SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
Mapping SaaS Growth with Erik Huddleston, CEO of Aprimo
Dan Balcauski is joined by Erik Huddleston, the CEO of Aprimo, a high flyer in the MarTech space. They explore the crucial role of organizational capacity for change in driving growth for SaaS companies. They discuss the significance of understanding the buyer journey, implementing OKRs effectively, and the importance of small incremental changes in driving organizational success.
Guest Bio
Erik Huddleston is the Chief Executive Officer of Aprimo. He has 25 years of experience in Marketing Technology, AI, and B2B SaaS with deep go-to-market and product expertise. Erik has helped scale technology companies across a wide range of settings: early-stage, late-stage, PE-backed, and public companies. Prior to Aprimo, Erik was President of Cision through its successful sale to Platinum Equity. Before Cision, he served as CEO of TrendKite, which sold to Cision in 2018 for $225M after four years of >100% CAGR.
Guest Links
Connect with Erik on LinkedIn and Twitter
Aprimo.com
Hello and welcome to SaaS Scaling Secrets, the podcast that dives into the trenches with leaders of the best scale up B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today, I have the privilege of interviewing Erik Huddleston. Erik is the chief executive officer of Aprimo. He has 25 years of experience in marketing technology, AI, and B2B SaaS with deep go to market and product expertise. Erik has helped scale technology companies across a wide range of settings, early stage, late stage, PE backed, and public companies. Prior to Aprimo, Erik was president of Cision through its successful sale to Platinum Equity. Before Cision, he served as CEO of Trendkite, which sold to Cision in 2018 for 225 million after four years of greater than 100 percent compound annual growth. Join me as we explore Erik's unique stories, uncover the secrets to his success, and reveal his strategies to scale Aprimo successfully. Let's dive in. Welcome Erik to SaaS Scaling Secrets.
Erik Huddleston:Appreciate it, Dan. Super happy to be here.
Dan Balcauski:Well, I'm very excited for our conversation today, Erik, for people in the audience who are not intimately familiar with you and your journey, can you briefly just introduce yourself? Tell us a little about your journey in the SaaS world.
Erik Huddleston:Absolutely. So, I've been, in the SaaS world since before there was a SaaS world. so, it got started in the early nineties, right at the dawn of digital. And, the first product that we launched in market, we were woefully, behind, on delivery for this is when you shipped CDs to your customers. and so we ended up. convincing our early customers to let us host their product for them. and then, just to save time because we didn't want to have customizations for all the customers. Cause back then enterprise software, you did a lot of customizations. We kept it in one code base and one database. So we ended up with multi tenant hosted enterprise software in, 95, probably, so I'm probably an OG of SaaS by, by that measure.
Dan Balcauski:Definitely an OG in 95 with Hosted Software, because that was, I'm sure many people were not even aware of what was possible. As you look back over your career. Many people have a moment where things just change for them. I sometimes refer to it as your superhero transformation moment. What was the, I'm Peter Parker. I get bit by a radioactive spider. Go to sleep and wake up. I'm Spider Man. Everything is different. What moment was that for you in your career?
Erik Huddleston:Yeah, it was actually super early on was kind of the first transformational moment and that's, started out, I was really technical and, I probably would have, ended up being a developer and then the development executive and that's how I would have ended my career. But. it was the early days of the internet, nobody knew what an internet was or what you would do with one. and so I, I got drug out into the field by sales reps. And, as I was drawing, this giant take over the world architecture diagram of how their business was going to be transformed, by digital, and the internet on the whiteboard for, a fortune 100 company. I realized that. The diagram and the pitch that I gave was in some ways more real than the software that I had built. and so from that moment on, I had a, every job I had one foot in technology and products and one foot in sales and go to market. And so I don't know if I'm a techie that likes to sell or a sales guy. That's a little bit technical. but I really think that was, a pretty, profound realization of, being able to, to see, the market from both sides.
