Customer Success – An Argument Against the LAER Model

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Warning – this is a long article.  Its purpose is to create an “oral history” and rationale for a different approach to Customer Success.  I considered posting it in chapters but decided that having it together in context was more important.  Feel free to chunk it up and read it in chapters yourself.  If not, go get some coffee!
My last article described the various factors that weighed into my decision to do the customer success role.  That was the easy part.  Once I had the responsibility the challenge was – what exactly is customer success?!
Assess Situation
The first step was to assess what the industry was already doing.  Since Customer Success was such a widely used term there had to be a standard methodology similar to sales and sales engineering right?
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Cool standardized name – Yes.  Consistent approach? Nope. Nyet. Nada. We found that it was about as standardized and understandable as the master plan and road layout in downtown Boston.
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Example Customer Success Approaches:
  • A. A fancy name for their Tech Support
  • B. Renewals and Upsell sales team
  • C. Professional Services and Deployment
  • D. All the above
The most common models we could find were LAER (Land, Adopt, Expand, Renew) and a Periodic Table.
Caveat alert.  Customer Success is a new function and we all owe a debt of gratitude to those who pioneered the original approaches.  I am sure I don’t fully understand the details or nuances of these approaches and how they are addressing the Customer Success need.  I am also not trying to say that they are wrong, we just reached a different conclusion.
Imagine I presented the LAER model to a customer in order to explain what Customer Success is.  What do you think the customer would say?
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“This sounds great!  You should totally land me.  I am really glad I bought your solution because I am looking forward to the expanding.”  Or….
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“My company totally wants to transform!  I am glad you got it covered, I want a different service & support experience and have product success! I am glad you are focused on my outcomes, my manufacturing/retail/healthcare/xyz company is focused in 2019 on the following outcomes: adoption, renewal, expansion, tech touch, etc.”

Is this Customer Success or Vendor Success?  

All of the approaches were from the perspective of the Vendor out to the customer!
Ok… ok… perhaps I am approaching this wrong and I shouldn’t be presenting it to the customer.   I should have a different model that is customer facing.
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Unfortunately this would increase complexity by 2x.  Now we need to communicate one strategy internally and different one externally.  We will need two separate sets of metrics, etc.  Which set of metrics do you think your managers will focus on the most?  What behavior do you think this will drive? When you are starting up a new function and you need to double or triple your headcount annually complexity is the enemy of success (pun intended).
Let’s take a step back and look at this with a clean slate
Given that the existing models were educational but didn’t align with our Customer Obsession culture we decided to take a step back and rethink the problem.  History and lessons learned are valuable… if I had a clean slate, what have I learned in the past that would be applicable?
  • MBA
    • Sustainable Differentiation:  lots of companies are good at a lot of things.  Is that why customers buy their products?  Not Really.  Companies are successful when they offer a capability to the market that other companies are not offering and can not easily replicate.  At new hire training I ask “why do you think customers buy our solution?”  I write down all of their answers, “We reduce cost!  We are innovative! We can Scale! We simplify their operations! We have good relationships! We buy them beer and give free T Shirts!”  I then select one of their previous employers and use those exact terms to describe their product.  For example, Webex, Veritas, Dell, VMWare, Avaya, Microsoft, etc all say they are. innovative, reduce cost, etc.  At the end of the day, it isn’t what we are good at, it is what are we sustainably differentiated at?  Why else would customers pay a premium for us?
  • Exec Coach
  • Critical Accounts – Escalation
    • Unknown“The Change Function”:  The early days of VOIP and Video over data networks are not well remembered for their 99.999% quality and uptime.  The ‘negative business impact’ was enormous.  For example, in one hospital emergency room a patient had a heart attack and when the Nurse tried to use her WiFi VoIP phone to call a doctor it deregistered and failed.  The patient passed away.   Heck – most companies a decade later still can’t get Skype to work consistently.  If it was so bad why did Customers stuck with it when they had perfectly fine copper phone lines?
    • Support and Satisfaction: Support organizations often tout their Customer Satisfaction scores. We are a 4.4 out of 5!  Our customers are 96% satisfied!   I don’t know about you, but when I have to call customer support it is not because I am satisfied. No one is ’satisfied’ when they have to open a case.
  • The Best Man in Your Wedding
    • Ever wonder what the difference is between your hundreds of friends/acquaintances and your Best Man, “Bro”, or Maid of Honor?  I believe it is spelled out well in a famous poem called footprints.  This applies to your customers as well.  When they have a major problem, are you there for them even when it isn’t your fault or responsibility?  Do you stand by them in their time of need?
    • Adapted Version: One night a man had a dream. He dreamed He was walking along the beach with his “Bro”. Across the sky flashed scenes from His life. For each scene He noticed two sets of footprints in the sand. One belonging to Him and the other to his “Bro”.

      When the last scene of His life flashed before Him, he looked back at the footprints in the sand. He noticed that many times along the path of His life there was only one set of footprints. He also noticed that it happened at the very lowest and saddest times of His life.

      This really bothered Him and He questioned his “Bro” about it. Hey man, you said that once I decided to hang with you, you’d walk with me all the way. But I have noticed that during the most troublesome times in my life there is only one set of footprints. I don’t understand why when I needed you most you would bail on me like that.

      Dude chill, I Love ya, and I would never leave you hanging! During your times of trial and suffering when you see only one set of footprints, it was then that I carried you.

  • Sales Engineering
    • Architectural Control Points: When your sustainable differentiation aligns well to solving your Customers’ Business Objectives then not only do you provide a smooth path to adoption/expansion you are also well positioned defensively against your competitors.  At Cisco if we had Call Manager installed and owned call control then it was just a matter of time until the customer would purchase a new phone handset for every employee.
    • Market Messaging: coming from the pre-sales side I had a good handle on our corporate value prop and what customers wanted in our POC.  When customers buy a solution they not only buy today’s technology but your vision for the future.  The post sales experience should map to this market messaging vocabulary, terms, etc.  Too often post sales teams invent their own lexicon.
  • Start with the Customer/Outcome and Work Backwards
    • If you take all the ’stuff’ you did previously in renewals, sales, support, professional services, etc and try to combine it all into Customer Success in a bottoms up approach you will end up with a very comprehensive but likely overly complex approach.  However, if you put the primary focus on the customer and work backwards it is amazing how much simpler and more robust your solution will be.

