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Podcast

Podcast

Harvard Business School Professors Bill Kerr and Joe Fuller talk to leaders grappling with the forces reshaping the nature of work.
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  • 09 Jun 2020
  • Managing the Future of Work

Covid -19 Dispatch: Dan Springer

As Covid-19 has made remote work the norm, DocuSign and other e-signature companies have provided the digital architecture within which parties can seal agreements and process documents. This has allowed business transactions and official business to proceed while much of the economy has ground to a halt. DocuSign has seen a surge in business in healthcare, government, emergency services, small business lending, education, legal, and other sectors. CEO and HBS alumnus Dan Springer talks about the digital infrastructure for striking and managing agreements and how DocuSign has weathered the pandemic. The experience has led the company to help its employees work better from home, including subsidizing remote work setups.

Joe Fuller: Welcome to the Managing the Future of Work podcast from the Harvard Business School. I am Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. This episode is one of the series of special dispatches on the sweeping effects of Covid-19 on our economy, society, and the future of work. In addition to our regular podcast episodes, we will be bringing you shorter and more frequent interviews with business leaders, policy makers, and leading scholars on the coronavirus.

Digital signature company DocuSign was well into remaking itself as an infrastructure provider before Covid-19 hit. In building its Agreement Cloud, DocuSign had built off its traditional strength in signature management of document management, payment systems, and the other elements necessary to reach an agreement between parties and maintain that agreement. The pandemic has created high demand in new opportunities for services like DocuSign. It has seen a surge in activity in health care, government, small business lending, and legal services. I’m joined by DocuSign CEO and Harvard Business School alumnus, Dan Springer. He’s here virtually to talk to us about how the pandemic has accelerated demand for the Agreement Cloud and for a more robust and flexible digital work infrastructure. He’ll also share thoughts about how DocuSign has and will continue to change its work practices in response to the pandemic. Dan, welcome back to HBS, if only virtually.

Dan Springer: Thank you very much for having me.

Fuller: Dan, there have been a number of applications that have really been affected by the onset of the Covid pandemic. Obviously, people are aware of things like Microsoft Teams and Zoom. What are the biggest changes you’ve seen on the demand side at DocuSign?

Springer: Well, I think there’s some things that we would expect—a la your comments about Zoom, where so many people have turned that into a household name—and in DocuSign, because the e-signature is really the core product that was really the foundation of the business, more and more people were realizing the benefit of being able to do those things in a remote fashion and the necessity to do that. So we’ve seen a dramatic increase in demand for our core e-signature capability, and that, of course, I would say has not been a surprise. One of the things that has been interesting to me is how it has changed so much by industry. Much of it is what you would expect. So industries that you’ve seen a lot of strength in—like health care, life sciences, financial services—as there’s so much more activity that’s been an opportunity for these businesses to do in a situation of people working from remote settings, we’ve seen. But we’ve also seen surprises to us like government. There’s been a dramatic increase in government saying they really feel the need now to see this opportunity to be their workers in a remote setting. Those are some of the things that we’ve seen on the positive demand side. Not surprisingly, the travel industry, hospitality, we’ve seen some slow down, and we’ve seen those industries in a situation of sort of retrenching. But that’s been overall the lay of the land.

Fuller: Is it work that companies or sectors like government, that for some reason were hesitant or reluctant to adopt service, have been fast-forwarded into the future, and this crisis has obliged them to reconsider and overcome those concerns?

Springer: Yeah, I think there’s a view that we have at DocuSign, which is digital transformation and the need for companies to really modernize their manual processes, what we sometimes call their “paper-based processes.” That’s not a new concept. This is accelerating people on that path, and I think there’s certain places like government agencies, certain divisions of financial institutions, that have had just historical resistance. Some of that is change management that you’d understand well. Some of that is technical and perceived legal barriers to the digitization of those work processes. Those are the things that we’ve seen that have been the barriers. And now the phenomenon of saying, “I just don’t have an office where a bunch of people can pass paper around,” has created a sort of acceleration of what we believe would have happened anyway.

Fuller: Well, I hope that some of the legislators in Massachusetts are listening, because I think we’re one of the few states still that they cling to a pretty historical and traditional way of doing things like notarization of documents. Maybe you’ll get to the final frontier of getting my state to convert.

Springer: We will keep pushing until we get them there.

Fuller: Please do. For our listeners that really aren’t familiar with DocuSign services, maybe you could just give us a quick description of what you do.

