Aneel Bhusri is the chairman, co-CEO, and co-founder of Workday, and a former managing partner at Greylock. But despite his accomplished resumé, he says, “There’s nobody that comes pre-built to be a CEO.”

So how did he get there, and what signals to him that someone has what it takes? Number one, Bhusri says: “Do they have a compelling vision? Do they truly have a vision — not an idea, but a vision? Can they paint a picture of what their company and their product and their markets can look like? Number two: Do they attract great people?”

Those two pieces — a compelling product and the ability to find and retain great people, both embedded in clear company values — are the building blocks for Bhusri, who co-runs a company originally built for HR that’s now on its way to $10 billion in revenue. Because while company culture matters for your workforce, it also matters for keeping work.

When asked about the Great Resignation, Bhusri doesn’t mince words: “If you don’t have happy employees, you’re not going to have happy customers.” And happy, truly listened-to customers are what keep businesses booming and innovating at all levels of scale.

“There’s nothing that’s more powerful in enterprise — assuming you’ve got a great product, you’ve hired the right people — nothing more powerful than a happy customer,” says Bhusri. “If you stay close to your customers, they’ll tell you what to build. They’ll tell you what’s missing. They’ll tell you what they really need to solve their business issues.”

Bhusri spoke with Greylock General Partner Sarah Guo  as part of Greylock’s Iconversations series. During the discussion, Bhusri shared his advice on finding and hiring people who share the company’s values, retaining employees through opportunity and education, and what he’d study if he were starting college today.

You can watch a video from the event on our YouTube channel here, and you can listen to the conversation on the Greymatter podcast here:



Episode Transcript

Sarah Guo:
Hi, everyone. Welcome to Iconversations. I’m Sarah Guo, a general partner at Greylock.

Today, I’m honored to welcome my friend, mentor, and former leader, Aneel Bhusri. As an extraordinary triple threat of technologist, leader, and investor, he’s the chairman, co-CEO, and co-founder of Workday. He’s also a former managing partner at Greylock, and he really co-led Greylock’s reinvention into a leading Silicon Valley–based, software-focused venture firm. He [also] remains a valued advisory partner with us.

At Greylock, he invested in entrepreneurs, driving fundamental innovations in SaaS identity with Okta, flash storage with Pure, big data with Cloudera, and many others. Aneel’s the reason I’m in venture capital, having recruited me almost a decade ago, for which I am eternally grateful. And he’s the single leader whom I’ve seen most consistently focus on innovation and culture in my career.

Aneel, thanks so much for being here. I’ve been looking forward to this conversation. Let’s dive in.

Aneel Bhusri:
It’s good to be with you, Sarah. Yeah, let’s have fun.

Workday is clearly one of the most important software companies of today: $75 billion worth of market cap, over $3 billion of subscription revenue — en route to $10 billion — and 50-percent-plus of the Fortune 500 as customers. It’s also a company that’s committed to using its influence and resources for positive impact.

It’s taken you a huge journey to get here. I want to start by backing up a little. The company really exists today because of the relationship you and your co-founder, Dave Duffield, formed almost 30 years ago. Can you tell us a little bit about the beginning and how that led to where you are today?

I met Dave in 1992. I was a summer intern at Norwest Venture Capital, working with this guy named George Still, who continues to be a mentor and is on the Workday board.

And then as I was finishing up school — I really liked Dave — I was going to move back to New York and go into venture capital. This was 1993. And I ran into George at a Burger King of all places. And he said, “Go talk to Dave.” So I talked to Dave, he took me out for a beer. PeopleSoft was an emerging company at the time. It wasn’t huge, but it was public, and Dave was a legend already.

The fact that he took me out for beer, I immediately wanted to work for him. I thought, “Hey, I’ll learn a lot from this great leader. I’ll do HR software for two to three years. I can’t see doing HR software for that much longer.” And 30 years later, I’m still in HR software.

But we started that friendship back then, and we’ve been together now coming up on our 29th year. And I just feel very fortunate to have crossed paths with a great leader, a great human being, a great visionary [and] entrepreneur at such a young age. Having him as a mentor definitely shortened my learning curve in many areas.

You were working for Dave at PeopleSoft, and you moved quickly up the ranks there. What were some of the key learnings? What did he teach you, or what did you teach each other, on the product front, the culture front?

I’d say a lot of it was about values and running a company based on a set of values. And when you go back to the ’90s, that wasn’t a popular thing. Being a great place to work was not on everybody’s radar. So Dave was pretty unique that way. He always led by example.

At that time, everybody was talking about the customer being number one. And he said, “No, employees are number one.” And to this day, I remember his famous quote, and I use it all the time: “I’ve never met a company that has happy customers and unhappy employees.” It just doesn’t work that way.

If you don’t have happy employees, you’re not going to have happy customers.

He focused on innovation, on having fun, on integrity. And we really ran the business on those values. And today those are exactly the same values we have at Workday. It’s changed because the world has changed so much in how we use those values. But I learned a lot from him [and] that perspective.

The other part was, in the tech world, if you don’t keep innovating, you ultimately become irrelevant. And so he was a relentless innovator, pushing and pushing and pushing, and he was the first CEO I’d worked for.

