SaaStr Podcast #361 with ServiceNow Chief Customer and Partner Officer Lara Caimi

Ep. 361: Lara Caimi is the Chief Customer and Partner Officer @ ServiceNow, the company that allows you the power to make work, work better. Prior to their IPO, ServiceNow raised funding from some of the best in the business, including Sequoia Capital and Greylock. As for Lara, she joined ServiceNow in 2017 and spent 3 years as Chief Strategy Officer before assuming her current role just this month. Before ServiceNow Lara spent an incredible 17 years at Bain & Co across a variety of different projects and roles.

In Today’s Episode We Discuss:

* How Lara made her way into the world of ServiceNow and SaaS having spent an incredible 17 years at Bain & Co.
* What does the role of Chief Strategy Officer really entail? How did the role change in Lara’s 3 years in the position? What is the optimal relationship between the Chief Strategy Officer and the CEO? How does Lara advise founders on when to hire their Chief Customer Officer?
* How does Lara see the 4 phases of startup growth? What are the most challenging elements within each? How does one instill process and discipline without losing agility and speed? How does one set targets that are a stretch but also not a stretch too far? What is the right balance?
* How does Lara think about what great change management looks like today? How does that change in a COVID world? How does Lara approach the right way to address enterprise customer communications? Why has that been made easier in COVID times?

 

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Jason Lemkin
SaaStr
Harry Stebbings
ServiceNow

Below, we’ve shared the transcript of Harry’s interview with Lara.

Harry Stebbings:

We are back. You are listening to the official SaaStr podcast, and you’re listening to Harry Stebbings. Now, joining me in the hot seat today, I’m thrilled to welcome Lara Caimi. Lara is the chief customer and partner officer at ServiceNow, the company that allows you the power to make work work better. Prior to their IPO, ServiceNow raised funding from some of the best in the business, including Sequoia Capital and Greylock.

Harry Stebbings:

As for Lara, she joined ServiceNow in 2017 and spent three years as chief strategy officer before assuming her current role just this month. And prior to ServiceNow, Lara spent an incredible 17 years at Bain and Company across a variety of different projects and roles.

Harry Stebbings:

But that’s quite enough for me, so now I’m very excited to hand over to Lara Caimi, chief partner and customer officer at ServiceNow.

Harry Stebbings:

Lara, it is so great to have you on the show today. I’ve heard so many good things from many former guests on the show, so thank you so much for joining me today, Lara.

Lara Caimi:

Thank you. I’m so excited to be here.

Harry Stebbings:

Well, that is very kind. But I do want to start with a little bit of context. Tell me, how did you make your way into the wonderful world of SaaS, which we both know it is, but especially come to be chief strategy officer at ServiceNow today?

Lara Caimi:

Yes. Well, it was, like many good career stories, not one that I had ever planned, but one I’m super happy to have landed in. I started my career at Bain and Company in consulting and unexpectedly spent over the course of 17 years staying at Bain mainly because when I would get comfortable, I would always have the next opportunity for the next promotion or the next client, et cetera, so I felt like I was always learning and growing.

Lara Caimi:

And like many good opportunities, I wasn’t looking, but in fact was busy, had my head down, was happy in my job and had a headhunter call come across my desk. And a lot of those, as you do, you glance at them and move on with your day. But this one was like, “Oh.” It’s reporting to John Donahoe, who, as you know, is an amazing leader and started his career, like me, 20 years at Bain, so was renowned in the halls of my Alma mater and then ServiceNow, and of course, knew about ServiceNow.

Lara Caimi:

And then the more I dug in and studied, the more intrigued I was about how amazing the opportunity for the company was. And so really, that’s where I landed in this role of chief strategy officer, which I held for two and a half years and actually a week ago just got promoted to chief customer and partner officer. And so that’s a bit about my history there.

Harry Stebbings:

Congratulations on the promotion. I do have to ask, though, because, again, we mentioned [inaudible 00:04:29] getting on schedule. I do just have to ask, in terms of John, obviously, as you said, amazing leader. I’m really intrigued, from your perspective, though now having had the chance to work side by side with him, what makes him the amazing leader that he so clearly is, from your perspective, having had the chance to work with him?

