325 - The M&A Field Guide for CPOs: Heather Dunn (Chief People Officer, Brex)

0:00Heather Dunn: Not only were we starting diligence on that Monday, but we were announcing three weeks later. So Capital One had an earnings call on January 22nd and they were like, look, this is the date. Like earnings call is not moving. You know, we're going to be doing this. And so trying to get through diligence, which I can talk a little bit more about and figure out a communications plan with a, you know, Fortune 50 company and thinking about sort of the pivot we were going to have to do on our entire employee base in three weeks was pretty wild. And, you know, anyone I've talked to that's done big M &A before is sort of in disbelief that we were able to do this in about three weeks time.

0:47Heather Dunn: This is like one of the fastest deals that I have ever seen at this size and scale. You're listening to the Modern People Leader podcast, where we go behind the scenes with today's top HR leaders and work experts. We talk to them about how they've gotten to where they're at, what they do every day and what they see coming next for the future of work. Hope you enjoy.

1:11welcome heather we did it it's friday we're recording how are you doing yes so excited to be here it's it's actually a great way to end the week so really really grateful to be here with both of you this is our recording this week it's been a marathon yeah this is this is abnormal we try to limit it to one or two a week but we took a few weeks off and everything got stacked on this week. And so it's been quite nice, honestly. I mean, it's my favorite part of the job.

1:44Heather Dunn: Summer is summer. Schedules are always bananas. I found a little crazy. A little crazy. And so what we have a lot to talk about, and I know we need to get you out of here at the top of the hour. And so let's start with our traditions. Our first is what we call good news story, just a way to kick things off with some positivity, personal work. It's up to you. we prefer for our guests to kick us off. Yeah, good news. I'll give you two. One, we've just moved into a new home and I got my closet set up last night. So I'm feeling really good for everybody who is organizationally minded, like having my clothes everywhere has been sort of a nightmare the last week.

2:30Heather Dunn: Then the work front, we've had a couple boomerangs back to Brex over the last, let's call it two weeks, like really, really high performers that have made the choice to come back. And quite frankly, those are always the feel good stories for me in terms of also being able to go back to the company and say, hey, grass is not always quite greener. And so really excited to invite them back to Brex. Love me a boomerang. That's the best feeling because it's so hard when you say goodbye and it's just part of the workplace. But when they come back, it kind of makes it even that much better. So Daniel, what do you have?

3:08I'm trying not to be repetitive because I know we've done four other good news stories this week, but we've been in our new house for seven nights now. I also just moved Heather and how you tried to put some furniture in there and like bring some boxes in the room just to like take away that echo sound. So as we recorded this week, I literally pulled in like 15 boxes to do the same thing. And so my is my office is officially set up. And we, I think fingers crossed, have built all of the new furniture. And so we've been staying up like, probably like midnight most nights just building side tables and nightstands and bar stools and it's not my favorite I'm not like I'm not a very handy person and so it's not my favorite type of work and so I'm glad that we're finally done you got an accent just to be clear

4:09Heather Dunn: I'm like, I can hang things. I can instruct very well. So kudos to you. That is crazy because I haven't moved into a new house, but we are in contract to buy a house. And so like that on theme there, but that was my update. Yes. My good news yesterday is like inspections going well, a couple of leaks here and there. We got some things to figure out, but I think we're still trending in the right direction. my actual good news is my almost eight month old you know seven and a half month old son it had two consecutive nights of decent sleep y 'all so if i'm bringing a lot of energy today and you're like wow steven is like really bubbly today it's because i freak it i slept for the first time in a long time so that's my good news hopefully i don't want to jinx it so we'll just see.

5:06I'm going to consider it a fluke for now because he is not his two older sisters, they're teenagers. They they were sleeping through the night by like, I don't know, four or five months. And this kid just does not want to sleep. And so it's been pretty brutal. But I'll take two nights. Thank you.

5:23Heather Dunn: Yeah. Congrats on that. Even if it doesn't last two nights of good sleep. It's like, yes. So let's keep this moving. You know, the next question is is honestly my favorite question of these podcasts. And I call it the Brene Brown question. Tell us your story, Heather. What was the journey? The ups and downs, the twists and turns, the laughs, the cries, all of it that led to you becoming to where you are now, the chief people officer at Brex. Yeah. So I am probably one of those rare birds that actually found myself in the people space at the age of 16. And I promise I won't, I won't take you through, you know, my whole childhood, but I said the whole journey.

6:06So like, let's go.

6:08Heather Dunn: That's fair. When I think about our recent humans, times, machines, conversations that we're having with CHROs, there's one theme that keeps coming up. The vision is clear. The pressure is real, but the roadmap is a little bit less clear. It's one thing to talk about the future of work. It's another to sit down with your CEO and say, here's how work, the workforce and our organization really need to change. But I get it. There are a lot of difficult questions that you need to answer. Like, what work should we redesign? How will AI reshape roles and careers? What kind of organization do we need to move faster?

6:46And these are exactly the questions explored in Deloitte's latest Human Capital Trends Report. There's some interesting findings in there. The report shows that we're no longer balancing tensions. We're at a tipping point. The report brings together insights from thousands of leaders and explores how organizations can build a human edge. It's about moving beyond simply having humans and machines to creating a system where their capabilities multiply. It looks at how companies are redesigning work for this new future, how to shift from a mindset of cost efficiency to want to value creation, and how to move from static plans to dynamic orchestration of talent and technology.