And so, as I’ve been working with him and running Workday for the last 15 years, I’d have that same relentless push towards innovation.

“Once you realize that the threats don’t come from the other big companies — they come from that next startup that’s going to create something from scratch — that’s going to be a leap.”

You have to be on the lookout for those kind of companies all the time and make sure that you’re thinking like a startup all the time. That was one of the things about Dave: Dave always thinks like a startup CEO, even when we’re running a huge company.

I’m sure this is not a favorite experience of yours, but it sounds like it was a formative one — you and Dave are innovators, and you’re swallowed up by a company that is more of an incumbent. So what happened in the PeopleSoft/Oracle acquisition, and how did that change your thinking as a leader?

Well, so the way I got to Greylock was [that], in 1999, the board and Dave came to the conclusion that the company needed a new CEO. Dave just was out of gas and didn’t want to do it anymore. I was the heir apparent, but I wasn’t ready. And in hindsight, I know I totally wasn’t ready.

So they went and got a CEO from the outside. And for the first three years, it worked just fine. This person drove higher levels of profitability. We were a better-run company, but we started to lose our soul. And we were not as focused on employees, we weren’t as focused on customers, on innovation.

Fast forward to 2003, and the culture was changing. We buy a company called JD Edwards, and that causes Oracle to want to buy the two companies. And they launch a hostile takeover. [It lasts] 18 months, [and] the Department of Justice gets involved.

Towards the tail end, Dave and I are still on the board, but we’re not running the company. We’ve been out of the company for four years. I’m full-time at Greylock. Towards the end, the board fires that new CEO, asks Dave to come back [as] CEO. And Dave asked me to go with him. So I took a four-month leave from Greylock.

And we did our best to keep the company independent. PeopleSoft was a great company, but we didn’t prevail.

But being back in that world, we realized that, Hey, we’re going through a big shift. We used to call that software as a service back then. Now everybody calls it cloud. But it was 2003, 2004. It was very early on. And you could see that PeopleSoft and SAP and Oracle customers were struggling with on-premise software. A little company called Salesforce was beginning to get a lot of traction in CRM. And we thought, Well, if PeopleSoft’s going to survive, we’re going to jump into this new world.

We didn’t get that chance, but a few months later, we were able to start Workday. And so at some level, I’m grateful to Oracle and Larry Ellison, because I think it’d be really, really hard to start to do the disruptive innovation we did from scratch as a 7,000 person, billion-dollar revenue kind of company. [As a] startup, we had nothing to lose. So we just went all in on software as a service.

You joined Greylock in 1999. What drew you to investing?

I got there — the world was so consumer back in ’99 — and I just tried to invest in some consumer companies. Every time I invest[ed] in a consumer company, we lost a lot of money, and I thought, “I got to bring on somebody who knows consumer.” Dave (Sze) was at Excite@Home. We were really good friends from business school, and I talked him into joining. I think I’ve had a bigger impact on Greylock from hiring Dave Sze than any of my own investments. The guy is a rockstar and we remain close to this day, but I was the one who actually recruited him.

The first few years were tough because we were the two young West Coast partners in an East Coast firm, competing against the same set of competitors. Other than Andreessen Horowitz, it’s basically the same group — Sequoia, Benchmark, Accel — and they were all fully West Coast. And so that was the point we made the decision to become a West Coast firm.

I would say David Sze would also suggest that his early years were tough at Greylock. He had the mirror experience of yours, where he’s like, “I tried to be an enterprise guy and I tried to invest in virtualization infrastructure and it just didn’t work.” But it all worked out in the end.

Was there a part of your brain, or helping entrepreneurs, that fundamentally you found attractive about investing as well?

Well, the first thing is, I love startups. Just love being around the energy of entrepreneurs. I’ve seen a lot just working with Dave in the early days of PeopleSoft. And I think of myself as an entrepreneur. Creating something from nothing is a really cool experience.

And what I particularly liked was that initial go-to-market phase — where you come up with a product, need to map that product to the requirements of the market, and you bring out that version one. If you get version one right, it’s a whole different ball game than the people that iterate their way in version four or five to get it right. You just have a huge head start.

And I really focused on working with those kinds of startups, which led me to work with a lot of technical founders, folks that had a great product idea or technical idea who wanted some help shaping the business. That’s really what attracted me to it, so much so that it is the reason [why], when I got a chance to start Workday, I went off and did that, because I just love that startup phase.

Yeah. That phase and working with some of those extraordinary product and technological technical founders is my favorite part, too.

Your track record at Greylock includes incredible companies, such as Okta and Pure and Cloudera. Besides being leading technologists, what are some of the main characteristics you look for in founders?

Well, I’d say the leading technologist is definitely the most important, and sometimes overlooked. I’m a big believer in Clay Christensen’s “Innovator’s Dilemma.” Disruptive technologies come from below. If you’re a startup with a product that’s 10-percent better, it’s not going to be good enough. I’m going to put aside consumer [businesses]; I don’t know consumer that well. But, [in] enterprise, you’ve got to be 50-, 80-, 90-percent better than the legacy products. And that usually comes from an investment in breakthrough technology.

