Focus on the Future: An Interview with PagerDuty’s Jennifer Tejada

Patti Williams: I thought we would start with what is PagerDuty? I’ve read that half of the Fortune 500 and nearly 70% of the Fortune 100 use PagerDuty. Tell me a little bit about what you are doing for these organizations?

Jennifer Tejada: PagerDuty is a pure software-as-a-service platform that exists to help the largest and most innovative companies in the world deliver reliable and highly available technology services. If you think about how any business runs that you interact with as a consumer, all of those businesses are running on software and, increasingly, on data and AI. The challenge is, you become very reliant on the convenience or the 24/7 on-demand availability of something, and when suddenly your brand experience isn’t available to you or doesn’t work effectively because of a technology challenge, you don’t blame the technology, you blame the brand as a consumer.

As the world’s been, so to speak, eaten by software and become more technology driven, reliable and available technical infrastructure, software services, applications and, increasingly, LLMs and agents have become mission critical and important. And software, like human beings, is imperfect. We’re deploying an unprecedented amount of software and technology into the ecosystem and new technology in the form of LLMs, agents, applications, integrations, APIs. All that complexity leads to the storming of breakdowns, or what we call incidents.

The way our customers think about us is we help them manage their digital operations. Whether you’re a financial services business or online travel and hospitality, a tech company, a rideshare platform — all of these platforms increasingly deliver the vast majority of their brand, services, their experience, they drive their revenue-driven transactions, all through technology. It has to work, and it has to work perfectly all the time.

Williams: I think for so many organizations, a lot of that was back office, right? It wasn’t solution-critical. And that’s a real change in the importance of this and how it’s the center of the strategic value proposition for many of these organizations.

Tejada: The way I think about it is, you would never think of NASA’s mission control as back office. But that is kind of how this works. You have a combination of technology, people, and AI watching how a very complex technology organization operates, and giving you an early read on things that are looking like they’re acting outside of their traditional operating boundaries, or [spotting] an early sign that something bad is about to happen.

The goal for us and for our customers is not to just help them respond more effectively when things don’t work the way they’re supposed to, but to help prevent big issues from happening. And, likewise, to learn from every challenge that runs on the platform. We’ve been in the AI business now for almost 16 years. We’ve been collecting a significant amount of proprietary data since the very beginning of PagerDuty. We started with machine learning and algorithmic AI, analytical AI, and in the past year and a half, have added generative AI. And just yesterday, we announced agentic AI in our platform.

Williams: We’re going to come to that in just a minute. You’ve been at PagerDuty as CEO since 2016. Eight years is a pretty long time.

Tejada: It’s unusually long for our industry, for sure. Particularly for somebody who isn’t the original founder.

Williams: You took the company public in 2019. As you think about your leadership over those eight years, what are some of the biggest lessons you’ve learned about leading an organization and leading this organization, in particular?

Tejada: Oh, that’s a great question. In my early days at Procter & Gamble, in probably some of the first management training that I received there, they did this tremendous job of putting you through an academy of job-specific coursework. One of the things they would say is, “Act and think like an owner” — which goes a little further than, “Spend the company’s money like you would your own,” right? Some people don’t spend their money wisely, so that might not actually be a good metaphor. But acting and thinking like an owner isn’t just about trying to drive the share price or the share value up. [Instead] it’s if you were running this job or your team like it was your very own business, and you owned all the investment in, all the outcomes, all the growth, all the challenges, how might you think differently? I think so much about being a CEO, particularly in a culture of innovation, in a high-growth startup, in an early public company, is about having that ownership mindset.

The company was founded by three co-founders. I sort of became the re-founder, or the adoptive parent. What’s interesting about that in the early days is, you’re raising that child with the other parents sitting nearby, looking on. There’s a very high standard for how you adapt the company over time, how you develop new capabilities on an existing foundation, how you drive disruption, even when you may be attacking somebody’s sacred cows.

Probably the most exciting thing for me has been how you’re forced to reinvent yourself. We’ve been through many chapters and many transitions as a company. We were very small, $30 million in ARR when I joined, less than 200 people. Now we’re over 1,000 people and close to a half a billion in ARR. We went from being this private, series A-backed startup to being a public company traded on the New York Stock Exchange, for now almost six years.

