Virtual Summit Recap: Positive Employee Experience is Key to Successful M&A

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Formal discussion of the day is Positive.

Employee experience is key to successful M.

And A and our speakers are Jill Harrison, V VP of Silverland Ventures Cole.

Breidenbach, Head of M and A Integration.

At Okta Josh Olson, Head of Experience.

Solutions Sales at the Americas at VMware.

And Amy Yanaway, Vice President, Global Compensation.

Benefits and HRIs at VMware. Awesome. Thank you so much Maddie. We're really excited to host this panel today and talk about what makes for really great employee experience. To introduce the panel, we've had some really great conversations as a group about what employee experience means, and I think right now, in this day and age, it's especially important to consider employee experience because of everything that's going on here in Brooklyn where pretty much week by week things change and there's lots going on in the world around me here. I know it is for everyone making sure that culture, that trust, that the true employee experience is at the heart of all of the technology decisions, that the firms that we work with every day is really super important. And so I'm super excited to have all of our panelists with me today to talk about what are our tips to ensure that employee experience first, leading off into the discussion, we have talked about at length what sort of leads up into an integration. And I think in our discussions leading up to this panel, I think, Amy, you had pointed out that really leading with trust is the absolute most important element of any M and A process. And that solid foundation creates the sort of optimal conditions for enablement, for transparency, for promotion of corporate values. We've all agreed that technology as technologists really helps set the cultural tone. There's different phases of a deal process and I'd love to start off with a sort of round robin here of each phase of the deal process. How do you really set the tone for that trust? How do you set that kind of transparency with employees on both sides of the fence to understand what's going on? And I think I'll sort of direct the first question to you, Cole. You know, how does this play out in the due diligence process sort of early on in a deal? Love to hear your opinions.

Yeah, absolutely. It's a great question. To me, it's all about alignment and communication and that starts kind of almost even upstream of due diligence. Pre loi. Right. So it's being very clear about what type of deal we're doing, whether it's a tech tuck, whether it's a revenue focused deal where we're going to acquire a scale business, whatever that looks like. I think from an internal perspective with the management and leadership team, it's being very clear on what those plays are that we're going to execute, on why we're buying it, what's the strategic rationale and the deal thesis, getting alignment around all of that and then getting alignment on how we're going to measure those things and what the expectations are. And then as you kind of move throughout due diligence, it's then at a macro level, just being very, very transparent, clear and succinct about why we're doing the acquisition between the two leadership teams in this day and age. And I will touch on this a little bit later. In this environment, in my opinion, you can't really tend to do or want to do a deal without being very clear with folks who are already a little bit wary about why they're being acquired anyway. So being very transparent very early about why we're doing the deal, how we're going to onboard people, what the expectations are, I think is very important. And then during the last session, I think just to reiterate on this point, communications being critical to M and A, as we all know, as you approach integration planning, putting even more focus on the communication side of this thing for all stakeholder groups, internal leadership teams as well as external partners, et cetera, I think it just becomes even more and more paramount.

For sure. Thank you, Cole. And I think, Josh, that sort of segue into the true integration planning and where you all at, VMware start to get involved in a very deep and kind of interesting way with planning for that integration, planning for the continuance tools, systems, technologies. What are the tips that you see or that you can pull forward into sort of the integration planning process.

Thanks, Jill And Cole brought some great points. Right. I think one of the things that for me personally, I think, you know, somebody said it to me a long time ago, they said, how do you make somebody trustworthy? You have to first trust them with something small, right. And when you do, then they follow through. Then you trust them with more and on it goes. Right. And when you start to think about this from a technology perspective, Cole mentioned certain things like you want to be able to understand the process of what's happening. You want to build transparency on what's happening across the events. And so giving them notifications in a secured kind of, you want the security and the kind of digital wrapper, if you will, around this consumption layer. So if I had this conduit, this digital workspace where I can now give this to you prior to the deal actually closing. But I can have certain information obviously vetted with lawyers appropriately, but I can give certain information to you as an employee saying this is what to expect. This is the next stage in the process. Now all of a sudden I'm taking some of that fear and anxiety out of the process and I'm giving you that transparency. And you kind of need this, what's called multi tenancy. You need this ability to have all of your systems set up in such a way that yes, I've got the parent company security and those types of stuff settings all already set. But likewise, when I bring over an acquisition kind of parent child kind of situation where I bring in this child organization, I want to be able to automatically flow down all of those security settings so that I can have that appropriate level of access to corporate communications and Other things that I want to give again, the right, at the right time, with the right level of interaction.

Right. So as you've built the foundation of trust, you've communicated, you've been transparent about what's happening, what the vision is, sort of laying that foundation to seamlessly move forward with the integration plan is I think, a really great point. And Amy, I know you have a very specific lens through which you see the integration and the onboarding process happen. And I'd love for you to kind of talk us through what are the best tips that companies can think about as that integration plan moves to action.

Sure. So I think there are a few ways you can lay the foundation in advance of a deal closing. And one is by being very transparent about what will happen with people's pay and their benefits. Because if you can't assure them what's happening there, then it's almost a non starter to get them focused in thinking about any of the business activities that you need them to be able to engage in. So ideally, if systems are set up so that you can get them offer letters, information about benefits, zoom meetings about benefits, all in advance, then that kind of is taken off the table and they get to see first how you treat employees, how you care about them, and then you can kind of calm everyone's nerves. And if, depending on how you have your technology set up, if you can give them access to some systems that are appropriate for pre hires and then that's great, and then you have it ready to go where when the deal actually closes and it's appropriate legally for them to access systems that's all queued up based on what they should have access to. And so they see that you're trusting them with access to content on the Internet or whatever it might be that they need to do to start integrating their work. And so I think the more you can be transparent and the more you can give access as appropriate early, the better you are on a path to integrate company product and all the strategic reasons that you're executing on that integration.