Springer: Absolutely. So what most people know DocuSign for is that traditional e-signature capability, which allows people to, instead of sending paper documents around and FedExing them or faxing them to people, to do that all with just a click, a simple mouse click, and have the ability for people to create agreements and then finalize those agreements and to make them legally binding on an all-online environment. That really started in terms of popularity, particularly the United States, in the real estate business. And the realtors were one of the first folks to say this is a dramatic improvement in this old signing ceremonies that they used to have, which was not a very good customer experience. This opportunity to do that all from a remote standpoint, a virtual standpoint, online, has been tremendous. Now when I meet people and I say, “I work at DocuSign,” the number one response I get is, “I love DocuSign. I bought my house, and it was so much better than the way I did it before.” That’s been the core of the business. A few years ago, just before we went public, we realized there was an opportunity with our customers, our corporate customers, telling us it’s not just about getting these workflows and signatures done. We also need to get our agreements prepared. We also need to, post-signature, take actions on them. It might be to make a payment to someone once you’ve reached an agreement on a contract. It might be to have an API [application program interface] connection to another software, to go back into their CRM system, like a salesforce.com would be an example. Then lastly, people said, “We need to manage all the agreements that we’ve created.” Now that they’re in electronic format, it creates an opportunity to have a contract management system that is, of course, digital as well. We’ve expanded, and that broader step of preparing agreements, getting them signed, taking actions on the agreements, and managing the agreements is what we call the “Agreement Cloud.” We think we’re going after what we believe will be the next big cloud opportunity, which is the Agreement Cloud.

Fuller: That jumps across a lot of what were historically discrete steps in the process, but also supporting focused software capabilities. Are you getting a lot of receptivity to creating this kind of single-cloud concept that pushes away those barriers, and are other people responding with their own different definitions of their own cloud to try to block your growth?

Springer: Yeah, it’s a really interesting sort of business strategy question, and I know both of us share time at business strategy consulting firms, you more than me. I think the construct for this one is you have what was not a traditional industry. You have DocuSign, which has a very, very strong significant market share lead. We have about two-thirds of the market in e-signature. But it’s such an early situation, in an especially early and open industry, that we think we’re about $1 billion of revenue in 2019, and it’s about a $25 billion TAM [total addressable market] for e-signature. So it’s still early days, but of the businesses there, we have a very strong market share lead at about six or seven times the next biggest player. We have strong leadership in e-signature, and to some sense when people say they’re forced to put out a report, it’s sort of like the Kleenex phenomenon or the Xerox phenomenon. When people say “DocuSign,” that’s what they mean. They mean e-signature. The rest of the spaces, like contract lifecycle management—that piece that once the agreements are done, the preparation of agreements, the actions—there’s not a large player in any of those spaces. It’s much more fragmented. From that standpoint, the industry economics and the dynamics that we see is an opportunity for us to leverage our leadership in e-signature to try to expand that to that broader Agreement Cloud. What we see from customers is that message resonates quite well, because they have just what you described, Joe. They have this phenomenon of a bunch of disparate systems that they’ve cobbled together into their own that we sometimes call a “system of agreement.” We’ll tell companies, “You have a system of agreement. It just might include things like mailing documents, routing paper processes, storing them in different systems, and keeping multiple copies of them. And we want to give you one integrated system of agreement, which will be the DocuSign Agreement Cloud.” So there’s a very positive reception to it, and our execution challenge now is delivering on those other components as well as we have on e-signature so people say we clearly are the best-of-breed provider across each of those four sections. That’s our goal to deliver great customer success.

Fuller: Well, certainly we’re hearing in our conversations with companies here at Harvard Business School that the Covid-19 pandemic is causing them to rethink fundamental processes. I’m hearing the same word very consistently, which is “touchless.” That, whether it’s supply-chain management or even now a lot of finance and administrative functions, that the ambition of the companies is to accelerate their digitalization and try to both reduce the number of process steps but reduce the number certainly of physical interventions—or even if they’re digital, the number of touches that any document or process requires. Is that consistent with what you’re hearing?

Springer: Absolutely. In fact, one of the things that sort of surprises people a lot is that they are users of DocuSign. They’re familiar with the process of either sending agreements out to people or being what we call a “signer.” You receive a DocuSign agreement, and you just click to confirm that you will be a signatory to the agreement. For both of those groups, they think that’s how the majority of DocuSign transactions occur. Actually, two-thirds of our transactions occur where no individual is actually sending an agreement or signing it. It’s all automated, and people use our API—our application program interface—libraries, and integrate it with their other software systems. So if you’re sending a contract—let’s say you use salesforce.com as your CRM system—and you’re a salesperson is sending out a contract, you want to integrate DocuSign into your CRM. So once you send the agreement and the signatures are created, it automatically goes back into your Salesforce instance, updates that that opportunity is now closed, and goes to your other systems to send people their first bill, turn on the software for them so you can start gaining revenue on it. All of those get automated, and again, about two-thirds of all of our transactions are completely touchless, and no one is actually creating a separate agreement. They’re just integrations with the other software systems.

