SaaS CEO Interview Series: Tony Zingale on Scaling Culture
In the world of enterprise software, Tony Zingale is one of those seasoned CEOs whose advice on all matters company building is timeless. Tony has been a CEO of three enterprise software companies (Jive Software, Mercury Interactive and Clarify), each of which he took public while at the helm. When you do it three times over, it’s not just luck! Since retiring from his full time role as CEO of Jive in 2014, Tony has been spending time mentoring younger CEOs on how to navigate the treacherous waters of fast paced growth. One area where I’ve particularly found his thoughts to be refreshingly relevant is culture. Culture can be an amorphous topic, but Tony has a knack of taking an amorphous topic and boiling it down to the 1–2 things that really matter. So I sat down with him recently to talk about what it takes to institute a scalable, performance oriented culture.
You’ve built three successful companies yourself, and have been an advisor and board member to several others. Are there any common patterns in terms of culture that you see across the best of the best organizations? What does it come down to? Is it intensity? Is it accountability on a quarterly basis? And how should CEOs think about instituting culture?
I think there are. It really matters where the company’s at in its lifecycle because in my opinion the culture evolves over time. I also think that the culture and the value set emanates from the leader. It’s not a cliché. It’s actually true that the leader puts their imprint on the culture. If they’re gregarious and hard driving and tough and take no prisoners, then the company is largely going to be that way.
First and foremost, I think there has to be a clarity of thought and communication around the vision/mission of the company. It’s important to understand what they are, then build a strategy, a set of objectives and a set of key goals around those. What are we trying to accomplish over a reasonable period of time? What are we trying to accomplish in the market? What are we trying to disrupt or change? You have to start there. This is part of building a culture and getting people behind it.
Then you have to say, “What’s our strategy to achieve that vision/mission in the marketplace?”. The leaders that I have seen be very effective building strong cultures and teams are the ones who are crystal clear on what their vision/mission/strategy/objectives are and then turn that into an operational plan and holding people accountable to execute the plan. The leader must be really clear from the beginning. They have to be voracious communicators, over and over and over again. They can’t waver unless the fundamental assumptions of the plan change over time.
The good news is, in the enterprise market, trends don’t change as rapidly as they do in the consumer market.
I believe setting a plan, then a culture and a tone where everybody’s clear on what we’re doing and why removes a ton of the angst that exists when people are not clear on what we’re doing and why.
Then you’re absolutely right. You said the ‘A’ word. Leaders must delegate AND hold people accountable. Accountability to me is the most important aspect of a performance-driven culture in an enterprise software business.You as the CEO cannot do everything. You can, when you’re doing $1–2M quarters, you probably can sell every deal, you can probably be involved in every product design review, you probably can interview every person before an offer letter is given, you probably can review the P&L every week in great detail, you probably can sign off on every expense report for a while . . . and then it doesn’t scale and you haven’t developed any leaders underneath you so yes, delegation AND accountability are critical.
So to me, the core ingredients are: clear vision, clear communication of the vision and how we’re going to do it, and accountability.
Speaking of accountability, a lot of CEOs have to do the balancing act between the warm and fuzzy culture and imperative of winning. How should CEOs strike that balance where people feel excited about coming to work and yet feel like they have to deliver on something? It feels like a balancing act between stress and fun.
That’s right. I think it’s work hard and play hard. I think the warm and fuzzy culture, as we sit here in 2017, is a given. You better have a great workspace. If millennials want to work in San Francisco then your office better be in San Francisco. You can’t say, “Come to Santa Clara”. It’s not going to happen, right? But the big element of warm and fuzzy, beyond the office, the snacks, work from home and all the rest is, I believe, an open, honest, regular communication dialog with the employees. The leader needs to be open, honest and available to communicate. I think using a collaboration communication tool, whether it’s Jive or Slack or Chatter, is fundamental and super effective. However, it does not replace the old way of communication, which is, you need to get in front of people physically. Let them see who you are. Let them see your emotions. Let them see your passion and commitment. Let them see what you value and what pisses you off. Let them see all of it.
Be honest about where the company stands. People will run through brick walls if you tell them the truth and what you need them to do, if you’re credible in leading that way.
Remember what I said earlier? The headline statement for the CEO is that the organization is a reflection of that person. Employees need to see it. When I’m writing a blog post, when I’m responding to a comment in a community, that’s one thing. When they see me in person, it’s totally different. Even if I’m introverted versus extroverted, it’s fine. That’s who I am. Make it feel like a family, make it feel like everybody’s involved and matters, make it feel like I’m not hiding anything from you. People love that more than anything.