Through all those chapters as a leader, it’s never boring. You’re always having to anticipate: What does the next leg of the journey look like? How do we need to be prepared for that? As you get bigger, those preparation cycles take longer. You need to be farther out in front of what’s coming. One of the things I’m really proud of is we did, I think, quite a good job of future-proofing our platform for big data, for AI and machine learning, and now generative. We rallied around one of our core value propositions, which is trust.

PagerDuty’s core reliability engineering is critically important, because if we have to be up when the rest of the world is down, our customers hold us to a much higher standard than most technology and SaaS platforms. In the 16 years of the company’s existence, we’ve never had a maintenance window. A maintenance window is when you log on to something and it says, “Sorry, we’re not available. We’ll be right back.” Can you imagine if you were undergoing a major technology incident, a ransomware attack here at Wharton, and the one platform that is supposed to help you detect that and manage it and resolve it and remediate is not available for that hour?

Our ability to keep innovating and expanding our product set and our platform, while at the same time delivering the level of fidelity and reliability and trust that our customers [expect] — to live up to that standard as the bar keeps getting higher, because the technology gets more complex, has been a really big challenge. We’ve done it while delivering very high gross margins while continuing to grow, and while becoming a profitable company that produces a lot of cash flow.

Williams: One of the things that I think is particularly interesting is that you don’t have a typical tech CEO background. Could you talk a little bit about your background, how you got here, and how you think that makes you a better “adoptive parent”?

Tejada: I grew up in small towns across the Midwest. I went to the University of Michigan on a scholarship. I got a liberal arts degree in organizational behavior and business management, which was basically psych for groups. When going to a big university like Michigan or like Penn, one of the benefits is you don’t just learn how to learn. You learn how to navigate a complex system. And you learn how to advocate when you’re a small speck in a really big universe.

I felt like my experience at Michigan prepared me for the world in a lot of ways. Coming out of a smaller city into this very diverse environment where I had to fight for classes, I had to kind of choose my own major. I was a 19-year-old kid. That felt very stressful. But when I look back on it, the opportunity to choose my own adventure and just spend four years discovering what was interesting to me, what I thought was going to be important in the world, that was a very strong foundation. I didn’t really know what I wanted to be when I grew up. I still am trying to figure it out, actually.

I was originally going to go into health care administration, and the industry was deregulating at the time, so I decided to work for a couple of years and learn how to adult and just get some experience under my belt. By the grace of God, I got a job with Procter & Gamble, and they had this phenomenal leadership rotation. From the very early days of my career, I was taught important basics and foundations of what makes a great leader. How to find your own leadership voice. How to think about surrounding yourself with the kinds of other leaders or people that have skills that complement your skills and experience. In my very early 20s, I was already thinking about, how do you compose a great team? What makes the collective of a team better than just the sum of the individuals? Some of those really early lessons stuck with me for a long time.

When I showed up in the in the tech industry in the mid- to late ‘90s, because it was moving fast, I could see this innovation happening. Not only did I not want to be left behind, I didn’t want to be a simple participant. I wanted to be a part of leading that disruption and that innovation from the front. I took a very big risk and went to work for a supply chain automation software company called i2. I leveraged what I learned at Procter & Gamble and what Procter & Gamble was known for, which was brand and marketing and go-to-market and to some extent product management.

I didn’t send out any resumes. I met a guy on an airplane. I always remind my daughter, who’s a college sophomore right now, you’ve always got to be ready to give your elevator pitch. Sometimes you’re only going up two floors, right? Sometimes you might have the Sears Tower to work with. But when someone asks who you are and what you do, make sure you put your best foot forward in an authentic way that makes someone want to learn more.

I think that liberal arts degree, having an undergraduate education that was really all about identifying complex problems and figuring out how to pick them apart but then make the solution accessible to lots of different kinds of people, prepared me really well for general management. I’d also say I come from a really hard-working family, so I have a sick work ethic. Sick in a good way. I also came from a family that really expects you to contribute to your community and to not wait to be asked to take initiative, to think about how you serve the community around you. That mindset of looking out into the community and figuring out where you can add value is really important in the CEO job right now — because we have such a diverse stakeholder community now, much more so than even five years or 10 years ago in the role.

Williams: As a marketing professor, one of the things that I have appreciated, besides the fact that you came from a marketing background at P&G and you have this branding mindset that you bring, is that I’ve heard you say that you spend about half of your time with your customers.

Tejada: I do.

Williams: I’m not sure most CEOs, even in marketing-driven organizations, spend half of their time with their customers. Talk a little bit about why you do that, and how you think it gives you advantages as a leader.