Awesome. And I know we're going to talk a little bit about some specific tools and some specific technologies that people are using, especially now under Covid to do a lot of that onboarding. So we'll save a bit of that discussion for the kind of tail end of this conversation, but that was awesome. So laying that foundation of trust, certainly the important first step. But when we're thinking about how we move forward into sort of executing that plan and getting employees connected together, I want to dive into the sort of employee experience considerations that help support things like I think, Josh, you were saying, the security and compliance of an organization, the, you know, the necessary building blocks to make sure that when these organizations come together that all the, you know, boxes are ticked and everything is dotted. So you know, as you all consider the way that you play with companies to help onboard systems and provide access, what are sort of the insights that you have around getting employees connected, but the sort of operational requirements of getting people access to their systems.

I will start off with. I start with a bit of a, like a framework. So think about the planning of it. And the reason why I'm doing this is because employee experience is so much bigger than just technology, but it's technology enables so much of it. Right? And so now when you start to think about it, you got to kind of put the framework on it. Things like the macro, the micro and the nano. And what I mean by that is from a macro perspective, these are global things, obviously. COVID 19 GDPR regulations affecting every company that's out there, all of those types of things from a global perspective, the micro is going to be the organization or the company itself and how it's responding to that kind of. And also then there's the nano level where what's it like for me, the individual contributor or what I'm doing for this role in this job, what's it like and how does it change because of COVID 19 how's everything changed? Why is that important? Well now all of a sudden all the communications that you were planning to get to me, I've spoken with organizations in large distribution companies, for example, and I said how do you do speak to all your package handlers? And they said, well, we put a poster up in the break room. I said how many people are seeing that now? It's kind of like those kind of considerations. When you kind of think through that, you start to really do a couple of great things, which is I call it software defined experiences where if I can software define a process now all of a sudden I can track it and I can make it better. And I'm also agile enough where I can actually change it on the fly as the company gets better. And so especially you're starting to think of these integrations if I have that foundation of intrinsic security. So we have different things like carbon black and other things. We've integrated it throughout what's going on in the data center out all the way to the endpoints and all the cloud applications that you might leverage that level of security is baked in. Likewise, we have the privacy baked in that privacy framework across all of your applications that you're willing to use it on your bring your own device, maybe your phone or tablet or something like that, as well as your corporate devices, PCs and Macs and everything. Now all of a sudden that digital workspace isn't assigned to a particular device, that if it breaks now, what do I do? Or if it's at the office and I have to be sent home, what do I do? Instead it's assigned to you. So now all of a sudden you can be transformative on how you get those communications out to everybody in a moment's notice because there's a hurricane rolling through or wherever it happens to be great.

So at that sort of macro level, you're sort of planning for the framework of how you're going to communicate, how you're going to get people connected. But I think from your perspective, Cole, I'd love to shift into helping employees get connected to the day to day tool sets that they use. And I know you all at Okta have a really specific point of view about auditing those systems, making sure that employees can really get connected to where they're used to doing work. So I'd love to hear some tips from you too.

Yeah, absolutely. I mean, there's kind of the Okta side in the way that we provide an actual solution for M and A practitioners by giving day one access to acquired employees to the services and the applications. They need day one to do their jobs and be productive. Obviously, as a byproduct of M and A, that's extremely important given the synergies of the deal. You know, I think to back up though, I mean, just given the current environment and the way things have evolved in today's world, I imagine that the due diligence part of those tools is going to be even more critical. Right. So, you know, maybe before there had been some back office cost saving synergies where we said, hey, we're acquiring company A and they use Microsoft Teams and or they use X, Y and Z tool. We're just going to cut those off and convert them over to whatever tools we use. There's a totally different consideration. And a step back, I think we all have to take as integration leaders to say, well wait a minute. Obviously in today's world everybody's kind of working remotely and those collaboration tools are now interwoven into company culture and how we all work remotely. Right. And so does it make more sense from an ROI or a business Case perspective to allow if that team's more effective on their own collaboration tool and it's a small subset of people for day one for that, let's just say it's an R and D team. Is it worth it to really get rid of whatever tool they're using that they're really effective at and rock the boat even more than they are just by being acquired? Right. So I mean, I think just focusing more on those collaboration tools and the way they're getting their work done today culturally is really important. And then just the consideration on getting people access securely to the applications and services they need. I mean, it's part of really the business case and a lot of the reason that many of our customers, global customers, purchase Okta, a lot of our largest customers are serial acquirers. And when they do that, there's a lot of complexity with multiple domains and multiple employee IUDs and their email addresses. So providing a meta layer or an identity and access solution, Okta's identity cloud will allow us to really drop an ad agent on top of their domain. I'm now solutioning here and making it sound a lot simpler than it is. It's not that simple, but I'd like to think it is. And giving those employees access to whatever subset of applications they need just makes things much easier and really provides a seamless onboarding experience. I mean, along with many of our customers who also kind of leverage VMware as a joint integration and their device trust platform, moving towards that zero trust framework as you kind of integrate the companies, I think is a really powerful message.

