31. Integrating Theory into Your Organization: Black Duck by Synopsys

Hi, this is Clay Christensen, and I want to welcome you to a podcast series we call the Disruptive Voice. In this podcast, we explore the theories that are featured in our course here at hbs, Building and Sustaining a Successful Enterprise. In each episode, we'll talk to alumni of our course and others who are trying to put these theories to use in their lives and in their organizations. It's great fun to hear from them, and I hope that you find these conversations inspiring and useful.

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School to begin this meeting that we're having right now in the Competing Against Luck conference room of Black Duck Software here in Burlington, Massachusetts, came about kind of by happy accident. I was getting ready to teach class, Clay's class, on a Monday morning and I saw you in the hallway and I told you what I was doing and you said, oh, Clay Christianson, that's interesting. And you told me a story. Can you tell our listeners what you told me that morning?

Sure, I can tell you. So I had been introduced to the book December, I guess, of 2016, and as CEO of Black Duck Software, I was reading the book. It hit me viscerally how important and how simple the concept was. So I thought the jobs we've done in theory could explain a lot of things. But most importantly for starting with our senior management team at Black Duck, I wanted to make sure all the senior managers understood who our customers were, why they bought our product, and why they hired us or why they fired us. And Tim knows, as the head of culture, I worked really hard with some people on the management team. It was quite easy. The head of sales, the head of services, even the CTO were very frequently in conversation with customers. Other members of our management team weren't so much and were kind of hesitant to. But I thought what was so powerful about competing against Luck was this notion that everyone in the company owns a customer and everyone in the company should know what customers are doing with our product. So I had a great head of hr, but she was a little bit hesitant to call our customers because she didn't really know what they were doing, what was the job we were doing for them, and why they liked us or didn't like us. So I thought it was important that we get everyone in the company understand who our customers are, and then to push it down to the entire organization so the developers that are developing the code, the salespeople that are selling it, they all really know what job we're doing and why the customers hire us or fire us. And so I brought Tim in to say, how do we make this tangible? And Tim, as head of culture, is really good at just taking ideas and making them tangible. And kind of, he's really good at stagecraft, making something really realistic. And so he helped us come up with this conference room. And then Patrick put the company content together, and then we've used it for customers, we've used it for board members, we've used it for future investors. When Synopsys bought us, I brought the CEO of Synopsys through here, and I think they were sort of taken aback by, wow, you guys are really honest about what isn't working. So it helped us with sort of this culture of transparency we wanted to push through the organization.

Fascinating. So I think you said this, but you had this eureka moment, and you purchased copies of Competing Against Luck for your whole company.

Yeah. So at the beginning of the year, we would always have, as we kicked off the new year and went through our goals and objectives as a company, we would winnow it down to three or four goals. And then to reinforce those goals, I would tend to always give a book out to the employee base. We had this cultural issue of not everyone in the company really understanding what our customers were going through. We were going through a product transition from an old product to a new product. Some of the customers wanted to keep the old one, but we really needed to migrate them to a new platform. So we thought Competing Against Luck Framework would help us educate our customers and our employees about both the need to get to our new products, to solve multiple use cases with one product, and to get our employees to understand how much pain at the time our customers were going through in this transition from an old product platform to a new one.

Patrick, this was clearly a team effort. It sounds like you first came across this book and this concept. What was it about jobs or this approach that caught your ear and you said, woo, this could be the medicine that we need here. What was most distinctive or appropriate about it?

Well, there were a couple of things. For people like myself who have been in product development, function and product management and software development, we have a language that we use commonly today that helps us shape requirements for building a product. We talk about Personas and epics and user stories, and that's pretty well established in at least the software development world. But the challenge is if you go and you use those terms outside of the realm of the technologists and the product developers. So you talk to the CFO or in some organizations, the head of marketing or the head of hr. Those sound like very foreign terms, and they're kind of nebulous. And what appealed to me was the simplicity of the model. It is different. Certainly. We don't tend to otherwise think of our customers as hiring us, but it's hiring managers and jobs is something that everybody in the leadership team, regardless of their function, can sort of relate to that language. And it takes a little while to get comfortable with with using those terms, but once people get used to it, it feels quite natural. I think also, where we were as an organization, there were a number of challenges that we were grappling with or decisions that we were trying to make. What do we add to our products? We were starting to get traction with our core product. What did we need to add to it? Should we look at acquiring other companies? What do we need to do to sell to larger customers or larger deals? And without having a language to help arbitrate those discussions, it was always very difficult. You know, well, okay, we could acquire that company. What would that do for us? I don't know. So what I saw with this is that, and I mentioned this to Lou at the time is, you know, I think if we go back to this and look at a real review of who are our hiring managers, what really are their jobs to be done, that provides us a framework, a language by which we can actually make these decisions with some amount of confidence that, yeah, that's the right direction to go, because we know who the hiring manager is, we know what their job to be done is, and we know whether making this alteration to our product, improving the customer experience, or making acquisition would actually yield results. And I think that's what jumped out to me right away.