Data Domain was the first one, then Okta, Polyserve, Pure Storage, Cloudera. They’re all based on really hard-to-do technology. If it’s easy to do, you can have a lot of competitors. If it’s hard to do and you break through, you have a huge advantage.

And then the second piece was about identifying big markets. That’s always a tricky one, because big markets don’t present themselves with a poster sign saying We’re a big market, but in the case of Data Domain, backup was being done on a tape.

The founder was a Princeton professor who came up with an idea to compress data in a way that made the cost of disk the same as the cost of tape. But now you had all the benefits of having the data be [in] digital versus analog forms. And I think that changed everything in that market.

“You’re always looking for that in enterprise — that replacement market. ‘What product or market can I replace if I get it right?'”

In the case of Workday, we’re looking to replace SAP, PeopleSoft, Oracle. It’s generally a zero-sum game in enterprise. You’ve got to figure out who you’re going to replace if you’re going to build a big company.

When it comes down to the individuals — other than being technical founders, they had to be people that were value-based. It’s the thing I learned from Dave. Focus on integrity, focus on doing business the right way.

As you know, startups are up and down. There’s no straight path for success. There’s going to be tough times. And when they are, you’ve got to rely on your values to get you through that. The loyalty of the team, the commitment of the investors and everybody being on the same page to make it work. And if you don’t have that, there’s a good chance it falls apart.

I notice that you don’t really talk about many of the skills that one might look for in a CEO over time when you think about founders. Let’s say enterprise sales, [which] is probably the most obvious, or distribution thinking, or the executive ability to communicate a vision. How do you think about these founders that are extraordinary, but are not complete when you compare them to, for example, you, 30 years later as a co-CEO?

Well, I didn’t have a lot of those experiences starting out. When I look at a founder, [my primary question is] do they have a compelling vision? Do they truly have a vision — not an idea, but a vision? Can they paint a picture of what their company and their product and their markets can look like over the next three to four or five years? That to me is number one by far.

Number two, do they attract great people? All those things, like, the revenue side: I’ve never been on the sales side, but we’ve done OK on sales because I’ve learned to identify top sales talent and then how to recruit them. And being that recruiter is really killer.

What goes along with all that, for a founder, is not just that compelling vision, but being a great communicator. Steve Jobs set the bar really high, but you look at a lot of the great entrepreneurs — if they’re not great communicators at the start, they figure out that skillset. You can hire a lot of skills out there if you can communicate a really compelling vision around a great product and build a team around you. There’s nobody that comes pre-built to be a CEO. Although, I’d say that product vision is the most important thing to being a great CEO.

When you think about the role that you as a venture investor or a board member can play, and then the other seat, sitting as a founder, how you can get help in that all-important goal of recruiting the best talent…

I was talking to Adam Aarons, and he was like, “Well, I joined Okta because Aneel told me to join Okta. Todd and Freddy, those were weird guys, but they were talented, and I believed in the cloud and I thought they had something. They couldn’t communicate it at the time, but it made sense. The CEOs cared about passwords.” And Adam was like, “But really, Aneel told me to go there and it was a good decision.” Very talented sales guy. Very talented sales person, and an extraordinary, extraordinary needle mover for Okta.

How do you think about how founders and venture capitalists can team up to do that recruiting?

It’s been an interesting journey.

“By the nature of what founders do and entrepreneurs do, you have to be an optimist. So you just go for it. You go for that brass ring.”

Venture capitalists, I learned as an investor, try to provide the guardrail. So while the company’s going for the brass ring, it doesn’t go off the rails. And so you have to be somewhat of a, maybe not a cynic, but maybe a skeptic. Ask all the hard questions, constantly push the management team on, Do you have the right strategy? Do we have the right business model? Most importantly, do we have the right team? The best teams don’t win all the time, but they sure win a lot of the time. And so that is probably where I learned the most.

As a CEO at Workday, I learned so much from my time at Greylock about recognizing world-class talent and constantly realizing that it’s not just one and done, you’ve got to constantly bring in new talent.

The person running sales at Workday in the early days was phenomenal, Mike Duffield. The person running it today is phenomenal, Doug Robinson. One person was optimized for $50 million of revenue. One person was optimized for $5 billion of revenue — [they just had] very different skill sets, and you have to be very focused on that.

I think the job of the venture capitalist is not to give answers, but to ask hard questions. And at the end of the day, it’s not to meddle in operations, it’s to be a sounding board for operations, to push the CEO to do all the right things.

I allow myself to get pushed by the board more than I probably would’ve been comfortable with at Workday if I hadn’t been through the venture capital experience, because I realize I’m heads-down. I’m very focused on what we’re doing, and they have a broad perspective, and we all want what’s best for Workday. And so it’s made me a better CEO, just being able to listen to the advice of the outside board members.

For all of the entrepreneurs in the audience, many hope to someday do what you’ve done with Workday — challenging extremely established legacy incumbents. What advice would you give to entrepreneurs facing that competitive dynamic?

First and foremost, come up with a product that really is disruptive, that solves a real need. Doesn’t have to be the 100-percent solution upfront for all customers, but it needs to be a 100-percent solution for some segment of the market. Maybe it’s medium customers, maybe it’s in a particular industry, but come up with a compelling product. And for those first 25 or 30 customers, make them wildly successful, because there’s nothing that’s more powerful in enterprise — assuming you’ve got a great product, you’ve hired the right people — nothing more powerful than a happy customer.

