Inclusive Innovation: Why Cross-Functional Teams Create Better “Hacks” – A Q&A with Zenefits CTO and Co-Founder, Laks Srini

May 10, 2018

Laks Srini knows a lot about innovation. A product developed five years ago helped power the fastest-growing cloud software company in history. And through continued innovation, it delivers broader value to the small and mid-sized businesses that rely on it to start, run and grow their own companies.

Today, he keeps the fresh thinking coming—and provides a creative “release valve” for Zenefits’ engineers, product managers sales reps, services, marketing, support and operations folks alike— with a quarterly internal hackathon. These events leverage cross-company inputs and experiences to build new or better solutions for customers and internal use.

We sat down with Laks to get a look at the genesis of this program, its cadence and commitment to “inclusive innovation” that connects more than the traditional engineering teams to solve hard problems and ideate on new opportunities.

Why a hackathon?

LS: Small teams with a high level of purpose can move mountains in a very small amount of time.

We have been hosting internal Hackathons since the beginning, when we were 20 people.

As companies grow, requirements from sales, financial models and elsewhere in the business put added emphasis on product roadmap development and focus. Innovation is usually a step function on an exponential curve. It is not linear like delivering on a roadmap.

When we hire, we are looking for people to join our organization with a balance of empathy toward customers and their needs, and also the intellectual curiosity to engender thinking outside the box. The challenge for any business, is making the time to allow for the great ideas, which won’t get done when you are focused entirely on day to day business deliverables.

So we built in a “creative release valve” with a quarterly company-wide hackathon.

Innovation is making our products amazing. What moves the needle is new product and making things 10,15, 20% better. It is not about making robots chat, it is the little details where innovation exists. And it is certainly not a lab where people sit.

What are the parameters for your hackathons? Why not “just” engineers, like many companies?

LS: In terms of rules or parameters, we believe less is definitely more.

Our framework is simple: we excuse you from your daily work for three days and expect you to put work on pause as much as possible. How you use those three days is entirely up to you. No approvals, no need to ask for permission. We provide the time, access to new and emerging technologies and lots of food and encouragement.

We have just one expectation: that you work with people and departments outside your own. In fact the more diverse the team, the additional bonus points when scores are tabulated for winning projects. We’ve seen that ideas with multiple points of view grounded in actual customer experience with service, support and engagement across the customer journey, have bigger potential for impact. No single team can see around the corners as well as a more diverse group.

In fact, this is a core value at Zenefits that we refer to as being  In It Together. We apply this not only to the relationships between internal teams, but we also look to this value to make our business stronger by operating with this ethos around our customers, our partners and the communities we work in.

How do you measure success with a Hackathon?

LS:  We measure each entry on creativity, potential impact to our customer or our business and readiness for market: how quickly it could be finished and used.

For example, this year we had one new product idea that had been scoped for market need and differentiation, prototyped and even set up on its own URL. We were using it internally the same day.

An additional great side benefit of the cross-company piece of the process is that team engagement takes care of itself. People that connect in a hackathon form new bonds that they use in the regular course of business.

Is breadth of ideas as important to you as one killer new product idea?

We like both. We’ve found over the years that even though we set up the hackathon to “fund” the development of only the winning ideas, that we often pick back up on many more incremental functional ideas, as they all add value to our customers’ and our own business.

For example, depending on where we are in the market timing, a partner training tool could be as impactful as a whole new customer app. Last summer we added a great new way to use Alexa for voice- activating a time off request from our app. But a cryptocurrency payroll option that bubbled up before that market took off would go in and out of favor with the swings of the pendulum in Bitcoin valuation. And then there are a ton of small increments that make the product experience better: digital signatures, QR codes, broader diversity options for filling out onboarding forms.

Ingredients of a great hack: do you have recommendations for others looking to build an environment of innovation…even if they don’t require engineering for their business?

LS: Regardless of what you call it, continual, collaborative innovation is useful for any business. Freeing up time for creativity is key to a thriving, growing business. And it is not about some huge breakthrough —it is the little details where innovation exists and makes your product or service more amazing.

Here are a few ways we’ve structured our inclusive innovation for success:

Don’t require, empower. Innovation is best with minimal requirements.

Make sure you help free up enough time. We announce about a month in advance, support people in forming teams and help them clear three consecutive work days to collaborate.

Set the stage: celebration during and after. Make hackathon week festive. We offer breakfast lunch and dinner —plus fun mid-afternoon snacks like ice cream sundae bars— for the entire office. This supports the participants but also builds better awareness and team support for the whole event. Then dedicate time for the whole company to learn about the winning entries.

Encourage collaboration. Leverage bonus points to get more cross-functional participation: teams with broader representation (more departments) earn bonus in final scoring. This has two benefits: broader thinking and perspective as well as setting up a network that will likely be leveraged year round with new connections.  

Judge success. Consider a combination of potential impact, market readiness/completeness of solution and team collaboration for winning entries.  It should be about ambition, not time or expense. Sometimes the thinking is so clever, that it winning solutions come together with minimal effort.  

Follow-through. Assign mentors to help ensure that winning entries are ushered through to completion. Never waste great thinking!