David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple that you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Neil bougie, the co founder and chairman and CO CEO of Workday, with a Neil started workday with David Duffield, they defined a handful of core values for their company. Now, this is pretty common practice for business leaders. But here's the problem. A lot of leaders write down the company values and never think about them again. They even laminate them, put them up on the wall, but I gotta tell you, all they do is collect dust. But that wasn't the case with a Neil and his co founder Dave Duffield, they decided that investing in their people was going to be the number one value at their company. So how did they live out that value? Well, believe it or not, they personally interviewed the first 500 team members they hired. Now that's something that says they value people over anything else. The key lesson here is that they align their schedules and their priorities with the company's number one value. You see, the great leaders I know walk the talk of their core values. They just don't write them down and forget them. They actually use their core values to dictate how they spend their time, and how they focus their energy. We have a lot to learn from today's conversation. So let's get right to it. Here's my conversation with my good friend Han soon to be yours, Anil Versary, the co founder and CEO of Workday.

Neal, you're a good friend, I can't thank you enough for taking the time to be on this show.

Aneel Bhusri 1:56 

It's always great to be with you, David.

David Novak 2:00 

You've built one heck of a company. I mean, workday is just a fabulous company. Could you start just by giving our listeners a snapshot of the scope of your company today.

Aneel Bhusri 2:11 

So we started the company in 2005. And what we saw was this opportunity to take the legacy HR and ERP applications into this new model called Software as a Service, now called Cloud, and it covers the areas of human resources, payroll, talent management, financials procurement. And specifically for higher ed, we actually have a student system business and we really target medium and large companies, half of the Fortune 500 actually uses workday in some way or another.

David Novak 2:43 

Well, I know Yum, brands. When I was CEO, we used you and you did a fantastic job. We certainly appreciated that. You know, Neil, I can't wait to really dig into how you lead. But first, tell us a story about your childhood that really shaped the kind of leader that you've become.

Aneel Bhusri 2:59 

Well, I was fortunate to have wonderful parents. They were immigrants from India, they came in the 1960s, my dad with $400 in his pocket and made a life for himself. And for all of us by working hard. He was an electrical engineer. Now he's probably the reason I didn't go into engineering because it wasn't the smartest him. But I just watched the way he raised our family and the way that he was always about values. And I've always gravitated towards leaders and individuals like you, David, that are values driven. And it's it starts with my parents. I grew up on the East Coast in New Jersey and Boston. And the other defining thing is, I loved sports. And I played them all. Not all well, but I played them a whole baseball, basketball, tennis I stuck with tennis. That was also a defining experience just to be competitive at a young age.

David Novak 3:47 

You'll I know you love winning, and I know you probably hate losing but which one really drives your your success and how you go after things.

Aneel Bhusri 3:57 

Well, I like to win by like to win with grace and being a sportsman. I think that's everything. And that's why you and I have this passion for golf. It's not just about winning. It's the sportsmanship. It's the camaraderie, golf, the one sport where you can actually call a penalty on yourself. I just think it's such a great sport for values. So I like to win but when the right way. I also think in business, there's a lot of chances to do win wins. You don't have to be win lose in sports you do but in business, you can be win win.

David Novak 4:27 

You know, you mentioned earlier, your dad was a electrical engineer, and I saw where you got a degree in electrical engineering at Brown. You know, how did you find that that has helped you along in your business career? Well, it's

Aneel Bhusri 4:38 

a great background for number one understanding technology. And back then electrical engineering included software, I'm old enough where they didn't have a specific software to increase. So that was just an emerging category. So I did a lot of software and that has served me well. But also electrical engineering is a lot about problem solving. And in business, they're just problems that come up on a pretty regular basis. says, you need to know math really well, especially for a public company and with the financial statements and then problem solving. And I feel like engineering prepared me for both.

David Novak 5:09 

Now I know you got your MBA at Stanford, you know, which is a hotbed for entrepreneurs. Did you always have it in the back of your mind that you wanted to start your own company someday?

Aneel Bhusri 5:18 

You know, I actually wanted to go work at Apple. So I was working at Morgan Stanley, between college and business school had a great experience. And I was always lured out west, I came out to visit San Francisco once I thought, Wow, this place is pretty cool. And when I got out here, my goal was to get a job at Apple upon graduation, and I never did, but I always wanted to work at a cool technology company. At that time, the coolest company was apple. Instead, I veered off into the world of HR and financial software, because I met this amazing guy, Dave Duffield,

David Novak 5:52 

you know, and Dave was the founder of PeopleSoft. And he hired you right out of business school, as I understand it, and you were the company's first planning director. Tell us about how you thought about that decision. And what made you want to work for Dave, why was he somebody you wanted to hook up with?

