Rocketing to Success – The Mechanics of Sound Organizational Growth

Pari: Hello, and welcome to a brand-new episode of Zinnov Podcast – Business Resilience series. I’m Pari Natarajan, CEO of Zinnov, and I’ll be your host today.

The last few decades has witnessed the creation of a new industry category called Enterprise Software. The industry is dominated by the tech giants and still there are very interesting entrepreneurial companies that have found their niches.

One such success story is Rocket Software, a leader in mainframe infrastructure software. To shed light on the evolution of Rocket Software, the lessons learned along the way, and the best practices that helped propel the company into one of the most respected software brands in the world, I have with me, Andy Youniss, President and CEO of Rocket Software. Andy co-founded Rocket Software in 1990 and continues to guide the company’s growth through strategic technology investments, acquisitions, and partnerships, including actively managing Rocket’s longstanding relationship with IBM. A software engineer by trade, Andy understands the importance of building software that matters.

Welcome, Andy. Great to have you with us today.

Andy: Thanks, Pari. Looking forward to the conversation.

Pari: Great. I must start by bringing up the unique name – Rocket Software. What was the genesis of the name?

Andy: Well, when we started Rocket, we had this dream to be rocket scientists. My business partner and I, when we co-founded the company, thought it would be great to call ourselves rocket scientists. In fact, in our early days, if you looked at our business cards you would see my name, Andy Youniss, and my title was ‘scientist.’ And we thought that was really clever. And, we brought the business cards to our meetings and many of our customers looked at that and they didn’t quite understand what that meant. So, we got rid of the clever title ‘scientist,’ but kept the name rocket. It’s a name that seems to resonate across generations, across geographies, across languages and culture. And so, we moved on from calling ourselves rocket scientists, but we’re still Rocket Software.

Pari: Amazing. So, you have kept the name for the last 30 years of the journey. That’s great. And your journey of building up a multimillion-dollar company from scratch is a fascinating one. Give us a glimpse into how you built Rocket from the grounds up. I know you can write a book on this, but what are the key insights behind the company and the key inflection points in the journey or the last 30 years?

Andy: You know, from the beginning, we had a – I think, a pretty simple idea – which was, we wanted to make sure that we were good listeners and we built good software. In other words, we wanted to listen to what our customers needed and deliver exactly what they needed when they needed it. We said from the beginning that we would win with real products that solve real problems. That sounds like a simple idea and a simple plan, but it’s something as we look back on 31 years, it’s something we really stayed true to, year after year. We like to put our customers first; we like to make their agenda, our agenda, but we also back it up with good technology. We say that’s our value proposition to our customers – real products that solve real problems.

Our first test of that was in our early years. We had built some technology for IBM mainframe customers. We were lucky enough to have the opportunity to enter a partnership with IBM. And the first thing that IBM did before they entered that partnership is they took our software for a test drive. The product was really tested hard by IBM engineers for quality, for performance, for accessibility, and reliability. We were so proud when our products, right away, passed those really rigorous tests from IBM. That was our first inflection point – was entering our partnership with IBM.

We’ve had multiple growth phases since then, but if you look back across – all of those, you would say the common thread was that we either built good products or acquired good products, and made sure those products absolutely worked and solved real problems. And we like to say really hard technical problems for the most demanding customers in the world.

Pari: Got it. So, it sounds basic, but very hard to do, like listening to the customer and building great products, solving very hard technical problems, and focusing really on the product. Right now, there is – it’s fashionable to focus on a lot of other things outside of the product, but really that’s a differentiation, and that helped you tide through several different inflection points over the last 31 years.

There is this notion that talent predominantly is in the West Coast of the US. And that’s where most of the tech giants are being built. And Rocket’s headquarters is in Boston. How easy or difficult was it for you to build and attract this high-quality talent who can solve these customer problems?

Andy: There’s no doubt that Rocket’s Headquarters, and I would say our cultural center is here, in Boston. This is where the company started. And, in the early days of the company, we were competing for talent with a lot of brand name companies at the time – who, by the way, don’t exist anymore.

But we competed hard to find talent. And what we learned, it was really hard as a start-up – as a brand that people didn’t know, it was really hard to attract talent. And so, in our early days, we had a strategy of acquiring talent. So, after our first decade, we started acquiring businesses, which really gave us access to software engineering talent. Our first set of targets were in the Boston area. In fact, I think our first five acquisitions were Boston-based companies. So that allowed us to stay in Boston and really acquire our way into a talent base.

But we soon grew from Boston to today, almost every geography in the world. And so, Rocket’s success over 31 years can be tied to the talent that has joined us – either talent that we’ve hired or talent that we’ve acquired on the East Coast of the US, on the West Coast, and then to Europe – Eastern Europe, Western Europe, Japan, China, India as you know, well, you and I worked closely on our growth strategy in India.

