Know Your Talent Better Than You Know Your Customers

THE DECODED COMPANY

Using Big Data in Human Resources

What if companies knew as much about their employees as they knew about their customers? That is the provocative question at the heart of The Decoded Company — a book written by a group of entrepreneurs connected to a technology-driven health care marketing agency called Klick Health. Klick Health CEO Leerom Segal and his co-authors are great believers in the potential of big data — the myriad of information that is quietly and continuously collected from you as you go about your business as a consumer. Surprisingly, while companies have near-unanimously embraced the use of big data technology for their customers, very few attempt to find out more about their employees.

Three Principles

Using their own experiences as leaders of a fast-growing technology company, the authors describe in their book three fundamental principles for decoding your organization — that is, truly understanding in real time the individual skills, motivations and successes of employees, recognizing the challenges they face, and supporting each individual or groups of individuals as needed.

  • Principle 1: Technology as a Coach and a Trainer. According to the authors, most organizations use technology as a referee rather than as a coach. Technology allows companies to monitor what employees are doing and to whistle the fouls when they fall behind or fail. In decoded companies, technology is a      trainer and coach — preparing employees for the game (to continue the metaphor), then watching from the sidelines and jumping in to coach as      needed. One coaching idea proposed by the authors is the hiring of a “concierge” — someone who might use some of the traditional HR tools, such as career counseling or performance reviews, but whose one and only goal is to design a customized solution for each employee that helps them perform and grow. Technology as a trainer, the authors explain, means using “data and systems to watch blind spots, identify teachable moments, and proactively intervene with just-in-time training.”

 

  • Principle 2: Informed Intuition. The second principle is that technology does not replace but rather augments the intuition of leaders born from their      experience and knowledge, thus allowing them to make better decisions. The      capture of ambient data — ongoing information about what employees are doing or saying — is vital. (One example of the creation of ambient data is your Facebook activity. Facebook tracks with whom you communicate on their site, how often, from where and through which method, such as posting or chat message. This ambient data determines which Facebook friends end up on your newsfeed.) After analyzing a combination of ambient data and selected self-reported data, such as performance self-evaluations or monthly results, managers in decoded companies use their intuition to seek solutions to employee challenges. Bank of America discovered that the performance of call-center employees improved based on whom they talked to  during overlapping lunches. The bank thus decided to create more opportunities for employee conversations by changing a policy that had restricted overlapping breaks.

 

  • Principle 3: Engineered Ecosystems. The third principle is to use data to set up the culture and the environment that enables employees to work at their highest levels. Engineered ecosystems are both data-driven and talent-centric. For example, the authors describe how Google — which, as the company that tested 41 shades of blue for one of its toolbars, is notoriously data-driven — launched a major initiative to identify the most important traits for its managers. The results seemed at first less than earth-shattering: The eight identified traits included not micromanaging, expressing interest in employees’ success, having a vision and a strategy, and having the technical skills to advise the team. The data, however, not only identified the traits but also ranked their importance, and this is where Google’s leaders uncovered a truth about its culture that was contrary to everything they believed: technical expertise, once thought to be the keystone of a great Google manager, is the least important trait that a manager can have. Everything else comes first.

While Segal and his co-authors use Google and numerous other companies in a variety of industries as examples, it is their own success at Klick Healthcare that make The Decoded Company an authoritative, balanced and real-world exploration of the human resources potential of big data.

Keeping Business Simple

Checklists are a modest way to reduce failure, ensure consistency, and safeguard comprehensiveness. We use checklists to do the grocery shopping or to plan a weekend project. What if there was a checklist for running a successful business?

Jim Kerr provides an “executive checklist” for those dealing with the extreme complexities and challenges of the 21st century business world.

  1. Establish Leadership – the foundation for change.
  2. Build Trust – a vital component for enduring achievement.
  3. Strategy Setting – translating vision into action.
  4. Engage Staff – the way to gain support and accelerate success.
  5. Manage Work through Projects – a means to strategic alignment.
  6. Renovate the Business – a way to become “of choice.”
  7. Align Technology – it’s at the core of all we do.
  8. Transform Staff – the people part of enterprise-wide change.
  9. Renew Communications Practices – transparency improves performance.
  10. Reimagine the Organization – the expressway to the future.

