Monday, October 31, 2016

A Year of Volatility

When we named our sailboat “Volatility” we thought it was a clever way to describe our shared life together. Over the course of our first 13 years together we have collectively moved 15 times including coast to coast, from the city to the mountains and back, from conservative bastion to liberal epicenter and from our remote mountain top cabin to our current home floating on the sea. “Volatility” also described well a partnership that was not always easy or without friction. As anyone who knows us can attest, I am perfectly agreeable but my wife can be quite opinionated.

Volatility can also describe startup life. From the excitement of disruptive technology to the hard realities of employee and customer turn over and the impacts of large scale boom and bust cycles, working in a startup in Silicon Valley is a highly dynamic experience.  As we celebrate a year of living together on a sailboat I am struck by how much of what we have learned applies to building and managing a start-up. These are my top 3 takeaways for thriving amidst volatility.


Before we moved onto Volatility we made some hard decisions about what to keep and what to let go of. As we whittled our processions down to the bare minimum I was amazed at how much stuff we simply didn’t need or care that much about. While we both share a minimalist aesthetic we still found that we had accumulated more than we needed and much more than you can live with on a boat. To make it work we had to simplify.

Keeping it simple in a startup is more difficult than it sounds. I am continuously amazed at how easy it is to start accumulating processes and tools that you simply don’t need. Like the extra shoes in your closet, all of these processes serve a purpose and make sense at the time they are launched. I need four pairs of running shoes! But in the end they just clutter your closet. They distract and complicate. The success of my Customer Success teams at SuccessFactors, HireVue and Kahuna were driven in large part by keeping it simple. The job: focus on doing the right thing for the customer by driving value. Period. It is not always easy but to make it work, we start by simplifying.

Go/No-Go Decisions

One of my biggest frustrations during our first year of living on a sailboat was just how little we actually sailed. The winter of 2015/16 was an El Nino winter and I was frequently frustrated as the swell on the open ocean rose above our comfort level or the winds were simply too strong for our sailing experience. Whenever the red flags (small craft advisory or gale warning) came up my heart and hopes for sailing sank. Weekend after weekend we made go/no-go decisions, often choosing to stay safe in harbor.

Successfully managing a team in a startup is as much about what you do as what you choose not to do. It is easy to get in over your head and find yourself swamped with work that doesn’t actually move the needle or projects with scope creep that suck up valuable time and resources. To consistently drive positive results, it helps to have a system for evaluating what you work on. Understanding and constantly looking to your core objectives is really the only place to start. If the project or initiative you are considering doesn’t align, doesn’t support and doesn’t move you in the direction of success against those objectives, why are you doing it? There is no Coast Guard in a startup environment raising the red flag to tell you to stay put. It’s up to you.


When we sailed under the Golden Gate Bridge on our way to Half Moon Bay it was everything I had imagined for the long seven months we had waited. Beyond the bridge, the expectations were pretty much out the window. While I love living on our boat, and in the harbor of Half Moon Bay, there were, and still are, a lot of surprises. From the sea lions that occasionally bump the boat and constantly bark at night to the outdoor shower leak that filled the bilge with fresh water, boat living is not always as carefree and easy as I thought it would be. I have had to adjust my expectations constantly to find the joy in the reality.

With all of the press that startups get, it makes sense that everyone has an expectation of what it is like to work for one. For professionals coming from large companies like Salesforce, Oracle and SAP, the idea of small fast moving teams and unencumbered innovation holds significant appeal. The expectations for fast easy success and rapid growth can quickly get away from even the most pragmatic people. It’s Silicon Valley, everyone is successful here! The reality is, startups don’t often grow in a straight, up and to the right path. Mistakes get made, the wrong people are hired and take too long to fire, the competition catches and passes you one day even as you might catch and pass them the next, big accounts leave you and you are only as successful as your last board meeting. Success, and enjoying the experience, requires letting go of expectations and embracing the challenging reality that often looks like incredibly hard work, constant adjustment, adaptation and perseverance.

Startup life is highly unpredictable and dynamic. While this volatility can present significant challenges it also represents considerable opportunities. By embracing the reality of the challenge, taking a hard look at what you do and choose not to do, and keeping it simple and focused, you will have the best opportunity for smooth sailing.

About David Verhaag 

David is the Founder of Olifano, a context-based knowledge assistant bringing information into the flow of work. Before starting Olifano David held roles as Chief Customer Officer, VP Customer Success, and Director, Strategic Services at several notable startups.

