00:00:02

So to set up the next session, let me state that one of the problems most expressed by this community is how to influence senior leaders in our organizations. They struggle with existing orthodoxies, conservative leadership blocks, powerful, centralized, shared services, organizations, functional silos, project management, procurement security. But I think the biggest challenge is how we get as a community, senior business leadership on board. And I think this is often difficult to do because it is a black box. We don't get very many opportunities at bat. We don't really understand what are the conversation that happened within the black box. And again, the interactions are so infrequent, so it's very difficult to learn and even dealing with CF and dealing with CFOs is even more difficult. So one of my favorite constructs of just, uh, how difficult is challenges was framed by Ben Horwitz and a famous blog posts called ones and twos.

00:00:50

And he said, when they fund companies, they kind of put their founding CEO's into one of two buckets, uh, the ones or the ones that know what to do. And then two is getting the company to know what you know, and there's this, this wonderful description about what one's like. And don't like, what ones love ideation. They love talking to customers. They love playing eight dimensional chess against the competitors. They get bored of execution details, process design, goal, setting, structured, accountability, training, performance management. So that's the ones, you know, of course the two is that once we'd love that, in fact, uh, you know, they get agitated when they do sort of strategy sessions when they know that there is a business to run processes, to improve people, to hold accountable. Um, and I think in this community, we often represent the ones, right? We have, uh, we see that there's a better way of working and the opposition or the twos, right?

00:01:40

The people who are, uh, trying to enforce compliance around the existing processes. So last year, one of the most talked about sessions, uh, was the session with Chris. O'Malley the CEO of Compuware, where he taught us about how to better communicate with the twos, how to survive and to beat the opposition. Um, and it just was so exciting that, uh, Dr. McPherson and I, uh, went to a Compuware in Detroit, uh, for our followup session. Um, and what I learned was just riveting. Uh, but maybe it's the set up of the story. Uh, you know, we were handed an agenda and the first thing on the agenda was a data center tour. And I said, I turned to mic. Uh, and I said, I'm so sorry. I have no idea what we're getting into. I I've seen plenty of Halon extinguishers. I'm not sure what we're going to get out of this.

00:02:27

Um, but it turns out it led to a revelation that stunned me because here's what we saw. It was basically empty. There are two mainframes there, right? Um, uh, and then the rest of the data center floor was basically empty. There were, uh, outlines of where the racks used to be like a, you know, an outline and a murder scene. And in its place are a little placard that says what business process used to be run here and how much money are we saving when we got rid of it. And the profound mustn't to me was the reason they did that was so they could reallocate three to $5 million out of back-office and move it into R and D the things that customers have to care about. And that was one of the biggest revelations I had in the development of the unicorn project and led to, uh, the fifth ideal, uh, the fifth ideal.

00:03:17

Oh, and now you can actually see 14 tons of equipment that was just hauled away. Right. And they celebrate that. And the question for me was how did it feel like for the CIO who built this empire over the last decade to now start dismantling it and what we're, you know, ha you know, how does one motivate the behaviors that we want, uh, genuinely create lasting, durable business advantage. And that's what led to the fifth ideal customer focus, you know, not ideal as functional silos who prioritize silo goals over the highest business goals. Ideal is we do whatever is best for the customer and the customer. Doesn't appreciate it, view that as something they want to pay for, maybe it's not at your core competency. Um, uh, Jeffrey Moore has a notion of core versus context core are those things that create durable business advantage that customers pay for context is everything else, right?

00:04:05

Payroll is there often mission, critical payroll is important. We can't get that wrong. We have an obligation to our employees. However, our customer's willing to pay you for world-class payroll is probably unlikely, right? So that is context. And so, uh, Jeffrey Moore in his book zones to win, uh, says that context is a killing ground of companies because contexts can starve core. So, uh, these aha moments, uh, led to a bunch of things which got integrated into, uh, the unicorn project. And I asked Chris O'Malley if we could do a cul two last year session, and if he could bring his CFO, Joe , uh, so that we could all better understand how do CFOs think, what do they care about and how do we as a community, uh, get them on board. So without further ado, please welcome Chris O'Malley and Joe ahow CEO and CFO of Compuware

00:05:04

Hello, Chris Jane, how are you, Joe? Great. You forgot your green eyeshade, um, bean counters, right?

