Interview with Kris Duggan, CEO of BetterWorks

“The goal is to just remain independent and create a new category of software. If we just keep working at that and chipping away then magical things happen...

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“The goal is to just remain independent and create a new category of software. If we just keep working at that and chipping away then magical things happen if you’re prepared to put in the hard work.”

Founded in 2013, BetterWorks is an enterprise goal setting platform based on Goal Science thinking that aims to improve engagement, empowerment, and cross-functional alignment among workers. BetterWorks CEO and Co-Founder, Kris Duggan, is not only a serial entrepreneur but a serial pioneer. Having previously led the way in the field of gamification as CEO and Founder of Badgeville, he is now creating a new category of software in goal management with BetterWorks as the tool that aims to redefine how organizations measure performance and drive operational excellence.

Prompted by a recent article about how BetterWorks could be a game changer for enterprise productivity, SaaScribe caught up with Kris to gain his insights on performance, goal-setting, and how SaaS might be the ideal mechanism to bring the concepts of goal science to life and implement them in the modern workplace. We got more than we bargained for with this extensive interview in which Kris tells us about the genesis of BetterWorks and his plans for the future of the company, how millennials are fundamentally changing the face of organizations, how FitBit was the inspiration behind the BetterWorks mobile app, and even the details of Kris’ own goals as CEO and how he’s progressing against them.

Kris spoke with Michael Cullen on the SaaS Revolution Show podcast, which you can listen to on SoundCloud or subscribe to on iTunes. This article is the transcript of that interview, lightly edited as a Q&A.

Where did the inspiration for BetterWorks come from? Was it from your time at Badgeville or did you recognize that goal setting in organizations on the whole was inefficient and needed to change?

So actually it’s a great question. A bit of both of those.

When I was at Badgeville we grew the company to about 100 people and the thing that was really important for me was that everybody act like an owner and that entrepreneurial spirit. One way to frame it would be, ‘did everybody know what it took to be the CEO of their domain?’ And that didn’t matter if that was in engineering, in sales, in marketing, across the entire company.

And the way that I thought that you could ensure that that spirit was happening, was everybody would have 3-5 key things that they were working on for the quarter to really drive value for the organization. I think I learned about this quarterly cadence having come from the sales and marketing side of things, or maybe a decade of work prior to that.

So actually I looked for some personal software to facilitate this process and looked at the market but I actually couldn’t find anything. We ended up using PowerPoint combined with Chatter, Salesforce’s product, and hacked it all together.

I found that the spirit was great but maybe the implementation was fairly poor. That was maybe the first time that I really started to think what if there was some software that was offered to the world to really modernize this very traditional process of setting and managing goals? That was really the inspiration behind BetterWorks.

Do you think that the annual performance review type of goal setting is a thing of the past and is there a huge requirement now for more regular goal setting and real time feedback? And is the best method for doing that applications in the users’ hands – is it Software-as-a-Service?

Yes. So I think the biggest challenges that are facing companies today around driving business results and really delivering growth are fundamental core challenges. Things like alignment and lack of clarity on what’s happening, what’s important, what should we focus on, how does my work connect with other people’s work, etc?

And then also engagement. You know, are people engaged at work, how do you motivate them to really give it that little extra to drive results and overachieve?

So I think actually goals end up weaving a fabric across an organization that connects those issues: alignment and engagement.

And there’s a ton of research out there, and we can talk a lot about Goal Science if you’re interested, but one of the areas of Goal Science that I think is particularly interesting is how companies can shift from an annual cadence to a quarterly cadence and the potential impact that can have on productivity and performance.

In fact, there was a recent study that came out from Deloitte which says that companies that move from an annual to a quarterly cadence on goal setting are 3 ½ times more likely to be high performers in their industry. That research indicated that it didn’t even matter what industry the comparison was happening in.

And it makes sense. It’s common sense that if we’re more agile, more flexible, more responsive, more coordinated then we’re going to have higher results. I think of it as, if you remember, the old product roadmap planning cycle which was typically a 12-18 months cycle. People would have all these waterfall charts and build these huge programs for 18 months at a time. Software was really hard to ship back then. It took forever. And now people do it the agile methodology in engineering and product development.

I think that same metaphor applies to how people are rethinking people management and realising that things have to be on a much more frequent cadence than ever before given all the competitive pressure and all of the changes and dynamic aspects of the markets they’re in. And I think goals end up being a really clear way to drive that kind of behavior.

