 Live from Seattle, Washington, it's theCUBE, covering Smartsheet Engaged 2019. Brought to you by Smartsheet. Welcome back everyone to theCUBE's live coverage of Smartsheet Engaged here in Seattle, Washington. I'm your host, Rebecca Knight, along with my co-host, Jeff Frick. We have Chris Marsh on the program. He is a research director of Workforce Productivity and Compliance at 451 Research. Thank you so much for coming on the show. Thanks for having me. So you have just completed a massive report that really looks at the future of work. And the premise is that the future of work is changing dramatically because of the rise of digital technology. It's changing the way companies think about employees, the way employees think about their jobs. Give us sort of the high level findings here. Yeah, so yeah, a big report took me most of my summer so I kind of hibernated for a good month and a half to do it. And yeah, it crystallizes a lot of our views around how, you know, process, technology and culture coming together to ground new ways of working. And I guess the basic premise is that we all know there's pervasive friction across day to day work. I mean, we've sort of dysfunctionally accepted that as a status quo, but actually we've seen a lot of our survey research that it's being regarded increasingly in the upper echelons of management within companies as a priority that needs to be addressed. In fact, we had some survey work that came out of field recently. It was to both IT and line of business decision-makers and it was what should IT's priority be when it comes to transformation initiatives. And number one was improving the productivity and collaboration experience. Now if you put that in the context of all the other things on IT's plate, the fact that that's number one when traditionally it hasn't been is significant. And actually we did the same question, same survey September last year and it was number one then. And that was the first time it blipped on the radar. So this is, you know, risen up the agenda, exec management, IT leadership and now looking at ways to address that pervasive friction. So I guess the basic premise of our thinking is that a lot of the legacy technologies aren't, I mean they've led to that friction in some ways, right? So most companies have organized in one way or another around the silos that application, traditional applications have created and that's created organizational silos and hence all of the friction. But we see a lot of interesting new technology trends and tooling that are allowing people to basically operationalize work in the seams between those legacy systems. So lifting some of the data information and potentially workflow workload out of those systems and having them in a, you know, some of the new types of work platform that we're seeing of which smartsheets are good example to actually operate in a much more agile way. And we call that shift one from systems of record which we kind of understand to what we call systems of delivery. So that to us will have a big gravitational effect on the way the rest of the business application landscape will evolve. So didn't the IT kind of grow up to support the silos that were defined before there was IT? There was always sales, there was marketing, there was the executive suite, there was accounting. And the IT and the apps grew to be aligned. So do you think now that the actual collaboration apps like Smartsheet can actually pull, can pull the silos of the organization into this more hybrid structure? Yeah, I think that it certainly looks like I think that's what companies want to happen. I think it's still early days. I mean, the way most companies are set up, you know, actually has the linears going back a couple of hundred years, the Industrial Revolution and mechanization leading to standardization, leading to compartmentalization and then you have lines of business as we kind of currently understand it. And that's why this is such an interesting time at the moment, because a lot of that is breaking down relatively quickly. And obviously the computing area has been the prime catalyst for that. So yeah, I mean, you know, other things that come out of our survey research, a massive appetite from senior managers for more collaboration across departments, right? So not just within teams, which in and of itself is a challenge, but across departments. So, you know, marketing speaking more often and more purposefully with finance, legal speaking more often with operations. So there is an appetite for higher order types of not just collaboration, but actually work design, planning, work execution, not just sitting in those departmental silos. So yeah. And what do you think is driving this appetite? Because I mean, it would seem like it was always there and maybe that there's just a recognition that we have the tools and the technology to actually execute. Or is there something that's actually fundamentally changing about the global world that we're living in? Yeah, I mean, so we talk about in the report about this era of personalization, right? Which is just everything we've seen explode in the consumer domain around technology. And the acclimatization we've all had to new kinds of digital experience and how they are coming into the workforce. People want, people will have expectations for new kinds of digital experience as part of their day-to-day work. And so that's one thing. The obviously the related element to that is that companies need to be much more agile in responding to disruptions in their own market. And this is obviously vertical agnostic now. So if there's one thing that you really need to make sure you're good at in the digital age, it's being agile, right? Spotting the sort of signals in the market, understanding what they mean in terms of customer demand and then catering to that demand quickly with some kind of new product or service or experience. So I think it's that need to be able to respond really quickly because there's so much disruption that technology has brought to us that means that companies are saying, okay, we can't any longer wait six months for this project lifecycle or this work lifecycle to run its course. We need to respond more quickly. We need to organize much more agile. We all need to be on the same page when it comes to what we're supposed to be doing, right? So there's a big demand for a clear line of sight across work. So I think that's probably where it's coming from. All companies realizing we need to act quicker, respond quicker. I'm curious, you know, it took a long time for DevOps to really be accepted as the optimal way to create products, right? Versus a PRD and an MRD and then a PRD and then we define it and we take these and we build it and shoot, we miss the market, right? It changed. In terms of actually running the business though, I mean, do you have any kind of point of view on how long it will take for people to figure out that yes, we can make micro adjustments on our strategy based on speed, competitive