Leadership Cross-Training

Jennifer Tejada has a sixth sense for business opportunity.

As CEO, she’s guided PagerDuty from a single-product company into a multi-product platform by detecting novel use cases and broadening awareness across industries. In 2019, Tejada spearheaded an impressive $1.8 billion valuation at IPO for PagerDuty (as reported by Forbes’ Alex Konrad), and today the operations management company plays in such diverse fields as transportation, energy, local government, and healthcare — even orchestrating time-critical organ transplants.

Tejada recently joined Greylock general partner Sarah Guo on Greylock’s Iconversations series, where she credited part of her success to her own intellectual curiosity. A desire to learn and to build things led Tejada to develop experience in such diverse verticals as consumer packaged goods, private equity, supply chain automation, and DevOps — effectively, an exercise in business cross-training.

“One of the challenges in our industry is an over-rotation toward specialization,” she says. “My advice is, if you want to be CEO, you need to move across organizations. You need to build a breadth of skillset. At a minimum, you need to develop strong familiarity of the role every function in a business plays, because you’re going to own pulling those puzzle pieces together.”

But even in spelling out the path to personal achievement, Tejada cautions against quickly moving from one opportunity to the next, emphasizing that there’s no replacement for experience, even if it means enduring the occasional crisis. Instead, one of her big motivators is to ask herself the question, How much value did I create?

Says Tejada: “I’m not saying you have to be patient. I think all great CEOs are impatient by definition. But the yardstick with which you measure your success shouldn’t just be how quickly you move from one title, one project, one job to the next.”

In her conversation with Guo, Tejada covers the importance of empathetic leadership, the value of automation in service of people, the effectiveness of trust and transparency as a means of corporate communication — and shares advice on how to build good relationships with your current and former employees, your executive peers, and your board of directors.

You can listen to the podcast episode, and read the full transcript, below.

 

TRANSCRIPT

Sarah Guo:
Jennifer Tejada is the CEO of PagerDuty, the operations management company she took public in 2019. The company’s successful IPO marked the first time in a decade that a female CEO has taken a software company public on the New York Stock Exchange.

Being a CEO while female isn’t the only thing that makes Jennifer stand out, of course, and I’m hopeful that being both of these things at once will soon stop being considered rare. Jennifer is a second-time CEO, previously the CEO of Keynote Systems, and a long-time tech marketing executive.

I’ve long appreciated her unique ability to communicate in a real direct, honest, and understandable manner. She translates technology for the business world, she has a broad view of it, and she’s also a board member at UiPath, Puppet Labs, and Estée Lauder.

Jennifer’s a courageous leader, and the measure of courage is not speaking out when others do but when they don’t. PagerDuty became one of the first tech firms to issue a statement against racial injustice following the murder of George Floyd and subsequent violence last year. PagerDuty is also a leader among companies pushing for diversity and inclusion in the workplace, an issue near and dear to my heart, and the company has an equality-focused foundation, PagerDuty.org.

Real talk is an all too rare quality in the competitive enterprise market these days, but Jennifer has set the standard. Under her five-year leadership, PagerDuty has grown considerably from beloved brand of tech companies to mission-critical tool for business-critical operations. And its momentum has accelerated with the pandemic era shift to remote work.

But I’m especially excited to host Jennifer because I think many still underestimate PagerDuty’s potential and ambitions. Thanks for being here, Jennifer.

Jennifer Tejada:
Hey, Sarah, it’s great to be here. How are you?

SG:
I’m great. We’re really excited.

It’s almost exactly five years to the day since you joined PagerDuty. I remember speaking to you soon after you joined as CEO. A lot has happened in that time. The company had one of the biggest IPO pops of 2019. It’s been a wild ride.

But before we dive deep into the company, let’s talk about how you ended up in tech in the first place, because it wasn’t your original plan. Can you walk us through the various paths you’ve taken that have brought you here today?

JT:
Sure. I get this question a lot. I think people are interested in my career path because it is different. What I hope it is symbolic of is the fact that there are opportunities in tech for all different kinds of people.

I have a liberal arts degree from one of the best universities in the world, University of Michigan. But I graduated thinking I was going to move into some form of business management or even healthcare management because that was what my dad did. The healthcare industry was deregulating at the time, so I decided to take a job to get some experience, and I worked for Proctor & Gamble for just under seven years.

What I loved about my P&G experience was it’s a company that drives its talent and promotes talent from within. So they invest heavily in leadership development and generally in career development.

So I’ve built a very strong foundation in a number of areas of expertise, from leadership management, brand management, marketing, product strategy, etc., in less than a decade there. That positioned me really well to look at big problems to become a general manager, but also positioned me well to be flexible.

I’ve worked in a lot of different jobs. As soon as I left P&G – and really the impetus for leaving P&G was to join the tech industry – I joined a supply chain automation company, which wasn’t really obvious given I was a consumer marketer, but I love value propositions that are highly quantifiable. It just made so much sense to me that if you start with a supply chain that has a lot of waste in it and use software to automate the system and all the players in that value chain, you can actually create great demonstrable cost savings and value for customers.

So that was my first experience in software. [It] was a high-growth company called i2. I was the head of marketing there. I had terrible imposter syndrome and was way over my skis in terms of what I was doing. But I had that foundation of great leadership and how to build an organization, how to manage people effectively, how to think about positioning your brand. And from there, the tech industry was just a part of who I am and something that I’ve done for a long time.

