Don Schuerman - CTO at Pegasystems

(Joel Beasley at 00:00:00) Hello, my friends. Today we are talking to Don, the CTO of Pegasystems, and we discuss the different aspects of digital transformation, finding employees who are relentlessly curious about the customer, and how doing improv may be the secret weapon to progressing in your career. All of this right here, right now on the Modern CTO podcast. Here we go. This is the Modern CTO podcast.

(Joel Beasley at 00:00:35) Hey, buddy.

(Don Schuerman at 00:00:37) Hey, Joel. How are you?

(Joel Beasley at 00:00:38) Fantastic, man. How are you doing?

(Don Schuerman at 00:00:40) I am great.

(Joel Beasley at 00:00:41) Dude, I'm so pumped up right now to be talking to you.

(Don Schuerman at 00:00:44) This is very exciting for me too.

(Joel Beasley at 00:00:46) I watched your crazy videos. They were unbelievable, man. You're like standing on laptops. It's good.

(Don Schuerman at 00:00:53) Well, you gotta make things at least interesting for people, right? You can't do just your standard sort of tech presentation or people are gonna tune out and go find something else to look at.

(Joel Beasley at 00:01:05) Right. I'm learning all about customers and value, and I really like the style. Chloe called me over. She said, you're gonna love this guy. They were passing your video around the office and everything like that. It was pretty cool.

(Don Schuerman at 00:01:19) Yeah, that's awesome.

(Joel Beasley at 00:01:20) Yeah. So I'm pumped. By the way, this is the podcast.

(Don Schuerman at 00:01:22) That's what I figured. I figured we're in it.

(Joel Beasley at 00:01:24) Yeah, we're in it. We go deep. We go right into it. But one thing I'm curious, a lot of the CTOs I talk to, they start out in engineering. Looks like you started out in sales.

(Don Schuerman at 00:01:36) So I actually started out in support and engineering. My first role at Pega was on the support team. I carried a pager. I troubleshot VAX batch jobs that went wrong at like two, three in the morning. Early on in my career, I was writing JCL scripts for one of the largest banks in the US on their mainframe. So I started there, and then I actually found myself as a Java programmer for a number of years. I actually wrote a decent amount of Java code just down in engineering. And eventually, the opportunity kind of came around to do a little more customer-facing stuff. And I happened to have enough knowledge of how the product worked and was also an engineer who wasn't afraid to go talk to people. So I ended up doing a lot more of the technical sales side.

(Joel Beasley at 00:02:30) VAX, so you've been there—how long have you been there? Like, twenty years?

(Don Schuerman at 00:02:33) I've been with Pega for twenty years. Yeah. So I've seen the—I've seen portions of the technology. Like, again, like I said, I've written JCL code. So I've touched some tech that a lot of people coming into the world today don't really even know about, even though in a lot of the big enterprises, it's still running a lot of the banking systems we use.

(Joel Beasley at 00:02:53) Yes. I was just doing—some people sometimes they call and they ask for me to connect them with other people or help or advice. And I'm talking to this one guy about a project that they're working on and they're moving things off of mainframes. That's the project. And I was like, whoa. He's like, yeah, their whole infrastructure, everything is still on this, and it was a very important company and a very important business.

(Don Schuerman at 00:03:14) Well, and the incredible thing that a lot of those organizations are struggling with is that there's no new resources. It's not like people are leaving college that know how to do CICS programming, right? So you've got all these massive core systems that are still running in the mainframe and a whole bunch of guys with beards and Coke bottle glasses who are nearing retirement age, and there's no sort of transition plan. I wouldn't be surprised if the Y2K thing that kind of ended up being a dud, the mainframe programmer retirement actually becomes the cliff that really impacts enterprise IT in a much broader way.

(Joel Beasley at 00:03:52) Dude, it actually is an issue. We had someone on the show, and they kept all the information private, but here was the gist of it. A utility that supports 3,000,000 people for water or electric services. Their people—all the people that made the systems, no documentation, all have since retired or died, and they had no idea how to do anything with any of the systems. And so they had a consulting company come in and backwards analyze everything.

(Don Schuerman at 00:04:17) Yeah. Yeah. There are a couple of startups that are actually basically coming into the world of, like, we're just gonna provide mainframe programming skills or mainframe transition skills because there's gonna be this huge sort of need.

(Joel Beasley at 00:04:30) Well, at least when I'm 80, my retirement plan is like writing SQL for people.

(Don Schuerman at 00:04:36) Exactly. That's exactly right. Yeah. You'll be the last of the database jockeys out there, actually writing SQL and building Oracle indexes.

(Joel Beasley at 00:04:45) Right? Everyone will be so far up on ORMs. They have no idea what's even happening below. But anyways, I wanted to apologize a little bit because internally, I've been calling you Pegasus.

(Don Schuerman at 00:04:56) Yeah, that's fine.

(Joel Beasley at 00:04:57) It just sounds really cool. But Pega sounds really cool too.

(Don Schuerman at 00:05:00) Pega. Yeah. We generally say Pega or Pega Systems, I think, is the official company name, but we've been going by Pega for fifteen years or so.

(Joel Beasley at 00:05:08) Yeah. They were telling us in the office. They said, it's Pega Systems. And I was like, oh, Pega Systems. I don't think internally they say Pega Systems every time they're talking, but Pega is even more efficient than my version.

(Don Schuerman at 00:05:19) It is. We saved a lot of time every year once we took the Systems off. We got incredibly more efficient inside the company.

(Joel Beasley at 00:05:27) I would like to have been a part of that strategy, that board meeting. Like, this is our big thing, our big initiative for 2017. We're gonna get 30% ROI on this. We're gonna shorten our name.

(Don Schuerman at 00:05:36) Shorten our name, ROI.

(Joel Beasley at 00:05:38) Okay. So now that we're talking about this, what does Pega do?

(Don Schuerman at 00:05:43) So we're in the business of helping some of the largest organizations in the world make the really complicated world of digital transformation simple. And we really do that in two ways. We really look at how do we help these organizations engage their customers in a way that is more personalized, more direct, drives better value on both sides of the equation? And then how do we help them get their work done? How do we help automate and manage the big processes that are a result of things like servicing customers and onboarding new customers? So bringing that one-to-one nature to customer engagement while also being able to automate all the processes and experiences that come out of the back end of that.

