Six months ago, Workday took its first step away from being founder-led when it named Chano Fernandez to share the CEO reins with co-founder Aneel Bhusri. It was an important milestone for Workday, but the choice of Fernandez as co-CEO signaled that it's no fork in the road. He has been a trusted lieutenant for almost seven years prior, first as EMEA President and then EVP of Global Field Operations and ultimately co-President. When I caught up with him late last week, he told me his main goal as co-CEO is to keep the company's growth on track. He says:
We see ourselves in front of a huge market. We clearly want to keep fulfilling and serving that market, if anything much better and deeper, but hopefully faster, in terms of how we're accelerating innovation and impact across our customer base.
On that, he's in lockstep with co-CEO Aneel Bhusri, with each driving and taking responsibility for a distinct aspect of the business while staying in close communication. Fernandez says:
I think these roles work when you have a friendship, trust, clear set of responsibilities, no ego — basically, we both want to do the right thing for the company. Aneel is working more on the product side, where I'm working more on the go-to-market side.
I think a good way to think about it is, I'm more thinking about the growth — or accountable, responsible for that part — and Aneel is more thinking and being accountable on the innovation. Everything in between, we keep communication lines very fluid and [we have] active and continuous discussions.
Drilling down, Fernandez cited three areas where he wants to leave his mark on the company — all of them reinforcing existing traits, rather than signaling any change in direction. The first is culture. He says:
The first thing for me would be, the values remain very strong and getting stronger. That means our culture, more than any other thing ... how employees feel about this company, and how engaged they are and how they help us out to protect and enhance this culture.
An important part of that is Workday's commitments to diversity and inclusion, as well as giving back to the local communities where it operates. He explains:
We just want to do the right things for our employees and our people. If we can grow and really have an impact on our employees [and] the communities in which we operate. And clearly what we're doing as well, to make a better society overall, in terms of diversity, inclusion, in terms of where we are supporting them on volunteering, and again, having the impact on local communities.
On that note, the Spaniard's European background brings an alternative viewpoint to the Silicon Valley-based company. He explains:
I think having someone with a perspective that is sitting outside of the US and more a global citizen — because I've had the opportunity to work across many different countries in Europe, and a number of them in Asia, and that has been even ahead of me joining Workday — I think I bring that perspective.
Every time we have the opportunity to have our executive committee discussions, if there is something that I'm not feeling that is inclusive enough, from a global or cultural perspective, I'm usually the one raising my hand.
The other two areas where Fernandez intends to leave his stamp are customers and growth. He says:
The second thing would be our customers. I want to remain, as we scale, with the same track record on customer success that we've been having to date, if not better.
The third thing I would say, is clearly, making an impact and contribution to the re-acceleration of growth, which is what we've been signalling to the market.
Seizing the opportunity to drive growth
There's plenty of opportunity to drive growth in the wake of the past year, as enterprise leaders have recognized the agility and innovation that can be achieved by moving to cloud-based IT systems. Fernandez elaborates:
Success today demands for companies operating at what we call a higher metabolic rate. And most organizations, unfortunately, are still illiquid, from a systems perspective, for that acceleration.
Companies are looking for a continuous recalibration — what we call the faster plan-execute-analyze cycle and making faster decisions. They're looking for breaking down silos and operating much more seamlessly in real time. They're looking to mitigate uncertainty with a full broader picture, of your financials, your people, your operational data. They're looking for rewiring processes in days instead of, I don't know, months and years. And they're looking for, especially during this time, how can you shape a new future? And that new future many times, meaning, how do I run multiple scenarios? How do we get actionable insight? How do I support new business models? It's very hard to do these with legacy systems.
Again, that's been an evolution that companies have realized into. I think you need enterprise management, cloud-ready systems like a Workday, at least to do that on your people and your money.
Seizing that opportunity nevertheless has required some adjustments on Workday's part, both in its go-to-market and in its product offering. Perhaps the most notable change has been the switch from in-person sales calls to virtual selling. It seems unlikely the old ways will return once the pandemic lifts. Fernandez says it's impossible to predict how much the reduction in travel will be, but he believes quite a few sales visits that used to be seen as a courtesy will no longer take place. He says:
If you give it a good guess, it's potentially more around that 50% reduction that we're going to see. Most likely those trips that many of us were doing, let's say from London to Zurich for one 45-minute meeting. Sometimes you were doing it because you thought it was maybe disrespectful towards a customer or a prospect to do it any differently, if you were not making the effort of going there.
Post-pandemic shifts in the Workday proposition
One of the most important shifts in Workday's proposition has been away from product sales to more of a solution sell. The company introduced dozens of new solutions after the pandemic hit that were designed to address needs uppermost in people's minds, such as back-to-work solutions, the VIBE inclusion belonging and equity solution, vaccine management, and so on. Fernandez recalls:
When we made that pivot from more product orientation to more solution-based orientation, that was really relevant to the times that we were living. That resonated much better in terms of the engagement we were having with our customers — because we were clearly trying to help bring out what was core centre to the discussions that they were having, and it was a priority for them.
Besides these point solutions, there's also a broader direction towards offering more industry solutions. Here, Workday is working closely with ecosystem partners. Fernandez points to Deloitte's work on a performance-based variable incentive compensation solution for financial services, a project with Accenture to develop holistic financial planning for specific industries, and initiatives at KPMG to provide a labour distribution solution for healthcare, powered by pricing analytics, and IFRS compliance for the insurance industry.
In the HCM space, Workday's recent acquisition of Peakon was a response to the growing emphasis on employee engagement and wellbeing — already a rising trend, but accelerated by the pandemic. Fernandez observes:
I think it's been a more intense need than ever before, to understand how employees are doing, now that we are not seeing them ...
We're lacking those — corridor, lunch or coffee — corner conversations that we could have in the office where we would pick up on things that we can't any longer unless we do it this way.
Finally, the disruption of the pandemic has brought home to finance leaders the importance of automating data flows and accounting processes so that their teams can focus on exceptions and analysis rather than getting bogged down in manual tasks. There's going to be a growing emphasis on the use of machine learning and workflow orchestration in Workday solutions for finance teams, particularly based on its Accounting Center product. Fernandez said to look out for more examples of Workday interacting with external systems to automate financial process flows, either working with Robotic Process Automation (RPA) vendors such as UIPath and Automation Anywhere, or on occasion making RPA redundant by deploying its own orchestration capabilities for those external links.
We covered a lot of ground in our first chat since Fernandez became co-CEO. There's a lot to discuss — Workday has a broad portfolio now and is expanding its footprint further with industry solutions that necessitate deeper co-operation with its partner ecosystem, at the same time as helping customers and prospects navigate an increasingly complex set of demands in their digital journeys. Product innovation is a key part of that mix, but there are plenty of other moving parts that are equally important for customer success, which is why it makes sense to have a second co-CEO leading the charge on them.
My impression is he'll be taking a much more visible profile as he settles into the role, although his main focus inevitably will be on customers and employees. But don't expect this change at the top to bring any significant change in messaging from Workday. His appointment sends a clear signal of continuity in Workday's culture and go-to-market strategy.