Ep. 48 – Zendesk’s Employee Engagement And Exceptional Customer Service with Tom Keiser

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Zendesk: A big part of the COO role is identifying, dealing, and making sure that the right people are trying to solve the problem.

Give us an example of a specific health measure that you were watching, that you saw, it was outside of the band of acceptability and what action that you took as a company off that.

We continue to go lower and lower into our measures. We’re a publicly traded company. We break our business out in the quarters. We track our marketing pipeline, opportunities and ourselves against a weekly and a daily set of goals. We can see globally and down to specific markets where the business is going well or not. We’ve had some soft spots. I won’t say which parts of our business but specific countries and specific bands of customers, soft spots where we’ve turned that into action plans, marketing-related action plan, sales-related action plans and watch that turn over subsequent weeks. We can react relatively quickly and turn things where there’s an execution issue or where something has been missed. Sometimes you can’t do that, but we’ve been able to watch ourselves turn and turn things from red back to yellow into green by taking action based on what we see happening.

I had a mentor years ago, he’s being groomed as the CEO of Starbucks, and one of the mantras of Starbucks was, “Grow big, act small.” They wanted to become this big brand, but they didn’t want to get corporate and bureaucratic. At Zendesk, how have you orbited that hairball and not become corporate? What are the things you’ve done or systems that you put in place to stay scrappy and stay entrepreneurial and not get all bureaucratic and bogged down?

Our founders still run the business and we still have the mindset of a small, scrappy startup in many parts of our business as we grow and scale it. It comes up a lot as part of our culture. It’s very open and transparent culture, and we do a lot of open Q&A. It comes up a lot that people are concerned that we’re putting too much bureaucracy in place. One of the things that I’ve focused on is around agility. Agility from the standpoint of not just agile development and organizing for agility but making sure that we think about our processes that we’re putting in place for scale. The systems that we’re putting in place for scale, that we’re building them in the way that we can still have the flexibility to adjust our business model.

In my previous worlds, we implemented these giant, ornate, end-to-end sets of processes that made tremendous sense at the time, several years ago. It drove out tons of costs, improved quality in all different ways but those systems and processes are boat anchors around retailers that need the flexibility to be able to adjust very quickly to competitors, to different business models, to disruptors. We make sure that we build our processes and our systems with the flexibility to be able to adjust, which means that we may not be able to be building the most perfectly efficient set of processes, but we’re trying to build and measure speed in there. We haven’t quite figured that out yet but I bust that story out regularly as well to make sure that that’s front and center. We’ve built an agility set of leadership competencies as we look at our leadership development to make sure that agility is a core competency that is a part of every level of our leadership as well.

How about the employee engagement side? What do you do as a company to first, measure employee engagement and second, turn yourself into that company for great talent? Especially in the technology sector where you’re competing against the best of the best and you’re in that group. How do you build out that great culture? What are you guys doing that’s different?

Cultures are really set early in a company’s life cycle and we’re fortunate our company was founded by three Danes in Copenhagen. They spent time, not just on the product that they were trying to put together but on the design aesthetic and the culture they wanted around the product and the culture of the company early on that’s still ingrained in us. We have a word that they originated called humbledent, which is we are very competent and confident but humble employees. We use that filter as we look at bringing people on, and we practice many things to keep ourselves humble as we go through the building of this company, but it starts with that. It’s very hard to change a culture. You can see some companies change bits and pieces, but it’s hard to change the core of who you are once the company has started. We started with good roots. We very much differentiate ourselves from our competitors up and down the streets here in San Francisco on that culture. People know that Zendesk is a special place. We’ve got the secret sauce of a great product. We’ve got the secret sauce of a great design aesthetic, but we’ve also got the secret sauce of great people and a great culture that cares and it’s all about getting the work done.

How do you say no to employees and to projects without crushing their spirit?

We have to work in a relatively fast and a confined space that’s where having prioritization frameworks that everyone agrees to, and that consistently practiced helps with that. People care tremendously about our products and what we’re doing. They care what our customers need. We’re very much a horizontal product in that we’re not verticalized at all. Our product was built as a free trial and buy the product several years ago. It’s grown from that and we still approach from the mindset of everyone should have access to these capabilities that we’ve built. Our customer base is from a five-person mom and pop shop and is doing something around customer experience, up to some of the largest companies in the world. It’s still home-based of software and that means we have tremendous customer requests coming in at us all the time. We try to be fair and consistent, have a framework and make the decisions, and move on. Including me, I get disappointed and sometimes I get said no to as well.

How do you manage the customer side of the business when your entire business is around the customer? You might have high expectations from them.