Dan Balcauski:Mmm. Well, I don't, I want to be careful. Is the lesson learned there, that the salespeople aren't afraid to sell, vaporware, software that doesn't exist? What is t takeaway?He
Erik Huddleston:anyway, yeah, ita little different for me because if I sold the vaporware, I had to deliver on it. But, so, so I learned to be careful. But, but I think that there's, one of the things that, is challenging for organizations is, understanding the laws of physics. When they're executing their go to market motion, so you either get, really good at selling and you get out over your skis. or you build so much stuff that, you know, it crowds out what the market actually needs or wants or what matters, out of the, hundreds of thousands of lines of code that you wrote without having a single person use, it, in anger.
Dan Balcauski:Mmm. Well, hopefully nobody's using your software in anger. I can't imagine what that would look like. Oh, press this button! maybe, I may have shipped some software in some days that maybe caused some people to use it in anger.
Erik Huddleston:One of the best metrics in the world, I'm trying to think of who, who coined the phrase, but it was one of the early, analytics, SaaS analytics, providers, but the term was the Rage Click, and it would analyze when somebody, like, hits, hits the mouse button, repeatedly, and it would actually show you your app and you get like a little heat spots where the rage clicks were. so you say people using your software in anger. that's actually a great product metric.
Dan Balcauski:Well, if anybody wants that experience, just go use your local state government website today, and you too will understand the power of the RageClick, because that software has not been updated since 1987. That being said, so you started on the tech side, you get dragged by the sales folks to, actually go out in the field, talk to customers, understand, hey, there's a way that the software I'm creating actually has to make. and create value for customers. How did that lead you into, senior executive position? I guess, you and I first were introduced, I guess, when you were at Trendkite, but, did you make the transition fully over to the business side? what finally pushed you over that edge?
Erik Huddleston:know, I always, I always had roles that had responsibility in both. And that was really, I think, unique, and valuable. but, I think at some point the oil fuel mixture, that's, moved more and more towards go to market optimization, and less towards technology innovation, which might make me a little bit sad, but, the cynical side of me tells me that, that's telling you what, the world of technology, values more.
Dan Balcauski:Yeah, for sure. Well, for, just to kind of complete that arc, I guess, so now you're at Aprimo, so can you just give us a real quick snapshot of what Aprimo is, its mission, and I guess how you've found yourself leading this current company?
Erik Huddleston:Yeah, absolutely. So, you know, Aprimo was, one of the high flyers in the MarTech space, kind of same vintage as Marketo. they filed their S 1, they got an offer above their stock price that they had to take, so they got acquired by, Teradata. that's by all accounts went terrible and, they were carved out, in 2016 and, they lead 3 Forrester waves, the MRM space, which you can think of as the, all of the, marketing, budgeting, planning, Workflows, like the back office of the front office of marketing, and then they lead the digital asset management space, which you can think of as like the repository for all of the stuff that marketing creates. and then all of the plumbing for, how all of that stuff that the marketing creates, finds its way into, all of these customer experiences and, and then into, into the market,
Dan Balcauski:you mentioned, a few interesting things at the beginning I want to, kind of circle back to. So, obviously this podcast is called, SaaS Scaling Secrets. And so you've been a leader of a couple of, pretty intensely scaling, software companies. I guess, what do you feel is sort of the conventional wisdom about scaling that, is untrue in your experience?
Erik Huddleston:most of it. I mean, so, so 1 thing is it's not 1 size fits all, right? 0 to 1, 1 to 10. and loosely 10 and beyond, are very different. So, there's kind of four phases scaling, and the playbooks that you use, the problems that you face, they're different, from, I'm a B round venture backed startup that's, 15 million ARR and I'm trying to get to 100 versus, I'm a public company and I've got 800 million, of ARR. And, the, the laws of gravity, are such that, to put even a point of growth on that is, like, like launching a man to the moon. so, I think that's the biggest, kind of misconception. People have all this advice, but they forget the context in which that, that advice works. and, I've had the. The privilege to have a fairly eclectic career. So, I've, I've been in, founded companies. I've been, I've taken over companies in their seed stage, taken over, in late stage, been a section 16 officer in a public company with, so I've seen, all of the. all the stages with a growth mandate, and, they're just radically different.