Aneel Bhusri 6:08 

I get goosebumps just thinking about it. So I was pretty set to go back to the east coast and work at a venture capital firm, it would have been a good decision. But it wasn't the right decision for me. And I kind of knew it. And I ran into a mutual friend of ours, George Phil, who had been my mentor over the summer between years of business school, at Burger King near a Costco where I was doing the weekly Costco run for my roommates and I, and he convinced me to go see Dave. And so I went to go see Dave. And you know, here's the guy that's already had quite a bit of success. PeopleSoft was already a public company. And he took me out for a beer. And after an hour, in an interview, he said, You know, I don't know what I'm what I'm going to do with you. But why don't you take a break for a couple months, when you come back? I'll figure it out. And you know, the rest is history. We've been together now for almost 30 years. And I just thought, This guy's an amazing guy. I can learn a lot from him. He's great entrepreneurs and software. I also thought HR and financial software, not a big market, I'll probably do this for a couple years and go do something else. 30 years later, I'm still doing a ton financial software. And the rest of the story is

David Novak 7:17 

so you, they've hired you, you go to PeopleSoft, you're their first planning director, and then you rise within that company to vice chairman. Tell us a story about an event that really accelerated your trajectory of your career as you were moving up the ladder there.

Aneel Bhusri 7:34 

Well, probably the biggest event was actually having that beer with Dave. But afterwards, less of an event, but more I would say, a series of conversations with Dave, he decided to invest in me. And so we would go out once a month for a breakfast or lunch or a dinner. And I'd ask him any question I could come up with about how we thought about things and how we built the business. And if you know Dave, he's all about building businesses the right way around core values, which wasn't the most popular thing in the 90s. It's now very fashionable, but he was always wired that way. And over time, I just I had this great benefit. I accumulated the knowledge of someone that had been around the block PeopleSoft was his fourth company workdays, his fifth company, I just got to learn from him. And it's just become this amazing friendship and relationship that's lasted 30 years.

David Novak 8:26 

You know, I really want to hear now just the story of how you two teamed up. And you left PeopleSoft and you've formed workday. How did that happen?

Aneel Bhusri 8:36 

It was one of those emotional times where you remember everything right? Your brain was imprints those things that are emotional. So I had actually left PeopleSoft on a day to day basis and gone off to be a venture capitalist at a firm called Greylock teams had retired as chairman. And we brought in a new CEO to run the company had been passed over for the CEO job at PeopleSoft, which was totally the right decision. I wasn't qualified at that time. Then we got into this situation with Oracle where they launched the hostile takeover on PeopleSoft. And after a period of time, the board asked David knight to come out of retirement to try to save the company. And it was during that time where they asked the previous CEO to go who's still a friend, as David had to come back day focused in on the culture being more customer focused, like we had been in the early days more employee focused like we had been in the early days. During the time we were away. We had gotten away from that. And I focused in on what would happen with PeopleSoft products. And it was during that time, I came to conclusion that what we were doing at PeopleSoft was not going to work in the future. There was a small company salesforce.com that had pioneered a new model for sales and customer services. And I thought, well, someone's gonna do that for HR and finance. Miles will be us and so we actually had a plan in the very early stages to do it at PeopleSoft. But Oracle prevailed took over the company and a hostile takeover. Didn't matter Ask David I'd state and so Dave and I three months later started workday, the basic premise was, let's take those PeopleSoft applications start from scratch, and rebuild them for this new model. And let's have fun along the way. And we brought our value system with us. And that value system continues to be the one that we live by today.

David Novak 10:19 

You know, tell me about that value system. What is that? Exactly?

Aneel Bhusri 10:23 

Well, so I have to give my co founder, Dave, you know, just a lot of credit, he thought about values and created a framework for how to build a company around a core set of values way before people ran businesses that way. So number one, is employees. And you know, there are a lot of companies that have number one is customers days view was, if you don't have happy employees, you're not going to have happy customers. And to this day, I see that in spades. I've never seen happy customers and unhappy employees that appeared together, it just doesn't work. So number one, employees, number two, customers and customer success. Number three, fun. Number four, innovation, number five, integrity, and six, not really core value, but important to pay for the rest profitability. And we reward those core values, we measure people against those core values, I think about that all the time, like, how are we doing against our core values? How are we doing VA employees? How are we doing via customers? And so, you know, what I'm proudest of is we've been in the top 10 list of great places to work multiple times. And it's because we take that employee core value seriously. And our customer satisfaction levels have always been, you know, 95% or higher, because our happy employees know that taking care of customers is the right thing to do. And so it's a virtuous cycle.

David Novak 11:39 

I was talking with Ryan, who's in your communications group a little bit earlier. And he and he said, the thing that really is driven home daily is walking the talk of your values. Now, how do you cascade that to everybody in the company? Because this just can't be you and Dave?

Aneel Bhusri 11:55 

Yeah, well, so David, I interviewed the first 500 People purely for fit with our value system, We assumed that if it was a marketing person, or a salesperson or an engineering person, that the managers would have made sure that they were the right level of talent, we would screen for values, and we would look for people that were we not, we'd looked for people that had committed to their previous company or something in their life endeavor that show they would do something for a long time. And they wouldn't jump around every few years. Who would see if they had a sense of humor. They even have a crack jokes. Sometimes they probably weren't funny to the to the interviewee, but we had fun with it. And then we told those 500 people, you're going to protect the culture and the value system. And so we need you to be part of interviewing the next 5000. So we're past that group, but we've continually perpetuate the culture carriers and the people that really embrace our values, there has to be one on every interview cycle to make sure that, you know, we're getting the right people in the door.

David Novak 12:51 

You know, I've never heard of any two leaders interviewing that first 500 team members, I mean, that is such a sensational thing. That takes a ton of time, you know, and here you are, you've got this startup, you got to get going, you know, you've got all these business priorities. You know, how did you stay true to that?