Yes, and from us quite frankly. We have a customer support organization. We call it Customer Advocacy of about 300 people in three primary locations and some smaller locations around the world. They’re leveraging our Zendesk products to provide support to our customer base around the world. We just hired our first chief customer officer. She started from Microsoft and will be continuing to build out and more strongly represent to our customers and back to our staff and our organization what our customers want and need. We have a customer success organization that we’ve been building out over the last couple of years to build an account management structure to better take care of our larger customers that are growing with us. We’re highly critical of ourselves and we go through somewhat of a reinvention of our customer experience most every year, pushed from the top and push from all of us. I want to make sure that we’re the best representation of our own product and what we’re espousing as best practices to be doing.

I was at an event a couple of years ago. I was listening to one of the experts who were there and he was talking about customer engagement. He said, “The only reason we have customer service departments in the first place is on one of four reasons, either our product sucks, our service sucks, we overset expectations with the customer, or we have really poor FAQs on our website.” I’m curious from your perspective, what we need to learn from that statement or what we can also learn from your experiences having been in that customer engagement world for so long. Where can we as normal average companies improve?

There’s truth in what you quoted but you can turn that into a more positive set of things. The reality is if your customers are contacting you, they have some question or some problem that they need to be resolved. What we talk about is answer their question and honestly, do what you say you’re going to do. Whatever they’re looking for, respond to them but more importantly, use the data that you have, which most companies have quite a bit of data about their customers. If they’re coming through a mobile device or a website, you know where they are on the website, you know what they’re looking at, you’ve got their purchase history, get ahead of your customer. Answer their questions before they have to contact you and make the experience when they contact you super easy.

We’ve been pushing on this concept or product of omnichannel doesn’t mean that they can contact you on the phone, email or text or through a messenger service. It means they can do all of those things, but it’s one continuous conversation across those so that you do not have to reauthenticate each and every time you drive your customer bongo. Whoever is looking at that customer, whatever machine learning is working against their data, it’s that one consistent conversation. We all experience good customer service. We occasionally experience great customer service and when we experience great, it raises our expectations of what we expect. We know what great is, and it’s how do you bring that into what you’re providing to your customers and the technology is there.

For the most part, it’s a matter of will and a lot of traditional companies have treated their customer service like a cost center to the point, “How do we make this as cost-efficient as possible?” Which is part of it but it’s a small part of it though. The big disruptor companies in the world that have exploded in the last several years have put the customer at the center, they’re still thinking of doing it as cost-effectively as possible, but they want the best customer experience. They’re bringing those data thoughts holistically.

They’re trying to wow the customer and trying to understand and learn from the customer. They’re trying to get ahead of the customer as well, which is huge. I had a client over in Germany and they’ve got about 6,000 clients and they’re saying that their customer service team spends 90% of their time answering the same questions. I’m like, “It seems pretty simple. Explain it in advance so they don’t have the same questions.” It was this big flash the obvious for them.

Machine learning’s a real thing. It’s not just a concept. We have a whole set of solutions that’s under our help center. We have a product called Guide that is a content management process that has machine learning built into it. It’s here and thousands and thousands of companies are using it and getting after exactly what you’re talking about.

Is that where the AI is starting to come in then?

Yeah, it’s coming in on both sides. It’s what the questions customers are asking. It’s serving up the most likely answers to their question and getting validation so it gets better and better. It’s also serving up what content you’re missing in your help center products to help direct the content that needs to be built that could answer those questions. Our customers are recoiling the disruptor companies and they want their customers fully engaged in whatever service they’re providing. If they’re a gaming company, they don’t want the gamer coming out of the game, they don’t want the gamer to be able to ask their questions or raise their issue while they’re playing the game and to continue to play the game. They want as much speed and automation into those responses as possible. They want their customer service reps to continue to provide and have deeper and deeper skills and keep automating away all of the simple questions, so that it’s really a very rich set of content that they’re providing support for.

These are technology tools that if company A puts this in place, by the time company B figures it out, it’s game over. 

It could be. Think about the unicorns that have taken off, for the most part, we’re right in the middle of all of them. It’s usually something to do with it’s your phone, it’s an app and then it’s an experience. It’s a disruptive experience with the customer right in the middle of it. Think about Uber, Lyft or Airbnb, any of those gaming companies, any of the food delivery companies around the world, we’re in the middle of all of those. They’re disrupting industries but with the customer right at the center and building off of the technologies, building a better and better experience, and continuing to push and raise the bar on everybody else.

What do you focus on the day-to-day? What’s your core focus over the course of a week? Where are you spending your time?

Zendesk: The big disruptor companies in the world that have exploded in the last five, six, and seven years put the customer at the center.

My responsibilities from when I stepped out of the CIO role into the COO role, it was an and role. I kept responsibility for all the things I was responsible for as a CIO and added all of our go-to-market functions, added our sales and all of our post-sales sets of activities. We created biz ops and an operational organization. It’s all about scaling. We’re on a growth trajectory that’s pretty extraordinary. It requires a whole lot of moving parts to be able to come together and deliver on those quarterly numbers while we’re building the foundation for where we want to be in several months.