I did a short stint in private equity. I was the COO of a public telco. I went in and became the number two in a private equity-backed software company, the largest enterprise software company in Australia. [Then from there] to a large multinational engineering firm, and decided I really wanted to get back into growth. I wanted to go back into building.

I returned from over a decade in Australia to San Francisco, and set out looking at different roles.

Keynote Systems was a really interesting transition because it was private equity backed. It was a company I took private with Thoma Bravo, but a great way to cut my teeth going from being the number two to the number one leader in a company. And yet I still found it wasn’t growing fast enough. It was an orientation around EBITDA and profitability, and I wanted to build again.

So I turned to the people who are funding all the building — the venture capitalists — and started talking to different respected investors about which marketplaces were growing, where they saw emerging new business models. And very quickly I decided I wanted to be in something that was either B2B2C-esque or this emerging bottoms-up SaaS market, so that’s how DevOps came into play.

PagerDuty wasn’t really an obvious choice. It’s an infrastructure software company — deep tech selling to technical people. Me and my little marketing degree had a pretty interesting transition to that. But actually, I learned a lot about infrastructure in my last couple of jobs, and I know a lot about enterprise software, and, most of all, I have a lot of experience in digital transformation. So the customer base for me has been the same across the board even if the buyer has changed.

What I love about PagerDuty is it leverages my consumer brain because our app is consumer-grade. The way we engage with developers is the same way I learned to build products and market directly to consumers.

Likewise, you have this awesome crossover from product-led growth to enterprise, which drives a lot of the explosion in your business. So it actually ended up being a really great fit. And five years later, I think it was a good decision.

SG:
What an adventurous career. In terms of just making those decisions before you came to PagerDuty, for many people who’d want to emulate growth and leadership the way you did, how did you decide? It clearly wasn’t doing the same thing repeatedly, but how did you decide like, Oh, private equity, supply chain, DevOps?

As they build careers, many people are trying to build depth of expertise in just one sector or one stage of a company. You obviously thought differently. So what were you looking for each time?

JT:
Yeah, I actually think one of the challenges in our industry is an over-rotation toward specialization. Because when you look for a leader, a functional leader or regional leader or a business leader in a business unit, you want someone that has broad experience, that has actually seen how all the functions come together to build a business, that understands product strategy and go-to-market and how you get to Friday’s payroll and see a path to profitability.

The challenge is if you’re specializing, trying to take the elevator straight up, you don’t learn. You don’t cross-train and learn a lot of those capabilities, which are really important in general management.

My first piece of advice is this:

"If you want to be CEO, you need to move across organizations. You need to develop strong familiarity of the role every function plays in a business, because you're going to own pulling those puzzle pieces together."

For me, someone helped me discover very early on in my career that I’m motivated by a steep learning curve. I’m severely intellectually curious. I’m an extreme extrovert. I like to surround myself with smart people. My goal is to always be the dumbest person in the room, which is not the same as not wanting to have the answer. I suffer from that problem too. But I would say that it was great for me to be able to try different things. I always would take one fanatic thread.

I took my marketing expertise, and that’s how I jumped into tech. Then I took my enterprise software experience to move from supply chain into more private equity. Then I took my leadership experience and moved into a public company CMO role. And then I brought that to business and product and MNA and took that into my COO role.

I’ve always found one way to jump to the next stepping stone in my career. But I have never done anything twice other than being a CEO. I mean, that’s just odd.

I’ve tried to do new things, and the two companies I’ve run are very different in terms of their profile and their growth rate and even their global distribution and everything else. And so I would say, don’t be afraid to try things that are counterintuitive to you if you can see that they will help you build your leadership toolkit.

SG:
Yeah, I think that’s super sage advice simply because there’s such an emphasis on rapid progression right now that the value of this idea as you described it, like business cross-training, is not discussed very often.

Just to pull on one other thread of wisdom from your experiences, there are a lot of people building and leading companies who have not seen an economic cycle before. You worked through the first dot-com bubble and the recession. How do you think that affects your leadership today?

JT:
I think it just steels you for a crisis because you know from experience, you don’t have to take someone’s word for it. The pain might be deep and it might be broad, but it will have a beginning and an end.

You know how some people say, “It’s not my first rodeo?” It’s not my first recession. It’s not my first crisis and I’ve survived. I’m very hard to kill, apparently. That gives you the confidence to seal yourself and sustain yourself for whatever period of time you have to change and be in crisis mode.

I also think, as a leader, you mentioned this rapid acceleration. The rapid progression of careers. I’m going to sound like the old lady in the room, but I think it’s really important to remember that there’s no replacement for experience.

If you play a sport, if you play an instrument, if you do anything that’s competitive, you know that all the experience that you get makes you a better player. I golfed in college, and what I learned is the more times you could play a course, the better your core strategy would emerge. The more issues that you had to manage on the golf course, the better you got in keeping it together and keeping that low score at the end of the day.

Sometimes we don’t place enough value on just getting the miles under your feet and being able to trip a few times and learn that you can get back up, learn that you can run through an injury, learn that you can get through a crisis.

So, sometimes, think: Before I quickly switch to the next thing so I can add a letter to my title or have a new project, did I make the most of this experience? Did I fulfill my learning goals in this experience?

