You can’t do it alone. If you want to create a company with a significant impact, you must build a team that goes beyond only you. You don’t need just any team either. The end goal is to get employees to take ownership of their work and the client experience. My guest today is Stu Sjouwerman, CEO of KnowBe4. His company was ranked #92 in the 2018 Inc 5000 list. Stu shares his insights to get employees to take ownership. We talk about the strategies and tactics that have worked for his company to grow at an insane pace. Discover how you can get your team members to go beyond taking responsibility for a feeling of ownership that drives the organization forward.
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Stu Sjouwerman: The Transcript
Target Audience: Stu is the CEO at KnowBe4. KnowBe4 is InfoSec’s latest Unicorn with a Billion dollar valuation. They have had 25 consecutive record setting-quarters. This is his fifth startup. And have decades of experience in IT. One of his company was called Sunbelt Software, scaled up to hundreds of staff as co-founder and got repeated Inc 500 and 5000 listings.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Do find yourself with a dedicated full time employee that as really as they’re own extreme ownership to make sure that employees do well in the company.
[00:00:13].770] – Gene Hammett
Welcome to Grow Think Tank. This is the one and only place where you will get insight from the founders and the CEOs. The fastest growing privately held companies. I am the host. My name is Gene Hammett. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow. Growing your people.
[00:00:31].920] – Gene Hammett
How important is it for you to grow the people inside your organization. Well today is a very special episode because I have been really looking for companies that really invest in their people put their team first and know the importance of giving the right training the right support as they grow and really support the overall organization. Stu Sjouwerman is the founder of KnowBe4. KnowBe4 is a technology company around you. How do users are individual people create the right security measures and protocols and it becomes a human issue not just a technology issue. And so I had him on the show to talk about why they invest in their people why did they get them to take ownership of the work how they do that with stats and what they do with their growth team. This is a really special episode that can’t wait to share with you.
[00:01:22].950] – Gene Hammett
Thanks for tuning in here to Growth Think Tank. Really excited about sharing this with you. And before you run I have done so many interviews the last few weeks I have such an exciting time to share with you that those interviews have been organized into the 12 core principles of fast growth companies. So all you have to do to get that is going to GeneHammett.com/worksheet. You can get the 12 Principles and I’ve been able to go in there and find which episodes will align to each individual episode we are subscribe to grow think tank you will find exactly what you need so that you can move forward and many of them haven’t been published yet depending on when you’re hearing this but you can you can tune in to the date. That means the most to you. Now here’s the interview with Stu.
[00:02:07].950] – Gene Hammett
Hi Stu how are you?
[00:02:10].050] – Stu Sjouwerman
I’m doing fabulous. How are you?
[00:02:12].060] – Gene Hammett
Fantastic. Glad to have you here Growth Think Tank. We’re gonna kick off this with a very easy question for you. Tell us a little bit about you KnowBe4 and why that company exists today.
[00:00:00].000] – Stu Sjouwerman
KnowBe4 is my fifth startup what we do is we add more employees to make smarter security decisions and why it exists. Is that just software layers for security simply don’t cut it. You need a human layer on top of all your hardware and software security hardware and software.
[00:02:49].800] – Gene Hammett
Well that makes sense because you know that weakest link. Maybe the people actually using the tools.
[00:02:55].170] – Stu Sjouwerman
Definitely so in my last company we did build an antivirus anti spyware firewall product and we had a couple of million and points out there and the workstations still were getting infected with all kinds of malware all the time. This is how we identified that the human is a crucial element in this whole security picture.
[00:03:23].400] – Gene Hammett
Well I appreciate you coming here to the show. I want to talk to you a little bit about the company growth. Just highlight some of the things that are in this. I’ll kick this off with Number 96 on the 2018 Inc list. You know what else would you say about growing a fast company?
[00:03:40].720] – Stu Sjouwerman
Hyper growth is the most critical and also most risky phase in a company’s life. I’ve seen dozens of high tech companies either explode or implode during hyper growth. This is a stage that needs to be managed very very carefully otherwise all kinds of mishap occurs.
[00:04:07].500] – Gene Hammett
Well you’ve got 700 plus employees so that’s a lot of employees that you’re you’re managing. And I want to talk to about some of the core aspects behind that. I have that about right about 700 plus?
[00:04:19].160] – Stu Sjouwerman
Yeah, we’re pushing 800 now.
[00:04:21].060] – Gene Hammett
Fantastic. When you think about the core elements they’re growing the business. We talked last week about some of these things but you talked about the need for people to take ownership go beyond responsibility and take real ownership for their work. How important is that had been to the overall success of the company.