A New Customer Success Model

Before diving in, let’s look at 4 example company/products.
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1. Clippy: if you google “Top Tech Fails of all time” poor Clippy comes up first.  If you don’t remember him, he was Microsoft’s attempt to guide you through the product.  Unfortunately, he never seemed to be able to guess what you were trying to do (Screw you Clipp,  I am not writing a letter!) and added no value.  Worse than that, he caused Word to crash at the worst moment – every time.
2. Gasoline: what gasoline brand is the best?  Which brand will you drive miles out of the way to purchase and pay a premium.  For 99.9% of you out there there is no ‘best’.  Instead there is what ever gas is the cheapest or most convenient.
3. Wireless Service circa year 2000: remember your first cell phone? “Oh wait… damnit the call dropped.  Hello?!  Can you hear me now?”  How many times a day did your calls drop?  My bet is a fair amount more than your land line at home.  Yet, did you give up your cell phone or do you still have it today?
4. Apple iPhone: If you kept your wireless service then chances are at some point you purchased an iPhone.  It  not only provided excellent quality compared to my old Treo and Blackberry but transformed how we use our phones.  High quality cameras, hundreds of 3rd party apps per person, Apple Pay, video calling, etc. Apple is now worth almost a trillion dollars.

Now lets overlay the concept of EXPERIENCE
(user experience, quality, results)

As the British would say, “Is it fit for purpose?”
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  • Clippy: poor user experience, crap quality, and it definitely didn’t help me write a letter.
  • Wireless: Can you hear me nooooooow?  Nuff said.
  • Gasoline: fueling at the pump is usually pretty quick and easy so the user experience is ok, gasoline makes our cars go vroom vroom (results) and for quality… when was the last time you had bad gas? (Pun intended).
  • iPhone: my grandmother can use it (experience), I can’t remember the last time it crashed (quality), and it makes calls (results).

Next lets overlay the concept of TRANSFORMATION.

Transformation is an alternate word for sustainable differentiation and value.  What are you able to provide to a customer that provides 10x the value compared to what they were doing previously.
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  • Clippy: 10x the annoyance… not value
  • Gasoline: no real Transformation – it has been working the same way for a hundred years
  • Wireless: I can receive a call anywhere!?  I can leave the office and take a call while catching my kids baseball game?!  Cool!
  • iPhone: Candy Crush.  Nuff said.

How does this apply to Customer Success, Renewals, Upsell, Churn?

Note: I couldn’t find the original source for the matrix below but someone smart out there made it.  Probably someone from McKinsey – they love 4×4 matrices.

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  • Clippy: not only is he crap, I am going to tell everyone he is crap.
  • Gasoline: if your competitor offers me gas 1 cent cheaper you are fired and I will go to them
  • Wireless: since I can make calls anywhere and use it in an emergency I will give you an opportunity to improve your service over time but I will not be buying more lines for my family and getting rid of my landline.
  • iPhone: I will not only spend 10x compared to my old Nokia but I will also buy an AppleTV, iTunes, Mac and read fanboy websites about upcoming product leaks.  I don’t think Apple is trying to shake me down for $$.  I *want* to buy more things from them.

We are missing one key factor though… ENGAGEMENT

Customers want to feel an emotional bond to your brand and people.  Does your company listen to me?  Do you know how I want to use your product?  Are you teaching me about it?   Engagement is a multiplier.  If your company is heavily engaged with me I will likely buy more and be more resistant to churn.  If you ignore me I will take for granted everything you do for me and will start to listen to that really friendly new sales rep who buys me beer and gives me free T-shirts.  Think of it like a marriage – don’t ignore your spouse 🙂
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Translate TRANSFORMATION, ENGAGEMENT, EXPERIENCE into a Customer Success Model

  1. Identify what your TRANSFORMATIONAL 10x value to customers is.  Collaborate with your pre-sales team and marketing
  2. Identify what an amazing EXPERIENCE would look like
  3. Learn who/how your customer wants to ENGAGE
For our company:
  • TRANSFORMATION:
    • SECURITY: protect and apply business policies to 100% of user traffic anywhere regardless of encryption
    • NETWORK: transition from expensive private hub and spoke networks, the internet becomes your corporate network
    • APP ACCESS: trusted users can access trusted applications with nothing bad in between
  • EXPERIENCE:
    • QUALITY: means never having to open a case/ticket/bug in the first place
    • EXPERIENCE: 100% of end users able experience our solution transparently and apps just ‘work better’,
    • RESULTS: achieved the costs savings you expected, kept the bad out and the good in
  • ENGAGEMENT:
    • We meet on a scheduled cadence with the network, security, application, and executive team to “Make the news” not “Report the news”.

When a Customer purchases our service they are coming with Business Objectives, themselves (contacts) and an existing architecture (environment).  They purchased us because they want to TRANSFORM their network, security, and/or application access.   To achieve this we will ENGAGE with them in a process to make this happen and endeavor to ensure a world class EXPERIENCE.   We are able to measure all of these outcomes quantitatively to track our mutual progress.