threats, but at the same time, I've got to be executing on some of these longer term objectives as well, which I would imagine would be a pushback on that technique. Yeah, I mean, it will take as long as the technologies need to have to emerge to support companies really operating in that kind of agile way. I mean, one of the things we talk about is what we call the three A's, right? So the imperative to be agile operationally, I think there's growing realization that that means that there needs to be tooling to support more autonomy, which is the second A, right, more autonomy for more of the workforce to do higher order types of thing. So rather than having these centralized teams of process specialists or technical experts, there needs to be more capability in the tooling, the everyday tooling for people to design work and execute on it. But that really is dangerous if you don't have the alignment piece, which goes back to kind of what you were saying about, we can't just have a distributed set of teams who are going off and doing their own thing. There needs to be alignment back to strategy. There needs to be alignment potentially back to governance and compliance. And there needs to be alignment potentially also to work that's adjacent but relevant that's happening in other teams, maybe in other departments. So I think that's really the sweet spot, how you balance those three things, which is driving a lot of the new interesting technologies that we're seeing emerge. But we're still in relatively early days, I think. So give it some time to play out. There's different layers of abstraction, I think in software that needs to happen for organizations to really be able to operate in that agile way. There's resource management, there's planning, there's process automation. A lot of these things have been resident really in discreet kinds of tooling but they're broadly being democratized. And Smartsheet's actually a good example of the type of company that's beginning to offer those kinds of capabilities workforce wide to Smartsheet users whereas they were maybe previously just a preserve of certain types of specialist user. I want to ask about what this means for the individual employee in terms of it sounds as though he or she will be more empowered to do more and execute but also more will be expected of that employee in terms of what his or her skill levels are. And then I also want to ask what you're seeing here at Smartsheet engage that is most interesting to you particularly as it relates to the report. Yeah, I mean, I guess it's inevitable that more will be expected of employees but I think in a broad sense what we're seeing is the balance of power shift not in an absolute terms but in relative to how it's looked historically towards the employee. So a definite strand of inquiry amongst our clients in 451 has been how do we create an employee engagement narrative, right? There was growing realization that we've talked about customer experience for a long time but we've neglected the idea of an employee experience. So more companies are realizing that happy employees tend to be the more productive ones. So how do we introduce the right combination of tooling, technologies and then compensation and then career opportunities to allow people to feel more engaged and empowered so that they can do those higher order kind of things. And this is happening in a very kind of organic way so I don't see this as companies saying you need to now achieve more, it's a little bit more we need to provide you with the ability to achieve more that's really the role of anybody who's making a decision around technology and enterprise at the moment. But it's interesting because the company has so much more data than they had before on kind of execution and some of the demos in the keynote in terms of what are utilization and how many hours are you applying to this task. So it almost feels like there's more of a treating people like a resource versus treating people like people. And I'm just curious how that kind of plays because you want to do that, you want to measure, you want to know how your resources are allocated with the same time they're people, they're not machines and they're motivated as people and that's how you keep them or lose them. A lot of times is the people part, not necessarily the job or the task. So how does that not happen? If I'm aggressive and I'm feeling good, yeah I like doing more but there's probably a lot of people that aren't necessarily up for that job at the moment. I mean there's been a lot of talk in this conference already but more broadly in other fora of the implications of more data in the context of machine learning and artificial intelligence, the degree to which by automating things that may previously have been done manually is that going to upset people? I think on the whole, for a lot of types of work that may be smart sheet is enabling that's not so much of a concern. Because you'll see here from their users, very engaged, very enthusiastic, they want to get as much value and leverage out of the platform as possible because they realize that's allowing them to do things that previously hadn't. But there is that sort of dichotomy of at what point do we automate things and not give you a choice in the fact that that's been automated. But I think these guys and the industry broadly is very conscious of that. So where you see all the kind of data being leveraged to do intelligent recommendations, intelligent notifications, there's going to be a wary eye on doing that without either an opt-in or where an opt-in maybe isn't required, at least having permission from the end user to accept the implications of whatever's being recommended to do. So I think on the whole, people are sort of trying to figure out what that balance is. What do you think this means for the war for talent? Because I mean, this is the topic that the technology industry in particular is really grappling with, particularly when there's so many high-level skills that are needed, skills in AI and ML and other kinds of specialized technology. How do you put your findings in that context? Yeah, I mean, it really came on the agenda, this theme a couple of years ago, if not a little bit sooner than that, as a really strategic issue. And in fact, we see that in our own survey research. We asked the question to employees across the workforce, non-managerial to C-suite, and it was strategically, what one thing do you need to improve on? And it was basically recruiting, developing and managing talent. And that's ahead of everything else, like improving our product differentiation, improving our customer experience, coming up with a strategy that's more fit for purpose. It was all about talent and people and managing people. So it's definitely risen up the agenda. I mean, I think one of the things that companies definitely are beginning to think about is how to increase the acquisition of skills in the existing workforce in a way that's quicker than the way that's