(Joel Beasley at 00:06:27) I like it. I think I watched the video a little bit about that. I like how in the video you actually use real terms, and that was pretty cool.

(Don Schuerman at 00:06:36) Yeah. Yeah. I kind of refer to what we do as we help companies make decisions, and we help them get work done. Right? So if you look at a company like Sprint or Commonwealth Bank of Australia, Commonwealth Bank of Australia uses Pega across 18 different channels. And about 50,000,000 times a day, our software figures out when I'm talking to this customer, what's the conversation I should be having? Should we be recommending a service to them? Should we be offering them a new product? Should we just thank them for having been a customer for ten years? But what's the conversation that's gonna be most valuable to the customer? And it's really just about making those decisions using all the data. That's where the AI stuff comes in and doing it in real time. And then on the get work done side, we work with organizations like Cisco to manage all of their order fulfillment. Or Google uses us, believe it or not, to manage how they roll out changes in their network.

(Joel Beasley at 00:07:33) Oh, that's awesome.

(Don Schuerman at 00:07:33) Yeah. So it's cool. And part of what makes the job fun is we work with the largest organizations in the world. So we're really tackling some of the hairiest, most complicated problems. How do we solve this? How do we make this work? And how do we help this big company through both the technical and cultural transformation that they need to go through?

(Joel Beasley at 00:07:53) Oh, really? So you've learned both parts then. You know how to not only do it technically, but then deal with all the people issues.

(Don Schuerman at 00:08:03) Yeah. I think you have to. One of the things that we're talking about at our upcoming conference, we talk about that make decisions, get work done as sort of like brain, right? Make decisions. And muscle, right? But increasingly, we're also talking about, well, it's brain, muscle, and also heart. How do you actually understand, when you're driving big transformation, in some cases, the technology's gotta be really good, but the technology is the easy part. How do I get my people to come along with that change? How do I get marketers who are used to sending out batch and blast email campaigns every month to totally change their way of thinking and think about each customer interaction as a one-to-one experience? How do I get engineers that are used to being code jockeys and cranking out a whole bunch of handcrafted code to give some of that control to the business to use model-driven or low-code tools to build some of these applications themselves? The making that human transformation in the business, I think, is equally as powerful or as important as actually standing up a SaaS instance somewhere.

(Joel Beasley at 00:09:15) Hey. Do you know who Gary V is?

(Don Schuerman at 00:09:19) No.

(Joel Beasley at 00:09:19) Okay. So you gotta check this guy out. He's all about marketing, all about value, things like that. He works with Fortune 500 type companies. I think that their core business, they control ad spend. So I don't think he conflicts with you at all. But he's really cool. And he's built an $800,000,000 company in the past six, seven years or whatever. And he's got this chief heart officer. And so he said brain, muscle, and heart. And I follow her on LinkedIn, and I had a call with her once just to chat because she's in learning and development slash people ops slash chief heart officer. And you would like her style, the way that she talks about it, because she talks about it very similar, like, the brain muscle. And she said the next trend—it was your muscles back in the day when we would lift stuff, then it became brain power for engineering. And the next trend that we're in right now is heart.

(Don Schuerman at 00:10:06) Yep. Well, and I think that one of the interesting things that we've been talking a lot about is AI technology at its core is about optimization, right? That's what AI machine learning algorithms do. They optimize to an outcome. So I can use deep learning to optimize image recognition so that I can identify this is a picture of a boy with a bicycle. And isn't that amazing? But I'm optimizing to an outcome. And when we use AI technology to drive decisioning, we're optimizing to an outcome. What's gonna drive the best customer value? What's gonna drive a higher NPS score? What's gonna drive reduced risk or reduced cost of service? But what AI is not gonna do is have empathy for the human being on the other side of the conversation. What AI is not gonna do is understand how to listen to somebody, like a customer, when they're having a really troublesome moment and create the human relationship that actually makes them feel better. That's gonna take a customer service agent, not a chatbot, to make that happen. So the ability to provide empathy and I love the way that you described that, that's sort of the next phase of as we use the AI to do more of the optimization, the importance of the humans to provide the empathy, the heart into the equation is increasingly more important.

(Joel Beasley at 00:11:29) And I love it. And right when you said 50,000,000 times a day, I instantly was like, what are they doing with machine learning right now? Because they have loads of data, and that's exactly what you need to do cool things, right?

(Don Schuerman at 00:11:43) Yeah. So the Commonwealth Bank of Australia is using a lot of machine learning for that. They do some stuff that we call adaptive modeling, and they're—to get a little techy—they're naive Bayesian machine learning models. So they're feedback loops, right, that are taking a series of predictors, figuring out what those predictors recommend, making the recommendation, taking your action, and then feeding back whether or not it was successful so that the thing can learn. And what they've done is they've deployed about 250 of those adaptive models across all these different channels and different outcomes they work with. And in their mind, that's the equivalent of 25 data scientists working for three years. And they deployed those 250 models in about two weeks. Right? So machine learning really allows us to do powerful things with the data at a speed that we never were able to before.

(Joel Beasley at 00:12:39) I'm interested in you for a second. Something popped in my mind while you were talking.

(Don Schuerman at 00:12:43) Okay.

(Joel Beasley at 00:12:43) You made these zigzag transitions throughout the organization. You're in Java. You're doing some sales. Now you're CTO. A lot of growth happened for you there over twenty years. How do you create an environment so the next generation of talent can grow like that? Why did you stay there? What is it about the company?

(Don Schuerman at 00:13:06) Yeah. Well, so I think there are a couple of things about the company that keep me around. One, as I mentioned, the problems we solve are interesting and challenging. The technology we work with is exciting. I touch AI and robotics and microservices and SaaS and all these different areas of the technology space. So I never feel like I'm being left behind by where the market is going. The company's growing, and it's exciting to work for a place that's growing but also dealing with the growth challenges of a growth company. That's an exciting thing to be a part of. But most importantly, probably, the people I work with are people I like. The teams I work with in product management and in corporate strategy and in sales and my fellow people in marketing, they're people that I enjoy seeing every day. That's fundamentally what makes work worthwhile. And the thing that I tell people on my team and that I try to grow is I think that there's a degree to which—and hopefully I'm not saying something sacrilegious as a CTO here—but a lot of technology skills, it's just syntax. If you have curiosity, if you have problem-solving capability and you know how to take a problem and break it apart into pieces, and then put those pieces back together, the actual syntax of writing Java code or Lisp or Perl or JavaScript, that's syntax.