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A common objection to the Customer Outcome based approach is that you cannot operationalize it at scale.  Every customer will have different business objectives.  Yes and No.  If you successfully identified your areas of TRANSFORMATION then they are why the customer bought your solution.  If not, then why would they have chosen your solution over someone else’s?   Sure the customer may use different terminology and project names but the end results are usually similar.
Knowing this you can choose consistent metrics that best indicate progress on their outcomes.  NOTE – these metrics should not be a % feature usage that product management asked you to go drive.  For example, for Network transformation instead of tracking a feature we track how many of their global offices were able to do local internet breakout and how many of their employees are covered when working remotely.   My next blog article will be a deep dive on customer metrics (similar to Measuring & Tracking SE Teams – Solved?)
This customer facing “Journey” also serves as our internal organizational strategy, maps to our CSM/TAM Job role definition, our metrics, our bonus plan etc.  If something is not customer facing we do NOT operationally measure it.  For example, typical CS metrics like NRR, CLTV, churn rates, Customer Success Qualified Leads, are only measured at end of then quarter and only at the global level.
If the customer is TRANSFORMING with a positive EXPERIENCE and good ENGAGEMENT then they will not only happily renew but if your solution is well designed then the upsell will be a natural progression and be driven by customer vs. sales rep.
Future posts will delve into how this is operationalized, how to design good customer outcome metrics, how to get your customer’s business objectives (hint: it is not as easy as just asking)

Customer Success (not Vendor Success)

Job Titles – the dangers of the “Senior Principal XYZ”

One controversial topic when building an organization is how to handle job titles.  In my first leadership role my Director always used a very simple email signature, “- Name”. I asked him why he didn’t have a formal signature and he shrugged “if people are contacting me it is because they already know who I am and what I can do to help”.
Over time I have become more and more turned off by fancy titles.  A recent favorite of mine is “Senior Principal XYZ”.  Seriously – google it.  It is all over the place.  I searched my email inbox and found the following examples:
  • “Senior Principal Analyst” – Research firm
  • “Senior Principal Customer Success Manager” – Symantec
  • “Senior Principal, Expert Advisor” – Data Science at SAP
  • “Senior Principal Learning Consultant” – Enterprise Rent a Car
  • “Senior Principal Program Manager” – Veritas
  • “Senior Principal Actuary”
  • “Senior Principal, Digital Marketing Platform & Analytics at CSC”
  • “Senior Principal Java Engineer – Java” – from a monster.com email in 2009!
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I always thought Principal was better than Senior, or maybe Senior is better than Principal?  Why not just make the title “Good Great Program Manager”?   When was the last time you saw a job posting for a “Junior” anything?  Next time I choose a doctor or lawyer I will be sure to get a “Senior Principal General Medicine Doctor”.
The arguments in support of titles are:
  • Individual
    • I can’t get a different Job without it!
    • I need it for my customer to feel important!
    • I can’t get Married without the right title!
    • I want to know I am progressing in my career
  • Manager
    • We couldn’t give the person a raise but a Title is free and helps show recognition
    • I can’t hire good people unless I have it
My concerns with these:
  • Individual
    • I can’t get a different Job without it! First, good to know you are planning to have a nice long career with our company 🙂 Second, I too would never want someone to feel trapped in a role.  I believe that our team is a volunteer organization.  You should have whatever title makes you not feel trapped.
    • I need it for my customer to feel important! This is the argument for banks and everyone being a VP. But really… when was the last time a customer said “Boy I am really glad I have an Account Executive and not an Account Manager!” or “I dont want a Sales Engineer, I will only work with a Senior Sales Engineer!”.  Customers care about good people who can help them.
    • I can’t get Married without the right title! Yes. This is true in places like India.
    • I want to know I am progressing in my career. Most of the work force today grew up in the world of Pong, Super Mario Brothers, and World of Warcraft.  We grew up in a world where we “gotta play one more turn, gotta get to the next level!” Even though the next level is only minimally different from the last.
  • Manager
    • We couldn’t give the person a raise but a Title is free and helps show recognition! – this comes up a lot when your company isn’t doing well but you want to retain talent.  Let’s give them a bigger title and show them how important they are!  I have seen it work but it also seems cheap/fake to me.  If you want to recognize the person then recognize them through clear honest ways.
    • I can’t hire good people unless I have it – they wont apply! – I dont know of many managers who hire great talent through unknown applicants.  Almost all hires are referrals or somehow connected by 1 or 2 levels of separation on LinkedIn.  Do you think excellent hard working top performers will only apply based on a title?  The smart humble people you want are better than that.
  • as-a-kid-grumpy-old-man-as-an-adult-hero-7074116

Why am I so against fancy titles?

  • If you bring them in at the wrong level – you can’t demote them.  Leaders aren’t perfect.  It is hard enough to bring in people who will be successful at your company but then to also bring them in at exactly the right level too?  What often happens is you want to hire someone but their compensation is high and it forces you into the salary band for that title.  Then when that person joins and doesn’t perform at that lofty level their fellow team members resent that the person has a higher title than they do.  When you make this mistake you can’t just demote the person – they would quit.  You are locked in.
  • People want a checklist of things to do to get the title – when you start to differentiate one peer from another with a different title they want to know why.  So you are then required to document each difference and what it takes to get to that other level.  Do you think you can clearly write the legalese required to satisfy your detail oriented team members? 🙂
  • It defines not only what you do, but what you WON’T do – then once you have documented all the differences you give someone a reason to start saying “that is not in my job description, I am over qualified for that” or “I don’t do POCs or take Problem tickets any more”.
  • You can’t move people more than 1 title level – every try to move someone from a “software engineer I” to a III or a “Junior TAM” to a “Senior Principal TAM”?  Skipping more than one title level somehow becomes an act of god.  You are now breaking some unwritten rule of the corporate ladder.
  • Tie your self worth to a label rather than your impact/results – your title then begins to define how you value yourself. “Oh, I can’t leave this job – I am a VP and I don’t want to go backwards to be a Director”.  Guess what folks.  I was a VP in charge of 8 people at GoodData and left to be a Director of 25 people at Zscaler.  Turned out pretty good for me so far… go check our post IPO performance 😉
  • It only serves to make one person feel better compared to their peers – this is the most important reason.  If at the end of the day the customer doesn’t care about your title, compensation isn’t tied to it, opportunity to work on more challenging projects, and training isn’t tied to it, then the only purpose it serves is for one team member to feel more important that the other.
Have you ever taken a step back to ask why we have a job title in the first place?
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It is because without a job title you would have to spend 5 minutes explaining what you do to every person you interact with.
The purpose of a job title is to convey what you are responsible for and the scope.
Role: what do you do?
  • Engineer
  • Sales
  • Support
Scope (Assuming ~9 person teams the below framework will scale to ~7,000 people…)
  • Manager = 1st line leader
  • Director = 2nd line leader
  • VP = 3rd line leader
  • CXO = 4th line leader
So what is my approach?
  • Choose only a few titles
  • Convey scope
  • Convey responsibility
  • Single very large compensation range
  • Enables a person to marry anyone they want and get any job they want.
For example in our Organization we have only two titles
  • Customer Success Manager (CSM) = a post sales resource focused on making the customer successful
  • Technical Account Manager (TAM) = someone who is technical and dedicated to only a few accounts
In the last Org we had
  • Sales Engineer:  deep product expertise, few named accounts
  • Solution Architect: broad industry expertise, lots of accounts / overlay resource
For scope we do have traditional levels like the ones above but we don’t do Sr. Director.  Instead I have become a fan of what Google and Atlassian does.  For scope everyone is “Head of” something.  For example
  • Technical Account Management – Head of Americas
    • Technical Account Management – Head of East
      • Technical Account Manager – Head of Boston!
Originally these teams had titles like “Senior SE” or “Senior TAM”.  All at once we hey-chill-out-youre-the-teachers-petnormalized everyone to the same title.  Surprisingly there wasn’t much backlash.  Perhaps because it is harder to be upset when everyone has the same title as you.
A person shouldn’t need a fancy title to be able to work on the hard accounts, get the best training, the highest compensation, peer recognition, etc.  It should be based on performance and results.  If you are good – you get more opportunity.  If you stop being good you get less opportunity.  As a leader you need to fulfill your part to make these things happen.

