Watch Stewart Butterfield, CEO of Slack, and John Heveran, CIO of Liberty Mutual, talk to Susan Hobbs, Partner at Crunchfund, about the future of work.
“You have people starting at your companies next week, next month, next year, and all of them will start with empty email boxes, so completely cut off from the conversations that happened before they got there. And in the cases of large companies that have been around for a while, that can be hundreds of millions, billions, tens of billions of messages. And that’s a just completely insane approach to the basic knowledge management of that day to day communication.”
Susan Hobbs: Slack has been the new darling for a while now, but you’ve really got the numbers to back that up. I was looking, you have 6 million daily active users in more than 100 countries. 55% of those users are outside the united states, from my understanding, so not only do you have like a super solid foundation, but you’ve plenty of room to grow. 43% of these Fortune 100 companies use Slack, one of them is Liberty Mutual.
John Heveran: Indeed.
Susan Hobbs: Which was founded in 1912 and still going strong, growing. So, when I look at Slack, Slack was born organically as a communication tool from Tiny Speck. We talked about that a little bit earlier today. Could you explain channels and how this type of communication is different and better than maybe what we’ve used before?
Stewart Butterfield: I would love to. So, before I do, how many of you know that you’re customers of Slack? How many of you suspect that you might be unofficially? That’s pretty good. That’s an on top of it group of CIO’s.
The difference between channels and email, or addressing a message to a channel instead of addressing it to an individual or group of individuals, is that it’s much more accessible than it would otherwise be. So there’s a couple of things that 10, 20 years from now will seem crazy about the use of email in corporate environments and email definitely has its place, I don’t think it’s … We’re gonna have it for another many decades, or maybe even for many thousands of years to come. But, there’s 2 huge disadvantages to the use in team based work, and 1 is that messages are trapped in inboxes, so people just don’t see them. You’re having this conversation and there’s a constant tension between on the one hand, I’d like to be kept in the loop so please CC me, and on the other hand, I get way too much emails so quit CC-ing me on everything.
And then the second one is you have people starting at your companies next week, next month, next year, and all of them will start with empty email boxes, so completely cut off from the conversations that happened before you got there. And in the cases of large companies that have been around for a while, that can be hundreds of millions, billions, tens of billions of messages. And that’s a just completely insane approach to the basic knowledge management of that day to day communication.
So, channels in contrast are pulled rather than pushed, depending on how you look at it. They’re accessible even if they’re not actually being accessed by everyone on the team. And I’ll give just one quick example. We have accounts dash customer name, for all of our big customers, and we were closing Oracle, who’s now our second biggest customer about 3 months ago. And I was doing this demo and I could go and see where we’re at with the vendor approval process, the security review, the negotiating the terms, redline MSA back and forth. And, that’s great, so I didn’t have to ask someone and compile a report and send it back. But it wasn’t just me who had access, it was everyone at the company, theoretically. Including engineers who were working on features that were blocked. We’re blocking the deployment at Oracle. And there’s … That context is invaluable and you never know exactly what context is gonna be important, and we can come back to that later.
Susan Hobbs: Cool. So, John you use Slack at Liberty Mutual, and actually, Stewart you use Liberty Mutual at Slack.
Stewart Butterfield: That’s true. We just switched providers.
John Heveran: Thank you.
Susan Hobbs: Can you tell me a little bit about how you use Slack as a tool? And do you like it? Why do you like it? Why do you not like it?
John Heveran: Sure, love it. Everyone should get it. But no seriously, this was a, from the ground up. Our engineers basically started using it and said, “We absolutely want to use it more pervasively.” We we’re doing a lot more agile development across the organization, and it really had taken off. It had taken off in terms of the free version, so, as was mentioned earlier, in terms of the conversion was, people wanted, the developers wanted to convert to — well I should say, the managers wanted to convert to the corporate version for some security and data retention reasons.
