Ep. 142 – Dom Ricchetti – Service Now – Understanding KPIs In Market Research

My guest today is Dom Ricchetti, Senior Staff Research Lead at ServiceNow. Headquartered in Santa Clara California, ServiceNow is a software-as-a-service provider, providing technical management support to the IT operations of large corporations. Prior to ServiceNow, Dom has been leading research at many of today’s top companies including in Microsoft, Intuit, Millward Brown, Dell, and Gartner.   

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 [01:01]

Over the last decade the market research industry has been disrupted.  Our largest agencies are struggling to keep up as their customers turn to newer, faster and cheaper data sources. Now we are on the edge of yet another major market shift. Now is the time for us to reassert ourselves as the rudder of the brands we love. Thank you for tuning in to the Happy Market Research Podcast where we are charting the path for the future of market researchers and businesses. Hi, I’m Jamin Brazil, and you’re listening to the Happy Market Research Podcast.  Today my guest is Dom Riccheti, Senior Staff Research Lead at ServiceNow. Headquartered in Santa Clara, California, ServiceNow is a software-as-a-service provider, providing technical management support to the IT operations of large corporations. Prior to ServiceNow, Dom has been leading market research at many of today’s top companies, including Microsoft, Intuit, Miller Brown, Dell, and Gartner.

Dom, thanks very much for being on the Happy Market Research podcast today.   

[02:01]

Thanks so much for having me, Jamin.

[02:04]

I’d like to start out with a little bit about ServiceNow.  This is a massive corporation, impressive growth, yet I don’t think a lot of our listenership have heard about it.  Can you tell us a little bit about ServiceNow?

[02:17]

Sure thing.  We’ve been very successful, and it’s been an interesting story.  We started out really being a small engineering company, developing a platform.  Out of that platform, trying to figure out selling it in enterprise how best to apply it.  The logical conclusion to start with was in IT service management. So, most people know when they have a problem with IT, they call up IT; they create a ticket.  You make a request, or you have a problem – there’s a ticket. Somebody’s assigned a ticket to work on it, and it gets passed around. People use a knowledge base, look up information about what’s going on, what kind of things worked in the past, how to we solve this problem.  That whole process of IT service management fit our platform very well because it’s geared towards assigning things, managing the workflow process, integrating with other software and information in the knowledge base behind it. So, that’s really matured over the years to be this awesome, workflow-integration platform underlying everything, and we’ve started to extend it to many other business processes.  Besides IT service tasks, we’ve extended it into IT operations, and IT management, like asset management and other uses for IT. Then into external customer service – you have the same kinds of issues: when a customer calls up about your product, needs help, has a request, just how to use it, or break/fix kind of things. That’s also a service desk management, facilities and field service – same kind of issues and processes where the workflow and integration really benefits those areas.  

Then an area we’re really excited about – it’s been growing fast – is in HR.  You think of problems that HR internally in a company is trying to support their employees on a wide variety of issues.  An interesting scenario that we delivered is on-boarding new employees. You get a new employee you have to set them up with their computer, desk space, access right to networks, get them signed up on workday, APP payroll, United Health Care benefits.  You’ve got all these processes you have to manage and take somebody through. Different people manage those tasks, integration with different software; so, that whole workflow can be automated on our platform.

[04:57]

Is a large part of the pitch to your customers improvement to operational efficiency that then impacts gross margin or another way of thinking about it would be the benefit be improvement to workers’ output quality or overall enjoyment

[05:21]

Yeah, that’s a tough question.  I guess I’d have to say it’s both.  I think where customers realize the value is, first of all, in efficiency.  We thought maybe artificial intelligence and virtual agents would help the service desk have fewer people; there’d be fewer agents needed to answer stuff because there’s usually the top 20% that comes up 80% of the time.  People need to reset their password and stuff like that. Most companies have some way to automate that and a lot of consumer products do, and you can go down that list. But really what we found is that our customers are finding they can process more requests and do more things; so, they could start applying the resources that they have into more areas that may be important in helping the whole business process move better.  Then it becomes more about improving the way the company works, improving people’s life at work.