Dan Balcauski:No, I think that's absolutely on point. And, I spent a lot of my time in the pricing and monetization world and, I even did a webinar the other week and, it's like, people are like, well, that's broad, but that doesn't apply to, X, Y, Z sort of industry space, whatever. And it's just like, yes, no, because the advice needs to be very specific. I guess, you. I love this. I can tell you're technically minded because a few times now, whether it's throwing a man on the moon or physics of companies, you're using a lot of these analogies. So I guess, is there a uni like, and for context, let's assume it's a company of the sort of scale that, that Aprimo is, or maybe, where sort of a Trendkite was before, it Sold, right? So it kind of give you a universe in which to, to land this question. Is there a... speed of light constant, a primary rate limiter of growth and scale for SaaS companies at that size.
Erik Huddleston:The number one rate limiter to growth for a SaaS company, particularly in B to B, but generally, is organizational capacity for change. as soon as you have any understanding of how to sell to your market, the thing that, that is going to hold you back is going to be how fast you can absorb the changes that you have to make in order to optimize your go to market motion. So, if there is a Planck's constant, in, in scaling SaaS, it's that, that, that's the rate limiter.
Dan Balcauski:Well, so help break that down a little bit. Organizational capacity for change. cause I think I know what you mean, but I'm not a hundred percent sure. And if I don't understand, I'm guaranteed maybe our listeners don't are followed either. Like what are the sort of sub components you're thinking of when you think of organizational capacity for change?
Erik Huddleston:Yeah. So it's, if you grow at any meaningful rate. Things break, and as things break, they kneecap your growth. So the faster that you fix the things that break, so that thing scales a little farther than it did, the faster you're going to grow. So you can look at almost any, growth chart, for a SaaS company that's had, even 15 percent growth rate or higher, and if you. If you, like, zoom in enough, eventually you're going to see a kind of a stair step looking, growth, curve, it's almost never smooth, unless they've really mastered, that, that kind of scaling axiom, because, you have to detect the thing that's the bottleneck in value creation, then you have to fix the thing that's the bottleneck in value creation. Then you got to test it, and then you got to scale it, and those little cycles, create these little fits and starts, throughout the kind of the buyer journey, that you're taking, the, your market segments that you're selling to through.
Dan Balcauski:Got it. So let me see if I can use an example, maybe at a earlier stage. So I think there's a well sort of known transition point where you go from sort of founder led sales to, to, hiring a sort of a sales team. Some of the, where some of the companies don't survive that sort of phase transition is because, it's like, there's not. the founders like intimately knowledgeable of the business, and then they try to bring in, oh, we'll just hire 20 sales folks and just have them go run around and, cold call and just, run a play. But there's not really a sort of a defined sort of, playbook. is that sort of like, sort of capacity for change sort of moments
Erik Huddleston:Yeah, if we go all, if we go that far, that early stage in an organization, yes, it's like, okay, I can close so many deals just off of, my infinite knowledge of my company, my product, the problem that I saw, I can use my Gravitas, I'm going to be the best dancing bear in, in the sales cycle, and I'm going to be any alternative solution just because I'm the founder. It's like, okay, now that doesn't scale anymore, right? I can only do so many sales cycles and still run and grow the company. So I'm like, okay, now I'm going to hire some sales reps. So I hire, maybe not 20, but I hire the first, 5, 7, 8 sales reps. Now then, the next thing that I do is, I send them all out into the market and then they bring me in to the right meeting in each of the sales cycles. So now I'm not running the sales cycles. I got people that are running the sales cycles for me. I'm just like the, the pixie dust on top of those sales cycles. But while I can do that for, the five sales reps, if I want. sales reps or 15 sales reps, all of a sudden, the time that I have is the founder and the dancing bear, I can't even do all of the pixie dust meetings. It's like, so now then I have to, figure out how I'm going to do sales enablements, and sell a sales process. and so that's the next thing that I'm going to have to go figure out. And it's like, okay, but now then, the reps are all starving because the magic, SEO driven inbound that I'm getting won't feed all of the mouths. And if I need more sales reps, then I need more food on the table. So now then I've got to rev up the mansion and it just keeps going and gets, more sophisticated and harder to solve, with every scaling point, of the organization. And that's really what I mean by. organizational capacity for change. Every one of those things is really hard. and the farther you go, the harder the changes are that are going to have a material impact.