But one of the things was, it was really about the ease of use. And, every engineer was … When we upgraded to an enterprise agreement, in the early days we had some issues with our single sign on internally, nothing as a result of Slack but more of kind of how we implemented it. And we almost had a revolt, right? The developers were like, “Screw it. I’m going back to the free version, gimme a call when you’re ready. But I am not losing this productivity.” And it really was this idea that I could be in touch with everyone on my team or other teams seamlessly. Whether I was on my phone, on my work laptop, on my personal laptop, wherever it was. And it was a really compelling value proposition, that kinda snuck up on us honestly, and again, this idea of empowering the engineers in the company. Which is a new concept for a company like Liberty Mutual to really start to empower that community, and we’ve learned an awful lot with it.
“ We were entering a completely new area of the market. And the mantra was, act like a startup… And it really changed both the business’ expectation of what you could achieve with a development organization”
Susan Hobbs: Now, Slack’s not the only new enterprise tool that you’re familiar with. You headed up a bold experiment at Liberty Mutual, where you brought something to market in just 7 months, which is unusual for what it was. I’d love for you to share, with the room, about …
John Heveran: Sure
Susan Hobbs: About what happened.
John Heveran: We were going into a new business. We were extending our benefits business. This is a business that provides employers, long term, short term disability, other hospital coverage, other types of benefit products that you would use through you’re own company. We were entering a completely new area of the market.
And the mantra was, act like a startup. And so the first step was sitting down with that business leadership team and saying, “Okay, so if we’re really gonna do this, then that means its full agile, full dev ops, release the production daily, every developer owns their code through production. You know, all the things that Pivotal and others, and I’m sure Slack do. Which was very unusual for a company like Liberty. And the business leadership team was impressed, and was impressed with the pitch and said, “Sure, we’re all in.”
And so the first step was, well how are we gonna do this? And we didn’t hold a meeting or a committee to decide, we opened an AWS account and started coding. Now, that kinda freaked out some people, but we got past that, we worked past that, the business was our ally in that. And we took … From nothing to a full insurance platform, so quote to cash, claims, billing, everything, all financial transactions, everything, native in AWS in 7 months and went live. And it really changed both the business’ expectation of what you could achieve with a development organization and it really helped jumpstart what we were doing internally and some of these ideas that were, in pockets and they were nascent but to be able to see the art of the possible in the large companies that many of the folks here represent.
We hear about these things, we read about these things, its like, “Well, its not really possible in my environment,” and we were able to do it. And that team and a number of other teams would never turn back, well, if we made them turn back they would leave so we’re not gonna make them turn back.
Susan Hobbs: So, how do you overcome, and this is for each of you, how do you overcome the nobody ever got fired for buying X argument.
John Heveran: No, I mean, I think our culture has changed dramatically in the last 2,3 years. Through a number of … And this isn’t the only the experiment in the new business launch that I mentioned. And this has been, this kind of constant evolution and, one success, and there’s been some snafus, some failures. But, the beauty of this team is releasing over 1000 times a week to production. The beauty is they screw stuff up but, they can redeploy it. And all of the things that Pivotal and others talk about, it really is real and it’s about just giving people that freedom. So, the culture is rapidly shifting so that it’s not, I wouldn’t say it’s perfect but it’s not so much that, if you don’t go with the marquee thing you’ll be kind of banished.
Susan Hobbs: What about you Stewart? How do you approach this as somebody coming in as a relative newcomer.
Stewart Butterfield: I got this from Jeff Smith who was CEO of IBM until maybe 8 months ago or so. IBM’s our biggest customer so we’re very grateful, and he had a real agenda. And my lack of experience in this domain had me a little bit surprised of that. Like, how he didn’t view his role at IBM as one that was just supporting and enabling the use of technology, but he wanted to see wholesale change, and there’s 380,000 employees there. And, they have tens of thousands, bigger than my hometown, whole groups of people to move over from one methodology to another methodology.