As a Software-as-a-Service provider it’s not really just a platform that you’re providing. What you’re selling is an organizational culture, and in a lot of cases a huge shift in organizational culture. So do you find that that’s a tough sell to a lot of companies? And how do you make BetterWorks, not just the platform but the goal science methodology that underpins it, easier to adopt for your customers?

From a SaaS delivery standpoint, obviously the service is easy to activate and provision for clients. And we do exciting things like we’ll integrate with their directory service or some of their systems of record like Salesforce to capture transactional data. And even their HR systems like Workday and SuccessFactors. So the technology side is actually I think quite the easy part. And we can deploy to thousands of users literally within a couple of weeks.

You know, I think as you mentioned there’s also the change management or the behavior change aspect of this and I think there’s some interesting things that you can do around the product to actually facilitate engagement and get people really adopting the product. We can talk about that if you’re interested.

But we also provide customer success resources and I think customer success now has become table stakes for any solutions-oriented SaaS provider where they are selling up-market, they’re selling to medium to large enterprise, they’re looking at a long term relationship with their clients and they really are, they care about customer success and customer adoption and usage and renewals and upsell and cross-sell.

So those are the things that we bring to bear in the process.

You know, one thing I would say that maybe has made it a little easier for us is obviously we go out and evangelize the ideas that we have every day into the marketplace, but I would say that we’re being really pulled into the markets that we’re going into, particularly the mid to large enterprise where these companies realize that they have to become much more open, much more collaborative, much more aligned and coordinated. They have to think about their goals on a much more frequent cadence than ever before – the annual process doesn’t work.

So we’re receiving RFPs now for goal management and we’re creating a category around goal management. A year or two ago that just simply wasn’t the case. It didn’t exist. It was a new concept. And it feels to us like this awakening is happening in the market so it’s nice when our interests align with the customer’s interests and in which case that can lead to some very tremendous growth as a company.

In terms of goal management suddenly becoming a category, do you think that that’s driven by the number of millennials joining the workforce who are more goal-orientated, more mission-based, and seek short-term reward? Do you think BetterWorks as a platform is more suited to millennials or can older generations adapt to that kind of methodology as well?

Yeah. I mean, actually I think that the younger workforce, the newer workforce, the millennials and some of these companies that we talk to, by the way, have 80% millennials. So this is part of these organizations now. So obviously everybody knows, I think, all of the data around that group, which is they want more frequent feedback, they want a sense of progress, they like to do work collaboratively, they want to know the big picture, I mean, all of these things are core motivators.

I guess one thing maybe I would challenge a little bit around the general thinking of millennials is that we have to serve them and we’re doing all this stuff for them. I actually think that that’s not correct. I think that millennials are the ones that will have the courage to ask for change in the workplace because they don’t really know maybe anything different. But the benefits that they’re bringing about I think impact everybody.

And everybody benefits from more transparency, more connectedness, more sense of purpose, more clarity, more focus, more trust in the organization and the culture of trust. So I think they might be triggering some change but I think everybody in the workplace benefits from these changes.

If some of the companies you’re dealing with are 80% millennials, is your customer base mostly start-ups? Is it mostly in the tech sector or is it more diversified than that?

Yeah. So we’ve been around for about 2 years now and we are working with about 100 enterprises at real scale, like real divisions or large groups of users typically in the thousands. But now some are actually scaling to the tens of thousands of users inside an organization.

And I would say we started off in the high-tech, early adopter group of customers, like Lookout Mobile or NerdWallet or Zynga or companies that were very high growth and were already very comfortable with openness and transparency but maybe they didn’t really have a formal methodology for alignment and coordination and this is the solution for that.

But I would say now actually most of our demand is coming from large enterprise clients and they typically might be using Workday or SuccessFactors for their HRIS systems. Now they realize we really need to have something that’s collaborative that allows our organization to connect and align around key initiatives, that we want to make sure everybody feels connected to those things that we have, really we’re maximizing the way that we harness our resources.

So they might already have a very diligent goal setting process. You know, some of these companies have been doing this process for 100 years. But what they don’t have is a very collaborative, social, almost… You know, I call it product FitBit for Work. It’s not Success Factors 2.0. It’s more FitBit for Work.

And so how do you make that engaging, how do you connect the people, how do you put that all together in a very high-adoption kind of way? In these large accounts we’re already supporting their very diligent goal setting process but what we’re doing is making it much more collaborative and open and transparent than ever before. I think that’s really the transformational piece that we’re enabling.