To learn more about this checklist, how it works and how to use it, join us for our Soundview Live webinar with Jim Kerr on April 10th, entitled A Guide for Setting Direction & Managing Change. Put this eventon your must-do checklist.

Lessons from Leading CEOs on How to Create a Culture of Innovation

QUICK AND NIMBLE

Out of the Mouths of CEOs

What are the core elements of an effective culture that encourages and enables innovation, and how can leaders create such a culture? These two questions are at the heart of Quick and Nimble, a new book from New York Times feature writer Adam Bryant. Bryant replicates the process he used for his previous book on leadership, The Corner Office, by interviewing more than 200 CEOs, then gathering their insights into focused chapters on key topics.

Leading Innovation

In the first part of Quick and Nimble, Bryant outlines the basic elements identified by the CEOs he interviewed as essential to an effective innovation culture. A sample of these elements include:

  • A simple plan. Complex objectives and goals won’t be understood and will therefore fail to inspire and focus employees.
  • Values. Behavior in the organization must be driven by clearly communicated values.
  • Respect. Interactions between all leaders, managers and employees must be built on unwavering respect.
  • Team focus. All members of the organization must be ready to do their part for the team.
  • Frank feedback. Misunderstandings and disagreements are unavoidable, but they need to be resolved through honest and open “adult conversations.”

In the second part of the book, Bryant shifts to guidelines for leaders who want to build on the cultural foundation of their organizations and foster innovation. These guidelines include the importance of:

  • Constant communication to keep employees focused on priorities.
  • Training managers on key managerial skills, behaviors and habits.
  • Offering learning opportunities to high-performing employees by moving them around the organization.
  • Surfacing problems that might be hiding under the surface.
  • Knocking down silos.

The Wisdom (and Wit) of CEOs

At the beginning of the book, Bryant writes that he structured each chapter “much like a dinner party conversation, with me as the host, guiding the conversation with a large group of CEOs.” The metaphor is apt, as the reader can imagine a circle of CEOs gathered around a dinner table, adding their insights and stories to the discussion at hand. The chapter on having values as the guiding “rules of the road” is a case in point.

Lars Björk, CEO of data software firm QlikTech, shares the values that drive his fast-growing company: challenge (the conventional); move fast; be open and straightforward; teamwork for results; and take responsibility. Robert LoCascio, CEO of software company LivePerson, recounts the challenge of changing a culture that had become hierarchical and bureaucratic. The major changes he introduced — beginning with asking leaders to move out of offices — did not go over easily: one-hundred twenty employees and three-quarters of the management left the company, either voluntarily or not.

To reinforce the values through stories (one of the most effective reinforcement techniques), City National Bank CEO Russell Goldsmith describes how he organizes a quarterly American Idol-inspired “Story Idol” for employees (Goldsmith, it should be said, is a former movie industry executive). Other CEOs share the clever expressions that summarize the culture, such as LinkedIn’s “next play,” which echoes the phrase Duke basketball coach Mike Krzyzewski yells to his players at the end of any play, offensive or defensive. Like Krzyzewski, LinkedIn CEO Jeff Weiner doesn’t want his team celebrating what they’ve just accomplished or lamenting what they failed to do: Just move on to the “next play.”

For health care supply company Medline Industries CEO Andy Mills, a favorite expression is “kissing frogs.” Mills often tells employees that “they have to kiss a lot of frogs,” which means that they should not be afraid to take long shots that might not pan out. After, the frog might just be a prince.

Filled with the wisdom — and wit — of 200 successful practitioners and well organized into focused topics of discussion, Quick and Nimble is an insightful, comprehensive and entertaining overview of the role of culture in building an innovative company.

Building Brand Loyalty

People everywhere describe their relationships with brands of all kinds in deeply personal ways—we hate our banks, love our smartphones, and think the cable company is out to get us. What’s actually going on in our brains when we make these judgments?

