by Alan Moore on 22nd November 2017
I talk to Rod Drury CEO of Xero, an accountancy software company. We discuss the idea of legacy, beautifully written code, why beautiful businesses are the future, and why craftsmanship plays such a key role in Xero’s enterprise design and customer experience; how that relates to automation and AI. Can you scale beauty? Its a question I am often asked. My answer — yes. Accounting is one of those things we all have to do. It can be as ugly as nits. Or, it could be beautiful. A beautifully designed business this one, taking the simple logic of taking one of life’s absolute truths taxes (not death) in this instance, then turning the process into a thing of uncommon grace. Life enabling, Life Simplifying. Beautiful UX, beautiful businesses model. A CEO asked me the other day if any business could be made beautiful? I replied, “why would you want to do it any other way?” Rod Drury is a different sort of leader.
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Transcript of Interview:
I am here with Rod Drury, Founder and CEO of Xero and we are sitting here in New Zealand House. Rod, thank you so much for spending a little bit of time with us. Xero – tell me what Xero does.
RD Xero is a global small business planning platform, it started off in New Zealand and now we have over a million customers in 180 countries around the world. I have just been in London and we had our 5th Xero event for accountants and bookeepers with 2,000 attendees at Excel so business is flying here.
AM You talk about beautifully written software, can you explain to me how you got to that?
RD When we first looked at Xero we followed small business owners around at a time when Windows XP computer would take 7 minutes to boot up and they’d then go and put the jug on and come back and the first business thing would be to go online to their bank to see who had paid them overnight, but they wouldn’t process the data. So our first big design epiphany was how do we get those bank transactions loaded into Xero so when you log-in in the morning to Xero your bank transactions are there and then we gamely it. It is like a game of Tetris and you actually finish doing your books, every morning and you get right up to date and we tell you – you are all done. A small business has never been up-to-date with anything and what that simple design change means is that horror of small business trying to get your books ready the night before a VAT return is due, kind of goes away , you have got a real time daily view of the numbers, so design led thinking drives beautiful experiences.
AM So that kind of relates to something you also talked about which is human beings are driven by empathy and purpose and that there is a duty in a sense for business to really look at how we create quality human reactions in everything that we design.
RD So machines will do compliance better than humans will do, but what small businesses want from those accounting channels is the human nature, it is empathy, purpose, vision, it is a port, that is what the accounting channel and accountants give (?) in a machine driven world.
AM I am really interested in this idea of craftsmanship, you also talk about quality at Xero and that is very important to you
RD One of the things that I think distinguishes us at Xero is we write all of our own code, although code written is by Xero people that share our vision and are empowered to go and do great work and that delivers magical experiences and it is so neat, especially with AI machine learning we can surprise people and give them an unexpected experience which in turns brings delight. It’s fascinating watching what is happening in our industry, back to your original point, accounting was grey and there wasn’t a lot of love in it, but once you deliver these great experiences the pendulum swings, especially in a small business sector you can actually do beautiful business. It is things like paying your bills on time, not having, not funding your business based on other small business and all the data we see and we see the transactions from large businesses coming in, we can go and lean on large corporates and government departments and say hey do you understand that if you don’t pay your bills it has an impact right through the eco-system. We have had a lot of success talking about those very human things and just being very clear about the way that business works and you can do it in a high value way which creates, it is really paying it forward, and it creates good behaviour throughout the eco-system, so we love the idea of beautiful business as well.
AM The other thing that I am very interested in is this concept of openness, Xero works as a platform, it has an open API system. How did you, and why did you arrive at openness as a key business strategy?
RD Right from day one as we were building our first user interface features, we also built an API because we knew it wouldn’t just be is building accounting software, accounting software was a key systems of record and we wanted to make it easier for other people who are working in vertical industries to connect and leverage the investment we’ve made, because together an eco-system is always more powerful. A great example of that is that we have just launched our Xero HQ open practice platform, so rather than say to accountants that we are going to build with all the tools that you need, like a traditional vendor would do, what we did was we working with our best of breed accounting side partners said could we deliver a seamless experience to our accounting customers across all of our products, so like a single client list, a single staff list, a single activity feed and if we all understand that blueprint we are all adding and we get value from all of us working together and I think that has just been a killer business strategy.
AM I know you have touched on automation and AI a little bit earlier in our conversation, but tell me a bit more about how Xero is going to embrace artificial intelligence and how does that actually make for a more efficient and a more beautiful way of working.
RD At the moment, most business software is pretty traditional, you walk up to it, you put some data onto a screen and numbers get crunched, you might get some reports that come out the back. Yet, we’ve got these servers now that you are digitally connected to. So what we see is the model moving much more towards to an event driven model where the servers are monitoring what is going on and your business, there will be calendar events, or things happen with data, arriving into the system where we can start doing as much work as we can and just tell you what you need to know. We are actually into this really golden age of business software where everything has to be rebuilt over the next 5 years, so step 1, you have got to get into modern platforms that can do that work, and when you think of all the business software companies and all the, rather dated software that is being used now, it is just such a mess of opportunity and that is pretty exciting.
AM Should all businesses be beautiful?
RD Yes, I think the world now needs businesses to step up. There is a bit of commentary about business is evil, it is all about profit. It is not. Businesses are here to solve social problems, we need to create job opportunities, for more people and we need to lead by example. Especially as the world goes cross border and gets more and more global, so I think it is a time for businesses leaders to speak out, business is good and we think about, internally our purposes is to create employment for our network of customers and our accounting network and if we do that we know we leave the world in a much better place.
AM So that sounds to me like legacy is very important to you?
RD Yes, I think so, when you are a start up entrepreneur it is about proving your success, but once you have done a few deals and you are building a business for the long-term, not just to be bought, then with the climate of what is going on in the world at the moment I think that is just supper important. I really saw that, I was fortunate enough to be in New Zealand entrepreneur so I went up to the World Entrepreneur event in Monaco a few years ago and every entrepreneur that I met there was all about the opportunities of creating in their own community, how they were helping with social issues and this idea of environment as well. I think really successful business people are very aware of the good that their companies can have, but also the sort of staff that you get will be interested in that as well, in fact they will want you to do that, so if you can have an organisation with purpose you are going to get the best talent in the world too.
AM Rod, thank you very much
RD Thank you.
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Beautiful Business helps people, teams and corporations deliver authentic, profitable restorative businesses through product and service innovation, training as inspirational learning, and mentoring. For more information on how we can help you email@example.com