Lara Caimi:

He’s an amazing strategist. I mean, he understands business. He’s a real student of leadership and understands how companies need to scale and evolve as they reach the next level of their growth. But also, he’s just a wonderful human and he’s a very down to earth, humble, thoughtful person who really cares about developing individuals. He’s the kind of person that when you read the review that he writes for you, you’re like, “Man, he nailed it.” He sees everything and the way he invests in helping you grow and develop and rise is really special. And so I learned so much from him. In the same way, I’m learning so much from Bill McDermott, who is a very different kind of leader in many dimensions, although shares a lot of the same core characteristics of John.

Harry Stebbings:

No, absolutely, and incredible to hear in terms of the commitment to people’s development. I do want to ask another one, which is 17 years at Bain enjoying that success, and I have a lot of university graduates coming into the workforce today and they always ask me, “Should I join a startup? Should I start a startup or should I join a large incumbent?” I’m always quite struck by the responsibility is suddenly placed on your advice, but then I’m mostly thinking especially for you with this incredible experience at Bain, and now in ServiceNow, how would you advise them and what would you say?

Lara Caimi:

Well, I think my career is unusual to spend as much time and then jump over to the senior role that I had. I’m not sure it’s the thing that everybody gets to do. As I think back of what would I do differently, I don’t think I would change much because I’m so happy with where I landed.

Lara Caimi:

But when I think about others starting their career, I do believe that the foundational training of strategy consulting or sometimes investment banking can provide is it gives you this baseline skillset around a general manager headset, foundational understanding of how to think about big problems and divide them up into meaningful chunks, focusing on the real pieces of value that’ll move the needle and then how to communicate very clearly to influence. And those are just, I think, core general business skillsets that get hammered into you formally through training, but then just through your experience with clients that at least a couple years getting that kind of skillset, if you haven’t already in your career, is a valuable thing to consider.

Lara Caimi:

And then in terms of where to go from there, to me, it so depends on the opportunity, the team, and the track record of growth that others have seen. I like places where you don’t get pigeonholed in a particular function or a particular silo, that people are looking for talent that can grow and expand perhaps in unconventional ways, but will give people a shot and then identify high potential people and put them in roles of responsibility. And I think those are real great opportunities when you see a management team or a leader or a company who tends to do that, that will be a place where you will learn and grow faster maybe than in a different environment.

Harry Stebbings:

Totally with you in searching for those opportunities for growth within roles. We mentioned your promotion and I’m really interested because we have seen the rise of chief strategy officers over the last decade or so and it means different things to different firms. Can I ask, what does it really entail and how did your role change over the time that you were chief strategy officer?

Lara Caimi:

Yeah, it’s interesting because when John brought me in, the company had never had strategy formally before or a chief strategy officer. And so in some ways I was defining it for the company and for my peers in the C suite. And it started by, of course, building a purpose-built function, often people that came from consulting or strategy backgrounds, but it was designed to be a feeder of talent into the organization, into other roles. It was never meant to be something that was permanent. It was always a source of talent.

Lara Caimi:

And the way I thought about it was when you think about some chief strategy roles, one spectrum could be like, “Hey, it’s a staff role that makes slides for the CEO for board meetings or something.” And at the other end, it’s a true partner in the C suite that’s partnering and guiding the strategic agenda for the company. And that’s the much more powerful and meaningful end, which is what I think we created at ServiceNow.

Lara Caimi:

And as I thought about that, it was definitely not to be John’s person or John’s team that would parachute into situations that the CEO wanted to fix, but rather it was to act as a true peer on the C suite with CJ Desai, who runs product, or Dave Schneider, who at the time was the president of customer operations, and really think about what we needed to do to make the company better.

Lara Caimi:

And in that way, that’s really how that role evolved. It started with just proving myself and building out a basic team and adding some value to really thinking about the longterm strategic agenda. And for us, it was painting our path to $10 billion in revenue, which is the aspiration that we laid out, which is super exciting. And that was done very much in collaboration with the business, with the management team, with the board.

