This week is a customer engagement platform Pega’s annual user conference, PegaWorld. For the third year in a row it’s virtual, and for the second year in a row Alan Treffler, founder and CEO of the company, joined my CRM Playaz co-host Paul Greenberg and I for a candid LinkedIn Live conversation leading up to the event. And as a founder of a 39-year old tech company doing a billion+ dollars in annual revenue, and also as a member of a century-old family restoration business, Alan has been there, done that, and seen pretty much everything when it comes to business. So we pick his brain on the current state of affairs and how it the current state of the economy compares to what he’s seen and lived through previously.
Below is an edited transcript of a portion of our conversation. Click on the embedded SoundCloud player to hear the whole discussion.
Paul Greenberg: I’ve always been impressed with Pega’s ability to seamlessly evolve itself over your 39 years. It’s a very hard thing to do. How have you done it?
Alan Treffer: In the tech business, you don’t see many good examples. You see lots of bad examples of what companies do. The tech changes enormously. And the worst thing a company can do is not always be looking for where the tech is going, what the changes are. In the course of our lifetime in Pega we’ve seen the world go from character-based IBM mainframes and Dec VAXes to Minicomputers to PC networks, to client-server… I could ramble on for another 5 minutes. And all of those technologies had elements that you can learn from. But also, each one of them successfully had elements that held them back.
What we’ve always tried to do is figure out how to look at where technology is going and find a way to ride that wave. But at the same time, use the concept of model driven architecture. Use the concept now referred to as low-code to make it so that the business intent is captured in a way that we can change our tech. But that business intent, that hard work that drives our clients businesses, can come along on that journey; Even if the tech itself is as radically different as our tech is typically every handful of years.
No-code, Low-code and Lotus Notes – A year later
Brent Leary: You said last year if this no code low code thing isn’t done the right way, it’ll just end up turning into the latest Lotus Notes or something to that effect. Are you seeing it go the right way or the Lotus way?
Alan Treffer: I’m seeing a shocking number of Lotus Notes type cautionary tales, if somebody wants to do kind of a standalone little system for half a dozen people in the corner to use to do something better about their work, there are lots of good ways to do that, and there’s probably no consequence. On the other hand, if you’re building something that’s going to touch an organization’s customers or that’s going to potentially have a large number of users, or is going to become one of the mission critical systems, you need to make sure that’s able to grow with the business, otherwise what ends up happening is people get to a certain point, and then they get stuck.
For example an organization will say “I want to provide better service in some area, so I’m going to start in a call center. I’m going to put a great call center system in, or I’m going to create a great chat bot.” If they start doing that with a low code or any system and embedding that business logic into those channels, then they’re creating a problem when a customer wants to move from one channel to another channel, and customers want to do that. I’m seeing lots of “Phase Ones” that were kind of successful but not scalable because they don’t have the right architecture built into it.
Paul Greenberg: You’ve always taken into account business models and culture as part of how you define digital transformation, in that technology plays a role but it isn’t the only thing involved. How do you manage to maintain that through the pandemic?
Alan Treffer: I think we’ve always been sensitive that a business transformation is a transformation of the business. It’s not a transformation of swapping out one tech versus another. I think one of the advantages of having been around a while is we’ve seen tech changes happen, and we’ve seen where they’ve really manifested themselves into great successes. And in other times it just changed the underlying technology.
You need to understand that businesses ultimately are about people and it’s about their customer relationships. It’s about their partners, it’s about their internal relationships. And if you’re going to transform the business it better be about empowering the people of that business. Look at all the stresses that people and businesses are under today. The biggest drivers at this instant for digital transformation is not just there’s new cool tech out there, though. It’s that businesses have staff who have been under enormous stress and really are in many cases stretched to a breaking point. Those staff are exhibiting less and less affiliation and loyalty. Those staff are subject to enormous personal inflation in terms of what’s happening to their budgets and what they need to do. Those staff are also getting visibility to a very discontinuous job market where the job inquiry, the raises and in some cases the opportunities are suddenly coming on and having an enormous destabilizing effect on the businesses. And as businesses go to hire, they struggle to be able to find the talent they need and also to reconcile the talent they’re getting with the teams they have.
It’s something we all wrestle with. I think it can be addressed by digital transformation, but digital transformation will not replace the need foring about each one of those things. It simply provides additional capabilities and vehicles for an organization to now make it staff jobs easier. How do you reduce stress? You give the team better tools. How do you handle the fact that turnover may be higher? You make it easier to onboard because your systems are smarter. How do you make it so the staff doesn’t feel as overworked? You use the capabilities of digital transformation to include the end clients more directly in the processes and in the engagement.
But if you’re going to do that, you better have great client engagement. The client engagement better actually be engaging. So I think digital transformation is a tool for capable management teams to use to go after some of the very specific problems.
Brent Leary: You’ve been in business for 39 years. Your family’s been in business for a century. Given all that, is this the most challenging business climate that you’ve faced personally as a CEO and working in the family restoration business?
Alan Treffer: I think that this will be the most challenging business climate, for many people, that they will have ever seen. I think the business climate will be shocking for many, many people. But, having been around a long time, I’ve seen some other traumas as well. I’ve seen, for example, up close and personal the bubble explosion, which was pretty traumatic for lots of businesses in the technology space. And I don’t think we’re in a completely analogous situation, but we’re not in a completely dissimilar one either. There are lots of comparables there. I also can remember, though I was pretty young, when inflation hits the mid-teens. And I don’t think people understand what that means in terms of destabilizing an economy.
So, I would not say that this is as challenging. But I think it affects directly what all businesses, ourselves included but also our clients, how we want to think about the next 12, 18 months. When businesses get under stress, they start very rationally figuring out growing revenue is hard. But also figuring out how becoming more cost effective offers more control. We’ve been anticipating a shift more from the parts of our business that say “sell, sell, sell” to the parts of our business that say, “ let’s make sure we’re operating in a prudent, highly effective way”. We see that as something we need to do as well.
The other thing I think is critical is customer engagement. You can’t at the same time that you’re doing that (focus on being prudent), take your eye off the client engagement ball because if you do that, the business can completely fall apart. You can get the worst of all possible worlds. So I believe client engagement is right at the heart of dealing with some of these paradoxical changes. That’s why we feel excited about the types of digital transformation we’re plugged into. We’re not simply moving stuff to the cloud. We’re changing the ways that businesses operate.
Brent Leary: What do you make of this Elon Musk Twitter thing? Are people making too much of this? Does it matter? What’s your take on this thing?
Alan Treffer: I think we’re making exactly as much out of this as Elon wants here. He’s getting the full news cycle the day after day after day. And I’d say it’s definitely better than 50-50 that he’ll buy it.
I do think he underestimated the amount of regulatory aggravation he will have as a result of buying it. Because, you know, you got the Europeans, you got a lot of people in the US It’s such a highly polarized environment. For platforms like that.
Brent Leary: Metaverse. Is this something that people should be focused on in the near term? In the long term? At all?
Alan Treffer: I think that the key part of that phrasing is “averse”
Brent Leary: How can I add to that?
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it’s an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.