Zenefits new CEO David Sacks wasn't kidding when he promised the company was going to be painfully open about how it was revamping its culture and fixing the compliance problems that led to the resignation of founder CEO Parker Conrad earlier this month.
Sacks is trying to regain everyone's trust by talking openly about the problems and the fixes.
On Friday he published a blog post about a new system Zenefits is rolling out using Salesforce tools, which will make sure that only properly licensed sales people can sell insurance. The system requires salespeople to upload their licensing into Salesforce before it will allow them to get any leads, including a PDF of the actual license.
After that, the company's newly formed compliance team, which doesn't report to sales, verifies that info.
Zenefits was accused of allowing employees who were not properly licensed to sell insurance in multiple states. It conducted its own investigation and uncovered some troubling shortcuts in the licensing processing, including a secret application that may have allowed some employees to skirt the law when studying for their insurance certifications. Sacks also fired the people involved with that program.
Getting leads is a big deal for sales folks in any organization but we've heard stories that it was particularly cutthroat at times at Zenefits. One person who knows the company well told us that under Conrad's administration, some sales people were told that if they weren't in the office very early (as early as 6 a.m.), their leads for the day would be given to someone who was. We asked Zenefits about it and the company declined comment.
It's not surprising that the sales people were under pressure. Conrad had repeatedly said that Zenefits was on track to become the fastest cloud software company to ever hit $100 million in revenues under contract, and that he expected Zenefits to do that by January, 2016, just three years after it launched.
That kind of growth encouraged VCs to pour nearly $584 million into the young company.
But Zenefits missed that target, Conrad later admitted to Business Insider — even after Zenefits changed the compensation plan for parts of its sales teams.
Sacks, for his part, has vowed to change how Zenefits treats its employees.
In the scathing email published by Business Insider announcing Conrad's resignation, Sacks berated the current company culture and promised he was adopting three new values including operating "with integrity" and to "make this a great place to work for employees."