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Tuesday, June 21, 2016

5 Things Your Customer Success Managers Are Doing Wrong

I have had the opportunity to work with some exceptional Customer Success Managers over the past few years. At SuccessFactors, where Mark Bissell and I developed the Customer Value function (read how here) we were able to hire an incredibly talented team from both inside and outside the company. This team, hired globally and working remotely, came from a variety of backgrounds and experiences and worked hard to deliver exceptional customer retention while evolving with our growing team. At HireVue, where I built and scaled the Customer Success function, I had the opportunity to define the organizational model for Customer Success and hire a new team to execute on that model, leading us to some exceptional results (read about that here). That’s not to say that every hire I have made has been a success. Like any hiring manager, I have made my share of poor hiring decisions. At times, I discounted the advice of my team, looked past obvious red flags for the sake of expediency and ignored the gut feeling that something didn’t add up about a candidate. And in those cases I paid the price with a bad hire. But poor results aren’t always the result of a hiring mistake. The role of Customer Success Manager is new and evolving in many organizations and there are few role models for how to successfully balance the role (read about that here). Having had the opportunity to build and scale three successful Customer Success teams, including hiring and developing more than 50 Customer Success Managers, I have found that there are five things that CSMs do that can lead to poor results. 

Focusing Too Much on the Technology

When dealing with complex software implementations and integrations, disruptive technology that doesn’t always work as advertised, and the long difficult process of changing a customer’s processes, it is really easy to get lost in the weeds of How it works and lose sight of Why it needs to. A common mistake CSMs make, especially eager and well intentioned junior CSMs, is focusing too much on the technology and not enough on why a customer needs it. This goes beyond the basics of “What are your business goals?” and “How do you plan to measure success?” It requires that a CSM understand the customer’s business and business processes absent the technology solution. “Why do this at all?” and “How do you do this today?” are important questions for a CSM to understand if they are going to deliver the value and impact of the solution. If a CSM can’t whiteboard the customer’s process without talking about the technology they might not understand it well enough to drive value in their role.

Doing the Same Things and Expecting a Different Result

One of the most painful aspects of being a CSM is the unresponsive customer. The goal of Customer Success is to make the customer successful. Period. There is no charge for the services. The CSM is not trying to sell the customer anything. They are simply there to help. But sometimes, customers don't acknowledge, let alone return, emails, phone calls, or text messages. They go silent and the CSM is stuck. CSMs can’t drive value if the customer won’t engage. But silence is not always a sign that things are off track. At HireVue, we often struggled with unresponsive customers because the software simply worked and it was not a burning problem that they needed to solve. But the CSM, tasked with driving adoption, can’t accept that everything is okay. So they call and call and call. The mistake is trying the same thing over and over. “Well I left them five messages and sent them five emails and they never responded”. The best CSMs adjust the medium early, adjust the message often and look for alternate channels after the second unresponsive attempt. If a customer doesn’t respond to two emails, the message isn’t resonating. It is as simple as that.

Not Leading with a Sense of Urgency

After the contract is signed the clock is ticking. Time to Implement – the clock is ticking. Time to Value – the clock is ticking. Time to Renewal… you get the idea. A mistake that CSMs make is enabling the customer’s project team to slow roll an implementation, to slow roll an adoption plan, to over-complicate the process and slow everything down. The best CSMs lead with a sense of urgency right out of the gate and embrace disruption at the first sign that the customer’s team is not feeling the same. The customer’s project team isn’t ready to meet for three weeks? Let’s get the sponsor on a call today and light a fire. The roll out plan calls for a pilot followed by six months of expanding adoption? Let’s get our partners in Sales on the phone with the sponsor; maybe they don’t understand the value of the software and the cost of delay. Urgency doesn’t just happen and the best CSMs create it.

Managing to Process Not Outcomes

Process is important. Creating scalable processes is important. They are, in my mind, a necessary evil and a sign of a growing organization. They can also become an excuse for CSMs. It is easy to focus internally on process development and bureaucracy, who is supposed to do what, when customer results are less than stellar. When a customer is failing, it is easy for a CSM to point to the project plan, issues log, or governance model and explain that they did everything they were supposed to do. Scalable processes are important for driving consistent success but cannot replace common sense when a customer situation requires something different. The best CSMs understand this and find the balance between one-off solutions that maintain the “whatever it takes to drive success” mindset with the scalability needs of the organization.