Fuller: You’re operating a digital platform and obviously operating it with a now-remote workforce with a growing company that has very, very high security requirements and must be meeting the Six Sigma standard on performance on everything from verifying transactions and ensuring that document version control is right and whatnot. What have been the operating challenges of doing that in this environment?

Springer: Well, I think there were a set of things pre-pandemic that were important for us, and you’re spot on. DocuSign is a trust brand, and the reason the world’s largest banks and the governments are all comfortable putting these valuable assets that are their agreements with so much important information and managing these valuable business processes through us is because we’ve built out a fantastic network infrastructure. We actually deliver an uptime to our customers of 99.999 percent with no maintenance windows. For those people in your listeners that are familiar with online systems and software as a service, that is an unbelievably high SLA [service-level agreement] to give to folks. That was super-important for these larger customers—particularly, again, some government agencies, financial services firms—to be comfortable that we could be trusted from the standpoint of the performance. The other big area is around security and privacy. Again, to be a trust brand, you have to make people comfortable. That’s why we became FedRAMP certified, which is the highest level of government certification, that the federal government says all their agencies can work with you. I think the security and privacy requirements that we had in advance for our platform of the pandemic held us in good stead. But what’s happened in the post-pandemic is, one, there has been a dramatic increase in demand for our services, which I mentioned earlier—some of the verticals like health care, life sciences, and financial services and government—that had to accelerate their digital transformations. We had to add significant new capacity, while ensuring no disruption to our availability, and make sure that our security stayed in such a state that people can maintain that comfort and see DocuSign as that trust brand. That has been a huge challenge for our team, and doing it to your point remotely, it’s the first time. Let’s just say it’s the first time we had all of our 4,000 employees working remotely and taking such an expansion of the capacity while maintaining security. So it’s kept us busy.

Fuller: Dan, we’ve been talking to a number of executives about how their operations have been affected as they’ve gone to remote work. You’re running a company with 4,000 employees around the world. What are you taking away from this? And are there lessons you’ve learned that you think are going to carry into the way you manage operations going forward?

Springer: Yeah, I think the biggest learning for me is that we had created a lot of expectations about limitations and flexibility points that we didn’t have that we now see we have. We had a number of roles—I think you can see this across many other companies as well—that we never would have thought could work remotely a significant portion of the time, much less full time. While I don’t know that all of those positions will be optimal working in a remote fashion, I think it’s going to be absolutely possible. I think you’re going to see, particularly in the tech space, a continuation of some of the announcements we’ve seen from other firms that have said they could be comfortable having significant portions of their workforces being remote. What’s particularly interesting to those of us in Silicon Valley—and the two largest offices for DocuSign are Seattle and San Francisco, quite expensive markets for people to live in—it opens up a new construct for folks to be able to live in more-affordable communities if their jobs don’t need to be physically present. That was probably the biggest single learning. Secondary thing for me, though, is that we’ve also seen a lot of our employees say they would prefer not to work remotely. For a lot of people, I think it falls into two big buckets. One is they don’t feel they can be successful, particularly in collaborative roles where there’s a component of creativity or innovation. Many of our folks are saying, “I just don’t feel I can sustain this output if I can’t be with my colleagues in person.” Then the second thing we’ve seen almost from a social sciences’ standpoint, quite a number of our employees are saying, “I’m not comfortable, just who I am as an individual, working remotely from home. I want to be in an office. I want to have that energy. I want to have that sort of person-to-person connectivity.” Those are the things that we’ve seen going forward. I think that means we will continue to have offices. We will, in the post-pandemic world, I think we’ll have to be very cautious as we bring folks back into the offices, but we will have offices, and we will still have, I think, the bulk of our employees will work in our offices. We were about almost 20 percent of our folks worked remotely before the pandemic, either majorly or all the time working remotely. My guess is that number will go up substantially, but I don’t think it would come close to 50 percent in terms of where we end up post-pandemic.

Fuller: Certainly we’re hearing from other executives the same themes. First, many of them have enjoyed pretty discernible productivity increases, at least in the early phases of Covid, that your people were very focused on work and didn’t have all the distractions of the workplace, but this very strong social element of work and the type of psychological satisfaction people take from collaboration, from being mentored and mentoring, from the intrinsic, almost anthropological nature of work. We’re hearing from quite a number of companies now that a permanent primarily remote workforce a vast majority of the time just doesn’t seem like it’s going to work.

Springer: I guess everyone at some level considers themselves a social scientist. I have that same perspective, that the construct of a significant productivity improvement, which a lot of companies reported the first month or so post-pandemic, probably are as much to do with sort of a Hawthorne-type effect. Any change will create some sort of stimulus to folks’ activities. I think we definitely saw that at DocuSign as well. But I also feel that that almost adrenaline-fueled productivity would be very difficult to sustain. I don’t know that I think we will be less productive. I think some jobs could be equally productive in a remote environment. But I would not have the expectation that we would have a higher productivity. My very non-scientific response, Joe, would be I think we’d be a smidge less productive with folks primarily in a remote setting.