Aneel Bhusri 13:09 

Well, again, it comes back to employees being number one, and you know, we're up against two formidable companies and SAP and Oracle. And we thought, hey, if we get the first 500, right, and they really are the best in our industry, that will give us a shot, we want a shot, but we're gonna need the best people. Because we're up against these really formidable companies, we got a great idea. We've got disruptive technology, but we need the best people. And you know, Dave and I are passionate about this topic. And so we just agreed we'd interview the first 500. And that took precedent over everything else we had in our schedule.

David Novak 13:42 

Was there something that changed the way how you approach the business, because of these interviews, you know, I'd

Aneel Bhusri 13:47 

say something that I'm not necessarily proud of, I had a bias towards people from the right schools. And it turns out, talent is everywhere. And sometimes you just have to look a little harder. And in some cases, some of the right schools didn't actually produce the best employees, because there can always be at sometimes a sense of entitlement. And so I really got to see this attitude of hungry, I'll do whatever it takes to be successful. And, you know, that's invigorating, it's exciting. And you want you just want to hire more people like that. So less and less about, you know, educational history more about what they've done with their lives and what they wanted to do.

David Novak 14:24 

You know, you've got to be one of the most experienced interviewers on the planet. What advice can you offer the rest of this?

Aneel Bhusri 14:31 

You know, I think what every CEO or management team wants are dedicated employees who have good values. And importantly, you want them to stay as a company for a long period of time. People that leave every two years, it's really painful. It's very, very costly, right? You've just trained them up, they will now know the company and I call them shiny new Penny folks are looking for that next opportunity. It's really digging into someone's background to get a sense that they'll be committed for the long run because Every great company I've seen or been around, there's a whole host of employees that had been there from the start, or if not from the start for a long period of time, we have quite a few tenured people in our company that both bring the value system to work everyday, but also our folks that have so much expertise now in our products and technology, that it's just invaluable.

David Novak 15:19 

You've had so much success, and when you have that kind of success, everybody wants your people and you know, recruiting people's one thing retaining them is another, you know, I really believe recognition was key to retaining people. I mean, what's your belief on how you keep people beyond just having that fantastic culture that you have?

Aneel Bhusri 15:38 

Well, absolutely, it's in your book. I think recognition is a huge part of it. And what we've tried was recognize our people around our core values. So someone that had done a great job around a customer go live or a customer experience would be up for an individual we call them OCA is outstanding contributor awards. And we give out those words on a quarterly basis. There's a team award for a group of people, hopefully, that was cross functional, that did great work on a product on a sales situation on a customer, whatever it is, they weren't together and the more cross functional, the better because that creates those bridges across the company. Innovation, we have a quarterly innovation or Innovator Award. So we try to just reward behavior around the core values and people take notice.

David Novak 16:22 

And I have to ask you who came up with the workday name?

Aneel Bhusri 16:26 

James daughter, who, who is a very talented marketing executive Amy Duffield, I will just say that Dave came up with a name. I wasn't a fan of I came up with a name that he wasn't a fan of. And Damien said, let me go do a project. And we'll come up with a better name that when we would come up with and I'm not going to mention our two names, because they're there. I think they were so bad. And when she came up with a list of 10 names, working with an outside agency, Dave and I both looked at each workday. I mean, the minute we saw it, we both knew

David Novak 16:58 

it's such a great day. That's why I had to ask you that I had a terrible name, too. We actually went with it with before we had Yum, it was tricon. And nobody knew what that was. It was terrible. Sounded like an industrial cleaning company, you know. But anyway, I'm glad we moved on to something a little bit more upbeat. You know, and taking you back again, we talked a little bit about the culture. What was the process you and Dave used to lay out the original vision for workday? And the company that you are today? I mean, how did you guys formulate it all?

Aneel Bhusri 17:29 

Well, we knew the space from our days that PeopleSoft. And what we saw was a market that needed a fresh solution, from fresh insight that had old products that were harder and harder to go from one version to the next. Customers didn't like running these products on their own premises. And as I mentioned, we saw the small company, Salesforce, and we thought, well, Salesforce is doing it in small and medium sized businesses. But that's not really my background, or Dave's background. So we said, let's start with HR. Every company needs a better HR system. And an HR system happens to be an application that touches every employee in the company. And so one of our big bets in the transition from the old legacy systems to the cloud systems was that the user experience had to be much better. And so building a great UI was a huge part of what we set out to do at the start at workday. And we started out with medium sized companies, but always with the intent to grow to larger companies. And over time, the product line grew from HR to HR and payroll to HR, payroll and talent. And we always knew we'd go into finance, because that had been a big part of the PeopleSoft vision, really, if you think about it, for lack of a better term, but the administrative backbone, HR and finance and procurement just end up being the administrative backbone, and they naturally work together. And so that really was our vision from day one. And I'd had that time at Greylock. I'd had the time running products that PeopleSoft. You know, my great moment was convincing Dave at 65, that he had one more left in him. I said, Hey, Boss, come on, let's just do this. You got this one more. And he did. And he moved his family down for a period of time to California. And I see him quite often. He's an amazing guy. But a big part of the reason workday exists is I convinced him he had one more in him and I come up with the basic outline of what a product idea would look like. And he said, Okay, let's do it.