Dan Balcauski:Got it. Well, and no, that's super helpful. I really appreciate that. those examples, I think, give me a much more concrete idea of what you're referencing, as I understand. So, so, Aprimo, as you mentioned, acquisition and then spun back out, et cetera. and then, you came in as a, non founder leader of an existing organization, I guess, is there, when you start as a leader, is there a way you think about, Like understanding what that organization capacity for change is. And then, how, I guess from there, like, how do you think about, okay, how do I accelerate that? Is there a process that you go through?
Erik Huddleston:Yeah. So, the first thing that I do, is I call it mapping the buyer journey. and what I really mean by that is, okay, they have some TAM that they've got well articulated. What are the actual market segments within those? What are the buyer personas, within those market segments? And then, how do we attract them? So you can think about like the marketing funnel, like, Oh, this is how we create awareness. This is how we get them engaged. This is, how we qualify them. And now we're getting into the sales cycle and you have your sales stages there. I know, okay, now then, we're convincing and we can solve the problem. It's some kind of solutioning phase. Let's go, Oh, now we're, we're getting selected. They've decided that we are the one that's going to solve the problem. Okay. Now then we're in contracts and whatever our close process is. Now we have a customer. Now we have a post sale journey with whatever the onboarding and adoption, value realization, renewal kind of stages are. So I figure out what those are. Everybody has them, but they're usually just like containers. for stuff. Like, people, like, forget the reason why, you know, those exist in the first place. and so they do a lot of things inside each of those stages, but, they're not very articulate about why. So I'll, like, figure out what's the actual value that's getting created in each one of those stages. Like, what's the objective and how can you quantify that? and then I figure out what activities are the actual key activities that create that value. so if I'm in a classic, inside or outside sales motion and I'm in the qualify stage or whatever you call that, maybe it's the discovery call. Like, that's the thing that's actually, from an organizational perspective, at least, drives the value of that stage. Like, if it's the solution stage, maybe it's the demo or the free trial or whatever. So I figure out what that activity is. I figure out the resources that execute that activity that creates the value. and then I do some very lightweight instrumentation, like stage duration, stage conversion rate. how do I quantify the quality of those key activities and how can I articulate the, efficiency at which the resources could be people, it could be like a marketing budget, or maybe it's API calls from, a stripe or whoever I have as a vendor, what, whatever those resources are, how do I understand how efficiently I'm executing the key activity? If I get those four things, I can then diagnose, like, where's the bottleneck, uh, in value creation, so it's like, like lean manufacturing, and you do value stream mapping, and you figure out, like, where the bottleneck is, just like it was a factory floor, you can identify. where the optimization ought to take place. And that then gives you a map, even if you don't know a lot about the business yet, or, or, what people like, how do we need to reorganize or any of those things, you at least know, like, where is the low hanging fruit. Increasing Growth.
Dan Balcauski:Well, let me ask a dumb question because, I just put myself in the shoes, maybe a listener here and they're like, well, okay. Yeah. So, my, VP of marketing, they understand what our customer funnel looks like from, first, website visit or talking to us at a trade show all the way to, then become a qualified lead. And then, sales team has got, their pipeline stages set up in the CRM. Right. And then, customer success has got, their, whole renewal cycle or onboarding, flows that they go through. I guess what is missing in sort of that retelling of the world that you're sort of looking at that's different, is there, yeah.
