NA Sales Culture

Culture DefinedWe define Culture as the combination of values, principles, and behaviors that, taken together, give the CA North American Sales organization the highest chance of continuous success for many generations of technology and people.

NA Sales CultureOur ValuesOur PrinciplesOur Behaviors

NA Sales CultureOur 9 ValuesOur PrinciplesOur Beliefs

You can see real company values by who gets rewarded, promoted, or let go5

Real values are the behaviors and skills that we value in fellow employees

Respect for PeopleYou are open, honest and ethical You assume positive intent in othersYou are quick to admit mistakesYou are non-political when you disagree with othersYou only say things about fellow employees you will say to their faces

Consistently Innovate and AdvanceYou remove roadblocksYou reward intelligent risk takingYou create new ideas that prove usefulYou challenge prevailing assumptions when warranted and suggest better approachesYou make wise decisions despite ambiguity

Inspire Customer LoyaltyYou are dedicated to outstanding qualityYou do the right thing for our customersYou seek to understand our strategy, market, and customersYou are broadly knowledgeable about business, technology and our customer’s needs

Create Amazing Team SpiritYou have fun and work hardYou deliver on promisesYou seek what is best for CA, rather than best for yourself or your functionYou make time to help your colleaguesYou share information openly and proactively

You identify root causes, and get beyond treating symptomsYou pursue issues to discover practical solutions to hard problemsYou think strategically, and can articulate what you are, and are not, trying to doYou smartly separate what must be done well now, and what can be improved laterJudgment11

You listen well, instead of reacting fast, so you can better understandYou are concise and articulate in speech and writingYou are known for candor and directnessYou treat people with respect independent of their status or disagreement with youYou maintain calm poise in stressful situationsCommunication12

You accomplish amazing amounts of important workYou demonstrate consistently strong performance so colleagues can rely upon youYou learn rapidly and eagerlyYou focus on great results rather than on processYou exhibit bias-to-action, and avoid analysis-paralysisImpact13

You tactfully say what you think even if it is controversialYou make tough decisions without excessive agonizingYou take smartrisks even when the choice not to do so is openYou question actions inconsistent with our valuesCourage14

You inspire others with your thirst for excellenceYou care intensely about CA’s successYou celebrate winsYou are relentlessPassion15

“You question actions that are inconsistent with our values”Part of the Courage valueAkin to the honor code pledge:“I will not lie, nor cheat, nor steal, nor tolerate those who do.”All of us are responsible for value consistency16

Values reinforced in hiring, in 360° reviews, at comp reviews, in exits, and in promotions17

NA Sales CultureOur ValuesOur PrinciplesOur Beliefs

Principle 1. High Performance from EveryoneImagine if every person in CA NA Sales is someone you respect and learn from…

Like every company, we try to hire well

But, unlike many companies, we practice “adequate performance gets a generous severance package.”

We’re a team, not a familyWe’re like a pro sports team, not a kid’s recreational teamCoaches’ job at every level of CA to hire, develop and cut smartly, so we have starts in every position22

The Keeper Test Managers Use:“Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at CA?”23

The other people should get a generous severance now, so we can open a slot to try to find a star for that roleThe Keeper Test Managers Use:“Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at CA?”24

Honesty AlwaysTo avoid surprises, you should periodically ask your manager: “If I told you I were leaving, how hard would you work to change my mind to stay at CA?”25

What about Loyalty?What about Hard Workers?What about Brilliant Jerks?26

Loyalty is GoodLoyalty is good as a stabilizerPeople have been stars for us, and hit a bad patch, get a near term pass because we think they are likely to become stars for us againWe want the same: if CA hits a temporary bad patch, we want people to stick with usBut unlimited loyalty to a shrinking company or to an ineffective employee, is not what we are about27

Hard Work – Not Directly Relevant It’s about effectiveness – not effort – even though effectiveness is harder to assess than effortWe don’t measure people by how many evenings or weekends they are in their cubeWe do try to measure people by how much, how quickly and how well they get work done – especially under deadline28

