Christopher W. Cabrera is not the same leader he was when he founded Xactly Corp. more than a decade ago.
“The story I share with my team and with new people is the idea of reinventing yourself,” Cabrera says. “The notion of what got me here isn’t going to get me there. It’s so true in a company growing this fast. I just learned early on that for me to survive, I have to continually reinvent myself and recognize that everything I was doing at each stage was great at that stage, but it needed to be different.”
Xactly provides cloud-based incentive compensation solutions for employee and sales performance management.
These solutions are used to optimize incentive compensation and drive behavior by automating manual processes and streamlining workflow.
The company was founded in 2005 and completed its initial public offering on July 1, 2015.
Revenue for the first nine months of 2015 was $55.3 million, up from $45.3 million for the same period in 2014.
“Taking something from an idea to ringing the bell at the New York Stock Exchange has been an amazing experience,” says Cabrera, the company’s founder and CEO. “There’s no question that it’s creating the right team chemistry and the right level of engagement. We’re in the business of helping our customers find ways to get their employees engaged and to drive better performance.”
The path to lining up more than 725 customers around the world has been filled with success stories. But Cabrera adds that going from 30 employees in Silicon Valley to more than 400 employees around the world still presented a few challenges along the way.
A simpler approach
Back in the early days of Xactly, Cabrera had a lot more time to get to know his people.
“We would have group lunches and do team dinners and go out and build homes for less fortunate people through Habitat for Humanity,” Cabrera says. “All those experiences were awesome and made for a really cool culture.”
Cabrera is still very proud of the culture, but the numbers have changed significantly. Xactly now has 100 employees in Denver and a team in Washington, D.C. In addition, the company has 100 employees in India and a few dozen more people in the United Kingdom.
As the company grew, Cabrera noticed that the focus on the 13 core values that represented what Xactly stood for had diminished a bit.
“I would walk around the halls and meet employees, even in our remote locations,” Cabrera says.
“I would stop them and say, ‘What do you think our core values are?’ Invariably, I’d get a blank stare and a panicked look across their face. It was obvious they didn’t know them and therefore they weren’t living them. I don’t think they were at all able to be convinced that we were living them as a company. That was the point where I said this is not working.”
Cabrera brought his team together and the 13 core values were whittled down to a more concise group of four: customer focus, accountability, respect and excellence.
“It’s only lasting and impactful if we can get to a point where no matter how many people we have, we can stop them in the hallway and they know what they are and can articulate why they are important,” Cabrera says. “We picked the four of the 13 that we believed were core and unbending. Serendipitously, it spelled out CARE.”
Each of the four principles is important, but accountability perhaps offers the key to making the core values an integral part of the company’s operation.
“We have high expectations of our people and when they don’t do what they say or they don’t live the core values, and we have had that happen from time to time, those people are removed from the culture very quickly,” he says.
“From me on down, the executives have to be living these core values and hold each other accountable to what we say and deliver on what we mean,” Cabrera says.
“Something might come up where there is a question. What are the CEO and executive team going to do? Are they going to invoke the core values? Or are they going to make an exception and scoot around this? I’d like to think we always err on the side of believing in the core values.”
Nobody’s perfect, of course, and Cabrera says mistakes and missteps must be taken into account. But for the most part, he is confident that the core values are a solid part of the company’s foundation.
“I regularly bet people my paycheck to find an Xactly employee who has been here more than 30 days who isn’t able to articulate our core values and why they are important,” he says. “I’ve been doing that for years and have yet to have to pay up.”
Keep your promises
For many years, Xactly only supported a single language in its offerings. But as demand outside the U.S. began to grow, additional languages were added into the mix. It proved to be an enormous undertaking and deadlines began to be threatened.
“I can remember being in some meetings where the engineering team was highlighting, ‘Hey, this is more work than we thought. Looks like we’re going to miss this deadline we set,’” Cabrera says. “It would have been no big deal and probably wouldn’t have mattered that much to the customers if we had said, ‘Hey, guess what, we’re going to miss on this by two months.’ We could have gone on doing our business.”
