Cure back-office blues with tech management techniques

If you’re in senior management at a startup or a midsize tech company, you’re likely bored with and flummoxed by necessary but tedious back-office functions like HR, accounting, and legal. And there’s an even chance that those departments aren’t as effective as they could be. Take heart. Skills you have and processes you know can play roles outside R&D and product development.

When Gigaom Research surveyed senior execs at startups and smaller companies, they told us they’d much rather spend their time on activities where they could contribute the most value to their company. That meant core strategy and growth. In fact, only 14 percent were happy with how they spent their time. They felt back-office operations and maintaining the business distracted from growth.

activities-where-small-company-leaders-would-like-to-spend-more-time-237282

Applying tech disciplines

Many senior execs at tech companies started in engineering or product development, where they soaked up the best practices illustrated in Eric Reis’ The Lean Startup like the minimum viable product and rapid iteration. In software development, agile techniques proved their effectiveness over the old waterfall, and DevOps drove home the discipline of integrating operations, development, and QA. In his latest report, Gigaom Research analyst Philip Sheldrake sketches out how to apply these tech management techniques to back-office functions, with the objective of making them more responsive to customer needs.

Sheldrake recommends the following:

  •  Human Resources should adopt concurrent testing techniques from agile development. Resume processing doesn’t have to be a linear process pass-along; rather it should exploit modern communication and collaboration techniques. Another Gigaom Research report suggests that most HR departments underuse social media communications, and might be more effective if they were managed by the CMO.
  • Finance can be crippled by outmoded project cost analysis and ROI forecasting practices. Agile’s focus on time-to-market and flexible reaction to changing customer needs promotes radically different cost justification. ROI gets built in by design. Stock market techniques like real-options valuation play a role.
  • Legal and Procurement should take lean manufacturing principles to heart. Think of those departments’ processes in the context of reducing waste in transport, inventory, waiting, and over-processing.

We did an analyst roundtable webinar on these topics as well.

Put the cloud to work

Similarly, it’s time to put the cloud to work on the back office. While many organizations are moving non-differentiating IT functions to the cloud, to date they’ve mostly focused on front-office functions like sales, customer service, and web presence. Leading-edge cloud adopters say they’re equally interested in moving significant back-office workloads onto cloud-based applications and services.

business-application-workload-migration-2014-234498

 

Nimble HR is like Trello for hiring

I’ve written about Trello, the popular teak task management app designed around Kanban-style “boards” (see “Trello and Atlassian are quietly making inroads and announce new funding” and “The 2013 task management tools market”) Nimble HR is a “people operations” app that starts with a Trello-like user experience then turns into a social tool for hiring employees.

Nimble’s founder, Darren Bounds, tells me that the idea came from his experience using Trello when involved in hiring at another company. Trello worked well, but it remains a general purpose task-management tool. So Darren has built in the remaining 80 percent of the particulars of hiring.

Here’s a screenshot of the tool opened to a particular job. The various panels are the states for applicants. Note that the state changes are made by users either dragging and dropping candidates’ cards onto a panel or by automated mechanisms.

position_candidates

Below you can see a candidate’s card. Stacy may have initiated the process from one of the many job boards Nimble HR has partnered with, and the data from that site is mapped to the candidate card. Note that the social media handles are prepopulated by Nimble HR based on the email address. You can see that the team are sharing thoughts in the activity stream, which can be used to communicate with the applicant as well.

team_conversation

The usual conventions for social communication — @mentions, up votes, down votes — are supported. And the application has useful analytics for tracking progress, and other features.

position_analytics

Darren showed me a beta feature, which is in context video conferencing, which includes recording video sessions. These are managed in the activity stream with other artifacts, like files, chat, and state changes.

The tool integrates with others like Slack, Dropbox, Hipchat, and Google Apps.

Nimble HR is an amazingly intuitive social hiring tool, with what I think must be as close to a zero learning curve as is feasible. I expect that once Darren has rolled out a few more features — and raises some venture capital — he will start thinking about how to tackle the other parts of HR that are crying out for a new user experience.

 

Checkr gets $9M in the hot background checks market

Checkr is a competitor in the new hire background checks space, which is seeing a lot of growth due to the growth of freelance work platforms, like Homejoy, Instacart, and so on. The company has raised a round of $9 million, led by Accel Partners, with participation of Khosla Ventures, SV Angel, Data Collective and Google Ventures, and a long list of angels.

