people management practices from google, facebook and apple
TRANSCRIPT
THE BEST OF THE BEST
TALENT MANAGEMENT
PRACTICES FROM THE
SILICON VALLEY
With A Focus On Google, Facebook And Apple
BAPM - Nov. 13, 2014
© Dr John Sullivan
107slwww.drjohnsullivan.com
A quick tour of…
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I’m from the Silicon Valley…
so I will move fast today
- Learning, Innovation, Speed & AdaptivenessLISA
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Sit back and consider the possibilities
1. They asked me to expose you to some
leading edge best practices from the
Silicon Valley… in order to make you
re-think your current approaches
2. Realize up front that these practices may
or may not be a glimpse of the future of
HR in Europe
3. Please note: because these are advanced
features… pick and choose the
approaches that fit your firm
We call him
Poorly dressed
Young
Uneducated
Inexperienced
CEO
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The talent areas that I will cover today
1. Productivity and business impacts2. WOW physical features3. WOW employee benefits4. Aggressive recruiting5. Prioritization6. Metrics7. Internal movement8. Retention9. Learning 10. Innovation11. Speed 12. Adaptiveness
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Productivity and Business Impacts
In the Silicon Valley we focus on…
Recommended actions
• Make it your primary Talent Management goal…
to increase employee productivity
• You must know and then manage the factors that
increase productivity
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Where does HR rank… when compared to other strategic business functions ?
When CEO’s and board-level executives were
asked to rank business functions… which one was
listed as the most strategic?
Sales
Where was HR ranked on the list?
“the least strategic function”
Source: DDI Survey - Simon Mitchell 2014
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2 strategic questions related to employee productivity
Are the employees working at firms which have
“top performing” talent management functions…
significantly more productive…than the employees
that work at firms with only average performing
talent management functions?
Yes / No
If the answer is yes… What is the percentage of
productivity improvement… as a result of having a
great talent management function?
Comparing the workforce productivity of “Top to Very Good” firms in the computer /tech industry
A comparison of employee output (rev per employee)
Average $208,000 USD
IBM $229,700 (11% above the average)
HP $352,400 (Nearly 1¾ times the average)
Amazon $697,016 (Nearly 3¼ times the average)
Microsoft $877,000 (Nearly 4 times the average)
Google $1,320,000 (Nearly 6.5 times the average)
Facebook $1,580,000 (7.5 times the average)
Apple $2,218,000 (Nearly 11 times the average)
Key learning - it takes 10X more employees at IBM… to produce the same revenue as Apple (From 7/2014 data from www.MarketWatch.com )
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Does a top “best place to work” ranking correlate with business success?
Employer brand
1. Google
2. Apple
3. MS
4. Facebook
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Market cap value
1.Apple - $478 b
2.Exxon - $406 b
3.Google - $403 b
4.MS - $315 b
13 Facebook - $211b 5/2012
Product brand
1. Google
2. Apple
3. IBM
4. MS
Do you see the similarities?
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Realize that… most of your firm’s productivity comes from your top performers
How much more do top performers produce?
The top 1% of your workforce produces what %
of your total output ?
The top 5% produce
A top performer produces how much more than
the average employee in the same job?
- 10 times more than the average
- 25 times more than average employee
- 300 times more than the average
- 1000 times more than the average
GE & Yahoo
5%
Apple
Microsoft
26% (5X) - U of Indiana study
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WOW Physical Facilities
Recommended actions
• Don’t give employees a reason to leave the building
(Casino)
• Enhance collaboration with serendipitous meetings
In the Silicon Valley we have…
How does this compare to your office?
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How does Amazon’s new HQ compare to yours?
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A view of and access to the SF bay
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Can you match this?
The Sweet Shop
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Can you match a BBQ smokehouse story?
24/7 technology access
Every building has 24/7 IT supply and repair
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Google sends a message that they want you to think
Massage chairs
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If you don’t like the massage chairs… try this!
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Google Bowling Alley
Google wants going to a meeting to be fun
Slides in Google offices (they see no compliance issues)
22Regular slide Long slide Fireman’s pole
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Open space/ standing desk for collaboration –“swing your arms and hit someone”
Improving decision-making speed at GSK
Open-office design improves decision-making speed
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More interaction & cross-functional collaboration
increases decision making speed by 45% Source: Forbes 2012
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Video games for collaboration and fun
A scientific approach to the work environment
Why does Google do this?