Instead, the feeling in the room amongst team members was that doing so would have represented a failure to keep a promise.
“We’ve put a stake in the ground,” he says. “We’ve told our customer we’re going to deliver by this date. So even if it’s going to cost us a little bit of money and make our lives a little uncomfortable, come hell or high water, we’re going to hit that date. We rearranged some things so we could afford it and we doubled down our engineering efforts. Lo and behold, we made the deadline and delivered. Every one of those decisions matters.”
The tricky part for some companies is managing the needs of the customers and the ability to grow the business with the resources on hand and what those resources are capable of providing. When there is disagreement on the latter, it can quickly lead to tension.
“You have to create an environment and culture where it’s safe to tell the truth,” Cabrera says. “It’s safe to tell management not what they want to hear, but what’s real. That’s a tough culture to create. I think as much as possible, you root out politics. You root out people caring more about hierarchies than the truth. We’ve done a good job of that by not killing the messenger because you don’t like the message.”
Incentives have proven to be helpful in this area. The key to their success is setting them across multiple departments or areas of the company.
“It creates this teamwork and cohesion for wanting to help out other groups,” Cabrera says. “If they just do their own little silo and their one group does well and the other three don’t, we don’t all win. It’s this notion that we all live together.”
Cabrera isn’t afraid to add resources, including new hires, to help the company perform at its best. But he takes a measured approach to such decisions.
“We don’t just go back to the till and throw another $2 million of loss on the books,” he says. “We say let’s do this so it fits into our overall plan of getting the company to profitability while maintaining these very nice and appropriate growth rates.”
Be willing to change
One area where Cabrera has become a little bit less conservative when it comes to operating the business is with hiring and internal advancement. The change came about when he underestimated the drive and desire of the millennials that the company had hired.
At the time, the expectation was that you would start at Xactly as an inside sales rep and stay in that job for four or five years before moving up. It was a path that Cabrera himself had followed in the early days of his career.
“These younger folks were so driven and energized and they wanted to be recognized amongst their peers for achieving things more quickly than this five-year thing,” he says. “So we changed the sales force.”
New levels were created and new opportunities to earn more money, more shares and more responsibility.
“It gave us an opportunity to take these super smart millennials that were so driven and create a track for them where they could keep seeing success in a shorter window,” he says.
And it was another opportunity for Cabrera to demonstrate his willingness to reinvent his leadership style when a new approach is needed.
“If you are self-aware and you have great mentors and coaches and people who are not sycophants, but are comfortable telling you your weaknesses, you create that environment,” he says. “You can change and be open to addressing opportunities to improve and reinvent yourself every step of the way.” ●
- Focus on what’s really important in your business.
- Don’t backtrack on your promises.
- Be willing to reinvent yourself.
The Cabrera File
NAME: Christopher W. Cabrera
TITLE: founder and CEO
COMPANY: Xactly Corp.
Born: Framingham, Massachusetts
Education: Bachelor’s degree in business, University of Southern California; MBA, Santa Clara University. I went through the entrepreneur program at USC and was recognized as the 2011 Entrepreneur of the Year.
What was your first job? My first job was the San Francisco Chronicle and I only did that for about eight months and then I moved to the San Jose Mercury News and I did that for five years. The paper route was how I made money all through high school.
Who has been the most influential person in your life? My father, Eduardo, who passed away about three years ago. He didn’t get to see the IPO at Xactly, but he would have loved it.
What did you learn from your father? He was a serial entrepreneur in the years when you didn’t raise money and do the venture capital thing to grow your business. Everything I learned about how to sell and how to treat people and how to build teams I learned from him.
Every summer, I was always at his office working. He was president of his own company. He treated everybody the same in the sense that, whether it was the janitor or another CEO.
He treated people respectfully and never talked down to them. He always wanted to get to know them and learn about them. He was the kind of guy who would give you his last dollar if you needed it. He didn’t play any politics with his team. What rubbed off on me was to create these apolitical environments as much as you possibly can. I don’t care what your title is. I just want to know what you think and what your feelings are.