In this session, Jason Lemkin receives some valuable insight from Kirsten Helvey, COO of Cornerstone OnDemand, a cloud-based learning and talent management solutions provider. Drawing from her 11 years of experience with rising up in the ranks from employee #30 to her current position in the company, which is now 1500-strong, she talks candidly about the importance of customer success, how to create a thriving culture around people, providing individuals with the opportunity to shine in their current and future roles, upsells versus renewals and “topping” your boss.
Watch the video or read the full transcript below – and grab a ticket for you and your team to the SaaStr Annual 2017!
Jason Lemkin: All right, let’s give it up for Kirsten Helvey from Cornerstone OnDemand.
Jason: Thanks for coming. I’m from LA, this is a treat.
Kirsten Helvey: You’re a wonderful host and your team. This has been an amazing event and I’m really happy to be here. Thanks for inviting me.
Jason: This is on for a couple of reasons. Cornerstone’s an interesting company. It’s one of the…always SaaS from day one, I think?
Kirsten: Day one.
Jason: Day one, right. It’s pretty much in the early two or three companies that have been doing…when was Cornerstone founded?
Jason: 1999, did we even call it SaaS 1999?
Kirsten: What’s interesting is, and I started in March of 2003, my primary role as an account manager, so think about this, there were roughly 30 people. We had eight customers. I came on as account manager, my primary job was to sell SaaS already to companies that we had already sold, because we were dealing with large enterprise customers.
SaaS was very new and we spent our time talking about what it was and the benefits, which I no longer have that conversation today, I have different conversations, but that was the focus because back then, nobody was really adopting SaaS.
Jason: What are the maintenance fees again? You’ve got it wrong.
Kirsten: Exactly. Hey, there are none…
Guess what? We, back in the day, I won’t tell you how often we released, but we did it more than we do today. Little to no change management, did I admit that on stage? But now, we have our own robust processes and everybody gets their seamless updates. We have one code version and it’s been a good ride.
Jason: You have an amazing story. You join one of the iconic SaaS customers early as employee 30, you go through that, you eventually run the whole customer success organization which is super important topic we’ll talk about. IPO 2,000 employees and now, you’re COO. It’s quite a journey and I want to briefly talk about all the things that have changed.
What changes from 30 to 2,000? Then, you’ve had an amazing seat, and that seat has changed over the years.
Kirsten: Yeah, it really has and firstly I’ll say, when I joined, I did not know what I was getting into and didn’t really even think about it that way.
For me, I wanted a job closer to home and didn’t want to be on the road 24/7, so I found a company and I thought, that job’s a no-brainer, I’m down, enabling technology, I’m kind of good at that. Business process, I’m in.
After that, getting on the ground, starting, and really understanding what the company was about, I set out to really make some changes because of my consulting background. One of the things that we needed to do was marry up all those business processes with our customers to the solution that we were selling.
That journey has taken many turns through the years. It’s changed a lot. My role has changed a lot. One of the good things is I make a lot of mistakes and I move on from those. I think that’s key.
The evolution is you have to keep changing what you’re doing, being agile. Somebody just asked me yesterday, not the thing that I hate about my job, what’s the thing that I like. The like is the building. As a startup, you’re building.
The fallacy is, is when you get to a certain size or scale, you stop. If anything, it’s more important to keep building and keep changing how you’re operating. Whether it’s interfacing with your clients or the market, even your competitors. Coopetition is life. That’s the way we do things.
The journey along the way, one of the things for me, is that I fundamentally believe if I don’t learn something new every day, then I need to go be doing something differently because that, to me, is what life is about. It’s about experiencing.
I’ve been able to put those two things together with my job. While I do the non-sexy HR stuff, it’s something that is so important to companies as a whole because employees are your greatest asset. We’ve heard a lot of talk about culture through all the sessions.
“Hey, guess what? Stop talking about it. It’s table stakes.” If you don’t have culture because culture is about your people.
Jason: It is table stakes. It’s table stakes.
Kirsten: I’m always fascinated that we talk about the culture. That’s table stakes. It’s not about a ping pong table or an arcade or a candy wall and the candy wall is on my floor. I don’t really like that. I wish they would put the candy wall on a different floor because I like candy.