A lot of my time is spent with our leaders on the now if we have things we need to deal with immediately, but then also talking about and getting clear on where we need to be several months out, so that we’re putting those capabilities in place. It’s a lot of meeting with direct reports and with teams to make sure that it is clear and we’re working on the right priorities as much as possible. Having a cadence to the way updates take place from the Monday operational meetings, to the Tuesday seat staff, to the Wednesday go-to-market leadership meetings and COO organization meetings. To make sure that everyone is clear on what the message and the direction are along the way, and answer questions.

I like that you have that cadence built in as well. Companies need to have those meeting rhythms in place and then build everything else around it.

The other part of the job, which is the most educational part for me is I spend a lot of time with customers and with prospects. We have a whole series of things that we do around the world talking to customers and bringing in Silicon Valley and the approach that we have in the customer experience. I speak at a lot of those events. I speak at a lot of CIO events. The CIO is around how to leverage modern technology, and I spend time with customers, especially if a customer has a CIO or a CTO involved in their decision-making that they’re trying to work their way through. I probably meet with maybe ten customers a week. We’ve launched executive briefing centers. Sometimes it’s escalations of things that have gone awry that you have to take it on the nose, but frequently it’s helping them think through what they’re trying to do, where they’re trying to go and how to leverage us. I also make our technology stack and how we think about running our business very open to companies, which is of interest, especially for traditional companies as they try to sort out how to step into modern technology.

What do you think that the average company, a small to medium enterprise, can learn from the bigger companies? What are you doing well at Zendesk that the smaller to medium size, 50 to 500-person company can learn from?

When I arrived, it was full of brilliant people. We’ve done a great job of building out and recruiting a lot of brilliant people, but we were relearning a lot of things. Some things need to be disrupted but some things you need experience in. Over those few years, we’ve really tried to balance the youth movement and the athletes that come with that, with bringing in an experience that has gone through some of the things we’re about to go through so that we can apply those learnings more quickly to keep advancing the company. Trying to get that right balance while embracing the culture and with what we’re trying to do is a challenge, but we’ve done a pretty good job at it. Our leadership team, we could compete with almost any company you can name out there for horsepower, throughput and mental acumen. It’s a strong leadership team, a mixture of deep experience, and a lot of agility and speed.

How about yourself, if you think about in your career and growth as a leader as a COO, what have you really had to work out over the years to improve on?

It’s endless. With every job, there is a significant amount of discomfort that goes into it, and that fuels you. The discomfort I had coming into a more modern tech company was I was really out of my depth. From a business standpoint, I bought a lot of software in my career, but I had never worked in a software company before. I had experience with some of the modern tech, but I didn’t have experience with anything like what we were doing or what we were building. I had responsibility for the IT support desk and some forms of customer support desk but nothing like what we are selling here. I had to go through fairly long and detailed learning of product, of technology, of mindset, full of embarrassing moments and missteps along the way. I was 50 years old when I joined Zendesk. I think embracing and stepping into new and super uncomfortable areas, having confidence on the experiences that you’ve had and the success that you’ve had, but also being completely vulnerable and stepping into something uncomfortable and challenging yourself is rejuvenating.

How do you balance that vulnerability as a leader with also having your team not lose confidence in you?

You’ve got to be in it with them. We have a good culture here. We have a very strong culture. It is one that has a positive bend instead of expectations. There was certainly a degree of cynicism you can feel, especially from engineering departments that are working on technology that you’re not familiar with and you’re bringing in a perspective that is dated. I treat it as learning opportunities and I don’t take it personally. You prove your worth over time, especially as a leader, by being there with the team, by making decisions, by representing the team and getting them through whatever dark spots that they’re into a successful place and building trust.

What are you working on as a leader for yourself? Where are you trying to grow?

I’ve had to get comfortable out in front of the company, representing the company. We have founders that have very clear and strong points of view which is extraordinary, but I have to do that. It’s not something I’ve had to do before. I’ve had to get comfortable with that. I’ve had to learn to scale and scale myself really out of a lot of the details that make me more comfortable, knowing and trust that the things are happening, and then drop in at the right times to be able to ask the questions. As we grow this company toward a multibillion-dollar company, I get further away from the details. I spend time with customers, which keeps me in the details, but I get further away from the details and I like details.

How do you know when to trust, when to drop in and how do you ensure that if you’re moving away from that that those details are still being taken care of?

That’s where the cadence is important. I prioritize that Monday operational meeting and try not to miss it. Even if I’m on a plane, I’m trying to listen in to stay connected to what’s going on in that meeting and in the subsequent meetings that we have during the week to make sure that I’m not missing things. People also know to escalate to me if things are going awry or if something feels wrong or off. I have frequent drop-ins if something is happening there. I have a very demanding founder that I work for that is constantly not just asking questions about what’s going on now but asking questions about the future, about things that perhaps I have not thought of yet that are challenging.

