“We're in phase three now and we need to go far together, so that takes a deliberate journey to view the world through a common lens. It's never been more important that the common lens is supported with tools behind the scenes for our organization and our team members to see it the same way.”

What is the company-wide transformation happening at VMware right now?

Now we're crossing the chasm from phase two to phase three. We're shifting from a technology focus to customer-outcome focus, to a place where we are selling business outcomes to business leaders instead of technology to technologists, and that difference implies that we arrive at the customer differently. It implies that we weave together all these amazing stories that were intentionally siloed in phase two to make maximum impact on our customers.

That means we're leading backward from customer outcomes. We don't start the conversation with the product, we don't start the conversation with the sale, we start the conversation with product outcomes that happen to include our products, and we know that time to value, integration with existing technology, line of sight to business value, and being able to articulate this with a business leader who really doesn't care that much about the technology, they're looking for the business impact at the end of the day. That requires a change in our operating model and our culture to deliver.

It’s a journey, of course, and this is a transformation that takes place behind the scenes as we go from our focus on silos and our focus on products and our focus on sale to our focus on customer outcomes. There's a great quote, 'If you want to go fast, go alone. If you want to go far, go together.' And you could argue that in phase two, we wanted to go fast. There were great reasons to prove out our products very, very quickly, and to see what was going to work and resonate with the market. Well, we're in phase three now and we need to go far together, so that takes a deliberate journey to view the world through a common lens, and it's never been more important that the common lens is supported with tools behind the scenes for our organization and our team members to see it the same way.

“There were two pieces of our transformation: one, that common mental model that enables us to all see across the chasm… And then the second piece is the community that's going to activate this. So, one is the vehicle for the transformation, the other is the engine of the transformation. ”

How are you building those operational efficiencies in this new phase of the company?

We started with targeted transformation workstreams, and what that means is the senior leadership team developed a set of specific WorkBoard Workstreams that were cross-functional, that we had to take action on right away. They said, 'Do these 20 things, make sure you get these things done,’ which was unique because in the past, those decisions were made on a product basis or on a functional basis, now it's coming down from the top of the company. But that's reactive, right? That's not sustainable. We can't have the senior leadership team coming up with those workstreams every time. That needs to be something that we build from within and don't rely on a bottleneck of a small group of people at the top to make those decisions.

So, from that point, we said, 'Let's build a proactive vision for the future from which we can build the future Workstreams.’ So, our CEO and senior leadership team built out their strategy memo and a vision that was very focused and not broken down by products. They talked about it from a holistic VMware perspective, and we then built-in cascading and supporting strategy memos and OKRs, Objectives and Key Results, with the rest of our senior leadership team. We built that into Vice President alignment so that now we're all operating from cascading objectives throughout the organization. You can start to see we're reorienting our business model from that more matrix approach in the past to a more top-down focus so that we can all be driving to the same outcomes as an organization.

Today, we now have a common lens through which we view this destination across the chasm from phase two to phase three, we're activating our senior director. Our senior directors are about 700 leaders across the organization, global leaders, with every functional background. These are the ones closest to the action, they're some of our best technical leaders, but they are also strategic leaders. In my old world as a fighter pilot, these are the ones who were both the best pilots, as well as the ones who had some strategic insights at the same time, and these are the ones that led change, these are the change agents. So in this environment, our senior directors are the ones we're going to activate to help us cross this chasm first and to help us build and activate the plans that will make us successful.

So, there were two pieces of our transformation: one, that common mental model that enables us to all see across the chasm and see phase three the exact same way, through OKRs, through strategy memos, through a common lens, that's a critical piece of success for us in a visioning statement, which is very different from our past when we went fast alone and we were very siloed; and then the second piece is the community that's going to activate this. So one is the vehicle for the transformation, the other is the engine of the transformation, and we're excited to talk about how the tools behind the scenes are helping to lead us in this transformation.

Tell us about your approach to cross-functional teaming while instilling a focus on outcomes, rather than activities.

For the first time, we have fingerprints from all of the different groups across the organizational product teams coming together and saying how we can build the 1 + 1 = 10 story and see how we can build better alignment and better synergies across this group, cascading alignment from the top down. We're all going after those same three outcomes as a company, we can map ourselves in our individual efforts into how we're supporting the entire team. And then the really important piece is that we're taking team members from these functionally diverse groups, from all these different silos, and bringing them together on teams that are not functionally-focused, but outcome-focused, and allowing us to look for customer outcomes or internal process outcomes that they're driving as a cross-functional team.