7:24In other words, it helps turn big future of work conversations into practical leadership questions for a world that won't sit still. If you're thinking about how your organization evolves in the age of AI, go check it out. It's a great read. I read it a couple of times. So if you want to learn more, you can find the link in the show notes.

7:43Heather Dunn: You know, I was working in a workers' comp insurance company doing claim management. and one day they came up to me and said hey do you want to work in personnel and I said I have no idea what that word is and what it means but yes get me out of here and so I ended up working in that people function you know after school during high school and then during summers at that company for several years and that really helped me sort of hone in on doing my undergrad and master's program in HR. Grew up in Michigan and was lucky enough to have two really good schools that specialized in that space. And so was able to also do a bunch of other internships during that time and everything from insurance to food service to an internship at Microsoft.

8:37Heather Dunn: And I had never been really to the West Coast. I was born and raised in Michigan and go to Florida for spring break was sort of the extent of my travel. And I just remember stepping into Seattle and thinking, oh gosh, like this is a whole new world out here. And to walk into tech and did an HR business partner internship there and received the offer to come back full time through their rotational program, which was essentially two one-year rotations. And then you landed in your final gig. It was called HR Tracks. And I knew I wanted to be a business partner. And so I really looked at those two rotations as how can I become a better business partner at the end?

9:24Heather Dunn: So I did a year in compensation, which I'm so grateful for even to this day. And then I did a rotation in recruiting. I was recruiting PMs to join Microsoft to work on Windows Phone. Let me tell you that really 2011, 2012, that was quite a thing of resilience. If you remember anything about what was going on in the phone space at that time. But once I landed in that gig of being a business partner, I would say Microsoft really taught me about what it means to lead at scale, what it means to learn from a company that's been really on the cutting edge of a lot of practices at that time. They were going through a CEO transition right as I was leaving and really was, you know, earlier in my career and antsy to pilot things and to move quickly.

10:16Heather Dunn: And I got a call from Dropbox in 2015 and they were about 800 people at that time. They were really just building the people function. And so I came in to be their first engineering HR business partner. And so to step into the world of startups and moving to San Francisco and, you know, looking back, just like we like picked up our whole life and just like took a bet on this, on this startup. And obviously Dropbox was doing quite well at that time, but to have, you know, almost a thousand people and really know people infrastructure was really, really critical to sort of my future career path, where we designed the programs, we hired the business partner team, went through the IPO, and so left eventually leading the business partner team there.

11:07Heather Dunn: But the reason I left was my boss, Melanie, who is still the CPO of Dropbox today. She said, look, Heather, I can put you in another role. But honestly, I want you to be ready for my job in five years. And so I think you should go off and become a head of people and scale a company on your own. And Daniel, you look like you might want to interject on something so I can pause there too. I just wanted to shout out to Mel because it seems like that's very intentional on her part. Like, didn't she create a CPO and residence program at Dropbox? And so I imagine you're one of many that she's like sent down this path.

11:47And so I was I was wondering how many other CPOs have come out of the like the Mel family tree. Not to distract us from your story, but that was going through my head.

12:00Heather Dunn: Yeah, I mean, between because I would say Arden Hoffman, who was Melanie's predecessor, was the CPO for a while that generated a few of them as well. So if I think about sort And Mel was there for that entire period herself. I mean, there's probably at least 10 of us from a very short time window that I was there. And, you know, it's really amazing to have that level of community, too, where we already trust each other. We actually all spend time with one another. Mel is obviously there for me day or night on things that I've been going through over the years. But I may be off in my assumption of being too low, but I think it's around 10 to 12 of us that have gone on to do these roles.

12:47Heather Dunn: It's pretty crazy. In a small world connection, Arden and I worked at Goldman Sachs together. So when I worked at Goldman, she was like in the L &D. I think she was like senior VP or MD and I was a VP in the mobility function. And so, yeah, small world. And I just looked her up and she's at General Motors right now. I know. I had no idea. She crushes. Yeah, I owe a lot to both of them in my career. And Dropbox really was that launch point for me. I think people ask me, how do you choose the right companies? And it's like, some of it's luck. And a lot of it has to do with the types of people that you're working with.

13:30Heather Dunn: And Dropbox was one of those really high talent density places during that era that even outside of the people function just generated a lot of founders and other leaders across functions. So I went and took my first head of people job in 2019, end of 2019, at an insurance technology company called New Front. And I mentioned that date because let me tell you, doing COVID and your first head of people job at the same time was probably one of the more challenging moments in my career, but taught me a lot about that resilience and building a company, you know, kind of through that period. But then at the end of that time period, we actually ended up merging with employee brokerage firm, employee benefits brokerage firm, ABD.

14:18Heather Dunn: So I got to work on that merger as I was thinking about what was next, which was, you know, we'll get to M &A and that being a part of my story. But that was really the first time being in an executive seat and really being, seeing kind of the ins and outs of what M &A really looks like. And then, you know, I took some time off because I, one, I was exhausted. And I think a lot of people leaders felt that way coming out of the 2020, 2021 era. But also I just wanted to be really thoughtful about the type of founder and the type of business I was going to next. I love this craft so much that making a compromise on either of those things felt difficult for this second go.