[06:43]   

Yeah, and improving the overall customer experience, right?  That’s really interesting how your customer base is adopting the technology, and instead of shaving off large pieces of their departments, they’re reassigning those resources to create better customer experiences.  

[07:03]

Yeah, that’s right.  

[07:05]

Recently, you won a – I should say ServiceNow won a Forbes #1 most innovative company.  That is a very prestigious award. Can you talk to us a little bit about that award and what that means to the company?    

[07:21]

Yeah, that was just a tremendous success.  People really got pumped up about the recognition of it and the perspective.  We’ve been working a long time on just growing the business and the application of the platform.  We’re used by about 40% of global 2,000 companies; so, we’re well penetrated into large companies around the world.  But a lot of that is just in particular areas – maybe IT service management or maybe even they’ve adopted HR as a first application, and the expansion of the platform into helping their business processes across departments is a huge thing driving our growth, which has been at 35% – 40% been running along at that rate. But a key part of this has been just trying to get across our positioning and our value of what the platform can do in a lot of work with people like Gartner and Forrester.  Now we find that we’re recognized as the leader or, at least, a visionary in many different Gartner magic quadrants, which is where a lot of the IT departments go to the find out which vendor has got right stuff to help them with where they need to move with their company. I think it’s been an outcome of that understanding of the value and application of the platform that’s driven this number 1 most innovative company.

[09:07]

In April of last year, you got a new CEO, John Donahoe, who was the previous CEO of eBay.  He’s well known as a marketer and branding genius. With his appointment, is… how’s that impacting ServiceNow?  

[09:33]

Yeah, it was quite interesting.  Little aside: John and I started on the same day; so, I hope both of us are contributing how much stock has moved up.  [laughter] But it was an interesting move by the company. He’s our third CEO really, and another phase in terms of the company’s growth.  We’ve been growing so fast that the board and the company has recognized that we need different talents, leading the company for the next phase of what we’re doing.  So, with John coming in, we’ve put a lot more emphasis now on developing brand and marketing so that people will hear more about ServiceNow, know what that means, and what we do.  As well as just discipline in managing strategic decisions and our internal processes, we do a lot of running ServiceNow Now, we call it, so the Now platform. We use our own tools and our own… or the release.  We’re the first testers of the applications of things. And we’re a big enough company you can push and break stuff and understand how to apply it best. We learn a lot from that internally.

[11:07]

It’s really interesting to me that you are applying your public platform to your internal processes.  I personally found at Decipher that platform was birthed out of me needing to program surveys efficiently and then it becomes the preferred platform for, I call it, institutional or research-heavy companies.  The reason why is because we have this certain level and certain job function with a consistent type of deliverable. Everybody has shared pain points and, if you can automate… if you can apply technology to automate those processes, then you just inherently improve people’s lives.  It sounds like that’s exactly the application at a much, much larger scale, of course, that you guys have been successfully applying.

[12:06]

Yeah, that’s a great point.  I’m sure from that experience, you realize too what we see is that it’s the most intimate use of the product.  And you can get so deep with yourself, as a customer, that you could really understand what’s happening and how to improve things.  Yeah, we get some work actually. It’s been in HR department. It’s been interesting because we’ve done some work for our HR to understand our employees and what are the moments that matter in an employee’s experience at work.  How can we make their life better, evolve the things that affect an employee’s life? We’ve done work on both sides: we’ve done work with customers for HR product and work internally about how we can improve HR. And they overlap.  Some of the information on both sides is driving: well, what do we do in our HR, in our own HR, and what do we do for HR product for other companies?

[13:15]

Yeah, and that creates this beautiful connective tissue between product delivery, R & D, and sales.  So you’ve got this, in my opinion, this perfect eco-system of constant product improvements. And then you guys understanding, because you’re using the platform, the implications of those improvements and how they’re used, which then just informs everything else that the company does all the way up to or down to, depending on your view, the end-user or the customer.  So, prior to joining ServiceNow, you served for eight years as the Senior Vice-President of Radius Market Research. This is a very large market research firm based in New York. Why the pivot from the agency to the brand side?