So in terms of your integrations, I know that you have recently announced integrations with Workday and with Salesforce to take in the metrics that users are working towards so they don’t have to log those manually. Are there other integrations that are planned in the near future, and is that the best way to get the data in there? Or is there going to always be an element of self-reporting amongst the employees?

Yeah. I mean, my thinking here is that manually captured data along with computer captured data is really the answer. Now that I think about it, when you use them together it’s like a very harmonized experience. You use FitBit to capture your steps and then you use MyFitnessPal to enter your calories. What I’ve experienced is that if you just fully automate everything, it’s hard to drive the behavior change with the human. But if you don’t automate the things that you should automate then that creates extra work or frustration for the human to have to keep track.

And so now let’s apply that to the workplace. So clearly if you have 3 or 4 or 5 key goals in the organization and maybe one of those is related to much more quantified maybe goals, maybe like delivering a certain number of leads or doing a certain number of analyst briefings or delivering a certain number of customer briefings or something like that. I think entering the human progress, having human enter the progress, the first thing, which is key initiative and maybe checking off the milestones as those things happen that seems very natural to me.

And then the second thing if it’s very quantified and there’s already data that’s existing in other systems. Maybe that’s like task-based systems like Salesforce or JIRA or anywhere where you’re doing your day-to-day work. I think those things should just be fully captured and automated for a human and to give them credit.

And what really is interesting is not only so we save time by automating that capture. We do that with Salesforce today. And by the way, it’s not just for salespeople. Anything that’s related to marketing leads or customer renewal rates, or anything that’s in, which is the Salesforce platform, can now be captured inside BetterWorks and give you automatic credit towards your goals. Which is pretty awesome to see the progress growing and seeing how you’re doing relative to your peers and understanding the history of your performance and learning and gaining insights from that.

But beyond that I think it’s really interesting to think about what does that mean from an organizational visibility standpoint?

Imagine if, for example, I don’t log into Salesforce anymore. I go to BetterWorks. I can see all of our sales, our sales development, our marketing and our customer success progress. Imagine if you could do that for JIRA engineering and Asana, if you’re using that, or Zendesk and support tickets. You can basically capture all of this data that’s happening on a very transactional basis and roll it up in the context of key objectives and the things that we’re all working on that are important. I think that becomes a very high value visibility capability inside the organization to know what’s happening at any one point in time without having to log in to all these day-to-day, task-based systems.

I also think that it gives the worker the flexibility to choose how they want to work. If they want to use Trello or Asana or JIRA or Dropbox or however they want to actually get their work done as long as they put that in the context of why we’re doing this and what’s important then actually it allows them to then figure out how they want to do the work and also at the same time communicate the progress of that across the organization.

When it comes to empowering the user and letting the user, do you think that moving towards this type of methodology and implementing a system like BetterWorks facilitates a flattening of organizational structure? And is it a case that the role for middle management may be less relevant and you could drive a more flat, open structure?

I definitely think it facilitates a more nimble and agile organization that can make faster decisions, has more accountability, and a stronger culture of trust. I think that information becomes a freely flowing thing inside the organization as a result of this approach.

And clearly, I mean, I wouldn’t say we’re religious about that concept. I think clearly some information should be managed correctly like inside information or certain kinds of things.

But I think if you look at how information ends up being controlled today inside organizations and actually even worse is the game of telephone that happens with information. When it gets passed from one person to the next and by the time it’s cascaded 10 nodes or 5 nodes the quality of the message has changed. I think that this does become a way to drive acting like a flat organization.

And at the same time we still respect the organizational structure and hierarchy but I do think that this shifts the role of a manager to somebody that’s basically like exclusively driving accountability and communicating up and down to one that’s really more a coach or mentor role.

And now I think the expectation for manager is can you coach people around how to reach their full potential? Can you coach people to stretch themselves even further? And to think the big picture around the role that they have. Can you unblock things for them if there’s blockers on their progress? And how are you helping facilitate their success versus this very traditional manager hierarchical profile?

We’ve talked a lot about numbers and about metrics. The whole idea of quantified work is at the core of the methodology here and of what BetterWorks is doing. So, I can understand quite well how that would work for the functions within an organization which are metrics-based like sales and marketing and engineering to a certain extent. But in terms of the less data-driven functions, the more human, tacit elements of work that are more difficult to measure and more difficult to understand, how do you deal with that? In your implementations to date, are you just implementing into the more metrics-based functions or are you implementing into other functions as well?