00:05:18

So, um, Chris, um, and Joe, thank you for being here again. Thank you for having us. And, and I think the first question, you know, maybe go to that story about the empty data center. Could you tell us, um, you know, what was the motivation that led to that? I mean, I think so many people here in this audience, uh, they know of people, or have, um, been personally responsible for bidding at building up these huge, vast technologist states built up over decades of bad automation built upon even worse business processes from a CEO's perspective. Why was it so important that you rip out everything in the data center?

00:05:53

So, um, you know, when we think about this, I mean, the story that I'm going to go through, the one thing I think you should think about is that you talked about type one and type two, that you've got type one of the visionaries and type two are the pragmatists. And there's a lot of circumstances where these players come together and they're confrontational. They're actually opposing one another. And I think this is a heartwarming story about collaboration between type ones and type twos, and ends up creating a, a good outcome for everybody. So when I came to copier in 2014, certainly I didn't come with a purpose of doing this. Right. You know, I'm doing out the data center. I came with a purpose of turning the company around, uh, before I came in 2014, the company had been in a serious revenue decline over a number of years.

00:06:38

We hadn't come out with a new product since 2015, or excuse me, 15 years previously, uh, you know, we were really not getting up every day and doing the work that our customers needed us to do so that we would reward us with more business. So, uh, if you're going to turn that around, you can't just hope it away. You got to get a bold vision and that bold vision, uh, for a new reality starts with going to customers and finding out what the care about, what are the issues they're facing and how does the, in our case, the mainframe have to change in a material way to make them successful in the age of software. So we settled on this vision of mainstreaming, the main frame, making it the equivalent of any other platform, a first-class digital asset relative to the, uh, the efforts of agile and dev ops so that these companies could best Ben, better compete.

00:07:26

We also then had a double click on that and create a mission, a mission about what we were going to do as a company to come out with new products, with new capabilities, integration, with leading and preferred dev ops tools so that we were a party to making that vision come true. Then ultimately you land on a strategy. How do you actually do it? Um, so that's where the character of the type two comes in and Joe, in a meeting, uh, you know, in the course of us trying to get the company restarted, ask these questions after hearing about the vision and the mission, like how much is this going to cost and how are we going to pay for it? And how is it going to make a difference? Now that puts a damper on the meeting. Obviously we're all excited about the vision and the mission, but reality kind of gets thrown on us all, but that's a healthy thing.

00:08:14

Uh, you see examples like we were at recently where that CEO is a type one that got out of control. He didn't have a team of rivals around him that was questioning what he was doing and what he was trying to create, where the business, uh, you know, Joe, in a sense brings that thought process. And that is important part of reinventing and transforming a business. Cause if you do it wrong, you can actually make issues worse. So in thinking about the vision and the mission, we also started looking hard at copy where itself, you know, what are the things that we do as Jean was saying that, you know, don't bring value to our customers, don't make a difference in their eyes, uh, because you want to do less of that. And certainly if you can do those things better, cheaper, faster, that's a huge, huge win.

00:08:56

So one of the things that we changed was we changed the way we do internal it in 2014, I just was not a believer that doing infrastructure management internally was going to give us any form of competitive advantage, doing it better, was not going to make us a better servant to our customers. So we made the decision and created a theme of two platform, one speed it, and the basis of that was that anything that we could build that would give us a competitive advantage in serving our customers, doing things that they cared about, we're going to do it on the main frame, everything else we're going to do as a cloud consume service. So now you see the, the reflection of that, that 80% of our data center is now empty, but the good part of that story and the type two's contribution to making copy where a success is that we've saved $6 million in run rate by doing this.