Right, I like that idea there, Cole. That again, if you're solving for the sort of infrastructure in which everyone can securely and compliantly interface and then you're sort of planning and doing that audit of systems to understand who uses what typically and where can you achieve sort of synergies. Amy, I know you have a really specific point of view, you mentioned earlier about sort of onboarding and giving new employees sort of access to either pre onboard systems or so forth. I think nothing sort of is a substitute for asking people what they like to use and how they like to work. Right. I mean, you've been an advocate with surveying directly. So how can we engage people to get a really good sense of what's gonna work and what's not gonna work pre and post.

Cole's comments really resonated with me that you don't wanna rock the boat over maybe a small thing where you could get some savings right away and say we're gonna consolidate on the same collaboration tool. I think it's important in some cases to move slowly so areas that might not matter consolidate your HR systems. Employees can learn how to use the new benefits enrollment tool, but when it's their day to day work and it interacts, it impacts their interaction. I think it's important to seek to understand, to kind of watch and listen how they're using their tools. An obvious winner might emerge over the coming months as teams start integrate. It makes sense to just be in listening mode for part of that. And then my other thought on this is don't assume people are reading your messages because you're posting them to your internal social channel that you expected them to. They're integrating and learning like 50 new systems and 20 different emails a day, this, that and the other thing and to just assume, oh, we communicated it via email. Yeah, we've made that mistake and we've realized, oh, what we needed to do was to understand they used X Slack channel. That's where they were used to hearing messages on benefits or this is where they asked questions about their stock. And so while it might not be efficient for the first few months or first year, it makes sense to meet them where they are. Even if it's copying and pasting similar messages or having a team member for whatever appropriate initiative, whether it's IT technology or HR or benefits, that they're there meeting them where they are and give people that transition path and just understanding that they're going through a lot, a lot of coming at them. And if you have an important message, don't just do it the way you have on autopilot because it's efficient because then you miss the whole point sometimes.

I think that's a great point. And you know, it's also I love the idea that really listening to folks will help ease the burden of the anxiety because I know for us at Silver lion, if you took away our Slack channels with the animated gifs, I don't know what we would do. Simple things, but they are these, you know, it goes to this whole, this whole idea of collaboration tools. The way that we work together really kind of shapes our culture and you know, it's sort of a self fulfilling cycle. So I'm curious if any of you just have general comments on what you've seen with other companies that have either joined your firms or you know, you've been instrumental in the deals with like what are the ways that M and A practitioners can think about what even collaboration tools say about an organization?

I think One of the things to think about, Jill, is just how you get access to those collaboration tools. So some of the tools in general. Right. Because one of the things that we did with our workspace, One Hub, we have the ability to unify it all. So when we did acquisition a while back of another company, they had a different sales process. So their salesforce was set up a different way than the core system was, all those things. Right. And what we simply did is gave them access securely in this unified way so they could very quickly gain access to the actual systems and know what the heck everybody was talking about. And then when the notifications came out and the emails and the Slack channels and everything else, they go, oh, that's what they're talking about. That's where I need to take action is in that tool, not this one. But it was all unified and easy enough for them to be able to move back and forth. And your point is, somebody said earlier, you have the ability then to sunset those old applications, but the user experience is like, I've always gone to the same area, I've got single sign on to everything I need to do. I'm just effective and efficient from the workers perspective. And I think that that's a good point that Amy brought up too, where sometimes we give so much focus to the shared services group, make that team as efficient as possible and just wring out any other excess. Right. Which I get. But the problem is sometimes you're doing that at the detriment of the broader workforce. Right. And you got to kind of balance that to go, okay, how do we unify the things we can and allow for that difference. Right. And celebrate the difference where you can as well. Right. And be able to bring it all together collaboratively.

Yeah. And the one thing I would add on is that while technology is great, Slack channels teams, whatever it might be, to not lose sight of that human interaction. And six months ago I would have said if there's someone that's really active on Slack and maybe they're stirring up a little bit of drama or there's misunderstandings, conspiracy theories about what the company's plan is to do with their team, you know, try to have a one on one meeting in person or fly an executive or fly the right leader out to that location and of course, you know, we're in different times now, but I think the principle still applies that get that one on one zoom, meeting that face to face, get to know as a person, dig a little bit deeper to understand what their challenges are or what maybe the perceptions or misperceptions are. And often if you connect with that person that is viewed as an internal leader to the the team that you might have acquired making that connection with them, then you've extended that trust to their entire team because they'll represent differently, they'll show up differently, they'll share the message, they'll understand they're being heard and that they're in a channel to get to the right team. So I think you can use technology so far to communicate to large groups and then leverage that as a connection point into that group and take things off social and into an in person conversation when needed.

Great points and all really resonated with kind of the way we're looking at things at Okta as well. A couple things that just, I mean we haven't executed a deal yet during, you know, since the environment's changed. Right. But some of the things that I think we will look to bolster our capabilities on and focus on kind of go back to communications and just alignment, having repeated town halls, more openings where people can join those calls to ask some of the questions on a much more regular basis. In reality, you're also. I almost view some of the. It's the responsibility as me as an integration leader to really white glove and introduce those right leaders to each other so that that trust can be built. Because a lot of times those leaders on our side are, you know, they're involved in DD and on top of that they're also doing their day and night jobs. Right. So the last thing that they might be thinking about is kind of who's my counterpart. So I think there's going to be an extra lift on integration leaders and folks, maybe even the corp dev leaders or corp dev practice practitioners overall to make sure that those relationships are built and those folks know each other. Then the last thing I'll say to Amy's point, like kind of taking it off Slack and making it more of a social thing is one of the things we've started instituting at Okta is this. I forget what the actual application or plugin is called for Slack. You join it and it's called something like Donut. And it basically on a random day you join and it matches you with somebody random in the company and then kicks off a zoom automatically and you literally just spend 15 minutes like just shooting the wind with somebody, right? And saying like, hey, you know, hey, what are you doing? How's this entire situation impacting you? Et cetera. I could see us leveraging something like that in Kind of a subset for certain culture carriers, both at the acquired company and at Okta to really get to know each other, even like across across functions doesn't even matter. Just to kind of bring and really surface that human element and make sure that it's part of the integration, make sure they're heard.