Brilliant JerksSome companies tolerate themFor us, the cost to teamwork is too highDiverse styles are fine – as long as the person embodies the 9 Values29

Why are we so manic on high performance?In procedural work, the best are 2x better than averageIn creative work, the best are 10x better than average, so huge premium on creating effective teams of the best30

Why are we so manic on high performance?A Great Workplace is made up ofAmazing Colleagues31

Principle 2. We are Grounded and DecisiveOur strategies are grounded in reality

Principle 2. We are Grounded and DecisiveWe deal with FACTS not opinions

Principle 2. We are Grounded and DecisiveItems discussed can be executed uponThey’re not just theoretical

Principle 2. We are Grounded and DecisiveWe use data effectivelyWe draw conclusions No analysis paralysis

Principle 3. Everything we do is Pass-Fail because…The outcome trumps the taskWe are Goal Driven

Principle 3. Everything we do is Pass-Fail because…We are fanatical about goalsWe Keep Our Eye on the BallWe know how to block and tackle

Principle 3. Everything we do is Pass-Fail because…We never let circumstances compromise our commitment to our goalsWe don’t rationalize mistakes.Can Do!

Principle 4. We are Fast and Relentless, soWe have outrageous urgencyThe Impossible is Possible

Principle 4. We are Fast and Relentless, soWe NEVER quit on a deal The Impossible is Possible

Principle 4. We are Fast and Relentless, soWe anticipate obstacles and plan for themThe Impossible is Possible

Principle 4. We are Fast and Relentless, soWe prioritize our time to stay proactiveSuccess@30 is our mantraThe Impossible is Possible

Principle 5. We are CommittedWe are committed to something bigger than self; to fellow team members, to the team or function or area, to the Areas and the NAs.

Principle 5. We are CommittedLeaders emerge from any position

Principle 5. We are CommittedWe pull off the impossible

Principle 5. We are CommittedWe imagine and take on the unconventional

Principle 5. We are CommittedWe are creativeThere is always a better way

Principle 6. We are ResilientWe don’t require perfect circumstances for success

Principle 6. We are ResilientProblems are opportunities in disguiseProblems are opportunities to shine

Principle 6. We are ResilientChange creates energyResistance to change retards growth

Principle 6. We are ResilientChallenges are motivation

Principle 6. We are ResilientWe are undauntedSwagger

Principle 7. We are Winners, whoThoughtfully pick battlegrounds…and then go all-in

Principle 7. We are Winners, whoHave high standards for deployment of finite resources

Principle 7. We are Winners, whoSet high standards of professionalism and demand compliance

Principle 7. We are Winners, whoDiscipline to strip-line

Principle 7. We are Winners, whoFanatical about org charts and HVNHVN is a daily HABIT

Principle 7. We are Winners, whoNot afraid to ask the tough questions

Principle 8. We are Strategic Partners We have business acumen

Principle 8. We are Strategic Partners Business Alignment templates are way of life

Principle 8. We are Strategic Partners We speak in our customer’s language

Principle 8. We are Strategic Partners We understand our customer’s business

Principle 8. We are Strategic Partners We articulate future end-state and business outcomes

Principle 8. We are Strategic Partners We are not afraid of financials and business metricsROI is KING

Responsible PeopleThrive on FreedomAnd are Worthy of Freedom66

The Responsible Person isSelf motivatingSelf awareSelf disciplinedSelf improvingActs like a leaderDoesn’t wait to be told what to doNever feels “that’s not my job”Picks up the trash lying on the floorBehaves like an owner67

Our desire is to increase employee freedom, rather than limit it, and thereby continue to attract and nourish innovative people, so we have a better chance of long-term continued success68

With the Right PeopleWe can expectResponsibility,Innovation and Self-Discipline from each person and therefore provide more Freedom69