(Don Schuerman at 00:14:42) And guess what? We're going to release a new framework and new code every couple of years, and the guys at RedMonk are going to show us what's going up the programming language thing. That's going to change, right? But you can learn that if you've got the curiosity and the problem-solving skills to pick it up.

(Don Schuerman at 00:14:58) So having that curiosity and having problem-solving skills is hugely important. But I also think the people skills side of it is increasingly more important. The need for people who are just pure engineers or pure data scientists is going to become less and less. We're going to have more and more of the systems doing that for us, right?

(Don Schuerman at 00:15:27) So the people who can sit with one foot in the tech and one foot in the business and act as the communication line between those people, they're the ones whose jobs aren't going to be outsourced. They're not going to be replaced by automation, right? That's the role. So how do you build those skills? There's basic stuff. How do you build writing skills? How do you make sure you have communication skills? How do you have listening skills, right, so that you can really understand where somebody's coming from? And so what I'm trying to build in my team is people who bring that deep curiosity about the tech, but also bring that people-focused listening skill, because that to me is where you can get real magic, and that's where you get people who can truly drive and thrive and become leaders.

(Joel Beasley at 00:16:20) I love it. And here's a fun fact that I read that backs up what you're talking about. The World Economic Forum, right? They're global. It's in the name. They said that the largest shortage of skills in 2021 is going to be soft skills slash leadership.

(Don Schuerman at 00:16:40) Yep. Well, it completely makes sense. There's a great article in Slate a couple of years ago where it talked about how the future of CEOs are product managers.

(Joel Beasley at 00:16:51) Oh.

(Don Schuerman at 00:16:52) Right? And if you think about what that means, well, what's a product manager? Well, a product manager is somebody who can sit and bridge that line between the technology, how we do this stuff, and the need on the business side and act as that communication channel, right? And when you think about what kind of skills would you need a CEO to have in today's world, that's it.

(Don Schuerman at 00:17:20) Right? So I completely agree with that sort of world of skills development and world of where people need to be. And that's what—I always joke, but I'm serious about it. Spending 25 years doing improv comedy was as useful in my career development as seven years writing Java code, because the skills around listening and communicating and collaborating that you pick up from going and trying to make an audience laugh with five to six other people every night, right? Those kinds of soft skills and the boot camp you get on those soft skills to me is equally as valuable as, yeah, I can go read through a piece of Java code and tell you what it's doing, right, and understand the underlying componentry of how a Java system is put together or a cloud system is put together.

(Joel Beasley at 00:18:14) No, I like that when I read it in your bio because I did the comedy boot camp thing at our local comedy theater, and I did it a couple times for fun. But the important thing that I picked up from that is it gives you an extreme sense of self-awareness, of timing, of conversations, of how people react to different things. Writing a book will do that too. You put a book out there, everybody sees it differently, and you get all this feedback. You're like, whoa. I didn't say that, but I'm glad you found it useful.

(Don Schuerman at 00:18:43) Yeah.

(Joel Beasley at 00:18:44) Yeah. But another thing to back up what you said, which—I'm liking you more as we continue to talk, by the way. Last year, we called up the CTO of Verizon, Hans. We're like, "Hey, Hans. We'd love to have you on the show." By the way, so cool because we emailed him directly, and he just picked up the phone and called us.

(Don Schuerman at 00:19:04) Right.

(Joel Beasley at 00:19:05) Yeah. I know. I was like, what? And so he's like, "Yeah, but you don't want me." And we're like, "Why?" He's like, "Well, in two weeks, I become the CEO and the new CTO. I'm promoting from VP, director of something in engineering or product to be the new CTO." And I've seen a trend of CTOs becoming CEOs. I mean, at Verizon, at other companies, and it's because they were taught—for us to survive in product and engineering, we have to build something useful for the company.

(Don Schuerman at 00:19:32) Yeah.

(Joel Beasley at 00:19:32) Or for the customer. I apologize. Build something useful for the customer. And in order to do that, you have to understand them and know them really, really well. Yeah. And so—and then I find some CEOs don't do that. And I'm like, well, you're supposed to be the chief of connecting the customer and the company. You know?

(Don Schuerman at 00:19:52) Well, yeah. And it's, I think, really interesting. You know? I'm still amazed when I hear in our clients' business leaders who say, "Well, you know, I'm not very technical." And, you know, to which my response is, well, what's the plan for thriving in the world that we live in today without having some understanding of the technology?

(Don Schuerman at 00:20:18) Right? I mean, it's a truism. But if you're a bank, you're a software company that moves money around via ones and zeros. That's what you do. So having an understanding of how your technology does that seems to me to be pretty vital to actually leading, thinking, and driving the future strategy of what that organization is going to do.

(Joel Beasley at 00:20:39) Oh, it's so important. I mean, especially cross-generational communication, which is something—I've got an article for you too. I'll send it to you. Past guest Brad Sousa is at AVI Systems. So when you're watching the baseball suite on TV and they show you all the metrics, well, one of their divisions—they're large. I think they're about the size of your company. One of their divisions, they make those—they hook up the sensors and then they sell those packages and those wipes and those transitions to, like, ESPN and stuff.

(Don Schuerman at 00:21:07) Okay.

(Joel Beasley at 00:21:08) But they're a really cool company. They also do neonatal video conferencing, like if you have—in the hospital. It's just wide array of stuff. But he has this great article that talks about a conference room. And you go into a conference room and he shows the perspective of how each of the generations will see that conference room and either think it's awesome or think it's horrible or think it's difficult. But, yeah, communication to your audience and especially cross-generational when you're talking with customers. Right?

(Don Schuerman at 00:21:36) Yeah.