Erik Huddleston:2 or 3 things are missing. 1, there's a macro worldview there. That's local optimization versus macro optimization. So, like, yeah, I can go let my marketing team, like, go try to figure out how to generate more leads. But, oh, those leads are low quality. And, so they're converting at a low rate. that's sapping all of my sales capacity. So the efficiency of my sales reps is very low. And the number one driver for the low efficiency is actually quality of leads. So I actually want marketing to generate less leads, at a higher quality rates to actually, optimize the growth rate. So, so that's the first thing is, you have to have. Global Optimization, not Local Optimization. The, the second item is, you end up, with the, the end in mind. and so, like, your marketing person is trying to optimize for, MQLs or whatever they're turning over to sales. sales is trying to book deals. and so even in their local optimization, it's not in human nature really to have that kind of disciplined thought process of like, where in, even in my part of the world is the best place for me to optimize, so that's like the second problem, and then, and then the third problem is like, in a lot of cases, people are drowning in metrics. so they, a lot of people have a lot of great instrumentation. And then the question then, becomes, like, how do I really know the thing that's I should try to optimize because you have very limited resources to put against change initiatives. And that's why if you're very disciplined about what's the key activity, and how much of your organ, your organization's labor is going into executing that key activity, if you don't have like, maniacal focus on just those two things. you're gonna, you're gonna, you're gonna have an entropy problem. a lot of your energy is gonna escape as heat. Versus being, converted to, kinetic energy moving the, the deals forward.
Dan Balcauski:Got it. Got it. So, so make this a little bit tactical for me. So, so you come into Aprimo, like, what is kind of first 90 days, first 180 days of this process look like? as much as you're willing to talk about it of like, what did it look like at Aprimo? Like in terms of like, how did you make this? idea, this system tangible for your other your senior leaders that you're, you have together, like what's the, I guess, what's the artifacts, how do you get them thinking of, and moving in this model, right? Is it just a series of new, I imagine it's more than just a series of dashboards or a new OKR process. I mentioned include some of that, but that's not the entire thing. So can you just lead us through what 180 days looks like?
Erik Huddleston:Yeah, so I'll talk about, kind of the big 5 things I try to implement and then I can back up and talk about, like, what is the, what is the 90 day plan? Which, by the way. I think 90 day plans are actually kind of bogus, because, everybody asks, like, okay, like, what's your 90 day plan if you were to take this company over? And it's always the same, right? It's like, oh, I'm going to spend month, month one, like. Assessing the situation and, doing my discovery, my research, and I'm going to spend the next month, like, building my plan. And then I'm going to spend the 3rd month, like, executing on the quick wins or however you say it. From my perspective, that sounds like. I'm going to spend 90 days to 30 days worth of work, which I don't find is like a great, value proposition to be pitching. So kind of hate that, that kind of term and concept. I'm much more, believe in kind of the, the law of incremental gains or marginal gains. And you make very small changes. that take a very short amount of time to execute on, and a bunch of things happen. One is, you don't have a bunch of wasted time before you get to value. The risk of failure is much lower. There's a compounding effect of small changes, called value under the curve, where You know, even if it's less efficient to make a whole bunch of small changes, the fact that the business benefits accrue early means that the value that takes place. before you would have got to the same point, like with a big bang, but much more efficiently executed approach, you'll never produce more value, than you will with kind of the small incremental changes. And then it builds momentum because nobody really.
Dan Balcauski:Go ahead.
Erik Huddleston:Okay.
Dan Balcauski:I was going to was,
Erik Huddleston:all the failures.