Why I Chose to do Customer Success

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Apologies to the readers (the 3 or 4 of you out there)…  it has been a year without consistent articles.  To be honest, since transitioning to the Customer Success Leader role I haven’t been sure I should continue this blog or pivot it to a CS focus.
wifi-does-not-work-memeAlso being on a 12 hour flight without Wifi helped too… Onto the first topic.
Even though our organization is almost 200 people I still do the final interview for every candidate.  A common question I am asked is “why did you leave Sales Engineering to do Customer Success?”.  When I talk to fellow sales leaders about their Customer Success teams a common theme is that if you have a person who isn’t performing “but is a good guy” rather than manage them out of the company they put them in Customer Success.  Ummm…. Not a ringing endorsement.
Yes, it was my decision to do Customer Success. Why I Chose to Do it
If you have been following this blog then you would know I am a big supporter of doing what you love, don’t chase titles, money and opportunity will follow.  I loved the  SE leader role I had.  I had the opportunity to build a team the way I wanted to, the talent was top notch, and I really enjoyed the people.  So when candidates ask me why I chose to do Customer Success I tell them: “I didn’t, I said no 3 times”.
  1. Head of Talent:
    • “Bill you have the unique background of post sales escalation support, business savvy, technical acumen, and know how to scale teams – this job would be a big promotion to VP and perfect for you!”
    • Me: “I have already done the post sales thing before, after working ~300 critical accounts at Cisco I don’t think there is much left to conquer/learn.  Love what I am doing, make good money, titles aren’t important anymore.”
  2. COO and Chief People Officer:
    • “Bill we don’t like the retained search candidates, and think you would be a good fit for this role.  It will grow to be one of the most important roles in the company responsible for all of our recurring revenue.”
    • Me: “That is pretty cool.  But I love what I am doing.  I am really happy.  Here are some other good people…”
  3. CEO, Chairman of Board, Largest Share holder
    • Ok – maybe I should at least listen 🙂   Again I said I love what I do – but suggested that rather than interviewing for the job why don’t I take some time to think about what I think the role and team should be.  Then let me come back and propose a vision that I would be happy and engaged fulfilling and if it is a fit for the business I will do it. If not, no worries – I love my job.
When I was 25 my career really took off.  My boss left the company and I was planning to accept a role as an SE Manager.  Before I transitioned my general manager asked if I would create a proposal of what should be done with our escalation team once I left.  So I proposed a whole new org/function that was not only focused on escalation but the whole customer lifecycle – “Deployment Success Organization (DSO).  I wished them best of luck and I was off to go do the SE thing and make bunches of $$$ until… our GM asked if I would be willing to stay and run the new org as a second level leader.  It may not be the same $$$ but it would be an opportunity to build something from scratch.  Taking that opportunity over more $$$ was one of the best decisions of my career.
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Now 15 years later I had the same opportunity.
I thought about the things I was good at and liked to do:
  • Build a team and scale
  • Be involved in both business and technical
  • Learn how a customer’s business worked (like an ongoing MBA)
  • Challenge the customer to get out of their comfort zone and change/transform
  • Present on stage at events
  • Entertain clients and travel
  • Be able to float around and focus on different things internal/external
  • Get shit done and be independent
Then I thought about the business need for a Customer Success organization.  I purposely did not go and look at what other companies were doing.  I wanted a fresh perspective.
I went back and looked at what drove me to leave Cisco in the first place.  During my last 3 years at Cisco we changed how our Collaboration team sold.  Rather than try and focus on multi million dollar deals we realized we could drive growth by simplifying our sales process and focus on consumption economics.   At the time Cisco was trying to sell all these different complicated features, upgrade all their customers software versions, and it was easy to get stuck in the weeds.  Our approach was:
  1. Determine what our sustainable differentiation in the market was and put them in 3 buckets (Architectural Control Points)
  2. Document the customer’s current environment and control point status (Collaboration Profile Tool)
  3. Learn a customer’s business objectives and map them to one of 5 differentiated use cases (Power Plays)
  4. Rather than pitching 100’s of features, work backwards from the Biz Objective to the technology needed
  5. Drive adoption of the technology through guerrilla end user marketing and technical assistance (Ranger Program)
Our hypothesis was that if we did this correctly we could turn selling phones and video units into SaaS consumption business and unlock budget from the customer’s lines of business and individual teams rather than IT.  For 3 years we did > 30% growth and grew the business to almost $1B.  All of this while the rest of the segments and global teams had -1% growth.
Doing Sales well isn’t about pitching and closing.  It is about understanding a customer’s business objectives, your solution’s sustainable differentiation, and how you can marry the two of those together and make it a reality.   The conclusion I came to was that Customer Success is really just the fun part of sales without the burden of a quota!
So what was the proposal back to my company on how we should do Customer Success?  It has evolved and matured over time but the initial hypothesis has held true.
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If we did this would it check the boxes on what I was good and and liked to do?  International travel, business/tech, present on stage, get shit done, etc.  Yup! IMG_3426.jpg

Yes, it was a good decision to do Customer Success and it has been a wild but rewarding ride the past year.  If building the SE org was like checkers then this has been like 3 dimensional chess.  My next blog posts will cover this journey and lessons learned.  My tentative topics are below.  If you have suggestions feel free to comment below.