Through their original research, customer loyalty expert Chris Malone and social psychologist Susan Fiske found that we relate to companies, brands, and even inanimate products in the same way that we naturally perceive, judge, and behave toward one another.

Early humans developed a kind of genius for making two specific kinds of quick judgments: What are the intentions of other people toward me? And how capable are they of carrying out those intentions? Social psychologists call these two categories of perception warmth and competence, and they drive most of our emotions and behavior toward other people—and in today’s modern world, toward businesses too. As a result, we become devoted to certain companies, brands, even products, but we also have high expectations for loyalty from them in return.

We’ve invited Chris Malone to join us for our Soundview Live webinar on March 11th. Join us for How We Relate to People, Products & Companies to learn:

•             How the social psychology concepts of “warmth” and “competence” apply to the way we perceive and relate to companies and brands.

•             From in-depth analyses of companies such as Hershey’s, Domino’s, Lululemon, Zappos, Amazon, Chobani, Sprint, and more.

•             How and why we make the choices we do.

•             What it takes for companies and brands to earn and keep our loyalty in the digital age.

Make sure to bring your questions for Chris, to post during the webinar for him to answer, and invite the rest of your department or team to join you.

Jeff Bezos and the Age of Amazon

THE EVERYTHING STORE

Jeff Bezos’ Dream Come True

While the face may be somewhat familiar and everyone knows his company well, Amazon founder Jeff Bezos has not enjoyed the iconic status of a Bill Gates or the ubiquitous (at least in business literature) Steve Jobs. And yet the Amazon story, as told in a new book from Bloomberg BusinessWeek writer Brad Stone called The Everything Store, reflects foresight, courage, vision, hard work and innovation that matches the story of any other major Internet or Information Age startup.

The company was started in a garage, although it stayed in the garage only for about three months. And it was not fresh, just-out-of-school whiz kids who started the company but a Wall Street veteran who decided that he, rather than the hedge fund company he worked for, should control his dream: to sell books over the Internet.

Bezos’ New York employer, a technology-driven hedge fund firm called D. E. Shaw, had already invested in several Internet ventures, and it would have been ready to finance an online retailer. But Stone describes how Bezos’ growing desire to strike out on his own was confirmed by his reading of the bestseller Remains of the Day — a brilliantly subtle but ultimately devastating novel of regret.

Much of the outline of the Amazon story is well-known, from its first focus on books and then a few other categories (e.g., movies and toys) to its current status as the behemoth of online retailing for just about any product, a giant in the e-reader space, and more recently, a major player in cloud computing with Amazon Web Services. Today, the company is headquartered in a campus of a dozen buildings and reached $61 billion in sales in 2012. Most people watched as new initiatives came online — Search Inside This Book, Super Saver Shipping and, more recently, Amazon Prime are three examples — and quickly became expected features. In fact, it is almost surprising to learn that Amazon is only 18 years old. The first book ordered on Amazon was Fluid Concepts and Creative Analogies by Douglas Hofstadter; the date was April 3, 1995. The buyer was a former colleague of Shel Kaphan, a founding employee of Amazon.

The Stories Behind the Story

Although the overall plot of the story might be well known, The Everything Store is filled with the unknown stories and the vital but often anonymous people who made the Amazon success possible. Kaphan is an example. A veteran programmer when he was hired, Kaphan, who Stone calls Amazon’s “primary technical steward,” was responsible for turning the dream into a functional reality. Promised that he could stay with the company for as long as he wanted, Kaphan lasted five years before, as described by Stone, he was made less than welcome by Bezos.

Bezos, of course, is the star of the story. The portrait offered by Stone is of a complex, driven, hands-on, creative entrepreneur, which is no less than expected. It seems that there is an archetype for the successful entrepreneur and one that seems to run counter to the generally accepted view that respectful, team-oriented leadership works best.

According to Stone, one mention of work-life balance in a job interview at Amazon during the early growth years would kill your chances. Bezos, however, has had some formidable sparring partners, including Barnes & Noble and the New York publishers, not to mention the challenge of a dot-com bust, all of which would have conquered a less confident — and visionary — opponent.

The Everything Store is a fascinating exploration of a unique company and its equally unique founder.