(Joel Beasley at 00:21:36) They say they're non-technical. Well, first of all, that's not true. They have a supercomputer in their pocket so that they can operate effectively enough to get food, take them places, and move their money around. So, yeah, I think it's just a lot about perspective of looking at it.

(Don Schuerman at 00:21:53) Well, and I think, you know, you get a good point, which is the customer, the end customer is increasingly, whether they know it or not, far more technically savvy and especially as we move generationally, right? I mean, I've got a seven-year-old and a 10-year-old. My kids do not know a world where there is not connectivity everywhere they go. And they also do not know a world where when they want to play with the Minecraft game, they essentially program new worlds in the Minecraft game. Right? I mean, these are people who are learning the concepts behind programming without even knowing that they're learning it at pretty young ages.

(Don Schuerman at 00:22:39) So I think the kinds of software that we're going to see come out of that generation, especially as we're enabled by all these tools that basically make the startup cost nothing because you can get cloud services, and you don't even need to write code because you can just drag and drop most everything that you want to do—the kinds of solutions that generation is going to be able to put together is going to be pretty amazing. And I hope we, you know, as the current generation of leaders, open the communication channels enough to let some of that in and let those insights sort of drive where things could go.

(Joel Beasley at 00:23:12) Yeah. So speaking of communication and openness, have you checked out the Elon Musk Starlink thing that he's doing?

(Don Schuerman at 00:23:19) No. I haven't followed Starlink.

(Joel Beasley at 00:23:22) Okay. So I hope I'm getting the name right. But this weekend, I had five minutes while my kids were sleeping, right?

(Don Schuerman at 00:23:29) Yeah.

(Joel Beasley at 00:23:30) I've got 19 months and two months. So a boy and a girl. And so I'm right in that early stage. But I like to follow him on Twitter. And I click on one of his—on the article. Dude, they're putting 5,000 near-Earth orbit satellites into space that will orbit in this net pattern around the globe to provide anytime satellite—we'll get our Wi-Fi from satellite is the concept.

(Don Schuerman at 00:24:02) Wow.

(Joel Beasley at 00:24:03) And, you know, the satellites are already built. They're at the launch facility. They have FCC approval. This has been going on for a while. They're getting ready to launch them now.

(Don Schuerman at 00:24:14) I mean, some of the stuff and some of the impact of these things is going to be pretty amazing. And what's interesting, right? Did you read—Thomas Friedman wrote a book called Thank You for Being Late? It's one of his newer books. And he has this chart that's from Astro Teller, who's the moonshot CEO at Google. But what he does is he shows that there's this curve of we've got this pace of technology change, right, that's happening, and it's just getting faster and faster and faster. You know? It's like the Starlink, the satellites and AI deep learning and all this kind of stuff.

(Don Schuerman at 00:24:54) But it's reached a point that it has probably surpassed our ability as humans to keep up with the pace of technology change. And so much of the gating factor in what goes on in the world is not going to be about the technology's ability to support it, right? Self-driving cars are not going to be because we don't have the requisite amount of vision capability and decisioning capability and intelligent capability that we can put into a car. It's going to be because we don't have the regulatory infrastructure, the ethical infrastructure, the indemnity infrastructure to actually figure out what happens when one of those cars goes down the road, right? You know, we've got social media that is so good at targeting people and getting people to change the way they think that political systems in the US and the UK and other places can't actually keep up with what the social media targeting has allowed. So, yeah, I'm fascinated by the idea of what needs to change in our businesses, in society, in the way we do education that actually helps bend that curve of how humans can keep pace with the technology change that's coming. Because the technology change is going to keep going, you know, off the charts.

(Joel Beasley at 00:26:14) And, you know, most of those things you mentioned, you're going to need people that have exceptional people skills to deal with it.

(Don Schuerman at 00:26:19) Exactly. Exactly. It's going to take people who—it's not going to be an engineer who figures it out by themselves, but it's also not going to be a politician who puts his or her hands up and says, "I'm not technical. You know? I don't know how to do this." It's got to be somebody who can stand with a foot firmly planted in each land and actually help drive those conversations.

(Joel Beasley at 00:26:44) Personally, I love it because I'm all about you have to be constantly aware of the market, where the value of the skills are, what skills you need to have. Like, if I only ever had needed to be an engineer and that was it, I'd be like, that's not fun for me. You know?

(Don Schuerman at 00:27:00) Yep. No. And one of the things that we're seeing—we do a lot of work in this area called low-code, right, which is about how do I engage more people in the building of the software for the enterprise. And what I think is really powerful and exciting about that is if I can get it so that if I need to build a new payment processing app or a new service case management app or an investigations app. And instead of doing the traditional, "Hey, I'm going to have some business person write down what they need, and they're going to do it completely in a vacuum without understanding what's technically possible. And they're going to throw it over a wall to a sprint team that's going to start running some sprints and eventually hand them back something"—but if I can actually get those business people to put hands on keyboards and actually start designing the solution and become aware of what the technology can and cannot do and what's easy and what's hard, not only do I get stuff out the door a lot faster—you know, we've seen 10, 12 times faster than doing this in traditional code—but I also get stuff that's more innovative, that meets the needs of my business better. And perhaps, you know, most exciting is you create these career opportunities for people. You can take somebody who has spent the previous part of their career sitting on the floor of a contact center and the floor of a business operation and say, "Hey, you can take that knowledge now that you've amassed and use it to actually change the way that this function in your company runs through technology." So you're creating not only just great opportunities for businesses to change and solve problems, but career opportunities for people in those organizations.

(Joel Beasley at 00:28:45) So does your company—do you have those low-code systems?

(Don Schuerman at 00:28:49) Yeah. So we've got—you know, there was just an article that came out about an organization called National Australia Bank, right? And they're using us across a variety of areas. They use—we built a bot for them that does email automation. So it uses NLP, natural language processing, to figure out what somebody is emailing them about, pull out the relevant pieces of data, and then automate the processing of it. So they don't have to have people manually triaging emails. But they're also running a program that they call Universal Workflow. So they've got a team from IT, and they take our low-code application platform, which lets you build stuff just by dragging and dropping. And they go into business areas and they say, "Look. We're going to send one business analyst. We're going to sit down with a couple of your business experts. And together, in a couple of days, we're going to build you an app that addresses this business problem and then hand off to you the skills to maintain it and evolve it and change it going forward." And if you can do that, you can start tackling a lot of these little problems across the business that oftentimes IT hasn't gotten to or business people have built, you know, little duct tape and bailing wire systems on Access databases to solve. And I can solve it in a much more coherent way, but I can also give the business some control so that they can make some of those changes themselves.