Likewise, another one of my big motivators is, How much value did I create? Was it incremental, was it disruptive, was it a steep change? Because sometimes I see people not even staying in roles long enough to make a difference. To me, that’s a motivator. I want to know that I had an impact on our market, our customers, our products, our people, etc. And sometimes that takes a little time. 

I’m not saying you have to be patient.

I think all great CEOs are impatient by definition. But the yardstick with which you measure your success shouldn't just be how quickly you move from one title, one project, one job to the next.

SG:
One thing that at least comes across as intuitive versus learned, or maybe it’s learned with getting the miles, is that your leadership style from the outside seems highly empathetic.

I admire the fact that through many positions across different industries in your career, you’ve obviously been able to figure out how to quickly connect with people, learn, communicate with them. I’m sure the executives at the Thoma Bravo–backed company were different from the execs you worked with at P&G for example, right?

JT:
Yes.

SG:
Figuring out how to build those relationships had to be really different. I know you as somebody who genuinely desires to understand others. What shaped this mindset of just being able to connect to different people, and then making that part of your leadership?

JT:
Yeah, I think the first example I had of what leadership should look like outside of school teachers was my father. My dad was a hospital administrator. This is a really interesting job because when you’re running an 800- or a 1,000-bed hospital, you’re responsible for everything. Not just patient care, but everything from janitorial services all the way through to neonatal healthcare outcomes.

One of the things that I think made my dad a very special leader was that when he walked the halls of the hospital, everyone from an individual contributor on the janitorial staff and someone handing out food in the cafeteria line to the head of the medical staff felt like they knew him, and he knew them. He had a way of connecting on a level playing field basis with anybody that he came across in a business.

It always amazed me that as his jobs got bigger, and as the hospitals got bigger, that connection that people felt to him stayed the same. If anything’s been frustrating about the pandemic, it’s that it has felt harder for me to connect with people when I’m stuck in this single Zoom box.

I’m bursting to get out and run around the world and meet new employees and reconnect with employees that have been with us for a long time, and see some of my customer friends and just my CEO peers. Like get out and get back into the world and make those connections, because I do think they’re super important.

But I just remember [my father] saying, “Everybody has a contribution to make, and you never know when somebody’s going to make a huge contribution or when it may be really important. So look for that opportunity in every person that works with you and works for you.”

And I’m not perfect. I mean, there have been times over the last 18 months when I’ve been stressed or we’ve been under pressure, when there was a lack of visibility in where the market was going. We had no idea. I’ve been short and grinding my team and looking for us to build stronger muscle out of all of this.

So being empathetic doesn’t mean you’re always nice. It doesn’t mean you’re always perfect. It doesn’t mean that you’re not critical sometimes. I’m working on coaching versus being critical because I’m really critical of myself, and I’m sometimes really critical of my team. And I can be a hard driver.

But at the same time, with that intensity comes someone that I think my team knows really cares about them, and really cares about our customers and how we show up as a company.

I've been known to say, "It's not just what we do, it's how we do that matters." Because people will not remember what you said or what you did, they'll remember how you made them feel.

And that’s something that stuck with me for a long time.

SG:
Along this theme of connection and even working on the different styles of connection within your employee base and with your global community, you’ve made some of your choices and created some of your own opportunities through seemingly random connections. Can you talk a little bit about that — how you built that as a muscle and how you do it authentically?

JT:
Well, part of it comes from that intellectual curiosity. I’m interested in people’s stories. I like to hear about what makes them tick.

I remember being younger and hearing leaders say, “I don’t really like managing people.” I would think to myself, Then why the hell are you in that job?

I still love developing people. I love the expression on someone’s face when they do something that they didn’t believe they could. When you ask them to do it, they looked at you like you were crazy. And then here they’ve achieved something huge. That transformation in a person for me fills my cup. And so I’ve just learned to listen to people’s stories and understand what’s important to them.

But my first tech job manifested from a conversation with a person on a flight. It turned out we had just come from meeting with the same headquarters. I had screwed up a deal they were trying to close by saying, “You’re not ready to do something.”

So that was touch and go there for a minute. There was a cocktail involved in bringing that over. But this person had a really interesting story, and it turns out he was a leader at i2. One thing led to another and that’s sort of how that happened. I believe in the potential of people. I think the minute you write somebody off, the harder it gets.

Adam Grant is someone who I really respect, and we’ve done some work with them. And he’s participated in a couple of virtual events recently with us.

One of the things he recently posted was this idea that as you become more powerful or more senior in an organization, your ability to judge character is harder because you’re further and further away from seeing how people behave when nobody’s watching them.Yet, some of the less experienced people in the room are watching that all the time.

So who you look to [in order] to double-check your instincts on people might not be your senior team. It might be that really observant individual contributor in engineering, or that really seemingly cynical person who iss really analytical and paying a lot of attention to what’s going on.

I think just being open-minded about who influences you, what influences you, and how you think about not creating such a hierarchy for the relationships that are important. We hear so frequently, “You need to prioritize ruthlessly.” I don’t know, I think the color in life is getting to know different types of people and hearing their different perspectives. That’s how we imagine bigger things. That’s how we find the solutions to big problems. That’s how we disrupt markets.

SG:
Yeah, I mean, this may be specific to venture, but perhaps not. I remember one of the first things I was taught as part of the Greylock culture coming in, not even thinking I was going to be a venture capitalist for a long time, was to invest in long-term relationships.