And what’s interesting, you look at both ends of the spectrum, so all of you presumably, have some kind of agendas. No one is an executive and says, “Things are fine exactly as they are, steady on, we don’t intend to change anything.”
The other hand you look at what its like to be an “end-user” inside of these organizations, just a regular employee. TV show The Office, the movie The Office Space, Dilbert, all of the common tropes of modern corporate life are, bosses are a bunch of idiots, I don’t know what’s going on, and usually there’s that missing context and what do the executive want? They want alignment, they want shared consciousness, they want to break down silos. The interesting thing is it’s exactly the same thing. The people literally want … The bosses and the workers all want exactly the same thing so the force of that bottoms up, swell that you’ve experienced, and the force we see often we see from executives, like in a top down motion towards Slack is, it breaks right through that, no one gets fired for X. And also I think that we’re, more or less, a new category, and things are changing pretty rapidly so there isn’t a big incumbent that we’re displacing. Other than email, and no one really owns email.
John Heveran: Right.
“If you educate people about security and really what you’re trying to kind of prevent, they’ll come up with creative solutions.”
Susan Hobbs: Yeah. So, because communication is happening in all these new places, how do you keep it secure?
Stewart Butterfield: By hiring great security people. And doing our ISO 27001. So, what’s interesting is a lot of the concerns were not what we originally anticipated.
So, very few breaches, very few actual incidences of data loss are like there’s a black VT100 terminal with green text and people are doing crazy network hacks. It’s a lot of either bad actors internally, or poorly implemented processes or poorly supervised processes. And, one of the big concerns from customers was, this massive increase in transparency, so, going from like, I have 3 basis points of percentage access to all the communication that’s happening in the company, to 30%, or something like that. That’s a many orders of magnitude more access to information. Now there’s a lot of people seeing stuff that I didn’t want them to see in the first place. So, DLP can cover a small number of easily pattern matched data types. But then there’s a new, almost like a sociological change that you have to have happen inside the company so that people take a little bit more responsibility for the kind of conversations they’re having and at what scope. I would say that 95% of the security and policy related concerns are just like the regulatory and compliance concerns, in other words, they’re about people as opposed to software.
Susan Hobbs: And, what have you found?
John Heveran: Yeah, I mean, I think people are a generally inherently good. And as humans we have this natural tendency for self-preservation, right?
Susan Hobbs: Mm-hmm (affirmative)
John Heveran: So, you can not get in a car accident if you never drive your car. It may inhibit your ability to travel, but you don’t swerve into oncoming traffic because there’s a bad outcome. And so I think it’s about this, and what I like about Slack is the access to information and treating people like adults and kind of giving them some guidelines, they can make the right decisions.
People are releasing code to production, like I said, 1000 times a week and it’s not willy nilly. They’re trying to make sure that it’s completely checked, that the quality is there, and does every now and then something go wrong? Yep, you can change it. That’s the beauty of software. You can change it quickly, if you’re set up in that model. And I think the other thing is, if you educate people about security and really what you’re trying to kind of prevent, they’ll come up with creative solutions. So, when we did this new business launch. They developed all the services in AWS. There’s not a single console access to anything. It’s all controlled through code. You can’t deploy unencrypted services, it’ll automatically shut it down. Those are just things you can engineer in, and about educating people what the outcome you’re trying to achieve, generally, engineers love to kind of solve those problems and then share them so that other people can learn from ‘em.
Susan Hobbs: So this is how you’ve re-architected your platform to be cloud native?
John Heveran: Absolutely, and we did with a … We built a lot of software ourself, but we did it inherently with a pretty monolithic third party insurance suite, that we run completely in the cloud. And, at times, I had more problems with them than I did internally, because we were kind of pushing them into this. They’ve now completely converted. They’re redesigning their platform to be 100% cloud native. But they were nervous as a software company about the lack of control that they were giving up.
