The OKR Podcast
The OKR Podcast

Episode · 3 years ago

Outcome Focus at Scale: Zuora’s OKR Story w/ Tien Tzuo

ABOUT THIS EPISODE

Zuora CEO Tien Tzou and Deidre discuss the inverse relationship between a company’s growth and its alignment. As a company scales up, alignment on outcomes often goes down -- the strategy doesn't trickle through the new layers and most people get further from customer.

Zuora's OKR program reconnects people to the outcomes they drive for customer and company; it's unlocking growth and unleashing the power of teams for this high-growth SaaS company.  In this podcast, Tien talks about the shift to an outcome mindset, how OKRs are scaling managers and leaders to help scale the company, and why every day counts.

Tien is the CEO and Founder of Zuora, an innovative company that predicted the modern subscription economy well before others. He is a widely recognized thought leader on SaaS and the author of the best seller Subscribed. He holds an MBA from Stanford. He was employee 11 at Salesforce, where he was CMO and Chief Strategy Officer prior to founding Zuora.

You're listening to the OKA OUR PODCAST, a show for leaders who want to unlock their organizations growth potential by leveraging the okaur technique and other cutting edge strategies. While many recognize the power of objectives and key results, okay ours, to accelery outcomes and foster a growth and outcomes culture, there's a dearth of information on how to do them well and reap their full benefit. That's where this podcast comes in. Will help you learn to align and measure results pervasively, manage fast, to grow fast and, most importantly, achieve the powerful objectives you've identified. Here's your host day, dread pack Nott. Our guest today is teams out. He's the CEO of Zora, a truly innovative company that foresaw the move to and really coined the phrase subscription economy. Team Welcome. Let's get started with maybe the background of the story of the company.

Tell us how it started and what you saw way ahead of everyone else. We started the compee twelve years ago with this idea that you and I would buy, listen this products and instead we was subscribed as services. We saw the trend happening. A software people don't really buy software anymore. They subscribe to it. But we believe there's going to happen to all other industries, media companies, car companies, and that's exactly how it's played out of the sticking so team. What are some of the challenges of being a high growth company and what change is what breaks as you scale and the organization gets larger? One of the challenges of growing a High Growth High Tech Company is that the organizational size really goes through different flection points. And so you know, we started the company and it was just a handful of us, me and to co founders, and now we're three hundred people. And so there's been successive break points in the company where, because the company size right, the way the way we operate, the way we communicate, we coordinate, the way we big decisions really starts to break as successive layers of management coming and...

...so we really found certainly a year ago we had a successful IPO with the company size, of starting to break to a different level. Decisionmaking had to be pushed down in an organization and we really found it. We need a whole new set of tools and systems in order to continue to scale as an organization. Tell us a little bit about how team of teams enable your organization to be more Nimble. Well, one of the things that was really important to us is we have a cultural value we call Zeos, where we call our all ourselves Zeos, and we all haven't we have a value we call the Z value and, you know, we take a sort of slightly different approach. Rather than writing out five or six values, we let it be dynamic set of values that we communicate through stories, you know, in many ways. I'll how we all learned about, you know, values and cultures, and so we the set of stories we tell each other about what it means to be a ze open to the part of it is a sense of empowerment, it's a sense of leadership, and so it's really really important to us to retain that CEO value in allow every employee to be empowered as we scale as an organization. And the key thing that allowed to do that,...

...we figured it, was teams and as we wanted the organization that companies, stead of a hierarchical structure, to be really thought of as a set of teams where every zeal is part of one or two or more teams. And we want the teams to be semi autonomous and executing the goals that they have, but also recognizing there's a lot of dependencies between teams right, especially as we grow as an organization. What led you to okay ours and the workword platform for okay ours? What drove that decision? So we were seeking of the right system that really had the embodiment of a team concept, but with clarity of what the team's objectives are and allowing teams to have a transparently of collabrity with each other. And whatever reasons we started working with workboard was it wasn't just a software tool right. It was a set of people are going to come in and coach our organizations right how to do this right. And you hear stories about other people who from the okay our systems and you know you'll hear things that takes a year, two years, and sometimes the rules on one part of the organization. We really wanted something for the entire company.

You know, I always say friends don't let friends do okay ours alone the first time. You really don't have to mess it up for three quarters before you get value and you get impact and and so having a set of coaches from workboard really come and teach us how to do that was important. So we decided to do is we took about a hundred folks to an off site in Monterey California by the aquarium and we did a bunch of legwork in the about two months preceding that to come up with our five corporate objectives. Right. We weren't sure if we can have three, four, five. We ended up with five corporate objectives. There was citic ground rules or set the the goals for the company really for the next eighteen months. And then at the off site we divided the folks up into about twelve thirteen teams, and then the teams would you know, spend it? We few about half a day explaining the context between the five corporate goals and the next day and a half lean localizing the five corporate goals, the five corporate objectives, across the thirteen teams. And so we keme out of that off site completely unified...