Customer Success Manager as Hero

A common mistake of Customer Success Managers is adopting the idea that they need to be a hero in an account relationship to secure recognition for their good work. They adopt a mindset of relationship control that is more focused on limiting access to the customer than celebrating their health and success. Taken to an extreme, they can sometimes go Lennie and the rabbits, inadvertently leading to the same outcome. The best CSMs understand that a successful customer is not the result of their work alone but the strong partnership with Sales, Professional Services, Support, Marketing, Product, and Engineering. It takes the entire team working together toward the same end. The CSM is simply leading the charge. Instead of controlling and limiting access, effective CSMs ensure outreach and connections are synchronized so the customer is not asked the same questions about their success or overloaded as a reference or a speaker.

Great CSMs don’t just happen. It takes hiring the right individuals, creating smart processes and tools for them to use (more ideas) and working with them to avoid these five common pitfalls.

Tuesday, May 17, 2016

Making Time: Insights on Time to Value

My Dad worked for more than 40 years as a watchmaker. Sitting at his counter in an old pharmacy in the Spokane Valley he made time. Replacing batteries, fixing old pocket watches and telling corny jokes to the customers who came to know and love him, he made a life and a career of helping others mark the passage of time. On a recent visit home I sat alone in the living room where I grew up listening to time moving on. In a watchmaker’s home time is everywhere. The grandfather clock. The anniversary clocks. The various watches and timepieces, seen and unseen, all keep score. Everything appears to be ticking. Every counter, cabinet and hutch a resting place for a clock, watch or time piece. Periodically, chimes and bells create a stir noting another milestone. Sitting there I was struck by how important time is to all of us in our jobs. In my own career, time is a yard stick of success; time to implement, time to resolution, or time to value all measure our performance as a team. Across the customer journey we measure our success against the clock and, though less obvious than that constant tick-tock of home, it is always moving forward.

While there are a seemingly endless number of ways that we are impacted by time in Customer Success one measure stands out in my mind.

Time to Value

Time to value is more than just a measure of the days from signature to business outcomes. It is a measure of the partnership and the organization’s effectiveness in delivering on a commitment to the customer. From the customer’s perspective it is an important milestone. As a sponsor of the software purchase, time to value can be validation of a smart decision or a red flag that will require explanation.

At both HireVue and Kahuna I was supported by tremendous Customer Success Business Analysts, Dave Andreasen and Blake Schiafone, respectively. Their data analysis showed us that there are many elements which contribute to revenue retention and account growth. Some indicators are intuitive like Net Promoter Score and Referenceability. Some indicators are less intuitive but equally important and correlated with retention such as participation in marketing events and utilization of Support (interestingly no utilization of support is more concerning than high utilization when it comes to predicting retention). The analysis also showed that time to value is an excellent predictor of customer retention and a leading indicator of success. Customers that successfully adopt the product immediately after go-live, and according to plan, have a higher likelihood of long term success and realization of value. Through further analysis we were able to define this adoption curve as a success trend line and map new customers against it to know whether we were off to a healthy start based on time to value.

We leveraged this insight to drive improved customer retention by incenting our Professional Services team not just with launching customers on time (time to implement) but on the pace of product adoption post go-live. This incentive took the form of a quarterly MBO, one of several key objectives, that measured PS performance based on customer product adoption 90 days post go-live against the adoption curve that we had validated as an indicator of success. Through work with Brett Hart, at the time HireVue’s Director Sales Enablement and Solutions Consulting, and a fantastic ROI software solution provided by theROIShop, our Customer Success Team leveraged that same ROI calculator that was delivered Pre-Sales to ensure that the customer’s value realization was meeting or exceeding the commitments made during the Sales process. Combined, these initiatives had the effect of helping us proactively drive time to value by focusing on the time component (how fast the customer adopted the product) and the value component (did we actually deliver the committed and agreed value as measured by ROI).

While it is not always as obvious as a ticking clock in a room full of timepieces, the time to deliver business outcomes for customers is constantly slipping away. Time to value can be an important predictor of customer retention and a leading indicator of success. By aligning the Customer Success team with Sales on the points of value and the expected return on investment for the customer and incenting the services team to drive to outcomes, not just go-live, you can ensure that time is well spent.

About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Thursday, March 31, 2016

The Origins of Customer Success at SuccessFactors

During the financial crisis of 2008, widely considered one of the worst since the Great Depression, considerable financial pressure was put on everyone in technology, including market leaders in the software as a service space. Against the backdrop of these tough market conditions, SuccessFactors faced a critical challenge. Strong competition in the Talent Management space signaled increasingly challenging renewals and for the first time, half of the company’s revenue would come from existing customers. To stay ahead of the curve and maintain what had, to that point, been strong customer retention, SuccessFactors doubled down on the investment in our customers to proactively ensure renewal by driving customer value. The Customer Value Team was born.