I had a very recent example where somebody had introduced me to an engineering leader at a big tech company as a friend. Just, “Please be helpful to this person, he is my friend,” probably six years ago. And that person just became the engineering leader of one of our very promising, growing companies.

You build all these connections where you’re just trying to pay it forward, not assuming anything comes back. I’ve been shockingly surprised. The ecosystem is actually smaller and far more connected than you think. And so, I love being able to operate that way and seeing some positives of that.

JT:
I always say to people, “Never burn a bridge.” You just never know. Even if you have to let someone go because things aren’t working out, the way you do that, make that a win-win for everybody. Because you just don’t know where someone’s going to turn up again next, or what you’re going to need in a different role, or who’s going to ask that person what they thought of you. So I try and play the long game.

SG:
It sounds like that also requires some optimism about what everybody’s capable of, right? I love that.

JT:
Yeah, I don’t think you can be a great leader unless you’re optimistic and you think about what’s possible for a person. Sometimes that does feel like it’s in conflict with making a hard decision. I think especially when we’re hyper scaling, or we’re scaling a business and you realize that a business has outgrown someone, my first instinct is: Can we coach that person?

If that doesn’t work, my second instinct is, well, can we find a different role for them? Because there’s institutional memory there, there’s all kinds of history, their connections, their relationships.

And then the third thing is, will they be better off trying something different? And can we help them make that transition? So there’s a lot of options outside of showing that person the door and giving up quickly. Sometimes when speed is so emphasized, we can be a little biting off our nose to spite our face in that regard.

SG:
OK, let’s get back to what I’m sure feels like 90% of your brain. Getting back to where PagerDuty is today.

You’ve been there since 2016, and the company was … I don’t know if this is acceptable to say, somewhat of a sleeper hit for the first couple of years.

JT:
I mean, nobody ever heard of PagerDuty. It was not a fun thing at cocktail parties to tell people where I took a job. I’d be like, “I took a job at PagerDuty.” They’re like, “What? Are you bringing pagers back?” So, yeah, it was a little bit of a cult sleeper.

Developers knew what it was. Any developer you asked not only knew PagerDuty — but this was the thing that really struck me when I was joining the company, because they’re like, “Oh my God, I love PagerDuty.” Or it was like, “Oh my God, I hate PagerDuty, but thank God for PagerDuty. It’s waking me up in the middle of the night, the whole thing.”

It’s really been fun to reposition the company and help this little baby grow up to be an enterprise-grade platform that has become critical infrastructure across the global 2000, and frankly support the most important brand engagements and operational environments in the world.

Some of that has been a lot of hard work in the background that you don’t see, like investment and innovation in infrastructure, investment in innovation, in resilience at scale. There’s nothing sexy about shipping a new capability that helps you get from four and a half to five nines, unless you are the last line of defense for all the revenue in the universe.

So there’s a lot of blood, sweat, and tears that have gone into really transitioning a single-product company to a multi-product platform that has ubiquitous application across just about every industry in the marketplace. We’ve just been somewhat smart and somewhat lucky that digital transformation, DevOps adoption, cloud adoption, and, more recently, distributed working, have all been phenomenal tailwinds for the company.

SG:
What have you heard from or learned from customers over the last year and a half that’s different? What’s new in terms of learning from a customer base?

JT:
Some of the things that I think are new which I love are that customers now recognize the importance of the relationship with their strategic vendor partners. We went from, in some cases, having a very transactional relationship: “I’ve got software to sell. You need to buy some software. Let’s go through procurement and make that happen.”

One of the things that I think the pandemic shifted was this move to starting every meeting with a wellbeing check-in, like, “How are you?” A much more transparent, open conversation about the challenges that we’re facing, like we’re all in this pandemic together. That’s led to some really strategic and more open conversations around what are some of their business challenges and their technology challenges that we can serve.There’s been this relationship shift that I think is just much more vulnerable and much more interesting, in my view.

Another is that even though we’ve been talking about digital transformation for a long time, most of our customers are still on the very early end of the continuum. Some of them are moving slower and some are moving faster than others, many accelerated a lot of initiatives that you see on the front end. So they shifted to digital go-to-market models, they shifted to digital brand experiences, but they haven’t necessarily caught up on the backend.

And so we’re still seeing a lot of plans for and future investment in transformational initiatives to modernize the technology stack that supports how the business shows up, how the company runs, how revenue is generated, etc.

The third thing is that security and data management, and just responding to unplanned issues — these have all become mainstays, not compliance boxes you need to check. My view is that more work is shifting from being predictable and planned and scheduled to being spontaneous and unplanned and mission-critical. And that bodes really well for a platform that manages real-time operations.

Some of the other things I hear from companies is this problem of … There’s lots of proclamations out there, but this problem of figuring out how we all work best, how we’re going to work in the future. There’s a lot of experiments running. We’re all part of one big experiment.

Most of us in the business world are incredibly privileged and fortunate. If you look around the globe, there are a lot of communities that are still in real pain, no access to vaccines, little access to internet. You’ve also got to constantly remind yourself as a leader of where we actually are and how many communities around us still have such a steep climb to get to a place where they can take care of themselves effectively, where they can reduce the risk of the pandemic.

Frankly, until we solve that for everybody, we can’t solve it for ourselves.

That's the last point I'd make is that the responsibility of the CEO has really broadened. It's not just about running your company. It's not just about looking after your shareholders and your customers and your employees. It's about actually leaving the community in a better place than it was when you got there, being the source of information to help people live and learn and work safely.