“Usually people show up on their first day on the job and they’re introduced to a couple peers, they know their manager, and they begin to start to triangulate the actual social structures. Almost like a process of echolocation…”
Susan Hobbs: Interesting. So, Stewart, you talked about how on day 1 an employee comes in and you’ve got a company like Liberty Mutual, or any of these companies in the room, and if all of the data is siloed in email, then its like, “Oh yeah, maybe I should send you a few of these things, maybe there’s a Wiki or something that like exists from years ago. How does that really work, when I come and show up on day one, and Slack’s implemented in this enterprise, how do I know where to go look? Does somebody tell me? How does all that happen?
Stewart Butterfield: Yeah so there’s a lot of … Usually people show up on their first day on the job and they’re introduced to a couple peers, they know their manager, and they begin to start to triangulate the actual social structures. Almost like a process of echolocation, like you say something and you see who responds. And, slowly discern who really makes the decision, who knows the answers to what kind of questions. That stuff happens a lot faster. So usually, well managed Slack using organization, there are a set of channels. People have created user groups, if this is your role you’re automatically added to a bunch and then search should be relatively easy and then you start to discover and then there’s a little bit of word in mouth.
But, being able to just have the scroll back over what’s happened in the last couple months for either the closest working group, you know, the 5, 8, maybe 15 person, and then the slightly larger groups, either functional, business unit related. They’re having those conversations, super valuable. But, maybe even more valuable is starting to detect the social patterns, like the expectations around response times, how serious versus how freewheeling the conversation is in the different channels. And people come up to speed way faster.
Susan Hobbs: That’s great. So, ultimately, I think that this kinds of things that we’ve been talking about so far have talked about changing the bottom line satisfaction for people in their jobs, right? So, in today’s competitive talent market, how do we better serve the people who’ve joined our team to better create that kind of loyalty and make it something that they really wanna be a part of.
John Heveran: Well, its interesting. We’ve done a couple things that … I think it’s even surprised us in terms of how well they were accepted. So, first we went and we implemented flexible work schedules, which, for an insurance company, Opal from Allstate would be able to relate to this, if you’ve never worked in an insurance company, you haven’t worked. I’m just gonna tell you that right now. So, to say we’re rule followers is an understatement. So, this idea of, well what do you mean they can set their own schedule, if they talk with their manager. And so we did this and 3 years later, it’s the number 1 customer, kind of, satisfaction metric. All new employees, I talk to interns, summer interns, new hires, college hires, they all cite that as the number 1 reason. We just introduced a new, much more generous leave program. Rave reviews from employee base.
Susan Hobbs: Parental leave, right?
John Heveran: Parental leave, yes, yes, parental leave, yes. And so, I think, like the experiment we took in the technology we tried some of these things ’cause we were really trying to challenge some of the status quo, and just really surprised how much it took hold. And it wasn’t small groups or small it is, how pervasive the openness to it was.
Susan Hobbs: It sounds like a lot of what we’ve been talking about actually boils down to just trust. Trust of the people that we work with, trust that the people can handle these kinds of freedoms of information, of being able to deploy things. I think that’s really, really interesting. So, in the whole, future of work, that we were titled to talk about, and also to what Aaron with AI being terrifying,
John Heveran: Yeah
Stewart Butterfield: Yeah, and useful right? Yeah.
Susan Hobbs: And good, and good. So, last week my former colleague, Sam Altman, proposed an idea on Twitter for feedback called, American Equity. I don’t know if any of you saw this or if any of you follow Sam, but basically he was saying, each U.S. citizen should get a share of the U.S. GDP each year. And the initial feedback that I saw when I went and did this search and kind of poked around was like, “Oh, you’re just re-skinning universal basic income.” And while there might be some truth to that, I believe that those of us in the Silicon Valley who are quote, unquote, disrupting. Really there’s a lot of people who have a strong conscience about what this innovation looks like, what does our future workforce look like, and how does the speed of automation affect that? So, maybe Stewart you could answer, is the future of work less jobs, or different jobs, or…
Stewart Butterfield: No I don’t think so. You look, 150 years you can see the whole U.S. workforce has rolled over it’s jobs 3 or 4 times. Everyone approximately was a farmer in 1820 in the United States. Now there’s 1.9% of the population that works in agriculture, and those jobs are totally different, and this is actually interesting. We were talking about this before, Henry Ford could walk around the factory and look at stuff that just seemed like it was inefficient. That this person’s walking back and forth a lot, we should move these two things together, or split these jobs up. Knowledge work is a lot less easy to inspect, and it’s less tangible, it’s hard to know exactly what’s going on, it’s really hard to spot those efficiencies. But definitely people change what they’re doing.