[14:10]

That’s a good question.  Let me tell you a little bit about how I ended up there.  I guess I can just go into some of my background. It’s kind of unique in the diversity of different roles that I’ve had and how things have evolved.  I feel like I’ve been asked similar questions along the way in my career. [chuckles] I’ve been back and forth from tech, brand, and product side with different companies, brand companies – let’s just say – in different types of research agencies, including doing product and market research in different kinds of industry analysis.  I think seeing the world from those multiple sides in building a multi-disciplined education experience has worked great for me in my career. It is something that I would advocate for other people because I feel especially if you want to be a researcher, you should be broad; you should understand the different people in different departments who you work with, and how they might be looking at problems also helps you understand customers.  But, of course, there’s some areas you should probably be deep in; pick those based on your own talents and what the call is for you in your career opportunities. I started actually as an engineer, studying computer science, Although I did a lot of math, it was wasn’t the same kind of statistics you would normally learn to do market research, but it gave great perspective, I think, and it was easy to extend from that kind of STEM education.  I learned a lot about critical thinking, formulating and testing hypotheses, and thinking about problems as we do in research. In research we typically think of it… We’re designing an experiment to test a hypothesis and then prove it or disprove it and develop new insights from that – if not that hypothesis, what’s a new one? That’s what you try to do in both a lot of engineering and science roles as well as in research. So with that, I started working on microprocessors and personal computers and graphic workstations at Digital Equipment way back.  For those who remember and know the name [chuckles], they were the number 2 computer company in the world next to IBM. IBM brought about personal computer; Digital Equipment competed. Digital Equipment was also a leader in networking. They were one of the first companies to develop chips and low-cost what was ethernet at the time and then the internet was build on and their involvement in the internet and integrating that with the PC in the way you’d work with distributed computers. So it’s quite an interesting perspective, but digital equipment no longer exists.  What went wrong really? I learned there first-hand how some of the best technical solutions just don’t necessarily succeed in the marketplace. They aren’t solving a real valued problem for customers that makes it worthwhile. Otherwise, it’s a… you’re overbuilding, a lot of people would say, or maybe you aren’t applying it in the right way to what brings value to the market and will sell well and endure. With Digital Equipment, I actually moved out to Palo Alto, California, which was interesting. The group out there was developing Unix-based workstations and was seen as a little bit rogue in the company, but we were very plugged into Silicon Valley and seeing what was happening in the market.  I changed roles out there in realizing this with engineering roles to then do market and competitive analysis to start to look at more about how could we apply technologies better and guide the engineering teams to being more successful in what we delivered in the end for the product.

[18:51]

Originally, you were a… started out on the engineering side.  What attracted you to Gartner? ‘Cause you’d spent a lot of time at Digital Equipment like twelve years.  Then to move to an insights function inside of Gartner twelve years later, that’s a BIG pivot.

[19:13]

Yeah, it was.  I think making this bit of a transition out in Palo Alto to looking more at…  looking at the market and doing competitive analysis and being part of the Silicon Valley world really opened my eyes to that.  And that’s what got me interested in moving to Gartner and more industry analyst roles. So I was at Gartner and then a little later after Dell too, I went back to Millward Brown, and Telequest Group as a VP of industry analysis.  So there I was starting to round out more disciplines in my career, more experience. At Dell, I was actually part of a strategic group underneath Finance. We were looking a mergers and acquisitions and other areas as Dell was developing…  as Dell was expanding in the server marketplace. I first joined them to do industry analysis about what was happening in the server market. Back then, it was more of just take a desktop PC, turn it on its side, put extra disks in it [chuckles], and you could build a server.  But Dell was up against Compaq and IBM, SunMicro Systems with Unix, and all other kinds of other players who had this great VAR network about being able to load and support applications and other things on a server to make it a more robust server, but Windows was great in driving…   There was particular areas of the market: the file and print servers [chuckles] That’s where you kept all your storage, right? And also Outlook and Exchange servers. So for mail, that was pretty much standardized. So it was easy for Dell to progressively start at the low end of standardization and push up levels of standardization and push more into the server market.  That’s what my analysis was showing, what we were looking in, what we started to drive. Then in the server markets, I was doing analysis of some of the shipments out there for Gartner Dataquest where I was working previously and IDC and found that at least half or more of the revenue to be made in the server market was about storage. So, that’s where Dell got into the partnership and initial work with network appliance and EMC (EMC now part of Dell in the end), made a lot of revenue and bit off bigger and bigger chunks of the server market.

