As CEO of Aerocare, an airport services company based in Sydney, Australia, Steve Shelley had a problem. The management of his large and growing hourly workforce had become untenable. Constant shift changes, calls in sick and payroll complexities were sucking away management time. It was a drag on growth. Desperate to solve the problem, he decided to bring in a software engineer to automate tasks. That software engineer was Ashik Ahmed. The year was 2004.
Ahmed quickly got down to work, building out software solutions to such vexing issues as employee scheduling, time tracking, payroll preparation, employee communications, task assignment and performance management. As Aerocare’s growth began to accelerate, Ahmed’s software releases kept one step ahead, helping Shelley manage the growth of his company. Within a span of three years, the company’s employee count rose from 200 to 1400.
By 2008, the system Ahmed built had transformed workforce management inside Aerocare. So well, in fact, that Shelley had an idea. He approached Ahmed with a proposal — to launch a startup. They would spin out a separate company that could bring workforce management to other businesses with lots of hourly workers. Shelley fronted the money, covering expenses for the first year and a half. Ahmed took on the task of building the new company.
The first decision was to name the company. The name Ahmed came up with was “Deputy”. To Ahmed, “Deputy” conveyed the essential idea: for any business owner or CEO of an hourly worker-intensive business, we are your trusted deputy. Just like a valued COO or head of operations, your deputy takes care of all the nitty gritty details of workforce management.
Ahmed is a passionate, wicked smart leader with a hunger to change the world. Under his leadership, Deputy began with a vision to make the lives of shift workers and their managers easier. Since starting Deputy, he has seen first hand the thousand calamities that befall business owners and managers as they seek to staff their businesses to meet demand, pay their people properly and give employees information updates related to their jobs. From the “I can’t make it to work today” text that arrives at 5 AM Monday to the “you didn’t pay me the right amount” email received at 11 PM on a Sunday, the job of managing shift workers is never done. And the more a company scales, the more the complexity rises.
It’s not just managers and business owners who struggle. Too often shift workers find themselves overwhelmed or underworked, left in the dark, struggling to get a payroll mistake fixed or forced to dial through their rolodex seeking someone to swap shifts with.
Ahmed built Deputy to solve these problems. For five years he kept the company small. Time was needed to sort things out. Ahmed focused first on the restaurant and hospitality verticals. Soon businesses from other verticals were expressing interest. This led him into new problems and workflows. As it turned out, some product requirements proved to be universal; others proved to be unique to one vertical or another. Deputy had been built for Aerocare, a large business; but it quickly became clear that the needs of small businesses were at least as compelling.
Ahmed had to figure out the verticals and company size profiles he would focus on. It took a lot of testing and iterating to nail the ideal customer profile, and then build a product sufficiently comprehensive to meet its needs. Pivots abounded, including a big one in 2012. Even by 2013, Deputy had only 150 customers, with revenues under $1M.
Eventually the product matured. It began to take hold with customers, especially SMB firms. By 2016, revenues were approaching $10M. As of the end of 2018, Deputy was serving 110,000 locations and growing fast. Though the 2018 revenue number is private, revenues doubled from the previous year. That revenue growth provided the traction proof that fueled an $80M funding round in November 2018, bringing its total funding since inception to over $100M.
Today almost half of Deputy’s new customer growth is driven by viral effects. Hourly workers who have used Deputy and have moved on to new jobs encourage their new employers to adopt the platform. The onboarding experience is now fully digital; a new prospect discovers a seamless experience from website arrival through to platform adoption and implementation.
Deputy’s future is bright. 60% of the global workforce is comprised of hourly workers. The company has expanded beyond its Australian roots, gaining footholds in the US, Europe and Asia. It is moving up market from SMB to mid enterprise and beyond. Large global enterprises are beating down the door.
Of course, to take full advantage of the opportunity, Deputy must evolve into a fit systems enterprise, capable of fulfilling its generative and adaptive imperatives at scale.
What can the story of Deputy teach us about the fit systems enterprise? The answer is “a lot.” In full disclosure, I have been privileged to serve as coach to Ashik Ahmed, Deputy’s CEO — so I’ve had an inside view. It is my honor and privilege to serve such a gifted leader. I am thankful he has given me permission to share his story with you.
Let’s explore how the eight key attributes of the fit systems enterprise are brought to life by the story of Deputy.