Dan Balcauski:yeah, well, I was going to say too, like, I, and it's clear to me now kind of thinking about my previous experience, sometimes like, I've left companies because they get too bureaucratic and that as a CEO asking for small incremental changes also gives you a really good signal of, The organization's capacity for change. if everyone's immediate reaction is, well, we need to have a set of 10 meetings around this decision to see how we can actually execute it. That's really good insight for you as a new leader to be like, Oh yeah, this organization can't make any changes because what you've asked for is so small, it should be done immediately. And you get to see the bureaucratic mess
Erik Huddleston:Yeah, you can route around, that, and I'll talk about, some of the things that I do there, but you actually relied on one of the things that, that is always, the case, which is kind of like a corollary of Gall's Law. If any complex, successful system evolved from a smaller, less complex working system. And you can by extrapolation, it's the law of incremental gains. And it's so hilarious. Anytime you go into a new organization, or anytime you want to launch a change initiative, it may start with, Like the classic is always like, Oh, we're going to tweak the sales process somehow. And it's like, okay, we need one more field on the opportunity. Like everybody always needs one field, but you know, I mean, one more field on the opportunity to enable this process change, and then you'll have the 10 meetings and the outcome of the 10 meetings is. We're going to re architect our data model is first step of, the little tweak the sales process. so, so, you kind of have to divorce that and the, the five things that I do. One is I do map the buyer journey. It's a great way for me to understand how I create value in the organization. It identifies the things I actually care about. and it gives me a cheat sheet for the things I don't care about, like, because you know all of the key activities, it's actually creating, value at least in, from a growth standpoint. and so I do that. I do a rudimentary level of business instrumentation, which we kind of talked about, like the bare minimum of kind of conversion rates and, stage duration, you need to be able to do, slice and dice those a little bit to do a distribution of those, so not necessarily as, as simple as it sounds, the key activity quality metrics, the, those, resource pool, efficiency metrics. And then I take those efficiency metrics. So that's kind of two instrumentation. I take those, those efficiency metrics and what those really are in 90 X percent of the time is that's your CAC and your cost of revenue uh, models, capacity models. So I'll take those and then I'll just, roll into finance and I'll bolt them onto my forecast model. So that I'm now using the capacity models that I discovered for executing the key activities. And I use that then to predict my forecast model. So it's using yesterday's weather. It's sort of like at the current efficiency and quality level of our key activities and the resources tied to growth. This is what's going to happen for the next 12 18 months if we make no changes. And it's always, 106 percent of the time, much worse than whatever forecasts that they have. and in fact, it's usually shockingly bad. and so, but once you have that, then it's a blueprint for, what's going to happen when you make each of those little changes that you're talking about making. So then, I take, I, I roll out an OKR process. That is, focused. not exclusively, but pretty much exclusively on optimizing the, the instrumentation of the buyer journey based on those assumptions in that assumption driven forecast model. and then I'd roll out a cadence of the business, like I injected into every meeting. Like, so, you organize your week and your month and your quarter so that you can harvest as much time. and focus from the organization as possible on the change initiatives. Going back to the thesis that's what, is the rate limiter for growth. So, you inject it into the staff meetings, you inject it into, your operations review, you inject it into, the one on ones that, that, that take place. and, that then reinforces kind of like this virtuous circle of optimization, and measurement of the change of your go to market.
Dan Balcauski:Interesting. And so you said a ton there. And so I'm going to, I'm going to try to summarize and recap, and I'm probably going to get part of it wrong. So feel free to correct me where I do. So, so starting with really understanding how you're driving value for the customer and the buyer, and maybe those are the same or different depending on your go to market model. understanding which activities in your organization really go create that value at a, a detailed level. Understanding how we're sort of, Instrumenting those activities and the outcomes that those are creating and using that to understand, okay, what is the set of, resources, time, money, people I need to put against those activities get to, to get the, to get those outcomes. So it's almost what I kind of heard there, correct me if I'm wrong, is it's almost like a zero based budgeting of like looking at the customer journey to figure out like, okay, what do we. What activities, like who do I need? Not because these are the people I always have, and we're just gonna increase headcount 10%, but understanding with the activities that drive value, I need to support those activities with a certain amount of resources. And then wrapping that into a set of, I guess financial, sort of financial outcomes, in terms of customer acquisition and your cost of revenue. and then, how do you sort of. Do goal setting around all of that with OKR. So, and feel free if I, there was a lot of, you said there, I was trying to track. So did I summarize it correctly?
