Sramana Mitra: I love this keeping all your innovation process tied to customers. That may yield slightly less glamorous innovation, but it keeps a good solid innovation process running. The thing that is tricky at this stage where ServiceNow is, it’s now getting to a much larger organization. It’s over 7,000 people.
There are a lot of people that are connected to customers in different ways. Somebody knows something about a customer through the grape vine. This could be a relatively junior engineer or a pre-sales engineer. There needs to be process to bring that knowledge and insight back to the decision makers through a sustained process so that you are not missing opportunities for act three or act five as this company scales.
That’s where a lot of innovation processes are failing right now. There are a lot of innovation opportunities that are left on the table because the grassroots are not tied into the decision making process.
Anita Sands: I think you’re spot on about that. It’s one of the things that gets more difficult as you scale, and so many things get more difficult as you scale. Organizations have been structured in such a way that information flows from the top down. When somebody on the front line actually has that really insightful piece of information from the customer, how does that information flow back up to the organization?
I believe that as we migrate more towards this agile, more modular way of structuring ourselves, which reflects the dominant technology of today, I think it’s going to be important to empower those teams at the front lines to not only give them a certain degree of autonomy around how they operate but also to have some mechanism where things are loosely coupled together and there is alignment.
Sramana Mitra: You need methodology. The other thing you said about the M&A policy and the extreme thoughtfulness, it’s very much Fred. He’s a thoughtful and deep man. I hear you describe it and I see Fred’s face. In the process of ensuring that there is code base compatibility, there is one thing that comes to my mind. You have to catch them early. If you want to have that level of compatibility, you have to catch these opportunities early.
Often, I talk to CEOs about how they keep in touch with companies that they want to acquire. They say, “We talk to VCs. We are in touch with all the VCs.” I’m thinking, “That’s maybe too late.” If you want to have a good view into who are the players in your industry who are doing innovative work and if you want to know who they are, you need to have process, methodology, and mechanism to be in touch with these people a lot earlier so that you have the ability to influence how they’re structuring their code and how they’re organized.
Then if they do succeed, then the acquisition is a seamless acquisition. If you don’t have those relationships and those touch points, then you’re going to inherit companies that are much further along. The price tags go up, and the compatibility is not as seamless.
Anita Sands: We see that a lot at Symantec, which is another company I’m on the board of. The cyber security space is so dynamic.
Sramana Mitra: M&A-heavy.
Anita Sands: Yes. It’s hard to make that judgement call as to when the timing is right for something. You talk a lot about this being an ecosystem. It is. You have to be very holistic and very open-minded about where you’re sourcing your thoughts from and what you’re exposing yourself to. The VCs are important stakeholders. They have a lot of exposure to some good stuff, but it extends far beyond that.
The one lesson that I learned from Fred Luddy about this is, Fred was great at reminding us not to stick our heads in the sand. As you become more successful, it can get easier to dismiss some of these emerging players. Find out what it is about these new players that customers love. What do they like about them? What is it about Slack that people actually love? Your competitor may have something that customers love. You need to pay attention to that.
As you said so rightly, he is very thoughtful, but he also remains very strong in his conviction that he’s there to do the right thing for the customers. He wanted to make the world of work work better for people. He was open-minded as to how he should think as the landscape starts to shift.
Sramana Mitra: Fabulous conversation. Let me offer you an opportunity to make some closing comments.
Anita Sands: Thank you so much for the opportunity. It’s been a pleasure. All of your incredible content has so much to offer in the ecosystem. I really thank you for your contributions. Thank you so much for the chance to chat today.
Sramana Mitra: Great. Thank you for your time.