David Novak 19:21 

Now, as you have made some shifts, how do you go about making strategic shifts to take on new product categories? You've evolved your core strategy considerably?

Aneel Bhusri 19:33 

Well, I think there are two pieces on the technology side, every few years, I take the smartest technologists off site for a day or two. And we'll just talk about what would you do today? Like we built workday around the set of technologies in 2005. What would you do differently today? And something always comes out of that conversation in 2010. He was mobile while we build the application for mobile first, and 2012 13. He was all about big data in three or four years ago. was about machine learning. And what we do is we take that insight about what a startup would do. And we try to incorporate it. And in some cases, we rebuild things from scratch. And so there's no lines of code from our product 15 years ago, because we rewritten everything to take account of these modern technologies. On the expanding the footprint, we just listen to our customers, we just acquired a company called pecan, just a couple of months ago, that is all about employee engagement, and measuring how happy your employees are, and how engaged they are in a really formulaic machine learning way. It's a really powerful application. We were dabbling in that area. But as we talked to CEOs and HR leaders, especially during the pandemic, they really wanted to get a sense of the level of engagement of their employees. They said, you know, what are you doing in this area, and we looked at were too far behind. So went on bought this company, pecan to fill that gap. And I think it's constantly listening to your customers, they're not going to be the ones that tell you, hey, build an in memory database and come out with a new application. But if you ask them what they would like next, they'll tell you, if you're really close to their customers, they'll tell you,

David Novak 21:04 

you and Neil, I've heard you talked in the past just about the importance of listening your customers and solving their big problems. How do you go about finding out what the most important problems are, so you can be focused on the big ideas.

Aneel Bhusri 21:18 

So we've got multiple ways of getting feedback from our customers, we have one called brainstorm where any customer can log in a request, and then the requests will get voted on by other customers. And so we'll figure out where we have some hotspots or we have where we might have a hole or an issue. The next level down would be, we have meetings of CHR, OHS and CFOs, where they give us general feedback about what areas you want to move into. But then when we're designing an actual product or feature, we create design groups with our customers, we'll look at a new area, we came out with a new product called accounting Center, which is a high volume accounting engine for parsing all your accounting transactions, we looked at the customer and said, Okay, we need somebody out of financial services, we need somebody out to retail customers that are passionate about and we collected a group of eight customers, and they helped us define what they needed from the product. So we'll come out with that kernel of an idea. But then we really let the customers shape what they want in the product. And the great thing after that is, if you pick the right customers, they're representative of future customers. But also, they're really bought into it because they were part of creating it. And it's great to have advocates like that out when you're trying to sell it to a new customer.

David Novak 22:24 

You know, you just have passed on so much credit to Dave, in the partnership that you've had with him. And then now you're passing on credit to your customers, when you have the right customers, you build your business? When did you learn the importance of recognizing other people celebrating other people's success? Even more than your own,

Aneel Bhusri 22:42 

are probably not gonna love the answer. It's also Dave. All roads lead through Dave, I was very fortunate, I went to work for him at 27. And I got to see a CEO who had learned a lot from his previous experiences, and now had come up with a model of what an ideal organization would look like, Dave, he's very humble. He's one of the most humble people you'll ever come across. And he's been very successful. And so after working with Dave, I would think, well, it's hard to have an ego, he doesn't have an ego. So how can I have one, but I watch how people would react to his generosity, his nature, about always wanting to pass out compliments and reward people with done a good job. And, you know, again, it was really a formative experience for me to work at PeopleSoft with Dave. And then I got to apply it at workday as CEO and with Dave as my touchstone, and my sounding board on a lot of these decisions. But I've just been very fortunate to have great mentors. And I mentioned George is also one of those kinds of folks,

David Novak 23:42 

fantastic people, you know, and Neil, you're such an innovative company and put your whole category in what's going on in business right now. It's just changing at warp speed. How do you keep you and your management team into that rat a tat tat of staying on top of what's going on?

Aneel Bhusri 24:00 

Well, you know, part of it is you just have to stay connected again to your customers. In my case, what I tried to do is stay connected to a group of CEOs who I think are, you know, at the vanguard of of dealing with this change. So I think about people like Doug McMillon, Walmart's our biggest customer and Doug is a fantastic leader. And I get a really good sense of what's happening talking with Doug or Mary Barra and GM. I've got John Donahoe at Nike, we've got all these great folks, and I just tried to stay in touch with them and listen, because that's the way we can keep up with it. And then, from a technology side, you got to be on top of all the startups. There's so much innovation happening right now. What I ask our team to do is, hey, you got to focus in on what you're doing day to day. But please pay attention to what's happening in the startup world. And so we invest, I think, at this point in 50, emerging technology companies that are relevant to work day that are usually partners of some sort that keeps us fresh, and we get to see the new ideas because the new ideas never come from the really big companies that new ideas come from small startups. It's always been the case At least from the business to business area,

David Novak 25:02 

what innovation today are you most excited about at workday and tell us how it came about?