being done now. So actually, one of the other areas we cover in our research is this shift from traditional learning management systems, which have been kind of compliance oriented. You need to do this course or training because we need to show that you've done it to the kind of new generation of LXPs or learning experience platforms, which provide much more agile ways for people to understand skills gaps and take on those skills. So I think that's going to be a big driver, actually, of the agile ways of working that we're talking about, but also how people address talent, the talent wars. If you can't find it externally or you can't find enough externally, you can look internally, of course, to existing employees and make sure that they have the platform to acquire new skills. And it's almost by rule you can't find it externally because right now just not that much labor out there to go get, it's just so competitive. So you've got to develop a lot of that inside. Yeah, yeah. I mean, and it's not just sort of technical skills, it's other kinds of skills, right? But I think there's a nascent appetite amongst a lot of the workforce just to do that from a career progression point of view. If, you know, and I think that's one of the implications of companies trying to find ways to be more operationally agile, manage resources in more kind of agile ways. You know, it might be the case that people who maybe wouldn't be considered for a particular role might now be considered because they saw that there was a capacity problem, a resource problem, they learned the skill, they can be assigned to that kind of project. Whereas previously maybe lines of department, lines of business prevented that visibility into who has skills across the workforce. It's interesting, you have a point of view about kind of workforce transformation and you're given a talk tomorrow, how to avoid the Frankenstein workforce experience tips for effective workplace transformation. But it's an interesting play that digitally transform your people to digitally transform your business. People talk about doing it to the business, but they don't talk about doing it to the people, they talk about the workflows and the customer engagement. You're taking it down, you know, start at the base, start at the bedrock. Well, I mean, this is a lot of the reason as to why companies like Smartsheet came about. I mean, digital transformation, I think, is a kind of narrative, has done a good job of making companies realize they need to change and they need to change quickly. Technology is being enabled of that. But it has tended to be a kind of top-down way of thinking about it. It's tended to be sort of, do you have like a center of excellence? Do you have a technology council? How do we sort of transform from core outwards? It's not really been grassroots from the bottom up, but increasingly tooling like Smartsheet is enabling that to happen. How do you get people really engaged using new kinds of tooling to do higher order things? How do you connect that with work that's being done elsewhere? So it's a much more bottom up movement, how I think about workforce transformation than digital transformation has been. And I think more people are cottoning on to the fact that that's the way you need to think about it. What's your number one advice for an executive who doesn't have time to read the 47 pages? Yeah, I mean, I guess it goes back to maybe those three A's I was talking about earlier. I think certainly progressive companies, but I think it's mainstreaming that companies are realizing they need to be more agile in a broad brush. And obviously it depends on the context that company, who their customers are and what they're trying to achieve. But really, I think it should be a consideration, especially when thinking about workforce tooling and like knowledge worker tooling, to what degree is that giving more autonomy to those people to do higher order things? But also, again, can you tie that back to your goals as a company? Because we've had certain technologies in the past sort of decade that have created a bit of a Wild West. People go off and do different things and then there's a lack of visibility, a lack of line of sight back to strategy. But if you get the sweet spot in your technology choices between, do they help us be operation agile? Are they giving people more ways to do higher order work? Can we tie that back in the way that we need to? Then I think you're at least thinking about it in the right way. It is really analogous to shadow IT. As you're sitting here talking about kind of the groundswell up of people finding tools to enable them to do their job better and get around kind of the hierarchy that existed and got in their way before. It's, you know, there's a lot of parallels to what happened there before finally the corporates figured out, okay, we actually need to do a dev in public cloud. There's a lot of advantages, et cetera, et cetera. Yeah, there is. But it's kind of like a legitimate version of shadow IT. Shadow IT was like, we don't like the tools we've been given or we don't have them. Let's go and find ones we actually like. Now it's like the ones that are enterprise grade happen to be the ones we also like using, right? So that is the super interesting sort of wave that companies like Smartsheet are carrying. These tools fundamentally appeal and they have lots of evidence they're appealing virally. Well, I mean the fact that you can collaborate with people outside your company on your license for free and I think Mark said 50% of their users are people that are outside of the organization of the licensee. That's a pretty, I don't want to say Trojan strategy, but certainly feels like a great way to permeate. Exactly, exactly. Which I think back like at Lassian with the way they got started with a $10 10 seat license. And again, AWS and some of these early kind of backdoor ways in to deliver real value that people were willing to put the credit card down for. But you know, I mean, so I guess a challenge for Smartsheet and others are as you become a more enterprise grade platform how do you keep that user appeal? Because there could obviously be one scenario which says more features, more complication, actually more difficult to use, more complex. These guys are very conscious of it. Others in their sort of environment are very conscious of it. But yeah, I mean, the whole can do thing which Anna talked about this morning in the keynote. It's interesting. It's like a really interesting sort of democratized way of talking about power users that we kind of used to talk about. The sort of folks that have that technical ability and they're the ones that drive some kind of work initiative, you know, platforms like Smartsheet and others are giving more people the ability to be that power user. And that's kind of cool. Awesome. A great note to end on. Thanks so much for coming on the show, Chris. Thanks for having me. I'm Rebecca Knight for Jeff Frick. Stay tuned. You're watching The Cube.