I tease our sales people all the time [that] I’d always take a happy customer over a great salesperson. Because a happy customer’s got no agenda other than to say, “I love this product.” And other customers want to hear that. So getting that first wave of customers up and running and successful with the product, it’s worth everything.

And I see, historically, people miss that. They are so focused on the innovation on the product, on selling more, that customer satisfaction is sort of something we deal with later. That’s a mistake. You’ve got to deal with customer satisfaction from day one and build it into your DNA.

I think [that’s] one thing that companies perhaps are missing right now is in the race for growth and the sort of extremely strong focus on year one, year two revenues. We actually have seen companies in the past that have [gotten] to amazing year one, year two, year three revenues, but in a SaaS business, you can even lock people into multi year contracts. If it’s not valuable, it will eventually turn and your business will be in trouble.


And I think that is actually a dynamic that we’re beginning to see across startups who don’t have that focus that you describe.

Yeah. And if you stay close to your customers, they’ll tell you what to build. They’ll tell you what’s missing. They’ll tell you what they really need to solve their business issues.

I remember in the early days at Workday, we were delivering this new HR system, and a customer said, “We just need a better org chart. We’re a big company. We don’t even know where our people are.” And we’re like, “OK, well, no one’s brought that up before.” I asked all of our customers, they said, “Yeah, we’d love a better org chart.” And so from very early on, we started working on our org chart and a flexible way to manage it.

If you’re close with your customers, they’ll give you the roadmap. They won’t come up with a new innovation, but they’ll tell you what problems they have. And if you can solve their problems for them, you’ll get to be more and more valuable to them.

One thing I hear from the founders and CEOs that I work with is concern about how to stay close to customers as they get larger, and how to make that a part of the culture of the company. Doing it when you’re a 10-person team is actually possible because you’re like, “Well, I, Aneel, I’m going to go see every customer and they’re going to have my cell phone number and we’re going to talk and I’m going to understand that they want the org chart.”

But as our companies get to 100 and 200 and 1,000 or 20,000 people, that gets more challenging. What have you done to try to keep the company close to customers?

Well, number one, you have to start leveraging technology just to make sure that you’re listening to all of your customers. You’re giving them tools to communicate. All of the customers from number one to number 3,000 — I think we have like 7,000, 8,000, but on the HR side, about 3,000 — they have my email. So if there’s an issue they’re going to email me directly. And then I will figure out how to navigate Workday to get them an answer or get their problem solved.

For that top group of customers that really drive Workday, maybe it’s 10- to 15-percent, we whack it up across the executive management team. So across about 10 people, we each have about 25 customers we check in with on a pretty regular basis. That gets us to about 10-percent of our base, and [we] ad hoc will check in with others. But that’s a good proxy for, “Hey, if we know what 10-percent of the largest customers are doing and how they’re reacting to Workday, we’ll probably have a pretty good sense.” For the rest, it’s using the tools and it’s also the compensation plans.

Historically, we’ve always had part of everyone in the company’s annual compensation tied to customer success. We measure it religiously. It’s always been above 95%. And so when there are issues, they tend to surface pretty quickly because people know that we care. And if they’re not getting an answer from our team, they tend to escalate it pretty quickly.

The short answer is, pay attention to your bigger customers. That’s where the problems arise. Use technology for the rest. And then for your employees, put in incentives that every employee in the company cares about customer satisfaction.

We are going to talk in detail more about what makes Workday Workday and a transformational leader in enterprise software. Before we do that, can you just orient us a little bit more about where the company is today and what the product lines are in your footprint?

Sure. We are now almost 15,000 employees. [We’re] pretty much in every major market in the U.S. We’ll pass $5 billion in revenues this year on our way to $10 billion, which is our goal.

We started out as HR. HR was a really great place to start out a cloud company because it’s an application that touches every employee, and a big part of cloud is having a much better user experience than traditional enterprise applications, so that was a natural place. We moved into finance. And from there, we sort of developed a vision that we call “Plan, Execute, Analyze, and Extend.”

We started out with HR and finance, and those are transactional applications, but we quickly realized that planning was a huge part of any good business. You need a planning tool in front to inform you how you’re going to execute. And then you need analysis tools on the backend to analyze the results, and you feed those results back into the planning cycle again. We plan with Workday Planning or Workday Adaptive Planning. We execute with HR, finance, and now procurement. We analyze with Prism Analytics.

The idea is to have a closed loop, so that — especially when you think about the world of COVID: the world was changing so rapidly, none of us knew what baseline business was, and the plans were literally changing almost every week — the cool way we’ve built it is when the plan changes, it updates the transactional systems. You get the results, you get this model of continuous planning, which I think is the future of business.

And the ”extend” part is something we’ve introduced recently, which is letting customers add capabilities in the Workday platform that we’re not building, so they can have that extensibility framework. But “plan, execute, and analyze” is really what we’re trying to do for that set of administrative applications — HR, finance, procurement — that naturally belong together.