But I also did more studying then too.  So this was the point in my career where instead of a typical MBA, I took Master’s courses in operations research.  I was extending out of engineering management roles and got into more marketing and finance. That breadth got me more exposed to statistical analysis, visualization, business communications, storytelling – put together more of the picture and understanding broader perspective of the business.  At Dell, it was very different in that it was driven more by the market and financial opportunities and trying to optimize finance and optimize efficiency of manufacturing, which was very different than my years at Digital Equipment, who is very technology-driven. That provided a different perspective.  At Dell, I worked on their initial submissions for the Malcolm Baldrige award, which is an extension out of Total Quality Management, in thinking about how in the end does product and manufacturing deliver for customers, solve problems for customers, and satisfy market requirements and needs. It was a real turn that kept happening in my career from engineering to understanding the market in being able to build skills that provided other perspectives on how to analyze markets and do research.

[24:04]

Yeah, I think one of things that I’ve learned…  Of course, you know this intuitively, but after you hear it…  Gosh, what is this? This is over 40 times for me interviewing people (actually closer to, gosh, over 50), sorry.  But is that this diversity of experience actually applies as tremendous amount of advantage to market research because it gives a more complete lense to the data for the researcher to then analyze and understand the consumer’s point of view.  And, secondarily, and maybe even more importantly, the ability to communicate that to the stakeholders effectively so that data then has change in the organization.

[24:49]

Yeah, that’s right.  In research, good practice is that you involve those different departments and get their perspectives.  So being able to relate to them, I think, is something that’s really important for a researcher. I found when I’ve done product innovation research, I came from a role where I was an engineer and was like, “Well, I understand this technology better than the customer.  What’s the customer really going to tell me about how to apply this technology?” Or, in things like artificial intelligence, there are discipline experts that understand that so well. They can engineer a great solution, but it comes back to how is that solving a problem for the customer.  How would you measure that you succeed on what you envision this technology’s going to do for a customer? Trying to understand that perspective in that it not only technically does things that they need but does them in a way that they can make use of it, that it’s intuitive, easy to use.

[26:06]

And then the ability to be able to connect that to an ROI…  Kristi Zuhlke of a company called KnowledgeHound out of Chicago, she was a guest on the show.   She actually talked about one of the tenets of Proctor & Gamble is every research project needs to have an ROI associated with it so that just connects the research with real business outcomes as opposed to more just fodder for a library wall.  

[26:37]

So, let me come back to answering your question about why I moved from Senior

Vice President at Radius to a tech company, being back on the brand side.  It’s my passion in developing and applying these techniques. I did a lot of it at Microsoft; they have a very large in-house, central market research organization; and at Intuit, they had a strong Six Sigma practice where you apply a lot of different research techniques to the end result.  Although I was very excited at working these things at Microsoft, I wanted to get more into the research techniques; so, I moved to a small research firm where we became part of Radius. That’s how I ended up a Senior VP at Radius. It was great that I was working with more business units than Microsoft, Google, Intel, and ServiceNow as well as some other smaller players, and I got my first exposure to ServiceNow, but also things outside of tech – so Starbucks, Nordstrom, REI, others in the Seattle area, and West Coast, where I had clients and could broaden that perspective of applying the techniques.  But in the end, ServiceNow – great company, great opportunity, and we’d been talking for a while; the stars aligned, and I saw that ServiceNow was really ready to start to put this discipline in place, mature their practice in research. It was a huge opportunity to leverage that back around, being able to apply and develop techniques to a technology company where we could try technical innovation. I’m loving it! [chuckles]

[28:44]

That’s awesome.  Congratulations. Let’s switch gears a little bit and talk about some issues that are facing big brands like ServiceNow.  How is market research being used by these brands to address those issues?