Checkr is unusual in that the company is providing an API to its customers — around 50 at the present time — who post information about new hires to Checkr’s background-checks-as-a-service offering, and a few days later Checkr posts results, which are based on both public and private data sources. These include criminal records, traffic violations, sex offender databases, and so on.

The reports cost $25-$35, based on degree of information desired.

Here’s an example record from the company website, in this case a positive search for someone on the US terrorist watch list:

Screenshot 2014-10-15 11.52.57

Checkr joins a small but extremely important group of companies that are providing businesses a critical service through APIs, like Stripe. The company has only four employees and is processing over 500 reports a day. Obviously the funding will allow them to expand considerably, and to compete more effectively with others, like Goodhire and BeenVerified. BeenVerified does have an API, but these older start-ups are organized around more traditional interactions with customers — through email and web pages.

The company was founded in April, and the founders met Accel partners at a Y Combinator Demo Day in August.

All watched over by machines of loving grace

I recently wrote about concerns about the role of big data that arose from Facebook’s research effort where the researchers sought to determine if emotional state could be manipulated by what appeared in their Facebook activity streams (see The fear of big data is growing). But directed efforts to shape our emotional state or to control our behavior are not the only ways that application of big data analysis might prove to be questionable.

Peter Capelli has posted a piece at the Harvard Business Review that poses some important questions about the application of big data and predictive analysis about future behavior and performance of individuals based on what big data may reveal. At core is the question of what businesses might do when confronted with the possibility of peering into the statistical future, and choosing who to hire — for example — based on big data-based predictions.

Peter Cappelli, We Can’t Always Control What Makes Us Successful

Many of the attributes that predict good outcomes are not within our control.  Some are things we were born with, at least in part, like IQ and personality or where and how we were raised.  It is possible that those attributes prevent you from getting a job, of course, but may also prevent you from advancing in a company, put you in the front of the queue for layoffs, and shape a host of other outcomes.

So what, if those predictions are right?

First is the question of fairness. There is an interesting parallel with the court system where predictions of a defendant’s risk of committing a crime in the future are in many states used to shape the sentence they will be given. Many of the factors that determine that risk assessment, some of which include things like family background that are beyond the ability of the defendant to control. And there has been pushback: is it fair to use factors that individuals could not control in determining their punishment?

Likening the assessment of an employee’s fate in a corporate downsizing to the judicial review of criminals may seem farfetched, but the parallels are obvious. The power lies in the hands of the courts and management in the two cases, and the employees and the criminals are powerless. One attribute of that powerlessness is that judges and management have access to statistical information — and its analysis — while the criminals and employees do not, in general.

Capelli makes an argument that the psychologists — who have been grappling with the ethics of human assessment in the enterprise for decades — are now being pushed aside by data scientists and software companies that are providing new ways to read the crystal ball. Instead of personality or IQ tests, machines are crunching big data, mined from hundreds or thousands of companies, that reveal who is most likely to be a good call center worker.

Xerox is using software from Evolv that is based on the analysis of the testing and performance tracking of tens of thousands of call center workers

Joseph Walker, Meet the New Boss: Big Data

By putting applicants through a battery of tests and then tracking their job performance, Evolv has developed a model for the ideal call-center worker. The data say that person lives near the job, has reliable transportation and uses one or more social networks, but not more than four. He or she tends not to be overly inquisitive or empathetic, but is creative.

Applicants for the job take a 30-minute test that screens them for personality traits and puts them through scenarios they might encounter on the job. Then the program spits out a score: red for low potential, yellow for medium potential or green for high potential. Xerox accepts some yellows if it thinks it can train them, but mostly hires greens.

The terminology — reds, yellows, greens — sounds more like the caste system of a dystopic science fiction novel than a contemporary business analytic tool, but it’s not. This is what is going on in business, today. And the reasons are simple, despite the ethical questions that accompany them. One driver for the rise of algorithmic HR is that people are bad at making hiring decisions: we have too many cognitive biases, and our capacity for balancing many independent factors for a candidate’s suitability for a job is limited. So the logical decision — as we have seen at Xerox — is to hand over the decision of who to hire and train to the machines.