(Joel Beasley at 00:30:12) Yeah. Because those projects, they just collect dust, get unmaintained, then you struggle with departments about resources and who's going to wait. So is this the word BPM that's huge in the low-code world, right? What does that mean?

(Don Schuerman at 00:30:25) So BPM is business process management, right? And BPM has been around—it also stands for beats per minute. But in the software world, it's business process management.

(Joel Beasley at 00:30:35) Done here.

(Don Schuerman at 00:30:36) But business process management, which as both a software capability and as a discipline, has been around for a long time. And what BPM tools were about was, well, if instead of designing a business process on Visio—remember if anybody remembers Microsoft Visio—we drew business processes and then handing it off to somebody, what if I could just draw the picture and that generated the application?

(Joel Beasley at 00:31:10) Oh, come on.

(Don Schuerman at 00:31:11) Yeah. And that's fundamentally how you build stuff in Pega. So when you build apps in Pega, you drag and drop a picture of here are the steps that my process needs to go through. Here are the things that need to happen at each stage or step. If I need a UI, I drag and drop and say, these are the fields I want to show at this point on the screen. Here's the layout I want to see on my desktop. Here's how I want to adjust the layout if it shows up on a mobile device, and we generate and make the app for you.

(Joel Beasley at 00:31:40) Come on. Is it—wait, is it self-service? Could I go register or no?

(Don Schuerman at 00:31:43) So if you go to pega.com right now, you can sign up for a free trial and check it out.

(Joel Beasley at 00:31:48) I could actually build a little process?

(Don Schuerman at 00:31:49) You can build a little process. Yeah, totally. You could build a little process in about twenty to thirty minutes.

(Joel Beasley at 00:31:56) Because I've got a legitimate interest right now. So we do the podcast, right? We have all the entries in a spreadsheet, and then we have a billion checkboxes and, you know, we do all of that.

(Joel Beasley at 00:32:10) And I've been considering using some of my engineering resources to build some system to help us deal with all the clips and the content and everything like that and the management of that being posted on social media and firing off, you know, information. So we could probably use that to build something.

(Don Schuerman at 00:32:28) Yeah, you could use what we do to build something. Now in all honesty, I'm gonna be—we primarily sell that stuff to Fortune 500. So you might have a hard time getting one of our sales reps to call you back.

(Joel Beasley at 00:32:46) It's self-service.

(Don Schuerman at 00:32:47) That's cool. But you certainly could sign up for the free trial and build that out. But that's exactly what we're doing. And what we've built the technology to do is to make sure that you can do that actually at the scale of somebody like a National Australia Bank or a Ford Motor Company or a Roche Pharmaceuticals, where not only do I need to do that little app, I need to build 500 of those little apps. And I want to make sure that if I build connectivity inside of one of them to a system, I can reuse it every other place.

(Don Schuerman at 00:33:19) And then I'm making sure that data that needs to be secure stays secure, that my app is GDPR compliant if I have rules that I need to deal with. So being able to allow that degree of control and simplicity, but still let IT maintain some of the governance and some of the security and some of the reuse aspects that at any kind of massive organization, you're always going to want to have in place.

(Joel Beasley at 00:33:45) So you must have built this platform app store thing that's multi-tenant so companies can have their own app store?

(Don Schuerman at 00:33:56) So yeah, to get into a little bit of the tech. Right? So we have a core technology we call the Pega Platform. Right? And that's our core product. We have also built apps on top of those products. We have a customer service desktop that somebody like American Express uses to do all of their customer service processing or Anthem uses to handle all of their member servicing. We have a marketing engine, which is what I was talking about with Commonwealth Bank of Australia or Sprint or Vodafone uses all across Europe to do real-time marketing to their customers. And those are all built on top of that platform.

(Don Schuerman at 00:34:34) And then the way we deploy it is—because of the size client that we work, we actually chose a number of years ago to go with more of a virtual private model. So when we deploy a system for, say, Sprint, we do it in a private tenant for them on our cloud. So they don't have to worry about security concerns, data intermingling, et cetera. We've built the cloud operations that allows us to upgrade and maintain this and do all the ops stuff for them so that they get that SaaS experience, but they get a degree of isolation into their world. The other thing that we think is really important on the cloud side is, especially at the enterprise level, you know, we are moving into a multi-cloud world.

(Don Schuerman at 00:35:22) And what I mean by that is organizations are going to not be in a one-size-fits-all cloud. So for example, Google, who we do all of this network operation stuff for, they don't need us to run their cloud-based software for them.

(Joel Beasley at 00:35:38) Right.

(Don Schuerman at 00:35:38) Right? They're pretty good at that. They have an offering called Google Cloud. Right? They're smart enough to know that we do a lot of our cloud-based stuff with AWS, so they probably don't want to pay us to do an AWS app for them either.

(Don Schuerman at 00:35:52) But we give our clients the option to take a Kubernetes container, a sort of box that we put the app in, and Google can go run it themselves. So Google runs us on the cloud, but they manage it and they manage it on their cloud. And what was interesting to me, I was out at Google Next, which is their big event they did in San Francisco a few weeks ago. And they just announced a whole new offering in their cloud service called Anthos. And it's basically all about supporting this kind of model where—

(Don Schuerman at 00:36:22) They're basically saying, like, if you can use Kubernetes, we can manage your workload whether you want to run it on Google Cloud, whether you want to run it on AWS, whether you want to run it on some iron you have sitting behind your firewall. So we're trying to make sure that while we continue to grow our own cloud-hosted SaaS business, we continue to allow our very large enterprise customers the ability to deploy what we call cloud choice, to put this on the cloud that they want to run it if they have a different option they'd prefer.