There’s just a heightened level of responsibility, and the job’s a lot broader and, in some cases, trickier than it used to be. I think you can look at the social unrest that we’ve seen, the inequality, and the conversation that’s really thankfully surfaced since the murder of George Floyd. I mean, none of those issues are easy, and there’s no executive in the world who can go past them without dealing with them, because this is a dialogue we need to continue to have. Because we haven’t solved the problem of systemic racism and inequality and social justice for everyone.

So yeah, it’s easy being a CEO. I really recommend it.

SG:
Yeah, absolutely. But I think your approach is clearly to recognize and to try to bring that into your leadership of PagerDuty. Then I think what you described certainly resonates in that, for many leaders, realizing or just being forced to see that any of these organizations we lead, they sit in a much broader context that’s very interconnected. We saw that across so many different dimensions over the past year — health, community, security, inequality.

This is one of the original reasons I was so excited to have you on this Iconversation series, is I think there’s so much potential for PagerDuty beyond just the initial developer on-call use case. I don’t remember a period of time where our companies at scale didn’t use it. I was like, I don’t know, how’s the service going to stay up otherwise? Database went down, PagerDuty is the system.

I think more and more people see that. But if you go beyond that, what do you think most people don’t understand about PagerDuty and what you guys are trying to do?

JT:
Well, I think the market is finally starting to get it. I mean, they’re starting to not only believe it, but see it. There’s an infinite number of use cases for a platform that can use software and machine learning to detect a signal that’s anomalous in some way, intelligently route that signal to the right handful of people who can diagnose the issue and start to solve that problem, and then automate more and more of that solve.

Generally speaking, it’s a new way to think about workflow, a more autonomous way to think about workflow, really targeted at challenges that are unpredictable, that are unexpected, that are usually expensive, and, like I said, business-critical, reputation-critical, etc.

What we’ve seen is our customers take PagerDuty from the development community and engineers into other parts of the business. And there are some obvious adjacencies, like IT and IT operations. Security response is another. And with the rise of ransomware attacks and phishing, most of our customers also use PagerDuty for security response.

There are things though that are less obvious. We have a large enterprise software company that uses PagerDuty to manage its quarter close, and has their legal team and their commercial teams working across the different business units to close out all the terms in contracts that manage pricing across different business units for single large customers.

You’re under a time crunch, it’s time-critical. You don’t know when a contract is going to come in versus another contract. You have to orchestrate the efforts of a lot of different experts in the business to get that done.

We have lots of healthcare organizations that use PagerDuty, lots of non-profit organizations that use PagerDuty. Organ transplant is one of our favorite examples because we would have never come up with that as a go-to-market proposition. But the signal that an organ donor is available starts an incident on the PagerDuty platform, and then PagerDuty orchestrates all the players necessary to find a recipient and to extract that organ, transport it, get it transplanted in the 36 or 72 hours of viability you have for that organ — time-critical, unpredictable, unstructured work.

So you just think of some of these examples, that’s what gets me excited about the business every morning. That’s why I wake up. So we’re taking more of a flexible approach and trying to make it easy for customers to leverage us in different circumstances like that.

One of the fastest growing today is customer service, where there’s a customer issue. You may find out about it through your social listening capabilities or through a customer calling into or chatting into a call center. That customer service person today has no visibility to the product owner and what’s going on inside the product environment or the technology environment. It’s a black box. It’s a series of creating tickets, trying to search through email distribution lists, etc.

Time really matters. We just launched a brand campaign, and one of the taglines is “Uptime is money.” Nowadays, you have a second or two before a consumer will just totally give up on you.

And that’s created lots of different use cases even within customer service.

I think the other thing that people don’t realize about PagerDuty is we are the center of all digital operations for the economy, not just a customer. We have over 560 integrations out of the box, and there is a class of companies being born building businesses off the PagerDuty signal.

It’s a really interesting environment to be able to build from because we see so much through that ecosystem. And that’s informing how we think about what the next product feature set is, or where a customer is really interested.

We spotted customer service because we kept seeing the name of these incidents associated with customer service. Or we’ll see a name of an incident and it’s something to do with accounts payable, or physical security.

That’s the next step for PagerDuty, is becoming the operations cloud for the modern enterprise and doing that by making the platform more flexible for all different kinds of users, more approachable for different users, but continuing to have really strong machine learning capability built on over a decade of data that allows you to automate more and more of that.

We think of it as automation in service of people, as human-in-the-loop automation as opposed to black box automation. And that helps us continue to build that heart and minds connection with the user, who is of the utmost importance to us.

SG:
Yeah, as an analogy, even when I joined Greylock, we were lucky enough to be small investors in Service Now. That company I think had the hardest time convincing the market for a while that IT help desk and service management would matter, right? Because it’s like, “Oh, I asked to reset my password or something.”

[Now] it is something that has become a backbone product in the enterprise. And so when you zoom out and you think of it as a more generic real-time workflow platform, I think that really opens up the aperture of so many use cases that are exciting.

If you project forward and you think about your and the team’s ambitions for PagerDuty, what are the biggest challenges you face, and what do you need to go build out and expand capability into to go meet those use cases?

JT:
Yeah, I mean, one of the big challenges is awareness and preference. How people think of you as a company and how people find you.