So we definitely have that. Actually at Silverline it's sort of like collaboration, speed dating, pretty fun. So we have had a couple of questions that have come in that I think are really apropos to the discussion right now. And the first one that I'll ask Cole mentioned transparency and open communication. Many times the acquired companies rank and file don't feel like they have a voice or maybe there's not two way communication. What are your companies doing to leverage the acquired company's leaders in this communication? Or what mechanisms or processes are you using to avoid potential discontent? I think that's a great question.

Yeah, I'll take it. And I'm sure Josh and Amy, you guys have a lot to add as well. One of the key areas of focus that we've really bolstered our capabilities on even pre Covid era is change management and identifying the change leaders and kind of that mid level manager. So it's one thing to get kind of leadership teams involved, but you also need kind of the mid level managers, the click down the folks who have the rank and file underneath them to make sure that they understand they have a platform and voice to speak with, whether it's the integration leaders or other leaders across Okta and make sure that those relationships, they're brokered. So I'd say having more process and more tools built around successful onboarding and change management is really an area of focus that we've instituted at Okta as we've learned, as we've learned and tripped and fallen all over ourselves just to be totally transparent. So yeah, I mean, I think those are some of the things that we focused on.

Yeah, I think from our perspective that we've done a lot more like town hall kind of scenarios, right. Where you're getting that leadership, the voice of the leadership directly to everybody. So that I call like the one to many kind of calls or videos or whatever. At the same time I think there's a lot more to be done with the one to one between those different business units that are the new acquired entities just to kind of break down some of those perceived walls, I think, if you will. I mean, and Amy, I know that for example, your organization does a really good job bringing in again this was pre Covid, but we could bring in groups for the new hire process. And that's a great way to get everybody on the same page and share practices. Do you want to talk about that a little bit?

Sure, sure. I think it's important to give people an understanding of the company culture. And we used to do that in person by flying people regional hub and giving them a three day experience. And we're working on a modified version of that and have used that I think the past couple of months to give people, whether it's a virtual tour, still show them our values. I think the upside to everyone being sheltered in place is that all the executives are available to show up at these sessions because they're not traveling and on airplanes. And so in some ways a we've had better executive presence just because of availability. And then we're able to also be more inclusive. So we don't just have a guest speaker for the Palo Alto location. But okay, it's anybody that can chime in during a Pacific time zone and try to pick something friendly. So I think it's really looking at how do you get more inclusive in the way you think about things? How do you maybe reframe things and then while you're moving along, think about what does the culture look like going forward into the future. What do you want to hold on to that's maybe working well at this time?

Yeah. And then I'll just add, as I kind of listen to Amy and Josh speak, I kind of had a few thoughts just on a few tactical items to address that question too. Jill, these are really, really straightforward and basic things, but things like instituting a buddy program for acquired employees. Now keep in mind, I know that doesn't really scale if we're doing acquisitions of hundreds or thousands of employees. OKTA is not that size and we're not doing deals that size yet. But so we have the latitude to do things like a buddy program, things like surveys, 30, 60, 90 day surveys and letting them know that it doesn't just disappear into the ether that these things are. Then we conduct focus groups off the back of those to really make sure that the key areas of feedback that had credibility and metrics and whatnot put behind them, that their voices are heard and we can action those items. And we tend to do that just due to our size though Okta is, I think around 2200 employees now, we can tend to still move with a little agility along some of those decisions. So I think that all helps as well.

Right. I think that Some from the other side of the lens, we at Silverline have growth equity backing from a private equity. And so one of the tactical things that we did as part of our integration plan or kind of onboarding plan really was invite our private equity principals and deal professionals to really be part of a lot of our cultural events. Right. So on a regular basis, they were part of the different ceremonies and our sort of transparent executive office hours and all of those sorts of things. And a lot of this was at our insistence. Right. It was sort of coming to the table to say this is how our culture works. In order for this to be successful, we really want to be inclusive. And then also we made some bobbleheads of some of our. Some custom bobbleheads of some of our deal professionals. So I'm not sure if that was a key to success, but it was quite fun. So thank you to Kevin for that awesome question. I think that's a really great call out to kind of engage those leaders. And I think it really does. It sort of transitions us into the next sort of topic we wanted to cover, which is beyond the establishment of trust, beyond sort of getting everyone connected and in a collaborative environment. How do you start to measure the impact? There's a few different ways to consider this equation, so to speak. And the first one historically has always been, I think, Cole, you mentioned it earlier, sort of the impact in terms of the synergies and the top line benefits and how do you bring the revenue and the cost to the center and make that all whole? I think that actually another question that came in that is really apropos for considering this first part of measuring impact is from Melissa and she wrote in and asked when reviewing the list of all vendors and systems which ultimately make up that sort of cost basis, who were the people involved in making that decision? How do you balance the costs with maintaining business as usual and what is the typical best practice timeline for integrating the majority of the tools? So I think I'll defer to Melissa's question because I think it's so fantastic to kind of help us think about how do you create that inventory and where do you recognize the benefits of it?

