Raj Sabhlok was the CEO in Pipedrive during the pandemic. Here is what he had to say about running a company through a pandemic and maintaining a company culture in times of rapid change.
One of the positive aspects of the deadly and disastrous health crisis we are in has been the acceleration of the future of work. The Covid-19 pandemic is probably the most important catalyst for a change in working-life since the invention of the plough (or maybe just the internet. Who is counting?).
In a matter of days, we were all forced into remote work. E-commerce received an enormous boost overnight, and automation proved its value as a reliable workforce immediately while humans displayed vulnerability in a time of crisis. As described in a previous article, 77 % of CEO’s reported that the crisis had accelerated their digital transformation plan. In Europe, the percentage of remote workers increased from 5% to 40 % between 2019 and 2020 - a trend that has been confirmed statistically all over the world.
The numbers suggest that remote work has led to higher productivity and an increase in job satisfaction due to more flexibility and autonomy. As Wade Foster, CEO in Zapier, said in our previous Crystal Ball interview, an almost innate desire for progress drives the future of work: “We don’t want to be trapped in jobs we hate. We don’t want to be doing work that is not impactful. We have things that we are passionate about; we have missions to fulfil. We want to see the world be better for ourselves, better for each other, better for our children,” he proclaimed.
But has it only been positive?
Of course not. Some have lost their jobs. Others have struggled with working from home while also home-schooling, running a nursery and trying to find the right ergonomic position at a kitchen table. There has been plenty of challenges.
For Raj Sabhlok it was especially challenging. He took over as CEO in the CRM software company Pipedrive in the middle of a pandemic and led the Estonian company to a successful $1.5B transaction with Vista Equity Partners. The Silicon Valley veteran, that previously led to super succesful Zoho Corp to over $500 million in ARR and 300,000 customers in his 10 years in charge, is now working with Bessemer Venture Partners advising their portfolio companies. He, therefore, had time for a conversation with us to share his thoughts and reflections on the past year.
How was it taking over in Pipedrive in the middle of a pandemic?
Intuitively, it didn't seem like the best time to make a CEO change! I also wondered how I would make changes within the company in the middle of a pandemic. I didn't think it would be possible, but it turned out to be a good move personally and for the company. I had a bit of an advantage in that Estonia was relatively open and so I could go to the office and meet people in the company. The challenge was replacing a very popular CEO/founder and then convincing the organization that I needed them all to recommit to the next leg of growth. Getting everyone to rally around that goal and mission and to get them excited about it – I thought that was the most important job for me to get done.
How did you approach it then?
You have got to have a compelling strategy. The first thing we did was getting people to buy in on a strategy. That needs to happen on every level. I will also say that it was important to get key existing stakeholders to contribute to the new strategy. The way I dealt with it was that very early on I put together a strategy team that met at least once a week and set milestones on when we would have strategies in place and when we would communicate it to the various groups in the organization. Strategy development is not a one-and-done type of effort. The strategy needs to be reiterated, and I would constantly point out how everything tied back to the strategy.
Ultimately, you need to get the senior executives on board because they are going to be ambassadors to the rest of the organization. That was a key factor to implementing a successful strategy. The strategy that we put in place is still being executed, so I think we came up with a sound strategy.
How do you balance that with maintaining a company culture?
It's funny you say that. At every company meeting and at every opportunity, employees would ask, 'are we going to change our culture?' It came up every time, basically, the thinking was that I would bring my thinking to the organization and forget about what got us to this point. The thing I repeatedly said is that I have no intention of changing our culture, but let's ask ourselves what our culture is? To me, it wasn't the platitudes like we want to be the best we can be or do no evil. What I tried to instill in people was that our values and culture are really defined by how we operate as a company. If we said customers are paramount and the number one for us, and on the other hand, tried to screw them at every turn, then the culture and the way we operate does not align with the platitude. I said here is where we are going from a strategy standpoint, and here is how we are going to operate. That is going to dictate what our culture is and what our values are, and ultimately, we all had to feel good about it. Nobody wants to go to work every day at a company you don't believe in.