  • Job Titles – the dangers of the “Senior Principal XYZ” 
    • already written – will post next week
  • An Argument Against the LAER Model for Customer Success
    • Part 1: Vendor Success or Customer Success??
    • Part 2: Team and Structure
    • Part 3: Metrics and Measurements
  • What Changes When You Become a Public Company?
  • Lessons Learned from Managing a Global Organization
    • Incorporating new entities in Eastern Europe
    • Opening offices in Latin America
    • Deciding marriages and parking passes
    • Keeping your own marriage intact
 
Btw – you can choose to do Customer Success too!  We are hiring and have 50+ openings to fill in the next 5 months.
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What is it like to ring the opening bell at Nasdaq and IPO?

A Wedding

This past Friday I joined 50 of my fellow co-workers at Zscaler to ring the opening bell at Nasdaq and observe our shares being traded on the public stock market for the first time.  The president of Nasdaq described the events of the day as similar to a wedding along with photographers, people directing you where to go, energy, and lots of well wishes.  While directionally correct I would like to clarify his comparison.  It is more like being at a wedding where you are the proud parents of the bride to be.
You have invested time in raising your child and you hope things go well but it is now out of your control.  You are not the focus of the attention but you are a part of it.  You are told where to stand and walk.  You sneak away like a little kid to take pictures and selfies.  You are hugging everyone in sight and congratulating them and they are congratulating you

The Legal Fine Print

When you move towards an IPO there are a lot of legal issues and concerns around privacy, insider trading, and ensuring all is smooth.  Therefore things can get very hectic towards that IPO day and in fact up until the night before the official day the IPO itself isn’t set in stone.  That makes it hard to nail down travel plans or let your wife know what type of clothes she should pack.
So what is the experience like?  When prepping for the experience I couldn’t find out much information online so I will do my best to detail it here.

The Night Before IPO and all through the house not a creature was stirring not even a…

Customer?  At Zscaler our customers are a critical part of our success.  They have driven our product and vision and as such we wanted to include them in the festivities.  The night before we sponsored a Customer Appreciation Dinner where our board of directors and executive team hosted customers who have been with us since the beginning as well as recent additions.  A great opportunity to get to know our champions and sponsors outside of a negotiation or post sales support issue.

The Night Cap

The one downside to the customer event was that our team had planned to have a group dinner at the same time.   After the customer dinner our COO and myself swung by the other restaurant to meet up with the team (and my lovely wife who attended our team dinner in my place).  A glass of wine and back to the Marriott Marquis hotel for a final night cap.  That is when all the various groups and teams started to trickle in and come together.  A few glasses of wine, some reflections on our journey so far, how lucky we were to be there together, some fun hazing (and maybe a few more beverages for the extra courageous).   Around midnight Julie and I went up to bed.  As I was about to turn in for the night I turned to her “I hope I don’t oversleep tomorrow.”   We both set an alarm just to be safe.

7:00 AM its go time

IMG_2247Get up, get ready, suit up!  We are meeting at the lobby of the Marriott so that we can walk across Times Square to the Nasdaq building as a group.  While the folks from the West Coast tried to wake up (it was 4am for us) we mingled around to chat and say hello to team members we don’t get to see everyday.  You of course have the few people who had the extra beverages the night before oversleep but in true team fashion we have their back and call to wake them up.
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7:30 AM – its Cold Out There!

IMG_8414We walk across Times Square before the crowds have formed and the Sun has a chance to warm things up.  None of us know what we are doing other than we go should go to the Nasdaq building.  What do we do when we get there?  “Just do what I did when I was underage at a bar.  Just walk in the front door like you belong there.”  In the front door we go and walk up to the security guard.  “Hello, we are from zscaler and we are here to ring the bell”.  I mean… what else would you say?  “Photo ID’s please” was the only response and through the door we go.  You mingle around the lobby for a bit without clear direction of exactly what you should be doing until about 15 minutes later when a woman with a headset lets us know we can go upstairs and brings us up an elevator.

8:00 AM There is always time for Bacon

We are brought to what looks like a TV studio with an adjoining breakfast area and stage/lecturn.  Some of us take the liberty to walk up on stage and start taking photos.  Others go for bacon.  Some of us go for bacon and eat it on stage.   Eat up!  Mingle!  Eventually groups start to form and a professional photographer starts taking photos.

8:45 AM Master of Ceremonies

The president of Nasdaq joins us and describes the agenda for the day.  We find out that our offices all around the world are having parties and we are being webcast globally.  As we look behind there are video cameras moving and following us.  After a short speech the President gives way to our CEO and Founder Jay Chaudhry who gives a short speech to our global team.
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9:00 AM Move to the Studio

IMG_2340We are then herded downstairs to a TV Studio with glass walls facing Times Square.   It looks like anyone out there can watch the opening ceremony.  It is a round room surrounded by cameras.  The back wall has TV screens with famous brands and their stocks on Nasdaq.

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We are advised that the CEO and Family will be at the podium, followed by the board, followed by the exec team, and then everyone else fills in  from there.  We do a practice run with lots of cheering.  It is recorded and will be used for Social Media.  In the meantime our group is packed in tight being goofy and marveling at the experience.
A couple more speeches and we are brought back on stage minutes later.  We are told to cheer… and cheer… and cheer for minutes.  The louder we are the more likely the news stations will pick us up and broadcast.  We see the TVs and they are all showing the various channels.  Eventually all 4 news stations pick us up and before we know it 7…..6….5…. (what happened to 10, 9 , and 8?) 4…. 3….. 2….. 1….. confetti!!!! That was a blur!