Yeah. I would say the ways that you can use goal setting vary across an organization, but I think many people will have very measurable types of goals, and also maybe less quantified goals at the same time. Capturing those in a consistent way regardless of the function or the role I think is something that our software facilitates.

But as an example, maybe if I’m in people operations or HR, I might have some key initiatives that I want to capture for the quarter in BetterWorks. Those could be things like maybe I need to deliver 100 new hires, so that’s obviously very measurement driven as I get 10, 20, 30, 40, 50. I check those in and I make progress against that goal of 100. And everybody can see exactly how we’re tracking against that goal.

And if I have a large team of recruiters, I could even farm out contributions to that 100 total and if people could check that in on a more individual basis then that would aggregate towards the overall total goal for the team. So that’s the measurement one. And that applies to sales appointments, marketing leads, analyst briefings, etc.

But also if I’m in HR I might have some other key initiatives like improve the company culture by facilitating maybe these three initiatives. Maybe we want to develop our emotional IQ and we’re going to bring in a consultant to help with that. And we’re going to facilitate the office move, or we’re going to define a new vacation policy and a new performance management policy.

Whether you did them or not is actually quite binary. We either did them or not. We defined a vacation policy, we communicated the policy out to the organization, etc. And so while they’re less measurement or quantifiable in nature they’re still, I think, very actionable. And so we allow people to express these goals and then also the milestones within those that will allow them to track their progress against that.

And interestingly the feedback that I get from users is they love this experience where they feel like they’re getting credit for their work. I mean, a lot of the stuff that we’re talking about seems like common sense, like let’s work openly and in a coordinated way where we have clarity of purpose. We’re all connected and we understand what’s important and we’re going to track our progress and feel good about our work.

But think about like the traditional approach where people don’t get their goals set for the year until May because they spend so much time buffing and polishing these things. People don’t check in during the year on things, they don’t engage in one-on-ones with their manager, they don’t have any sense of clarity of what’s important. Some of these companies, the employees might think that senior management doesn’t even have goals because they’ve never seen the goals from senior management. The alternate universe is such a negative place.

And I remember one user that said to me, it felt so good when I checked in on that milestone and I saw my progress increase that I immediately started looking for other things to check in on and make progress on.

And I feel like that speaks to our very human core nature, which is creating a set of things that we’re going to work on, seeing our progress happen, feeling good about that then reflecting on the work that we did, and then setting a cycle in place for what we’re going to do next. If you can tap into that psychology and that motivation and engagement then clearly it’s going keep people a lot more focused and a lot more productive.

Other really cool stuff that I’ve heard from users is things like I remember there was like one user that had like 18 goals assigned to them or they were like working on 18 initiatives just because people kept inviting them to, kept inviting him to contribute to their goals. He was a very cross-functional team member. It turned out that like obviously he had too many things. 18 things is too many things and the software brought that to light.

It wouldn’t have been known about all these cross-functional dependencies and horizontal things and all these groups that were counting on this person. And what that basically forced was a conversation on, well, I can’t do 18. I can only do 8 or 10. And let’s figure out which ones can we defer, which ones can we delegate, which ones can we ignore, but let’s have a constructive conversation about it.

And so that’s the very practical implications of having this kind of software.

Well, I guess while we’re talking about goal setting, something that might be of interest to our listeners and readers is what are your goals, Kris, say for the next quarter? And do you make your own goals as the leader in the organization visible to everybody else in the organization and how you’re progressing against them?

Yeah, that’s a great question. So while you were asking me that question I actually fired up BetterWorks. So I’m looking at my BetterWorks screen right now.

So I’ll tell you I have 5 goals that I’m working on for this quarter. Everybody in the company can see my goals. We’re public internally on those.

By the way, an interesting thing, we’re a real small company. We’re 50 people and we’re growing to about 150 next year. This is very different than having 10,000 people in the company. So how we might use it is actually maybe a little different than how a large enterprise might use our product.

Then in that I would say we don’t have a very strong emphasis on cascading multiple levels. Like for example, I don’t own all of the product goals and engineering goals so that they’re all in my name and then we have to cascade them to the product leader and engineering leader, etc.

I would say we’ve built a very flat information architecture where my role in the company is to facilitate some key things that I’m working on. And if you want to see what’s important for product, marketing, sales, etc., then you would go to that functional leader’s goals to see those things. And so that actually it makes it very freeing for me agility or adaptability standpoint that we don’t have to worry about cascading multiple, multiple levels.