So you started with this premise of software as a service, the cloud. You’ve since gone to plan, execute, analyze, extend. This is a much broader vision than just PeopleSoft in the cloud. How did you arrive at the conclusion that: We need to extend the platform for our customers?

It again comes back to talking to customers. If I had to do it all over again — after launching the Workday HR applications or HCM, we launched Workday core accounting financials — in hindsight, I would’ve done planning first because that’s where the pain point was.

So we go to these large companies, and they say, “At some point we want to replace our core accounting system with a cloud-based system, but right now we’re struggling with planning.”

And so Workday started off on building its own planning system and realized we were too far behind the market, so we acquired Adaptive. We’ve since sown Adaptive into the architecture so it’s like a native application. But it really was listening to customers and recognizing that the pain point for the CFO office at the time was planning, not transactions. And now, as we’re going through post-COVID, the need for a next generation transactional system — which was really maybe lower priority five years ago — is very high priority now.

The analysis piece is the same thing. Customers would say how hard it was to get all their transactional data into yet another system [so] that they could analyze the results. And by the time they analyzed the results, the data was stale. And so the way our analytics work, it comes pre-populated with the Workday data model. It’s based on Spark, and it allows you to just absorb a lot of data very quickly and get to sort of preconfigured answers about what problems you’re trying to solve. We just basically knocked down the problems that people felt were extensions of their transactional systems.

We’re still in the office of the CFO, the office of the CHRO, and that’s the way we think about it: We think about it outside in. But what those offices need is now very different than what they needed a decade ago. Talent was not on the market, was not on the radar 20 years ago at PeopleSoft. Planning was not on the radar of CFOs 20 years ago. It’s an emerging category. The technology world’s changed a lot, but so has the business world.

It sounds like Workday’s listening to customers, but also living many of the changes that you want to support and provide software for in real-time as a big company yourself.

It’s been an intense 18 months for everyone, with Workday and all your customers having major adjustments to how they work. What did this look like at Workday?

You know, fortunately, beyond the Workday applications, almost everything else we ran were native cloud applications. So it was pretty easy for us to go to a remote work model very quickly. And we did. I remember we had a sales kickoff meeting in March of 2020. We decided we’re not going to have that meeting. And, the following week, said, “OK, we’re just going to go remote until COVID sorts itself out, maybe three or four months.” And that was 18 months ago. I shouldn’t laugh. It’s really sad how it’s just devastated so many lives.We’re hopefully coming through the end of it.

So we were able to go to a remote workforce largely because of the technologies that worked ahead and also using things like Zoom and Webex, Slack, Salesforce. We were basically a company that started, fortunately, at the time when Office 365, Google Apps, everything we ran was a cloud app. We were fortunate we didn’t really have any on-premise technology, and that made it easy to snap into that world. And then it became all about trying to stay connected with employees and making sure that we could all get our jobs done and take care of our customers in this remote workforce orientation.

I’m just super proud of the way the company responded and reacted. And 2020 was a tougher year on the demand side. 2021 has been a really good year so far, without getting into our Q3 results yet, but Q1 and Q2 were very strong. And I think we just — we figured it out. And if you were a company that had the right technology infrastructure, you could make remote work work.

The two or three hardest things [were, first:] How do you stay connected to your employees? [It’s] really hard. So we did a lot of town hall meetings, a lot of virtual gatherings. We made big investments in mental health. We gave everybody early on in the pandemic two weeks of [pay] just to get ahead if they had any financial issues in their family.

And now, most recently, we offer up Fridays off. Every month or so, we have a free Friday just so people can have a mental health day and catch up on life. And so we’ve tried to work that way.

Another hardest part is, I thought I was an introvert, but even I like to be in the office and around people. And we all miss that as we’re coming back.

What I’m also really proud of is how the company supported its customers. And almost every pharmaceutical company, major retailers — they’re all Workday customers. Many of the healthcare organizations are Workday customers. And our people stepped up to make sure that the people that were taking care of us could run their businesses effectively using Workday technology.

So it’s been a huge learning experience. I think we’re going to go into a work world that’s not going to be the same. I would like to get back in the office, but expectations have changed. And so I think the reality is a hybrid work world is in front of us, but there’s nothing to replace in-person collaboration, communications, energy. And so I hope we get back at least some of that.

Yep. I mean, at Greylock we’re making huge investments on a future that is definitely hybrid, but also, some part of it has got to be in-person for me in terms of human connection.

We have a bunch of questions coming in from the audience. I’m going to hold most of them, except for one that is, I think, relevant now, which is: How has COVID and work from home changed how your customers think about their people? Workday’s a trusted advisor on talent strategy overall. What are you hearing from customers?

Well, six, seven years ago, I’m part of these CEO roundtables. One’s the business council, one’s the business roundtable. Not a lot of CEOs were asking me about talent. Today, on top of every CEO’s mind is their employee base, their talent. Number one, they haven’t seen them for several years in many cases. And so they want to get a sense of employee sentiment: How are they feeling about their job? How are they feeling about the company?

Number two, it’s a really hard hiring environment. Ironically, COVID has not had the economic impact on businesses the way people had expected it would. And so we are in the toughest hiring environment I’ve ever seen in 30 years. I’ve never seen anything like this.