The result is that there will be less turnover at Xerox, saving the company money, and the customers benefit from better customer support. The only ones iced out are the ‘reds’: those individuals who might have desired a job at the call center, but who will now have to find a job where their curiosity is a plus not a black mark.

The counter to Capelli’s concern should be the government or the education sector, who — armed with big data and analytic tools of their own — could be guiding those ‘reds’, and everyone else — toward the jobs and careers that line up with their gifts and backgrounds.

And the broadest ethical questions — like what to do about those raised in single parent homes in a world that might rate them a higher risk for all jobs — are beyond the scope of this analysis, today, but as Capelli points out, those questions need to be raised and answered by someone.

In a time when our institutions are in retreat, and the social contract between the worker and the business has been attenuated, you have to wonder who that someone is.

Can CultureIQ help companies manage culture?

I am a real believer in building in feedback into business, where management — and potentially all participants, depending on the degree of enlightenment of the senior team — can learn what the temper of the business is, and what needs to be paid attention.

As a result, I am always on the lookout for new approaches to what we might think of as culture monitoring tools, and in the largest context — when you include the notion of taking action to intentionally respond to what the measures suggest — to organizational culture management.

I had a chance to get a demo and briefing from the CEO of CultureIQ this week, Greg Besner. And what I saw I like.

The premise for CultureIQ is straightforward: companies should be polling their workers on a regular basis — annually or quarterly to discern what’s happening in various critical areas, like innovation, agility, environment, and others. This is the CultureIQ ‘full survey’, shown below. The CultureIQ is the aggregate of all metrics, and falls between 0 and 100.

Full Survey Dashboard

The questions in the survey have been designed to cover the full range of critical factors in business culture, according to Besner, an NYU professor. Note that users can add comments to the answers which in many cases are considered the best source of insight for management. Also Note that the solution is fully anonymized, so workers can speak openly.

The result of the full survey is a set of metrics in 9 areas.

Analytics Dashboard

On a more frequent schedule, the company can ask single, focused follow up questions, to take the pulse of the company between full surveys. These are called Pulse surveys.

CultureIQ surveys can be taken on mobile devices.

Full Survey Mobile (iPhone)

 

 

Besner’s solution also integrates with specific initiatives, such as mentoring, wellness, idea sourcing, and others. These are intended to shape the discussion and impact of company initiatives and their impact on worker engagement and job satisfaction.

I’m impressed with the design and philosophy of CultureIQ, and I intend to include the solution in a report later this year on Culture Management, where I will look more deeply into this product and others like tinyPULSE and 15five.

 

Zappos tries to leanify HR by going social

Zappos has taken another unconventional step. Recently the company dropped official job titles as part of CEO Tony Hsieh’s embrace of Holacracy, the manager-less organizational method (see Leanership trumps leadership), also adopted at Medium by Ev Williams and Co. But now Zappos is dropping the traditional model of attracting potential employees: job listings.

Now, instead of candidates poring over descriptions of jobs, and applying to the company for those that might match, Zappos has set up a social network for people interested in working for Zappos, called Zappos Insiders.

The solution feels a lot like a professional network, like Linkedin or Xing. Here’s the landing page:

Screenshot 2014-05-29 11.27.00

I chose Human Resources as my team, and found profiles of Zappos staff, but not other Insiders. Here’s the profile of a senior editor, Mandy Crispin.

Screenshot 2014-05-29 11.27.49

I think a candidate might learn a great deal about company culture by reading a bunch of these profiles, and getting in touch with specific people. I didn’t go far enough along in the process of becoming an Insider to test that hypothesis, but I presume that’s where it was heading when I bailed out.

Here’s my incomplete profile page, which was pre-populated from Linkedin data:

Screenshot 2014-05-29 11.30.05

Other parts of the Insiders set-up are fairly conventional, in that they talk about corporate culture and what Zappos Insider is all about:

Screenshot 2014-05-29 11.28.51

The Bottom Line

Last fall I commented on an article that Reid Hoffman and colleagues wrote in the Harvard Business Review (see Hire for “Tours of Duty” instead of pretending jobs are forever). In the article Hoffman et al argued that companies need to drop the empty promises of hypothetical permanent employment, and embrace a new social compact between the worker and the company, based on the reality that the average period of employment in the US in 2012 is 4.4 years, according to the US Bureau of Labor.