00:09:48

So we're better, cheaper, faster, and how we support the business, but we're doing it cheaper. We took all of that $6 million and put it into R and D. That's now having a difference in the eyes of our customers. So that company that hadn't come out with a product for 15 years when I started, has now come out with products and new capabilities, upgrades to our classic offerings, integration with leading dev ops tools for 20 consecutive quarters. Um, so it's improved our throughput. It's improved our efficiency. It's made us a better company. Now we're thriving and now we're growing. So again, I wanted to make a point that, you know, type one to type two, when you bring them together, right? And you get challenged with type two thinking you can actually make the outcomes better and better in ways that actually bring value to everyone.

00:10:34

Yeah. Um, so I'll never forget the lunch, uh, where Joe, uh, you first, you said that when you first met Chris as a career, long CFO, you heard Chris's plan. And he said, I thought it was crazy. Uh, so tell us why you thought the idea was so crazy and what changed your mind? Sure.

00:10:54

So, uh, give you a little context here. Uh, some background we were bought as a company we were bought and taken private in 2014. Uh, we had a new CEO come in. So now you have new owners, new board, new CEO. You automatically now have anxiety in the company. I mean, in your employee base, that's going to happen. So now I, I had never met Chris before. Um, now th this was actually the first time I was the CFO. I'm a career long type two person became the CFO five years ago, go meet. Chris had never met him. Chris lays out this awesome vision. We're going to change all the everything we do in supporting customers and our go to market. We're going to change all of that. We're going to change the way we do it. We're going to change the way we pay.

00:11:37

We're going to change the way we compensate. We're going to change all of our GNA infrastructure. We're going to change the way we develop software. And I'm sitting there just taking notes and I'm thinking, wow, this is great. We've we've already got our, you know, we've got our plan for the next four years. So thinking, all right, what do we do first? How long do we have, or you want to lay out a 12 month, 18 month? And Chris was like, no, no, no, no. We're going to do it all this quarter. So I'm thinking, they're thinking to myself, we're not going to have any employees. They're not going to quit. I mean, so now we, we, we we're now we have to go. You're not exaggerating. That was actually no. I mean, and here's the beauty of Compuware, you know, w when you, and we'll talk about town halls in a second, but, but when, when you're celebrating things at camp, you are, it is very common to celebrate anniversary milestones of 15, 20, 25, 30 years.

00:12:28

And I'm sure this is true. A lot of your companies, that that's not the recipe for a hurricane to come through and change every single thing you do about the way you do your business. So, yeah, I, I did think he was nuts at first. So it, you know, you know, what changed? What changed my mind? A couple of things, you know, one is like Chris said, he laid out a mission, a vision, and a strategy. Chris immediately operated in a growth mindset. And that, that is so important. We, we were in a stage of a state of decline, but Chris ignored that, um, no, w we could have a whole conference on what effective leadership means, but I think everybody would agree a very common answer to what is an effective leader is somebody that lays out that mission, vision, and strategy, and then moves people to accomplish that.

00:13:15

So Chris was quick to align goals and helping every department in the company, align goals to a main thing. Every, every one of you out there, whatever your company is, you have a main thing. What is the main goal? What's the reason you come to work every day? You know, ours is a metric around realization, rate, logo, retention of our customers. So everything we do, no matter how dramatic this change is going to be, we're tying it to that main thing. So what does that do? Well, now you start seeing people, you know, they start seeing this in, you know, in Chris, don't get me wrong. Chris had a sales hat on early and often, and, you know, we did town halls and we still do them to this day, every two weeks, Chris led a lot of the town halls in the first year, for sure.

00:13:57

And Chris is selling that mission, selling that vision. Why are we doing this? Where w where have we been and where are we going to go? And now all of a sudden you could start seeing a change in people. You know, you start seeing a little more confidence. She starts seeing a little more hop in their step. You start seeing a little more motivation, a little bit more engagement, a little bit more passion. So, you know, those are easy things to see. And you know, now all of a sudden the work is getting done in a different way. Let's face it type two. You got to see tangible results though. I mean, so now, you know, I had to see those and I had to see those early on. Well, that, that could be the way we do business. So for example, you know, our close process near and dear to a CFO's heart, you know, that goes from 22 days to eight days, you start seeing metrics in salesforce.com with a pipeline and coverage ratios and account manager activity. You start seeing software going out the door every 90 days, as opposed to from 19 97, 20 14, you know, we were in maintenance mode. So real, tangible results tied to the business. I became a believer really quick.