[29:00]     

Yeah, it’s interesting in the industry, and you go to the conference events and stuff too, there’s so much focus on Do-It-Yourself research and the tools, like what you developed at Decipher.  Broader perspective of the tools out there have enabled a lot of Do-It-Yourself research. I was seeing this at Radius Global too that… where traditionally large research firms made a lot of money on doing tracking studies.  Tracking study is not necessarily reinvented. There’s a lot of execution. You want to have accuracy about the dashboard and great insights and interpretation out of it, but it’s something easy enough for companies to do internally with the tools.  There’s been a major shift; there’s key pieces of research process that are easy enough to execute internally. And we’re doing that at ServiceNow and encourage people to take advantage of those tools, you get very intimate with the whole research process.  But I think one of the issues is that – and not to say full custom research firms are all going away. I think they’re reinventing themselves around the things that are trickier research problems and things where it’s harder to execute yourself or that it will take more perspective to derive the insights.  So a partner in a research firm that could bring experience in a discipline like customer experience, research driving loyalty and satisfaction areas, and bring that expertise to partner with you is highly valuable.

[31:10]

Just piggybacking on what I’m hearing:  it sounds like the utilization of longitudinal studies – large trackers. I’ll say – is…  trackers are, in fact, going away, not ever altogether but at least in the current framework, right?  And they are being replaced. What do you see as replacing those trackers? What types of projects?

[31:34]

Yeah, right.  You see it in the research industry that the numbers are shifting the types of work that they’re doing.  I think more of that is coming in-house: it’s easy enough to execute yourself because if it’s longitudinal, it’s repetitive by nature.  But I think there’s something more fundamental that’s changing, and I hope researchers are learning as well as companies that… You still see a lot of management wants the dashboard.  What is our net promoter score? Or even developing better and broader KPIs, net promoter scores, and everything over the past two decades of it being around or so. It is not the end game.  But having KPIs about what needles are you trying to move and tracking them is something that’s important. There’s the old Total Quality Management adage that you can’t change what you can’t measure.  But you also have to know how to change it. And that’s where I think research is shifting and becoming more valuable is that, instead of putting so much money into large longitudinal trackers and making sure you have the nth degree of accuracy on that dashboard seeing it move all the time quarterly, whatever, it’s more about doing the diagnostics.  What’s driving those KPIs? Do we have this KPI exactly right? Do we really understand what this means when we’re measuring it?  Do we understand it from the customer’s perspective? Our target customers or as we expand our market to other prospects, do we understand what it means to them?  You know, the full scope of it and clarity around what that KPI is. I’m a big advocate of the quantitative statistical analysis. We see there’s a huge amount of customer behavioral data just because the systems are in place and then especially with the cloud solution anything online what customers are doing in social media or on your website you build this vast knowledge; so, you have a great amount of data to be able to build models and do statistical analysis about what’s really driving those KPIs and diagnostic work, both qualitative and quantitative, to dig into those, understanding what those big levers are and how you can move them is so much more valuable than the dashboard.  I’ve been at a couple places now: Intuit, and I did some other work with Google, where after you learn enough about the big levers and build confidence in what’s driving those top level KPIs and things you want to watch on the dashboard, you refocus your attention. It’s no longer so much about the dashboard but putting campaigns, initiatives in place that we focus on those big levers. And we’ve done the diagnoses, learned something unique, and often a competitive advantage, about the way the market works or, at least, how the market works in your space of what you’re trying to achieve strategically.

