we onboard around 150 warm bodies every month.

Kerr: With such a broad geographic footprint, tell us a little about your existing culture across those many countries. You hear sometimes about the Spotify band culture. How’s that maintained? Is it a core competitive advantage for Spotify?

Berg: We are very purpose-driven company, and I think we’ve been from the beginning. I think when Daniel and Martin [Lorentzon, co-founder of Spotify] set off from the beginning, they could have gone, “Let’s do stream music for Scandinavia or for Europe.” But I think they were very audacious from the start, saying that we want to really enable music to the whole world. So easy to recruit on that purpose. But the mission has changed in a bit, where we now focus much more on two ends of the market—all the artists, all the creators, and obviously, all the people that would love to find and listen to, no matter if it’s a podcast or music. But having a very clear purpose and knowing that music, for sure, enhances every moment of your life. So purpose driven, yes, but also very value driven as a company. Some of our values, obviously, stem from our Swedish roots, but it’s also that we thrive with all the other cultures and all the people that are joining the band. So the culture is the people, and the people that are with us is also then coloring the culture. So it’s an evolution. It’s been important for us to talk about the right culture, rather than a strong culture. Our band manifesto is helping us to guide people to either decide to join, but also for us to enhance and remind people of what is really good and strong, culture-wise. So there are a couple of things that are more, I would say, culture based, value, for sure, driven. And then things that for different phases have been very important to us, like innovation—very, very important—and staying passionate, curious—very important. We say that growth is our mantra. We remind people before they join, when they are here, that change is our constant, and we don’t necessarily have any room for entitled egos.

Kerr: So one of your big initiatives has been DIB—or diversity, inclusion, and belonging—that framework. Talk us through how you’ve been talking about that within the organization, some of the changes that have come up around it.

Berg: What really made us double down and focus was what we call “town halls” that we have every fourth week, where half of the executive team is in Stockholm and half is in New York. There was a time lag in the sound from Stockholm going over to New York. So we couldn’t really hear each other. And we got a really important and somewhat sensitive question from our employees. And we couldn’t hear. What do you usually do when you don’t hear? You laugh a bit, like [you’re] nervous. And that came across as that we didn’t take that DIB question that was asked at that particular moment very seriously. And, of course, there is no way that you ever want to offend anybody. And our intention was never really, of course, to not take it serious, but it came across like that. It was one of those blessings in disguise, because then we spent a lot of time—and more time than anybody I think could imagine—in our lead team discussing what the difference that everybody’s talking about, the difference between intent and impact. And also for us to really think about why would diversity, inclusion, and belonging be important for a company like ours and what that means for us. What we came up with quite fast is, obviously, it’s the right thing to do. This was 2014, going into 2015. But for us, it’s very important as a business, and what we do, to connect it to what are the really main reasons besides the right thing to do, and work with these different areas. It was actually because we truly believe that it drives innovation, which is our DNA as well as our OKRs (objectives and key results). And from the beginning, when we said that, okay, it’s not just going to be something that we have up there, or it’s just not going to be a part of the people’s strategies. It’s going to be core to what the business is focusing on, is that diversity is important for the main reasons of, whatever you measure, we all know is getting done. So diversity, yes, we need to get the numbers right when it comes to all the different pillars within diversity. But when we get inclusion right, this is when something happens. We also wanted to say a couple of things: diversity, inclusion, and belonging comes with a cost. It slows you down. You go back to recruitment. It slows you down. The other thing is, when everybody thinks the same way, nobody’s thinking a lot after a while. It’s not good. Belonging is actually an add-on that we have had in the focus the last two years. And a very smart person said that diversity is when you are invited to the party. And inclusion is when you are asked to dance. And we added, belonging is when they play your song.

Kerr: This is fascinating. I’d like to ask maybe one follow-on question—it’s kind of a higher-level question—and then one that’s maybe a little bit more in the weeds. The higher-level question goes back to the creative differences, which has an innovation aspect for Spotify. But you’re also in a business that often has very edgy content. And so how does that kind of relate into the diversity, inclusion, and belonging framework? And then the second kind of more in-the-weeds question is going back to the objectives and key results—the OKR framework. Give us a little bit more about just how this gets built into the performance metrics that executives and team leads and so forth are being judged on.