We have talent in almost every geography – that diversity of talent, that diversity of background, that diversity of experience, that diversity of histories, of languages, of culture. Right now, we’re 2,500 Rocketeers and the diversity of our Rocketeers in every geography all around the world is really the strength of our foundation. Our Rocketeers, who’ve joined us – and really adopted our culture again, of putting our customers first of developing great software, making sure our software has high quality, but also, is innovative at the same time. We can only do that with this amazing talent base that we have across the world.

Pari: Very interesting how you started and you did acquihire even before the term was coined. Like I think, you did it 20 years ago. And you’ve now expanded to all of these locations across the world. But, how do you ensure the organizations true to the value system? And even though they have diverse ideas and diverse backgrounds, they’re aligned to the value system. So as a CEO, what are things you do to be able to get that alignment?

Andy: So, our core values at Rocket, are not just words that we put up on posters on the walls or put in plaques in our conference rooms. These values have been with us from the very beginning and are really essential to who we are as a company. We’ve simplified our values down to four words: humanity, empathy, trust, and love. We talk about them internally. We talk about them publicly. It’s hard for me to get through any talk without bringing up our core values. We model those behaviors. We talk about them, but we model them. We celebrate when Rocketeers exhibit our values and we’re very accountable for these. In other words, we hold ourselves accountable to living these values.

If you follow my monthly letter that I publish on our website, I’ll talk about our values. And I’ll say we try, we strive to live up to these values every day. I’m sure there are days where there are some Rocketeers that don’t live up to those values. I’m sure there are days that I don’t live up to those values, but we’re open about it and we’re honest about it and we hold each other accountable to this. And it’s consistently living the values, which makes it easier for new Rocketeers to follow along.

Now, look, before the global pandemic, I traveled a lot. I traveled to all of our offices around the world, I told stories. Again, we celebrated our values, which made it much easier. Now, in this configuration we’re in now where we can’t travel and we’ve all been working from home, it does make it a little bit more difficult. But we’ve amped up our communication at Rocket – the frequency of communicating the content of our communication. We have to talk about it more. We have to celebrate, we have to be good role models more than ever before, because it’s harder to do in this configuration.

The last thing I’ll say, Pari, is that our value system of humanity and empathy and trust and love isn’t a value system for everyone. And what we’ve seen over 31 years is Rocket has become a place that people self-select into. If these values resonate with who you are as a person, if you do want to treat people well, if you are able to and really get energy from putting yourself in other people’s shoes, if being accountable and delivering on commitments, and then loving each other and loving what you do – if that’s where you get your energy, that Rocket is the perfect place for you.

What we notice as we hire people, and as we acquire new businesses, this value system resonates with some and doesn’t resonate with others. When I look across the 2,500 Rocketeers we have, I would say the overwhelming majority of Rocketeers really understand and live our core values. And it doesn’t matter again – your history, your background, your language, your culture, where you came from, where you live. These values are really global and something that is deep in our core.

Pari: That’s very inspiring, Andy. You’re able to communicate as well – live the value. And interesting is, your value system is able to translate to talent across the globe, wherever they are, they’re able to connect and they’re able to join the journey of Rocket.

So, Andy, what would be, some of the key advice you would like to give the entrepreneurs who are in the early stages of building enterprise software companies?

Andy: As you can imagine, I’ve talked to many young entrepreneurs who are just starting out on their journey. I think I talk about two things. One is commitment. And the other is consistency. So, commitment – whatever it is you’re going to do whatever your vision and is, you’ve got to commit yourself a 100% of yourself to the journey. People talk about work-life balance, and it’s really work-life integration. When you’re starting off on an entrepreneurial journey, you have to commit everything, every moment of every day to the mission. And then consistency – you have to wake up every day and do it over and over again and again.

So, I think commitment and consistency are two pieces of advice. And I would also just remind everybody that there are multiple ways to run a business. But, you have to believe in something. What is it that you believe in? The advice that I would give young entrepreneurs is a full 100% commitment to what you’re doing, the consistency of waking up every day and doing it day after day. And then having all of that with underpinnings of a value system, something you believe in – who are you and who are you trying to be? I think those are three really important ingredients that give you the best chance for success.

Pari: Today’s entrepreneurs have a lot of money available for them. They are looking at the valuation of companies. There are a lot of distraction and noise around them. So, how do you now silence yourself and focus on the areas you talked about – commitment and consistency – any best practices Andy, on that?

Andy: You know, Rocket has been around 31 years and we’ve lived through a lot of disruption. I think when Rocket started, the Internet wasn’t really a thing, if you will; the web wasn’t a thing. We lived through the dot-com bubble and burst. We lived through the global financial crisis. Most recently, living through the global pandemic. When there’s noise in the system, when there’s disruption, when there’s uncertainty, when there’s anxiety, what we’ve done at Rocket is we’ve doubled down on those things that are important to us. So that’s when we listen better to our customers or listen more to our customers. That’s when we stay true to who we are and build good technology. That’s when we really make sure we’re living our values.