(Joel Beasley at 00:36:55) That sounds cool. Cloud choice.

(Don Schuerman at 00:36:57) Cloud choice.

(Joel Beasley at 00:36:58) Yeah, I like it.

(Don Schuerman at 00:36:59) Yeah. The multi-cloud or cloud choice world seems to be, at least at the enterprise level, where organizations are headed.

(Joel Beasley at 00:37:09) So I'm giving a talk on Friday

(Don Schuerman at 00:37:13) Okay.

(Joel Beasley at 00:37:14) About digital transformation, what I've learned talking to all these great leaders about digital transformation. You're right in the heart of it. What's a big trend? What's a—I need some content for my talk.

(Don Schuerman at 00:37:28) All right. So there are two aspects of digital transformation that we spend a lot of time talking about. And the first is this aspect of how do you engage your customers? First and foremost, you know, digital transformation, I think, is about understanding today's customer. Right? And expectations for the customer due to a whole bunch of reasons. Right? You know, organizations like Amazon and Google and others—Apple—are setting expectations of what good looks like in a customer experience world. Right? And because customers are more empowered, they can complain about anything online, they've got, you know, devices that allow them to be connected at any moment, they expect things to be easy.

(Don Schuerman at 00:38:15) They expect things to be seamless. Right? So when they are using their mobile app and then they walk into a store, they don't want that to feel like a completely disconnected experience. And they want things to be personalized. They want it to be about them, not, you know, a generic sort of view.

(Don Schuerman at 00:38:32) And the challenge that we see at the organizations that we deal with is when you really look at a large enterprise, they weren't built to deliver that. They have massive systems. They have redundancies and legacy complexity. They have silos that have split the business into operational chunks that don't work nicely together. So the big challenge of digital transformation is how do you deliver that easy, frictionless, seamless, personalized experience that a customer wants, yet do it with a bunch of technology and silos and organizational structures that were never designed to work that way.

(Don Schuerman at 00:39:15) Right? That's the fundamental challenge from an enterprise perspective that we see.

(Joel Beasley at 00:39:25) So what's the answer? Pegasystems. Pegasystems.

(Don Schuerman at 00:39:29) I don't think we have the answer in the sense that I don't believe technology is ever a silver bullet. Right? But I do think we've seen enough to know that there are mistakes that organizations make and how to avoid them. Right? So one of the big mistakes that we've seen organizations make is they jump into and try to solve things at the channel level.

(Don Schuerman at 00:39:58) Right? So we're going to digitally transform. We're going to build a chatbot. Right? Or we're going to digital transformation. We're going to build a mobile app. Right? Digital transformation. Everybody wins. Right?

(Don Schuerman at 00:40:07) Well, but, you know—and I literally heard an SVP from one of our competitors stand up at a conference recently and say, the chatbots that everybody knows and loves. To which my response was, I don't love chatbots. Like, I don't think there are many customers that are like, oh, great. I get to talk to a chatbot. Right?

(Joel Beasley at 00:40:29) Usually my mental thing is like, are you kidding me?

(Don Schuerman at 00:40:32) Right. Exactly. So instead of obsessing about the latest channel, what organizations need to learn to think about is what's the journey the customer is trying to go on? What are they trying to do? They're trying to sign up for a new account or they're trying to get help buying a house or they're trying to get phone service for their 16-year-old who, you know, is just getting their first cell phone?

(Don Schuerman at 00:41:01) Or what are they trying to do? Right? And then make sure that the channels plug into that naturally for the customer. So maybe I want to start on a chatbot. I want to quickly, though, let somebody connect to a real human being, and they want that connection to be seamless so that they don't have to be like, well, I was on your website trying to do this, and it got stuck.

(Don Schuerman at 00:41:23) So now let me—right. No. I want to be able to pick that up and just carry it along. And if you think journeys, you get there. The second thing that we see organizations struggle with is there's a lot of—everybody is very excited about automation again. Right? So we're in one of the great sort of automation waves that happens every fifteen to twenty years, and automation becomes a big talk. And so everybody's talking about RPA, robotic process automation is sort of the buzzword du jour. There's a robotic process automation company that just today announced some new round of funding where they're valued at $7 billion.

(Don Schuerman at 00:42:03) Yeah. Right? Which is, you know, a ridiculous multiple.

(Joel Beasley at 00:42:09) With $30 million in revenue. No, I'm just kidding.

(Don Schuerman at 00:42:10) Close to it. Literally close to it. Maybe 150, 200 million in revenue. So still pretty ridiculous.

(Joel Beasley at 00:42:18) That is pretty—that's 52x max.

(Don Schuerman at 00:42:20) Yeah. Great. So a lot of what this robotic stuff to my mind is missing is it's focused very much on I want to automate little tasks. So I want to automate somebody typing into an Excel spreadsheet. Well, I can automate that.

(Don Schuerman at 00:42:36) Okay. Great. Or I've got somebody who's, you know, using another app. Well, I can automate that. And I think that's great. I think doing that and continually improving the productivity of an organization is fine. But at the end of the day, that customer journey and the reason that you have processes in your business to begin with are because somebody somewhere wants an outcome. Right? Somewhere at the end of that process is an outcome. I want you to fix my broken service.

(Don Schuerman at 00:43:09) I want you to figure out why that charge I didn't make showed up on my credit card and make the charge go away. And so how do you build automation around the outcome so that I make it easy for the customer and I make it easy for the employee who's helping them to get to the outcome they want? And that takes not just tinkering at the task level, but stepping back and saying, what does my process need to look like from end to end? So learning to think about outcomes instead of just tasks. And then the third thing that we counsel organizations to do is digital transformation is really about thinking end to end.

(Don Schuerman at 00:43:49) So it's not just—if you're doing digital transformation inside a silo, like, if you're digitally transforming this portion of your operation, you're probably not transforming digitally. Digital transformation cuts across silos. So how do you do things that are cross-functional? So those are sort of the areas where we try to guide organizations to fix stuff. I think it takes a certain type of leader to actually stand up in the organization and make that kind of change.