Yeah, that one's pretty meaty. That's got a lot to it. Obviously it's coming out of due diligence. We get the audit of the systems that they have in place and we also get kind of the list of vendors that they've got. And so I think depending on kind of, it's all about marrying the roadmap on what you do with those systems and how and when you integrate those systems to the deal thesis and how you're going to go to market. I mean, I think one of the things that we found is depending on the deal type and what you're doing, you want to make sure that you're very crystal clear on the go to market plans and how you're going to measure success in each one of those areas. And then marrying the underlying kind of whether it's quote to cash and or collaboration tools and systems to that plan and then I think it's probably taking a look at specifically to the point around kind of the cost benefit analysis and who's part of those conversations. I think initially it's usually the internal team as we're doing integration planning. It depends on what you're looking at. If you're looking at, you know, kind of those more quote to cash transactional systems from front office, booking a deal, CRM all the way to rev rack and whatever you have in place to pull all those and recognize whatever your ERP is that might be a different group of people versus kind of more of the collaboration tools which might include our HR practitioners and business partners. So it's not one size fits all. Luckily in our quote to cash, which is where you get a lot of those systems items that surface. I'll use an example, we acquired a company a while back where during that kind of quote to cash cycle we ran with the team which almost every function is represented in that. I mean go to market all of our ops, sales ops and business Ops, legal, obviously IT, business systems, etc. And our revenue team. One of the things that popped up was the customers that are going to come through. We're going to EOL the product in a year, but that amount of revenue that's going to come in within the year is material. So we want to make sure we take care of those customers. So the business case and that decision making, which one of our leaders of support was there. We wanted to make sure that we took care of those customers and we didn't rock the boat again with the company who we were bringing over and their support folks. So we just made sure that we looked at the cost of the contract for that support service or platform they were using, which was different from the one we use at Okta. And we said, well the benefit of getting the revenue and making sure we have happy customers via these support folks for a year is much higher than the cost to maintain it and keep it alive for a year or two. So let's just keep them again, make sure that the support representatives can be effective, continue to support the customers in the same way they have been and provide that level of support and transition and then we won't impact the material revenue that's coming over as part of the deal. So that was kind of quick anecdote to run you through how we went through that. But it's usually a representative for each function and we go through an audit of systems and discuss best path forward.

I think there's a thing that we can add too where not every company has all SaaS based applications. So a lot of them still have some legacy applications. And some of the stuff though just anybody out there. If you're thinking about doing acquisitions of existing companies with data centers, the vast majority of the data centers out there are leveraging virtual machines in some way. So what that means is you may not think about it as M and A practitioners right off the bat, but when I think about it, I'm like, okay, well great. You have this ability now to basically turn on this digital wrapper that you have around all your applications and data in those data centers and lift and shift those to clouds and get those moving to that flexible scalable architecture right away and sunset those legacy data centers as soon as possible. And what that allows you to do then is it buys you and affords you the time to do that app rationalization we were just talking about earlier. As far as like the data center and the cost structures and those types of things. Some of those cost structures go away. Yes, you're paying for the cloud structure for a period of time until you get that rationalization done. But that's much easier to sunset as you go. Right. And again, as you kind of migrate to whatever systems you're migrating to, maybe it's like you were talking about, quote, cash or whatever happens to be right as you kind of go through those kind of systems.

Absolutely. And I would just add a few things. One, think about the customer first and not only the current revenue stream, but just your impact on them and on your company's reputation because you hopefully are going to upsell them, sell them other products. You want them to have a long term relationship even if it looks different. I think another one is when it's appropriate to get the right people engaged in making the system rationalization discussions. So people that day in and day out live breathe system just to make sure nothing's missed because often there's opportunities there. And then third, depending on the size of your organization, like our strategic sourcing team is phenomenal and leveraging what you can do creatively with vendors to consolidate contracts. Because often you might have a common vendor in mind and you want it to be a win win, but you don't want to be duplicating things. So sometimes those are the big dollars, but maybe an easier path to consolidate where you have things in common. So. So I think it's a hybrid thinking about the customers, but then going after those things that are big dollars and you maybe already have a really good partnership with the vendor.

Yeah, I think that's a great point because you get like a, when you think about like brand experience, you have the customer lifetime value and you have the employee lifetime value and you're trying to balance all of that. I think that's exactly what kind of Amy was talking about there. And then on top of that, then you kind of balance all that with the cost structures and assumptions you're putting into the synergies and the timeframes of you're trying to achieve those. I think if you can kind of go into it with eyes open on what you're trying to do with the customer side, then all of a sudden you get realistic timeframes on when you're going to sunset different things and your expectations are in line.

So we talked about sort of the cost savings, the vendor contract savings, the potential top line benefits and the quote to cash sort of synergies we've added in the sort of client experience or the customer satisfaction measurements of impact. There's another topic that I think you had raised, Amy, in our prep for this session, which is that of what is the employee satisfaction too. And I think that this is a, you know, it's sort of a relatively new concept over the last ten years or so. And I think that people understand intrinsically what this means. But I would love to hear any sort of thoughts and anecdotes about how you see people measure that specifically, because I know that different tools, different technologies give us the ability to keep a better pulse on where people's anxieties are, where people's satisfactions are. Any sort of thoughts on how to measure that effectively?