[35:48]

Right.  It’s kind of like…  I can’t believe that I keep going back to this interview, but it is so poignant, with Rogier Verhulst at LinkedIn:  the “now what” and “so what,” which is NOT found inside of the dashboard buy is entirely found in the post-analysis work that is done, whether that’s incorporating external transactional behavioral data or doing deep-dive qual or whatever.  Are you using qualitative, any unique qualitative tools right now outside of focus groups and traditional IDIs?

[36:27]

That’s a good question because we’re looking at them and trying to figuring out what to apply where.  Use a lot of traditional techniques, but what’s been interesting at ServiceNow too is that we’ve always had a very deep dialogue with customers.  So we have a lot of interaction CEO to CEO on down through all levels of people, great executive briefings and dialogue about implementing and applying the platform.  Those unstructured, often one on one or meeting kind of conversations more so than structured focus groups that you repeat, are very valuable but they’re not as easy to leverage for insights over time and across the company.  So having types of qualitative tools where you could record that stuff… You mentioned like Knowledge Hound and ways that you could integrate qualitative with quantitative with past research are key to maturing the process and in having more impact, other than the insights, making it more valuable.

[37:54]

With all of your hypergrowth that you’re experiencing at ServiceNow, what do see as the three characteristics of an All-Star employee?

[38:04]

At ServiceNow we say we listen, learn, and act.  That, I think, is a nice, short way of focusing on this aspect of listening to customers.  I think part of that is that researchers really need to let customers talk. Facilitate the feedback, but let them talk.  Listen beyond what you expect or what you’re looking for to hear. Something that I heard early on in my career and I like to use when drilling into things is to ask three “why’s.”  So when you ask “why,” somebody’s saying that, ask then two more times. Often they have the things they build on when they’re talking about it, but when you ask the third “why” you’ll get something unique, sometimes something unrelated.  But it gets them to open up and think more. Give them time to talk.

So, listen, learn, and act is the first thing.  I think the second thing is telling good customer stories.  There’s a saying of “Speak truth to power.” Internally, up the ladder at the company, telling good, honest stories about what customers’ situations are and how we can solve problems, how a competitors is solving the problems, or what’s happening in the market is essential to helping the organization understand the truth about what’s happening out there.  Pick your battles and build honesty and trust; be honest and build trust. But it’s about creating good contexts too for what you’re hearing. The third area is just getting that breadth of involvement across departments, leading participation, teaching things like Six Sigma practices, jobs to be done, outcome-driven innovation, how to apply different techniques.  We’ve done a lot of pricing studies. What is discreet choice modeling? Why is that best for doing pricing studies? How could we optimize the way we bundle package products? So teaching the organization how to better utilize the tools available, use the insights, create KPIs, and be clear about them, understand that you have to focus on the diagnostics besides just spending a lot of time watching that dashboard – is it moving or not?  It’s better if we spend the time and effort on the diagnostics; then we can understand how to change things and where to focus our work. That kind of leadership across departments to get them to participate and understand how the tools work in research and how to apply it, I think, is the key third thing that’s important to researches and employees at ServiceNow.

[41:23]

Yeah, so listen up Insights Nation and those of you that are looking to get employed in the market research space.  You’ve got to listen, learn, and act. It isn’t enough just to do one of two of those options. And that means you’ve got to be open-minded and check your biases at the door as much as possible.  And then the action – the feet to what you learn – is really important. The application to the business requires a business context of those insights. Then tell the customer story, and then lastly, lead participation.  That is critical.

My guest today has been Dom Riccheti, Senior Staff Research Lead at ServiceNow.  Thank you very much, Dom, for joining me on the Happy Market Research podcast.

[42:11]

It’s been great.  I enjoyed it so much.

[42:13]

And thank you, everyone, who’s been listening.  As always, our oxygen is your word-of-mouth referrals to this podcast.  Please give us your ratings. We love to hear from you. Have a wonderful rest of your day!