Fuller: As you will remember from your Harvard MBA, you’re allowed to speculate on anything, just so long as you can back it up with a case fact or some experience. How do you view the balance of choice between an employee indicating what they would prefer and the company stipulating what they expect of workers in terms of things like level and frequency of remote work or business travel or some of the other things that had been so severely affected in this pandemic?

Springer: Well, so it’s interesting. At DocuSign, one of our important themes that we talk a lot about is we want to create a place for people to do the work of their lives. We have incredibly high scores on our surveys, things like external sources like Glassdoor, and people are excited to work at DocuSign. Part of that is because I do think we try to have a fair amount of flexibility and give people choice in terms of how they manage their time, as long as they deliver in driving success for our customers. Now, at the same time, we have given managers some latitude to make decisions for their departments. If a manager has said, “I really feel I can’t run this organization effectively and deliver what I need to back to the organization if my folks are remote,” we’ve allowed that to be a non-remote setting, with obvious exceptions in short-term situations where an employee needs an accommodation of some sort. I think one of the things that I’ve now come out of this as saying, I think we have to be thoughtful about the manager’s flexibility versus the individual employee’s flexibility. We may shift that balance a little bit toward telling our managers they need to figure out how to be successful in running their departments with the fact that we’re going to allow a little more flexibility for a significant more, a larger number of their team. I think that’s probably how we will shift a little bit coming out of this, but I don’t think it’s going to be a dramatic change. I think that was already sort of the path DocuSign was on, but just like with digital transformation accelerating for our clients, I think you’re going to see that flexibility accelerate a little bit at DocuSign.

Fuller: Dan, it does sound like you anticipate within DocuSign that the nature of work is going to change a little bit, and that it’s going to be more fluid, more dynamic, a little less predictable for a while when you talk about getting your managers ready for this new future. How do you view the topic more broadly? And is it going to affect business prospects for DocuSign?

Springer: I think there’s a macro piece that’s external for us, and a macro piece, quite frankly, internal. And the external is, we have seen that this is not a one-time change. Companies have realized that in a work from home or remote work world is going to be a bigger part of our economy, and therefore, companies are going to need to be less reliant on manual processes, or we sometimes describe as paper-based processes. I think that’s great for the world. I think it’s going to drive productivity and efficiency, particularly in our professional sort of roles. And I think that’s great for DocuSign, because I think it’s an opportunity for us to leverage our technologies to drive more customer success. We think that’s going to be a big piece, and I do think the nature of work is going to change. From an employee standpoint—and really, I guess, not just our employees but others—I think companies are going to need to think more about the implications of that. I’ll give you one example. When we moved to a remote workforce, we found some things—an all-remote workforce—that were surprising to us. One is that a lot of employees come back and say, “I don’t have good WiFi. I don’t have a monitor at home.” We actually created a “DocuSign Cares” program, where we told people we’d give them a budget to go buy equipment that they needed to have in their homes in order to do their jobs. We also had a phenomenon where, because this is more pandemic-specific, when people said, “Now I’m working from home, and my kids are here, because they’re not allowed to go to school.” We ended up creating a “DocuSign Cares” program where we gave people money to help them with taking care of families and their loved ones, et cetera, in this challenging time. But going forward, I think people are going to realize that not all employees have an environment. We’ve talked a lot about parents of young children, but one of the areas that was sort of surprising to me at first, we found some of our very young employees—and those are folks that might be what we call “market development reps” or “sales development reps.” They’re out doing prospecting for customers, and they’re on phones and sending emails. A lot of these young people, particularly living in cities like Seattle and San Francisco, they’re living with three roommates, and it’s not the most conducive environment to be doing professional business transactions when you have three or four people in a small apartment trying to call out to folks. We’ve realize that companies are going to have to think about that and think about the kinds of people that they’re hiring and the spaces they’re going to need to create and the facilities they’re going to need to create for them to be successful in their jobs based on where those employees are. A lot of folks in the executive ranks, we have home offices. We haven’t thought about it as a very significant issue. But for other folks, again, it’s more challenging. I think companies are going to have to think about that. DocuSign is going to continue to invest in ensuring that all of our employees can be successful in a work-from-home or remote workforce environment, regardless of those investments we’re going to need to make.

Fuller: Well, Dan, thanks so much for joining us on this Covid-19 dispatch for the Managing the Future of Work podcast.

Springer: Thank you for having me.

Fuller: Thank you for listening to this special episode of the Managing the Future of Work podcast. To find out more about our project on the future of work and for more information on the coronavirus’s impact, visit our website at hbs.edu/managing-the-future-of-work and sign up for our newsletter.

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