What impact did the pandemic have?
We have all had to adapt to the new reality. I think we can all remember in March 2020, there was a grave concern about what is going to happen to our businesses and employees. And at the end of March and through April, there was a period of reckoning for tech businesses. In a way, we had to reestablish the way we did business, the way we did it remotely, the way we worked with customers. And I am happy to say that many of us found out that the market values our products and services and we would be fine – better in many ways. We right-sized our spending and we optimized our go-to-market strategies. We were able to develop products more efficiently and get out new offerings that in many cases addressed how companies were working today – remotely and online.
"My observation and this is something I have been a big proponent of, is that the traditional hierarchical management structure is a dinosaur model."
What did you learn as a business?
Among the many takeaways is that there are better ways to do business, certainly in tech. We should take the best of what we have learned over the last year and incorporate it into our businesses permanently. Lots of companies did extremely well last year, so we've got to ask ourselves: Do we really need to travel that much? Do we really need to have these massive offices where everybody came on a regular basis? Clearly, we were able to do that in a different more efficient way.
Obviously, a big component of our operating expenses is the physical environments we work in – leases and properties. It's one of the biggest expenses right after salaries, so is there a way to rethink that? Is there a way to rethink our go-to-market strategies considering that we figured out we didn't have to travel to every customer and customers still purchased. Each of these areas needs to be rethought from what we learned over the past year.
A point often made is that the pandemic only accelerated a future of work movement that was all well underway. You've obviously been in this game for a long time, so how have you experienced it? Has Worklife changed over the years?
Absolutely. My observation and this is something I have been a big proponent of, is that the traditional hierarchical management structure is a dinosaur model. We are all contributing, and we want a very open voice with respect to input on driving the business. Conversely, we want much flatter organizations where we bring in individuals that are smart, that we believe can execute, and we give them a lot of runway to do that. That is a big change to just 5-10 years ago where you had this model with a CEO where he or she is beyond reproach. And I should say he because that is typically who it was. They said this is what we are going to do, go do it. What I think is a much more effective model is to get the experts in various areas to come up with strategies and execute. There will still be the responsibility of senior management to say we are on the right track because, ultimately, they are the ones whose necks are on the line. But if you get experts in various areas and essentially give people the ability to be CEO's of their respective areas, organizations can move much more quickly and be much more effective at growing the business.
So what is driving this change? Is it a change in culture? Is it profit?
Ultimately, it comes down to how do you optimize the business for growth and profitability. Unless there was a feeling that changing the model would help those key points, you wouldn't do it. Ultimately, it starts and ends with the fact that you think you can grow and be more profitable, and what happens in between is that you get much more agility and speed.
So now that there is a genuine chance that vaccines will help societies open up in the second half of this year, do you think work-life will go back to normal?
I don't think anything goes back to exactly the way it was before. That is my overarching opinion. How we get together as an organization will change. We will come to the office less, be required to come less. We will have more pod-like offices where people can work more locally and live in a more distributed world. That is all true. But what I would say is that humans are social beings. They thrive on interaction with other humans, and that will continue to be the same. That social interaction is going to be critical. We might see people less frequently, but we still need to go face to face with them to an extent where we adhere to the new norms. We don't all want to be packed into one room for an extended period. We want to adhere to things like social distancing and masking. These are smart precautions, but I also don't want to lose this idea of a social being.
So how did you ensure to maintain the social element while working remotely in Pipedrive?
Well, it will be a work in progress. I will say, we had the best holiday/Christmas party in my entire career, and it was completely online! We had some outside celebrity hosts that ran the event. We had interlaced several employee interviews and skits from around the world. We toasted together, we drank together, sang together, partied together – virtually. That was one of the best events I have been a part of and hats off to the people that pulled this off at Pipedrive. It was very special.
"Ultimately, it comes down to how do you optimize the business for growth and profitability."
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