00:14:59

One of the things that, uh, you had mentioned to me was that, uh, because of this operational excellence in GNA, uh, you're actually running GNA at around 5%. Can you just talk about, uh, what this meant to you and maybe define what QA is?

00:15:11

Sure. So, uh, GNA, um, you know, your financial accounting, uh, your internal, it, your legal, your HR, your administration, and let's face it. Let's give a couple examples. Customers don't care how we go about generating an invoice. Customers don't care how we go about doing our order to care, shore order to pay that, that that's not something that they're going to go to bed and worry about. I go to bed and worry about it, but so what I, what I was out to do, let's make this a competitive advantage. Let's make it a differentiator in the company. And there's a big reason for that. When, when we got bought, we went to our board with a simple message. We're going to turn around the decline, but you've got a lot of spend the same amount of money that we're spending today. Now, you're Chris. Really?

00:15:56

He led it. I, and I was right there with him, but Chris led it. He's, he's putting his neck out on the line. I mean, there's two ways to do this. I mean, companies face this battle every day. Are you going to grow revenue? Are you going to cut costs? I mean, it's one or the other. And if your revenue is declining, you're probably going to cut costs in order to maintain profitability. Well, instead we said, we're going to spend the same amount of money and we'll stop that decline. So what that does is the reason, those back-office things that I just talked about, the reason we wanted to get those well under 10% best in class is 10% red, 6% today that 6% of revenues are spent on these back office, uh, the GNA infrastructure. So now what we have is if best in class is 10% and a lot of companies are spending 15 to 20, we took that money and we reallocated it to the two things that customers do care about. So of course, they're going to care about R and D of course, they're going to care about the new releases coming out every quarter of the, of, you know, of new ideas in the, in our customer support and things that, uh, will increase the net promoter score, things like that. Now this becomes valuable to a customer and the, and that's why you want to make that a differentiator for yourself.

00:17:06

Great definition. What does GNA is everything that customers don't care about, which I thought was actually very funny. So what astonished me so much about the story was, uh, the level of bravery. It takes to change all the business processes, uh, that all those applications were running. Uh, I mean, looking at those tombstones, AMEA, financial sales, commissioning help desk, uh, what's the remain NIAC would change all those business processes. That's the customer that the company runs on all at the same time.

00:17:31

Uh, well, maniac would be one that works for Chris or Kelly. Uh, but no, seriously. Uh, so two things, um, again, you know, we wanted to create a culture or, you know, what maybe a better word

00:17:43

Could you actually maybe described sort of those core business processes that you did switch out?

00:17:47

Yeah, so I mean, we of joke@thecompanythateverythingatthecompanynowiseitherrunonthemainframenetsuiteorsalesforce.com. So all of your order to cash, your order to pay, or your, the financials, the banking, uh, the way you pay people, the way you book a deal, everything is now consistent around the world. And that wasn't always the case a lot of times. And I'm sure a lot of your companies are global. You might be doing things a little bit differently in one part of the world versus another, that causes increased head count. That causes increased infrastructure that that causes inefficiency. So we wanted to make it where it's a, um, I was going to say culture, but really it's a platform of success. And what you're doing is you're seeing a shift when you do that. You're shifting people from a, from a mindset of being in a cost center to the mindset of being a business driver.

00:18:34

And again, as long as you tie that to the main thing, to the goals of the company, constantly remind them of why they're doing what they're doing and tying that to the main goal of the company. You're going to see that shift in that mindset. So that's critical. The second thing is, is we had to become much simpler to do business in what I mean by that is it was actually hard at one time to do business at Compuware. And what I mean is internally, I mean, it was hard for our sales reps to get deals through the system. It was hard, you know, in our order to pay in our order to cash in our expense reimbursement. I mean, there was conversations going on back and forth, and that is just wasted energy. I mean, you don't have time for that again, because customers don't care about that stuff.