Lara Caimi:

And so that for me is how it evolved as we built that, which it’s the most fun job I’ve ever had because I could think about the company, think about what we needed to do to get to the next level and improve and we would just go partner with the business and get that done. A lot of that has to do with the culture we had that we were true partners and we weren’t coming in to tell somebody what to do. But also I think the culture of the company, that one of our cultural values is hungry and humble and this notion that, “Hey, we all have a growth mindset and we can all get better and we all want to do a great job.” And that I think is conducive to partnering to solve problems and ultimately help individuals and the company be successful.

Harry Stebbings:

Can I ask, when I listen to this, it seems like such a foundational role that all companies should have really from day one in terms of the relationship with the CEO, the thought partner, how it expands throughout the different functions in the business. My question to you is I guess, how do you advise startups who are thinking about hiring a chief strategy officer? When’s the right time and how they should think about that from a strategic point-of-view?

Lara Caimi:

It’s interesting because I think about phases of a software company, and I think the first person to coin this was probably Frank Slootman, who was the CEO before John, and then we borrowed it and expanded upon it. But as I think about it, phase one for a software company is zero to 100 million dollars in revenue where you want to find that lightning in a bottle and you’re just looking for product market fit.

Lara Caimi:

And then phase two is when you go from 100 million to a billion and that’s when you found that product market fit and then you just have to scale the heck out of it while that window is open and scaling, building go to market, growing that revenue is the primary responsibility and thinking about growth and new customers is the main focus.

Lara Caimi:

And then phase three, which is where I came in, which is when we were transitioning into that phase with John was going from a billion to a multibillion dollar company. And to me, that’s an interesting inflection point where you might think about this because you think about the business I think even more holisticall.y expanding customers and renewing them becomes more important so you introduce customer success in a meaningful way.

Lara Caimi:

For us at ServiceNow, we were the best kept secret in Silicon Valley. And so we started to invest in brand that we’d never done before. And we had brand campaigns. That’s when we brought Pat Waters in as our CHRO, where we actually started to introduce a diversity and inclusion and belonging agenda and the company. It was really building the foundations for an enduring company.

Lara Caimi:

And oftentimes, as you think about those phases, you have founders or early stage CEOs who are doing a lot of that strategy work themselves in maybe phase one, phase two. And it’s really in phase three when the problem becomes multi-dimensional, but it’s often good to bring in additional thinking. That’s also sometimes when companies go from a single product to multiproduct, et cetera, when they start expanding geographically. And so I think it helps to bring in more structured thinking around that.

Lara Caimi:

And then of course, phase four is where we’re in now, which is where Bill’s really focused, which is where you go from four or five billion to a $10 billion company. And that’s where it’s even more complex because you start to think about the role of the ecosystem in a meaningful way, verticalization. You have to truly force multiply. That notion of customer success has to truly scale and deliver those customer value outcomes that you need. You have to expand not just to be known as your brand, but you actually have to be relevant to C suite buyers because you’ve started to have $10 million, $20 million, $30 million, $40 million customers. That is a C suite conversation at that point. There’s a lot of nuance, I think, as you think about those phases. And so I would say that phase three is when formal strategy might be important.

Harry Stebbings:

I think one thing that really strikes me in my thinking here listening to you is when you think about the scaling process that may be specifically in stage three and it’s like, how do you instill process and frameworks in this maturation stage without also creating barriers without creating a slowdown of process? How do you instill frameworks without slowing down activities so to speak?

Lara Caimi:

Yeah. I think that is such an important question. When I have studied companies that scale, a lot of what slows companies down is not having a good go to market engine or not having a good product. It is truly that they start to die under the weight of their own bureaucracy. And so that was something I was super cautious about.

Lara Caimi:

At the same time that we’re introducing a proper three year planning process and going through strategic product reviews once a year and actually having structure to how we think about our markets and our customers and our products and the product roadmap, all that stuff, we also started to think about talent and that was where we said, “Okay, of course diversity, inclusion, belonging is a super important conversation that we need to invest in and educate and build into the core culture of the company. But also, how do we really think about our cultural values and what are the things that we want to keep from the previous phase and what are the things frankly, that we want to evolve, which is a nice opportunity for a new CEO coming in to be able to do that?”