Sure, I think a few things. One, it's important to really think about what the intention is behind the data collection and what you'll do with the data once you have it. And often whether it's an acquired company or a specific business group that's going through a change, the request is let's survey, let's survey, let's survey some more. Let's get the more data. Well, that's nice, but if you don't have an action plan and something to do with the data, you've wasted a ton of energy. So I think one of the practices we've used more so recently. So beyond tactical serving, which I would say is, did you get your PC on time? How can we improve some of the logistics of the onboarding? But when you're thinking about culture and how people are feeling about the company, how they're integrating, is to use the similar surveying mechanism that you've been using for your broader company and then cut the data so that you can compare and contrast different groups of people that were acquired. And this gets into what you want is a confidential survey, but one that's not 100% anonymous. You have a few people at your company that can then connect those data points and compare and contrast. It's really interesting. Some of the companies we've acquired score us higher on systems and processes than our employees that have been with us for a decade would necessarily score us. Oh, are we being too hard on ourselves or where did they come from? So it helps you understand that maybe that's not the top thing to fix with them. What they need is help and how they're seeing our product roadmap and how that aligns. So really not making assumptions. And then when you cut the data, make sure you're controlling things for the level that someone's at, the location they're at, kind of some of those best practices, and be clear and transparent with the employees. Here's what we saw in the data based on this. This is the type of action planning we're planning to do. How does that sound? So check it and again, triangulate all that data to make sure that you're not making assumptions just based on the survey at the first pass, but that you're looking a little bit deeper and check, check, check before you jump into an action plan that might miss the mark.

I think that's a great point. And I think you also made a great point in sort of stating that there's a pretty fine line between sort of surveying for surveying purpose and surveying with intent. I would also like to maybe. I think someone had mentioned earlier that when you're considering the employee experience, when you're considering sort of this onboarding and all these new systems and sort of a new paradigm of working, there's also a lot of just general concern right now about employee surveillance. Especially right now with COVID and everybody sort of being in a work from home situation. We've all probably read like terrifying news stories coming across our LinkedIn feeds or otherwise about what's going on. So how do you strike that balance between that proactive, empathetic, compassionate outreach and like nanny state? Any tips?

I think that's a great question. So I see a lot of companies struggling with that. I mean, obviously you have the ability to do some amazing things. We've got this thing called intelligence and we can do this really cool thing. So that way it knows, hey, your device is having a battery issue or it's having some issue or I saw that this application crashed. Let's give you a different way to consume that application so you can very quickly be effective again. Right. That makes a ton of sense and it's great. You can use the tech for good or for evil is what I'm saying. Right. And I think the importance is that data is back to Amy's point. What's your intent? If your intent is to help people get it and you're transparent about it, people get it and they like it. The problem is, is when companies are out there and some of them now are actually touting, you know, there's, there's software vendors out there that are actually saying, fantastic. We, we exactly how many times Amy clicked on this application? We know how many times Cole did this. I mean, oh my gosh, right. You're like, no, no, no, no, too much. Right. And I think that's the point where you kind of over rotated to go, do you really need to know how many times I went into this particular application this way or whatever? I think that's kind of the balancing act companies are trying to figure out right now is I want to know you're working when you're remote. And I feel like, well, why don't you just ask me? But you know, maybe I'm old school, but.

Right, right. I think it's shifting the conversation to business outcomes and contributions. Maybe the tool you're measuring that in is whatever tool people are entering their goals in or how they're measuring what, what leads they have or what they're putting into Salesforce, but moving the conversation around business activities, contributions, what people need to talk about in terms of their goals, project phases and coach managers, that it's not about certain hours of time. Sure. It's important to maybe have an agreement around, okay, what time zone are you working in these days? Or what's the rhythm of our check ins. But beyond that, really focusing the conversation on outcomes versus just hours worked, that doesn't that what you're measuring is what you're going to amplify. And so if you're measuring contribution and business results, that's really what you want to amplify. Not more hours of speed spinning or just sitting and having zoom fatigue.

Right. Well and also or contributing to the extreme market growth in the sale of RVs right now. I've heard that that is quite a booming market right now as people realize they can do their work from anywhere. Like truly anywhere.

Freeing.

I think there's another point I think that Cole, you brought up about measurement and impact in just innovation agility and I know that that is like such a huge topic that's like the thesis of a lot of the deals that actually do happen or you know, a promise from them. How do you measure it? How do you think about it? You know, what are the. I know that's an impossible question right now, sort of a multiplier, but love to hear some thoughts.

It's interesting. It goes back to I think the earlier topic that we talked about on getting alignment very early with the internal teams on the strategic intent of the deal, the deal rationale is the deal going to be focused near term on revenue and are there other things we're really acquiring this company for? And I honestly think it's almost in some ways a shift in mindset at the executive level. Whatever you call that, whoever's kind of okaying and green lighting the deal, they need to understand that really the intent of the deal might not be focused on the near term revenue that may be a side benefit but really the deal thesis may be focused on those Horizon 3 things that really open up new markets or propel a certain product set that we already have and accelerate the roadmap and or the team that's augmenting something else opens up a completely different market segment. First, it's a shift from a lot of the ways I think even at Okta that we're trained to and our leaders really look at things which is as we've gone through hypergrowth, a very operational lens on metrics and KPIs and and shifting that towards more of an innovation lens. And those things are much harder to measure. As a few examples things we've dug up as we kind of do. I listened to some of the folks devorah earlier from Microsoft talk about things they measure the synergies. We look specifically at things like if it got us there might be marketing metrics, there might be competitive metrics, there might be unnatural or less operational, more kludgy or nebulous metrics that you may want to look at. But that upfront in the deal the entire executive team is really aligned around so that you don't get six months down the pipe and all of a sudden somebody is just looking for wins and losses and, or a revenue number and they're saying this thing's a failure. It's being able to reference back to the strategic intent of the deal and say, hey, actually you can't kill this thing because it didn't go right in six months to a year. This is a Horizon 3 investment that we're making and it's going to make good. The hockey stick comes later, whatever that is.