One of the things that really, really appeals to Clay about this concept is, as you're saying, the simplicity that it lets you focus on what's most important, not what's possible to do, but what's most important to do from the perspective of the customer.

Absolutely. That ability to have that focus, to get out of subjective discussions about, well, we like that company, or I like this feature and go around that in a way that's really hard to resolve is to. To align everybody is do we understand really who our customers are and why they're hiring us? And that makes a lot of those discussions much more objective and easier to navigate.

So, Tim, as head of culture, I guess we're sitting in the Competing against luck Conference ROOM if we were to walk into Black Duck and just try to see is jobs to be done in operation here, what would we see? What have you created to help keep people's minds on, focused on the customer and the progress they're trying to make?

Well, the overall environment was right for it. So as a precursor, we as an organization, one of the tenets we have in terms of culture is kind of method over madness. We like methodologies. You know, the Sandler training method used in sales, the agile development method used in engineering, the four disciplines of execution. That book is the bible of what marketing did. And then this kind of thing slipstreamed in. One of the important aspects of what we did in terms of culture and something I concentrated on was common language. You know, you got a growing organization, but what are the common language? So how this manifests itself outside of. This is the employment office, which is what we called it as a shorthand term, come to the employment office. This is where we, you can get hired or fired kind of thing. And using that language and bringing people through here. But also the idea, as you said, the simplicity. People read the book, not everybody read it, a lot of people read it, but it became something we talked about. You're in a meeting and people start going, so what is the job to be done here? Even if they don't know all the nuances, I'm talking to the receptionist and like, what's the job to be done here? Are you just here to push the door open, buzzer for people, or are you here to greet people as they come in? It became part of the fabric of what we talked about. And that's how I promoted it because I kind of one level up, I wasn't, you know, not everybody's going to read everything on the walls or get into maybe this room, but they're going to know that what is the job to be done? What are we really focusing on? Oh yeah, remember that book, that kind of thing. And we made it also very verbose. We put in a with respect to methodologies and I think specifically with this book, we created a lending library space where you have piled up books. People could contribute more, but they were there. I actually had the interns create little why would you want to read this book? Kind of thing. And so people would come and take it and engage, but it was working it into the fabric of what people did. That's the real thing. It's like hearts and minds. It's one thing to give a book and hope they read it versus remember that book? Well, there was this thing about jobs and getting the job done. What are we trying to do?

If you were now zeroing in on how, for example, your salespeople and your sales teams interact with prospects or with current customers, how did the introduction of this language and framing influence those conversations?

Well, I think what it enabled is a sort of a new language because if you think about the classic marketing organization in a tech software company, they create a product roadmap. Here's what's going to be in this release, here's what's going to be in the future. And they tend to be features and functions that product marketing comes up with. And then you get the customer to see, oh, you're a visionary, you're going to be solving, my current product has these things and my future product's going to have these things. But this framework made it easier. Instead of just a list of features, it was more tangible, more like the use case. Here's the use case of what somebody's doing and this is the job that they're trying to do. And then that enabled the sales team to say our customers can't do the job. And that would then show up in some real metrics that we wanted to look at. All right, what was the close rate, conversion rate, the marketing funnel, what was the discounting to get the deal? What was the renewal rate and usage? And those numbers matter a lot in a software company. What your new is and then what your existing customers, the rate at which they renew and buy more becomes very tangible. And if the salespeople could point back to, well, you weren't helping the person get the job done in this open source security metric or competitor's doing something differently here, I think it helped us frame up the common language.

And I would reiterate something Tim had mentioned about our environment here being ripe for this. In many ways, I would say the sales organization and the method that they follow here, which we use a method called the Sandler method, and it's a different model for selling. So the selling reps will go through a fairly extensive, we call it pain funneling, but it's an interview process essentially to really, really get the prospect to express in their own terms what their job to be done is. They weren't using that term, but when we looked at it, well, we were actually collecting this data all along as part of the sales process in a similar way that the engineering is documenting user stories and Personas. So really one of the things we were able to do with this is Actually marry those two to capture what sales was already gathering in their own language from customer pain and translate that into this jobs to be done. One of the things that we did was to review our win loss analysis and our sales reps, when they close a deal would put together a brief summary called a winflash. The winflash would talk about who was buying Persona, what were the pain points they expressed during the sale, what drove the final purchase, who were the other influencers. And so just by harvesting that and looking at that through a jobs lens, that gave us quite a bit more clarity into what really were the main jobs and hiring managers for our product line. And that gave us more focus in the way we marketed going forward.

