McKinsey: In the early days of the COVID-19 crisis, how did Workday help its customers adapt?

Aneel Bhusri: When we built Workday, we weren’t thinking we’d be in a work-from-home environment like this. But it turns out that native cloud applications and our values system are very well suited to such an environment. We believe that if we take care of our employees—which included going to a work-from-home model across the globe in early March and giving all of our employees below the VP level a bonus the equivalent of two-weeks’ pay—they’ll be able to take better care of our customers. And several of our customers occupy the frontlines with essential workers, whether it’s delivery, like FedEx; whether it’s retail, like Walmart, Home Depot, or Whole Foods; or whether it’s a healthcare organization.

The biggest issue I would say these customers faced was massive change. OK, so our financial model has been changed. Our hiring model has been changed. How are we going to react? On the planning side, customers were running planning models 30 times more than they were just a year ago. And that’s the world we live in right now; the plan that you had two weeks ago might not be relevant today. We were having hazard-pay bonuses of a million employees in certain companies, things we’d never seen before. It was like every day the volumes were close to Christmas. And then I would say we saw our customers really innovate as well. One big manufacturer used the Workday reporting system to actually track COVID-19 cases around the globe and use that to distribute manufacturing capacity.

McKinsey: Many software companies are beginning to rethink what the future of work will be post-COVID-19. How will the sales force change? How will our customer support change? Even how will engineering change? What do you see as the kind of enduring change at the end of this pandemic when we start returning to work?

Bhusri: We are asking ourselves how to think through this environment almost every week as a management team. I think there’s some constants for us. Number one, our value systems drive teamwork and collaboration. And on the engineering side, I just don’t see remote work as a great option down the road. We’re getting through this period of time because we have to, and we’re making the best of it. But as soon as we can safely get people back in the office on the research and development side, we want to get people back in the office. I’m not a believer in the remote workforce in the long run. We have enough case studies from past generations that show, especially in areas that require collaboration, it’s just hard to innovate if you’re not together in person.

Now we might be more flexible going forward, in that you work four days a week in the office and one day a week from home. As relates to the sales and marketing side and people in the field, there’s more flexibility to be virtual. And I think what we’ve learned is they can do work virtually with our customers—in terms of Zoom calls and implementations. We’ve now done hundreds of implementations completely virtually, which I never thought would’ve been possible pre-COVID-19, and we figured it out. And there’s definitely learnings from that experience that we’re going to be able to apply longer term, which will reduce our travel costs, reduce the time that customers have to travel, and I think actually will make for more cost-effective implementations.

McKinsey: What are you hearing from your own customers? Are some of them thinking of experimenting with different working models? Does it vary by industry?

Bhusri: I do think people are revisiting their office strategy. And if the work really is much more at the customer site, then they are thinking about how they might reduce their office complexity and office ownership going forward. And then you have other industries where I think it’s not really about the office; instead, it’s about the shop floor or it’s about the retail store; and they’re just thinking about how to take care of employees longer term in terms of giving them more flexibility with their schedules. Because I think one of the things we’ve learned through the process of COVID-19 is people get burned out, people get tired, and we need to give them more mental breaks than we had been thinking about before.

McKinsey: As companies are beginning to think about the future of work, and also about the return to work, a lot of companies are looking at it role by role. Workday helps your customers obtain a massive amount of data on individual roles. How do you see your tools helping them make these decisions about which group should come back to work?

Bhusri: There’s a lot of insight in that data. But let me start by saying it is our customers’ data. It’s not our data. If our customers are willing, we will aggregate that data in a very anonymized way to look for patterns. And we do have a big chunk of our customers doing that. And we can answer a lot of the questions you raised. What does the typical work environment look like for an engineer versus a salesperson versus a services person versus a marketing person? And we can help our customers make decisions about how they go back into the office post-COVID-19.

But most everybody, when you get into a detailed conversation and you talk about teamwork and collaboration, agrees that being in person is really critical. We are social beings, and we generate great ideas, and I think we inspire each other. So as we go through the next months of the COVID-19 crisis, I think people are going to be surprised and say, “No, we actually like office environments more than we had thought.” It might have been a novel thing for the first six months of the crisis, but this is not the future of work.

McKinsey: Technology is changing so much, on the human resources side, the finance side, and the recruiting side. How can software help make a dent in some of the diversity and inclusion issues that we’re facing?

Bhusri: As we began to go through this really challenging time of a health crisis, an economic crisis, and a social crisis, we took a step back and said, “Hey, some of these issues are going to pass, but this issue around social justice and equality is not going to pass. We have to dive in and address it.” We happen to be the HR provider for almost half of the Fortune 500. I think there’s a lot we can do. Number one on these issues is being open about the data. We’ve shared our diversity data. And if you want to improve on your diversity data, you have to first make it available, and then measure it, and then you can improve on it. If it’s all obfuscated, we’re not going to make improvements. And we can also help by pulling together best practices from our customers and creating mediums where we can share those best practices so we can all be better.

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