This is a very different way of operating for VMware. We used to just retreat to our marketing team or retreat to our sales team, or retreat to our product team and have these conversations in isolation, and it's not an indictment of that period. That was the right way to approach things with our plan to deliver as quickly as possible and determine whether our products would be successful. Now, as we're working backward from customer outcomes, we need to reorient and shift our teams to be functionally diverse and inclusive and see this all through a common lens, and it's never been more critical to have the tools to support that conversation, 'cause as much as we can tell our teams this is what they need to do, they're never going to get there unless we help them and give them the tools to be able to see that all the same way and understand what it looks like in their part of the journey and how they're supporting everything.

“We're taking team members from functionally diverse groups, from all these different silos, and bringing them together on teams that are not functionally-focused, but outcome-focused.”

Jamie, you’ve led OKR adoption across multiple product orgs and are now spearheading WorkBoard implementations and strategy alignment across the entire 37,000-person organization. Which key learnings would you share for those just started their OKR journey?

Jamie Temple, Results Management Office Executive, Office of the CEO at VMware: We had early adopters from the start, and then there was a sense of urgency and our CEO pushed our leaders to build out those strategy memos and build out OKRs and put them into WorkBoard. So we had the benefit of having a lot of early adopters. And through our partnership with WorkBoard, they helped me identify some of the early adopters, many of whom were on our Product Teams. Some of them had used this at other companies, some of them were first doing it in Confluence or PowerPoints or just Word documents, and then they shifted over to starting to use it in WorkBoard.

A lot of them created training assets, some of them pushed it down to the individual contributor, some stayed at different levels, so as I talked to them, I learned a little bit more about the culture of their groups and how we might be able to apply that throughout VMware. So just learning from people who've done it in the past at the company, and then their learning from outside was extremely beneficial.

The next learning is that leaders would build 10 objectives and then build key results under those, and it would sprawl very quickly. So, I think one of the lessons we learned was to really push everyone to focus on those critical few objectives. Start with those and then build out more key results over time. Build the systems so that you can get them updated and create a process that is maintainable and not going to be too big at the beginning.

The next lesson is reinforcing collaboration. When Raghu, our CEO, pushed leaders to build their OKRs after building strategy memos, some of them had a sense of urgency, they created collaboration sessions in their existing off-sites or their QBRs. Others just came out of those meetings and almost went on a different path where they said, 'Well, let's just set them at the top and then push them down, and we'll assign them.' Having conversations with the team and working with WorkBoard, we saw that the collaborative planning process is really where the value comes in and we really leaned into that. But the teams asked, 'Should we really hold another workshop after we just came out of some off-sites for four hours?' And the ones that did it saw extreme value, they felt the alignment.

One of the sessions we did in person, the team just felt like they made significant progress towards the year of what their goals will look like, and then they had to focus for that next quarter, so just making sure that the teams continue to collaborate around it and not see it as something that's assigned out.

The next lesson is about inspiring new ways of planning and thinking. So a lot of our Product Teams were the early adopters, and as we focused on the go-to-market teams in the next phase and the following months, a lot of those teams were used to having a number on their commission-based pay, and they started building OKRs around just popping numbers in. But as we had conversations with these teams, we asked, 'What really gets the teams to the transformation?' When you switch to SaaS and subscription and ARR, if you just keep looking at the next quarter, you're going to miss the mark.

What is that transformation that you and your team need to be thinking of? What training enablement, different ways of interacting with your customer do your teams need to start thinking of? And that applies to go-to market teams and other teams as well, but having them think about that aspect and not just the next number, is the conversation we continue to have.

“Push everyone to focus on those critical few objectives. Start with those and then build out more key results over time. Build the systems so that you can get them updated and create a process that is maintainable and not going to be too big at the beginning.”

And lastly, embedding an operating rhythm early. This is where the digital operating rhythm that WorkBoard has talked about significantly is as the teams who build OKRs, building out that running business review, and then really trying to have teams use that in their typical cadence, in their meetings, pull that up, pull their OKRs up in every conversation they have, every all-hands, those should be the top talking points.