There’s this, I wish I was clever enough to have come up with this, but, Benedict Evans at Andreessen Horowitz pointed out that this 1960 movie called, “The Apartment,” Jack Lemmon, Shirley MacLaine. And, Jack’s job is to sit at a desk. He’s got an electromagnetic adding machine, he’s got a typewriter, people come by with a little trolley, a sheaf of papers, they hand it to him, he looks it up, he performs a bunch of calculation, he types up the results, and hands it out. And there’s these incredible shots in the movie of just rows and columns of desks that stretch out into infinity. What is he? A cell in a spreadsheet. I mean, in an absolutely literal, very straightforward sense, the whole floor of this office building is like one worksheet, and the whole building is like a giant Excel file.
And no one does that anymore. We joked about this a little bit, hopefully there’s very few people doing that exact job now. Probably around the same number of employees, hopefully a lot more efficient. And, it’s like we’re 7 steps away from universal basic income, which is probably a good idea. But, those jobs are just not gonna go away. There’s always the opportunities. When we think about AI, I agree with everything Aaron had to say, really less about replacing the human, and more about augmenting. So, most of you are close enough to my age that you probably remember Texas Instruments’ calculators being introduced into schools. So, like there was one point where you should learn how to do arithmetic by yourself, and you shoulda learn how to do long division, and then you can just immediately forget how to do long division forever. Some of us are blessed with good arithmetic ability in their heads, and that can be very useful, but mostly it doesn’t matter. It’s mostly better that you learn how to use a calculator, you learned how to use Mathematica, if that’s your thing, you learn how to use Excel. And you let the computers do what computers are better at.
I think there’s a huge opportunity, just around, and I’ll wrap this up, I apologize. But, the 30%, and I’m making that up of knowledge worker time that is spent finding the answers or asking the questions around basic factual issues. Like, who is this person’s manager, like you mentioned, what is our revenue for this unit in this quarter? Who has a good contact at this customer company, even like, where is the paper for the copier? That kind of stuff.
But a lot of it is … We’re not actually applying human intelligence and human creativity. We’re doing these rote things. To the extent that technology is able to help there, I think there’s huge upside. We have this experience as consumers where you start typing your query into Google, you type 1/3 of it, it’s already predicted what you were gonna ask, you hit enter and then like 700 milliseconds later, the result is one boxed. Unfortunately, it’s actually much harder when you have less data to search, and you have less interactivity from humans and fewer people involved. But we’re, and I don’t mean Slack specifically, we and the people who have 500 times our R&D budgets are making some progress on these problems.
And imagine in the future where rather than people getting pestered, like constantly peppered with these questions that they have to … Or going to, trying to find the person who knows the answer in their 180,000 person company. Infinitely patient bots, who have perfect memory, who aren’t bothered or disturbed by this and can just answer the same question, same stupid question, over and over and over again. How do I do my 401k something, something? Where do I go for whatever? And that, as mundane as that might sound, I think, is the source, potentially, of double digit productivity increases over the next 20 or 30 years.
“We went to our business partner, and pitched this idea and tried to set a realistic expectation of just what it would be like. But it felt like a lot less control and a lot less certainty, right? But in the end, it was more.”
Susan Hobbs: Cool. Does anybody have a question for Stewart or John before we wrap up?