In particular, Bob Mesta, the milkshake man for clay aficionados, always talks about the thing that he likes about jobs is the notion that you're trying to understand the customer's struggling moment. And when you talk about really cataloging the pain points, we're all circling in on the same thing. Trying to understand what gets in the way of their making progress in their lives.

I think it's so relevant for tech companies and the reason is tech companies, here's a new technology, it could solve this problem. Oftentimes you see technology in search of a solution. But often small tech companies often don't really understand why customers buy their product. They come out with this first thought. We think these companies are going to buy it and then they buy it at a low rate. But some other company and some other user buys it at a much different rate. And jobs we've done analysis. That model really helps you distill down. Oh, actually our best buyers are this type of company and you know, we're not going to use something like a vertical market approach that which is a really blunt instrument to categorize your customers. You start to really understand who they are, who your buyers are and why you should spend your time focusing there, mining that vein of gold as you accelerate your growth.

What I think is interesting too you mentioned you asked about sales. What this also does is make a high level of transparency. So another cultural aspect is trying to be anti silo product doesn't get it. I'm trying to sell stuff they don't get my problems. I'm trying to develop stuff sales doesn't understand and so on. Well, it happens to be on the wall in this room and we brought them through and I know of conversations I've had on the sales floor. We go, no, no, Patrick gets it. You know, they know what's going on so that it kind of tears down some of those walls because it's on the wall and they can see it and go, yeah, this experience journey of our customers, we're documenting it and everybody can see it. So they don't feel as isolated. They know somebody's working on it because there are conversations where it's like, I really wish I could sell it this way, but I can't. We just don't have that. But everybody knows that they're working on it. And the anti silo aspect of it is very important. The transparency people know people working on things.

Were there surprises that you encountered where you were like, oh, I didn't know that was why we were being hired or fired?

Well, during the course of doing a set of customer interviews based on some of the models described in the book, when we would talk to existing customers and ask them, why did you end up hiring Black Duck? To address your open source security and compliance risks. And they mentioned three aspects. One, they had the functional job to be done. Two, it was personally important to them for their career that there not be a mess up in this area. They didn't want a security breach, they didn't want a 12 year old hacking personal records. But the other thing that came out in a number of the interviews was that they would tell us, well, I worked with Black Duck in my last company. We used you there and we didn't actually even look at any other options this round. I knew I had to get this job done. I'm going to hire Black Duck. And we had always known that we were a leader in the space, the longest standing company addressing the this open source risk space. I think what this caused us to do, it was a bit of a surprise that just how much power we had in that brand, in that Black Duck brand, that it actually had become iconic in the space. And in fact, when we would interview people, they would actually use the brand as a verb. So they would say, yup, I black ducked the code. We latched onto that from a marketing standpoint and it's like, well, this is tremendously powerful. What other company in our, in our space as a brand where they use it as a verb? So we really captured that and leveraged that in the way we marketed and promoted ourself.

And of course what Clay says is that if you can get to that place where you have been able to integrate your capabilities so perfectly over the attributes of the job that the customer wants to get done, you've essentially created a purpose brand like Ikea or Disney or you stand for the job in the marketplace. And that's a wonderful place to be. To be. To be black ducked is a wonderful position to hold. A couple more questions. The scary part of jobs theory is you identify through jobs the jobs that you're integrated to fulfill well, but you can also identify the jobs you're not integrated to perform well. Did you discover that as well? That in some ways the focus of jobs theory also brings with it a kind of discipline that says, oh, these things that we thought we were good at doing, we're not so good at doing. We should probably de emphasize or deprioritize those things. Does that happen?

Oh, it happens all the time. And I think one of you mentioned in conversations about whether we should acquire a company, it gets back to that product roadmap or you could say, oh, now I have this functionality. So there's going to be another segment of customers that want to buy our product, or maybe our existing customers will buy more of our product if we make that acquisition. But that's exactly what this did, was help us to understand what we weren't good at and not to focus there. Because a lot of, a lot of companies, I wouldn't say black Duck did this, but I've seen it in other companies where they become a little bit of a Swiss army knife. They're good at a little bit of everything, but not the chosen product for any one function or anything, one job. So you don't want to be the Swiss army knife, especially when you're a startup.