1. In the face of continuous change, the fit systems enterprise relentlessly pursues a customer centric, world-improving Virtuous Vision
Before Deputy was even founded, Ahmed spent four years addressing the workforce management needs of just one company. I have said before that the best way to start a B2B software company is to spend a lot of time solving the needs of just one or a few visionary customers. This was the case with Deputy. Even after it became an independent startup, Deputy stayed small for a long time. This long incubation period gave Ahmed the time he needed to deeply immerse in the customer’s problems — time to get it right.
Even as he began to scale, he kept attentive to unmet customer requirements. Speaking of those early days, Ahmed said, “Every time somebody didn’t sign up, I’d personally contact them. One in four people would respond. Whatever we learned allowed us to really hone in on how we could improve.”
Because he came to know his first customers so well, he developed an emotional connection to their struggles, a rich understanding of their practical needs and an abiding passion to serve them. To this day, that customer centricity is a hallmark of Deputy.
From the beginning, Ahmed has pursued a single virtuous mission: “To serve and protect business owners by making it easier to manage employees and perform related tasks, saving them time and money so they can do the things they love. Deputy is the trusted and dependable second-in-charge.” In turn, this mission makes virtuous the company’s vision statement (“Every shift worker in the world on Deputy”)¹.
2. To do this, the enterprise must advance two imperatives: to be Generative, and to be Adaptive. Being generative (continuously creating new value) is always the first priority; being adaptive (increasing resilience, scalability and efficiency) is second
Customer centricity at scale requires both generative and adaptive acts. The product has to be sufficiently configurable that it can serve multiple sizes of customer, multiple verticals and multiple regions and languages around the world. Making it so is a generative act. What’s the result? Success. And with success comes growth. Growth increases complexity. It requires teams to subdivide, increasing communication and alignment challenges. This in turn requires the building of feedback loops throughout the company to increase resiliency. To stay responsive, teams need the autonomy to act on data in fulfillment of business purpose. And limits to growth need to be quickly discovered and attacked, so as to increase scalability. These are adaptive acts.
As Deputy’s customers have expanded from coffee shops to Qantas Airlines and everything in between, Ahmed has been attentive to both the generative and adaptive imperatives — creating a product capable of serving an ever-widening array of customers, and a company capable of serving them well. For Ashik Ahmed, no measure in the business is more important than Net Promoter Score (NPS). This measure of customer satisfaction is trended over time. As Deputy scales, NPS is everyone’s constant reminder to remain customer centric.
The generative imperative is (and has always been) top priority at Deputy. Many companies are passionately customer centric at the beginning, but then lose their generative edge as they scale. Not so at Deputy. For example, in 2018 alone, Deputy released a plethora of product improvements. It launched a brand new dashboard; multi-language support; an employee break planning feature; integrations into multiple payroll, point of sale and HR systems; and new mobile features for employees and managers. But perhaps the most significant product improvement in 2018 was its auto-scheduling feature. This feature, powered by AI, helps managers optimize staffing levels to address changing patterns of demand.
Says Ahmed: “I’m excited about the innovation involved in the world of AI, how it automates tasks that used to bog down business owners in the back office. Our goal is to bring this type of innovation to smaller businesses to make a real difference.”
Deputy’s commitment to continuous product innovation means that Deputy customers experience continuous value enhancement over time. It’s not surprising that Deputy’s retention rates and NPS scores are so high, and that the product exhibits such strong viral effects.
In 2013, Ahmed began to realize that it would be prohibitively expensive to sell SMB customers via a sales team model. He decided to invest product and engineering resources to build a self-service experience. In a self-service model, simplicity is everything. If the user can’t quickly figure out what to do, she will abandon the attempt. Ahmed and the technical team embraced the challenge, and the result was what Jim Goetz of Sequoia Capital has called a “Sales Ready Product.” This is a product in which the “first mile” of the prospect journey (from initial online discovery to purchase) is so seamless, no human sales support is needed.
Ahmed’s intense focus on product excellence has resulted in raving fans and rapid growth. With that growth has come rising organizational complexity. Ahmed has worked hard to detect limits to growth inside the business, and attack them with creative solutions. He is fiercely data driven. He has built feedback loops everywhere to inform decision making, and he expects executives and managers to make data driven decisions.