Our early growth days came through word of mouth. Every developer chose us as one of the five or six tools that they had in their startup toolkit. Now, as a platform, you’ve got the challenge of continuing to build your relationship in those user communities and at the same time having a viable, clear, and interesting value proposition for CIOs and CEOs and CFOs. So there’s that balance, which I think a lot of enterprise SaaS companies go through, that transition.

And then at the same time, I think it’s also continuing to build out features and functionality, but at the same time making sure the app is super intuitive and super easy to use. Because our primary use case remains incident response. The difference is there are lots of incidents, there’s lots of different kinds of users, lots of incident types.

But if it’s not easy to navigate the app and get done what you need to get done, automate what you need to automate in the moments that matter, then the app loses a lot of its efficacy and its competitive advantage very quickly.

We spend a lot of time on UX. We’re really thoughtful about where we put a button. If we move something around, we get crazed calls and emails in the middle of the night from people who are going through an incident and can’t find the radio button they used to click.

We’re also constantly listening to the market, but also looking ahead at what’s possible. I see a world where PagerDuty is on every handset, every device in an organization.

Likewise, we’re seeing some really interesting trends with industries: trucking companies, energy companies, oil and gas companies, energy grids, local governments. Places that you historically wouldn’t have seen us go for because we started in software and the internet and then moved into e-commerce and kind of serve those obvious for SaaS markets.

SG:
And organ transplant, apparently.

JT:
And organ transplant! But all those investments that you make in things like SOC 2 and moving towards FedRAMP, etc., they become so important in expanding your addressable market. Those investments are paying off for us.

SG:
You mentioned machine learning and intelligent routing. What’s the strategy for investment in that at PagerDuty?

JT:
You can never invest enough. I mean, one is, how do you make sure you can continue to capture data that is important in a way that’s efficient and well engineered? That allows you to leverage that data, and in a way that maintains the trust of your users?

Trust is one of our core value propositions. Trust and transparency. I think in this world where people are increasingly concerned about how their data is leveraged, how their data is used — that’s a high priority for us. The second is not getting caught up in the interesting science, and focus on solving the big messy problems.

Some of the biggest problems in the world are not very sexy. So you have to constantly keep your eye on the ball of: What are the big, ugly problems that our customers need help solving, and how do we help them solve them?

I mean, another example I can think of. We have a retailer, and during hurricane season, depending on what’s going on, they need to very quickly move inventory from one distribution center to another. They use PagerDuty to connect their weather forecasting signal to their inventory environment so they can move fans and dehumidifiers to where it’s raining, and air conditioners to where it’s hot, and heaters to where it’s freezing.

That was all something that was done manually. But now if this particular retailer can’t do that, well, maybe Amazon or someone else can. So in a very competitive world, being able to respond to the situational environment for your customers like this is super important.

Those are just some examples, [which are] generally boring …

SG:
I don’t think that’s a boring problem to solve. I think that’s really sexy.

JT:
I know, but I mean, we don’t help you make playlists. We can’t help you get a ride. We can’t help you deliver food. But all the people who do that use PagerDuty, because you don’t like it if you go out for your run and your playlist doesn’t download, or Starbucks can’t get your coffee, or whatever. We’re sitting behind all of those experiences.

SG:
We got one question from the audience to start us off. The question is, “Do you change your relationship management style? Or, how do you think about relationship management differently when you think about the PagerDuty co-founders, executives, other employees? Just the different constituencies within your organization?”

JT:
I have a huge amount of respect for the people who come before me in anything I do. So when I met our three co-founders, one of the first things on my mind was, Wow. These guys basically came out of college and got a company to over 30 million in revenue with no experience. I can count the number of people I know who did that on a few hands and toes.

So, one, just paying homage to that achievement and that accomplishment, and keeping that in the back of your mind as you think about what’s the next stage of growth. Who do you need for that next stage of growth? Just really respecting the foundation that was built for you.

When I transitioned with our founder, I made a huge effort to make it a victory lap for Alex and the other co-founders, and make it a transition that [acknowledged] everybody who had come before me, [who had put all their] blood, sweat, and tears [into building it], and likewise [acknowledged] an exciting new future where we could all go together. It’s less about changing your management style and more about celebrating the successes of all the people that [preceded you].

Last week on a town hall I was just sharing some appreciation for our alumni. I mean, there’s a lot of people who have been part of the PagerDuty story that are no longer at PagerDuty. In this really dog-eat-dog talent environment, it’s easy to say, “Oh, man, why did that person leave?”

Instead, I try and think, Look at the amazing contribution that person made. I hope they take something they learned and the PagerDuty culture into the tech industry and build something great. I want all of our alumni to be super successful. And so I always say when people leave, “Let me know if there’s anything I can help you with,” and I mean it.

When you think about management as you scale, it’s really about, one, looking for people that can grow ahead of the company as opposed to people that are trying to catch up with the company, or people who are just growing alongside the company. You really want a mix of hungry up-and-comers that are innovative thinkers.

You want a mix of people who have seen around multiple corners and know what good looks like. You want people who know what a shitshow looks like and aren’t completely knocked off their feet when it comes. People that go, “Oh, yeah, I remember when that happened three times.” Sometimes my team will be like, “You’re not panicked?” And I’m like, “No, I sadly lived through this before. I really screwed it up last time. I think I have some better ideas this time.”