Well, and I think what we are all kind of alluding to is sort of you're going up that Maslow's hierarchy of needs, right. To kind of ensure that the foundation is there, ensure the trust is there, ensure the employee experience is there so that people can unlock new ideas. Right. And I think the sort of final item in this sort of impact equation perhaps is how do you also connect the employees in an acquisition or in an integration effort to the culture and to the purpose of your organization? Right. And thinking about that as sort of a holistic lens through which to look at the employee experience, to look at sort of that welcome to the family moment, you know, I think is really important and I know we're all a little biased here because we each have our own sort of foundations. I know VMware, you guys do a lot of hands on consulting for organizations that need it as part of your pro bono efforts. OKTA is part of Pledge 1%. I'd love any sort of thoughts and commentary on now that once systems are integrated, how do you get people sort of connected to purpose, connected to mission? How do you measure that?

I think a big part of that is through a thoughtful onboarding process. So yes, take some elements that you use for your regular new hires, but first have a conversation about that content with some leaders or select people at the company that you're acquiring and make sure that it resonates, maybe position it slightly differently in their language and some some keywords drawing the connection between, because most companies have values, their stated values and your stated values and kind of being able to draw that connection. So there's that common bond. I think thinking about how you can be inclusive in your approach to reach out and again include representatives from their organization as you're rationalizing every single employee program. I think the best practice we've had is again, when it was in person but we would do it remotely if it was now just whiteboarding out. What are the programs and the timelines that are important to your company? And not just HR things, but things the product team might be doing or the sales team. Different kickoffs, different events and then kind of comparing and contrasting what is the purpose of those, where can we bring those together and where do they. Maybe they need to be a little bit different and still, still running at this time. So I think it's really about that interaction, the collaboration, and not just forcing one way of doing it. At the end of the day, it might be 90% the way your company has been operating, but it's that seeking to understand. Sometimes it's just a really small tweak and then you don't lose the whole audience. So I think it's just, it's a lot of. It's in the planning ahead of time.

I'd agree with Amy and that's something that we've focused a lot on in the past. I think it's leveraging also kind of to go back to an earlier point. Those, those change champions and or listening posts as you'll hear them refer to. Right. To understand, to Amy's point, what are those key programs or initiatives or things that really matter to the employees? What's their mission statement? I mean, all these things should be really spoken about and decided way up front in the deal. But it allows you downstream to really plan and then tailor the onboarding process and then tailor all the follow on activities for how they're engaged and how they're brought into some of those programs in tandem. So it just allows you to kind of make it a seamless experience for folks.

It's almost like the system of belonging is another consideration as part of that onboarding and integration process. How do I feel like I belong here? How do I feel like I'm connected?

I think one of the things that VMware does a good job of is just sharing how there's the culture and then sharing how those values came about. I think that's an important piece of it too. Not just say, hey, this is what they are. It's to say, here's what they are, but here's how this came about and getting an understanding like this was a collaborative effort to come up with these. That changes your viewpoint on what they are as an employee of the company. Right.

Sort of that oral history, so to speak.

Yeah. I'll just add to that. Josh. That's a great point. And one of the things that we've Done on a smaller level is giving the acquired leadership and team a platform very early, multiple times to tell their story, to tell where they came from, to literally speak, live about their values and what matters to them a lot. And I think you find that even as the acquiring company, our employees, if they were to put themselves in the acquired employee shoes, they probably understand how uneasy and how many questions those folks have. So I think really having that empathy and exhibiting that and having that come from top down from leadership and we care about their story, these are things I think that's extremely important.

Great. Thank you all for that awesome commentary. So to shift gears as we approach the end of our session, I wanted to sort of do rapid fire here. What are the trends that you all think are going to sort of stick around after Covid? What are the tools that you see? What are the processes that have become fully digitized? You know, what are the things that you've seen in the last few months that are going to stick around?

I'll jump in with one that is top of mind for me is real estate. I'm seeing massive changes in corporate real estate. And you have high density cities that were having challenges. Again, from a hiring perspective, finding enough talent, there's a, there's a great opportunity to tap into diversity talents, just globally, geographically and all that. But also from a real estate perspective, there's a massive amount of corporate real estate that I saw something the other day which, which kind of blew my mind, but it's a great idea. A lot of these campuses, over 50% by the way, over 50% of the information workers of the US really want to just continue working. Actually like 80 some want to, but companies say that only about 50% can. Anyhow, the point is, if that comes to fruition, one, it's kind of freeing because people can kind of live closer to their in laws or wherever they want to do. Right. That kind of thing. But two, it changes housing problems, right? So you start to think about these big corporate campuses. What if some of those could be retooled and reused as actual housing? Because I don't need all that space anymore for corporations. That's a fascinating concept to think about, especially as you start to think about all the real estate costs of a newly acquired entity and what you're going to do with that site. Right?