[00:04:39].090] – Stu Sjouwerman
It truly is crucial and it starts at the top. But it does need to make its way all the way down. If an employee more like feels a business partner instead of just being there for a paycheck that makes all the difference. So extreme ownership is one of our very important tenets which is to a certain degree driven by also radical transparency everyone everyone knows and sees in real time how we’re doing. Everyone knows break even. Everyone knows exactly when bonuses kick in. So you get alignment which is the speaker. The bigger you get the more important it becomes.
[00:05:21].770] – Gene Hammett
Well take those pieces and break them apart. This ownership when you had other businesses or you have teams that aren’t taking ownership what is something that you sense or see happening across the teams?
[00:05:36].220] – Stu Sjouwerman
If teams do not take ownership for the total company results. You get teams that are becoming their own little unit and they don’t fit with the other parts of the company anymore. You get pissing contest between for instance tech support and sales or between marketing and sales or other groups. That’s causing enormous amounts of lost time and lost production. So that’s what you need to prevent from happening.
[00:06:14].010] – Gene Hammett
Now you see this very commonly we joke about it in big companies about the silos but there’s just no room for that in smaller companies I’ve seen.
[00:06:23].100] – Stu Sjouwerman
No and ideally there is no room for silos in large companies either. You really want to make sure that everyone truly understands where you’re heading and it doesn’t matter if you’re 500 or 5000 employees.
[00:06:39].810] – Commentary
Well Stu just talked about silos. These silos happen in organizations big and small. And that really happens when people want to get territorial inside their roles and that doesn’t help the organization grow. In fact it impedes growth. You know this small organizations don’t put up with it. And if your organization has any you know pressure for producing these silos and people are trying to get territorial then you really need to create the kind of organization where there’s more collaboration sales and marketing should be working together as partners not as you know kind of blaming each other for them not getting the job done leads not being good enough or not closing the deals they need to work to partners so that they truly are collaborating. Now in other areas of the company you have some of these silos that have a tendency to your job as a leader is to identify them and create the kind of conversations that allow them to see that this is not the way we grow together. That’s my take on this. Hopefully you can do that inside your organizations. You have any questions make sure you reach out. Back to the interview with Stu.
[00:07:44].880] – Gene Hammett
What do you do in the onboarding process that lets people know that you really expect them to take ownership of their roles and the client experience. Is there anything special that you can share with us.
[00:07:56].280] – Stu Sjouwerman
We have a fairly well-developed onboarding process. I actually sent an email after 30 days to each individual new employee and ask how it was. We get pretty universal rave reviews of the onboarding process itself simply because we take the time to make sure that someone gets our corporate culture. We we do take the time to introduce us to our call it. It’s almost our own dictionary but at least it’s critical words. Every profession develops their own call it lingo biology physics whatever. So infosec has their own highly developed dictionary with hundreds of terms. So we we teach people the language.
[00:09:00].030] – Gene Hammett
When you think about the onboarding process is there anything in there that you feel like you do unique that has had an impact on that first 30 days of the employees coming on board.
[00:09:09].550] – Stu Sjouwerman
There’s a lot of focus on culture. Now we’re not unique in that but it is rarely done. Part of being a four year in a row top workplace and Tampa Bay Times and having super ice core issues at Glassdoor shows that you really need to do that.
[00:09:35].980] – Gene Hammett
Beyond the onboarding process. How are your you know internal leaders and frontline leaders leading and inspiring people to take ownership of their work.
[00:09:47].410] – Stu Sjouwerman
Well we in a KnowBe4 start the process by identifying what is your production on your specific post and that is measured simply in a number of X number per day or per week per month in sales of course. It’s easy. You have your pipeline. But how do you create your pipeline Well it calls out emails out. Those are being actually counted. So everyone has a stat literally every one in the company has a stat and everyone else can see that stat. It’s an internal application we’ve built. And so if you if your production is visible for everybody else. That right there strongly promotes extreme ownership.
[00:10:37].290] – Gene Hammett
And that ties back into the radical transparency because if everyone else can see this stat it doesn’t take too long for people to realize they don’t want to always be under performing.
[00:10:49].660] – Stu Sjouwerman
Yeah it fosters a good sense of playing the game competition and nobody wants to be seen as a slacker.
[00:11:01].560] – Gene Hammett
When you think about creating these stats like sales is easier right. It is they’re truly just one measure. Or does everyone have one or two or three measures.