When you stay true to your core, it gives you the ability to work through these noisy disruptive moments. I’ll also say that this is where talent is really important. This is when your team really shows their resiliency. And I think, through each of those disruptive moments, it’s the resiliency of Rocketeers that just makes me incredibly proud.

There are moments where you really have to dig deeper, stay true to who you are, commit more, kind of be more consistent. But that resiliency is also a muscle that, you want to be developing along the way and a muscle that you’re going to rely on through those disruptive moments.

Pari: Yeah, I’m pretty sure that the talent resilience also is an inspiration for you to continue to drive that.

And switching contexts, just want to talk about technology. And one of the big things that happened in the last year and everybody talks about is how digital transformation has accelerated in 2020, and how enterprises are moving into public cloud and hyperscalers. And how is this trend impacting Rocket that focus on mainframe technology?

Andy: I said, we try to be, we strive to be good listeners. And so, from the very beginning of this global pandemic reached out to our customer base and really wanted to hear from them how they’re thinking of their digital transformation journey. They had been somewhere, they are experiencing something, and they’re going somewhere. And so, where have you been, where are you now, where are you going, is kind of in the theme of what we’ve been listening in for.

We’ve actually done three different surveys with our customers, over the past, really, I think two years. And so we get a very real and accurate view of what our customers are thinking about with digital transformation. And I think the overall theme is most of our customers want to modernize. They want to innovate, but they want to leverage what they have, instead of throwing it away and starting over somewhere else. So, I like to call it modernization-in-place. Can our customers continue to optimize what they have and operate what they have, while at the same time modernize what they have?

In our world of mainframe, that might mean connecting mainframe technologies to other technologies. It might mean that the mainframe data is the most important asset in the business, but that data needs to be accessible by other applications that are not running on the mainframe. That might mean that mainframe applications need to be driven slightly differently than they have in the past. Maybe not monolithically, but more via APIs and microservices. It might mean that my mainframe technology applications, databases, transactional systems need to work in a more hybrid environment. And so, what would I would say, is our customer base – and these are customers really of all shapes and sizes all around the world – are really thinking about what is now called hybrid Cloud. I can’t bet on one technology, it can’t just be public cloud and it can’t just be on premise. I have to make sure my workloads are running in the right place, at the right time with each other, through the right topology.

You started when you introduced me talking of Rocket with a heavy emphasis on mainframe, which is true, but the mainframe of today and the way that customers use mainframe today, couldn’t be more different than what mainframe was 10 years ago, 20 years ago, 30 years ago.

Mainframe is as open as any other platform, it’s as modern as any other platform. It can certainly work well in a hybrid environment or a federated environment. And with all the technology that we brought to the mainframe, mainframe data can interoperate with any other data, mainframe applications could interoperate with any other applications, mainframe security can fit into anybody’s security topology. What we do at Rocket in and around mainframe is as modern and innovative as any other platform, any other computing platform.

Pari: Interesting, Andy. Mainframe itself is in a way – it’s evolved significantly based on what you’re saying. And you also don’t want organization to lose a know-how and data they have on these systems they’ve built over a long time, and they will just wait to modernize and allow that data and other know-how to be accessed with other technology areas. Make it more connected, secure using your technology, and that gives them the best of both worlds. Probably the best way for them to continue to evolve and innovate.

Andy, before I let you go, I’d like to ask you something not related to business. I know music is one of your passions. What is one album that everyone should have in the playlist, especially at this time?

Andy: Well, in my monthly letters that I publish I always include a mini playlist each month. They kind of capture the moment or at least the theme of what I’m writing about. Music is very personal and it is very emotional. But through this global pandemic, music has been something that I’ve turned to, even more than I usually do. I’m a musician. I love playing, I love composing, I love recording. I play both guitar and I play piano.

And one of my favorite songs since I was young is Here Comes The Sun from The Beatles. I shared this with Rocket early on in the pandemic, and also later on in the pandemic. The lyrics capture where we’ve been and where we’re going as a world through this pandemic. But that phrase, “here comes the sun and it’s all right,” really, emotionally moved me and hopefully gave everybody hope that there is sun on the horizon, that the ice is slowly melting, that the smile is going to be returning to our faces. I hope everybody stays healthy and safe and here comes the sun.

Pari: Thanks, Andy, hope is a good thing in men – from the movie Shawshank Redemption – it says, a good thing never dies.

It is truly an enlightening conversation with you, Andy. Not only did we learn about Rocket Software journey from inception till today, but also a lot about your thought process, your passions, your thinking that have gone into making Rocket what it is today.

We hope that our listeners found this episode as insightful as we did, and that can drive them in their own journey to build companies that will stand the test of time.

Andy: Pari, thank you.

Pari: Thank you, everyone for tuning into this episode of Zinnov Podcast – Business Resilience series. Have a fantastic time ahead, and we will be back with another episode with a different leader and different perspectives.