Aneel Bhusri 25:07 

Well, probably the one that I'm most excited about is one that we've been working on for a while around machine learning. And I'm a big believer that there is a right partnership between humans and machines, not like Terminator where the machines are going to take over the world. And what it is, is the partnership is built around the fact that machines are amazing at analyzing huge amounts of information in seconds, but they have no judgment. You know, a machine now can tell you that it's going to rain in eight minutes. And human knows, okay, that means I should take my umbrella to work. When we think about weather forecasting. 20 years ago, we didn't really know what we're doing. But now we actually do. And it's that kind of partnership where the machine will say, here's the analysis and the human being will make a decision. And the machine will say, Hey, your business in Japan is doing poorly. Here are the top three reasons why we think that's the case where the machine thinks that's the case. And then the human does the exploration to figure that out. And I think the more and more we can get humans to be great at judgment and not have to worry about just crunching numbers where machines are good. I think it's really powerful. We're trying to fuse that across all of our applications. And it's a journey, we've been at it for four years. Now. There's more to do. But I think it's just part of this trend and road towards humans getting to do more and more valued work and not being replaced by machines. I don't see that future. And there's a book that's behind me called prediction machines, I highly recommend folks read that to really get a sense of how machine learning can be using them in a powerful way and a safe way and in an ethical way. When you have these

David Novak 26:35 

new products and these new categories that you go after what's absolutely critical when you assess opportunities.

Aneel Bhusri 26:42 

Well, I'd say the number one thing is is there a real market for it? And again, we talked to our customers. Number two, is there something that we can do uniquely, if it's something that 10 Other companies can do, why would someone want this from workday? And then the third piece is we might be able to build it uniquely. But does it fit into our existing sales and marketing model. And if it does, if those three things fit, big market, something we can do uniquely, and it fits into our sales and marketing model, we get pretty excited about it, whether we're building it ourselves, or whether we're doing an acquisition.

David Novak 27:12 

Neil, I love it. When you say you get together with your team and you say what would we do if we were a startup? As you get bigger? Is it harder for you to get people to think like a startup? And how do you do it,

Aneel Bhusri 27:24 

there's always a group of engineers that want to be on the cutting edge that are thinking that way. And I think it's making sure that you're in touch with them, and that you have relationship with them. And that you give them time to think about those things. You know, Microsoft, Amazon, Apple, three amazing technology companies, they all have people who are at the innovative cutting edge, even though they're huge companies. And so innovators are in all companies, you just have to find out who they are and how to how to stay connected to them.

David Novak 27:52 

We're definitely in a extremely competitive world. And disruption is the buzzword in almost every category. How do you look at competition?

Aneel Bhusri 28:01 

Well, we have two very traditional competitors in SAP and Oracle and formula companies. But we know a lot about their products. And we've been competing with them across two companies between PeopleSoft at workday, we have the same competitors. And when Dave and I started workday, I think a lot of folks thought we were crazy. And so not a lot of startups came into our market. And it's a big undertaking, building an ERP system, where you have to worry about HR and financial regulations across the globe. It's not something you just build with three or four people in terms of new competition. It's always looking at those startups and understanding what they would do with that new technology base. And so today, you would start with machine learning as the underlying part of your platform, you would never build out your own data centers the way we did, you'd work on Amazon, or Microsoft or Google's data centers. And so you're constantly looking for those emerging companies that might disrupt you the way, frankly, we disrupted SAP and Oracle, and learn from them, or in some cases, you know, acquire them.

David Novak 29:03 

You know, I understand and Neil, that you recently became co CEO. Now, most experts say this is very difficult to play out. Why do you have the CO CEO structure?

Aneel Bhusri 29:14 

Well, first and foremost, Dave, and I had that structure for, I think four years, right before IPO through 2014. It's great having a partner, Dave doesn't have an ego. I like to think I don't have an ego. When two people can come together and solve problems together. It can be magical. And after seven years of being alone as CEO, I wanted to go back to that model. And so we elevated a gentleman named Chantel Fernandez, who was our head of Europe than our head of worldwide sales and our head of worldwide operations, co president, and now he's my co CEO, and he's phenomenally talented. And the way we carve up the world is he really focuses on sales and customer services, and customer facing activities and I feel focusing on the products, HR and finance and we have a great partnership. I'll frankly say especially for a b2b company where sales is such a huge part of what you do. Being able to share the workload is a great thing. It's a big job. I've never run a company this big PeopleSoft wasn't nearly as big as workday is. And so when people ask me how you get along hygiene, I was like, I'm making a lot of stuff up as I go. And I've got great mentors, like our friends like Sam Palmisano, and Dave Dorman, who have run companies at scale, for me to be able to get back to the product side, which is my passion, and hopefully what I'm probably best suited for workday and be able to have a partner in China, it just, it just makes the business run better.

David Novak 30:38 

Neil, I understand that you have technology that will help people figure out their next career move. How's that possible?

Aneel Bhusri 30:45 

Well, it's part of our career plan and succession planning efforts where this is machine learning, again, at work, look at the person who is looking for a new opportunity, they'll then try to look at people who had been like that over the last several years and look at the ones that have been successful and what was their career path. And it will then based on previously successful career paths, make a couple recommendations to employee about what they should do next, and what training they might need. And so it's like a machine learning based coach that's coaching you through your career based on people that have been successful in those roles in the past.

David Novak 31:21 

How would you describe the state of the business world today? And more importantly, what's it going to take to be a truly great company going forward?