The combination drives you toward, first and foremost, making sure that the employees you have at the company are the happiest they can be. So this emerging area of employee engagement popped up. We had some applications there, but there was a best-of-breed company called Peakon, that really measures employee engagement in a machine learning way. And that’s been a very powerful application for us, but also a very powerful talking point with CEOs and CHROs.

And then the second piece is: How do you keep your best people at your company, from a skills perspective? And so it’s all about continually training your employees with new skills, creating internal talent marketplaces, [so] they can feel like they have mobility without having to leave the company.

That’s been a big part of what’s happened, and what’s really changed because of COVID. Number one, CEOs now are awakened to the point that: Hey, if I’m not on top of where my top people are, mindset wise, they’re probably going to leave. And number two: It’s way easier to add skills to existing employees than start from scratch with new employees. So I’m going to invest heavily in my current set of employees.

Yeah. One thing I’ve certainly seen that informed an investment we recently made in education technology — which is kind of a bad word in venture, traditionally — is if you compare the cost of recruiting and onboarding and retention of employees in this labor market, where I used to see leaders say, “Well, I need that talent today, and it’s just too costly to train people.” I’ve seen a lot of leaders change their tune, because they look at the actual costs and say, “It’s going to take me nine months to recruit this person either way.”

I think that’s true.

So I think that’s definitely changed.

I think education is now, I don’t know if you call it corporate education or just call it learning, but it is front and center. Not only does it take nine months to recruit that person, but when you lose a capable person in your company, they’ve usually been trained up for two to three years. They know how everything works at the company, not just whatever product they’re working on or sales they’re working on, but how the internal operations of the company works to get work done.

A new hire not only has to come on board and figure out their job, they have to figure out the company. So you’re saying nine months plus two years. When you lose somebody, I think it’s three years before you get somebody back in that same productive role.

I think these education technologies are going to be huge and transformational, very much driven by machine learning, telling people what they should learn to advance their careers, what people have done in the past to advance their careers who have similar backgrounds.

And so I think that we’re onto something really transformational that I think is all goodness. We’re creating opportunities for people. It’s what I like about enterprise technologies in general. Our companies have souls. We’re trying to make people’s work lives better. We’re not trying to get them addicted to social media. I had to stick that in there.

So, leadership and impact. Co-CEOs: it’s an unconventional choice, very uncommon. You’ve clearly succeeded and then doubled down on that model. How did you decide to do that?

With Dave and I it was pretty natural. We’ve been together for 20 years. [You and I] met when you were at Goldman taking Workday public. Six months before going public, Dave and I had dinner and both of us decided we didn’t want to be the CEO in public. And the only thing we could come up with was co-CEO.

We did it together for three years. Best three years of my working career. We had so much fun together. We had facing cubes, but we’re 26 years apart, we’re not trying to be the other person. I think of him as my mentor. We’re best friends. It was a great experience.

I then did seven years on my own. And enterprise is complicated, both from the product side and the go-to-market side. It’s really hard as a CEO to be facile in both. And so as we got to be a larger and larger company, I felt like I was losing time on the products, which is my interest and passion and knowledge, because I was spending so much time on the go-to-market side, which was not my set of skills. [And I thought] that splitting the job with someone that I totally trusted who had been with us for a long time, Chano Fernandez, who did have that sales background, would make the company better. As long as we could check our egos at the door and figure out how to focus on the things that made the company successful that we were best at individually.

And it’s worked really well. But you got to check the egos at the door. You’ve got to have a tremendous amount of trust in that individual. There can’t be competition. That never ends well. But if you can make it work, two [CEOs)] is way better than one.

Enterprise companies, especially ones with large direct sales forces, high-end enterprise, it’s like two businesses. It’s not a channel business. It’s not a consumer business — nothing against consumer businesses that are selling ads, but the business side is just easier on the go-to-market side than it is on large enterprises. That’s a hard thing to solve. And we needed that focus, and we got it with Chano.

On the flip side, you say, “Well, why don’t you just have a sales-oriented CEO?” And I think then at that point, you start losing your focus on innovation. And so we need to keep both.

When you have co-CEOs, how do you resolve disagreements?

I resolve them the same way with Chano [that] I did with Dave — over a bottle of Chardonnay. So Dave and I would get together once a month for our Chardonnay dinners and we’d work through any issues. Dave and I have been together for 28 years. We’ve never had a fight. And I think part of it is we always had this way of, Let’s sit down and talk through all the issues. And rarely do we get to where we needed the second bottle. Usually one was enough. We get on the same page. It’s all about listening. You have to listen to what the other person is saying. Because there’s, in many cases, no right answer. It’s about listening.

So: first seek to understand, then to be understood. It’s a great catchphrase from Stephen Covey’s Seven Habits of Highly Effective People. That’s the way we work through it. And that’s what we do.

With Chano, it’s a little tougher. He’s in London and I’m in the U.S. now, but we’re very good friends and we just make sure that we listen to each other first and then we try to make the best decision possible. It’s not perfect, but if, over time, there’s always give and take — as opposed to one person always making the decision that’s happy for them — if it’s give and take, it usually works out.