Lara Caimi:

And for us, it was about foundationally articulating the company’s purpose supported by those values, right, and creating a rallying cry around that, that inspired and motivated people. And then also we invested in a little bit of foundational operational excellence. And I would say that’s simple stuff sometimes, right? But it’s like, we needed a decision making framework. Who has the D? Who gets to make decisions? How do you ensure that you teach people really great meeting management skills in addition to educating people about program management or change management or getting work done cross-functionally? A lot of those were conversations that we had in more formal leadership development programs that I think were super important to ensure that that dying under the weight of your own bureaucracy thing didn’t happen.

Harry Stebbings:

I totally get you. And I love that also, because it goes back to what you said also about John in terms of the commitment to people development. Kind of tied to framework in a way is the element of planning just in terms of strategic thought-provoking activity. My question to you on planning today is given the transient state of the world and given the current flux that we live in, how do you think about appropriate planning and try and be as accurate as possible? What does that look like?

Lara Caimi:

Yeah. I mean, no one has a crystal ball and I think every quarter … We’ve now been through a couple in COVID, but it continues to be a question mark, how deep is it going to go? How long will it last? Et cetera. And so I find that there’s plan, plan and replan, and also build scenarios around that. So what is the worst case scenario that we could consider here?

Lara Caimi:

And a part of how we’ve thought about doing that is you start to get pretty granular in how you think about that, like segmenting your customer base, which industries and companies are most impacted, how exposed are we to those companies and how exposed is our revenue base to that? We’ve been very conscious about costs. I was just talking to a CFO of a pre-IPO company earlier this week. And he was saying how this has actually been a really good opportunity to reign in spending because there’s a huge opportunity with no T&E, no travel, not being an offices, et cetera, and really focus on that cash burn rate.

Lara Caimi:

For me, it’s about being super thoughtful about building multiple plans and the replanning as you learn more. And then I think inspecting is super important, so what pipeline do we need? For us with our go to market model, what kind of ramped reps will we need as we think about out quarters?

Lara Caimi:

And then I think when it gets really interesting is when you start to think about, okay, this is a new normal, and there are new problems now in the world that our customers are facing, so what problems can we solve that create opportunities for our business, right? And so the example that we went through is very quickly at the beginning of the pandemic, we mobilized to support our customers by delivering four emergency response apps that were totally free in March, right, that just helped them with crisis management, and then we pivoted in May to this thinking around safe workplace, returning to work.

Lara Caimi:

And so in the span of a quarter, we designed, developed, launched, took to market, and sold four different applications that were focused on employee readiness, employee health screening, workplace safety management, PPE and inventory management, contact tracing, which we had 500 customers that implemented. There were 2,500 app installations in that quarter alone. It was big names like Coca Cola, Uber, state of North Carolina, Sanford Health, Ascension Health, all of these different companies that we were really partnering with to help them think about the problem at hand, which was one that no one had ever imagined before, no one had ever planned for. And so I think that that’s a real opportunity too, in this pandemic, as you’re thinking about planning, also thinking about what are the new opportunities that we can help solve for customers that are new to the world that we may be well-suited to help with?

Harry Stebbings:

I totally agree with you there in terms of the product innovation and moving with the times, but I’m really interested. You mentioned some of the incredible customers that you have there with the product line that was created in the last couple of courses. My question to you is, customer communication is so key, especially in times like this. How do you think about the right customer communication process and how have you thought about that during the pandemic?

Lara Caimi:

Yeah. I actually think it’s easier to schedule meetings now with people because it’s so much less logistics and meetings are shorter, they’re more frequent. I actually think the meaningful customer communications, especially when I start to talk to more senior folks in the organization, it’s created an opportunity to, I think, connect more frequently.

Lara Caimi:

And in terms of how it’s changed, I think this should always be the case, but it’s even more acute during the pandemic, which is you have to lead with empathy and with understanding their business context. I’ll give an example. I had a conversation with Honor Health, and it was really important for me to dig into what was happening with COVID in Arizona, what was happening with the hospital system there, what was the context that they were dealing with? And it just creates opportunities to have curious conversations around their business problems and help them real time. And so it’s that frequency of conversation and the availability of senior people, as well as I think it’s raising the bar to help them in a time of need in a more thoughtful and nuanced and specific way to their specific needs.