Tejada: Part of it was choosing a perspective that enabled me to devote time to understanding our users, but also the economic buyer. The CEO, the CFO, the CIO who makes a decision to sign a multimillion-dollar, multi-year agreement with us. That is a long-term material partnership for a lot of the companies we serve, and they have lots of choices.

Part of it was figuring out how to get inside the minds of both our users and our buyers and really understand what was important in their business. I think it’s easy to become tunnel vision about what your product does, and focusing purely around the use cases that your products support. That’s how you miss pivots. That’s how you miss opportunities to move into adjacent areas. It’s more how our customers jobs are evolving. Like, what is keeping them up late at night? What are the big problems that they worry about, not for this week, or for this month, or for Friday’s payroll, but what are the big problems that that are keeping them up 18 months from now? Three years from now, five years from now? And what’s getting in the way of them positioning themselves and their businesses for success? Can you be part of moving those obstacles out of the way, or addressing those obstacles, or even changing the way the company operates?

Digital transformation has been like a playground. Somebody said that if you love what you do, you’ll never work a day in your life. I love the study of different businesses. I get to look at businesses across industry and find patterns in terms of where there are some common challenges or common threads, where there are emerging threats or opportunities, and use that pattern recognition to inform our product roadmap, to think about the pace and speed with which we invest in innovation, and where we might decide to say no to something.

I feel like my ability to anticipate what’s coming really comes through the sum of all the conversations I have with our customers and our prospects. It also helped me approach networking. I’ve never been somebody who likes to network. I don’t like to just go to a thing and stand at the cocktail table with my name tag on and meet people. But then I shaped it in the perspective of “this is my market research.” These are people that need to be part of my community, that inform how we allocate capital, how we think about our future roadmap, how we even think about our vision and mission as a company. That made it feel not so much like networking, and made it a much more tactical learning pursuit that delivers a really strategic outcome in the end.

It’s funny, because I think a lot of people in the industry have given me feedback that I have a really strong, deep, and wide network. I always giggle inside when someone says that to me, because I don’t like networking. I don’t really love going to conferences. I’m really picky about which events I’ll attend, who I’m going to invest my time speaking with, and what I’m trying to learn. What are my goals in that hour and a half, or the 16 minutes I’m going to have with that person? Is there one thing I want to try and take away from that?

But the thing that surprised me the most is just how much pattern recognition emerges, and how helpful that can be. In the early days, when we were really an amazing app that developers loved to use, I could see this pattern around data pattern recognition. Like being able to action analytical insights very quickly when time really mattered. You know, if you’re a trading platform in the financial services industry, and you somehow can’t manage transactions, because your transaction environment goes down, not only are you losing significant money every second, but you’re also in the risk of compliance breach, regulatory issues, fines — even being prevented from continuing to operate in certain jurisdictions.

That can happen in minutes, so the need to move fast really matters. As I’ve gotten to know my customers, I’ve also been able to identify patterns in certain verticals, new use cases that I see that are common across a vertical. And that usually comes from talking to the CIO, the CTO, the CEO, not the user. Not somebody who’s down, hands on keys, phone in hand, using your actual application. I think that’s sometimes hard for people to distinguish, right?

Williams: Absolutely. As a professor, I love people who love to learn, and it sounds like you’re bringing that growth mindset to the experience of networking, but also to thinking about how you’re leading your organization itself. I wonder if you can tell me a little bit about some of that pattern recognition, as we’re thinking about AI?

Here at Wharton, we’re really lucky. We have this base of faculty who have been in the space for a long period of time, and so we’re able to share our expertise. But what are the kinds of patterns you see across organizations when it comes to understanding and using AI?

Tejada: I think things often happen in stages or phases. What I initially saw was a very big hype cycle. A lot of our large enterprise customers, knowing that AI was a thing, recognizing quickly that it was going to be important and disruptive, but then falling into one of two camps, or in some cases, both. This fear of missing out. Like, “I need to be doing something, my board is demanding I do something. I must do something.” And this fear of getting in: “Oh my gosh. This is scary. This could be really dangerous. We could ruin our brand reputationally by doing the wrong thing and not knowing how to start and how to start in a safe way.”