15:00So I ended up

15:01Heather Dunn: joining GEM, which I'm sure many listeners here know GEM well. It was such an exceptional opportunity for me to join them. They were going through a tremendous amount of growth to be a chief people officer at a company that was also a people software company that I got to be a lot more involved in product and spending time with customers. And I think really understanding my breadth in terms of business acumen and business leadership outside of the people function. And Steve Bartel is just, he's such an exceptional CEO and human being and somebody I just, I really learned a lot from in terms of CEO leadership.

15:47Heather Dunn: And it's quite frankly, where I met a lot of the team members I might have at Brex today, because we, again, just, it was a very special place and sort of the talent density that we were able to achieve in a short time period while we were in a really big period of growth. The story there is, you know, we went through this growth and then I'm sure you all remember what end of 22, early 2023 looked like for the recruiting industry. and a company that was so focused on tech companies and recruiter seat basis, it was difficult on the business. And so we had to make a lot of hard decisions, unwound a lot of the scaling that we had done, at least from a people and headcount perspective and rethink what the business was focused on.

16:35Heather Dunn: And so I ended up leaving as they were downsizing towards the end, stayed on as an advisor and still chat with Steve really, really frequently. on the business and the overall health of his leadership team. And then that leads me to Brex because I took six months off after Jim. I think it may sound silly, but I kind of needed to mourn that experience to some degree. A great company, a great founder, a product I believed in, but it just wasn't the right time for me to be there from a business perspective with everything that was going on. And so really wanted to be intentional on that reflection, but also bring that in to how I thought about my time at Brex.

17:23What was that like? Because, you know, I just want to pause right here because I've been in a similar place where I've like deeply mourned a kind of work persona loss for the lack of a better word. and and so it sounds like you like rocket ship like from 16 like everything was going you know took you in a very kind of intentional and you know took you up and up and up and your experience it I'm not calling the experience at gym like a negative one like I'm but it's different to those other experiences and what was it like like processing that like what came up for you like you know, during the, that morning period?

18:05Heather Dunn: Yeah. I think for me, it was mostly like, and do I have good judgment? Do I know how to pick correctly independent? Like, did I just get really lucky at a Dropbox and a Microsoft and 16 being asked, you know, to go into personnel? Like it really, and it wasn't a like beating myself up. It was really looking at decision criteria that I had used and actually being quite analytical about it, but also finding ways to just release that. And I think that's why, obviously, a privilege to take six months off between a job. But I think there's no world I could have walked in as the CPO I am, and I know I am, at Brex if I had not taken that time.

18:53Heather Dunn: Because I think I would have just brought all of that baggage with me. And so I also use that time to just like, remember who I am as a person and go see my niece and nephew that are on the other side of the country for weeks and go travel with my best friend. And my poor husband was like, am I going to see you too at some point? But I think that like rediscovery of self, both from a professional, but a personal perspective was really important for me. I don't know how the experience was for you, but was a big part of it for me. I was just going to say yesterday, I was catching up with Jenny Molinoy from EarthL and was getting feedback on something we're working on behind the scenes.

19:39And I asked her, who are the three or four people that you have on speed dial when you need help? And you were the first name that came to mind. And one thing that she admires about you is your ability to be like a super networker and just like knowing the right people to be in contact with. And so where does that come from? Have you always been that way since you were a kid? Or is this a skill that you've developed over the years? And sorry, I know we're going in a completely different direction than we had planned.

20:09Heather Dunn: Yeah, no, this is great. I would say there's definitely something instilled from my dad in that like he was always in sales. And so just the level of community that he built over the years. I mean, he was like at companies for, you know, 15, 20 years. And so he would form these relationships with people across, you know, where we lived that I think really did influence me in that way. I think the other thing is I am just genuinely someone who wants to learn. And I think as I've gone into these CPO jobs for the first time in particular, it was like, it was a humbling moment. Let's just say that.

20:48Heather Dunn: And I really needed community around me to support me. And not only do I just like really enjoy these people and I enjoy keeping up with them, but I really believe in sort of that virtuous cycle of like, there are times I'm going to need more from someone and there are times that they were going to need more from me. And I think that's like a beautiful flywheel with the right people. I think I also just got really lucky in terms of Dropbox network. I mean, even as I think about engineering leaders, I still keep in touch with and the CTO that I used to support and the CFO, like they have all gone on and went to other companies or VCs and have incredible advice.

21:33Heather Dunn: And so to me, this role evolves so much that it would be foolish to not continuing to think about up-leveling myself in that process as well. So I am very deliberate about it. And I think that sort of openness for me to say, hey, I need help has also allowed others to say, oh, by the way, do you know so and so like they could really use some advice as well. Tech and this function change so rapidly, there's just no world in which I think I could do this job half as well without the network that I have. Well, and it sounds like there were, cause we were, we just got to the Brex part of the story, but we haven't kind of gone through that, but you know, then you get to Brex and there's more challenge and more learning opportunity awaiting you, which you probably needed to rely even more on your community.

22:28And so tell us about, you know, what you've had on your plate since, since you joined Brex.

22:32Heather Dunn: Yeah. So when I joined Brex about two and a half years ago, they were going through a pivot and sort of evolution as a company themselves. So there were a lot of things that Brex was doing prior to my joining that I would say were just not long-term sustainable in building a generational company. And so the year of 2024 was a year of complete transformation. We changed the way we were selling. We changed the way we were releasing products to our customers. we returned folks to an office we changed our compensation programs like you know replaced a lot of our leadership team before it became trendy to remove a layer we did that like in 2024 was probably the hardest year of my career because coming in as a new cpo leading through that level of change also like uncertain where this journey was going to take brecks longer term And, you know, we ended up having an incredible growth year that year and taught me a lot about the resilience of Brex as a company, but just of our employee base and like doing hard things that I would say was probably one of the more rewarding years of my career.