You want that balance of youth, enthusiasm, innovation, invention, and experience. That's less about management style and more about planning for the talent that you need to take the business where you want to go.

I feel like there’s always pressure from boards to say, “Well, don’t get too far ahead. Don’t get too far over your skis when you’re hiring.” I’ve just never had that experience as long as you screen for people who are entrepreneurial and willing to roll their sleeves up. You can hire somebody who is totally overqualified for a job that will pull you faster through that scale, as long as they are OK rolling up their sleeves and doing the work you need them to do.

If they need a lot of staff, if they can’t remember how to build, then they’re not going to work out. And that’s what boards are fearful of, that you’ll hire someone who can’t roll up their sleeves and build. They only know how to run up here.

So make sure you’re hiring people who know how to deconstruct something, know how to reverse engineer something, know how to build it from the ground up, are not afraid to make hard decisions, are not afraid of the mess.

When scaling, I look for people who love the chaos. They love the mess. They pride themselves in being able to put systems and processes into place alongside the more glory-generating work. But it’s a balance.

As you’re scaling, you’re letting go of a lot of things. You’re distributing your Legos, things that you traditionally managed yourself. You’re distributing those Legos on an ongoing basis. The good news is you will never run out of Legos, because there are new Legos falling from the sky as you’re distributing more Legos out. But your job is going to change, and that’s natural.

The things that I focus on now as a public company leader versus the things I focused on five years ago, when the business was less than 100 million in revenue — they’re very different. But it’s good different. Like, I don’t miss the things I used to do because I’ve replaced them with new things I’ve had to figure out.

The last thing is you have to build a team that trusts each other. No matter what. You go to the best people in the world, and you can be a great leader, but if that team does not trust each other, you’re going to move slower than the team that does. You’re going to hit a wall somewhere, and it’s going to become the finger-pointing game or the just-stay-in-my-lane game, and you’re not going to be able to achieve the big goals you’ve set for yourself.

So make the investment in team-building, in trust-building, in one-to-one relationships in the team. Don’t have everything coming back to you, because you’ll become the biggest bottleneck in the company.

SG:
I hear you, that has to work across the leaders in your team. But you also multiple times have stepped into being a CEO, not as founder, and it seems like the first step of that is also trust within the organization. And so how did you go about building that?

JT:
Well, I’m the adoptive parent. When you work alongside a founder, it’s akin to adopting their child, and they have to stick around and watch you raise it. So it’s a partnership. You can never forget about the fact that there’s an inextricable link between you and the founders as a leader, just like there’s an inextricable link between you as a leader and your employees.

My job as a leader is to try and keep that trust gap as narrow as I possibly can, because there will always be cynics. There will always be people who say, “Oh, leadership is up there doing something that’s not in our interest. It’s in shareholders’ interest, or it’s in their interest or it’s in customer’s interests, but they’re not doing it on behalf of employees.”

The best way to manage that trust gap is to constantly be talking and be transparent. I mean, I still answer questions in town hall that maybe my lawyers would advise against. Because I believe in transparency and trust. I trust our employees to treat confidential information with the respect and the care that it deserves.

That allows me to have an open conversation with nearly 1,000 employees. You earn that trust through action more than anything else you can do. People will listen to what you say, but they will really care about and watch what you do.

Every action you make, every step you take in a company — or, frankly, the things you don’t do — your employees are keeping score. And so I’m always trying to think about how do I stay on the positive side of that ledger? The trust ledger, let’s call it. How do I stay on the positive side?

Sometimes I get busy, or in the old days I’d be traveling a lot, and I wouldn’t be as outbound and connected to employees. And that creates a communication vacuum. They’re suddenly not hearing my narratives, so they’re going to fill it with their own narrative. So [it’s important that I’m] making sure that I’m touching base.

We used a ton of short-form video over the course of the last 18 months to stay connected with our employee base. I dropped into the San Francisco office this week and just reminded people of all the reasons why they chose PagerDuty, and how all those reasons still exist. But it is like fitness. You are always working at it. And if you take a week off, you’re going to pay for it later. You’ve got to continue to build that muscle.

SG:
Well, it’s clear that you get energy from exercising that muscle. If we just stay on this topic of leadership, and look at another direction of it around the board. You’ve seen it on both sides, and at different scales. How has your board work changed how you interact with your board members?

JT:
That’s a great question. I am a huge proponent of board work for executives at all levels, because I think it develops empathy that you don’t develop as an operator.

Number one, from a career development standpoint, I think if founders, if VP-level employees want to participate in boards, they should. It just gives you a lens of a company that is more strategic, more high level, balances risks and outcomes, and also gives you context.

Over the years, the boards I’ve been on — I’m no longer on the Puppet board, but even when I was on the Puppet board, Puppet was experiencing some things that PagerDuty hadn’t, and vice versa. And just that relative context helped both the Puppet team and me learn faster than we would’ve if we were doing it on our own.

So, I’m a huge proponent of doing board work in general. But what I would say is by being a board member, it’s helped me build empathy for what my board directors are looking for and expect from me. And likewise, by bringing operators onto my board, there’s a lot of operator empathy in that room.

One of the early lessons that I learned, that I’d love to help others not learn the hard way is: Bring independent board members into your boardroom early and often. A lot of people say, “I don’t need independence till I’m getting ready to go public.” You need experience. You need people who have seen the ugly movie before, who have made the mistakes before you make them, who can be in that room and sort of balance the discussion.