It’s about the people. It’s about connecting the people. You’re at war. You need to be in the trenches. You need to trust each other. That, to me, needs to be inherent. If you don’t have people who are signed up for that, they shouldn’t be there.
Jason: Let’s take it on that a little bit because I agree with you. You’ve been a Cornerstone from 30 to 2,000 or so. I love to hear the stories of the founder that wrote the seven principles on the Google Doc and posted it.
That was magic. It’s table stakes and doesn’t matter either. The employees are the culture. The color of the foosball isn’t.
Cornerstone has managed to have an enduring culture. Maybe it’s a benefit to do it in LA, outside of SA. What do you say? How do I create a great culture for my company?
Everyone here has something. Most of the folks here are a lot like Cornerstone when you joined and they probable have a good culture. How do I build a great culture?
Kirsten: What’s most important is that you acknowledge it and then work hard to maintain it. My boss, Adam Miller, who is the founder and still is the CEO today, always had a vision. That vision drove the culture. I’m really lucky that I had someone who cared about the vision of what we were doing and that it was a lifelong goal for him.
At the time, it was educating the world. Now, we’re about realizing people’s potential. That evolution has changed slightly, but educating the world and helping people realize their potential are not that far off.
The one thing is you got to have a mission and stay true to that mission. Everybody needs to be there for that mission.
We’ve made mistakes along the way because as you get to certain stages, you start hiring people for different things. That’s where you need to be really certain of what you’re hiring for, for each stage. You also need to be certain that folks that are going to get you from A to B may not get you from B to C, and so on.
Taking a step back, I heard a lot of that, it’s absolutely true. You need to be evaluating it all times, at all stages. Who’s on the team? Are they the right people on the team? Because you always have to be a step ahead and committed to that vision.
You have to follow the vision. You need the skillsets and the people to follow that vision.
Jason: Let’s talk about that a little bit. We talked about it a little with Phil before. I’ve got these great people on my team, but then I hit 10 million, 20 million, you’ve seen the whole journey. How do you I think about great employees but they’re not in the right fit for the next stage?
They’re great. They’re A players. I’m loyal. How do I deal with that scenario?
Kirsten: Cornerstone is actually particularly good at that. In the unsexy HR world, they call talent mobility. We’re very good.
Most people at Cornerstone have had three to four jobs at Cornerstone. Especially if they’re talented people, we’ll move them in a role that they’re better suited for at that time. Some people, you just got to cut bait. In some cases, they self-select out because they realize it.
Offering the career paths and the mobility is critical. Especially for folks who have done an excellent job for you at that period, there’s probably something else that they can do and be a superstar at.
What happens also in the startup world, you got a lot of A players and the culture is A player. The other key thing is you tend to have a lot of individual heroes…
Jason: A lot of individual heroes.
Kirsten: …especially as you’re growing rapidly.
What happens? There comes a time where actually an individual hero is a detriment to your success. You got to make that switch because then it becomes it’s no longer I, “I can get that done,” because the “I”s don’t scale. The “We’s” do. Having people who can make that transformation is critical.
Personally, I’ve had challenges. Adam, my boss, will tell you I’ve had some bad years, but I’ve had some good years. Hopefully, he’ll say mostly good years. Part of that is that journey of being able to scale and having the foresight to know what you, personally, are either not good at or maybe you’re not scaling and having that self-awareness to then change that.
That is critical as you go through the stages. The other key thing is you become an individual contributor to a manager making that switch. Some people are successful. Some are definitely not.
Jason: How do I know? If I’m an individual contributor here, how do I know when I’m ready? How do you coach people?
Kirsten: Part of that is having that plan with your manager around making that switch and understanding exactly what it takes to be a good manager.
One of my sayings is, “Forget the MBA. Get a psychology degree.” If I give anybody any advice, that’s my next reincarnation, I’m going to be a psychologist to all your startups, because it’s all about people. Motivating people. Helping people achieve their goals or realize their potential.
That is communication. If you can’t communicate what you want and how to get there…I had one employee who, for many years, was the go-to person. Not scalable. Things were breaking down. That person didn’t understand why he was not getting promoted.
Finally, we created a plan. That plan is we tried to give this person direct reports and it failed. That one thing we did was create a clear pass and plan. We measured it and monitored it. Now that person is a superstar manager doing really well, but there was a point in time where we actually took a step back and we’re like, “What are we going to do with this person?”