[00:11:13].430] – Stu Sjouwerman
Oh some people have six that’s.
[00:11:14].910] – Gene Hammett
[00:11:14].950] – Stu Sjouwerman
It really depends on the job.
[00:11:17].280] – Gene Hammett
And when you say make it available to everyone is this a website or is it some some other type of mechanism to show where everyone stands on their stats.
[00:11:28].710] – Stu Sjouwerman
It’s an internal cloud based application which shows the org chart to begin with and it shows exactly where everyone is on the org chart. There just is. You can query the org chart you can find out where people are phone number or email who they report to and what their stats are. Then the stats as a module where everyone enters their statistics and then there is the the OKR section. We started with six months ago the objectives and key results. That’s integrated in the app so everyone sees exactly what the OKRs are of 40 other teams and can see where we’re all heading now.
[00:12:18].470] – Gene Hammett
I love the fact that you can get everyone’s key role down to a few stats if you will. Is that something you learned from the other companies that you created or did you create new for KnowBe4?
[00:00:00].000] – Stu Sjouwerman
KnowBe4, you know it this is something this is a fortunately and unfortunately you’re looking at 40 years of experience in the I.T. world. I started professionally when I was five. Once you focus on production you start to see that people are are truly it to some degree. It functions as a filter. People that are truly productive and happy and happy to produce they have no problem whatsoever in showing their stats and putting them in on time and people that are not productive and not happy. Not really a good fit for company culture so they don’t make it ultimately.
[00:13:31].280] – Gene Hammett
Is there something that happens inside the kind of development process when someone’s falling below their target numbers on those those stats.
[00:13:40].880] – Stu Sjouwerman
Sure. We have actually a whole team here. It’s the growth team that is focused specifically on helping people who fall below the minimum production and essentially go in and figure out what’s what’s happening. How can we turn this around essentially debug anything. It could be outside of their scope of responsibility so then we debug what’s what’s the scene. In a sense if they don’t get their tools or they are in conflict with their manager or whatever it is we we spent a lot of time trying to debug first before we say listen this is just not a good fit.
[00:14:28].280] – Gene Hammett
Similar to the deeper reality. Sorry.
[00:14:31].200] – Stu Sjouwerman
The other side of the coin there is we spent a lot of time making sure that we hire the right people. Out of 3000 resumes per month we hire maybe 15 people. So this is one half of law percentage actually get hired.
[00:14:47].510] – Gene Hammett
That’s impressive. I was gonna go back to that that debugging you know being in the technology world you debug programs your debugging the process on a consistent basis so that people are growing individually but also just said sitting where you’re out of alignment. Is that fair.
[00:15:05].570] – Stu Sjouwerman
Yeah. Debugging a person obviously is to some degree tongue in cheek but it does boil down to figure out what’s going on. Where is the problem. Where is it. Where’s the real problem what is the actual, why are they not producing? it when you find correct why you can then go about fixing the problem.
[00:15:33].410] – Gene Hammett
You mentioned the growth team. I’d love to know how many people kind of that makes up at this point with almost 800 employees. But but where did you start with that team. Is just one person.
[00:15:47].410] – Stu Sjouwerman
A small group. Let me go to the org chart for a moment and do a quick count to where the growth sector here. We have our Chief Growth Officer. Come with me right. One, two, three, four, and then five, six. That’s including of course internal training are in training internal training team six seven eight nine ten. And third one eleven twelve 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26. There you go. So out of eight hundred twenty six people focused on internal training and growth.
[00:16:42].230] – Gene Hammett
Fantastic. The skills of this team sounds like there’s a lot of different this people inside their training and whatnot but I’ve never heard of a chief growth growth officer. When did that come on board for the company.
[00:16:58].520] – Stu Sjouwerman
At early stage. You know when you start I mean I started literally in a 10 by 10 broom closet and I was wearing 50 hats right. I traded the product. I did the marketing I sold it. I follow it up. I called when I didn’t get paid and I put the check in the bank right. So overtime you delegate those functions over time though you do find yourself with a dedicated full time employee that as really as their own extreme ownership to make sure that employees do well in the company. And so I think with about 100 I had an FTE dedicated to just that.
[00:17:45].820] – Gene Hammett
I love I love that his first time ever heard it and I think that’s a really big enough opportunity for companies to ensure that people are developing. I can remember who said it. There’s a quote out there about investing in people. You can either not invest than in them and they’ll stay and some may leave. But it really does hurt the company by not investing in the people and I think that’s.