Berg: Will that maybe start a bit of a conversation. And also, when you have that kind of edgy content, what does that mean to the inner debate of diversity, inclusion, and belonging? For sure, it does, and it should. I think it also gives you a recipe, but also [a] receipt on, when people feel safe enough to talk about the things that they don’t necessarily agree on, or that they think is right or wrong, or for some reason want to debate, I think that is when you have a culture of trust, when you have what I think you strive for—every opinion, every voice, everything is debated and discussed. But I also think it’s very important for a company to be very clear on what your mission is, what you set out to do, what your direction is, what the values are, because there could be a difference—I think it maybe also should be a difference—between the culture in the company and also what’s on your platform, because we are not in the industry of censorship. You need to have those difficult discussions. I think it’s a good kind of confirmation when everybody feels free to have those discussion internally. Then your second question that was more about ...

Kerr: Placing it into the OKRs. Kind of getting it into the actual quarterly cycles of executives and team leads.

Berg: Yeah. Back to us being [a] very data-informed company, but also, setting targets. The tricky part is, within all the different pillars of diversity, in some parts of the world, you are able and allowed—talking about if it’s legal or not legal—for instance, to have targets, and even if it’s self-defined, to ask questions about race and ethnicity. Where we are allowed to do that? Then we have targets on what we need to fulfill as a company when it comes to, for instance, down to minorities, and what we do both on recruitment—hires but also on promotions—and then all the way down to the business unit, and then, of course, all the way down to functions or teams. So this, we both set up, it’s transparent within the company, and also, their follow up is transparent. Those are the targets. Then we are looking into other indicators where this is not allowed. So for instance, in Sweden, where we have a lot of people—again, where you cannot put those metrics because you can’t ask, or you can’t keep notes on ethnicity and race—we speak today over 100 languages in the Spotify office in Stockholm. That is an indicator, or that is an index. And how can we grow that? You can also look at nationalities? That is also allowed. So we try to put those metrics, and we try to then target either hiring managers or the business units.

Kerr: With your core leadership team that’s surrounding the CHRO role, how do you talk about the effectiveness of these HR policies? What’s the productivity or retention benefits that you’re trying to measure and be able to quantify?

Berg: Here I don’t think we are necessarily very unique. Of course, if you are in that hyper-growth I keep coming back to, talent attraction is super important. So we measure that. It’s more of a workforce planning management—kind of, these are the people that we think that we are looking for in these different business units. Do we hit those targets or not? Retention is very important. Daniel was very clear, very early in our working relationship that if, for instance, it’s R&D that we see that most companies that you usually want to benchmark yourself with, people say 1.3 years, up to 1.8. And then he looked at me, and he said, “And here I would love for people to stay at least eight years.” I’m like, okay, the delta in between is—it’s not a stretch. It’s maybe even impossible. So there are, depending, high and low overarching, and also very detailed. We have all these measurements. But I think it goes back to us being very data informed in everything that we do. So retention and tenure is it. But then it’s all the health and the smaller matrixes that are important and also gives us a direction of, if we are really recruiting the right people. Are they staying where we would open a new office? That has to do with everything from talent density to labor law.

Kerr: Katarina, building on all these key roles that talent plays in a number of companies are really at the frontier of the future of work. You’ve noticed that CHROs—chief human resource officers—have many of the skill sets that are going to become necessary to be the next CEO. You’re not trying to take Daniel’s job, but can you talk a little bit about that evolution and what’s the future CHRO role in a company?