Jason: How much longer did it take her to grow eventually into a good manager? How much longer then than she’d hoped? How long was the time?
Kirsten: It took a lot longer. That person…
Jason: A couple of more years.
Kirsten: A couple of more years.
Jason: A couple of more years.
Kirsten: Part of that though is the lack of self-awareness. If you can do anything for yourself, take a look in the mirror. Know what things are going well or not. People will tell you if you’re being successful or not and, what are the things that you needed to change if you ask.
They may not proactively share it with you, but if you ask them they’ll give you that direct feedback. On my team, everybody knows. I’m pretty direct with the feedback, good and bad. I’m an equal opportunity jerk, as it will, that you got to give the feedback.
Jason: It’s meritocratic jerkiness.
Kirsten: There you go.
Jason: It comes from honesty in the right place. Let me ask you a related question. I see this especially often in sales, but it happens in every functional area really at this point.
I see someone that’s killing it as an individual contributor. You know they need a couple of years of seasoning to be manager, but they’re not going to listen. Even though they love Cornerstone or wherever, it could be any company, they have got to be a manager tomorrow.
What’s your advice? How do you manage that one? They have such drive, they have got to do it.
Kirsten: Firstly, I always love the drive. I love the people who want to go after it. As my boss, Adam, always says to me, “You always like the disruptors.” I do. I like the people who are going to shake the boat, rattle it, because that’s how we get our best work, is when we’re thinking not about the norm.
Around all of that is that one-on-one coaching. I often tell people to go talk to people in the roles that they want and what are the things that that person does to be successful. All of this is people. It’s the people business.
A lot of folks, you can learn some of that. Some of it, you can’t. I’m all about street-smarts. You got to be street-smart. You got to be able to read a room. You have to know how to adjust either in a sales conversation, a service conversation, or even an internal conversation.
Those skills are really what’s paramount. Having people focus on some of that and looking in the mirror is one of the key things that I do. I have told some people, “Look, you’re just not ready.” Sometimes they need to hear that.
If they choose not take that advice and, in some cases, they’ll leave, hopefully you’ve taught them a lesson. That lesson will help them in their career moving forward.
Sometimes you have to fail. A lot of the times, they fail and then they want to come back.
Jason: Are they allowed back?
Kirsten: Certain folks are allowed back. As a rule, we have a policy that, in certain departments, you’re not coming back.
Jason: Varies by department.
Jason: Let me ask you a related question because this is such an interesting conversation, the other one that a lot of founders struggle with. One is if someone can’t scale to an existing role, you try and find them another place they could be, which is great. That’s how you build that enduring organization.
Jason: A related one is how do you approach the tough topic of topping one? For some folks, it’s not tough. They’re just like, “I’m going to top Linda tomorrow.”
For most of us, it’s a tough thing to think about. How do you top someone? What’s your advice to that challenge?
Kirsten: That is actually a tough question.
Jason: “Here’s your boss, Linda.” [laughs] I know you didn’t even meet her before today. Now, she’s your boss. She’s the RSVP.
Kirsten: I’ve had that happened. I’ve also been the person who has come in over…
Jason: You’re the COO. Apparently, you’ve been a topper.
Kirsten: Earlier in my career, I actually became the boss of my boss. Super awkward, by the way.
Jason: Super awkward.
Kirsten: There are conversations that have to be had. It’s all about the vision and getting to that next stage.
One of the things that I try to do and it’s really hard in today’s environment, you can’t think three years out. Crap, I think six months out from a goal standpoint because everything is changing so quickly, but I need to know where do I need to get to. I’m a dreamer.
I’m a dreamer as an individual. I always have this in my head, this big thing out there that I want to achieve. Part of that is having those conversations, getting people to know what that big dream is, related to business, sometimes it’s personal too, and having those discussions.
I do them directly. I don’t like to beat around the bush. I always give the folks the opportunity to go along for the ride. The one thing that we don’t hear so much and I had this conversation last night at a meeting is, nobody tells you all the bad stuff you have to deal with in startup land, in scaling and growing.
Having to have those tough conversations with folks about whether or not they can scale, it’s tough.