3. When conceiving of the enterprise, the Systems View is primary; the functional view must be secondary
Most executives conceive of their enterprises in function-centric terms. Not so with Deputy’s CEO. Ahmed is a systems thinker. He sees that his business is comprised of systems, such as the revenue engine system and the product management system. These systems are made up of domains in which people, workflows, technology and money flows work together to drive business outcomes. When Ahmed encounters a limit to growth, he challenges executives to reassess the system — its people, workflows, technologies and money flows — and then make adjustments to remove the limiting factor.
Ahmed understands the difference between the product discovery system and the product management system. He has organized his technical domain teams accordingly. Inside his revenue engine system, the requirements of company size profile, vertical and region are kept in balance in organization design. He appreciates that within each system, process outputs must serve business outcomes. He knows that many of the most significant business outcomes (such as with product development and market development) occur as a result of cross-functional coordination, and so he has built cross-functional teams that can work effectively within their systems and domains to advance a business purpose.
Functional leaders are important and valuable in building functional competencies within cross-functional teams. Deputy’s operating systems would be nowhere without good, strong functional leaders. But functions serve systems. At Deputy, functional silos are not tolerated.
4. The enterprise is comprised of Operating Systems (such as the revenue engine system and the product management system) that create results; and Meta Systems (such as the governance system and culture system) that exist to elevate the performance of operating systems
Meta systems make operating systems better. That’s certainly true at Deputy.
Somewhere around 2013, Ahmed made a pivotal product road map decision. He abandoned product customization, and pursued a path of product configuration. Customization is easier in the short term. It allows you to meet the corner-case need of the customer right in front of you. But it leads inexorably towards a messy technical environment.
Configuration, on the other hand, is harder in the short term. You need to separate yourself somewhat from the corner-case demands of a large customer, voiced by your head of sales. You need to think through the permutation configurations required in every vertical you want to serve. Then you need to build a platform that can support the most common configuration requirements with a simple user interface. It’s a lot of extra work — work that (at least in the short term) steals product and engineering time away from building brand new features.
Ahmed figured out a way to keep his platform flexible and capable of accommodating diverse customer needs without creating a spaghetti plate of customizations. Just as Salesforce did, Deputy launched a programming language (called DXML) that enabled customers to code their own configurations. But these were maintained in the data layer, not in the application layer — keeping the platform free from hardwired customizations. Ahmed understood that the product management system’s long term purpose was to serve a massive number of global customers across many verticals with a continuously evolving platform. Configuration enabled a modular, microservices based architecture.
The configuration decision was and is a great example of a systemic decision. Ahmed stepped back from his product management system. He realized customization would be a sure path to a monolith. As he devised the configuration strategy, he was working within a meta system (the strategy / planning / architecture system). The strategy he developed gave new direction to the operating system (the product management system). That’s how meta systems uplift operating systems.
Another operating system, the revenue engine system, has also been built with its long-term purpose in mind. In the beginning, sales was hand-to-hand combat. But then Ahmed focused product and engineering resources on building a Sales Ready Product. He wanted the first mile of the customer experience to be as frictionless as possible.
He then began to cultivate key channel partnerships, such as with payroll platforms Xero and Gusto, that accelerated customer adoption at a low customer acquisition cost. Now, as he moves towards mid-market and enterprise sales across the globe, Ahmed is working to get the balance right between company size profile, verticals, regions and functions (such as Marketing, Sales, Product and Engineering). He also continues to seek ways to automate human steps. It’s a work in progress, always animated by a systems view. Here too we can see how the work of a leader in a meta system can ultimately lead to improvements in an operating system.
As Deputy has scaled, Ahmed has kept his eye on a third operating system, the cash management system. He knows that every funding event can only occur once you have achieved a value inflection point. It requires a story of global opportunity, combined with proof of traction. Assuming a large opportunity, it’s the traction proof that most spikes value. Traction makes an enterprise fundable. Deputy’s explosive growth rate in 2017 and 2018 set the stage for raising $80M in November of 2018. Cash management is a system: to create traction requires investments. But investments increase your burn, which reduces the time you have to raise money. You have to keep the system in balance. In 2018, Ahmed balanced these variables with care, resulting in a game-changing funding event.