00:19:20

So you gotta be simpler. You gotta remove complexities in order to make the way you do your business, more simple, more effective. And in the eyes of customers in the end, let me be very clear on something. The word simple can be very confusing. Sometimes people think simple is easy or it's lazy, not the case. Simple is hard. It's hard to be simple and effective. Well, let me tell you, if you can simplify it, you will be much more effective and you'll be, you'll be much better in the eyes of your customers. So if you,

00:19:52

Uh, for, in this community, if you hear objections that can't be done, we have an SAP 25 years old, and we have 45 different warehouse management systems impossible. And what would your reaction be?

00:20:03

Yeah, I mean, I, you know, been there done that. I mean, our example would be, you know, we had 37 compensation plans and how we pay our salespeople. Now we have one, I mean, I'm not saying it's again, simple, not easy. Don't, it's hard. You're doing a lot of heavy lifting early on, but trust me, it's well worth it.

00:20:19

Oh, it's simple. Maybe not. It's not easy. It's actually said by Richard Hickey, the creative, the closure programming language, this is very spooky, Chris. So,

00:20:27

And if I just could add to your, you know, if somebody came up and said, we can't change these things, you know, I would be a little more aggressive in terms of the response. And I would tell people to quit lying to yourself. Uh, you know, change is a necessary part of competing in the age of software. You know, you continue to do things the way you've always done it. You're going to get worse and worse results. So you've got to become part of the effort to change and adapt and do things that are necessary to become more competitive because software is an integral part of competitive strategy in this day and age. I mean, it's, uh, all of us know in terms of the services that we use as banks, retailers, there is a software component to it. And there's an expectation that that software component is always going to get better. So people that sit there and say, we can't change or telling you that you're going to fail, that we're going to go out of business. So you got to look at that with kind of a sense of shocking them out of human nature. Human nature is to embrace change, even when you know it's wrong because you like to live in the familiar, but you've got to shake people up and challenge them. Because if you stay the way you are, you will slowly fail.

00:21:35

And in fact, there were predictions that, uh, when you did all this in the company would implode and daily operations would cease. Did I understand that correctly?

00:21:42

Yeah. I, you know, the, you know, there's a lot of people who challenge me at the outset, you know, uh, within copy where that this was a mistake, you know, going from, we went from 40 years of waterfall to agile, and we did these things basically overnight. And everybody was like, this is not gonna work. Uh, and again, my, my disposition, obviously I'm CEO. So I get a bigger license than most people get in terms of reacting to these things. But I really wanted people to understand that if we can't make these changes, if we can't go from waterfall to agile, if we can't go from, you know, selective automation to intrinsic automation, if we can't get better at taking ideas that our customers care about and turn them into software deliverables that make a difference faster, with better quality, with better efficiency, we're going to lose, we're going to lose.

00:22:30

So you telling me, we can't change is basically saying this company is going to go out of business and I'm not going to be any part to that. And our customers, our customers expect us to be better than that. So again, I took a very aggressive disposition, you know, four years ago when I was saying those things, people thought I was crazy. I mean, they, they thought I was being too aggressive, but I don't know that you can be aggressive enough. Uh, but you do have to be in this type one mindset with you're a visionary, you know, you can't bull over people like Joe that are trying to give you the right questions to think about. So you're grounded in the reality of making sure you're making the right and best choices, because just being a visionary unchecked without a team of rivals around you is a recipe for failure at a year. You don't have the chemistry to make sure that you're going to make things, make the proper and best decisions for the company. So it's really the need for both. You need the visionaries, you can't have everybody saying we can't change, uh, but you definitely need people who are engaged or trying to make things better, but bring a type two thought process to every decision that's made.

00:23:35

Uh, Chris, let's talk about, um, maybe the softer side. One of the things that I thought a lot about for months was how the head of it must have felt when you said going to dismantle what this person's built over decades. Um, what was that like for, uh, this person?