(Joel Beasley at 00:44:20) So interesting as you're talking. I'm thinking about how companies can screw this up. All right? And so, like, let's say a company did some technological advancement or improvement in a silo. And the example that flew through my mind a minute ago was if they didn't do it in accounting because accounting is too complex and instead over here, but a key value to the customer is being able to access their accounting.

(Joel Beasley at 00:44:44) But if Verizon made it so you could do everything in their app but adjust your bill pay because their accounting is like—that wouldn't be digital transformation.

(Don Schuerman at 00:44:54) That's right. And if you don't fix the process, right, if you don't make the process better, and the process has to cross all the aspects of your business, and all you do is you stick a mobile app up there. All you're doing is exposing the customers to your crappy processes. Right? You're making—

(Joel Beasley at 00:45:15) That's why—here's my legacy system. See them, though.

(Don Schuerman at 00:45:18) Right. Here's the thing. You can't just operate from the mode of, yeah, my CSRs hate this process. So what I'm going to do is I'm just going to make my customers do it.

(Joel Beasley at 00:45:32) The calls and the meetings you must have, I can imagine—obviously, it's a rare case. Yeah. But I'm just—my mind is filling with all of the possible weird situations you have.

(Don Schuerman at 00:45:42) Well, our customers are actually pretty enlightened. Right? So, you know, the great thing that we have is we've got the benefit of people who—when we end up working with clients, we're working with people who get this. Right? And they see this vision.

(Don Schuerman at 00:45:58) And to your point earlier, they really care about their customers and their employees as humans and are thinking about, yes, profitability and, yes, growth, but also, how do I make that a great experience for my customer? How do I make the day-to-day experience of my CSR better so that they're happier? So when they talk to the customer, the customer hears a happy person talking to them.

(Joel Beasley at 00:46:23) Oh, yeah.

(Don Schuerman at 00:46:24) Right? So that's what we get to work with. And from a technology perspective, what we try to do is offer those people what I talked about earlier, that ability to make those real-time decisions to figure out what the customer needs and the ability to do that automation that cuts across the silos to manage the work from end to end. Yeah. So I don't think that's all of digital transformation.

(Don Schuerman at 00:46:51) There's lots of other pieces that fall into there. But I think from helping organizations figure out how do I map that customer experience you want to deliver and actually do it in the world of systems and silos that you actually have, that goes a long way to actually helping these organizations on their transformational journey.

(Joel Beasley at 00:47:12) Yeah. You seem very well versed in this process, especially for the large companies. And the cool thing I like about you is you can't escape in life the reality that your vibe attracts your tribe. Right?

(Joel Beasley at 00:47:27) So because you're so passionate about it, because your org, that means your organization is going to follow suit, which means you also have customers who are passionate about it. I like that.

(Don Schuerman at 00:47:35) Well, that's what they—I mean, I get the same thing talking to you. You know, when you're passionate and excited about this stuff, right, that's what gets whether it's customers, whether it's partners we work with, whether it's our fellow employees, like, that's what makes everybody want to get up and come to work and actually come and do this stuff and sometimes roll up our sleeves and do sometimes what is hard, challenging work. Well, we're excited and passionate about it.

(Joel Beasley at 00:48:01) Well, this is one of the best descriptions of how everything tied together with all the different examples and how well it was articulated of digital transformation that I have ever experienced. So I'm definitely going to include you in a little shout out. I took notes while you were talking.

(Don Schuerman at 00:48:18) Oh, great.

(Joel Beasley at 00:48:18) Yeah. I liked some of, like, think journeys, not channels. Like, that was a really good one. And I'm gonna include that in the talk.

(Don Schuerman at 00:48:26) I would, we'd—

(Joel Beasley at 00:48:28) Love that.

(Don Schuerman at 00:48:29) Yeah. We'd love that.

(Joel Beasley at 00:48:30) My job, like, selfishly, is amplifying signals. Right? Like—

(Don Schuerman at 00:48:37) Yeah.

(Joel Beasley at 00:48:37) You guys have this brand, this personality, this group of people. If I bring awareness to that, then it benefits me because you're judged by the people you introduce to. Right?

(Don Schuerman at 00:48:50) Yep. Yeah. And well, we appreciate that. You know? And I think one of the things that part of what I think my job as CTO is to help evangelize the technology, help amplify a little bit of our signal out to other CTOs at our client base and CIOs and people in the organizations that we work with who are trying to drive the same kind of change that we support. Right? Because I think with all of this, you know, we're all—the other thing about digital transformation is there was a Forrester report that came out recently, and there was some stat where it was something like 20% of organizations reported that they had completed their digital transformation initiative. And I was sort of like, you know, I had that sort of Princess Bride moment where, like, you keep using that word. I do not think it means what you think it means. Like, if you've completed your digital transformation, I don't think you've really done digital transformation. I think you've done a project. But so much of digital transformation is about just accepting the fact that we're in a world of constant change and constant reinvention. And how are you building the technology and the teams and the culture that allows for that on an ongoing basis?

(Joel Beasley at 00:50:06) And I love that. So I pulled up my talk while you were talking so I could give you the notes. So it starts out with the right culture. So one thing I picked up from Bryson, who's the CTO of Equifax, is talking about digital transformation with him. And he made this amazing point that you have to first determine if you have a culture that accepts the change, that will accept digital transformation prior to actually trying to push any digital transformation down the pipeline. And I was like, oh, what a good point. Right?

(Don Schuerman at 00:50:34) Yep.

(Joel Beasley at 00:50:34) Yeah. And then I'm gonna include stuff about you in there, have stuff about empowering people. It's like once you have the culture, you have to empower people and explain and talk about it. Leveraging experts, I'll probably include you in that. Right? Like third parties that understand the areas that you are unfamiliar with.

(Don Schuerman at 00:50:51) Yep.

(Joel Beasley at 00:50:51) Because trying to learn it on your own from scratch is just—

(Don Schuerman at 00:50:54) Oh, yeah.

(Joel Beasley at 00:50:54) Bypass that learning curve. Right? Exactly. And then vision and discipline, like, having a very clear vision of what it looks like for your company and your customer and then the discipline to stay that course because it's not easy. Like, there will be issues in digital transformation.

