This week is the customer engagement platform Pega’s annual user conference, PegaWorld† It’s virtual for the third year in a row, and for the second year in a row, Alan Trefler, the company’s founder and CEO, joined Paul Greenberg and I, co-host of CRM Playaz, for a candid LinkedIn Live Conversation prior to the event. And as the founder of a 39-year-old tech company with over a billion dollars in annual sales, as well 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 the current state of the economy compares to what he’s seen and experienced before.
Below is an edited transcript of part of our conversation. Click the built-in SoundCloud player to hear the full discussion.
Paul Groenberg: I’ve always been impressed with Pega’s ability to develop herself seamlessly over your 39 years. It’s very hard to do. How did you do it?
Alan Trefler: You don’t see many good examples in the tech business. You see a lot of bad examples of what companies are doing. The technology is changing enormously. And the worst thing a company can do is not always look for where the technology is going, what the changes are. Over the course of our lives in Pega, we’ve seen the world go from character-based IBM mainframes and Dec VAXs to minicomputers to PC networks, to client-server… I could go on for another 5 minutes. And all those technologies had elements that you can learn from. But also each of them successively had elements that held them back.
What we’ve always tried to do is figure out how we can 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 called low-code to make it so that the business intent is captured in a way that we can change our technology. But that business intent, that hard work that drives our clients’ businesses, can go along on that journey; even if the technology itself is as radically different as our technology typically is every few years.
No-code, Low-code and Lotus Notes – One year later
Brent Leary: You said last year that if this no-code low code thing isn’t done properly, it will eventually turn into the latest Lotus Notes or something along those lines. Do you see it going in the right direction or the Lotus way?
Alan Trefler: I see a shocking number of cautionary tales of the Lotus Notes type. If someone wants to make some sort of self-contained little system for half a dozen people in the corner to do something better at their job, 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 will touch an organization’s customers or potentially have a large number of users, or become one of its mission-critical systems, you need to make sure it’s able to grow with the business. , otherwise it boils down to people getting to a certain point and then getting 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 build in a great call center system, or I’m going to build a great chatbot”. If they start doing that with low code or some other system and embed that business logic into those channels, they create a problem when a customer wants to move from one channel to another, and customers want to do that. I see a lot of “Phase Ones” that were a bit successful but didn’t scale because they didn’t have the right architecture built into them.
Paul Groenberg: You’ve always considered business models and culture as part of how you define digital transformation, in the sense that technology plays a role, but it’s not the only thing involved. How do you keep that up during the pandemic?
Alan Trefler: I think we’ve always been sensitive to the idea that a business transformation is a transformation of the business. It is not a transformation where one technology is exchanged for another. I think one of the benefits of being there for a while is that we’ve seen technical changes take place, and we’ve seen where they’ve really manifested themselves to great successes. And in other times it just changed the underlying technology.
You need to understand that businesses are ultimately about people and their customer relationships. It’s about their partners, it’s about their internal relationships. And if you’re going to transform the company, you need to empower that company’s people. Look at all the tensions that people and companies face today. However, the biggest drivers for digital transformation right now aren’t just the new cool technology out there. It’s that companies have staff that have been under tremendous stress and in many cases really stretched to a breaking point. Those employees show less and less commitment and loyalty. Those employees are subject to massive personal inflation in terms of what happens to their budget and what they need to do. Those employees also gain insight into a very discontinuous labor market where job applications, wage increases and in some cases opportunities suddenly appear and have a huge destabilizing effect on companies. And when companies hire people, they struggle to find the talent they need and reconcile the talent they get with the teams they have.
It’s something we all struggle with. I think it can be addressed by digital transformation, but digital transformation will not replace the need to worry about any of those things. It simply provides an organization with additional options and resources to make staffing work easier now. How do you reduce stress? You give the team better tools. How do you deal with the fact that the turnover can be higher? You make onboarding easier because your systems are smarter. How do you make sure that the staff doesn’t feel so overworked? You use the possibilities of digital transformation to involve the end customers more directly in the processes and in the engagement.
But if you’re going to do that, you better have great customer engagement. Customer engagement better be actually engaging. So I think digital transformation is a tool that capable management teams can use to address some of the very specific issues.
Brent Leary: You have been an entrepreneur for 39 years. Your family has been in business for a century. Given all this, is this the most challenging business environment you have faced personally as a CEO and in the family recovery business?
Alan Trefler: I think for many people this will be the most challenging business environment they will ever see. I think the business climate will be shocking for a lot of people. But since I’ve been around for a long time, I’ve seen other traumas as well. For example, I witnessed the bubble explosion up close and personal, which was quite traumatic for many companies in the technology space. And I don’t think we’re in a completely analogous situation, but we’re not in a completely unequal situation either. There are many comparisons there. I can also remember, although I was quite young, when inflation hit in the mid-teens. And I don’t think people understand what that means in terms of destabilizing an economy.
So I wouldn’t say this is that challenging. But I think it directly affects what all companies, ourselves as well as our customers, want to think about the next 12, 18 months. When companies come under stress, they begin to think very rationally that it is difficult to grow revenue. But also finding out how becoming more cost-effective offers more control. We anticipated a shift from the parts of our business that say “sell, sell, sell” to the parts of our business that say “let’s make sure we operate in a prudent, very effective manner”. We also see that as something we have to do.
The other thing I think is critical is customer engagement. You can’t at the same time as you do that (focus on being prudent), take your eyes off the customer engagement ball, because if you do, the company could fall completely apart. You can get the worst of all possible worlds. So I believe customer engagement is at the heart of dealing with some of these paradoxical changes. That’s why we’re excited about the types of digital transformation we’re connected to. We don’t just move things to the cloud. We are changing the way businesses work.
Brent Leary: What do you think of this Elon Musk Twitter thing? Are people making too much of this? Does it matter? What’s your take on this thing?
Alan Trefler: I think we can make it exactly as much as Elon wants here. He gets the full news cycle, day after day after day. And I’d say it’s definitely better than 50-50 he buys it.
I think he underestimated the amount of regulatory burden he will have as a result of the purchase. Because, you know, you’ve got the Europeans, you’ve got a lot of people in the US. It’s such a highly polarized environment. For those kinds of platforms.
Brent Leary: metaverse. Is this something that people should pay attention to in the short term? In the long-term? All the way?
Alan Trefler: I think the main part of that phrasing is “averse”
Brent Leary: How can I add to that?
This is part of the One-on-One Interview with Opinion Leaders series. The transcript has been edited for publication. If it’s an audio or video interview, click on the embedded player above or subscribe at iTunes or via stitcher†