Today, much of Ahmed’s time is invested in improving the company’s meta systems. The $80M funding event in 2018 precipitated a significant expansion of his board. As such, the governance system now occupies more of his time. The critical review and strategic perspectives of his board influence his strategic decisions. He has also worked to improve the strategy / planning / architecture system. With scale, the maintenance of alignment at the top has become a first order concern. Ahmed has adopted Saleforce’s V2MOM model (Vision, Values, Methods, Obstacles and Measures) to ensure each individual’s role is in alignment with overall business purpose. Every executive, mid-manager and frontline employee is now expected to articulate and gain approval for his or her own V2MOM.
As the company has grown, Ahmed has devoted more time to the evangelization of the company’s culture. When the company was smaller, the culture emerged naturally, influenced by Ahmed’s daily acts of interpersonal engagement. But now, with the company spread across the globe, more formal means of cultural evangelism are required. He and his executive team have devised a short list of “shocking values” (such as “think big or go home”, and “it’s the service stupid”) to convey the essence of the Deputy culture. Ahmed has built cultural values into his one-on-one employee meetings and town hall speeches, as well as into hiring, recognition and performance assessment systems.
He has paid particular attention to the DataOps system. For Ahmed, Deputy’s data infrastructure is like the electrical power grid. It’s mission critical. As a data driven leader, it is a top priority for him to ensure the right data is put in the right hands throughout the enterprise at all times. Ahmed has made the necessary investments in data infrastructure to enable data-driven decision making. Similarly, he has partnered with his heads of product and engineering to build a strong engineering system, characterized by a commitment to reactive microservices architected systems, cross-functional technical domain teams and disciplined agile delivery methods.
5. The fit systems enterprise features Domain Driven Design — both in its technology design and in its organizational design. All systems in the enterprise are made up of domains; these domains integrate people, workflows, technology and money flows to achieve business outcome objectives.
To build modern technical systems, architects start with the principles of domain driven design (DDD). In DDD, he evolving model formally expresses a clear domain boundary. Within the boundary is a defined bounded context. DDD leads to microservices architected systems, in which services are isolated and loosely coupled with each other, enabling asynchronous message passing via APIs. This modular design enables scalability, supports fail-over, ensures systems can be modified more easily over time, enables spiky data needs with elasticity in the cloud, and other positive technical attributes.
Deputy’s technical systems are architected as microservices. And as Conway’s Law would predict, Deputy’s technical organization design is also domain driven. The following image shows some of the development squads in Deputy. Note that functional leaders (such as head of product management, head of mobile, head of QA, etc.) are to the side, while feature-based, cross-functional squads (domain teams) are the primary organizational form.
Today, the organizational application of domain driven design within Deputy exists primarily on the technical side of the business, although its regional sales teams also possess some attributes of a cross-functional domain team structure.
6. In the fit systems enterprise, data access is democratized; there are Feedback Loops Everywhere
From the companywide operating metrics executives use to track overall performance, on down to the metrics dashboards used by domain teams, data is everywhere at Deputy. The following screenshot shows some of the operating metrics tracked at the executive level:
Data driven decision making is a baseline expectation at Deputy. For instance, one technical domain team is dedicated to growth hacking. It continuously seeks ways to exploit SEO and initial website visits, and then maximize conversion at every step to right up to payment through a continuing series of data driven A/B tests. It’s just one example of the role data plays at Deputy.
Here is an internal application built by Deputy, showing a map of Deputy customers by location throughout the world. It is used to assess viral adoption, compare penetration levels by region and identify patterns in customer data. This particular map shows customers in Sydney, Australia:
Dashboards proliferate throughout Deputy, visualized with numbers in rows, maps, time series graphs and pie charts. And workers use them to do their jobs. Deputy’s underlying data infrastructure supports data democratization, enabling it to be a data driven company.
7. The fit systems enterprise exhibits rising Digital Leverage: its systems are built via reactive microservices architecture; its data infrastructure is modern and cloud-based; and its technical domain teams pursue disciplined agile delivery methods to build powerful solutions
Technical solutions emerge from a deep understanding of the problem to be solved. Ahmed says it this way: “I’ve spent my career devoted to building technologies that create better, more efficient organisations. Before solutions are created, you need to deep dive on an issue and workshop how to solve it. The insights and learnings gathered in that process are the greatest surprises of the whole journey.”