What does a founder who built such a large company does now?

We want to be a multibillion-dollar fully modern CRM platform and whatever that’s going to mean. Part of it is setting that vision and pushing us all toward that and pushing us past what we can see into something better. Our founder as the company has grown, has done something which is really difficult for most people to do, which turns loose of some things. That was when we agreed to create this COO role. He was turning loose of the sales organization, and he was turning loose of the post-sales organizations and allowing us to consolidate those and build out a go-to-market function. While he still meets with those leaders and gets updates, he’s spending his time more on the messaging, the product direction and the brand as we grow the brand. In hindsight, it seems natural and easy to do, but the reality is and for anyone who had to turn loose of things, especially something that they’ve built from nothing, is a very difficult thing to go through and to do. We’ve done it relatively well.

Is there anything that you see is changing in the business world that we have to be more aware of or adapt to? Is there anything that you see that companies are getting blindsided with and not being careful?

Everyone has backup plans for if our economy slows down. There are a lot of risks in our economy between Brexit and between the slides left and right that is going on in the United States, some of the other governmental things that are happening around the world and very important countries to us. You’ve got to have a more conservative plan to go along with your aggressive growth plans. The evolution of technology is both exciting, but it creates risk for everyone. We are all in on the public cloud. We’re all in on open source, which creates a tremendous opportunity for us to collaborate with all kinds of great technology companies out there. Every iteration, every time you go to an AWS event and you see all of the new tools that they are launching, you see how fast competitors can enter into a space to compete with you.

There’s so much available every year and more available that you have to stay on top of. The new technologies, 5G is going to create all kinds of interesting and challenging business models. We have a clear line of sight of what our mobile phones are going to be able to do in the next few years. All of the different scrutiny and issues that are around data and privacy that have come up have an impact on really all enterprise software companies. Any company that’s providing a set of services that has customer information in it and the EU passed their set of rules that raised the game. We’re seeing individual countries, individual states here in the US starting to pass their own laws and it adds a degree of complexity, especially for entities that are SaaS and horizontal that we have to stay on top of. There’s no shortage of risks and challenges.

What’s 5G going to do for us?

It’s going to effectively open up everything that you can do with a hardwire connection to your laptop onto your phone. It means every form of video service imaginable and machine learning. You’ll be able to embed all kinds of things into your phone. What it’s going to mean is to be determined, but each iteration of more bandwidth going to these phones introduces another round of creative and disruptive thinking around what you can do with the phones. The things we can do now were unimaginable a few years ago, and we’re going to go through another one of those unimaginable events.

I remember getting my first computer in “86 and having to export a Lotus 1-2-3 spreadsheet and then convert it using another software program called Sideways to print it out in landscape mode. Now I’m printing from my phone. The last question I’ve got related to your team that I want to wrap with a final question but is there anything that you’re working on cognizant with your leadership team in trying to grow them?

Zendesk: The evolution of technology is exciting, but it creates risk for everyone.

We’re a fast-growing company but still relatively small, we haven’t had the traditional leadership development functions as I had in my previous retailers or in consulting. We just hired our first chief customer officer. We’re working our way into a competency model and a leadership development model that we’re rolling out across our leaders. It is all about building whole leaders as opposed to when you’re in startup mode and you’re fast growing, you want the best athletes, and you keep them in the silo. You keep feeding them and make them run as fast as possible as opposed to when we go out and recruit leaders, we’re looking for leaders with a broad set of experiences. The recognition is we’re not building those. We need to be thinking about our leaders more cross-functionally, more holistically to make sure that we’ve got great session plans and that we’ve got the horsepower to grow to the multibillion-dollar company that we aspire to.

Final question, if you were your 21-year old self and you were giving yourself some advice, what advice would you give yourself back then that now you know to be true but you wish you’d known earlier?

That it’s all going to be okay. I started working when I was really young. I didn’t grow up with much, and the anxiety and the fear of where my next meal was going to come from have always fueled me. Every job I’ve been in, I’ve always thought, “I’m going to be fired at any moment so I have to do the best possible job.” There’s a lot of good that comes out of that. There are a lot of wasted cycles but my mindset was to get as much experience and a broader range of experience as possible that led me on my career path. I would reassure myself that is the right thing to do.

I was talking to my seventeen-year-old. He’s getting ready to go off to university, and he’s worried about all kinds of stuff that you normally worry about when you’re that age. I’m like, “It’s going to be fine. It’s all going to work out,” but it’s hard to know that when you’re at that age. Tom Keiser, the Chief Operating Officer from Zendesk. Thank you so much for sharing with us. I appreciate all the time.

Thank you so much. I enjoyed it.

Important Links:

• Zendesk
• Guide