Host Intro (Gene Kim)

Gene Kim: 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 the conversations that happen within the black box. And again, the interactions are so infrequent, so it's very difficult to learn. And dealing with CFOs is even more difficult. So one of my favorite constructs of just how difficult this challenge is was framed by Ben Horowitz in a famous blog post called "Ones and Twos." And he said when they fund companies, they put their founding CEOs into one of two buckets. The ones are the ones that know what to do, and then two is getting the company to know what you know. And there's this wonderful description about what ones like and don't like. Ones love ideation. They love talking to customers. They love playing eight-dimensional chess against their competitors. They get bored of execution details, process design, goal setting, structured accountability, training, and performance management. So that's the ones. Of course, the twos are the ones who love that. In fact, they get agitated when they do strategy sessions when they know that there's a business to run, processes to improve, people to hold accountable, right? And I think in this community, we often represent the ones. We see that there's a better way of working, and the opposition are the twos. The people who are trying to enforce compliance around the existing processes. So last year, one of the most talked about sessions 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. And this was so exciting that Dr. McKerson and I went to Compuware in Detroit for a follow-up session. And what I learned was just riveting, but maybe just to set up the story. We were handed an agenda, and the first thing on the agenda was a data center tour. And I turned to Mick, and I said, "I'm so sorry. I have no idea what we're getting into. I've seen plenty of Halon extinguishers. I'm not sure what we're going to get out of this." But it turns out it led to a revelation that stunned me because here is what we saw. It was basically empty. There were two mainframes there. And then the rest of the data center floor was basically empty. There were outlines of where the racks used to be, like an outline in 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 lesson to me was the reason they did that was so they could reallocate $3 to $5 million out of back office and move it into R&D, the things that customers actually care about. And that was one of the biggest revelations I had in the development of The Unicorn Project and led to the fifth ideal. The fifth ideal... Oh, and you can actually see 14 tons of equipment that was just hauled away, 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 how does one motivate the behaviors that we want, that genuinely create lasting, durable business advantage? And that's what led to the fifth ideal, customer focus. Not ideal is functional silos who prioritize silo goals over the highest business goals. Ideal is we do whatever's best for the customer, and if the customer doesn't appreciate it, view that as something they want to pay for, maybe it's not actually a core competency. Geoffrey 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. They're often mission-critical. Payroll is important. We can't get that wrong. We have an obligation to our employees. However, are customers willing to pay you for world-class payroll? It's probably unlikely. So that is context. And so Geoffrey Moore, in his book, "Zones to Win," says that context is the killing ground of companies because context can starve core. So these aha moments led to a bunch of things which got integrated into The Unicorn Project. And I asked Chris O'Malley if we could do a sequel to last year's session and if he could bring his CFO, Joe Aho, so that we could all better understand how do CFOs think, what do they care about, and how do we, as a community, get them on board. So without further ado, please welcome Chris O'Malley and Joe Aho, CEO and CFO of Compuware.

Fireside Chat (stage banter)

[walk-on music audible]. Hello. Chris, good seeing you again. Chris. Joe. Gene, how are you? Joe. Great. You forgot your green eye shade. Yeah. Bean counters, right? You want to sit there?

Gene Kim

Okay. So Chris and Joe, thank you for being here again. Thank you for having us. And I think the first question, let me go to that story about the empty data center. Could you tell us what was the motivation that led to that? I think so many people here in this audience, they know of people or have been personally responsible for building up these huge, vast technology estates 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?

Chris O'Malley

So, when we think about this, and 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 are 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 good outcome for everybody. So when I came to Compuware in 2014, certainly I didn't come with the purpose of doing this, right? Emptying out the data center. I came with the purpose of turning the company around. Before I came in 2014, the company had been in a serious revenue decline over a number of years. We hadn't come out with a new product since 2015, or excuse me, 15 years previously. 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, 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, for a new reality, starts with going to customers and finding out what they care about, what are the issues they're facing, and how does, 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 mainframe, making it the equivalent of any other platform, a first-class digital asset relative to the efforts of Agile and DevOps so that these companies could best then better compete. We also then had to 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 DevOps 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? So that's where the character of the type two comes in, and Joe, in a meeting, in the course of us trying to get the company restarted, asked 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. You see examples like WeWork 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 with the business. Joe, in a sense, brings that thought process and that is an important part of reinventing and transforming a business. Because 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 Compuware itself. What are the things that we do, as Gene was saying, that don't bring value to our customers, don't make a difference in their eyes? Because you want to do less of that, and certainly if you can do those things better, cheaper, faster, that's a huge win. 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 mainframe. Everything else, we're going to do as a cloud-consumed service. So now you see 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 Compuware a success is that we've saved $6 million in run rate by doing this. So we're better, cheaper, faster in how we support the business, but we're doing it cheaper. We took all of that $6 million and put it into R&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 DevOps tools for 20 consecutive quarters. 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 type one and 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.