Jason: How transparent should you be?
Kirsten: In some ways, you have to be transparent. It’s better for the individual. I am a no bullshit type of person. I’d rather tell you straight.
It’s better to have people know where you stand than to surprise anyone. That’s just not good because, guess what? It’s a small industry. Technology is very small. You will always run into someone whom you’ve worked with that you know that knows someone.
If you can do it graciously, classy, and it’s never about putting the individual down. It’s about the business. It’s never personal in the sense of, it’s about you, the individual. I always try to focus on where is the business going and what do we need to drive the business.
Jason: A lot of us struggle with this. When you go to make a hire and you’re just not sure, you hire or a VP or a director or whatever, “I hope that in a year you grow and you’re still the VP, but I just don’t know. You’re an overachiever. You’re a stretch hire.”
Do you tell that person that’s hyper ambitious when you hire them that I don’t know if you’re going to be the VP or director here?
Kirsten: Yeah, absolutely.
Jason: You tell him even on…
Kirsten: You absolutely let that person know because you got to give them the motivation to really be at their best and perform the best and a lot of times, I will hire people especially into new things we’re creating. I will say, “I don’t know what your path is, but trust me, if we’re performing and working together, I will create a path.” That is truly important. Transparency over all, you have to have it because that goes back to our beginning discussion around people.
People are your biggest asset. You want to keep the people who are driving the vision of the business and one of the ways you do it is you treat them with respect.
Jason: I want to make sure we spend some time on customer success, because I had to figure out what the heck customer success was. I don’t even really understand it until year three because then you get real renewal, like you’re three of a startup, you start getting real renewals and you start getting real churn.
You’ve seen customer success, I think from something that was account managements to a hack thing and now, we’re trying to make it a science.
What is state-of-the-art in customer success today, and what’s changed?
Kirsten: Firstly, I got hired to save a big customer. That was the sole purpose for my existence.
Jason: You have one account.
Kirsten: Yeah, I ended up having eight. You’ve got one account and it’s up to you to save that account. I think that we’ve always had customer success, now it’s grown into something different, but knock knock, if you don’t have customers, you don’t have a business.
There’s always been…I love what Phil said about the cocaine of a new sale, well, I have always been about the crack of the clients, and hey, your clients are your biggest…they’re your business.
Make them successful, focus on your clients, I think, along the way, part of what I have spent my time at Cornerstone, is really evangelizing that client-centric DNA, so start with it. Don’t be a product company, be a client company.
Be a company that is providing a solution or solving a problem for your clients, who by the way, pay your bills. That to me, I’m logical, not that bright. No, I’m just kidding. But, it’s just logic, and I think that along the years, we’ve done many things and I think the best thing we did is make the investment. It cost a lot less to upsell than to acquire a new customer.
Jason: A lot less.
Kirsten: Knowing that and spending the time, I’m particularly proud of our retention rate, we’re at 95, just above 95 percent dollar-rated retention rate since inception.
We focus on really delivering the right experience and it has changed, actually, it almost changes every year in a lot of ways because based on wonderful new technologies and data. Now we’re all software and data companies, and it’s what do you do with the data to help you drive your business.
Customer success today is about knowing the science of your customers, and knowing all aspects. Back in the day, we track it on spreadsheets…that sounds about right.
Now, it’s very metrics driven and thankfully to some of the new SaaS companies out there, you can automate a lot of it. Having that touch, the one to many is obviously the way to scale at when you have thousands of customers and depending on the segments, but every client is important and having that focus no matter how big or small, and we’ve got some whales and we have very tiny customers.
They all need to feel that they’re getting value and that you are giving them what they need to be successful, because at the end of the day, the outcomes of your clients are what you need to hang your hat on.
Of course, it’s new sales, but those new sales need to translate into multi-year contracts. To focus on that retention and the renewals is critical and there’s often significant amount of revenue to be tapped in that install base. One of the things that Phil mentioned too was a lot of times, you don’t focus on that, it’s right there, it’s in front of your face. Knowing that and focusing on it and setting up the processes to support it, is critical.
Jason: When you’re running customer success, were you focusing Adam on it, did you have to compete for mind share, did you give him quotas and budgets for customer visits or how did you get the resources that you needed?