Hoffman’s recommendation is to start with that term — 4 years — as the basis of an agreement between the parties, and work around it: not ignore it. As the authors wrote,

If you think all your people will give you lifetime loyalty, think again: Sooner or later, most employees will pivot into a new opportunity. Recognizing this fact, companies can strike incremental alliances. When Reid founded LinkedIn, he set the initial employee compact as a four-year tour of duty, with a discussion at two years. If an employee moved the needle on the business during the four years, the company would help advance his career. Ideally this would entail another tour of duty at the company, but it could also mean a position elsewhere.

So the new responsibility of a company requires building and maintaining an active social network with other companies, alumni, and organizations so that departing alumni can take on new work elsewhere. And to accomplish that, the company must create and maintain an active alumni network, at whatever expense, so that career-long relationships between alumni and employers.

Zappos is starting at the other end of the employee lifecycle, prior to hiring, but I think both sides need to be addressed. Zappos is focused on Outsiders (while calling them Insiders), but I wonder if there is any attention to the real Insiders, and the necessity for a Hoffman-style network for the inevitable departure of some Insiders (who are becoming Outsiders again).

At any rate, the bureaucratic, process-centric approach to hiring is simply too slow to keep up with the needs of today’s lean and agile businesses. The answer is to become more fast and loose, by allowing the participants to create direct relationships with people in the company, and not just Zappos Ambassadors.

I recently spoke with Gabriel Weinberg of Duck Duck Go (see DuckDuckGo’s Gabriel Weinberg talks about ‘Inbound Hiring’), an open source search engine. His company hires exclusively from within the contacts he’s met through the open source community, which is more or less what Zappos is trying to emulate. We’ll have to see how this shakes out at Zappos, and whether others will follow suit. My bet is on networks obliterating process, as usual.

Parklet is a small-and-simple people operations toolset

I’ve decided to adopt the ‘people operations’ term from Google, Dropbox,  and others in place of ‘human resources’, principally because I don’t think that people are ‘resources’, but also because those companies that adopt the mindset of people operations have significantly happier workforces.

I read that a new startup, Parklet, had won the DEMO Enterprise Conference, following in the footsteps of WebEx, Evernote and Salesforce.

Parklet is building a tool kit for people operations support, relying on a small-and-simple design approach. The first two tools are these:

People —  is a new take on a company directory, but one with a moderate amount of interaction built-in. The orientation is toward two major issues: onboarding new employees by helping them get up to speed about the company history, culture, and people, and supporting interaction around public acknowledgement of help received or work done (‘props’).

This is the user landing page on a fictional company account, JobSpice. Note the interactive timeline that can be use to quickly set up a visualcompany history.

Screenshot 2014-05-18 15.09.21

Each user is made part of the company directory when invited, but can fill in details — like Twitter handle, department,  and so on — on their profile page.

Screenshot 2014-05-18 15.10.03

That info shows on the public profile for others to view, as shown below.

Screenshot 2014-05-18 15.10.26

A tree-form of the company organization can be used to find other people or clarify company structure.

Screenshot 2014-05-18 15.11.38

Pulse is the side of Parklet People that automatically creates a stream of activities, allowing users to get a sense of what is going on across the organization. Below, you can see that 13 new employees have joined JobSpice in the past two months, various folks have been giving others props, and Hannah Collins is a featured employee.

Screenshot 2014-05-18 15.34.16

 

Workflows — Parklet’s second app is Workflows, a tightly focused task management solution that is loosely coupled with People. Basically, Workflows provides the checklists that are associated with the lifecycles in people operations: hiring, provisioning, reviews, documentation, and at the other end, possibly dealing with issues relating to employee’s leaving the company

Screenshot 2014-05-18 15.40.02

Here, people operations and others can keep track of their tasks related to people, as opposed to other sorts of tasks.

My only quibble here is that if my company was using a solution like Asana or Smartsheets for task management, I might like an integration so that I could see these tasks in my current task client, but  I bet they’ll hear that request frequently.

As the CEO of Parklet, Dane Hurtubise, pointed out in the DEMO presentation, this is only the very beginning of tools that Parklet might roll out for people operations, a point of departure for employee engagement, employee satisfaction, and employee productivity.