The challenge when you’re going through a disruptive phase in the technical industry is it’s very easy to use risk as an excuse to innovate gradually or incrementally, and generally more slowly than the disruptive players that have a stronger risk profile and are willing to make bigger bets. That is often how captains of industry can be left behind. We’ve seen this prior to AI. We’ve seen this in the payments space, for instance. Who would have thought that our children would not have cash and would use things like Venmo and Cash App. When you think about how that particular sub-segment has disrupted traditional financial services and their access to consumer assets, it’s a pretty interesting example where those startup payments companies had nothing to lose, right? The incumbents are trying to protect their current incumbency, but also figure out how to move faster and do things that are a little scary.

I think we’ve moved past the “just try and figure out how to get started,” and now we’re in this evaluation and judgment phase where our customers are trying to understand, where is the real value? What’s hard about that, to your point, is that it’s moving very fast, but it’s unclear where the value in the AI stack is going to be. Is it in the data center processing? Is it in the LLM? Is it data ownership? Is it the application sitting on top of it? Is it agents? You just see this kind of trend jacking that’s happening as technology providers, consultants, and enterprises are all trying to figure out how all this comes together.

I think the one really strong pattern that has emerged is whoever experiments the fastest and most efficiently wins. By setting up experiments where you can pair domain experts — subject matter experts in important parts of your business or customer-facing areas of your business that matter to you — with either easy-to-use technology or the technologists or researchers that can help them apply the technology to those domain-specific problems that they deeply understand, that’s where you start to see these eureka moments. Like, “Oh, this could be very valuable.”

There’s a lot of experiments getting run. I think it’s very, very early days. What I’m sure of is there’s a lot of work that humans do, drudgery — tactical, sometimes repetitive, sometimes interrupting work — that won’t need to be done by humans in the very near future. And we shouldn’t be afraid of that. We should embrace that. Because in every other industrial cycle where automation has been been a big part of the transition, humans have just found more interesting, high value, innovative things to do with their time. I think that will be the case with generative AI and AI more broadly.

Williams: In addition to being a CEO, I know you are a board member. One of the things that we have seen is that sometimes boards aren’t quite sure what their job is in this AI space. What do board members need to know? And how do you think about this as a board member versus as the CEO?

Tejada: I mentor a lot of operators and executives that are making the transition from being an operator, and being in the business, to being a board member and having oversight of the business. One of the things I try and remind them of is that a big part of their job is to ask the questions that may not be obvious to someone who’s in it. Sometimes, that means to step back and look at the long term. Try and think through the game theory of, if we do this and our competitors do that, and customers then do this, what will that mean for us? Or even testing, is this decision a one-way door or a two-way door? Help management size the scale of some of the strategic decisions that they’re making, and help them identify blind spots or fill talent gaps. Or just anticipate.

I think when you’re in it every day, there is a tendency to be near-term focused. The public markets drive this in the 90-day quarterly performance, which is super short term. Nothing really happens in 90 days. The board’s job is to keep the long-term viability, growth, and value of the company in mind, and then helping management think about how you’re serving your stakeholders effectively.

There’s a lot of coaching in board work. There’s a lot of outside the board meeting consideration. I often leave a board meeting and two days later is when I sit down and think, “Oh, I need to reach out to Stefan, the CEO, and talk to him about this.” Or, “This could be helpful.” I sent a couple of our board members the CEO book that was helpful to me, and the book keeps coming up. Sometimes it’s just a tactical, simple thing, like, “How can I help you find a shortcut? Because I’ve made this mistake before, so you don’t have to learn it the hard way.”

We often, as leaders, think of our boards as judges. Approvers. Our bosses. We need to think of our boards as coaches, experts, professors, maybe therapists, mentors, emergency response, etc. I also think that businesses can sometimes be a little short in their thinking about how you build board culture. How do you think about the unique role of every board member? In my own head, at PagerDuty, I have different roles for every single one of my board members. I give them, whether they know it or not, homework, or I ask them to help on certain things. If they’re interviewing someone for me, I’ll even brief them on what I want them to cover versus another board member, so we get the benefit of that complement of skills and experiences.

One of the reasons I think board culture is so important is because transparency is so important. You need to feel confident as a management team that you can share the big decisions and the big challenges with your board in a transparent way and give them the information that they need to support you in making the best possible decision for the business. Likewise, as a board, you want a no-surprises environment. There should never be a surprise in a board meeting. The board should always be pre-briefed that something’s happening. They should be briefed incrementally on the milestones and where you are against things.