The timeline that we had, and as I mentioned, we came in a bit after the standard quarterly reviews and meetings, so it's a bit of a challenge, we had to have an extra meeting for certain teams to build it in, but the ones that did lean in and started using this regularly and sharing it out, I see that's the teams that are having the most success with it, and having a model for that early is definitely very beneficial.

So overall, that the sense of urgency our CEO created was extremely impactful. It helped uncover misalignment very early and it gave us areas to focus on. For some teams, that was uncomfortable, and Joel and I had several conversations of, 'Hey, the misalignment was already there, this just uncovered it.' And so they're working together in new ways. Then the WorkBoard team's coaching and guidance on how to use the tool, how to use this as a methodology, what's worked for other companies, what's worked in different pockets of VMware, has been extremely helpful as a guiding light along the way.

Joel, any other learnings you would point out during this period of transformation at scale?

There’s a great quote, 'Success is in the vision, survival is in the details.' And the success in the vision that we presented up front, that was critical for us to all see it the same way. This is massive change management for 37,000 people and all our partners, and just seeing things differently across a global enterprise, and of course, we're all in a work-from-anywhere environment during the pandemic and our customers are in the pandemic. So it was difficult just being aligned within our silos during this time frame, let alone being aligned across the entire organization. So this is a bit of a superpower for building that alignment at a time when we need that most, and then Jamie shared some of the how and the details, and on a daily basis how we are revisiting this change management conversation and having new lessons every single day. It's great to have a tool like WorkBoard that allows us to see both the progress in the vision, as well as the progress in the daily iterations with the WorkBoard team that's helping us on a day-to-day basis.

“This is a bit of a superpower for building that alignment at a time when we need that most.”

You’ve mentioned the importance of a common methodology and shared language. Tell us how you’ve cultivated this common language across different functional units at VMware.

One of the values of this approach is it's ubiquitous, meaning you shouldn't have to change your talk track for the different functional groups. We know that diverse teams are empirically better than homogenous teams. But the little secret is that you have to have an inclusive way, a common process to unlock the power of those diverse teams. And so we don't change our talk track when we talk to these different groups, we say, 'This is going to be the Rosetta Stone that translates what you do over in the engineering team into VMware's success, or on the sales team into VMware's success, and it's going to allow us all to come together to unlock the potential of that diverse team.' So we very intentionally don't change that talk track when we get in front of these different functional groups.

[Jaime Temple] The common mental model and the language of OKRs as a methodology and WorkBoard as a tool is one thing, but it also uncovers different ways different groups are defining things at VMware. So as people started to say, 'Oh, we need to measure consumption or multi-cloud,’ then there's the, 'Well, is it monthly active users over here, is it daily? What exactly is consumption? What is multi-cloud? Is it these pieces or is it these other pieces?' And so it forces us to start answering some questions internally about defining measurements differently in different groups.

How has your CEO, Raghu, been involved in both using this new OKR framework but also enabling this new Outcome Mindset throughout the organization?

What a great transformational leader. You have to give Raghu so much credit because up front, this was really his idea. He took what he read about in a book, Measure What Matters, in terms of OKRs, and he listened to his product teams that were already leveraging OKRs and WorkBoard. He looked at other companies within the industry and watched how they were delivering change management, and very clearly this was a tool that was gonna make us successful in this journey as well. So he led from the front. It was top-down endorsements at all times.

It's absolutely critical to have that, you will not be successful unless you have your senior leadership team on board with this. It's a massive change management undertaking, you can't build this from the ground up. Of course, the details are with the team members in the ground, that built the groundswell, but you absolutely have to have that endorsement, and Raghu has been phenomenal at leading from the front that way when it's challenging to do that, because you can imagine, we have day-to-day operations, we have old-habit patterns from our phase two days, and it's just so easy to fall back on those, and yet he's challenging us to evolve in new and exciting ways.

Raghu’s built an office with myself and Jamie in the office of the CEO, by the way. We don't exist in some nebulous, ancillary group, we carry the weight and the credibility of the CEO into everything that we do, and that was incredibly important. He's incorporated it into every part of his talk track. So every time he gets in front of another group, with the reminder that it's never been more important to say the same thing over and over again, he's taken that to heart, and reinforcing OKRs and WorkBoard in this transformation, literally in every conversation that he has with the teams.