To enhance collaboration26
A visible business plan keeps everyone on the same page
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http://roger.kaywa.ch/files/innovationatgoogle.pdfhttp://roger.kaywa.ch/files/innovationatgoogle.pdf
LISA means you won’t catch us
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They even use their strategic plan as a recruiting tool on a bus in Seattle
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Google makes you look forward to going to work
http://onlinelibrary.wiley.com/doi/10.1111/j.1744-6570.2011.01239.x/full
“It's like… going to Disneyland everyday”
Source Google employee on Glassdoor.com
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Even our approaches to a conference
are different
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A conference room at Zappos
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A Google conference bike
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WOW Employee Benefits
Recommended actions
• Don’t let them worry about non-work things that
they must get done
• Provide them with “a story a day”
In the Silicon Valley we have…
Do you offer these WOW benefits?
High pay and stock
Free meals, espresso, red bull all day
On-site physician /dental
Valet parking, car detailing & bike repair
Employees design their your own cubical
Child care & back up
Massage, yoga, hair stylist
Company movie day, dances, picnics & concerts on-site
Takeout food for new parents
$5000 toward adoption
Maternity 5 mths at 100% pay
$20k for freezing a female employees eggs (Apple and Facebook)34
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Free time to experiment
Up to 20% free time to work on “your project”
20% time - “The important thing is that it really
lets you say ‘No’ to your manager”
From an employee’s perspective, under the
rule.... “Nobody can tell you that you can’t
experiment” Larry Page CEO
Would this feature attract top workers?
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Free Wi-Fi shuttle bus and ferry to work…
7,100 stops per day (Google, Facebook, Apple, Yahoo, Genentech etc.)
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Google offers a different band everyday
Google’s “policies” build their brand
Our Dog Policy
“Google's respect and affection for our canine
friends is an integral facet of our corporate culture.
We have nothing against cats, per se, but we're a
dog company”
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Eliminate bad rules
Google’s ‘Big Scrub’ fixes bad policies/ rule
Every quarter employees list and then vote on the
top 20 rules they want to see changed
(Google pledges to fix those rules within 2 months)
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Apple knows the value of a great job title
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Your policies can reveal the true level of your trust
---------------------Facebook does not track employee absences
Key lesson - If you focus on, measure and reward
performance… you won’t have attendance issues
“There is no policy or tracking”
Apple is much different than the rest
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No free food
A great deal of secrecy
No facilitated career progression
No individual bonuses
Instead they focus on just two things…
1.Doing the best work of your life
2.Having a noticeable impact that makes you proud
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Aggressive recruiting
Recommended actions
• You must focus on recruiting top performers and
innovators
• You must use bold and unique recruiting
approaches when you are fighting for the best
In the Silicon Valley we do…
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Proximity recruiting
Tokbox parked a taco truck across from Yahoo's HQ
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Yahoo raised the recruiting bar even further
Coffee cart recruiting at Google’s bus stop
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Bigcommerce “proximity” recruiting
At the same bus stop… this startup firm gave out
“poached” egg sandwiches and coffee
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Would this be an aggressive poaching?
EA vs. Radical entertainment (ASK-EE)
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Google Code Jam – Zombie smashers
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Google Code Jam
This version was a “Zombie smashing” contest
36,000 participants tried to solve 5 algorithmic
problems including figuring out the most efficient
way to whack zombies
Google gets 3 million applications a year
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Employee generated videos (film festival)
Make “finding the excitement” at your firm easy
for outsiders (200 films)
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Videogame practice – My Marriott Hotel game
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Video job descriptions provide a competitive advantage
A video job description
Can reveal the excitement behind a job (Quickstop, Accenture and Deloitte)
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Referral cards can be powerful
Your customer service just now was exceptional.I work for the Apple store and you’re exactly the
kind of person we’d like to talk to.
If you’re happy where you are, I’d never ask you to leave. But if you’re thinking about a change, give me a call.This could be the start of something great
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Firms have shifted to video interviews
Initial interviews are now done live but remotely
using a web cam (save travel and schedule issues)
It now has an app for iPhone interviews
Apple careers website
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Boomerang re-hires - DaVita = 16% of all hires and Yahoo 14%
“You’re always welcome here” e-card + alumni group
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Outrageous referral bonuses
They offered a $20,000 referral reward for any job
Any “friend of the company” qualifies for the $
They hired 9 in 1 month (from a base of 32 employees)
Why? “People don't always listen to recruiters,
but they do listen to their friends”
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Halfway
Any questions at this point?