You and Dave and the team at Workday did something unconventional in that you said, “We’re not just going to interview the first 10 people. We care about everyone. But we are personally going to be involved in making decisions on the first 500.” That’s something that doesn’t scale very well. Why did you do that?

We weren’t interviewing those first 500 — and for me, it probably went on even longer past 500 — we weren’t interviewing them for their skills. We assumed the team would get it right if they were a great marketing person or development person or salesperson. We were very focused on: Was this person a good fit from a values perspective?

Because we knew if we got the first 500 right from a values-fit perspective, they were committed to the long run, they believed in our core values, they were not the shiny-new-penny people that were jumping from job to job. If we could sort that out up front, in a we-versus-I, that 500 would then be empowered to hire the next 5,000.

We never thought past 5,000, but that 500, a lot of them are still here and they’re still actively involved in recruiting. And they basically make sure, not that we hire the most talented people, but we hire the people that have similar value sets to us. Not saying that our value set is perfect, but it’s our value set, and people with similar values do well in the company.

You mentioned the thing about having a soul. It is important to me. We don’t run this business for shareholders alone; I very much believe in stakeholder theory. I didn’t call it that back then. I only realized that that’s what we were doing recently after Marc Benioff helped me understand what we were doing is stakeholder theory.

But you take care of your employees, you take care of your customers, you take care of the community, you take care of your business partners. You make investments in helping society be a better place, whether it’s in diversity and belonging, whether it’s in sustainability. And I think it’s not just the right thing to do, but it’s a massive competitive advantage when you’re hiring. This new generation of people coming out of school, they want to be tied to a company that has a purpose beyond a high share price.

I want to come back to that in a second, but you talk about finding people who share the company’s values and are aligned to the company’s values. How do you judge that?

Well, number one, you’re going to learn 80-percent more about a person through reference calls than you are in an interview. So the interview is more just getting a sense of who that person is.

When you look at the resumé, do they have a pattern of jumping every two years? And that’s, to me, at least a yellow flag, that’s a shiny-new-penny person that is constantly looking for that next new gig where they’re going to jump to, because great companies are built on people that stay at the company for 8, 9, 10 years. All companies will tell you the same thing.

So, filtering out those shiny-new-penny people, that’s one. Get people to talk about their experience, and people will default to being pretty transparent when they’re in the middle of an interview, especially with two founders to see whether they’re “I” people versus “We” people. And you need to sort that out.

We’re a team-oriented company. The “I” does not work well, we need to have “We” people. Dave and I both have quirky senses of humor. So we’d crack jokes and we see if they laugh. That’s probably not a good test, but we want to see if people would have fun and whether they wanted to be in a place that might be slightly irreverent, and it was in the early days.

In terms of integrity and all those other things, you have to figure that out on the reference calls; that’s impossible to figure out in an interview. But we were heavy in referencing all those folks in advance. The shiny-new-penny piece and the “I versus We” were the two tell-tales.

I think that’s become more common than ever, just given the level of opportunity in Silicon Valley, and the compensation and inflation that’s happened in the industry today.

I want to go back to what you were just describing, which is stakeholder capitalism, and then also highlighting the fact that Workday’s really excelled in an area where many companies struggled, or has made great strides relative to much of the industry, in what you call VIBE: value, inclusion, belonging, and equity.

You’ve had women in some of the most important and executive roles, including, for example, Robynne Sisco, and a workforce that is overall more representative of the community where it operates than many. How have you achieved that to date? And is it something the company has invested [in] over time? What can other CEOs be doing?

Well, I think it starts with our value system. From day one, we’ve had a very inclusive culture, and it’s not been a bro culture. Half the management team has been female, really, since the very early days. And it’s because they were the most qualified people for the job.

The key is that [with] our value system and the way our company works, the right people filter up and get promoted into those roles. And so I’m very proud about our female representation in the company: our president, our CFO, our CIO, our CHRO, our chief marketing officer, all female. Our head of customer services, which is a very male-dominated role, Emily McEvilly, also female. So it’s about half.

Honestly, we have not done as well with underrepresented minorities. I’m embarrassed how low our numbers are. They’re better than most of Silicon Valley, but our numbers in Silicon Valley are embarrassing. And I think it’s because we’ve expected people to come find us. And that’s not where all the diversity is; the diversity’s all over the country.

And so the way we’re tackling it now is hiring more in Atlanta and in New York, but also training our employees to hire for diversity. I think that is really important, because people tend to hire for people that look like themselves.

And so we’re making progress. We’ve done quite a bit over the last years, but it’s creating a new mindset around, as you mentioned, value, inclusion, belonging, and equity — specifically for underrepresented minorities, where I think we all have to do a better job. And we still have a long way to go at Workday.

One last question on leadership, and then I’m hoping we can sneak in one or two from the group here.

You’ve served on the boards of incredibly interesting platform companies like Intel, and most recently just joined the GM board. You were also a board member at start-to-scale for many Greylock companies. How has being a board member at the largest companies informed your practice of being a CEO, or being an investor?

Well, I’ve never run a company as big as Workday. Everybody says: You and Dave had the experience on PeopleSoft. We only got to 7,000 employees and a billion dollars in revenue, a billion and a half. Workday is three times that size from a revenue side. And so watching some of these big companies in action and seeing how they drive innovation, seeing how they manage their cultures at a scale bigger than Workday is really, really valuable.