9:45 AM – Outside we go!

We are ushered directly outside into Times Square where the buildings all around us have our zscaler logo emblazoned on them.  My wife Julie is out there watching along with a number of team members who either live in NYC or were in town for customer meetings.  We move into the square for professional photos as a group in front of the Nasdaq and Times Square screens.  As we all marvel and cheer I catch photos of our team start to show up on the big screen.  One of my favorite parts was being able to snap photos of all of us as the pictures flipped through.

10:00 – Its Champagne time!

Back inside we go.  Now that the ceremonies are over our wives, husbands, and other team members can come inside to join us.  Or at least we snuck them in.   Champagne is served and we walk around a big room split in half.  One half has cocktail tables and windows that look out onto Times Square.  The other half has people at their desks working with multiple screens.  Our new master of ceremonies Jeff joins us and explains what to expect.  Our shares were all purchased the evening before by the banks.  The banks will now start taking buy and sell orders to try and match things together before officially allowing a trade.  The goal is the allow a smooth start without volatility.  He warns us that because there was a lot of interest it may take awhile to get an initial price and then trade.  While we wait we get distracted by fancy screens with pictures of us on them that we can touch and get emailed to ourselves.  Cameras are every where.  I find out we are being live-streamed when people keep texting me screen shots of me doing stupid things.

10:10…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.

10:15…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.

10:20…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.

10:25…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.

10:30…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.
We finally figure out who Jay is and some of us mingle over to look over his shoulder and see whats up.  It is very cool how we could just stand over his shoulder as he took the calls and worked the phones.  All while drinking champagne.

10:35…

Jeff comes back and lets us know that some guy named Jay is working with the banks to settle on pricing and trades.

10:36…

Jeff comes back and lets us know that we finally have an “Indicative Price”…..  holy crap!

10:40

We get our first public trade!  The price is set. CHEERS everywhere!!!

11:00 AM

Wow.  We are all so proud.  Pictures continue.  We have been on social media lockdown for weeks, but now we can share our excitement.  Onto Linkedin and Facebook we go!  We get to see all of the excitement finally from all around the world.  We had a feeling of being sequestered.  Our legal and finance team did a great job of putting the fear into us not to do anything that could be construed as inappropriate.

A favorite picture of mine came from my little sister who is studying finance in college and now thinks her big brother is kinda cool:

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11:15 AM

Things start to calm down and we all head to a nearby restaurant for a wrap up lunch.  All of us but our CEO Jay who has 20+ more interviews to do.

3:55 PM

Some texts to remote team members.  The day end. All of us emotional and proud.  Until tomorrow when there is more email to do and a Customer Advisory Board in the UK on Monday and in Germany on Wednesday.
As a final note, I apologize for the lack of updates to this blog.  About 5 months ago Zscaler formed a new organization called Customer Success and I left the SE Leader role to lead that global group.  I was not quite sure what I would do with this blog since it would be the first time in years I would not be an “SE”.  However, I do own the domain CSThoughts.com and will likely have that forward to here.  As I have reviewed my previous posts they are more about technical management and not just about sales engineering.

So… you want to be an SE Leader?

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Every few weeks a team member or colleague asks how to become an SE Leader.  The most direct approach would be to answer their question with a list of steps.  However, just as with customers we should give the aspiring leader what they need not what they ask for.  We must first take a step back to understand the individual’s drivers and motivations.  Educate them on what the role of the Leader is.  Provide them with tools for self introspection and awareness.  Finally, develop a career action plan – that may or may not be a leadership role.

Why?

When entering these conversations I can typically tell if the person would make a good leader or not with a very simple question.

“Why do you want to be a leader?”

The answers typically fall into 3 buckets:

  1. minions-03 (1).jpg“ME-ME”: the candidate talks about how successful they have been.  They feel like they have reached the peak.  They have to be a manager to move up in the company.  The majority of the time they are complaining about their day job.
  2. “SUPER SE”: the candidate describes how team members always go to them for help.  They want to formally train and mentor the team.  They know what SE’s want and how to have their back.
  3. “LEADER”: the candidate describes interests not only in doing the SE role but has evidence of learning or being involved in ancillary activities such as business, finance, non-profit organizations, interfacing cross functionally.  They are the ones who always step up to leading tiger teams, cross functional projects, and tools to help others, even if it doesn’t directly impact their quota.  They are seeing exposure to learn and to build.

I find that ME-ME’s reason for being a leader is more about a cry for help than it is a desire for leadership.  Focus on transitioning the discussion to a general career discussion.  They would not make a good leader – at least not with that current mind set.  Leadership is a servant position.

The SUPER SE is a borderline candidate.  Your focus with them is to educate on what the SE Leader role really is, i.e. only a small percentage is downward facing to the team itself.  Their risk is that they will try to be both an SE and a Leader and do both poorly.  Their SE skills will atrophy while never fully having the time to become a leader.  These are the managers who are constantly busy doing paper work, micromanaging their team, and being overworked but not producing.  These candidates are often best as peer leaders and mentors.\

LEADER’s are those who understand the multi disciplinary part of the SE Leader role.  They are ready to leave behind being an SE.  They have a build first mentality and have displayed a willingness to do so without personal gain.

What do you love doing?

After the “Why?” you should seek to understand the candidate’s drivers.  In any given day, what gives them energy and what takes it away?  What activities make the day go by in a flash but by the end of the day they still have energy and a sense of accomplishment.    What are 20 things that make you smile?  On the flip side, what activities do you dread going to work and doing?  What things do you procrastinate at doing?

How well do things that give them energy align to the activities of a leader?

Do you know what an SE Leader actually does?

Many aspiring leaders don’t actually understand what a leader does.  Remember, they only see the parts of the leader role that interacts with them personally.  They don’t have visibility to the other 70% when the SE leader works cross functionally or up the chain.