23:47Heather Dunn: And then the second year, the year of 2025, sort of became this year of like, okay, who are we now? We've re-earned the right to be here. Like, what is our story? And where are we going? And so I know we'll probably talk about this a little later, but this is where the EVP came into play in terms of thinking about how we wanted to be a little bit edgier, a little bit more controversial, and a little bit more truthful, frankly, about who we were as a company. Had another double digit growth year. Absolutely phenomenal. And I remember at the end of last year, Pedro called me and said, hey, I'd really like you and our CFO and our GC to start working on IPO readiness plans in the new year.

24:32Heather Dunn: we don't know when the market's going to be coming into a spot that that may be the case, but I want us to be ready. And so, you know, I, I go into my holiday and, you know, enjoy some time in Mexico with my husband. And then January 1st, Pedro calls me and says, Hey, you're the first person I'm calling. What a call on New Year's, by the way. I, yeah, I had told my husband, I was like, this isn't good. Cause Pedro's so respectful about, you know, when people are out and he himself was in Brazil. So I was like, it's like, there's only a couple of things, a call on Jan one. And he said, look, we're, we're being acquired by capital one diligence starts Monday, buckle up.

25:13Heather Dunn: So it's, and I know we'll get a lot more into the acquisition itself, but this year, I honestly, it feels almost like a blur in terms of just how much has been accomplished and what we've been through, but just the sheer hours and the type of work that has come with an acquisition of this size and scale. Well, and I want to just like keep going with this because I feel like it's just like the perfect segue. And so in our prep call, I think you use the word whirlwind to describe that time. And so give us a little peek. So you get the call on Jan 1, a peek behind the scenes, you get the call on Jan 1 and, you know, diligence is going to start imminently.

26:00Like, you know, what do you do? Like, kind of walk us through the kind of some of the key parts of that tornado that was selling the business.

26:10Heather Dunn: Yeah. So not only were we starting diligence on that Monday, but we were announcing three weeks later. So Capital One had an earnings call on January 22nd and they were like, look, this is the date. Earnings call is not moving. We're going to be doing this. And so trying to get through diligence, which I can talk a little bit more about, and figure out a communications plan with a Fortune 50 company and thinking about sort of the pivot we were going to have to do on our entire employee base in three weeks was pretty wild. And, you know, anyone I talked to that's done big M &A before is sort of in disbelief that we were able to do this in about three weeks time.

27:02Isn't this like typically like a four or five, six month process?

27:06Heather Dunn: Correct. And then you, you know, and then you've got you announced and then you've got to close. And we actually we announced January 22nd, we closed April 7. This is like one of the fastest deals that I have ever seen at this size and scale. And what's what are some of the requests you're getting from your CEO? Like what information are they looking for? What's keeping you up at like, what are you, you know, working late nights to get your the rest of the team so that you can get through diligence. Yeah. So other fun fact, you don't get to tell everyone what you're doing. So I had basically one other person on my team.

27:41Yeah.

27:42Heather Dunn: Nadine, who ran Total Rewards. And she and I were basically up till probably two or three every night for almost three weeks. And a lot of that work was just the diligence requests, right? Like they're sending hundreds of questions through that are, you know, some are very high level and easy to answer. And some require us to go like line by line on every employee that's ever worked at Brex. And you have to be 100 % accurate, right? Because if there's a discovery that anything was not correct, it's a reasonable way for the deal for Capital One to potentially say, hey, this was not, you know, a truthful process here, we actually have the right to step away from the deal now.

28:30Heather Dunn: So a lot of pressure. And I think Capital One's on the East Coast. We're on the West Coast. And so there was a lot, I'm not going to lie, of like being scared to go to bed because, you know, you're going to wake up and have another like huge spreadsheet of requests. And I think, so that was like one piece of it. But then in this role in particular, you're also dealing with the executives, right and how they're feeling not only about the workload that's coming for them but just this was a lot of change to ingest from going from like hey we're going to go on a public company march to oh we're being acquired and it's going to move really fast and so I think for folks that you know haven't been through this it is I feel very grateful that I had the relationships I did both with Pedro, our CEO, but also with the leadership team to really help navigate and to be able to spend time with each of them about their fears and how they were feeling about it.

29:30Heather Dunn: And it was a very bonding experience, but a very intense one in terms of both the volume of work coming our way and then, oh yeah, planning a communications plan for the whole company in the midst of still doing diligence up until the night before the announcement, all the way to, you know, Pedro's mind is a hundred percent focused on closing this, right? Like he, he doesn't want, he's dialed in, he's totally dialed in. And so my job is less, you know, oh, Pedro, you need to be doing this or that, but how do I go work on behalf of Pedro across the organization, not time, but the organization being the leadership team and making sure that we were a cohesive unit.