“You will not be successful unless you have your senior leadership team on board with this. It's a massive change management undertaking, you can't build this from the ground up.”

How did you get leaders to focus on the critical few, rather than the possible many?

It was a journey, and you can imagine, when we sit down with a team and we say, 'Alright, we gotta build out three objectives, and three is the magic number,’ that people aren't going to remember much more than that. Their first reaction is 'Well, that's great for those other groups, but you don't understand mine, we need five', or 'we need six', or, 'I certainly can't do this without 10.' And, 'I wanna label those three as the most important, and those other seven as less important.’

It's a work in progress. We're having to build that alignment towards the critical few, and we're transitioning from the 100 things we could or should do down to the three things we must do, and that's always challenging to accomplish because as leaders, the difficult question is, 'What if I miss one of the critical things?' There's always that inherent fear, it's a human nature thing, and we're building that muscle, being more confident and comfortable with hedging our bets on the few and learning that we don't have to keep them as the few. But what’s great about having a focused strategy is that when you can very clearly determine that you're going in the wrong direction quickly.

“We're transitioning from the 100 things we could or should do down to the three things we must do.”

How is alignment as a velocity-creator on a daily or weekly basis?

The customer is now a part of every single conversation that we have, and the customer impact is our new goal line for success, for which consumption's a proxy. I say that specifically because we are literally measuring ourselves by how well our customer succeeds in their strategy, and we can only do that because VMware spent 24 years amassing all of these great technologies, acquiring these technologies, building our skill sets and our insights and siloed purposes and now putting that all together. So now we're effectively taking all these different team members on a sports team, we'll say every one of them individually plays their position incredibly well, they are the best in the world at what they do, and now we're doing this as an efficient team that helps to be more effective on the field. So, it's on a day-to-day basis as we think about, how do we operationalize this?

[Jaime Temple] Many people have reached out to Joel and me saying, 'Hey, I have something that I've done that ties to a top-level goal at the VMware level, how can I help contribute to that?' And that's that piece, that pyramid, the nice visual of how do we connect all those teams? Because they want to do this on the side, outside of their day job, they just see this as important, and this provides that opportunity for those groups to truly work together on that common goal.

“It's never been more important for the senior leadership team to be echoing this focus on strategy at all times. VPs are working to turn that strategy into action with their teams, and then at the senior director level… they live at that nexus of strategy and execution.”

When it comes to horizontal alignment, what are the real scale enablers?

It comes down to the blind spots that we first identify. In other words, as you build up these OKRs, one of the first things that you're going to identify is that when we find the focused few Objectives for every one of these groups, we're going to see places where we're not aligned, where we say, 'Gosh, I always thought I was a part of your plan. I thought you were seeing the peanut butter jelly story, the 1 + 1 = 10, but apparently, you're not and there’s an opportunity for us to build that now.’

So as we think about the cross-functional Workstreams, they very often come from both the blind spots that are exposed through this process, as well as the opportunities to see emerging synergies that we can build. So, it's the next step in logical thinking, you see the different competencies of these groups and you start to imagine how they can come together.

How is VMware staffed for alignment at scale?

Every community has a different role in this transformation. The senior leadership team is driving this from a strategic perspective, they're saying the same talk track over and over and over again. Same three things that we're focused on to drive that alignment across 37,000 people, and it's never been more important to be focused like that, people need to hear things seven times before they remember them. In a pandemic, it's probably 30 times. So it's never been more important for the senior leadership team to be echoing this focus on strategy at all times. VPs are working to turn that strategy into action with their teams, and then at the senior director level. This is why this team is so important and why we specifically call them out, because they live at that nexus of strategy and execution, and when we activate that group, that's when we see the 'how' come into play, and that's the critical piece as we operationalize this.

[Jaime Temple] We have several chiefs of staff and strategy-planning operations roles at VMware, and they're typically the catch-all for anything rhythm of the business, anything that hits those broader VP or SVP teams, they're the touch point. So what we're trying to do is we actually have a conference scheduled with them in a month. We're pulling them together, and we just want to make sure that they have access to every bit of training or announcements or timelines that have been given to our senior directors and our leadership teams. They know how to run workshops, they understand how this can embed in the rhythm of the business, and we create that peer network of pulling all these people together because when they begin collaborating right, then those broader teams can as well.