Harry Stebbings:

A lot of customers in these challenging times are also adopting digital first tools, processes for the very first time, especially when you look at, as you said there, the life of COVID, thousands of employees around the world. And the big thing for me is change management and adoption. And it’s one that I think about far too much, I’m sure. But tell me, what does great change management mean to you from a starting point, I guess?

Lara Caimi:

Well, I mean, I think what’s so interesting about this time is the amount of change that this situation has forced us to go through is in such speed, it’s really mind-boggling, right? You would never in a million years plan to transition your workforce all remote overnight. That would be a change management nightmare, but yet the urgency of the situation has left the world with no other options. And so in that way, you’ve created one of the most foundational change management strategies, which is you need a burning platform, you need to be very clear about why you need to change and what you’re changing for. And I think obviously COVID created a huge burning platform that drove accelerated change.

Lara Caimi:

I think as we think about digital transformation, it’s a business imperative now. It’s not an optional thing to do. And frankly, the gap between those who are digitally transformed and those who aren’t will actually have meaningful business results and will accentuate the difference between winners and losers. I think the business imperative is incredibly clear, maybe more so than it’s ever been before. And so that creates an opportunity to have the burning platform, make a decisive decision about what you have to do, and then communicate that change over and over again until almost you feel like you’re babbling, you’ve said it so often, because I don’t think you can over-communicate enough about it.

Lara Caimi:

And then importantly, and this is what I think about, which is what can get screwed up as a result of this, right, which is I think too often when people are doing programs or change or whatever, they think about a project plan and a bunch of progress milestones. And it’s like, that’s the wrong thing to measure. You need to measure outcomes and outcomes have leading and lagging indicators that actually indicate whether you’re doing the right thing or not and whether you’re going to be successful at the speed you want to be. And those are the things you need to be measuring, not just the progress maps.

Harry Stebbings:

Can I ask, when you think about measurement of KPIs and when you think about targeting goal setting, one other thing that I’m always so stuck on is how do you think about setting super ambitious targets which inspire a team to achieve maybe more than they could [inaudible 00:22:38] but also not too ambitious where if they don’t hit them, they’re massively dejected and it creates negative morale within the workforce? How do you strike that balance?

Lara Caimi:

I mean, this is something that Bill McDermott is really amazing at. He’s a glass half full guy in a way that makes you realize that the glass was 10 times bigger than you ever imagined. He pushes you to think about not just what’s great, but what’s game changing. And he sets these big, audacious, big dream goals.

Lara Caimi:

That being said, I think it’s super important to not create something completely unrealistic, in which case you pretty quickly lose credibility and that whole big dream plan becomes just a pipe dream. And so that’s where I think timing plays a big role and making sure that goals are set in the context of reality that they’re actually achievable, but that they’re pushing people to go a little faster than maybe they would comfortably sign up for on their own. I think it is art as you think about it, marrying that, but that big dream narrative that might be a little bit off in the distance I think helps inspire and rally in a way that’s incredibly powerful.

Harry Stebbings:

Yeah. I think you have to have that driving north star visionary so I totally agree with you there. I’m pleased to hear that. And I also love to hear art over science any day of the week, so that makes me very happy. I do want to move, though, into my favorite, which is a quick fire round. I say a short statement line then you give me your immediate thoughts, and it’s about 60 seconds per round. Does that sound okay?

Lara Caimi:

Okay. That sounds fun.

Harry Stebbings:

Okay, so your biggest challenge with your role with ServiceNow today?

Lara Caimi:

Yeah. My new role is chief customer and partner officer, which I’ve now been in for a week, so I’ll give you my top of mind thoughts here, which is we’ve launched customer success a year or two ago, found good results, but now we need to scale it and I think focus on how do we get it much more embedded to ensure our customers are seeing value, getting to outcomes, et cetera, in a meaningful way is a big challenge that I’m very excited to think about different models. And I think there’s business models that we can innovate around, et cetera, to think about how to do this differently. And so that’s exciting.