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Prioritize and Focus
Recommended actions
• Prioritize the HR programs with the highest impact
• “Do the big things right” by prioritizing high-impact
bus. units, jobs and employees
In the Silicon Valley we…
Identify and then prioritize the people management programs that have the highest business impact (BCG)
59Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012
Mid and lower impact HR functions
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Make hiring the #1 priority
“Hiring is the most important thing you do”
Source: Eric Schmidt, Former CEO of Google
Prioritize top performers andknow what they care about
An average employee at firm
xyz want these things…
1. Doing the best work of your life
2. Proud of their impact
3. Great managers
4. Opp. to innovate/ take risks
5. Learn rapidly / being challenged
6. Work with top co-workers
7. A choice of projects
8. Opp. to implement ideas
9. To make decisions
10.Input into schedule/ location
But top performers at the same
firm want these factors…
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1. Guaranteed pay
2. Exceptional benefits
3. Security
4. Time off with pay
5. No surprises/ predictable
6. Seniority matters
7. Equal treatment
8. Minimize risk and stress
9. Work/ Life balance
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Focus on “A” players
Hire only “A” players
“The problem is that A players are only attracted
to work at places where they see other A
players, they smell B from a mile away” Inventor James
Dyson
Always hire the best managers, "A" people…
As soon as you hire a B, they start bringing in
B’s and C’s" Source: Steve Jobs
“If people see poor performers all around them,
they decide they don’t need to work that hard.
Your very best people will leave” Source: Laszlo Bock Google
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Data supported decisions
Recommended actions
• Utilize metrics everywhere
• Convert talent results into revenue impacts
• Utilize predictive rather than historical metrics
In the Silicon Valley we make…
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What areas does HR do well & poorly? (KPMG)
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The most advanced… and the non-usersof analytics by business function
Are advanced users Are non-users
1. Finance 58% 7%
2. Executive team 51% 11%
3. Operations 48% 9%
4. R&D 44% 23%
5. Marketing 41% 16%
6. Sales 34% 20%
7. HR 27% 23%
Learning: compared to HR, Finance has 2X the
advanced users and 3x fewer non-users
Source: AMA/i4cp 2013
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The use of analytics increases business results… (source: Harvard Business Review)
Advanced users of workforce analytics… produced higher business performance in these areas
% increase in performance by effective users
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Google is the world’s only data driven TM function
“All people decisions are based on data & analytics”
"We want to bring the same level of rigor to
people-decisions that we do to engineering
decisions"
“The best thing about using data to influence
managers… is that it’s hard for them to contest
it”
For most… just knowing that information…
causes them to change their conduct”
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Experimentation in TM
Google has an R&D team in Talent Management
People & Innovation Lab (PiLab) - it runs
dozens of experiments on employees in an effort
to answer questions about the best way to
manage a large firm (diversity, pay & weight)
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Improving internal movement
Recommended actions
• Faster and more impactful movement for retention,
development and productivity
In the Silicon Valley we focus on…
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Intra-placement
Develop a “Intra-placement” recruiting team
An intra-placement team… proactively identifies
who needs to be moved and then accurately places
them in the highest impact job
“Inside First”
Employee choice internal movement practice –A new employee selects their own path
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6 week on-boarding boot camp
They send new hires key paperwork to complete
before they start
Every new hire goes through 6 weeks before they
are placed
They get a mentor
The entire time they work on real team projects
with access to the complete computer code
“Bootcampers choose the team and the project
that they will join”
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Pick your next job
Hackamonth self-directed movement
Picking your own next job… increases the
likelihood that you will be doing “the best work
of your life”
Any engineer after 1 yr. can select any new
project for a month, and if they like working
there… “they can stay”
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Internal project availability website
Project availability website
An IM program success factor is… the ability to
make the available projects /rotations "visible"
The most advanced approach is an internal
webpage… to make employees aware of the
available projects/ assignments (some allow bidding,
while others proactively send out targeted alerts)
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How to excite young, “techie” and diverse workers
Reverse mentoring
Matching execs. with “technical” or diverse employees
It keeps execs up to speed with trends/technology
It spreads inclusion
It can increase the retention of younger workers
Cisco, HP, PwC, IBM, Microsoft and GE
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Retention
Other firms can learn from our focus on…
Recommended actions
• Prioritize your employees and jobs
• Personalize your retention plans
• Find out why they leave with pre-exit interviews
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Retention is an important issue among executives
A SHRM/ economist survey of global C-suite
executives showed that execs forecast that retention
will be the top issue for 10 years
1. Retaining and rewarding the best people
2. Attracting the best people to the organization
Turnover rates increased last year by 45%
Source: A SHRM / Economist survey 2010
85% of the employed would consider a new job.