Gene Kim

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

Joe Aho

Sure. So, give you a little context here, some background. As a company, we were bought and taken private in 2014. 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 had never met Chris before. Now, 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 everything we do in supporting customers in 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. We're going to change the way we compensate. We're going to change all of our G&A 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 got our plan for the next four years." So I'm thinking, "All right, what do we do first? How long do we have? You want to lay out a 12-month, 18-month?" And Chris is like, "No, we're going to do it all this quarter." So I'm sitting there thinking to myself, "We're not going to have any employees. They're all going to quit. Now we have to go- You're not exaggerating. That was actually a thing. No, and here's the beauty of Compuware, and we'll talk about town halls in a second, but when you're celebrating things at Compuware, it is very common to celebrate anniversary milestones of 15, 20, 25, 30 years. And I'm sure this is true of a lot of your companies. 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 did think he was nuts at first. So what changed? You know what changed my mind? A couple of things. One is, like Chris said, he laid out a mission, a vision, and a strategy. Chris immediately operated in a growth mindset, and that is so important. We were in a state of decline, but Chris ignored that. Now, 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. So Chris was quick to align goals and helping every department in the company align goals to a main thing. 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? 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, they start seeing this. And don't get me wrong, Chris had his sales hat on early and often, and 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. And Chris is selling that mission, selling that vision. Why are we doing this? Where have we been, and where are we going to go? And now all of a sudden, you can start seeing a change in people. You start seeing a little more confidence. You start 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 those are easy things to see. And 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. So now I had to see those, and I had to see those early on. Well, that could be the way we do business. So for example, our close process, near and dear to a CFO's heart. That goes from 22 days to eight days. You start seeing metrics in Salesforce.com with pipeline and coverage ratios and account manager activity. You start seeing software going out the door every 90 days as opposed to from 1997 to 2014, we were in maintenance mode. So real tangible results tied to the business. I became a believer really quick. One of the things that you had mentioned to me was that because of this operational excellence in G&A, you're actually running G&A at around 5%. Can you just talk about what that's meant to you and maybe define what G&A is?

Gene Kim

Sure. So

Joe Aho

G&A, your finance, your accounting, your internal IT, your legal, your HR, your administration. And let's face it, let's give a couple of examples. Customers don't care how we go about generating an invoice. Customers don't care how we go about doing our order to cash or our order to pay. That's not something that they're going to go to bed and worry about. I go to bed and worry about it. So 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 we got bought, we went to our board with a simple message. "We're going to turn around the decline, but you got to let us spend the same amount of money that we're spending today." Now, Chris really led it, and I was right there with him, but Chris led it. He's putting his neck out on the line. There's two ways to do this. Companies face this battle every day. Are you going to grow revenue or are you going to cut cost? It's one or the other. And if your revenue is declining, you're probably going to cut cost 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%. We're at 6% today. That's 6% of revenues are spent on these back-office, the G&A 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 two things that customers do care about. So of course, they're going to care about R&D. Of course, they're going to care about the new releases coming out every quarter, of new ideas in our customer support and things that will increase the net promoter score, things like that. Now this becomes valuable to a customer, and that's why you want to make that a differentiator for yourself. You had this great definition. What is G&A? It's everything that customers don't care about. Yeah, right.

Gene Kim

Which I thought was actually very funny. Joe, what astonished me so much about the story was the level of bravery it takes to change all the business processes that all those applications were running. Looking at those tombstones, EMEA Financials, Sales Commissioning, Help Desk. What sort of maniac would change all those business processes that the company runs on all at the same time?