Over the course of our 8+ years together at SuccessFactors, Mark Bissell and I worked closely on a number of challenging projects. Mark originally hired me at SuccessFactors in his role as Director, Professional Services. A fantastic mentor, Mark and I worked closely to implement the largest software-as-a-service projects ever (at the time), engage with new and key strategic partners on international deals and partner with Product Management on complex new product initiatives all while growing the Professional Services operating model. After a few years growing this team Mark moved to a new role in the company and I joined the Business Transformation Services team to lead strategic consulting projects with Steve Hunt and Jessica Kane. In this role I also led the development of the SuccessFactors Premium Analytics business with Doris Wong. For a few years Mark and I worked our parallel paths in the organization occasionally overlapping when we were called back in to solve an especially complex customer challenge. Mark liked to call this a “diving catch” and over time we got really good at it. 

As the financial crisis took its toll on the technology market we started to operationalize the “diving catch” and formed the Customer Value function at SuccessFactors in 2009. Mark, Deidre Schmidt and I started proactively engaging with the largest and most strategic accounts that were at risk a year before their renewal. We created opportunities and processes for engagement like our Customer Value Workshop to engage with customers and conduct a health assessment to flush out and solve any issues. We created a process, appropriately called “Surge”, by which we would request support from our partners in Professional Services to re-engage with customers to re-implement or re-train the customer, often at no cost. We also created the “At Risk” process which proved highly effective in engaging cross functional teams to solve critical customer problems. I describe the At Risk process a bit more here.

After a year, the results of the new Customer Value function were clear. We had protected more than $10m in “At Risk” renewal revenue, set more than a dozen strategic accounts up for expansion and created a process for the entire organization to gain better visibility into the health and needs of our rapidly evolving customer base. And with success came investment. In year two of the Customer Value team, Lars Dalgaard and Jay Larson agreed that instead of merely protecting strategic accounts in year 3 we would invest in proactive customer success in year 2+ and expand our engagement beyond the Top 50 and critically at risk accounts to the entire Enterprise customer base. Our team of three driving diving catches became a team of 30+ in the US, EMEA and APAC, proactively digging in to drive customer success, solve problems in the early stages and drive adoption and renewals. The team continued to grow well beyond 100 after Mark and I left SuccessFactors in January of 2013.

As the Customer Value Team evolved from diving catch to proactive customer success management, we learned a few things that proved critical to achieving success.

  • Customer focus and follow through are more important than being able to say yes to every customer request. Customer Success is not about giving the customer everything that they ask for, rather it is giving them a forum to be heard, having their requests thoughtfully validated and ensuring follow through. 

  • The Customer Success Platform is a critical component of understanding what is happening with the customer base. At SuccessFactors we had the benefit of Jeff Ulrich and Ron Stainbrook developing “SuccessCentral”, a precursor to today’s Gainsight or ClientSuccess. The insights into such metrics as product adoption, support utilization and Customer Value manager health flags proved invaluable in understanding how to get ahead of the issues.

  • Customers want to know what they don’t know. They want to know what others are doing to drive success and learn about relevant benchmarks. They want to be successful-- not difficult, not impatient, not custom-- just successful. Providing customers access to product experts who provided both thought leadership and subject matter expertise proved to be an essential tool in our get well plans. 

  • Customer Success may be the driver of the customer journey post implementation but the CSM can’t drive success alone. Our close partnerships with Product Management, Professional Services, Support and Sales were absolutely critical in delivering a comprehensive customer experience. Support and investment in the function at the executive level was critical to helping us get out of fire fighting mode and into fire prevention and proactive management.

  • Foundational processes like Quarterly Business Reviews, Annual Customer Value Workshops, and Health Assessments are all important tools to managing success at scale but individual account success is ultimately driven by getting into the details with the customer. There are no short cuts to untangling broken processes, re-earning trust after a product failure or consistently earning on-going business in a dynamic market. 

The Customer Value and Success Team at SuccessFactors was founded on solving a critical business issue: unhappy customers typically don’t renew. In the middle of a financial crisis and in a highly competitive market this business challenge takes on increasing importance. Customers that don’t derive the full and promised value from your software in a SaaS enabled world can easily replace you. The best approach, regardless of financial crisis, is proactively driving customer value.