Lara Caimi:

The second big piece of my job that I think about is the partner ecosystem. The partner ecosystem in SaaS, sometimes it’s underplayed. And the reality is that these guys have very deep, important relationships with big customers, right? They are helping drive their digital transformation agenda and recommending software platforms that can enable that. And so it’s really important to get to know these guys, go to market with them, help them build practices around you for at least the kind of software that we sell to the largest enterprises in the world. And I think there’s ways that their models can innovate, frankly, to accommodate a SaaS model. And so I think that partnership and really growing together is another piece of what I’m looking forward to impacting in my new role.

Harry Stebbings:

Tell me, what would you most like to change in the world of SaaS today?

Lara Caimi:

I think it goes back to what I was saying about customer success. In a world where SaaS can proliferate in such an amazing way with anybody in the company that has a credit card can swipe and download something, I think it has a potential to take away the focus of what SaaS can really do for you and that ultimately it will have this negative consequence of almost giving SaaS a bad name.

Lara Caimi:

And I think we can change the narrative where we really start to think about, what is the value or the outcome delivered from this software? And so to me, customer success in the past has always talked a lot about NPS and customer advocacy and stuff like that, which is important. But I think we can almost innovate the narrative where we can think about customer success being defined as realized value. We’ve introduced this concept of now value at ServiceNow that we really think about embedding through the life cycle where we’re always focused on how the customer can get the most value and that narrative I think is really important for SaaS to broadly develop and adopt because that will avoid that nightmare scenario that I laid out in the beginning.

Harry Stebbings:

Tell me, what was the biggest surprise for you internally since COVID began?

Lara Caimi:

I just was really, I think, proud of our employees and how quickly we were able to pivot to remote work to stay productive and that people at the same time were dealing with unprecedented personal change and the amount of empathy and thoughtfulness that was applied and we ramped up our communications to employees. We treated them with care and respect. We cared about them and their families. That is a major pivot. And I think as a result, our employees are more loyal. And I think we’ve created a situation that obviously you have to keep evolving. This is a long trying time. People get Zoom fatigue, whatever, but I was surprised and I think proud of both our employees and just the way it was managed.

Harry Stebbings:

Yeah, absolutely. I think it’s been incredible to see. Tell me, what moment in your life has changed the way that you think? Very, very hard question to ask.

Lara Caimi:

I mean, I guess I have to go back and credit Bill McDermott. It was a big transition where I started working for one CEO and within a couple of years had a very different and wonderful CEO to work with and learn from. And the biggest thing that he has done for me and for this company is instilled the power of the big audacious goals. He wants us to not just be a good company or a great company or just hit the quarter or whatever. Of course, he wants all that. But his goal for us is we want to be the defining enterprise software company of the 21st century. And when you set goals like that, it’s such a powerful unlock that lets people think about, I don’t just need to do what for us, what Salesforce did … I don’t need to just follow that model or think about other big software companies. I can think about how do we reinvent this? What are the problems that no one has figured out yet?

Lara Caimi:

And that bandwidth for thought and that inspiration that he puts out, I see it trickle down in the organization in all sorts of ways that we’re doing things and thinking about things differently for the first time ever and moving faster and I think with more enthusiasm than I’ve seen, and that’s incredibly inspiring. That’s an incredible leadership lesson that I’ve taken from him that I’m really grateful for.

Harry Stebbings:

It’s amazing to hear that about Bill, but Lara, listen, I’ve so enjoyed today. I so appreciate you putting up with me getting off schedule quite so frequently, but thank you so much for joining me.

Lara Caimi:

Thank you. This has been so fun. I really, really appreciate this conversation. Thank you for your time.

Harry Stebbings:

So enjoyed having Lara on the show there and such exciting times ahead for ServiceNow as they scale through phase four. And if you’d like to see more from us behind the scenes, you can on Instagram. 

Harry Stebbings:

As always, I so appreciate all your support and I can’t wait to bring you a fantastic, fantastic episode next week with Kyle Parrish, head of sales at Figma.

 

Published on August 12, 2020

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