That's absolutely true. That's the example that comes to mind for me as well, that as I mentioned, we were at a stage where we were considering, well, what's our next move? How do we continue to grow as a company? In one way is through acquisition and move into sort of adjacent spaces. We had been evaluating a number of potential companies and in this adjacent space and we kind of knew at a certain level like none of them just quite felt right. And we couldn't, I don't think we could really tell why. And we used this lens to try and examine this space. And frankly, the first answer that came back is like, we just don't understand the job well enough. We have no business making an acquisition right now until we know the job. And we're better off doing like you would as a true startup where you take a conservative approach and you get out there, you know, you get the first rev of a product out there and you see what you don't already know, what Actually is the job, because otherwise you're sort of speculating. And I think that that is probably one of the most important things that we got out of this is I think it helped us maybe not make a leap that wouldn't have had a good return on investment because. Because we really didn't know why that investment would have an impact on the company.

Maybe one last question. From a courage giving perspective or from an advisory perspective, how can somebody tell if it's worth taking the plunge into trying to install this language, change the way people think about customers? How do you tell if. If there's juice for the squeeze and going after this?

I think it's back to the word Tim kept using as transparency, because I think it's very easy, especially if you are growing. This was part of our problem. We were growing. So other. Growing fast, way faster than we had historically. So functions outside of sales would come to these meetings and go, everything's good here. We're growing 80% year over year. And that wasn't the point. The point was we could probably grow 90 if we did these other things better. Just if you use it as a tool for giving transparency and debunking some of the things you think you're really good at, you know you're probably not, and that's good for you. I think it's sort of part of this, like the growth mindset of like understanding taking the criticism of what you know you're doing well. But there's got to be things you could be doing better. And this, this helps with that.

Yeah, I think, you know, the transparency and having structure to feel that the decisions you're making as a leadership team are reliable in terms of predictable outcomes that you have something to measure against, you have some meaning to the madness. So engineers, and that's my background, we're very regimented in that way. And the software development discipline is built around this sort of measurable progress. But a lot of businesses decisions at the end of the day aren't in a lot of companies. Right. They're made at a visceral level. So having this framework that anybody on the leadership team, everybody on the leadership team can get their head around is certainly an attractive goal. You can ease into this because you really pose the question, you make people consider the question that's really at the core of this. It's like, well, what do you think our customers are actually trying to achieve achieve? And first answer might be is like, well, they're gonna. It'll be some parroting back of what the product does from a functional standpoint, you know, well, they're trying to scan their code to do blah, blah, blah. It's like, but wait a second, is that really what they're trying to achieve? And if they say, like, well, I don't really know. I was like, well, don't you think we ought to know that? And as they. You get the aha moment, you say, well, that's a job to be done, and you sort of get the light bulb. And then you introduce the terminology. Because then it's like, right, they're hiring us and they could fire us. And it seems so much more intuitive. That's a good approach, I think, to somebody who may be a little skeptical at the terms up front, to introduce them to the concepts in a way that they can absorb and get their head around. And then from there, you can spread it out and use more of these terms and it becomes much more intuitive.

For people because it's so powerful in its simplicity. I thought this is going to be easy to do because people will get this and it's so fundamental to our core mission.

And was it easy?

It was a rollout. Like, the point I want to make. We did not set up the room day one, right? That was important because then it's just, okay, you're throwing it at them. This was a while down the road setting up this room. It was introducing the book, and even Luke coming to me and says, I want to give a book to everyone. So how do we want to do that? Why do we want to pitch that? Because what we didn't want is, oh, God, here's another book from the CEO. I mean, how's this going to work? What's the context for this? Patrick got up and talked about it early on in a meeting. We started to introduce the concepts and then they got the book. And then we kind of worked out. And then we got to the point where the room was being put together and we started talking about that. But this was a process. Once we kind of get into, yeah, this is something we wanted, we want to try and do, but not a, here it is, we're on to maintenance. It wasn't, oh, great ideas, great ideas. And then they fade. We knew we wanted. We turned it into a program of rollout.

Over time and reinforcement, the language started seeping into the vernacular of the executive team first. So when we would do our monthly all hands meetings, it wouldn't just be Lou using the term. You know, our CTO would be using the term and the CMO would be Using the term and even, you know, the cfo. And so it sort of became clear that the leadership team was starting to use this terminology. And then the IT team had an initiative to make some improvements in our own security for our IT organization. And the next thing I see, there's signs up on the wall that say, Security360, it's a job to be done. And it, like, we saw that sign.