30:15Heather Dunn: We knew how we were going to communicate. We knew the risks and then figuring out the right way and the right time to go surface that to him. Because for him to be involved in that level of detail, actually, in like this short of a time period, like would not have been productive. And so, you know, if he were on this call with me, I think he would say that the ability for him to go focus on that and knowing that he trusted his team to go run with the rest was probably one of the only ways that this was successful. And I think, again, that had a lot to do with the trust across that leadership team and the ability for us to see around corners and to give him some of that insight where he needed to have it.

30:57Heather Dunn: But otherwise saying, you've got your piece of this. Trust us. We'll get the rest. We've got you. So you do, you move mountains to, to, to make this happen. Well, you, you and Nadine, was that her name? Nadine? Okay. You and Nadine like move mountains to get this to happen. Everything you get through this, the rigorous process and you know, it's announcement day. So like walk us through that part. I love this story. It's, you know, we hear all kinds of stories in the podcast and I'll never forget the story that was told about a Mexico Beach FMLA backfire. One of their employees was out on approved medical leave and then somebody spots them on Instagram.

31:43Feet up on the beach looking a little too okay for someone supposedly recovering. So cue the call from the CEO wanting to pull their leave and all of the panic that followed. But here's the thing. There's actual legal precedent that says a photo isn't proof of anything. You can't just yank somebody's protected leave because of how a vacation pic looks. You need real evidence. And that's a trap a lot of HR teams fall into. Making a compliance call based on gut instinct instead of actually knowing the law. And that's exactly the gap 650 has built to close. 650 helps teams manage compliance across the full lifecycle, from handbooks and policies to agreements, legal updates, and research.

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32:43Heather Dunn: It's so great. Like, I just, you know, it's like the night before Christmas and like you've got like the butterfly. I don't even really think I slept that night before because we also were up at, I think the whole leadership team was at the office till like 2, 2.30 in the morning, like refining the last bits of the plan. And I just remember we had like ordered a bunch of sushi and we were just having fun. Like it was just, we were all energized about what was about to happen the next day. And, you know, because it was tied to their earnings, we could not do a heads up to our employee base. And we knew that was a compromise to how we've typically communicated and that that would potentially have an impact.

33:24Heather Dunn: And so as I think about, so we had to wait most of our PT working day for earnings to happen and for it to be announced. And essentially we all morning are still going back and forth between the attorneys. Like it's, we have not signed that morning. And I think Wall Street Journal was coming out with the article at like 11 a.m. PT or 1 p.m. PT, something around there right before earnings. And watching Pedro just pace, everyone's just like, we're not speaking to him. Just let him do his thing. And then as soon as we signed, it was just, it was really emotional because I think so much work going into that, knowing how much we all cared so deeply about doing this the right way for our employees and maybe a little lack of sleep was causing some tears too.

34:25Heather Dunn: But we were all in the same room together and got to have that moment together. And then we had to tell the company, right? And I'm not going to lie. Like that was, you know, when you're riding the high of an excitement that you've known about for three weeks, you know, then you've got to think about how others are going. Like, remember the day I thought, you know, I heard about this and how did I feel and how are we going to really bring folks along? And so that first day there was we were all in the office. It was an in-office day on top of that. And so you just hear the gasp, like everybody is starting to chat.

35:00Heather Dunn: That time, Rex is like twelve hundred employees. I mean, this is a lot of folks globally to hear about news, you know, really not necessarily from Pedro. And so we had Pedro get in front of the company and we did sort of a two part communication to the team, which was the first part was the day of the announcement, which was him getting, you know, on camera, just speaking to the entire company about the process, the why, acknowledging some of the feelings that might be out there in terms of, you know, what folks thought we were working towards. and then setting the context of, hey, tomorrow, I'm going to tell you more of the story on the why and why this is the best deal that I think we could have ever made.

35:44Heather Dunn: And that this is absolutely the right choice for the business and for the company and then our customers. But also we're going to answer every question you have. And so we scheduled 90 minutes. It might've even been two hours the day after and just took, I mean, he spoke for about 20 minutes on the thesis and then peppered for hours and hours, which I think was helpful in getting some of those initial, you know, we're not going to shortchange the time that you're going to get to hear about this. We're actually going to go spend time on that right now. You mentioned the other week that since January, or since, you know, you've gone through this diligence process, you've been getting a lot of calls from other CPOs who are now working through the same process.

36:33Well, I guess question one, what are they asking you? What do they need the most help with? And what do you find yourself repeating the most often in those calls?

36:42Heather Dunn: Yeah, look, I mean, here's sort of a meta comment, and I'll get into the specifics. I think M &A is a real part of PeopleLeader's job over the next two years. Like, I think there is a real window that is happening right now where a lot of folks are going through this for the first time. And so I will say the genesis of the questions are usually something around one is like not even a question, but just more like someone to just have the emotion with and potentially warning what they thought could be. And, you know, I take that very seriously because you really aren't supposed to talk to anyone about this.

37:24Heather Dunn: And so to have the privilege of someone wanting to talk to me about it, I always want to use that time just to check in with them. I'm sure everybody who's listening to this and the two of you know, no one checks in on us. We're checking in and making sure everyone else is doing well. And we are holding everyone else's feels as, you know, the CEO, how the acquirer is feeling, how you're feeling, how, you know, your peers are feeling, how you're going to think about the company feeling about it. And so there's always space for that. And then it becomes just tactically, how did you get organized for diligence?

