Ask Acadian: Learning with Leighanne and Derek.
Why and how did Workday scale so well?
I’ve known Leighanne Levensaler for at least 15 years, for a good chunk of that time we were competitors. Despite that, we always got on well, and since we both have left the hurly bury of Workday (Leighanne) and SAP SuccessFactors (me), we have become good friends. Leighanne is an advisor to Acadian Ventures, and a limited partner (investor). While Leighanne is charmingly modest about it, she was the lynchpin of the HCM product at Workday. The decisions she made were instrumental for Workday’s success.
At Workday, Leighanne worked very closely with Derek Butts. Derek played vital roles in corporate strategy, M&A, product strategy for analytics, amongst others. Both Leighanne and Derek joined Workday early. Derek has also held leadership roles at Intuit and Blue Yonder.
A couple of weeks ago, we had Leighanne and Derek present to and lead an Ask Acadian1 discussion with a group of our portfolio companies: Learning how Workday scaled. We explored several topics, category creation, disrupting incumbents, product-sales relationships and more. Derek and Leighanne have developed an excellent framework that really helps understand the levers for hyper-growth. They call it the flywheel.
You are who you hire
While the whole session was fascinating, one thing really stood out for me. The founders, Dave Duffield and Aneel Bhusri, interviewed the first 500 employees. Not the first 5, not the first 50, but the first 500. The reason behind this was to establish and reinforce the organization culture and values.
If you create an organization where people really trust each other, and share a clearly articulated and deeply held set of common beliefs, amazing things will happen.
Connective tissue
It is not enough to have great engineering, top notch sales, and devoted support. They need to work together. The share values and deeply held common beliefs act as the Myofascial layer.
When sales trusts product, and support trusts sales, there is a strong connective tissue between the functions in the business. Derek really stressed the need to constantly work on getting the different functions in the business talking to each other, to continuously reinforcing the common values, and thus strengthening that trust. When you are crystal clear on who the ideal customer archetype is, and you place that customer in the centre of your work, it gets everyone aligned. This sounds obvious but it requires conscious effort to achieve, and maintaining it as you scale is hard. It takes discipline.
What do you believe?
Most successful founders develop a iconoclastic position on technology, product etc. They develop a clear theory of what makes their product different. In the case of Workday it was the conviction that cloud computing could run the most mission critical business processes of the world’s most complex organizations. In the mid 2000s this was most definitely not common wisdom. Today cloud is the dominant design, but then it was far from sure it would be.
For the academically minded audience, Workday’s growth is a classic example of De Santos and Eisenhardt’s Claim, Define and Control model, and would be a great use case for Teppo Fellin’s “what’s your theory?” A big part of Workday’s early success was its constant focus on its category creation efforts, generating what Leighanne labelled earned coverage, and becoming what Santos and Eisenhardt term the Cognitive Referent, for enterprise cloud SaaS.
Telling the story
As I look back on Workday’s early success they were able to leverage elements of the PeopleSoft narrative yet create a distinct break with the past. Managing this paradox was an essential component of its category creation efforts. Reading this early Workday blog post from Annrai O’Toole illustrates that rather nicely. Consistently explaining over and over again why you are different requires patience, and but it over time it builds a lasting brand, and the power compounds.
While telling the story to the market is vital, you can only really do that well can tell it tell it inside the organization too.
Thanks to Leighanne and Derek. The founders loved the session. We will be doing more of these for the portfolio companies.
Ask Acadian: where our portfolio companies interact with experts from the HR Tech / Future of Work.