Is Freedom Absolute?Are all rules and processes bad?70

Freedom is not absolute.Like “free speech” there are some limited expectations to“freedom at work”71

Two Types of Necessary RulesPrevent irrevocable disasterE.g. Financials produced are wrongE.g. Hackers steal our customers’ informationMoral, ethical, legal issuesE.g. Dishonesty, harassment are intolerable72

Mostly, Though, Rapid Recovery is the Right ModelJust fix problems quicklyHigh performers make very few errorsWe’re in a creative-inventive market, not a safety-critical market like medicine or nuclear powerYou may have heard preventing error is cheaper than fixing itYes, in manufacturing or medicine, but…Not so in creative environments73

Example: CA Vacation Policy and TrackingUntil 2004 we had the standard model of N days per year74

Meanwhile…We’re all working online some nights and weekends, responding to emails at odd hours, and taking an afternoon now and then for personal time.75

An employee pointed out…We don’t track hours worked per day or per week, so why are we tracking days of vacation per year?76

We realized…We should focus on what people get done, not how many hours or days worked. Just as we don’t have a 9-5 day policy, we don’t need a vacation policy.77

CA Vacation Policy and Tracking“there is no policy or tracking”78

CA Vacation Policy and Tracking“there is no policy or tracking”“There is also no clothing policy at CA, but no one has come to work naked lately.” – Patty McCord, 2004Lesson: you don’t need detailed policies for everything.79

Another example of Freedom and Responsibility80

Most companies have complex policies around what you can expense, how you travel, what gifts you can accept, etc.Plus they have whole departments to verify compliance with these policies.81

CA Policies for Expensing, Entertainment, Gifts and Travel:“Act in CA’s best interests”(5 words long)82

“Act in CA’s Best Interests”Generally Means…Expense only what you would otherwise not spend, and is worthwhile for work.Travel as you would if it were your own money.Disclose non-trivial vendor gifts.Take from CA only when it is inefficient to not take, and inconsequential.“taking” means, for example, printing personal documents at work or making personal calls on work phone: inconsequential and inefficient to avoid83

Freedom and ResponsibilityMany people say one can’t do it and scaleBut since going public in 2002, which is traditionally the beginning of the end for freedom, we’ve increased talent density and employee freedom substantially.84

Summary of Freedom and Responsibility:Minimize Rules.Inhibit Chaos With Ever More High Performance People.Flexibility Is More Important Than Efficiency In The Long Term.85

“If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead teach them to yearn for the vast and endless sea.”-Antoine De Saint-Exupery,Author of The Little Prince*translation uses ‘people’ instead of ‘men’ to modernize86Context, not Control

The best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people87

Context not ControlProvide the insight and understanding to enable sound decisionsContextStrategyMetricsAssumptionsObjectivesClearly-defined rolesKnowledge of the stakesTransparency around decision-making ControlTop-down decision-makingManagement approvalCommitteesPlanning and process valued more than results88

ExceptionsControl can be important in emergencyNo time to take long-term capacity-building viewControl can be important when someone is still learning their areaTakes time to pick up the necessary contextControl can be important when you have the wrong person in a roleTemporarily, no doubt89

Managers: When one of your talented people does something dumb, don’t blame them.Instead, ask yourself what context you failed to set.90

Managers: When you are tempted to “control” your people, ask yourself what context you could set instead.Are you articulate and inspiring enough about goals and strategies?91

Good ContextLink to company/functional goalsRelative priority (how important/how time sensitive)Critical (needs to happen now), or…Nice to have (when you can get to it)Level of precision and refinementNo errors (credit card handling, etc.), or…Pretty good/can correct errors (website), or…Rough (experimental)Key stakeholdersKey metrics/definitions of success92

Why Managing Through Context?High performance people will do better work if they understand the context93

Investing in ContextThis is why we are so open internally about strategies and results94