38:01Heather Dunn: Who did you bring into the room? How did you structure an answer to a question about something that's maybe not as buttoned up as you think that an acquirer wants to hear how like the communication to employees is probably one of the bigger pieces that that I've spent time with folks on and then you know maybe a little less comfortable to talk about but like how do I advocate for myself in this process how do you think about retention for the company in terms of dollars uh and so a lot and look every M &A transaction is different So Brex, we are running basically as an independent company still just as a part of Capital One.

38:46Heather Dunn: That's not the case for everybody. It sort of harps back to some of the M &A work I got to do at New Front and even at my time at Microsoft and Dropbox to be able to bring in a little bit more broad context. But I think that's the other piece, like every deal has sort of a slight twist and sort of helping folks navigate what could be reality and what may need to be released and let go from, you know, what M &A looks like in each scenario itself. If you look at the data, it's not great about M &A, like the success rate. And I forget what it like back when, you know, back in the like 2010s, it was like eight, nine out of 10 mergers and acquisitions fail.

39:33because typically because of the people issue. I think a large chunk of those were just bad business strategies and there's no ninja-ing that a chief people officer is going to do for just a bad deal. But the next biggest chunk of why deals fail is people. It's the cultural integration of these two very distinct businesses. And so I'm curious, was that on the radar? Was that front of mind for you? And what were some of the things that you did that you felt were unique to the Brex Capital One?

40:12Heather Dunn: Yeah. And look, I've got to give Capital One a lot of credit here. If you look at the portfolio of companies they've acquired over the years, and this was part of the thesis itself on why it made sense for us to join Capital One from Petra's point of view, which is they are not buying up dying businesses. They are taking companies that are continuing to grow and there's a very clear insertion of what they are doing as a part of their business strategy. And so I think I wanna be mindful that not everybody is going to have that same experience in terms of the why from an acquirer or how they might be thinking about the business itself.

40:58Heather Dunn: But I think for us in particular, it was, you know, Capital One has this phrase that don't crush the butterfly is what they say. Because, you know, in hearing Rich Fairbank, who is their CEO and still founder, by the way, so founder led company, 30 plus years. Absolutely remarkable. I did not know that. Yeah. He gets it, right? He gets the special sauce of a startup and what it means for people to feel like they're building to something bigger. And his instruction to every one of his leadership team members was, do not crush this butterfly. That is the only instruction. We are going to learn from them as well on how we think about talent, how we move really quickly how we've integrated AI both into our product, but also into the culture at Brex.

41:55Heather Dunn: We have a lot to learn as well. And how do we pour water, is their other term, of giving resources and quite frankly, dollars, right, of being able to interject even more growth for the company. And so I think what's been helpful and difficult about that to some degree, and maybe something I've learned in the communication about all of this to our employees at Brex is, you know, we wanted it to feel like not a whole lot's changed, right? An average employee should, like, still in our office, I still report to Pedro. Pedro has a new boss, you know, for the first time in his career, but sort of the day-to-day experience for an employee and our customers should not feel fundamentally different.

42:43Heather Dunn: And so I think what we're still trying to figure out is how do we go celebrate some of that pouring of water and resources and dollars with not losing the spirit that we are still a 1400 person company that wants to move quickly and managing a perception of being a part of a larger company and a bank, both internally for employees, but also with our customers. Right. And so I won't say that we've gotten everything perfect, but I think the thing that we have done, I think quite well is stating exactly where we are, you know, and whether that is, you know, I think there are some people that thought, oh, there's nothing happening.

43:25Heather Dunn: So there must be something, you know, being planned in the background. And it's like, no, no, no, there's nothing being planned in the background, except how to continue to accelerate the growth of this business. And so I think that's been the most difficult piece in thinking about both, you know, I think the positive side of managing communication with this sort of employee base, but also difficulty that comes with, you're not going to see this overnight difference to your day to day. And what's the longer term thesis that we're all working towards? And we're going to bring you along that journey.

43:59So I'm going to come back to what we're just talking about. Before I do that, you mentioned that one of the questions that you're getting is how do I advocate for myself? And I want to make sure we touch on that real quick. Are you, how did you advocate for yourself in this process? Did you even feel like you needed to? I know that's an awkward question to ask, but I imagine every person that's in your position that's doing the diligence in the back of their minds is wondering like, what what does this mean for me? Like, am I even going to be a part of this, this newly formed, you know, company?

44:36And so, yeah, how, what advice would you give to people for advocating for themselves?

44:41Heather Dunn: Twofold. One, and I'll get to what I did, but the advice I give is one, remember that your CEO is not, this is not the priority for them. The priority for them is to get this deal over the line. So be careful on how and when. The second is, if you don't ask, you'll never know. And so to me, and this hasn't always just been with the deal, but I tell people the worst thing that someone can tell you is no, but at least you asked. And so I was in a fortunate position where Ben Gamble, our president, absolutely amazing human being and business leader and friend, I knew he had my back. And I certainly gave him, hey, this is what it would take for me to stay.

45:34Heather Dunn: I need to have clarity on what's happening with GNA longer term for me to feel really good about this. I don't need to be a part of these conversations about myself, but here are the key bullets that I would like you to take into those conversations with both Pedro and with Capital One, as you talk about the entire executive team. And I think it's an uncomfortable spot to be in because you know, like as the people leader, you're going to know what everyone else gets. And like, that's part of this job. And you cannot sit there thinking that the chief people officer is going to have the same sort of incentive or clarity, quite frankly, as your CTO or your CRO.