Berg: I’m so old. When I left university, it was, if you decided to go into the field of HR, we all said that people are our most important assets the last 10 years. Everything else, more or less—the service or product—becomes a commodity. If anybody wants to do a blue [carbon] copy, they can do that. But when it comes down to growth from incubation stage to more of a scale up, and then into a mature phase, there are so many companies that have an excellent idea that are not able to do that. And kind of growth and accelerator of, how do you find the right people? How do you help them grow in those different phases? How do you sometimes let people go because they couldn’t do or didn’t want to do the next shift? How are you able to shift the load when it comes to strategies? The second thing that is really cool right now is, we’re maybe the only function, besides the CEO office, that actually had a touch point and worked really on the depth, but also into all the different business objectives of every business unit or function in the organization. So you have an overview that is similar to the CEO, but you might also work deeper when it comes to the growth with the talent, with learning and development, with everything that really is doing the propelling your business. At the same time, we work overarching, and we work through the whole company. And I think those things have now come to a point where everybody is more keen to do what we have done the last 20 years because it’s now strategic. So we didn’t see any people within marketing, for instance, doing or wanting to talk about employee branding until now. We didn’t necessarily see a lot of people putting their hands up or even organizing themselves, talking about strategic operations, which is very much what people operations always did. So you see other professions moving into HR—meaning it’s getting much more warmer, much more interesting, and way more, you’re more strategic than ever. And this is why I think colleagues of mine are asked to sometimes step into head of sales, head of markets, having a combination of HR and marketing, HR and comms, but also becoming CEOs.

Kerr: Katarina, as we’re recording this, it’s March of 2021, and so we are basically at the one-year anniversary of Covid-19 entering the Western world’s lives. How has that changed your recruitment and your approaches as an HR leader over the last year?

Berg: In so many ways—and in one way, not at all. Us being a very digital company, when the whole world, including ourselves, were hit by the pandemic, we had to, like most companies, I think, change our way of working overnight. Where we were slow, maybe over a week. So it meant that a lot of—for instance, if we take learning and development as an example—most of our trainings and leadership development were actually designed for face-to-face and classroom trainings. We had to make them into digital offerings and virtual offerings. But where we might not have to struggle—because we didn’t have to do the transactional work of becoming digital, or getting used to work with Teams or Zoom or Google Hangout or Slack—all of that was in our backbone to begin with. And where those tools and ways of working also pivot and developed a lot. But at the same time, I think a couple of things that my team started to think about very, very fast was, okay, that connectivity and the social tissue—the things that you take for granted when you come into one of the same places—now when the technology is enabling us to work in a smarter way, both in sync, but also in different times, but where we can do add-ons and where we can be much more on the same level and playing field at the same time. Because, to be honest, before the pandemic hit, when most people were either in Stockholm or New York, and then the other team members spread around the world were maybe a handful, it was very hard for them to either feel that they were part of the meeting, staying focused during the whole meeting, and it was almost that they had to tap on your shoulder digitally and ask for permission to speak, and then finding themselves being too late into the conversation, because everybody in the room had moved on. As soon as we were all on screen, 100 percent distributed, everybody had a voice. It was as easy to raise your hand or start to speak or mute or unmute. It actually evened the playing field in a very smart way, and also a very good way. So back to diversity, inclusion, and belonging, much more inclusive in so many ways. But the energy, the creativity, the innovation, I think that was why we were a bit scared. What will happen with that if we don’t come into the office and be able to whiteboard or feed off each other’s energy in the same way that we are used to? And also people being creatures of habit, what do we do with that? But I think we also realized that this was forced. What will come will be freedom and flexibility and freedom of choice, what works for me and my team. So we learned a lot of things. But to be also honest, I think we were already working like this in so many ways.

Kerr: This brings us to the multibillion-dollar question that most organizations are trying to think through right now, as the vaccines roll out and so forth, which is, what do you see as the post pandemic workplace? Is it work from home, work from anywhere, some kind of hybrid model? What’s Spotify gearing up for?

Berg: I think the most important thing is that every company or organization needs to start with their people. What is right for your people? And what is right for your business? And, hopefully, that is the right same answer. And I think that is what we started, too—that there are three reasons why we have decided that we wanted to launch our Spotify work-from-anywhere program. And the first reason, obviously, is because we want to retain our people. They are really, they’re the best bunch of band members that you can have. The second reason is, if you’ve been recruiting more or less like crazy for a long time, you’ve been tapping into the same waters, and you’ve been successful relocating people. But there are also people that might not want to relocate that have gotten a bit of a taste of that freedom and flexibility to work a bit whenever and wherever you want to. I think that is something that is going to be hard to take away. It’s going to be hard not to say that there will be a hybrid or a flexibility or freedom of choice. Also when it comes to sustainability around the world, do we always have to travel to a hub? Can we maybe do less of that? Do I always have to rush or get my kids, either to a kindergarten where it’s super stressful? Or can I come into work a bit later? Or can I, after kindergarten and leaving my kids there, can I then go home, which is closer, or do I go to a co-working space? So it was very important to us to listen to our people when we were home, but also understanding that work is actually not a place you go to. It’s something that you do.