Highly Aligned, Loosely CoupledThree Models of Corporate TeamworkTightly-Coupled MonolithIndependent SilosHighly Aligned, Loosely Coupled95

Tightly-Coupled MonolithsSenior management reviews and approves nearly all tacticsLots of x-departmental buy-in meetingsKeeping other groups in agreement has equal priority with pleasing customersMavericks get exhausted trying to innovateHighly coordinated through centralization, but very slow, and slowness increases with size96

Independent SilosEach group executes on their objectives with little coordinationWork that requires coordination suffersAlienation and suspicion between departmentsOnly works well when areas are independentE.g. GE: aircraft engines and Universal Studios97

The NA Sales ChoiceTightly-Coupled MonolithIndependent SilosHighly Aligned, Loosely Coupled98

Highly Aligned, Loosely CoupledHighly AlignedStrategy and goals are clear, specific, broadly understoodTeam interactions are on strategy and goals rather than tacticsRequires large investment in management time to be transparent and articulate and perceptive and openLoosely CoupledMinimal cross-functional meetings except to get aligned on goals and strategyTrust between groups on tactics without previewing/approving each one – groups can move fastLeaders reaching out proactively for ad-hoc coordination and perspective as appropriateOccasional post-mortems on tactics necessary to increase alignment99

Highly-Aligned Loosely Coupled teamwork effectiveness is dependent on high performance people and good contextGoal is to be Big and Fast and Flexible100

Pay Top of MarketPay Top of Market is Core to High Performance CultureOne outstanding employee gets more done and costs less than two adequate employeesWe endeavor to have only outstanding employees101

Three Tests for Top of Market for a Person What could person get elsewhere?What would we pay for replacement?What would we pay to keep person?If they had a bigger offer elsewhere102

Takes Great JudgmentGoal is to keep each employee at top of market for that personPay them more than anyone else likely wouldPay them as much as a replacement would costPay them as much as we would pay to keep them if they had higher offer from elsewhere103

Titles Not Very HelpfulLots of people have the title “Major League Pitcher” but they are not all equally effectiveSimilarly, all people with the title “Senior Marketing Manager” or “Director of Engineering” are not equally effectiveSo, the art of compensation is answering the Three Tests for each employee104

Annual Comp ReviewHiring is market-based at many firms, but at CA we also make the annual comp review market-basedApplies same lens as hiringEssentially, rehiring each employee each year, for purposes of compAt annual comp review, manager has to answer the Three Tests for the personal market for each of their employees105

No Fixed BudgetsThere are no centrally administered “raise pools” each yearInstead, each manager aligns their people to the market each year – the market will be different in different areas106

Annual Comp ReviewSome people will move up in comp very quickly because their value in the marketplace is moving up quickly, driven by increasing skills and/or great demand for their areaSome people will move down or stay flat because their value in the marketplace has moved down or stayed flatDepends in part on inflation and economyStill top of market, though, for that person107

Compensation Not Dependent on CA SuccessWhether CA is prospering or floundering we pay at the top of the marketi.e., sports teams with losing records still pay talent the market rateEmployees can choose how much they want to link their economic destiny to CA success or failure by deciding how much CA stock or stock options they want to own108

Bad IdeasManager sets pay at Nth percentile of title-linked compensation dataThe “Major League Pitcher” problemManager cares about internal parity instead of external market valueFairness in comp is being true to the marketManager gives everyone a 4% raiseVery unlikely to reflect the market109

When Top of Market Comp Done Right…Nearly all ex-employees will take a step down in comp for their next jobWe will rarely counter with higher comp when someone is voluntarily leaving because we have already moved comp to our max for that personEmployees will feel they are getting paid well relative to their other options in the market110

Versus Traditional ModelTraditional model is good prior year earns a raise, independent of marketProblem is employees can get materially under- or over-paid relative to the market, over timeWhen materially under-paid, employees switch firms to take advantage of market-based pay on hiringWhen materially over-paid, employees are trapped in current firmConsistent market-based pay is better model111