Yeah, I'll jump in with one that resonates with me. It's kind of to piggyback off of what Josh was saying, which is kind of this shift to dynamic work. So prior to Covid and all of that. Okta was already making this kind of two year journey towards a dynamic work environment. When I say that, I mean traditionally we had been kind of a very HQ centric company or office centric company. I think we did some sort of. We ran a survey once Covid hit where it said how often were people going worldwide going into offices. And it was something crazy, like 85% of people were going in five days a week to an office or more. So this was a major shift. Now that said Okta as a solution enables remote work. So it wasn't that much of a cultural upheaval for us now. But I do think what it's done is it's really accelerated that shift for our entire workforce to a dynamic work. So even when we start to start reentry or whatever you want to refer to it, as we start going back to offices, that's going to be staged. It's not going to be the same. Right. It's not going to be like it used to be. It's not going to be where you had a desk, you went there five days a week and that's how it was. It's going to be much more dynamic, more of almost a hoteling where you rent desks and there's less density in the office. Just going to be a much more dynamic work environment. So I think really what this has done is a lot of companies I think are facing the same thing. And a lot of these things, to Josh's point, you're going to see them shift and adapt very quickly to that sort of model.

Cool. I resonate with that. I think VMware is moving to something very similar to what you just described. I think what I hope stays with us that we've had during COVID is a more inclusive approach to those that work in a distributed manner. So the playing field is level. You don't have three person people in person that maybe are dominating the conversation and the one person on the speakerphone that's trying to get in a word, but no one has their camera turned on. So I hope that we keep the cameras turned on and include people and then I think there's a more democratized access to leaders. And I think whether that is even a session like today where it's set up that anybody can chat, anybody can ask a question, you don't have a position that is a more advantage because you can walk by the executive's office. And I think that there can be some good that comes out of that. In a way, we can be more inclusive, especially to Josh's point, if we're attracting talent from all over the world and we're trying to be inclusive and find those unique skill sets and unique things people bring to the table, what a waste if we're not giving them equal access and the right type of opportunity. So I hope that some of that stays the same and that we keep those behaviors where we're inclusive, even if some people return to the office partner full time.

I think that's a really powerful insight. Go ahead, Nicole.

I was just gonna say I totally agree with that. And in some ways, I think it benefits M and A. That was one piece of feedback we got from a few acquisitions we did, which was their offices were remote and they loved the opportunity to come to hq and they felt so plugged in when they were there. But the minute they left, they just didn't feel like they could have those hallway conversations. They didn't feel the camaraderie with okta. They didn't feel the culture anymore. Even if we had kind of a wework somewhere where they moved into. Once they moved offices. Right. It just wasn't the same. And so I think in a lot of ways, to your point, it kind of levels the playing field in a way. And it just. We're not going to have that issue anymore because everybody's kind of communicating. Everybody's communicating on the same plane.

Cole, you touched on it, too. Dynamic work. We happen to call it distributed.

Right.

But when you think about it, it was like we all went remote. Well, remote means you're remote from a center, right? And eventually you go back to the center, or you always go back to the center. It's like a hub and spoke kind of thing. And distributed or dynamic is really. There is no center that way. It's almost like software defined what the center is. Right? And I'm like, all right, well, it's literally the Internet. We went from this hub and spoke network to now we're the intranet, right. We're all interconnected. How can we best leverage that? And I think it's fascinating. Twenty years ago, I was literally selling the backbone to the Internet to companies. And at that point in time, yes, you did have to do that. But it's fascinating now to see what we are promising then come to fruition now, and only now people are tapping into it for distributed learning and all these other things that just to Amy's point, almost, it leveled the playing field for so many people that now there's so much potential that's Just untapped, right. It's just there's so much there to go after.

I know we are coming up on time here, but I think all of these comments sort of reflect the case that M and A practitioners can make for investment in technology, investment in sort of digital transformation roadmaps. Because we're all here in our zoom prison and it's not going away anytime soon.

Right?

Does anyone have any final thoughts as we close this out? Any other ideas for building that great business case?

Start now, if you haven't already as Corp, dev or integration practitioners started putting rails around, here's what Executing or doing a deal from dd, pre oli DD to integration, here's the considerations, here are the friction points, here are the material risks, and considerations here are capabilities we really need to bolster and focus on. Technology has got to be a key part of that. And so start putting rails around that business case and what that looks like now and filter that up to executives. I mean, really, that's what I did with my manager and our leader, Monte Gray, who's our SVP of corporate development. And we shared that with our COO and CEO to get them comfortable that, hey guys, we're really excited and we've started thinking through what executing a deal could look like and we're ready. So we should. We're lucky to be in a very, very. We're lucky to be in a very prosperous position where we can do deals in this environment. And we've already started putting rails around what that looks like. So I think if you're in a similar position, it's a good, just good practice to do something like that and start getting ahead of it.

The powerful combination of technology and then leading with trust and inclusion, and I think that together is kind of where all the magic happens and where the true value is created.

And I think the other thing I was just going to add is there was a question that didn't get answered here around GDPR and CCPA and understanding privacy regulations. It's a great question because you don't use any of these tools or this communication or whatever if you don't trust it. If I don't trust that you're not going to see these applications that I might have on my different devices for my personal life. I don't really want to share all that with you. Right. That's the kind of stuff that you have to have that privacy framework kind of baked into what you're thinking about. And now you get the adoption level, all the surveys and everything else you get better response rates. All of that is an outgrowth of that, but you got to bake in the privacy as a part of it.

Wonderful. Thank you all so much for your time. And thank you Kisan for inviting us to be the panel today. And please let us know if you have any questions for us after.

Thank you.

Thank you.

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