Aneel Bhusri 31:31 

Well, I have to say, I am so proud of how some of the biggest companies and their CEOs have led during this pandemic, I've always believed that business should have a soul that we have a broader purpose than just profits. And in a world where there's a social crisis, a political crisis, and economic crisis, you name it, there's some sort of crisis, I think business leaders stepped up. And we try to be that place where at least our employees and our communities could feel like someone was looking out for them. And it's leaders, like I mentioned before, like Doug McMillon, at Walmart, or or John Donahoe, at Nike or Mary Barra at GM, or James Gorman at at Morgan Stanley, I can just keep going through that list. And they lead with a mindset of more than just running the company, but being good citizens in this world and taking care of their employees, but also take care of their communities. And I think that's the future of business going forward. It's that whole stakeholder theory discussion we've had for the last 20 years, I think it's time is here. And I know people will say that's really not important to business, businesses need to be focused on profits. But I actually think having a stakeholder approach stakeholder management approach that's multifaceted rather than just shareholders actually leads to a better business, better attachment to customers better attachment to the community, employees that are far more engaged, because they think their company is doing the right thing in the community. I think those things matter a lot, especially the new generation employees, they want to see how you're making the world a better place. So I'm excited about where businesses today,

David Novak 33:03 

you know, a lot of people talk about purpose, and you use the word soul. Is there a difference? From your perspective? And why do you use the word soul?

Aneel Bhusri 33:15 

Because I think the soul means you've got a heart, right? Like you got to care. It can't just be I have a purpose about building a certain type of company. But you got to care, you got to care about your employees, you got to care about your customers. And I think those all those things mean to me, a soul and company shouldn't be soulless, they should care about these things. And the management team should care about these things. And I'm very proud of our management team. They care deeply about the topics that we've been dealing with the last 18 months, we have a foundation, the workday foundation that's been active well before the pandemic, and creating opportunities for all opportunity. OnRamps is a program that we created, and we're an HR software company. So we see that there's all this talent, but they don't have opportunities to get into the companies. And so it helps vets get opportunities in companies, it helps homemakers who might not have been in the workforce, the last decade, get into the workforce, it helps underrepresented minorities who might not have the right avenues get into the workforce and something that I'm really proud of. And I think, you know, we're making a difference. But we're also helping the economy. I mean, it's, again, it's one of the things you do good, but also it's good to do.

David Novak 34:24 

I've talked to a number of CEOs about workday and just preparation for this and you know, you get such high marks for helping their companies get back in the swing of things post pandemic. What are you particularly proud of that workdays done?

Aneel Bhusri 34:38 

Well, you know, David, so many companies, CVS and of course, yum brands, were on the frontlines during this pandemic, whether it was serving food or being a drug store. What I'm proudest of is those folks were taking care of all of us. And in turn, our employees were keeping their HR and finance operations running so they didn't have to worry about that. And so we took care of that. But it all starts with those people who are on the frontlines during this really difficult period of time. And I'm proud of the way our employees figure it out working from home, in many cases to support our customers really without missing a beat.

David Novak 35:11 

Shifting gears, you really do some fun advertising with Phil Mickelson, and you've linked up with other golfers as well, why Phil, and why golf or workday,

Aneel Bhusri 35:22 

the C suite pays attention to golf, there's no better sport to reach CFOs, CHR, OHS CEOs, maybe f1 Maybe at a lower level tennis, but if you want to get to the decision makers, Golf is a great way to do it. And so we started on the golf program brand, Seneca was the first person we work with who is just a great human being. And then, you know, a chance came up with Phil and and Phil's a needle mover. He's iconic. He goes by one name. I don't know if it's Phil or lefty. Either one works. And I would just say as an ambassador for workday. He works so hard on our behalf. He never says workday. He says we he talks about it as if he's part of the company. And, you know, the other part is you see in the ads, which we didn't know, we signed him if he's a pretty funny guy. He's got a great sense of humor, and our marketing people. You know, we're very focused on one thing when we do an ad, people don't want to watch boring games. They want to watch something that makes them laugh, leave a good message, but makes them laugh. And Phil is really good at that. A lot of his acting on TV is completely ad libbed by him.

David Novak 36:27 

And that's great. And it was so much fun to see him win the PGA championship

Aneel Bhusri 36:31 

that was that was a big deal for us. Yeah, absolutely.

David Novak 36:33 

Well, you had workday plastered all around the world for sure. You know, shifting gears another time here. You know, I know you've been an advisory partner. You mentioned this earlier, at Greylock. And you have a renowned ability to assess startups, they have what they call the Forbes Midas list, and you've been on it six times, what would be the top three things you look for in a startup?

Aneel Bhusri 36:57 

Number one, be entrepreneur, there's nothing that's going to happen great without a great entrepreneur. And I typically like the technical entrepreneurs that are really trying to solve a problem number two, disruptive technology. If the technology is 10% better, it's not going to be enough to convince people to leave SAP Oracle and IBM are a big company, it's got to be 50%, better 80% Better. Number three, a big market. And I think that third part is not always easy, because sometimes big markets system represent themselves as big markets upfront. But I found if you partner up with the right, technical founders that work now, there are lots of models that work that just happened to be my model. And I in consumers, different consumers, something gets hot without a lot of technology built in it. I don't know much about consumer technology. I'm a business to business person. And that model of technologists really deep technology that's disruptive to the existing players and a big market. The big market sounds obvious, but it's not always clear. I always say like, in the case of Workday, maybe the cloud model wasn't going to take off and there's gonna end up being $100 million market. But at the time, we had no idea that the whole market would shift to the cloud. Suddenly, you just kind of have to make leaps of faith on the market.