00:23:52

You know, it was terrible. Um, it's one where, you know, they've built a kingdom, right? And there's enormous joy using one of your, uh, your themes for your book, uh, in building that, that castle. Um, and there's a lot of pride in how efficient that it has become, but in truth, I'm not necessarily gonna say this to the person at the time. That's, that's misplaced pride. That's misplaced joy. Uh, when pride and joy are fully aligned to what customers care about, you know, you're, you're doing things that aren't necessarily helping to make the company better, uh, helping to serve customers in bigger and different ways. So it's very important as a leader that you're patient with those folks. Cause they gotta, you know, basically take down the kingdom, they got to look and have this data center being empty is something that's a significant achievement.

00:24:44

So as we did in, in, within copier every two weeks, we do town halls. And as Joe said, I talk about the vision and the mission. I'm getting people on point of what truly matters and what matters most. And I'm trying to create then disruption and energy and a sense of getting people to nudge and move so that the things like our data center that are just not valuable to our customers, that they can be a part of, of being the change agent to actually breaking it down. And at the end result of it feeling a sense of joy and pride in what is now an empty data center. And, and, uh, it was interesting. And one of the Christmas parties that we had, one of the members of it, uh, that did break down the castle and now he's taking pride in this, you know, explain it to me.

00:25:29

It's, it's a little bit like having your child go off to college. I mean, you, you don't want them to leave, right? You want them to stay home and continue to be part of the family, but you know that they have to go someplace else that bigger and better things. Uh, so you gotta let it go. You gotta let it go and you gotta let it go in ways. It makes the next stage of their lives successful. So it was, it was difficult, but a necessary part. Now, as you said, we celebrate, we have funerals for our racks that leave the building. And we look at that thing as an achievement, every time we get ton of doubt and set it off to be recycled.

00:26:02

Awesome. You know, uh, this is Chris or Joe. Why was it so important to you that you fund this internal devil's transformation and way of working without a large restructuring

00:26:09

Charge? Uh, yeah. So I mean, three things

00:26:12

Come to tell us what a large restructuring.

00:26:14

Sure. Um, so three things come to mind when you, when you hear the word restructuring, uh, money, time and people. So to Jean's point, restructuring is going to be a big money, outlay big cash outlay, because it's going to be a lot of severance. It's basically another word for saying, we're going to let a lot of you go, and it's a, it's a message to the rest of the employees. We're going to start doing things a lot differently around here. Uh, and it's not a good day. It just it's, those are not fun environments to be a part of. Um, so big cash, outlay, morale, killer, um, and you know, off to be better in a long time. So money time is another one. They take time. I mean, no matter what industry you're in, or, you know, sports or business, you know, you, you don't have time for big rebuilding projects.

00:27:04

Uh, so that was the other reason we love doing it without, without a big restructuring. So we didn't have the big cash outlay. It didn't take a lot of time in, in with us. I'm sure a lot of you are similar. Look, our competitors are big. So, you know, you know, the name of the game is to win. So how do you win? If somebody's big, you better be faster. You better be a little more nimble. So, I mean, just think of if you're taking on somebody in no matter what it is and they're big, well, you better be fast. So we didn't have to. I mean, we were basically changing the tires while the car was moving. We didn't have time and we didn't. So you're saving on time and you're saving on cash outlay. Now the most important thing about this is the people, the, the reason that I was so excited through this transformation now that we're five years later is it's the same people, the same people that were at Compuware the day that we were bought and taken private.

00:27:54

The day that Chris walked in the door are the same people that made it through the journey and that are still living the journey of, you know, this continuous improvement in these 20 quarters in a row. And, you know, there's a reason for that. They gravitated to the, to the mission and the vision and the strategy, but they also you've now become, uh, an a, um, a culture of innovation, a culture of risk-taking, um, a culture of working on things that customers care about. And no matter who you are, w w when you bring that to your workplace, your employees will go through a wall for you. I mean, and that that's, what's been the most exciting part to see is that passion, that engagement, that grit, uh, I mean, th that's in everybody, it's just a matter of getting it pulled out of them. And when you don't have those big restructuring, that's when you can do that, you can keep morale up and you can exercise, and you can see that grit and passion coming through.