Now, clearly in product there’s going to be goals that are important there that need to get support within the entire product organization or within certain sections of product that will ultimately align to the product leader’s goals. But I give you that background to demonstrate that my goals are actually just key things that I personally need to work on inside the company.

So for example I’m the sales leader today in the company. We just recently hired a new sales leader and that person starts next week. But currently I’m the sales leader so I own the sales bookings goal and that includes new bookings and upsell as well as renewals.

Then I actually have a goal around transitioning the sales leadership role to this new person and I set up a handful of milestones that will enable me to set that person up for success around the key things that I think they’re going to need to work on over the first 30-90 days in order to ramp up very quickly into that new position.

And then I’m looking for actually another leader inside the organization to really drive and own customer success going forward. And so I’m contributing to our hiring goal that exists across the company. By bringing on and committing that one, that senior leader to fill that customer success role.

And then one of the things that I’ve been really wanting to do is to spend some time around the vision and planning for the organization going forward. We’re going through a period of very fast scaling. We’re going to triple our head count by next year. We need to start to really mature a lot of our processes and how we handle things as we go from like a small-sized company to a mid-sized company. And so I’ve set up a whole collection of milestones this quarter of work that I want to do around how to facilitate that inside the organization.

And some of those are actually cross-functional, working with people operations which is our HR function and whatnot.

So that’s a summary but it tells you bookings, hiring, transitioning in this new role, defining the vision and going through a planning exercise and things like that that are pretty basic things but very important and they need to be done really well.

Absolutely. And you know, I love the fact that that’s transparent to the entire organization. And people who have just joined or people who have been working with you for a while can see what you’re doing on a daily basis and how you’re progressing and, I suppose, feel a sense of ownership and engagement and really being part of what the entire company is driving towards.

Yeah. I do think that it’s interesting that accountability just used to be like a downwards or cascading concept. Executives were beyond reproach or that they didn’t have to share information with the individuals like this is above their pay grade or this information is on a need-to-know basis. I think those companies are not going to succeed.

I actually think of it as more mutual accountability that I get to hold other people accountable but I also have to be held accountable as well. And so I think that’s an interesting concept.

One thing that we did talk about is along the lines of the FitBit for work metaphor.

By the way, I think the FitBit mobile app is really great and that inspired our mobile app. And what I think is really awesome about it is it shows you how you’re doing, how your peers are doing and it gives you all these great insights. And in FitBit, by the way, you can cheer or taunt anyone. And they have this really lightweight social gestures that facilitate this social environment.

So when we built our app, and this is our web app or mobile app, it doesn’t matter, either one you can do this in. You can cheer. Now, we didn’t go with taunt because “taunt” is not really a workplace verb. So we went with nudge. So you can cheer and nudge anybody in the company. And specifically, you can cheer or nudge their goals. You actually can’t cheer or nudge the person.

And so what that means, by the way, is that my manager can track my progress but beyond just the manager responsibility your peers end up cheering and nudging each other. And then even the person might end up cheering or nudging their manager or maybe even the departmental leader. It’s a very flat way of giving feedback reinforcement and pushing ourselves further along to reach our full potential. And we found that’s a very effective way of driving engagement with the platform.

What is the long-term goal for BetterWorks? Are you just focusing on growing the company right now, growing your customer base? Or is it a case of with your tight integrations into Salesforce that you see that as a potential acquisition play or do you see BetterWorks going for IPO in the coming years? What’s the end game?

So my personal goal with the company is to take the company as far as we can and really reach our full potential around the company. I think of that really as a long-term journey.

We’re here in Palo Alto. I live in Palo Alto. We’re right on university. We’re basically in the downtown Mecca of high technology. I feel like we’ve got a great opportunity that’s perfectly horizontal, that touches virtually every industry and every type of knowledge worker in those industries. And there’s a potential to create a very large, independent company in this category and to define a new category at the same time.

So the vision I would say is to keep building. We’re in the Year 2 of maybe a 7 to 10-year journey. Keep building, keep growing, keep focusing on customer acquisition and delivery of success for our customers.

And ultimately that has a strong chance I think of resulting in an IPO but I would frame it more as the goal is to just remain independent and create a new category of software. If we just keep working at that and chipping away then magical things happen if you’re prepared to put in the hard work.

Kris spoke with Michael Cullen on the SaaS Revolution Show podcast, which you can listen to on SoundCloud or subscribe to on iTunes.

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