Kerr: Talk to us about, coming from those objectives, what’s that going to mean in terms of your real estate, in terms of your offices and studios? Do you have people commit to certain schedules or do they get full flexibility? How’s it coming into practice?

Berg: So we’re going to give people the option, and we used 12 months to rebuild them. So it’s more of a dynamic workplace now, which means that it’s more spaces for collaboration, creativity, and innovation than before. So it’s going to be relevant. But when it comes to giving people an option, we talked about two modes to begin with. It was important to us to have some guard rails, because we don’t know everything. We don’t have the answers to everything. We’re not really sure how this will affect our people. And if the main reason for doing this is to retain them and make sure that we take care of them the way that they take care of our business, it would be plain stupid not to listen in and iterate as we go along. They either choose a home mix or an office mix, where the home mix is not necessarily 100 percent telling it’s going to be this many days at home and these many days in the office, but understanding that if you have a home mix, there will be occasions where it makes sense to gather everybody in your team to have strategy days or collaboration exercises or do creative work, but where you have the freedom to actually live, maybe, a bit farther away from your office, or even change a state. It will still be within the region. There are borders, there are labor laws. If you look into the U.S., it differs between different states. If you look into how global insurance looks today, even if I think that’s going to change because it’s business for insurance companies, but most insurances, no matter if it’s a company that pays for it or a person, they offer 90 days, then you have to go back. So for us to go 100 percent digital nomads, labor law needs to change, tax authorities need to rethink a bit, even if, obviously, we’re all for paying taxes, insurance needs to be different. So you also have to choose between those two mixes of home mix, as I said, and also office mix, but you also have to be where we have an entity. And then we ask you to [maintain] that commitment for 12 months, and then it is again in the dialogue with your manager.

Kerr: That’s great, Katarina. And let me maybe pull us back. We’ve talked about the very global nature of Spotify and all the way down to the differences across U.S. states and labor laws. But at your heart, you’ve been a Swedish company. And I think a lot of us are interested in just hearing what you think we should learn from the Swedish context and how Swedish businesses are being built up.

Berg: What works really well for us, and that has been important to us and well received from our people, is, for instance, we have more than 30 years of good experience when it comes to parental leave and what that does for your people to be able to take time off when it might be the most important time for you and your family. And put that on export and have a global parental leave policy for all our people, no matter if it’s the typical family, the way that we have viewed it the last 200 years, or if it’s a family with same-sex parents or if it’s an adoption or surrogacy. It’s been important for us to support that. So everybody gets six months plus one extra month to ease back. And [it’s] supported by the experience that we have had in Sweden for both moms and dads to take—sit down for this—480 days in the system that we have in Sweden. A bit shorter for our [other] employees, but it was important to do that globally. Then I think also the way that we’d been viewing a couple of things when it comes to leadership and values and trying to make sure that all our settings are built on the four universal drivers around the world. And I don’t think they are very Swedish, but autonomy is very important. Why do you recruit smart people and then micromanage? So autonomy is very important. Being a part of what we usually say, Swedish leadership, the last 150 years, competence and competence development, that is nothing for very few in the company or for the execs. It’s very important to develop and make sure that there is employability to all people, no matter if they stay within the company and move to different roles, or if they would leave. The third universal motivator or driver you see in very strong, in all Swedish companies around the world, is the sense of belonging, that all people are important and you build it as a team sport. And then, obviously, benevolence. To dare to be value-driven, to dare to be purpose-driven and have that transparency and openness.

Kerr: It’s a lot for us to learn from that. Katarina Berg is a CHRO at Spotify. Katarina, thanks so much for joining us today.

Berg: Thank you very much for having me.

Kerr: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you listen to podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.