There are great investors out there who are awesome mentors and coaches and have operational experience themselves, but they have conflict. They’re there to get an exit and get a return from the investment that they make.

If you bring in an independent operator into your board, their sole goal is primarily to make sure that you and the company are successful, that you go about that the right way, provide some oversight and have some fiduciary responsibility. So bring in those independent operators early and get that operator empathy in the boardroom.

I think the second thing that I’ve learned is, I’ve never seen a good board surprise, ever. Not good news, not bad news. There’s no such thing as a good surprise in a boardroom. So we have a no-surprises mentality, and we are very transparent with our board. And like anything else, a board relationship is a collection of one-to-one relationships, and then a set of many-to-many relationships.

You have to invest the time in building trust with your board members, or with management if you’re a board director, just like you have to build trust with your employees or your teammates.

Sometimes I think that’s overlooked because people say, “I want to minimize the time I spend with the board, so I’m going to talk to them every quarter when I have to out of obligation.” No, no, you should be touching base with your board members every month. When you’re younger in the company’s growth cycle, every week.

I do think it’s also good to remember that the board is there for the company. And sometimes we get that relationship mixed up, and we over-curate and control the messaging and the information that goes to the board, which limits their ability to be effective.

If you’re all in it together, and there’s a lot of visibility and transparency, then the board can be more constructive in helping you work through the hard issues and the hard problems. It’s your job as a CEO to curate which issues, which problems you really want the board to focus on.

I often say to my team, “One of our jobs is to prevent a board member from feeling like they have to bring help in an unsolicited way, because that means we either didn’t recognize the issue or we have not convinced them that we’ve got a handle on the issue.”

SG:
Right. Or communicated your prioritization, like, “No, these are the issues we really care about. We’ve heard you, but here’s where we’re going to focus.”

One thing that’s actually a question of genuine one-to-one advice from you that I’d love is: I believe trust is earned as a board member, and Greylock has a very long-term orientation, so we try to be as aligned as possible with our entrepreneurs. The exit is 10 years from now, and that looks more similar to what founders are doing than a year, right? But all that being said, I recognize that and I am a huge proponent of independence as well.

But I think one of the challenges I personally run into when suggesting this and trying to help companies build an independent board early is a sense of loss of control, or fear of that. What’s your reaction to that?

JT:
I think some of that is just inexperience and not having been around board members who know the difference between being a board director and an operator. The best board members, in my view, are phenomenal expert listeners.

They’re not proactively calling you every week to check your work or to get in your business. They’re listening, they’re helping you think of the questions maybe you should be asking yourselves that you haven’t. They’re applying pattern recognition and saying, “The last time I saw this set of information or this set of circumstances, here’s what the outcome was.” They’re helping you look ahead, look around the corner.

I think you can screen for that. I mean, one of the challenges with new directors, first-time board directors, is they have this huge natural desire to want to add value. I always tell new directors, “You don’t have to add all your value in the first meeting. Listen more, say less. It’ll be three, four meetings before you even really understand the company, even if you think you’re a vertical expert in marketing, sales, product, legal, pick your poison, finance, etc.”

And then the second thing is make sure that your board understands what you expect from them. Now, the reality is, it’s the board’s job.

The board’s number one job is to hire and fire the CEO. So if you’re not doing a good job demonstrating you do understand the marketplace, you do understand the issues, and they’re asking you questions and you don’t have good answers for them, well then you’re probably going to have something to worry about. But you’d be worrying about that anyway, right? So better you have people in your camp who can help you navigate through those issues.

I’m a huge believer in narratives. I’m trying to kill slides everywhere. I just think they’re the most unconstructive, useless time-wasters on the planet. And so I write a board narrative.

The board narrative I wrote at the end of Q1 last year as the pandemic was really hitting was pretty bloody. It wasn’t to shock our board members, it was to just really level set everybody on where the world was. Because if you weren’t sitting in a business, you weren’t seeing it yet. It was coming in a wave like a tsunami.

That was one of the best things I ever did. It developed a lot of empathy, the board hunkered down, they were super supportive. We took a long-term view. We made some decisions that have a huge long-term upside, but at the time might’ve felt uncomfortable. I think that’s what you want, but you need to be able to have an intellectually honest conversation with your board. And so it comes down to the people.

There are board directors out there that are frustrated, retired operators that want to do that. Form a pie without the responsibility. I try and filter those people out of the process.

SG:
Right. Well, perhaps part of the trust-building exercise is just making sure people understand they can screen for what they’re looking for and what can be helpful to them.

JT:
Before I hire a director, I talk to people they’ve worked for, I’ve talked to people who’ve worked for them. I’ve talked to their board members, and if they’ve sat at another board, I’ve talked to the CEO. I have a really good sense of how they’re going to behave.

One of the questions I always ask is, “What are they like when the shit is hitting the fan? When things are not going well, what does it look like?” Because you want somebody who’s calm and steady and supportive and helpful. We often hear a lot about what people are like at their best in an interview process.

SG:
Well, we are out of time here. Thank you so much for joining us, Jennifer. I’m looking forward to eventually getting to walk some miles together as well.

JT:
That would be great.

SG:
Jennifer, thank you so much again for joining us. We appreciate your insights. I learned a great deal and thank you for being generous with your time.

JT:
Oh, thank you. It was great to see you, Sarah, and thanks to the whole Greylock team, and best of luck to everybody.