00:28:49

So, one of the things that you said earlier this year that, uh, just stunned me, uh, you had made the statement is that the only, um, metrics that, uh, every business leader should care about are three things, employee engagement, uh, customer satisfaction, and cash. Those are the three metrics that matter. That seems so outrageous. Could you defend that statement and why do you believe that to be true?

00:29:12

Yeah. So, uh, you know, in order of importance, you know, customer side is the reason your business exists. I mean, you all work at the pleasure and service of your customers. Um, you lose sight of that and you lose sight of everything. Certainly the example of copy, where we lost sight of that, uh, up until 2014, and we had to get back on point, um, and then getting back on point, it's not just something you, you got to get obsessed about customers. You've got to get assessed about what their needs are, how things aren't being served in ways that they need them to, how things need to transform. You got to get yourself immersed so that you can make the right and proper decisions, uh, in terms of what your company does to better serve those customers. So that is job one job, one lose sight of that.

00:30:02

You lose sight of everything. Job. Two is that employees have got to be engaged, right? Uh, there's a Gallup survey that's been done for 40 years. Um, it's done every two years or so, and what's astonishing about it is the results never, ever change. Uh, and it basically tells us that in large enterprises of which most of you are part of a third of the people in those organizations on average are engaged. Half are unengaged, the just are doing their job. We'll do no more or less than what they're told to do. And then 17% of the people are actively disengaged. There can actually work to sabotage the efforts of the company to better serve customers. So you wake up every day with two thirds of the company on average working against every effort to better satisfy customers. So leader has got to get their head around.

00:30:50

How do we get the odds on the side of the engage gets a 50 51 60 62. So at copy, where, when I started, the statistics were worse than that. You know, today 62, 60 3% of the employees at copy were, or were turned to be engaged by Gallup. We get up with a different grit with a different spirit, with a different set of focus and taking that customer obsession and translating it into deliverables that make a difference. And then lastly is cashflow. We're not charities. Most of us aren't charities. We work for the purposes of creating a profit. Um, and that's not a dirty word. I mean, that is not a dirty word. And I think Joe is, and, and, and Jean were alluding to this that you need to have a sense of responsibility. That if, as a type one you're asking for more and more and more and more, and you're not listening to the Joe's of the world saying, how are we going to pay for it?

00:31:45

What's it going to cost? How's it going to make a difference? Cause you got to accept that it's a ying and yang to anything that's done within business, and you gotta be attentive to cashflow and profitability that if I'm going to ask for one thing, how do I look for two platform? It initiatives to basically take our costs, other places within the business that helped us sell fund. Because I think as we go back to point, number two of employee engagement, if you want your employees to be engaged and the consequence of expending more money is to do a reduction in force every quarter. That's not going to work. You're, you're, you're basically doing things that are at odds with those basic three principles. So I do think they've been true for hundreds of years in terms of the three most important things. And they will be true for perpetuity Joseph.

00:32:32

It's great to hear a type one say that's, uh, but does a type two also believe that briefly? I

00:32:37

Absolutely. I mean, I, I joke around with people that this is an odd math problem. It means the answer is in the back of the book, I can promise you, your CFOs are going to be happy if you take care of employee engagement. And if you take care of customer satisfaction, no matter how you do it, net promoter score surveys, whatever, if those two metrics, if you really are measuring them the right way in your company and they are increasing, I can promise you cashflow is going to take care of itself. No doubt in my mind. Awesome.

00:33:06

Well, Chris, do you have any last words of advice that you want to share with this community?