Audience #1: I’ll take one. Game Neverending, are you gonna take another stab when you’re through?
Stewart Butterfield: The background for the question is, me and some colleagues started a game company, failed. We made Flickr. We started again, it failed. We made Slack. No, I’m done. This is good.]
Susan Hobbs: No, no third time?
Stewart Butterfield: Twenty or thirty years.
John Heveran: Third time’s the charm.
Stewart Butterfield: Yeah, no. Too hard.
Susan Hobbs: Alright.
Audience #2: Chat bots, actually inside Slack, for real chat bots
Stewart Butterfield: Yeah.
Audience #2: Can we take whatever Mutual does without employee abuse? We haven’t seen yet ubiquitous, in this customer base, people do that inside Slack? But everyone using Slack and then their using CD next to it, do you see that as being the next logical place for Slack to go?
Stewart Butterfield: Yeah, I think, for a lot of the AI stuff, chat bots as a way of doing stateful query construction. ’Cause some people, for most people, it’s hard to construct a query that’s gonna find exactly what you want, especially with a whole bunch of operators. So, if you can refine what you’re looking for, your questionable you are looking for, in the context of a conversation with a chat bot, I think that’s great. A lot of it is chat bots that have 0 intelligence. And they don’t even have ELIZA from 1965. But that’s okay, because I don’t want them to, I just want them to be notified.
We have a help desk system that’s totally integrated with slack. I put in a ticket, I get a response back from the bot. I can respond to that, but it’s not a conversation. Like, we’re not friends or anything like that. It’s just a better update mechanism for those kinds of notification, and I think we’ll see huge amounts of implementation of that kinds of stuff. So, it’s surfacing a work flow.
And it really can be as dumb as a notification, and that can make a huge difference to your life, ’cause you think about, you get an email from your HRIS or from your expense tracking system. Click the link, browser opens, app starts to load, you get bound SSO, you auth, you come back, and then you’re allowed to press accept, or approve, or reject, or whatever it is. That can just come in the message itself, and you can approve or reject it in the context of the message without a separate authentication step. That’s not chat bots like, they’re smart. But, its chat bots like they’re useful.
John Heveran: Yeah, I completely agree, and I think chat bots are the best and the worst thing that are out there right now. In terms of all those examples, perfect. It’s this kind of extrapolation of, and they’ll be able to do everything. And I’m like, “If you can develop a chat bot that can talk to my mother, and understand what question she’s asking, I wanna invest.” Right? ’Cause she calls customer service and it’s this whole conversation, and she’s not gonna, it’s very narrow. I love my mother, okay?
Susan Hobbs: Well, there’s one other thing that I actually wanted to kind of wrap up with you John, and that was in this whole big experiment that you did, there was something about the way that you prepared for it that really spoke to me and I think that this applies to anybody in this room, I think it applies to startups, especially when they get to that first, kind of like, breaking point when you get that many people and you hit all those little spots along the way. And, that was how you approached this as leadership in doing something like this.
John Heveran: Yeah, we went and it was a gamble. We went to our business partner, and pitched this idea and tried to set a realistic expectation of just what it would be like. But it felt like a lot less control and a lot less certainty, right? But in the end, it was more. So, we got them really engaged from the get go, to where they were bought in and they were out there promoting and pushing. And so, whenever we ran into an internal obstacle, we were a unified voice. So the leadership team was set on, what are the objectives, and then the other part was, they got out of the way for the rest of it. We were very clear about what success looks like, in a very kinda tangible, measurable way. And then we let the teams decide how to achieve that success, right? They knew they had to achieve certain implementation goals, certain sales goals, and then it was, go figure out what the best way to do that is.
Susan Hobbs: So, you did the work up front?
John Heveran: Absolutely.
Susan Hobbs: Well that’s great. Thank you both so much for coming and being here.
This video was filmed at the Built to Adapt conference in Sausalito, California. The transcript was edited for clarity.