David Novak 38:07 

You Anil, you've had so much success, but almost every leader I know as an epic fail or a huge personal issue that they have to work through. Could you share yours with us? And what did you learn from it?

Aneel Bhusri 38:18 

I mean, outside of my golf career.

David Novak 38:21 

I know, I know, you just lost a tournament in day two. But let's put that aside. You know,

Aneel Bhusri 38:26 

the biggest one I went through is the loss of PeopleSoft to Oracle. That was very, very personal. I feel like my career and Dave's career you know intertwine for those seven or eight years we're working together. I didn't need to leave Greylock to go back. I took a leave of absence from Greylock to go be part of the management team running PeopleSoft in the middle of a hostile takeover for $1 a year salary. I did it because I love Dave. And Dave asked me to go back with them. And I thought we'd win. And, you know, we didn't it was heart wrenching PeopleSoft stood for all the core values that you and I have talked about today. And to see the company go was was heart wrenching. And also you just felt like you lost you just lost like, and there was no way to there's no way to recover. And it was a long three months. Dave and I both got the flu. I think we're just so rundown trying to run the company and the hostile takeover. But you know, that was the classic Phoenix story. What what happened was workday rose from the ashes. If workday hadn't gotten created, I would still I would still be living through that last six months that people talk because I love that company. I loved all the folks that were there. How did

David Novak 39:36 

you maintain or get your pot your positive person? How did did you lose your positive attitude during that period? How did you get your positive mindset back?

Aneel Bhusri 39:46 

I had moments where I was I was depressed. I listen to a lot of music that was inspirational and I watched I like a certain type of movie that is a true story that's inspirational like like Seabiscuit, or greatest game ever played. I just watched those movies at said, hey, you know, we might have lost the battle but the war is just beginning. I hate that that's a terrible analogy but, but that it's just a chapter and I need to move on from this chapter. My girlfriend at the time he's now my wife was also very supportive of what I was going through. She knew it was, it was painful, but I tried to exercise a lot. I just tried to do anything to get my mind off of it, because it was it was just really hard.

David Novak 40:21 

Yeah, I can tell it was definitely painful, you know? And, Neil, I'm a big believer and self coaching, how do you build self awareness and determine how to take your game to the next level?

Aneel Bhusri 40:33 

You know, I think number one, you have to have a great relationship with the people that work for you. And with you. And I asked on a regular basis, maybe I don't always get great feedback, or honest feedback, but I hope to get feedback from the people I work with on a day to day basis. And then I surround myself with mentors, who have no problem giving me direct feedback, whether it's George still, Chairman Payne, Sam Palmisano, you know, Condi Rice, I have all these people who I admire and look up to, you know, who are in some way or another involved with work to help? And I'll just ask them, you know, how are we doing? How am I doing? You saw me in the rack my team, what could I do better? So I think it's it's always asking questions and listening.

David Novak 41:14 

You know, I, I know you also mentor others and coach others. What's a one on one coaching session like with you?

Aneel Bhusri 41:22 

I just asked a lot of questions. What are you trying to be as a leader who you're trying to be as a leader? Where do you think you're doing? Well, what do you think you're not doing? Well, let's talk about some recent examples. And where is it that you want to be you know, in a year or five years and aspirational kind of discussion, and let let people talk and just out of the conversation, good comes out of it. And then I tried to suggest my books to read, you know, workday is built around the Good to Great concept that Jim Collins, he wrote several great books and every one he comes out with, there's something that we that Dave and I read and refer back to and a lot of good to great is not just about how to build a great company, but how to be a great manager how to be a level five manager, someone that deflects credit and absorbs blame, right? That's the that's the epitome of a great leader. And sometimes you when you read those books, it just reminds you those principles. And so I always have my three or four books that I recommend to someone who's aspiring to be a great manager.

David Novak 42:19 

And the alum I'm having so much fun with this conversation, I'd like to have some more here. You up for a quick lightning round of questions. Sure. Okay, three words that best describe you.

Aneel Bhusri 42:32 

optimistic? I don't know how to say the one word I'll say family. And hopefully everybody agree fun.

David Novak 42:43 

I would agree with that. If you could be someone beside yourself for a day, who would it be and why?

Aneel Bhusri 42:48 

I'll be so Mickelson and I know why. I'm a lefty golfer too. And just to just experience hitting the ball like that. One time in front of 20,000 people and the shot actually work. I think that'd be pretty cool. I would even need to be a day would just be a couple of shots.

David Novak 43:09 

What's something about you that few people would know?

Aneel Bhusri 43:13 

My favorite food is pizza. And as I travel, visiting our customers, the first thing that I tried to do is find the best local pizza joint and then have a journal from all the pizza joints that visited across the country.

David Novak 43:25 

Sounds like a good book to be Do you have any hidden talents?

Aneel Bhusri 43:29 

Not that I know.

David Novak 43:32 

What's your biggest pet peeve?

Aneel Bhusri 43:35 

You know probably ego. For me again growing up with Dave I pride myself on being confident and not having ego you can be confident but not have a huge ego. And I think egos are pretty off putting

David Novak 43:48 

favorite interview question.