About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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Tuesday, February 23, 2016

Getting that sinking feeling in Customer Success

In Customer Success, whether as an individual contributor managing key accounts or an executive managing a team, it is a constant challenge to balance unique and one-off customer needs with scalable, repeatable and sustainable business practices. Over time, with an effective Customer Success program, strong team governance and smart processes, managing customer success can become routine. Routine enough that many CS organizations have started to develop “playbooks” that individual customer success managers can follow to drive success. Developing repeatable strategies for driving customer success is an incredibly important part of building a world-class CS organization and codifying these into “playbooks” can be a great tool for new CS managers to leverage to understand what has worked in the past and to avoid reinventing the wheel each time. But playbooks are not a silver bullet. Without training and a disciplined and thoughtful approach to Customer Success, playbooks can lead your team off course.

One of our first adventures in learning to sail our boat “Volatility” involved unintentionally sailing into Mavericks, one of the most hazardous surfing destinations in the world. Here waves can top 60 feet and the crash of the surf can be measured on the Richter scale. When I say we unintentionally sailed into Mavericks I don’t mean we were mistaken about where we were or what was about to happen. We were painfully aware. We simply couldn’t do anything about it.

When my wife and I moved aboard “Volatility” in October of 2015, heading into winter and an El Nino season, it was a less than ideal time of year to start living on a sailboat in the Pacific Ocean. Neither of us are experienced sailors but we have taken ocean safety courses and sailing lessons. We purposefully chose a low swell and calm wind day to take our boat out for a shakedown. As we exited Pillar Point Harbor we were both a bit anxious but confident in our abilities for an easy day sail along the coast. And then, things got really exiting really fast. Passing the last break wall and heading into the open ocean we began to fully appreciate that we did not have a sailing instructor with us this time. We were on our own. My wife asked me to use the navigation to pin point our location and plot a course to the critically important first green buoy. The red and green buoys mark the safe channel for boats to pass through to enter and exit the harbor. These markers are especially important at Pillar Point. One one side of the channel is Mavericks. On the other side is another reef that sits just below the surface. The channel is the only safe passage for most boats and especially large sailboats with their deep keels. When I turned on the navigation I accidentally turned on auto-pilot and not to the safe buoy that marks the channel but to the Mavericks warning buoy on the far side of the break, warning ships not to enter. The auto-pilot kicked in, the wheel locked, and the boat turned a path into Mavericks.

Auto-pilot, if not used properly, can be dangerous in any setting. Whether sailing a boat into disaster, failing to manage your career in the face of evolving challenges or failing to adjust the course of your business to changing conditions, auto-pilot can lead you to ruin. In Customer Success, auto-pilot can lead to Customer Success Managers assuming they know what the customer’s challenge is because they have heard it all before. It can lead to CSMs jumping to a proposed solution before they have heard or thought through the business implications for a particular customer. It can lead to well intentioned but incorrect action plans that take a bad situation and make it worse. Auto-pilot and Customer Success Playbooks have a role to play in driving customer success and navigating on the open ocean but you need to know how to use them.

After a few minutes of panic which included frantically trying to adjust the wheel despite the lock, considering how much time we might have to call the Coast Guard for help before it got worse and more than a few visualizations of our boat taking the full brunt of a 60 foot wave, we stopped panicking and started to do what we should have done in the first place. We calmly worked the problem. Talking it through we realized that immediately before the boat took over I had turned on the navigation. After that I had plotted our course. My wife suggested turning everything off to reset. As soon as the navigation was turned off, and along with it the offending auto-pilot, the wheel unlocked and we manually corrected our course. The only harm done was the years off our lives due to the panic.

Playbooks for Customer Success are not the same thing as auto-pilot but they can have the same effect if used improperly by CSMs. Rather than immediately locking in the course for a customer’s success plan and letting the standardized playbook drive the action, effective CSMs need to carefully evaluate each situation, listen to the customer’s feedback and think carefully about the business implications, and then only if the situation warrants, leverage the playbook to drive success. Over time, great Customer Success programs can take on the characteristics of easy, repeatable and scalable processes that consistently drive success. Experienced CSMs and leaders know that it is not that easy. What worked last time might not work next time or for any given customer challenge. The same play executed imperfectly might do more harm than good. And turning on auto-pilot at the wrong time can lead to a sinking feeling for your customers and team.

About David Verhaag 

David is the Vice President, Client Experience at Degreed, the lifelong learning platform. Prior to Degreed, David established and scaled the Customer Success function at Kahuna and HireVue and spent eight+ years with SuccessFactors where he led the development of the global Customer Value team. David lives on a sailboat in Half Moon Bay, CA.

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