[00:18:12].150] – Stu Sjouwerman
Absolutely here. You have to because ultimately despite a lot of people claim they can say oh it’s your IP it’s your brand it’s your patterns. No. Ultimately IP and our assets. But the the most important element in your company obviously are always people and always will be.
[00:18:40].300] – Commentary
Hold on for a second. Stu just said something brilliant. When you talk about putting people first and you talk about creating a team for an organization you want to make sure that you’re really taking care of the people and that they feel that inside the organization you investing in them. They’re growing as people and their skills and their value that is truly something that you want to create inside of a business that’s running fast Stu’s organization is adding hundreds of people every year there they’re really creating a huge valuation inside the market force they are creating all of this going on and there’s no question in my mind that there’s a correlation between how much they invest in people and how much they are getting in return and the valuation of the company. So back to the interview as Stu.
[00:19:28].750] – Gene Hammett
The business of finding these stats for people so that they understand where they are that’s gotta give them a sense of ownership for where they’re going and that they actually have to do whatever work it takes whether be learning new skill spend a few extra hours doing it. Is that fair to say.
[00:19:49].670] – Stu Sjouwerman
Yeah that’s a good way to put it. The the growth theme actually is responsible for identifying and those statistics to train people what they are and how to get those production stats really only reflects production right. Same in sports where we are. We tend to say we’re the NFL. So the stat is identified as OK. This is the final result and we expect you to get. We pay people extremely well over here and like the NFL you’re your top top player. We we like to think we’re only a players here.
[00:20:37].420] – Gene Hammett
Well I’ve had some interviews on a podcast before talking about the reasons why we only hire tens was a very good interview recently. And you’re another person that that really sees the value of hiring the best of the best. And I guess you can do that when you have 3000 applications free. Any magic to getting so many applications in an area like Tampa that may not even have that big of a of a workforce.
[00:21:04].810] – Stu Sjouwerman
Well you’d be surprised the whole Tampa Bay area has an easy 5 6 7 million people living here. We have more than 100 open positions as we speak. But there is no magic that is just a lot of hard work creating a fabulous corporate culture making it fun for everyone to come to work. Transparency. One thing that I would like to highlight is that everyone understands what their break even is what our break even is. And then the first moment we do break that even as everyone gets on a dollar bill.
[00:21:48].580] – Stu Sjouwerman
This is hard. Cash in hand and then the next million up is two hundred dollars cash in hand. So on average we pay a thousand bucks a month. The cash bonus as an instant profit share which is just super fun game to play.
[00:22:04].660] – Gene Hammett
Well I appreciate you sharing that with us. I would like to ask you this question do as a leader you mentioned decades of experience in the I.T. world running five different businesses. What is one defining moment in your leadership where you had to when you made a big realization that you were growing or needed to grow as a leader.
[00:22:25].300] – Stu Sjouwerman
The moment when I decided to give away half my company to my business partner Kevin Mitnick. In the early days came to conclusion well I can own a hundred percent of a muffin or I can own 50 percent of our really a large pie. And after one or two days of chewing on that I decided okay I’m going to give away half the company. And that was the right choice.
[00:22:54].010] – Gene Hammett
That does take a lot of courage. I guess you had knew this person well.
[00:23:00].880] – Stu Sjouwerman
Kevin Mitnick is the world’s most famous hacker. So he’s an he’s an extremely well known quantity.
[00:23:08].310] – Gene Hammett
Fantastic. Well still I really appreciate you being here. Growth Think Tank sharing some of the inside strategies to fast growth. I really appreciate you sharing your defining moments with us and I really appreciate your wisdom and your insight.
[00:23:22].630] – Stu Sjouwerman
You are very welcome.
[00:23:24].640] – Gene Hammett
Wow what a great episode this content in here really aligns with the research I’ve done with hundreds of fast growth leaders about how important it is for people to take ownership and not just responsibility for their work but for them to really embrace transparency inside the workforce and really radical transparency is what our companies really crave and employees are growing through that radical transparency. There’s so many other elements inside here. Hopefully you took copious notes and you’ve really found something that you can latch on to do one thing from this interview and you will see the benefit.
[00:23:59].230] – Gene Hammett
Really appreciate having people like Stu on the show. So if you know of anyone else that could fit this for an Inc500 make sure you tell them about this show that they must listen in and that they can actually get a chance to be on the show. If they reach out to me and if you have anyone else that we would love to hear this information about you know the power of evolving as a leader can make sure you tell them about Growth Think Tank. As always lead with courage. We’ll see you next.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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