Kirsten: In particular, Cornerstone has been good in understanding working with our clients. Services as a whole has always been a laggard to anything sales-related, it’s just the way you grow your business. You’re not going to spend the money that you don’t have on necessarily servicing versus acquiring. It is a balance, and it is about figuring out how to do it with less.
You’re always going to be behind on resources, so you have to be able to. That’s why some of the new science out there is amazing because you can do what you need to do with fewer people and still have a very high-touch, very personal connection with your clients.
One of the things about Cornerstone, many of our clients say, “We buy you because of your people.”
You want to have the people touch which obviously cost more but it’s balancing that with automation and science to really create the right methodology and ultimately being able to show a retention rate and uptick in renewals, all of our CSMs are bonused on a number of those metrics, so it’s in their best interest to get a renewal or have an upsell.
Jason: How do juggle those two, because sometimes, renewal and upsell, there’s a conflict. Listen, I love the upsell, but the last thing I want to do is lose GE or Google to customers, so where did you learn about that conflict between upsell and renewal?
Kirsten: It’s a lovely dance, a nice waltz together. It’s really a partnership. Our client sales team or account management really does all of the renewals and truly the upsells, but the client success team is the business development team for the account management team. That’s critical.
Jason: Walk us through that…
Kirsten: If you think about it, this client success manager is responsible for developing relationships at certain levels, in our world, they’re responsible for the utilization of our solution, really making that solution sticky.
Number one, is helping clients realize the value and the outcomes that they expected. That’s their number one objective, but with that, they are uncovering the needs, because we’re talking about what are the goals of that organization, how do we align.
Out of that, the opportunities flow and connecting the dots and having that close partnership with account management or client sales, whatever you call those folks in your world, is critical.
They should partner, whether it’s meeting weekly or doing it with a solution. However, that works for you at your particular scale, when you have large teams, and we now we have fairly large teams. My team alone is a third of the company, but you have to facilitate the relationship building internally to benefit the client. Those relationships have to happen to then benefit clients.
Jason: One last thing I want to get in because we’re over in time, but you and I were talking before we had a great conversation, because you’ve gone from employee 30 to COO, especially for folks here that are VPs and driven folks, about lessons you learned about promoting yourself and raising your hand and being recognized versus being the heads down to meritocratic.
If you want to be successful, how do you promote yourself and does things get easier and what do you have to do to become a COO?
Kirsten: It’s a great question. I would argue that, I actually haven’t done a great job with that. I do have a lot of lessons learned. I was always focused on doing a good job.
Jason: Doing a good job, you’ll be recognized.
Kirsten: I will be recognized. Yeah, it just doesn’t work that way.
Jason: Necessary but not sufficient, right?
Kirsten: Yes. Why do I say that? It’s because you have to articulate your value and the things that you’re bringing. People aren’t just going to see it. Part of that is relationships. One of the ways that more recently is having those relationships and partnerships and being a trusted person, but then being able to translate that.
For me, one of the defining moments was when I finally realized, “You know what, I don’t need this shit anymore, if I want to leave, I will, but I don’t want to leave because I love this, I love what I do.” Having that attitude actually changed really how I perceive myself and the value of what I was doing and where I could go, I think that was a very defining moment.
I’m also a mother with young kids and I think, that, happening in my life forced me to be way more specific about how I spend my time and what I really wanted and ultimately, I go back to, I love what i do, I love the company, I love the people there.
We have a foundation that really embodies what we do and I would never leave my job for another job, because I have an awesome job, that I think is something you have to look in the mirror and figure out. Is this what you want to be doing? I said before, I’m a dreamer, so I put stuff out there and not even consciously, I have stepping stones to get there and I make decisions that lead me down a path.
If there’s one thing I learned too, a little bit of luck helps so make sure you’re on the lookout for the luck or the introductions and the people. SaaStr Annual is a great place to do that. It’s making those connections because that will lead to either a next step or luck whether it’s in your current role or your next role. Creating that web, there are people who do that wonderfully, and I would say, focus on that.
Jason: Everyone’s got to get better at developing that web. I wasn’t great at it either. It’s great advice. Kirsten, thank you very much. This was terrific.
Kirsten: Thank you.
Jason: Really great. Thank you.
(Cross-posted @ SaaStr)