(Don Schuerman at 00:51:07) Yeah. And you need to be able to, you know, again, we use some of these terms all the time, like, you know, fail fast or fail forward. But you need to accept the fact that this is an ongoing and learning thing. And part of agile is allowing yourself to have a couple sprints that you screw up. Like, oh, we went down the path. That didn't work. Okay. Great. That's all right. Because every two weeks, we can reset, and we can keep moving. And that's the only way you kind of keep this culture going. And I think the people who can do digital transformation fundamentally understand that and have a degree of comfort with it. Again, they need to take improv classes because you learn that sort of comfort. But I do think that's a big factor in it.

(Joel Beasley at 00:51:57) So shout out for that. Right? Where do you get local improv classes? You just go to your local comedy club?

(Don Schuerman at 00:52:03) Yeah. So, you know, I work with an organization, I still work with them, called ImprovBoston. And I have a sweet spot in my heart for ImprovBoston, not least of all because I met my wife performing there. So, you know, every time I drive past that theater, I'm like, this is one of the most important places in my life. We drove past the old location where ImprovBoston used to be this weekend. And I was explaining to my kids that if that building wasn't there, there's a good chance that neither of you would exist. So, you know, it's a very important thing. But ImprovBoston is based here in Boston and Cambridge. They do classes. But in any major city now, the great thing is there are improv theaters. There are passionate people. And it's, again, to me, not only is it a lot of fun, but there are real skills and development that I feel like I'm lucky to have had a chance to do and continue to learn to do and continue to, you know, go back and refresh and put in practice and relearn, which I think we all need to do.

(Joel Beasley at 00:53:05) Well, yeah. It's super fun and it's part of life. So you're primarily in Boston. That's where you are most of the time?

(Don Schuerman at 00:53:11) Yep. I'm in Boston. You know, we have offices in Amsterdam, in Reading, in Hyderabad. But, you know, I work across Boston, and then I get to spend time with our customers kind of around the world, which is nice.

(Joel Beasley at 00:53:24) That's, like, the best part. Right?

(Don Schuerman at 00:53:26) It is.

(Joel Beasley at 00:53:27) We had some cool customers. One of them makes—does the animation for the Lego movies and, like, Happy Feet. Oh my gosh. Yeah. They're called Animal Logic, and they're out in LA. And they're also in Australia and Canada. But those are the three areas that they are. Yeah. But they also did, it's like odd. They did the Matrix, and then they had a ten year gap, and then they do all these animated features.

(Don Schuerman at 00:53:52) Well, I mean, to me it's really neat to be able to—you know, one of the things you asked about early on was what are the skills that you try to encourage? And I always try to tell people on my team that you need to be relentlessly curious about the technology, but you also need to be relentlessly curious about our customers. Like, what are their problems that they're trying to solve? How are they using the technology? What works for them? What doesn't work for them? Because, fundamentally, you know, that's the connection that we as people in a product organization and a marketing organization need to help build. How do I help understand what our customers need so that I can connect that to the technology that will help solve their problems?

(Joel Beasley at 00:54:44) Boom. That's why I like you. You say this stuff I agree with. Oh, man. It's good. And you guys right now in tech, I looked up on LinkedIn. It said you have about 5,000 or so people. I don't know how accurate LinkedIn is.

(Don Schuerman at 00:54:58) That's about right.

(Joel Beasley at 00:55:00) How many of those are in the IT engineering?

(Don Schuerman at 00:55:04) We've probably got about, I'm guessing now, but I'm gonna guess about 2,000 in engineering. So with a big—you know, we have a headquarters of product and engineering here, but we also have a big engineering presence in Hyderabad. We have engineering offices in Krakow and Amsterdam and a couple other places around the world. But, yeah, we're very fiercely committed to engineering. You know, our CEO, I think, is at his heart an engineer in many ways. So we look pretty relentlessly and pretty deeply at the technology and how you build it in a way that is rock solid, built to scale, but also really easy to use.

(Joel Beasley at 00:55:47) Nice. So you have a solid foundation.

(Don Schuerman at 00:55:49) Yep.

(Joel Beasley at 00:55:50) Yeah. So I'll be out. I have—you know Vistaprint?

(Don Schuerman at 00:55:54) Oh, yeah. They're owned—

(Joel Beasley at 00:55:55) By Cimpress, but they're out in Boston.

(Don Schuerman at 00:55:56) Yes. They are. Yeah. I have some friends who work over there.

(Joel Beasley at 00:55:59) Okay. Do you know the CTO, Martin?

(Don Schuerman at 00:56:01) I do. I've not met Martin.

(Joel Beasley at 00:56:03) Oh, yeah. He's really cool. He's got, like, if you look at his LinkedIn picture, he's got this hilarious dinosaur shirt on. It's pretty cool. You would like him a lot. But I'm out there speaking this summer to all of VistaPrint's all hands engineering thing. But maybe when I'm out in Boston, I'll come by and say hello.

(Don Schuerman at 00:56:20) I'd—yeah. We'd love to host you here. Cool. Love to get to meet you in person.

(Joel Beasley at 00:56:24) Yeah. Is there anything else you want me to push out to the audience? Anything else you want to get out there?

(Don Schuerman at 00:56:30) Hold on. Let me—we are—we good? He's—the PR guy's happy.

(Joel Beasley at 00:56:37) PR guy's happy. All right.

(Don Schuerman at 00:56:38) PR guy's happy. So I think we're good. I really appreciate the chance to talk to you. This has been a lot of fun.

(Joel Beasley at 00:56:43) Yep. You have a fantastic day.

(Don Schuerman at 00:56:44) All right. You too. Hopefully, I get to see you in person in Boston.

(Joel Beasley at 00:56:47) Absolutely.

(Don Schuerman at 00:56:48) All right. Bye bye.

(Joel Beasley at 00:56:55) Thank you so much for listening. If you'd like to help, please take a moment right now to open up the iTunes app and leave a review of the podcast. If you take a screenshot of the review and text it or email it to a friend who needs to listen to the podcast and then CC me, [email protected]. If you CC me on the email, I'll send you a copy of the Modern CTO book or give you a shout out on the podcast, whichever you prefer. We're trying to get listed on the top 100 for iTunes, and I need your help in order to do this.