I’m not perfect at that, but I do work really hard to make sure nothing — I don’t sneak up on my board. I don’t even like surprises in terms of flowers and jewelry. I’m very specific about what I want. I think board members are the same.

Williams: What’s the book that you recommended?

Tejada: Oh, I recommended Working Backwards, which is a book that Bill Carr and his partner, who were executives at Amazon, wrote about the Amazon way of starting with the end in mind, writing a press release and the frequently asked questions that you think you’re going to get if you’re successful in delivering this thing. People call it memo writing. But it’s really the skill of of summarizing the critical insights that you want your reader to focus on, and distillation of a lot of complex information that gets to higher-quality decision making and higher-quality execution.

I shared that because it’s a template, and often getting everybody to use the same practice creates simplicity in and of itself. Just getting everybody on the same page will drive a lot of efficiency and simplicity and clarity.

Williams: Even just a vocabulary.

Tejada: Yes. Clarity is everything right now.

Williams: I know that you are here today to speak to some Wharton students, and you mentioned that your daughter is in college. What advice would you give young people about navigating their own professional careers, maybe especially at this moment? I just came from lunch with some MBA students who are finding the job hunt a little daunting. What would you tell them?

Tejada: I felt this way in the early years of my adulthood, and I hear this from my daughter and her peer group. It’s like, “Well, I should be doing X.” We’re often given these paths that feel a little bit like a salmon run in a river — like the current is going one way. “You must go into investment banking and get the investment banking internship, and then do your first two years as an analyst.” “You must go into consulting.” “You must do this. You should do X.” “If you don’t do Y, you might never be able to do Z,” right? And I just think so much of that is BS.

Investment banking is a very small part — an important part — of the business world. But there are lots of other ways to build financial acumen, to build management acumen. That’s not to take away from the wonderful programs these companies deliver and the opportunities they create for young people. But I just wonder if the mindset could be, “What if I could?” As opposed to, “I think I should.” I just find so many kids that are like, “I did that because it was what my B school kind of pointed me toward, and I missed this opportunity to just discover what I would really be passionate about.” When you’re really passionate about something, you tend to be better at it than when you’re just grinding through a checklist or working your way up a ladder.

The other thing I try and get my leaders and people to think about is that it’s not about the career ladder. It’s more about the architecture and the tapestry of all the different ways that you could go in a business, in service of having a steep learning curve. Of building a diverse set of experiences. As generative AI becomes more and more a part of our daily work lives and our lifestyles, a lot of the time that we spend on more tedious tasks is going to go away, and we’re going to have the opportunity to learn faster and apply new learnings more effectively, more quickly, with the benefit of technology.

The more context you have, the better you’re going to be able to leverage that technology. If you stay in a narrow lane, if you’re that wild salmon going down the Copper River, you’re only seeing one view of the world. I always say to Sam, my daughter, “Be the bear. Jump into the river every now and then, get a salmon, have a splash, and then get back out and go wander around in the woods and sort of see what’s going on around you.”

The last thing that I would say is, we have such a finite period in our lives where our only jobs are really to discover what’s important to us. It’s that period of education, whether it’s undergraduate or your graduate program. When you look back in your 50s and 40s and 30s at that time, you will never say to yourself, “I tried too many new things. I discovered too many new things.” I think that pursuit of getting on the path — the approved grade A, five-star, whatever the path is — sometimes means that you’re too focused on the destination and you miss the journey. You not only do not get to enjoy the ride, you don’t get to stop off at the different places along the way, which could change the course of your life.

Williams: I love the idea of just making yourself open to serendipity. Not only as a young person in an undergrad or MBA program, but I love your idea that serendipity throughout your career is also where you find the things you care most about.

Tejada: One of the challenges we have in the tech industry right now is that people tend to specialize early. A marketing person will sort of take the elevator straight up the marketing shaft and be a CMO. They may have ambitions to be a CEO, but they don’t have the financial acumen. They haven’t owned the product roadmap. They haven’t carried the revenue bag, so to speak. All of a sudden, you’re trying to find ways to give a senior executive exposure to these things so that they can capably run the business as a general manager.

I think the more leverage we get from technology, the more some of these general leadership skills are going to matter. Because the big, hard calls are going to be around judgment, ethics, regulations, data usage, privacy — some of these areas that are becoming more and more important because of how technology can leverage them so rapidly.

Williams: It leaves us to answer the big questions.

Tejada: Yeah. And those big, hard questions, that’s where the fun stuff lives, you know?