A few key points I make are:

  • The role is more than just SE skill development and mentoring.  It includes budgeting, territory planning, process development, customer escalations, content development, product management, go to market planning, forecasting, etc.
  • The job of an SE leader is moving the entire bell curve of team performance 5-10% higher.

Finally, the most educational tool I have found is to share my calendar.  Show the aspiring leader what the week is really like.  In the example below (click for full size) you can see red eye flights, staff meetings, enablement meetings, one on ones, customer workshops, recognition, pricing calls, team member assessments, forecast calls, head count planning, fiscal years planning and interviews.  You can also observe that there are times for work life balance such as hitting the cross-fit gym, traveling to Paso Robles, going out to dinner with the family, and attending wine tasting events.

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Scare Them Away!

The candidate would be crazy to want to be an SE Leader.  Do they realize:

  • booRecognition: They will no longer be the rockstar getting all the attention.  An SE Leader has to be OK with only 10% of the credit (or no credit at all).  The SE Leader role is one of the hardest and most under appreciated/recognized roles in a tech company.  You need to be ok with that.  We are servant leaders.
  • Adults can be Childish: Adults never really stopped being children.  Just because we turned 18 we didn’t mean we magically matured.  Adults try to play the “mom said no, lets ask dad game”, don’t know about personal grooming habits, fib, etc.
  • career-decision-making
  • Money: an SE Leader’s base salary may be slightly higher but for any given year ~45% of their team will make more money than them.  The SE Leader’s quota is the sum of their team’s quota.  They will have top performers and low performers.  Thus they are the average.  Go do the math 😉
  • Career Decision: moving into leadership is a completely new discipline than technical fields.  The aspiring leader must move from being a rock star individual contributor and start at ground zero on the skill curve.  They have to go back to learning.  It is not like trying out a different tech for a while and then swapping back.
  • Fail and you Leave Company: if the person moves into leadership and fails they end up leaving the company 90% of the time.  Sometimes this is the companies decision but more often than not it is the failed leader’s decision.  When they made the move into leadership their SE skills atrophied.  They also have pride and it is hard for a person to fail and then go back with being a peer again.

Personal Exploration

Arm and challenge the aspiring leader to do some personal exploration.  I often recommend they read a few books.  If they are fascinating reads then they are likely on the right path.  If they are boring drudgery that is a sign as well.

Take Action

At the end I explain that any career path they choose whether management or not I will support them and we should make a plan.  I am committed to their career whether it is in our current company or if I even have to find them a fit outside the company.

should_you_invest_in_a_401k_with_no_matchingHowever, the support I offer is not free.  I offer an employer 100% 401k match.  The amount of effort they put into their career plan and path I will match 100% with my effort.  I will join recurring mentoring calls with them, expose them to leadership activities, etc.  I warn them that their day job is busy and they will need to find the time to do these things.  After all if they can’t find the time now how do they think they can do it when they are a first time manager?

If we have discovered during the course of the conversation that people leadership is not for them then I do my best to find a different role or even create a role for them.

A final recommendation is that they try leadership out in a safe manner without having to go all in and risk failure.  Determine ways they can take on some leader responsibilities while still an individual contributor.  Setup a leadership training curriculum for them.

If they decide to take the plunge… get ready for a wild ride!

 

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How You Know You Are in the Right Role

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My next post is in process and will focus on whether or not an individual contributor should move into SE Leadership.  In the meantime I was listening to a new hire training presentation by one of our sales leaders and he shared the below graphic.  In my previous posts (How do you know when it is time to leave your job as an SE?My Favorite Interview Questions – SE & SE Leaders) I highlighted how important it is to uncover what gives an individual energy and motivation and align that to specific roles.  Innately I have understood the concepts of ‘You Love It’, ‘You Are Great at It’, ‘You are Paid for it’ but I missed the concept of ‘The World Needs it’ and how they can all overlap.

How does your role fit the following?

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If I think about my own recent roles

MIT Lincoln Laboratory

  • Great at it: didn’t have a PhD but I could write some decent code, but I was not most detail oriented.
  • World Needs It: shooting down nuclear missiles is a pretty important effort.
  • Paid for: not a ton since it was non profit, but I could feed myself
  • Love it: loved the people I worked with and the travel, but working on government and long term projects wasn’t the best fit for me.

GoodData

  • Great at it: SE leadership, enablement, SaaS were all strength areas.  Big Data was a new discipline and just average.
  • World Needs It: with a crowded market in analytics it was a nice to have vs. a change the world effort.
  • Paid for: sales is pay for performance, high tech – all good.
  • Love it: analytics just wasn’t a passion area of technology

Zscaler

  • Great at it: my background in IT sponsorship, time at Cisco, SaaS, application development, computer science, SE leadership, scaling teams, recruiting, hiring, mentoring – all areas of skill.
  • World Needs It: ummm… cybersecurity… have you seen the front page?
  • Paid for: sales is pay for performance, high tech – all good.
  • Love it: great people, honesty, scrappy, can wear jeans (most of the time), trust, etc. Yup.

 

How to Create an SE Leader Business Plan

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Q4 can really put a damper being able to takie a step back to reflect and write.  At least that is my excuse for the delay between posts.
One of the key needs for every SE Leader is to create a business plan for their team/organization.  The plan is leveraged in multiple ways such as the initial interview to get the job, fiscal planning for budgeting, as an ‘operations manual’, and also as a means to explain the vision, strategy, tactics, and results that the team will measure and how it maps back to the company goals.
doyourjobMany SE Leaders, especially those new in role, don’t realize the many facets of a business
plan or why to create one.  Rule #1 from the famous book “First Break all the Rules” is “Do I know what is expected of me at work?”  Without a plan how will your team know what is expected of them let alone the the rest of the company?  How will they know how to “Do their Job”?  For those of you who are interviewing for a new role this plan is a way for you to demonstrate your understanding of what the job entails and how prepared you are for it.
I recently went through this exercise with my SE Leaders (SEL) to build our FY18 plan.  Step 1 was a session on “What do we need to plan for?” 😃 The team did an excellent job of mapping out the areas to agree on and document.  What follows is a cleansed version of that output.