...organization. Well, their spots has been incredibly positive, and so so after the off site we continue to refine the objectives and the key results across the s but then we also started localizing these and so it's about a month secy off site and I think today we have about a hundred and twenty teams with objectives and key results documents in the system. Our goal is to get to about a hundred and forty. The missing gap was primarily sales team. They needed a close out their quarter first before they really could start focusing on this and and what we're seeing now is is the level of collaboration is high, which is exactly what we want it. How is the work for probably of fusing platform helped. First of all, each team had to be able to crystallize their objectives and key results and then they realize that in order to achieve some of these key results there were dependencies on other teams. It's so just the transparency what people are doing, the level of collaboration. We're seeing teams reach out to each other. These always a magical moment we start seeing, you know, cross linked krs right where the different teams are actually own the...

...same key results, and that's exactly what we wanted. We just were we were worried that we were getting to scale with the left hand the right hand didn't really know what each other was doing, and with the workboard system with a complete transparency what people are working on. That's really starting to to break down. We've gone beyond just setting the five objectives. So there's certainly was the exercise of setting the five objectives. That were the exercise of thinking about key results, but to bring them to life right. Other companies might say will set the objectives, will set the key results and we'll look at the end of the quarter. Right, but to really bring it to life. It really works when you can start looking at it every single week. So in our staff meetings every week we will start off with a BIS review dashboard inside a workboard. It says, okay, where are we? We'll go around the table and say where are we on every one of the key results against our five objectives? Are we on target to hit it? And we're just starting this quarter right? And so it's a start of the journey and it just keeps US focused on exactly what it is that we set out to do us an organization and that could just tract an and pulled into into too many other areas. The inner things we're starting to do now is to delve one level deeper. So once we are lying on how we doing against our...

...five corporate objectives. One of the spots in the companies right that we're worried about, and so we're getting to the point where if we have a question, first thing we do is F fire upworth work. They go search for the team and we get an understanding of what they're okay ours first right, so that we engage with them, we know exactly what it is that they're trying to do and how we could support one of the think causes are root issues of misalignment and organizations, is that the leadership team is looking for a set of outcomes, a set of results that the promised their shareholders, whether public or private. Most of the organization is focused on output and activity and that activity doesn't always add up to the results. Are The outcomes that the executive team, our leadership team, is looking for, and that misalignment is hard to spot because everybody thinks they're doing the right thing and they have set clear expectations and yet the Mashup just doesn't work. Talk a little bit about...

...your organization's journey to an outcome mindset, and so there's a whole concept that that work. We're really started teaching our teams in terms of output versions outcome and and what you see is that we tend to go too far too quickly to the task. Right. What is the action item that we need to do? What is it deliverable that we're going to produce? And then when the company is smaller, in in the people the company feel the direct impact of the market place. Right, the customers happy? Are we making our numbers? Is the system in delivering the UPTIME, in the reliability it needs? You feel that when you're thirty percent company, right, you feel that when your three hundred percent company, when one's three hundred people and you've got a team, what happens is the team is spending more time with themselves or with people in their functions and there's just tend to be further removed from what the market is telling them. And so in order to overcome that, we really need a transition to understanding outcomes. Right. What is the outcome that you're trying to produce? The other thing is when you're looking at cross functional...

...alignment, when you're looking at multi team alignment and you're trying to understand what a team over there is doing. When you're small, you've got so many inner so much interaction with each other that you kind of understand what they're doing. When you're larger and you're looking at what another team is doing in terms the output they're creating or the task that they're doing, it's hard to understand right. It's hard to understand why is that important. It's hard to negotiate, you know, with the other team in terms as are these are way outcomes are were looking for, and it's hard to drive accountability. And so so there's a whole learning process that we're going through saying, okay, these are the action items, but what are the outcomes that you're looking for? The last piece that I'll say is is the role of leadership and the role of managers becomes even more important at our side and scale it's going to continue to elevate, and so there's a there's a role in leaders not dictating the work, but really understanding of these are the business objectives in the company, these are the outcomes that we're looking for, and then empower their teams to figure out how to achieve those outcomes. And so what workboard is really allowing...

...us to do is to develop better managers and better leaders. As we wrap up, what advice would you give other executives or leaders that are thinking about how they scale their outcomes, scale the organization and maybe scale themselves as leaders. It's like anything else. I think don't try to do too much or I think the power of the workboard system, of power they were. Okay, our system is to balance between what I'll call lawn term objectives, laun term outcombs and then short term plans and so so you you set up twelve, fifteen, eighteen month objectives, eighteen months he results that you would like to have at the end of that period and then you do things on a quarterly basis, and that quarterly rhythm low as you to say look, if I don't get it perfect in this, ninety days all another chance. are kind of reset and learn, and so the power of iteration, the power of learning, is ultimately what you're trying to take advantage of, and so don't try to get a perfect understand. It's a learning process and let the organization learn. Team. Thank you very much. You've been listening to the...

Okaur podcast. Subscribe in your favorite player so you never miss a moment. Thanks for listening. Until next time,.

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