46:16Heather Dunn: But I think it is, you know, it is critical. We do so much work in the background that many, many executives don't see to be able to say, hey, these are the things that would drop if for whatever reason, there's not a role for me. If there is a role for me, these are going to be my expectations about what it would take for me to stay. And so that's exactly what I did with Ben and obviously with Pedro to some degree is just be really clear because all I care about is fairness, right? And it doesn't have to be fairness and equitability across my peers, but it's fairness for this role and the work and the impact that I have.

46:57Heather Dunn: And so you've got to sort of just come out with what you need with folks because otherwise you cannot count or bank on others going and advocating for you. Full stop. What's crazy is this isn't even the end of the story because after all of this, then there's still, you know, a journey of rediscovery of sorts. My words, not yours. You know, who is Brex now? You know, we've been acquired. You know, there's this thesis. Obviously, you know, that's going to influence a lot of who we're becoming. but you know to me the best transformations happen from within it's not like a top-down exercise it's like a ground a ground ground up kind of swell and so in the few minutes that we have left tell us about how you know what you looked at how it's going just in terms of the cultural transformation and like cultural and business right because you probably you know or at least from a market perspective, you're approaching, you know, you're going to market a little bit different now, and probably a lot of different other ways.

48:09So tell us a little more about that.

48:10Heather Dunn: Yeah. Yeah. So from a cultural perspective, I don't like this has been pretty interesting for me, like, if we go back to my desire to learn, to also learn from Capital One on on how they've gotten to this level of scale has been really interesting. But I think some of the pieces I would call out here. One is it's really important. And I think we've had a really good relationship with Capital One to say, what are the things that are unique to Brex that we really want to continue forward? So for example, Capital One is not saying, hey, overnight, you guys need to snap to our performance system. And like compensation probably is going to look a little different in the way that you all do it and the way we do it today.

48:58Heather Dunn: And so I think getting really crisp on the things that we do want to integrate versus not has been really, really helpful for us as we think about just overall change for the business itself. Like we want employees to just be focused on what's ahead. And I think the brand and the resource, like we're already seeing some of that from our customers. I would say like there's still a lot of communication to do externally for us. I don't want to sound like this is all rainbows and butterflies. We did see an immediate drop of top of funnel overnight for applicants to our roles, right? Because we haven't gone out and said what this looks like.

49:38Heather Dunn: I'm doing this chat with you all, and this might be new news for folks listening to it, right? So we need to go figure out how to relaunch a bit of the EVP just more generally and how Capital One is contributing to generating more founders and leaders and us being a true launchpad. Because when we get candidates on the phone, we're still closing at the same rates. So it's those types of aspects on sort of the internal side for us. And then if we think about externally with our customers, similar, how do we combat that feeling of, oh, now they're, you know, are they going to be innovative enough?

50:14Heather Dunn: Are they going to, you know, have as many AI features as their competitors do? What does this mean for their brand overall? And so I would say there's sort of a pendulum here in the ways that we're having to focus our time. And I think the biggest one for us and that we're focused on right now from both a PR perspective and from an internal communications perspective is how do we now go tell this story more broadly, externally about running independently still so that that's not harming our ability to hire the best talent or to bring in great customers in the way that we've been able to in the past.

50:55Tell us a little bit more about the story behind be the founder of your career. So it sounds like this is a big part of the EVP and I can see this being, you know, really compelling for talent, like pre-acquisition. And I get your point, like post-acquisition, people are probably wondering, like, is this still a thing? Like, can I still go to Brex and, you know, eventually become a founder? And so, yeah, walk us through how you're thinking about the EVP now and how that's evolving as you integrate more into Capital One.

51:31Heather Dunn: Yeah, of course. And I actually do now have a little bit more time if we want to dig in here anymore beyond this, but essentially, you know, taking just a quick step back into how we got to that point, you know, when I, as I mentioned, when I joined Brex, we were going through just like a transformation as a company. And a lot of our EVP prior to my joining just wasn't relevant anymore, quite frankly. And so Des, you know, who came on to do a lot of our, our talent brand work and our EVP work, she would probably smile and say, you know, I didn't do this the traditional way, the traditional way of like hiring a consultant and interviewing the whole company and then waiting six to nine months and finding out, you know, some generic phrase and then it's irrelevant and the launch never happens.

52:22Heather Dunn: We said, screw that. Let's just go look at data. let's go ask you know pedro and our leadership team what they feel and what was so interesting about all of that is that as we took a look at that data what we were discovering that with no like just organically we were generating 4x more founders than any other company of our size and stage and then we started looking at heads up that were coming out of brecks and going to smaller companies and taking on bigger leadership roles. And we had generated over a hundred of those as well. And, you know, you have to remember Rex is, you know, not even 10 years old.

53:06Heather Dunn: And so what we decided to do was really think about the flywheel, right? Which is, this is already naturally happening. How do we foster that more intentionally internally? And then how do we go use our alumni network super, super thoughtfully. But as you know, the beautiful flywheel for Brex is that founders, what do they need when they start companies? They need maybe some banking, maybe a corporate card. And so you have this beautiful flywheel that I think is really unique, obviously, to our business, which made it even stickier. So not only were we able to go and put out this incredible message and manifesto and really have Pedro's engagement on all of this.