That’s the core principle behind domain driven design. Understand the problem deeply enough to draw clear boundaries around each domain. That way, you can build software modularly. In turn, domain driven design pairs naturally with reactive microservices architecture, self-organized technical domain teams and disciplined agile delivery methods. All of these are hallmarks of Deputy’s approach to its technical systems development.
8. The fit systems enterprise exhibits a key foundational asset: “In The Loop Leaders”. They are ethically grounded, digitally literate systems thinkers. These leaders focus most of their attention on advancing a virtuous vision, improving the meta systems, ensuring domain team autonomy and increasing the density of 10Xers in high variation domains
Ahmed has a saying: “You don’t choose your passion; your passion chooses you.” He is passionate about Deputy. His commitment to architect a successful future for the company and to develop himself as a leader is total. Deputy is still young; there are many miles in front of this CEO and his executive team on the journey of company building. Nonetheless, it’s fair to say that Ahmed already personifies an In The Loop leader.
For Ahmed, integrity is everything. Whenever he faces and important decision, he first considers its ethical dimensions. As a systems thinker, he seeks to balance the needs of all stakeholders — customers, employees, investors and the community. He also balances now, near and far. In doing so, he integrates people, workflows, technology and money flows into his thinking.
Ahmed regularly reads comments posted by customers (even today, with hundreds of thousands of users interacting daily with the platform). “One of the things I do every night is to find time to go through Deputy’s support tickets and customer chats,” Ahmed said. “I read hundreds of conversations to find out what our customers want and need. This practice helps with ideas since Deputy is very customer focused.”
There was a day when these negative customer comments would prompt fiery directives from the CEO office. Today, Ahmed has refocused that energy. Now he works to ensure he has in place the right people at all levels of the company — people who will care about and respond to customer feedback with the same level of passion he would bring. He still reads the feedback, but he uses it to coach. He’s made the shift from being a doer, to being a coach of doers, to being a coach of coaches.
As a systems thinker, Ahmed is on constant lookout for limits to growth. Every Monday in his exec staff meeting, he and his fellow executives select the one problem in the business most significantly blocking growth. He then dedicates the entire day that Thursday (Ahmed does not allow any meetings to be scheduled on Thursdays) to attacking the problem (working side by side with whomever is responsible for the chosen area of improvement). He is there to ensure they get the resources and support they need.
Because of his technical roots (he studied Computer Science at the University of Melbourne), his digital literacy is high. He has already made many smart choices in the scaling of Deputy’s technical systems. While technical systems in scaling companies will periodically require refactoring, Deputy’s systems are more ready than most for accelerated growth.
Deputy is still in the early stages of scaling. Today, domain teams exist mostly in its technical squads — although Ahmed is considering how the domain team concept may apply to other systems in the company. These technical squads own business outcome objectives; they must decide what to build that will achieve them.
Ahmed understands that in high variation domains (such as technical teams) the difference between an average and a great worker is at least 10X. As such, spends a significant amount of time increasing the density of 10Xers inside his company.
Says Ahmed: “A person’s hunger will always triumph experience. When hiring, I evaluate a candidate’s attitude and passion for the mission to determine if they are a good fit. From there, we can train for skill but the kind of person they are and the soft skills they possess are far more important.”
Summary
In the fit systems enterprise, leaders understand the fitness journey is never complete. Deputy still has miles to go to fulfill its product vision. The company has barely scratched the surface of its global addressable market. Its technical systems, agile methods and technical organization design are still evolving and maturing. So too with its revenue engine system — and, for that matter, all of its operating systems and meta systems. And Ahmed and his executive team regularly find imperfections and limits to growth. Deputy isn’t a perfect company.
But what distinguishes Deputy is that its leaders search out these problems, draw them into the light, sort through their root causes and then mobilize initiatives to overcome them. Deputy is a fit systems enterprise because the pursuit of systems fitness is constant. In no small part, this is due to the passionate leadership of its CEO, Ashik Ahmed. He fits the profile of an In The Loop leader. He is an ethically grounded, digitally literate systems thinker.
I am confident in my prediction that Deputy will become a large global enterprise. It will transform workforce management for shift workers on the planet. It will be a top echelon business brand, known for product excellence worldwide. And its CEO will be a darling of the business press, featured in many articles (and at least one business book). Many will study and admire his approach to innovation and leadership. Mark my words.
Notes
- “Time-Saving Scheduling Software for Any Type of Business.” Deputy, n.d. https://www.deputy.com/.
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