I continue to believe that tightly focused and deep applications are the way forward for work management, and Parklet seems to be another entrant taking that road. I will have to follow their progress closely.

 

Laszlo Bock talks about hiring at Google, and why the GPA is irrelevant

Thomas Friedman interviewed Laszlo Bock, based on the Adam Bryant interview of last June which I wrote about at the time (see Google admits HR brainteasers were “a complete waste of time”). The big takeaway was that Google — and everybody else — have been using techniques to choose job candidates which are not great predictors of future success in those jobs. GPA, best schools, and the famous Google brainteasers are not enough.
Bock proposed ‘behavioral interviewing’, where candidates have to explain in detail how they would react in specific circumstance, but his description was too brief, and I don’t understand how interviewers are trained in the technique. So I have been on the prowl for more info on this topic.
Friedman doesn’t add much to what Bock says, so I have just clipped him out and retained Bock’s words, framed by my own commentary.
Asked about what Google looks for in a candidate, since GPAs are not a great indicator:

There are five hiring attributes we have across the company. If it’s a technical role, we assess your coding ability, and half the roles in the company are technical roles. For every job, though, the No. 1 thing we look for is general cognitive ability, and it’s not I.Q. It’s learning ability. It’s the ability to process on the fly. It’s the ability to pull together disparate bits of information. We assess that using structured behavioral interviews that we validate to make sure they’re predictive.

Number 1, the ability to learn quickly.
Number 2?

[Second] is leadership — in particular emergent leadership as opposed to traditional leadership. Traditional leadership is, were you president of the chess club? Were you vice president of sales? How quickly did you get there? We don’t care. What we care about is, when faced with a problem and you’re a member of a team, do you, at the appropriate time, step in and lead. And just as critically, do you step back and stop leading, do you let someone else? Because what’s critical to be an effective leader in this environment is you have to be willing to relinquish power.

The second most critical skill is leanership: emergent leadership. Not the title, not a degree in management. But the ability to steer things in the right direction without the authority to do so, through social competence.
And then? Responsibility and humility:

It’s feeling the sense of responsibility, the sense of ownership, to step in [and try to solve any problem]. Your end goal is what can we do together to problem-solve. I’ve contributed my piece, and then I step back.

This is a great description of the inner workings of cooperation. You add your competence because you are called to assist in the common cause with others: you feel responsible for that contribution. But you don’t need to make everyone get in line and follow your detailed plan for every step in every part of the project. You operate under the assumption that others will contribute their expertise in a manner similar to you, because of shared work culture: a culture greater than organizational culture; a worldview; a philosophical stance.
Part of that stance is ‘strong opinions, loosely held’. An intellectual humility:

Without humility, you are unable to learn. Successful bright people rarely experience failure, and so they don’t learn how to learn from that failure. They, instead, commit the fundamental attribution error, which is if something good happens, it’s because I’m a genius. If something bad happens, it’s because someone’s an idiot or I didn’t get the resources or the market moved.
What we’ve seen is that the people who are the most successful here, who we want to hire, will have a fierce position. They’ll argue like hell. They’ll be zealots about their point of view. But then you say, ‘here’s a new fact,’ and they’ll go, ‘Oh, well, that changes things; you’re right.’ ” You need a big ego and small ego in the same person at the same time.

This is another key aspect of the cooperation culture and of leanership.
What turns out to be least important? Expertise:

If you take somebody who has high cognitive ability, is innately curious, willing to learn and has emergent leadership skills, and you hire them as an H.R. person or finance person, and they have no content knowledge, and you compare them with someone who’s been doing just one thing and is a world expert, the expert will go: ‘I’ve seen this 100 times before; here’s what you do.’

Friedman paraphrases Bock as saying, more or less, that the inexpert may goof one in 100 times, but they are also capable of innovations that the expert would not consider. And that occasional breakthrough pays for a dozen small toe stubs.
The bottom line? The skills to look for in candidates are these, in order: the ability to learn quickly, leanership, responsibility, humility, and for developers, coding ability.
Let’s hope that the corporate HR folks out there are taking notes.
And it makes you think, obviously, that schools are focusing on the wrong things when the metric that they consider the distillation of the value they create — the GPA — turns out to be irrelevant.