53:51Heather Dunn: But we also built internal programs around it. So we built a program called The Foundry, where we were looking at across the company, who are those future leaders outside of Brex, but also founders and people that were interested in being founders, and how do we invest in them really intentionally. And so we'd have workshops and VCs come in, mentorship from alumni, Pedro investing in your first round. Like there was a lot there that was, you know, I would say very opinionated. And, you know, to me, as I think about sort of the genesis of what the deal and the acquisition does, quite frankly, that was a lot of the appeal of why Capital One was interested in the talent that we had.

54:42Heather Dunn: They had actually seen all of that work and said, hey, you know, maybe quitter's welcome as a tagline is maybe not exactly the, you know, framing we might want to use. So we have killed that. But this concept of, you know, Not everyone's going to be here forever. And that's okay. And let's plan for that. And let's get those people ready. And that's incredible for our talent brand. They have actually done nothing but want to foster a lot of that. And so for us, we're still very early days, right? We closed in April. There's a lot more work still to do. But to me, there is even more excitement about what we can do and talk about more generally as a company in partnership with Capital One itself.

55:33Well, that was a hell of a story, Heather. I think that's like the perfect place to end. Like we could keep, I feel like we could keep going for another hour, but like what a beautiful thing to have made it through this really tough journey. You know, anyone that has any amount of time that we can spend creating to me is a very precious thing. So for like these thousands of employees, you know, whatever the number was, like a lot of employees built this thing together, grew it, went through, you know, some really tough times together to have gone through this accelerated process and to, you know, have a newer version of yourself that is very, it's the same Brex, but like, you know, enhance in some ways and different.

56:26And what a cool thing. I would love to like fast forward and see like next year, maybe sometime or later this year, check in and see how things are going. But what an amazing journey and story. And kudos to you and Des and Nadine and the team, because like, it takes, you know, it takes a group of people you can really trust and count on to execute this way. So we have a couple of traditions left before we wrap up. Next up, we have rapid fire questions. Same set of questions we ask every guest. You ready to do this?

57:02Heather Dunn: Let's do it. Awesome. Cool. First question. What's one piece of advice you'd give to someone starting in HR today? Find your people. It just goes back to that networking aspect. You cannot. This role changes so much. It doesn't have to be the CPO job, but find people that understand and are so rooted in your work and learn from them. It's going to be a lifesaver at so many moments. And then you get to go do that for someone else at some point in your career. I love that response. Next question. If your team gave you a superpower nickname, what would it be and why? I may or may not have asked my team what they would say, And they all unanimously agreed it was chief truth teller officer.

57:45Heather Dunn: I am a big, big believer that clear is kind. Speaking of Brene Brown, and it's a phrase I say all the time, but, you know, really, really. And through the deal and integration, right? Being clear is the best thing that you can do, even when it's hard. And so that goes for the leadership team. It goes for Pedro. It goes for our employees. It goes for my team. Um, and so I am aligned with that, uh, with that name. Love it. You got to lean those hard truth discussions. Um, what's a strategy or practice from another company you'd love to steal? You know, I am such a Katie Burke fan. I like, it's hard to pinpoint one thing that she's done, but she is such an inspiration to me.

58:34Heather Dunn: And I think a lot of the work that she's doing at Harvey and some of those experimental programs around, you know, even within the field of attorneys and getting folks ready and the academies that they're rolling out, I think it's just like really, really special and unique. And yeah, I'm excited to see what she continues to do next. We love Katie. We need to bring her back. The last time we saw her was at NPL Live Austin in 2024. And I think now she's the COO at Harvey, right? Yeah. Okay. We need to have her back and talk to us about that transition from CPO to COO. All right. Last question for you.

59:11Who do we need to have onto the show next?

59:13Heather Dunn: Well, I mean, I sort of already answered that one for you with Katie, but I, and without knowing your, your full roster, I mean, Marianne at, you know, who was previously at notion and And yeah, she talked about a Dropbox alum, also absolutely incredible CPO. I think the work that she's doing at her new gig is absolutely innovative and world class as well. And somebody that I continue to learn a lot from in my network too. Well, that takes us, that brings us to the end. We have the final tradition, just as we reflect on the last hour and change, a way that we want to wrap things up. We call it one word or phrase closed.

59:57so order a few and again we prefer for our guests to go first

1:00:04resilience i'm gonna say story time like what an episode like my favorite episodes are the ones where i find myself just like observing as like a fan of the podcast and like just like listening to these amazing stories and so thank you so much for for sharing the the full journey of of Brex over the last eight, nine months. Like what an incredible story. And it might, might seem random at first, but I'll explain. I'm going to go with founders because I think I can't remember a podcast where we talked more about founders and founder led and a founder program and the foundry. And so I love that.

1:00:45It's a core of who I am. So I'm a sucker for it, but that's mine.

1:00:50Heather Dunn: Nothing better, no better, no better person to work for too than a founder. I will stand by that. Same here. Same here. Well, what an amazing hour spent together, y 'all. This is such a great conversation. Appreciate the time. It's been super fun. Thank you for having me. Been a big fan for a long time. So an honor to be on here. Thank you for joining. All right, y 'all. Have a good weekend. Bye. Thanks for tuning in to another episode of the Modern People Leader. We really, really appreciate it. And if you enjoyed the show, please leave us a five-star rating. It would mean the world to us. And connect with us on LinkedIn.

1:01:29We want to know what you think about the show. And you can find links to both of our profiles in the show notes. Thanks again for listening and see you on the next episode.