Erik Huddleston:Yeah, pretty much. It's, map the buyer journey, you want to instrument it so that you can understand. The quality, efficiency, quantity of value creation, then you want to, weld that to a forecast models. Do you understand how that's going to impact the growth rate and performance of the organization if you extrapolate? Into the future, then you wanna roll out an OKR process to manage the optimization of what you learned from those stages. And then you want, a ca you want a cadence of the business that drives the urgency accountability. And visibility of those change initiatives so that takes up enough of the oxygen in the room, that you're actually going to get, maximal organizational change.
Dan Balcauski:And, so OKRs. so that's fantastic. And I, yeah, so I missed at the end, right? Is it that wrapping it in that cadence of, in the operational, meetings with, at the, executive team level and all the metrics that are, in discussion that is being had there, to make sure progress is being made. You did mention OKRs. OKRs are an interesting topic. some companies, have found them to be successful. Other ones, find that they're, take up a lot of time and they have a limited, usefulness. I guess, have you had, what have been your lessons learned to actually do the OKR? Process effectively, and I know we could probably talk for three hours on that topic alone, but like, is there any sort of takeaways you've had from being a senior leader in implementing OKRs that you think would be helpful to folks that maybe have struggled with that process?
Erik Huddleston:Yeah. And OKRs are just a vehicle for doing it. It's just the most popular vehicle for organizing the company around change. So, they have to matter. So a lot of times, I watch OKR processes, which are basically like everybody just makes their stuff up. And it's not coordinated. So it's like, people are saying what they think is the most important thing, but if everybody did what they think is the most important thing, would we actually be in a better spot? And so the most important thing is, OKRs are a focusing mechanism to allocate a percentage of the labor in the organization towards change or towards the most important activities. So you have to define what's important. So, there's a whole conversation about how you set your corporate strategy and all that. I'll gloss over that for a second, only to say, like, once you understand what the levers are that you need to move in order to optimize your growth, like, you have to marshal organizational resources against that. So the OKR cascade then becomes one of the most important things that you can do because it puts the fence. around the random things that everybody's going to, think up for their OKRs and put, and instead turns that into organizational creativity around the best way to get those objectives accomplished. So you get, you move from, randomness that looks like we're wasting time on an OKR process to unlocking, creativity and empowerment in the organization to figure out the best way to. I did fix the problem that you've identified. So that's the, that's the first, big lesson. The second lesson is even if you have that, people are really good at figuring out, what they should do. What they aren't very good at is understanding what the dependencies are on. Allowing them to actually accomplish what they need to do. So, 1 of the weaknesses of the OKR process and any strategic planning process is the horizontal tie offs. So I've got to do some work in my team, but before I can, you need to do some work in your team. Because, I need the messaging from product marketing before I can build the sales play before, Jane's team can, build the enablement for the field. Before we can have any hope of running the AI play against 50 accounts by the end of the quarter. and so those horizontal tie offs, is kind of the next, thing that you have to do in order to be really successful with the OKR process. And then the last one is, like, it's a waste of time because nobody does it. It's kind of weird and paradoxical but everybody says, Oh, we're wasting all this time on OKRs. Because the common behavior is, at the beginning of the quarter, I waste, a week or two weeks, if you're really good or really bad, of organizational time setting the OKRs for the quarter. Then, at the end of the quarter, you waste a week or two weeks of organizational time, like, post justifying the stuff you actually did for the quarter. Underneath the OKRs that you said at the beginning of the quarter. Because it's, you only look at them twice in most organizations. And so the last big thing that you have to do to be successful with OKRs is they have to be front and center. So you have to sit there in your ELT meeting, your senior leadership team meeting, your global leadership team meetings, your staff meetings, your one on ones. And an agenda item needs to be like, where are we on the OKRs at the context that this meeting is at? what are we behind on? What's the action plan to fix the things we're behind on? What is medium or low competence? We're not behind on it, but we think it may not happen the way we want to. Why is that? What organizational resources do we need to fix that? And what's the action plan to make that happen? And then have that action plan process. be a feedback loop for whatever the cadence of that meeting is, hopefully weekly, and at worst monthly, so that the cycle time of optimization, and course correction of your OKRs, is appropriate. So, those 3 things and, generally you're going to get value out of OKRs.