We also have a lot of the HR teams leaning in because we're looking at what's the few too many? So how can we work with our HR business partners who support several VPs? If they understand what we're trying to do, then people can come to them when they have questions about this new program.

Have you mandated Objectives and Key Results down to a certain level?

Yes is the short answer. You have to be cautious, though, because these are tools and the tools are only as effective as the outcomes that we're looking to drive. Fire is a tool, it can burn you or it can cook your food, and the outcomes from the tool, WorkBoard, and the tool OKRs that we're looking to drive are better aligned and better focused, better accountability. If that cascades down to every person in the organization and an individual contributor has to come up with their three OKRs. Now we have a lot of noise, we have a lot of busyness that may not lead to productivity, and arguably, we're going to be working against the outcomes that we’re looking to drive.

So the threshold and the tension that we're trying to build, the trade-off, is that we need to push them down far enough so that we can build the accountability and the focus, but not so far that we're building something that begins to act as noise and actually slows us down as a distraction. So for us, that's through VPs, and then at the senior director level, we're changing the script a little bit and saying, 'Instead of the traditional OKR approach, we're gonna build work streams that don't reinforce your silos and don't cascade down to your position, but actually look at how we can work across the organization for those work streams.

[Jaime Temple] I worked with the WorkBoard team, and we created these groups of VPs who report to SVPs or other VPs, and we said, 'Let's focus on those groups aligning together,’ and then some of the ones that are outliers several layers down, let's work with them in a way that makes sense.' So there was a timeline, but with the flexibility of, 'Hey, if it doesn't make sense in certain orgs, we’re not going to push it.' Some of the early adopters said, 'We pushed this down really far, and we had a reason why it didn't work.’ Well, let's talk about it. So we continue to have those conversations and not really push too hard, but just bring back the learnings. The team was happy to hear those learnings.

In a highly ambitious organization, how are leaders navigating when people fall short of achieving goals? How are you leaning into these moments?

Uniquely, our CEO has given teams permission to fail at this time. That really wasn't accepted in the past, and we needed to be very predictable, particularly in an environment where we have all these siloed objectives, it has to come together perfectly.

As we think about the type of transformation and the aspiration that we're leading towards now, we can afford to build in some failure, and we want to because we want to learn through this process. This needs to not just be evolutionary change - 10% harder work for 10% more outcomes this year - but revolutionary change, where we find that 1 + 1 = 10 story. We're not always going be right, but revolutionary change requires that we take some chances, we experiment a bit. We accept failure as an opportunity to learn.

“Our CEO has given teams permission to fail… We're not always going be right, but revolutionary change requires that we take some chances, we experiment a bit. We accept failure as an opportunity to learn.”

How do you balance between your priority OKRs and the activities that are, say, fueling the engine, but aren’t transforming the business?

It's the tension between perform and transform, right? And what we're selling our team members on is that when we do the transform, perform becomes easier as well, and it's not that this is VMware's idea to go into this new market where we're driving customer outcomes. The market's already there. The market has moved into that direction, and so this is us enabling to better serve the market that needs to be reached that way, and so the perform gets much easier, the faster we transform and the faster we adopt these new behaviors.

[Jaime Temple] Some people think they’ll just keep doing things the same way as before. But then they start to think in the one VMware mindset of, 'There's someone else doing that in another group at VMware. What if I talk to them? Can we do something better together?’ So, it forces all of us to ask if the way we’re doing something, quarter after quarter, is that the best way or can you grow and collaborate to create the new VMware best way and go together?

As teams gain visibility across VMware, are there any sort of duplications or inefficiencies you've been able to eliminate?

The wrong, and much more painful approach to eliminating inefficiencies, would have been to come up with those ideas at the SLT level. It’s really tempting to say, 'I see redundancies that exist right now, I'm just going to chop this part of the organization and remove that.’

But what's taking place now, because this is a transformation that we're all participating in, is that it exposes these redundancies for all of us to see, we all feel that tension much more organically and the garden weeds itself. We get to see the places where we can build better efficiencies.

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