The other thing people love more than anything is a decisive leader that doesn’t get into analysis paralysis — “we’re going to decide next quarter, let’s kick the can down the road”. Whatever it is, we’re going to make decisions based on what we know, the assumptions that we make, and we’re going to go right now. People want decisions and they want to act. Make them and get out of the way.
Finally, you’ve got to hold people accountable. I think the more mature people you have on your executive staff, a little peer pressure is a good thing, as long as it’s not toxic or malicious. For instance, if the engineering team misses a release deadline, you’ve got to have the conversation: “I’m sorry, you said you were going to deliver the release on the last sprint on September 1st and now we’re two weeks late, why? What are you doing right now to address this?”. Saying “Hey, we’re going to be late” is not enough. The sales team will not be able to sell the new release that they’ve been promising to prospects now. Now their deals just slipped out of the quarter. So somebody in the executive team needs to put their hand up and say, “I’m taking accountability for this”. A little bit of the accountability, peer pressure, is required and expected by mature execs.
Can you talk about how the CEO’s job as a leader changes as a company grows beyond initial product-market fit and beyond 75–100 employees?
The short answer is: know that you can’t do everything, and hire the best team you can for where you are as a company.
The CEO has to have an epiphany, realizing they can’t do it all anymore. They have to prioritize the most important tasks the company has to get done, then delegate and hold leaders accountable to deliver. The CEO needs to lead and manage the team, and individuals contribute where they are needed to make a difference. There are obvious tasks for the CEO to deliver against: making the quarterly bookings targets, continuing to develop the product portfolio to exploit the product/market fit that is fleeting if you don’t stay on top of it, and maintaining the culture of the company. Managing the investors/Board is also in the mix.
My perspective is that a lot of first time CEO’s don’t get this balancing act right because they drag their feet hiring the best team around them for where they are at in the company lifecycle. Hiring the best team possible is one of the most significant factors in the success of the company. Period.
I’m really super biased in this regard. I believe enterprise software companies have to do two things really well. They have to build stuff (also known as products) and they have to sell stuff (convince people to give them money for their products). You better get those two right. You better get your engineering product leader right to sustain the product/market fit in the first place. You better get your sales leader right and recognize that you’re probably going to change out that person if they can’t scale over time. I’ve seen it over and over that the person that gets you to $25M is probably not the person that gets you to $100M in sales.
Another fundamental miss I see all the time is the lack of understanding for the need for a complete “go to market” approach. For the sales team to sell products extremely well, they need a great marketing machine behind them. This takes investment in people and programs. Sales need awareness. They need a pipeline and qualified leads. They need collateral. They need a viable website. They need references and success stories. They need analyst reviews. They need enablement. They need demos. They need, they need, they need, they need, they need. The days of just sales and just marketing is over… it’s “go-to-market” and they go hand and hand.
You’ve got to hire people that you can trust to do the job. The failing I see all the time in young CEOs is they know they can do it better. If I go on the Visa sales call, I know we’ll get the deal. Okay. Is Visa the biggest deal in the quarter? Then you should go. If it’s a $70k deal, why won’t you let the Sales VP go do it?
Being smart enough to know where you need to inject yourself on the lever points that are going to ensure that the company’s growth momentum continues. If you don’t get the team right, you’re never going to get there.
CEO’s need to embrace the fact that that leaders may only scale so far as well as understand that you don’t shoot for the moon at the wrong stage of growth. Don’t make the mistake of hiring the bigger sales leader from Oracle or engineering leader from Google now if the company and the culture is not ready for it. That person could seriously mess up your culture. You want the person that’s as hungry and aggressive as you are and wants to aspire to be the person running all of engineering or sales for a long period of time. I’m a big fan of finding the director level person and stretch them into VPs, or the VP that have been a VP for a couple years. Culturally, they’ve got to be a fit with you. You’ve got to have chemistry with them. You’ve got to believe over time you’re going to be able to trust them and hold them accountable to deliver because you can’t do it all.
It’s the thing that I think first-time CEOs struggle with a lot. Hire people that are better than you are in those functions. And once you do, get out of their way. I messed this up myself. I hired a marketing person at Clarify and she sat down with me after like the third meeting and said, “Look, I can do this job or you can, but we both can’t. Either you trust me to do it or not. Get out of my face. Manage me. Coach me. Advise me. Hold me accountable, but get out of my shit”.