Joe Aho

Well, maniac would be one that works for Chris O'Malley. Yeah. But no, seriously. So two things. Again, we wanted to create a culture, or you know what maybe a better word would be a plat- Well, could you actually maybe describe sort of those core business processes that you did switch out? Yeah. So we kind of joke at the company that everything at the company now is either run on the mainframe NetSuite or Salesforce.com. So all of your order to cash, your order to pay, the financials, the banking, 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 headcount. That causes increased infrastructure. That causes inefficiency. So we wanted to make it where it's a, I was going to say a 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 mindset of being in a cost center to the mindset of being a business driver. 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 we had to become much simpler to do business. And what I mean by that is, it was actually hard at one time to do business at Compuware. And what I mean is internally. It was hard for our sales reps to get deals through the system. It was hard in our order to pay, in our order to cash, in our expense reimbursement. There was conversations going on back and forth, and that is just wasted energy. You don't have time for that. Again, because customers don't care about that stuff. So you got to be simpler, you got to remove complexities in order to make the way you do your business more simple, more effective, and in the eyes of customers. And 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. But let me tell you, if you can simplify it, you will be much more effective and you'll be much better in the eyes of your customers. So from this community, if you hear objections that it can't be done, we have an SAP instance that's 25 years old, and we have 45 different warehouse management systems, impossible, and what would your reaction be? Yeah. Been there, done that. Our example would be, we had 37 compensation plans in how we pay our salespeople. Now we have one. Again, simple's not easy. It's hard. You're doing a lot of heavy lifting early on, but trust me, it's well worth it. Oh, simple is not easy, is actually said by Rich Hickey, the creator of the Clojure programming language. This is very spooky. Chris, one of the things-

Chris O'Malley

If I just could add to your... If somebody came up and said, "We can't change these things," I would be a little more aggressive in terms of the response, and I would tell people to quit lying to yourself. Change is a necessary part of competing in the age of software. 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. All of us know in terms of the services that we use as banks or 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 are 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 got to shake people up and challenge them, because if you stay the way you are, you will slowly fail. In fact, there were predictions that when you did all this, the company would implode and daily operations would cease. Did I understand that correctly? Yeah. There's a lot of people who challenged me at the outset within Compuware that this was a mistake. We went from 40 years of waterfall to agile, and we did these things basically overnight. And everybody was like, "This is not going to work." And again, 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 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. So you telling me we can't change is basically saying this company's going to go out of business, and I'm not going to be any part to that. And our customers expect us to be better than that. So again, I took a very aggressive disposition. Four years ago when I was saying those things, people thought I was crazy. They thought I was being too aggressive, but I don't know that you can be aggressive enough. But you do have to be in this type one mindset with your visionary. You can't bowl 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. You don't have the chemistry to make sure that you're going to 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. 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.

Gene Kim

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

Chris O'Malley

It's terrible. It's one where they've built a kingdom, right? And there's enormous joy, using one of your themes from your book, in building that castle. And there's a lot of pride in how efficient that it has become. But in truth, I'm not necessarily going to say this to the person at the time, that's misplaced pride. That's misplaced joy. When pride and joy aren't fully aligned to what customers care about, you're doing things that aren't necessarily helping to make the company better, helping to serve customers in bigger and different ways. So it's very important as a leader that you're patient with those folks, because they got to basically take down the kingdom. They got to look and have this data center being empty as something that's a significant achievement. So as we did within Compuware, 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 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 then it was interesting, in one of the Christmas parties that we had, one of the members of IT that did break down the castle and now is taking pride in this, explained it to me. It's a little bit like having your child go off to college. 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 to achieve bigger and better things. Recycling. So you got to let it go. You got to let it go, and you got to let it go in ways that makes the next stage of their life successful. So 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 tonnage out and send it off to be recycled.

Gene Kim

Awesome. This is to Chris or Joe. Why was it so important to you that you fund this internal DevOps transformation and way of working without a large restructuring charge? Yeah. So, three things come to mind- And can you tell us what a large restructuring charge is? Sure.

Joe Aho

So three things come to mind when you hear the word restructuring: money, time, and people. So to Gene'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 message to the rest of the employees, "We're going to start doing things a lot differently around here." And it's not a good day. Those are not fun environments to be a part of. So big cash outlay, morale killer, and often take a long time. So time is another one. They take time. No matter what industry you're in or sports or business, you don't have time for big rebuilding projects. So that was the other reason we love doing it without a big restructuring. So we didn't have the big cash outlay. It didn't take a lot of time. And with us, I'm sure a lot of you are similar, look, our competitors are big. So 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 just think of if you're taking on somebody, and no matter what it is, and they're big, well, you better be fast. So we were basically changing the tires while the car was moving. We didn't have time, and so you're saving on time and you're saving on cash outlay. Now, the most important thing about this is the people. 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, 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 this continuous improvement and these 20 quarters in a row, and there's a reason for that. They gravitated to the mission and the vision and the strategy, but you've now become a culture of innovation, a culture of risk-taking, a culture of working on things that customers care about. And no matter who you are, when you bring that to your workplace, your employees will go through a wall for you. And that's what's been the most exciting part to see is that passion, that engagement, that grit. 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.