Exactly. And it's a direct result of that, to feed that into the whole lexicon of what we were doing so that people talked about it became familiar and easier to slipstream it in. It was something I discussed in new employee training. When they first came in, we brought in all our new employees, and as culture, I kind of got up first and I introduced the subject, and so they, oh, you got to go over and grab one of the books on the lending library and so on. So even new people kind of being brought into it and familiarized with it.

I'd say in some ways, the engineers are probably sometimes the laggards in this because they already had a language. They've been talking about Personas and epics and user stories. So they look at this and it's like, well, wait a second. The hiring manager, that's like a Persona and like a job to be done sounds like a use case. And so they'll kind of look at you like, well, why can't you just. Why can't you guys just all talk about Personas and. And use cases?

And what do you say? Why not?

I think the way I would always express it to them is, well, that language works for you, but we want to have a language that works across the entire organization, including HR and finance and marketing. And this is a way that we can really orient it. And by the way, that use case and that Persona, that's really biased towards the functional aspect of the purchase, and we've got to not only integrate across that whole value chain, but we need to think about the emotional and the social aspect as well. We need a much more expansive view of the world to really be great at what we do.

So, Lou, one thing that our listeners might be thinking, I'd love to have a head of culture to help me roll out this kind of program. What if we don't have a head of culture? How do you organize to roll out a theory like jobs?

Well, what Tim does is unique in terms of being able to roll out concepts and lexicons and create a common language for the company. But I think you could do this with product marketing. With marketing and with customer success or customer support. Those functions with you as a CEO could do it. Maybe not with as much stagecraft and pomp and circumstances as to Tim can pull it off, but you could still drive the change because it's so relevant to your success as a company.

Yeah, I would agree. I think, I mean, Patrick was deed for this and you know, I may have put some stuff on the wall, but he filled it kind of thing. So I do think that those functioning areas, it was the people that came through this room and do come through this room that's important. Organizing that, getting, exposing them to that kind of stuff is what you could do. And I think the functional areas you do, you do have to have champions. Lou identified the areas, but within those, I think you identify those champions, those people that really get it, those one or two folks. That's what we do with culture too. Those people, you know, that want to contribute and help their. Their colleagues. You find those people no matter where they are. So forget about, you know, dedicated cultural resources. The people that are really committed to that kind of thing, like Patrick was to this leverage that and have. Have that moving forward.

Frankly, this book, this idea is so important, I think, for executives and general managers and leaders of business units to absorb because it really is important that the person at the top be open and willing to go down this path. Because it really. I could have brought this into the company and worked with product management and it would have kind of probably stayed in sort of the product marketing, product management sphere. I think getting support, you know, from the leader of the company and having that focus that we want to not just be good at what we do. We don't just want good growth. We want to be great at what we do. And we're willing to take a step back, look at our customers, look at their jobs to be done and fundamentally shape the way we steer the company based on that. I think that's key. One thing we didn't talk about that is addressed in the book is competition. And we leveraged this. I recall talking about this when we had our annual sales meeting. Well, who really is our competition? And we were in a market that was, was heating up. So a lot of new entrants were coming into the market, startups, they were moving fast and the sales force was starting to get nervous. It's like, well, this company has this feature and this company has this feature and like, do we have to go build that? And then you start chasing all this. And there was a good section in the book that talks about, well, what are you really competing with? So I made this point to the the sales team is like, well, look, the bulk of our competition today isn't this other company. The bulk of our competition is doing nothing for our particular customer space. So we're still mainly competing against that. And oh, by the way, even when it's a feature for feature head to head competition, you have all these other aspects about our business. You have the purpose brand, you have a mature support organization, you have a well thought through customer life cycle. These are all the other aspects that actually will motivate a customer to buy from us versus the competition. A head to head feature competition, everybody sort of gradually approaches the same level and it becomes too hard to compete on that. But competing on the basis of having the most robust customer experience, that's a way to really win.

From Clay's perspective, his biggest frustration as an author and as a thinker is that it's easy for him to put a book in some one person's hands and to have that person go, eureka, I found the new key. But to actually then be able to spread that word in such an effective way that it changes the way you talk, the way that your company looks, the way that you engage with your customers. That's a magic that he is really interested in understanding better. And I think that our alumni need to understand better as they figure out how do you actually create cultural change organized around the progress your customers are trying to make? And I think what you've shared with us today will be incredibly valuable to the thousands of our alumni out there who are trying to trying to emulate in some way what you've done and then also beyond that group as well. So thank you very much.

Thank you for listening to us at Disruptive Voice. If you like our show and want to learn more, please visit us at our website or leave us a review on itunes. Until next time. Good luck, everybody.