Employee SuccessIt’s pretty ingrained in our society that the size of one’s raise is the indicator of how well one did the prior year – but at CA there are other factors too – namely, the outside marketIn our model, employee success is big factor in comp because it influences market valueIn particular, how much we would pay to keep the personBut employee success is not the only factor in comp, so the linkage of prior year performance to raise size is weak112

Good For Each Employee To Understand Their Market ValueIt’s a healthy idea, not a traitorous idea, to understand what other firms would pay you, by interviewing and talking to peers at other companiesTalk with your manager about what you findMinor exception: interviewing with groups that directly compete with CA, because their motive is in part confidential information 113

EfficiencyBig salary is the most efficient form of compMost motivating for any given expense levelNo bonuses – just include in salary – so much simplerNo free stock options – just big salaryGreat health plan options, but high employee co-payNo philanthropic matchInstead, put all that expense into big salariesGive people big salaries and the freedom to spend as they think best114

Optional OptionsEmployees can request to trade salary for stock options, if they wishThe options are fully vested, granted monthly, and cost employees in pre-tax salary approximately half of what such an option would cost in the open marketOptions ultimately valuable only if CA stock climbs over the next 10 yearsInvesting in CA stock or stock options lets on participate in CA success or failure at whatever level is comfortable for employee115

In some time periods, in some groups, there will be lots of opportunity and growth at CASome people, through both luck and talent, will have extraordinary career growth116Promotions & Development

Baseball Analogy: Minors to MajorsVery talented people usually get to move up, but only true for the very talentedSome luck in terms of what positions open up and what the competition isSome people move to other teams to get the opportunity they wantGreat teams keep their best talentSome minor league player keep playing even though they don’t move up because they love the game117

CA Doesn’t Have to be For LifeIn some times, in some groups, there may not be enough growth opportunity for everyoneIn which case we should celebrate someone leaving for a bigger job that we didn’t have available to offer themIf that is what the person prefers118

Two Necessary Conditions for PromotionJob has to be big enoughWe might have an incredible manager of something, but we don’t need a director of it because the job isn’t big enoughIf the incredible manager left, we would replace with manager, not with directorPerson has to be a superstar in current roleCould get the next level job here if applying from outside and we knew their talents wellCould get the next level job at peer firm that knew their talents well119

TimingIf manager would promote employee to keep them if employee were thinking of leaving, manager should promote now, and not waitBoth tests still have to be passedJob big enoughSuperstar in current role120

DevelopmentWe develop people by giving them the opportunity to develop themselves, by surrounding them with stunning colleagues and giving them big challenges to work onMediocre colleagues or unchallenging work is what kills progress of a person’s skills121

DevelopmentFormalized development is rarely effective, and we don’t try to do itE.g. Course, mentor assignment, rotation around a firm, multi-year career paths, etc.High performance people are generally self-improving through experience, observation, introspection, reading and discussionAs long as they have stunning colleagues and big challenges122

Individuals should manage their own career paths, and not rely on a corporation for planning their careersLike retirement planning – safer as individual responsibility123

Individual’s economic security is based upon their skills and reputationWe try hard to consistently provide opportunity to grow both124

Why is culture important?What is our culture trying to support?125

Culture is How a Firm OperatesWhat practices give CA the best chance of continuous success for many generations of technology and people?126

Continuous Success = Continuous growth in revenue, profits and reputation127

Need a culture that supports rapid innovation and excellent execution128Both are required for continuous growthThere is tension between these two goals; between creativity and discipline

Need a culture that supports effective teamwork of high-performance people129High performance people and effective teamwork can be in tension also – stars have strong opinions

Need a culture that avoids the rigidity, politics, mediocrity, and complacency that infects most organizations as they grow130

This slide deck is our current best thinking about maximizing our likelihood of continuous success131

Our culture is a work in progressEvery year we try to refine our culture further as we learn more132

NA Sales Culture

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