Aneel Bhusri 43:51 

Favorite interview question. What's your favorite movie?

David Novak 43:56 

And funniest thing that ever happened to you got so

Aneel Bhusri 43:59 

many things? Well, so when I was an electrical engineer, I was always better at the software side than I was the chipboard side. And once during an experiment I actually wired my chipboard properly but I wired the capacitor boards between positive and negative and a puff of smoke rose off the board and it set off the water sprinklers. That's That's what I thought, you know, maybe I should maybe I should do software. That's hardware things that work now. That was set the lab on fire.

David Novak 44:31 

That was but you know, thanks for that now, what three bits of advice would you give to all the aspiring leaders that are listening in right now?

Aneel Bhusri 44:40 

I would start with separate out being a manager from being a leader. There are two different things you need to be both. But a leader is inspirational. How are you going to inspire your team? How are you going to set ambitious goals and the way you get there? Number one is being empathetic. Listen to your employees. Listen to what's important to them, you know, understand what's what's important at work, but also understand what's important to them at home. And that will help you get that loyalty and get those folks to be really focused on the inspirational goals that you have in front of you. So that'd be empathy. Number two, it'd be cycles. To me, organizations I come across the goals are diffused, or they're not really achievable, set specific goals. And probably the third part is get a mentor. And there's so many great mentors out there. I've been a great beneficiary, I'm sometimes known as someone that collects mentors, and I will keep collecting mentors, because I learned something different from all of them. You can either go through the world and make mistakes on your own and figure it out after the fact. Or you can learn a lot from the mistakes that other people have made, and focusing on making new mistakes. But let's not make the ones that other folks have already made, who are willing to be mentors that can help you be great leaders.

David Novak 45:53 

You mentioned home, and you have so many irons in the fire and deals. How do you go about balancing work and family at home?

Aneel Bhusri 46:05 

Well, I would say before the pandemic, it was a challenge, I was on the road a lot. And my wife would schedule a night or two where I'd be around for dinner. And then during the pandemic, I was around for dinner every day. It's finding a balance where I need to travel for work, but family is really important. So I tried to devote weekends to family. And a big part of having a co CEO now was I don't have to be on the road. Three weeks out of four I can I can spend time with my wonderful wife, Alison, and our and our two kids.

David Novak 46:37 

And last but not least, we when you look out into the future, what's the unfinished business for you as a leader,

Aneel Bhusri 46:43 

the tech companies that we measure ourselves just keep getting bigger and bigger and bigger. But I think workday is this company that does business the right way that takes care of its employees and takes care of its customers. And I want to see it have an independent future. And we're on that path. I think in three or four years, we'll get to 10 billion in revenues. And at that point, I think we have secured our future. And that's really important to me, I want to be that independent company the way in today's world of applications company, Salesforce is now on that on that path. Adobe is on that path. And I hope I hope we're next.

David Novak 47:16 

Well, I'm sure with you at the leadership as CO CEO, and just the founder that you have been workdays best days are ahead of them. And Al I want to thank you so much for taking the time. And thank you so much for the candor that you've had in this conversation of ours. That was great to be with you do.

You don't have my conversation with the Neo was like having a conversation with the brother, we are absolutely philosophically aligned, people are absolutely the most important thing you can focus on. And the way I really wanted to drive that home was using recognition as our number one behavior, our number one core value. And I knew that I had to lead the way. That's why I created the personal recognition, award my walk the talk teeth, and when I would see somebody doing something great, I would recognize them, I'd take my walk and talk teeth out I'd write on top of and I'd number it, I take a picture of the person say, Hey, I'm gonna send you a picture, you can do whatever you want. But I'm going to put your picture on my wall in my office, because what you're doing is what's making our company great. And guess what happened. I filled the walls in my office with people that I recognized all around the world. And when I was running out of wall space, people said, Hey, David, what are you going to do next? And I said, just start looking up, because I'm going to start putting pictures of people that I recognize on the ceiling, which is exactly what I did. But let me tell you something, people love to come into the CEOs office. The reason is, is they kind of want to learn about the person. Well, let me tell you something, I want people to learn about what makes our company tick when they walked into my office. And it wasn't me it was the people that we were recognizing all around the world. Now the good news is I cast a shadow and other people followed in everybody else in the company started developing their own individual recognition award and doing recognition themselves. And that's how it really became something that yum brands actually became famous for. We got all kinds of accolades, other companies best practices, because they wanted to learn how we use recognition to drive results. And we got great results at yum brands. Now, I don't know about you, but I love that quote, you cannot be what you cannot see. That concept applies to us this week, and that you cannot expect your team to do things that you're not going to do yourself. You have to live out your core values. If you want anyone to follow you. Do you want your core values to simply be forgotten? Of course you don't. I've got to tell you it's really up to you as the leader to make sure that doesn't happen by live In your core values every single day. So here's what I want you to do. I want you to pull out that list of core values that you have in your company or that you created for your team, which are the one or two that you're going to put time and energy into this week. How are you going to prioritize these on your calendar? This simple exercise really matters because what we learned today is that great leaders walk the talk of their core values. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the best leaders in the world. I make it a point to give you something simple on each episode that you can apply in your business so that you will become the best leader you can be. See you next week.