00:33:10

Yeah. The, the premise of this fireside chat was to help you as type ones, you know, so type twos on your ideas and I'll use Joe as the proxy, your Joe's, uh, how do you sell Joe Idaho, um, and to get your head right? I think there's three really, really important things. Uh, first you've gotta be customer obsessed. Um, you know, Jean and I did a fireside chat last year, we talked about, you know, engineering and, and, and, uh, product management, product owners working in tandem like Lennon and McCartney. You've got to, even though you're running dev ops, and you're worried about your pipelines and, and creating intrinsic automation, you know, you gotta be grounded in what are the things about your customers that caused them to be beautifully and wonderfully dissatisfied? And what is it that we're not doing? You need to understand that and get a sense of urgency that we've got to solve.

00:34:01

Those problems. Customer obsession also goes to the backlog, right? You need to know what's in your backlog, what features need to be delivered to those customers, right? That you feel a sense of urgency and excitement. I use the example within copy, where that I need the engineering team to look at that feature backlog and feel like it's prisoners in the distill and your revolutionaries. And we've got to get them out of that prison. And we got to set them free because we got to get France back to the people, right? You, you got to feel that sense of urgency and excitement around your backlog. And that backlog also has technical data in it, right? And the technical debt has to be resolved. If in fact, you can prove to yourself that by doing so that feature future, future flow will be made better. You've got to understand that that's part of the process of making those dissatisfied customers happy and obviously maintenance and defect works.

00:34:53

But if you get obsessed in that way, the decisions that you make, uh, will be far better. The prioritization of things will be far better and joke and smell when you can't connect the dots between what you're asking for and whether it makes a difference to a customer, because he's going to ask questions, you're not going to answer them, right. We don't answer them, right. The answer should be no should be now. So get, get grounded in customer obsession. Second thing, um, is commit to what matters most commit to improving customer sat, which means you have to measure customer sat. And if I hear one more person say that we can't measure customer, you need to measure customer sat either through net promoter scores, or you got to do it through featured option or whatever means that you think is a relevant proxy, but you got to commit to making that better and hold yourself accountable and be responsible that those things that you can affect directly.

00:35:51

And I think that the metrics that really matter most is software delivery, velocity, quality, and efficiency, and employee engagement. Those are the four things that you, as leaders can affect. And you've got to commit and promise to the business that knows them doing those things and making them better. The customer sat will in fact improve because Joe knows a liar. You know, Joe knows whether here, in fact, these things that you're trying to do relate to customer sat or don't. And he wants to see that the things that you're asking for have a causality and to make a difference as it relates to how customers view your business. Um, and then last thing is you gotta have a growth mindset. Um, you know, a growth mindset is really defined in setbacks, both big and small. Uh, when you go through any transformation of this scale of going from the way you are to where you want to be, it's going to be hard.

00:36:47

And there's going to be things that go wrong. You're going to fail. I mean, for the ones that are, you know, uh, inside of large enterprises out there, you know, and you hear people that come up here that are parts of startup, you know, they get a blank sheet of paper. You know, you start with 40 years of legacy. I mean, you're, you got 40 years of bad habits. You've got a 40 years of people saying no, 40 years of people feeling comfortable in the status quo, you got a much bigger problem, um, much more complex problems. So you're got to have setbacks thing. Ain't going to go so good. But when you respond to it, you got to say, well, that didn't work, but I'm, I'm a problem solver. And I like a challenge, right? And then I'm going to learn from what I just went through and I'm going to get up tomorrow and make it better and push cause what Joe doesn't like is quitters.

00:37:36

He doesn't like quitters. He wants to know that if he's going to commit to you that there's a covenant, that you're not going to quit and return because when you quit, what happens, Joe's left holding the bag. He's the one that's accountable and responsible to the failures that you create when you quit, do not let those setbacks cause you to fall over. You got to get back off the mat and you can't do it once a month. Get to once a week, got to do it every day, got to come to work. And no matter what's presented to you choose to have a growth mindset, choose not to have a fixed mindset and be that example, you do those three things, right? And I think you can sell Joe and they sell. You have that.

00:38:19

Yeah. Well, thank you so much. You've been so generous with your time over the years and, uh, showed up in the unicorn project. And I hope this has helped this community to help better understand CEOs and CFLs. So thank you so much.