With GM, it’s a fascinating company going through — I don’t know which is the bigger one, autonomous driving or EV. In the short term, EV is going to change the world, and it’s the biggest innovation since basically the combustion engine of the 1920s.

So it’s huge. And to be part of that with an amazing leader in Mary Barra. She just epitomizes that person who leads with the soul. I put her and Doug McMillon as two of the best CEOs on the planet right now. They lead with values. And just to see that at scale is pretty cool. But also, I’m a techie, and I like to see GM be successful and see how I can help them be successful as they transition into being a tech company.

“Every company in the world is going to be a tech company in the next 20 years, whether it’s tech-enabled or just pure tech.”

And so I’d like to see GM be one of those successful ones.

So here we are running out of time. I want to ask at least one personal question. How do you choose to spend your time beyond Workday, as little as there is?

I have two great daughters. I try to spend as much time with them and with my great wife, Allison, who you’ve met. And then golf, and not much more. I like to play a lot of golf. That’s the thing that clears my head. It fits my engineering mind, and I’m now just trying to get the rest of my family into golf. And so that’d be the winner. And just spending time with friends and family.

So those are hard comps: My family, golf, and Workday. When you choose to get involved in something that is a nonprofit or a charity, what makes something worth being a part of, or what makes something bubble up?

It has to grab your heart. You got to say like, “Oh, they’re doing something really neat that I like to be a part of.”

And so the two ones I’ve probably been the most involved with are Year Up, which creates opportunities for under-privileged youth who are in that 16, 17, 18 year age, where they get an internship at Workday. The Workday foundation is one of their biggest supporters, and Allison and I are one of their biggest personal supporters, too.

And then Eat. Learn. Play., with Steph and Ayesha Curry. During the pandemic, Oakland got hit really hard. The kids count on their meals coming through the school. And there was no school. And so very rapidly Steph and Ayesha’s foundation filled that void and served meals to kids during the pandemic. Just amazing. And that’s right in our backyard — we need to take care of our citizens and those closer to home.

It’s our community. Right? And I just got both excited about the fact that they’re trying to give everybody equal opportunity. And in the case of Steph and Ayesha, they’re busy people. Steph’s probably the greatest basketball player on the planet right now — I’m biased; I think he is. He could wait until he is retired to want to have an impact, but he’s having an impact at the prime of his career. I just have a ton of respect for that.

You want to have a big impact, but it’s got to catch you at the heartstrings level, like the tugs on your heart like, “Ah, they’re doing something I want to be a part of and help.” And childhood hunger is just something that — that’s a hard one. It’s a hard one not to just get really sad about. And it’s something that can be solved.

I really respect, as you said, many people, they think, “I’m going to serialize this. I’m going to do my business. I’m going to use my skills and then I will figure out how to give back.” And if it’s Steph and Eat. Learn. Play., or you with the work through Workday Foundation and your own personal pursuits, and stakeholder capitalism and the commitment to that, I just really respect that.

Let’s wrap it up with a lightning round and then maybe one question that I have to ask you, because I need the advice. So lightning round, quick questions. Only one piece of advice for founders just starting out. They found product market fit, now what?

Hire great people.

OK. One personal change that you made during the pandemic.

Exercise more. That’s aspirational. I haven’t done it yet, but I’m doing it now.

We still have time. We still have months, hopefully less, but months. And the last book, podcast, piece of content, anything you’d recommend? Movie, bad Netflix show?

Ted Lasso, just the best show of all time. I think about a great quote, “Be curious, not judgmental.” That’s one of the great quotes from that show. As is: “The best animal to be after something bad happened is a goldfish, because they have no memory.”

Be a goldfish. Yep.

Be a goldfish. And then, I was really surprised how interested I was with Formula 1: Drive to Survive. Not because I’m a car guy, but just how into it people get and how athletic the drivers actually are. I thought that was fascinating. It was just a world I didn’t know. And without the pandemic, I wouldn’t have had time to sit down and binge watch that.

I’ll put it into the queue. And then the last question which I had to ask, but also came from an entrepreneur in our group: Workday recognizes and rode the shift to cloud. What are the macro trends you think founders should be paying attention to today?

Well, I think it’s very clear that the next wave is all about the data. One of the beauties of the cloud is that the data is captured in a normalized way. When you think about on-premise applications, everybody customized them, the data was not centralized. The cloud is the perfect platform for machine learning and AI.

And if I were starting Workday today, I would start it with a machine learning AI approach first. Like: What insight was I trying to give my customer out of these applications? and work my way backward to What processes do I need to automate to get that insight to them?

Because I think, over time, automation is out and it’s all about insight. And if I were somebody that was about to go to college, I’d go in and want to be a data scientist, not a computer programmer.

Oh, this is a strong recommendation.

We’re way short. Way short. Every company I’m involved with is way short on data scientists. And it’s going to be that way for a long time.

Well, we’ve come to the end of our session. Aneel, thank you again so much for your time and insight and your longtime support for me and for Greylock. I always learn so much from you. I appreciate it.

Thank you, Sarah. Fun to be with you.