Dan Balcauski:Oh my God. Erik, I could ask you a million and one more questions about this. I could talk to you all day. you are just an absolute machine of operational systems, thinking. And, I know I've got a huge amount of value out of this conversation and I would love to continue to talk to you, but it be respectful of your time and our audience time. I do need to start wrapping things up. I got a couple of lightning round questions for you to wrap up. You ready?
Erik Huddleston:Let's do it.
Dan Balcauski:Erik, how do you define success?
Erik Huddleston:Oh. I'm not sure if that's an existential question or not, but, my, my scoreboard, is pretty clear. my success is first and foremost organizational success. Like, that's can pretty, that's a pretty black and white, kind of financial plan, enterprise value creation, scoreboard. The next is, my team's success. that's, it's a little harder to measure, it's, one component growth, one component compensation, and then one component, ergonomics of the ride. Are people, engaged in having fun with all of the, the hard work and urgency that we're putting on things? We have the whole episode just about that, probably, around culture, but, so that's probably my number 1 and number 2, and then number 3 is, am I intellectually engaged? And sometimes, even when you're losing, you're personally winning. Just because, you're engaged with really difficult, important, meaty problems. I think boards like, they think I'm a pessimist, most of the time, but in reality, I get really excited about things that are going wrong because one, I know what they are, and two, it probably means that I can do something about them. If everything's going right, and we're still not happy, like, that's the worst thing that can possibly be happening, to an organization.
Dan Balcauski:I love that. Erik, I view you as successful and nobody of any level of success gets there on their own. Has been a close leader, other mentor that has helped you on your journey?
Erik Huddleston:I am the Borg of, like, SaaS, success. So, I hoover up every last piece of knowledge and advice that I can get from, anyone that, that, has a pulse. and then I assimilate that and I try to learn from it, so the list would be infinite, there's been a ton of, great leaders, in my career, some that I've worked for, and some that I haven't, that, that have been instrumental from, Jimmy Treybig, who was a great client or partner, created Tandem Systems. One of the first like, iconic, high availability, many computer, companies like he, he would always, I would have meetings where he would just ask me 1 question and, it would always be some rendition on like. his advice would be, I'd just go ask for the order and, he really helped, keep me, commercially oriented and he had just brilliant advice to, John Long was a, still is a fantastic mentor of mine, a great, SaaS, thinker, and, I could go on and on, but, I've been very fortunate, to have a lot of really talented people. help me along the way.
Dan Balcauski:Just go ask for the order. I think we caall benefit from that. well, if you could give one piece of advice, I give you a billboard, you put anything on it for other B to B SaaS CEOs trying to scale their company, what would your billboard say?
Erik Huddleston:I, heck, now that I may have to say ask for the order, but, but probably, if I were true to myself, it would, it would probably, since I probably said it a thousand times, in this conversation, it's, the number one rate limiter to growth in a SaaS company is organizational capacity for change. So if you want to grow, start there. It's a big billboard a pleasure
Dan Balcauski:It's been a billboard, big billboard. We'll give you, we'll give you two rigso we can spread iter so we can spread it out. Erik, it's been an absolute pleasure. how can listeners stay updated on your insights or, and or Aprimo's journey?
Erik Huddleston:LinkedIn's the best place, connect with me on LinkedIn, engage with conversations with me on LinkedIn, on Twitter, and then, I'm always available on email, Erik at Erik.net, erik at erik. net, and I'm always, happy to help entrepreneurs. It's my hobby.
Dan Balcauski:Well, Erik, we will put those in the show notes for listeners. Everyone that wraps up thiepisode of SaaS Scaling Secrets, a massiveve thank you to Erik for sharing his journey, insights, and valuable tips. For our listeners, if you found this conversation as enlightening as did, remember to subscribebe so you don't miss out on future episodes. Until next time, keep innovating, growing, and pushing the boundaries of what's possible.