Who is joining the party?

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ou probably know most of what you want the team to do and achieve.  The easy approach is to make the plan yourself and then come down from the mountain with your 10 commandments.  Unfortunately, you don’t know everything and you are missing an opportunity to leverage the talent of your team.  You did hire people smarter than you right?  Also, by involving not only your team but also your cross functional stakeholders you increase everyones understanding, ownership, and buy in.

What do you mean I can’t just do what ever I want?

When you create your plan you will often have different guiding criteria from the various groups such as Finance, Exec Team, Sales structure and for global
  • Finance: headcount ratios, investment…
  • Sales:  sales territories, rep placement, segmentation…
  • Global SE Policy: programs, initiatives…

Categories of Planning

The approach I take is to create either a single PPT deck or a Webpage/Wiki spelling out each of the below.  The key is that your plan is in a medium that can easily be shared verbally as well as bookmarked and referenced by the team.  The structure our team leveraged is as follows:

 

Feedback & Lessons Learned

    • Last years Plan Summary with final results: too often leaders shared a plan at the beginning of the year but never stick to it.  The only way the team will believe you is if you are continually referencing it and then when sharing your progress throughout the year you map it back to the plan.  Thus I always start the plan off with the previous year’s exec summary slide (more on that below) and document the results.
    • Team Sentiment: many companies will do employee surveys.  At Cisco we called these Pulse scores and at Zscaler we call them Voice of the Employee.  I typically take the scores and do a summary analysis showing the changes from previous surveys over time for the team but also where they are relative to the rest of the company.  It is important to not only be transparent with the survey results but also to document action plans to improve.  These action plans do not only need to be SEL owned but may also be owned by a tiger team of the SE themselves.
      • Areas of Strength / Weakness (Discontent) – relative
      • Improvement Action Plan
      • 360 & Skip Level Feedback Consolidated

Summary Plan

  • SE attention spans are very short.  Thus I have found it valuable to have an exec summary of the entire business plan that fits on one piece of paper or slide.
    • Vision: what are you trying to achieve as a team?
    • Strategy: what are the high level strategies or concepts you will use to get to that vision?
    • Tactics: what are the concrete actions you will take to implement those strategies?
    • Results: how will you know you are successful when you execute those tactics?  What are the measurables?

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  • A second slide can also be useful that covers
    • Start, Stop, Continue: much of your plan/approach will be similar from year to year so it is often useful to call out the key changes.
    • Ratios, Alignment, Comp:

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Customers

  • Segmentation
    • How will you cover and engage with your customers?
      • By Size: Commercial, Enterprise, Large Enterprise, Majors
      • By Vertical: Oil, Finance, Retail, etc.
      • By Type: Federal, State Local, Education, Enterprise, Service Provider
      • TAM (Total Addressable Market)
  • Coverage
    • SE Organizations are typically driven off ratios of X SE of a particular type mapped to Y number of Sales Reps.  Before you can plan your own coverage you typically need to know
      • SE Ratios
      • # of accounts
      • Geography of Sales Reps
  • Event Planning:
    • How will you cover your major events throughout the year?  For example, for us it is RSA, Gartner, HIMMS, EDUCAS, and Black Hat.
  • Technical Sales Process
    • How will you engage with your customers and what are the proven steps to win their trust and business?
    • How does this map into the greater sales process?

Partners

  • What is your partner plan?

People

  • Job Role Expectations
    • For all roles
      • SE
      • Architect
      • SE Leader
    • One Page Summary for each covering
      • Mission Statement
      • Core Skill Set
      • Customer Verifiable Outcomes
      • Responsibilities
      • Metrics – what does success look like?
  • Career Paths
    • Grades, titles?
  • Recognition Plan
    • Annual merit, retention bonuses, stock allocation
    • Ongoing recognition (verbal, awards, etc) – we had an SE working group define this.
  • Compensation
    • Split & Out of Territory Policies
    • Comp Plan (team, individual, geo, product specific, net new, renewals)
    • Teaming Policy
  • Enablement
    • Labs, Training, SE Summits
    • New Hire On Boarding – rotations, certifications, etc
  • Talent Assessment
    I have found it valuable to evaluate the team across many different lenses as it serves different purposes.

    • Skills Matrix – do you have any skill gaps such as core networking skills?
    • Potential vs. Performance – 9 block & skill vs will are models for this
    • Readiness for Next Role (Up, Out, Different) – how soon?
    • Risk to Depart – 2×2 matrix of criticality to the business and risk to leave
    • Participation Rates & Performance – any risks of people who didn’t earn?
    • Bench Depth – if one of the SEL were hit by a bus, who would take over?  Are there people in support or services who would like to be an SE?
  • Hiring (who, what, where, when, how)
    • Budget (Zero BB) vs HC (specific number of people)

Operations

  • OPEX
    • Travel, Training, etc.
  • PTO Schedules
    • When you are on PTO/Holiday what are your expectations?
    • Policy – Coverage when on PTO (individual, manager, comp)
  • Process Improvements & Changes
    • POC Extensions, Activity/Outcome Tracking
  • Communication Cadence
    • Mandatory vs Optional Meetings/activities
    • Meeting Cadence (1 on 1’s, all hands, ZU, MM)
  • Operational Cadences
    • SFDC Hygiene
    • Ensuring the Technical Sales Process is followed
    • Hand off to post sales teams
    • Meeting notes
  • Cross Functional Requests & Dependencies
    • Invest in other programs or resources

Communication Plan

  • Create it
  • Communicate it
    • Again
    • Again
    • Again
    • Again
    • Again
    • Again
    • Again
  • Post it front and center on your team web page
  • Reference and update it whenever you speak

Our Fiscal plan ended up being ~53 slides.  However many of them are from the People section that are restricted to SEL only.  The goal is that the plan becomes a reference guide for the team but for the day to day they can just reference your one page exec summary.