Gene Kim

Chris, one of the things that you said earlier this year that just stunned me, you had made the statement is that the only metrics that every business leader should care about are three things, employee engagement, customer satisfaction, and cash. Cash flow. 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?

Chris O'Malley

Yeah. So, in order of importance, customer sat is the reason your business exists. You all work at the pleasure and service of your customers. You lose sight of that, and you lose sight of everything. Certainly, the example of Compuware, we lost sight of that up until 2014, and we had to get back on point. And in getting back on point, it's not just something you say. You got to get obsessed about customers. You got to get obsessed 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 in terms of what your company does to better serve those customers. So that is job one. Job one. Lose sight of that, you lose sight of everything. Job two is that employees have got to be engaged, right? There's a Gallup survey that's been done for 40 years, and it's done every two years or so. And what's astonishing about it is the results never, ever change. 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. They just are doing their job, will do no more or less than what they're told to do. And then 17% of the people are actively disengaged. They're going to 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 a leader has got to get their head around, how do we get the odds on the side of the engaged? Get to 50, 51, 60, 62. So at Compuware, when I started, the statistics were worse than that. Today, 62, 63% of the employees at Compuware are returned to be engaged by Gallup. We get up with a different grit, with a different spirit, with a different set of focus in taking that customer obsession and translating it into deliverables that make a difference. And then lastly is cash flow. We're not charities. Most of us aren't charities. We work for the purposes of creating a profit. And that's not a dirty word. That is not a dirty word. And I think Joe and Gene 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 Joes of the world saying, "How are we going to pay for it? What's it going to cost? How is it going to make a difference?" Because you've got to accept that it's a yin and yang to anything that's done within business, and you've got to be attentive to cash flow 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 help to self-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 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.

Gene Kim

Joe, it's great to hear a type one say that, but does a type two also believe that, briefly?

Joe Aho

Absolutely. I joke around with people. 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 cash flow is going to take care of itself. No doubt in my mind.

Gene Kim

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

Chris O'Malley

Yeah, the premise of this fireside chat was to help you as type ones sell type twos on your ideas, and I'll use Joe as the proxy. You're Joes. How do you sell Joe Aho? And to get your head right, I think there's three really, really important things. First, you've got to be customer obsessed. Gene and I did a fireside chat last year. We talked about engineering and product management, product owners working in tandem like Lennon and McCartney. Even though you're running DevOps and you're worried about your pipelines and creating intrinsic automation, you've got to be grounded in what are the things about your customers that cause 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 those problems. Customer obsession also goes to the backlog. You need to know what's in your backlog. What features need to be delivered to those customers, so that you feel a sense of urgency and excitement. I use the example within Compuware that I need the engineering team to look at that feature backlog and feel like it's prisoners in the Bastille, and you're revolutionaries, and we've got to get them out of that prison, and we've got to set them free because we've got to get France back to the people. You've got to feel that sense of urgency and excitement around your backlog, and that backlog also has technical debt in it. And the technical debt has to be resolved if, in fact, you can prove to yourself that by doing so, that 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. But if you get obsessed in that way, the decisions that you make will be far better, the prioritization of things will be far better, and Joe can 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. When you don't answer them right, the answer should be no. So get grounded in customer obsession. Second thing 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've got to do it through feature adoption or whatever means that you think is a relevant proxy. But you've got to commit to making that better and hold yourself accountable and be responsible that those things that you can affect directly. 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 doing those things and making them better, the customer sat will in fact improve. Because Joe knows a liar. 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 make a difference as it relates to how customers view your business. And then last thing is you got to have a growth mindset. A growth mindset is really defined in setbacks, both big and small. When you go through any transformation of this scale, going from the way you are to where you want to be, it's going to be hard, and there's going to be things that go wrong. You're going to fail. For the ones that are inside of large enterprises out there, and you hear people that come up here that are parts of startup, they get a blank sheet of paper. You start with 40 years of legacy. You got 40 years of bad habits. You got 40 years of people saying no, 40 years of people feeling comfortable in the status quo. You got a much bigger problem, much more complex problems. So you're going to have setbacks. Things 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 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." Because what Joe doesn't like is quitters. 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 in 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. So 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. You can't do it once a week. You got to do it every day. You 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.

Gene Kim

Can they sell you on that?

Joe Aho

That's right.

Gene Kim

Well, thank you so much. You've been so generous with your time over the years, and it showed up in "The Unicorn Project," and I hope this has helped this community help better understand CEOs and CFOs. So thank you so much.

Chris O'Malley and Joe Aho

Thank you. Thank you. Thank you, Joe. Thank you. Thank you.