Source: LinkedIn 2014
Almost everyone is available
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Retention of top performers
High achievers will leave for better opportunities
“High achievers… are leaving their employers
after an average of 28 months” (i.e. high achievers are
those that are on average 30 years old with great school and work
credentials)
If you don’t provide a better internal opportunity
within 28 months… you will lose your high
achievers
Source: Harvard Business Review 2014
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Identifying who will quit
Google uses an algorithm to identify who might quit
Employee reviews
Promotion history
Pay history
Employee surveys
Peer reviews (360 degree)
Employee training
Leadership meetings
They look for employees who “feel underused”
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Use “stay interviews”
Hold stay interviews before they quit
This firm uses stay interviews (why do you stay?)
to head off retention issues by asking current
employees what excites them and makes them
want to stay
They then reinforce and build on those factors
The #1 Gallup lesson on retention
“No one ever quits a company…
they quit their manager!”
Conclusion of the Gallup Survey
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Develop a “bad manager identification program”
Improve retention with a More of / Less of list
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I would like less of
1.Meeting attendance
2.Paperwork
3.Writing reports
4.Travel
5.Weekend work
I would like more of
1.Leadership roles
2.Stretch projects
3.Interaction with execs.
4.Attending conferences
at Stanford
5.New technology tools
Work flexibility
Mass career customization (Deloitte)
Every employee can dial up/ down their job… as
career aspirations & personal needs change.
They can adjust:
• Work hours
• Travel demands
• Job responsibilities
Results:• 2/3 of employees choose to dial up their career• Voluntary turnover rates of top performers
choosing this option were 2x lower
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Remote work helps the bottom line
Results Only Work Environment
• Pick when you work
• Pick where you work
• No in-person meetings required
Is this laughable? Is it risky?
The business impacts of a “mature adult” policy:
ROWE employees have a 45% higher / lower turnover
($13 million per year at $102k per employee)
When workers switch to ROWE, their productivity jumps by 35%
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Pay to quit
“Pay to Quit” at Amazon
“Once a year, we offer to pay our associates to
quit”. ($2,000 the 1st yr., to $5,000 the 5th)
We hope they don’t take the offer, the goal is to
encourage folks to take a moment and think
about what they really want in the long-run
“An employee staying somewhere they don’t
want to be isn’t healthy for the employee or the
company.”
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Influence the influencers for retention
4,000 showed up
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Learning
Other firms can learn from our focus on…
Recommended actions
• Make employees own their personal development
• Offer on-the-job projects because they are the best
ways to learn
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Learning ability is the #1 competency
“… learning ability is the key determiner in deciding
among candidates” (across all jobs)
Laszlo Bock VP of HR
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Development
Development not training at Google
"Do not get scared into thinking training is
development”… “ training courses are of little
use” because “people do not learn through going
on training courses,"
"The vast majority of people learn through on the
job learning”
The primary mechanism for development is "on-
the-job learning" through continuous internal
project transfers
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Constant learning is important that Google
“Testing on the Toto toilet”
www.flickr.com/photos/gubatron/246489031 91
They recruit “makers” not degrees
Obviously they can’t require a college degreeBecause their obviously successful
CEO is a college dropout… “It would be weird for us to require
a college degree”So instead their recruiting focus is
“If you can build awesome stuff and have big impact, that’s all we’re really looking for”
At Google - “the proportion of people without any college education at Google has increased…” 92
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Innovation
Recommended actions
• Calculate the business impact of innovation over
productivity (5X)
• Develop processes for hiring and managing
innovators
In the Silicon Valley we focus on…
What is required to increase innovation?
Google has a formula for increasing innovation(Algorithm)
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Innovation = Discovery + Collaboration +Fun!
Source: K M World Magazine Webinar 2008
(i.e. learning)
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Successful organizations must have innovation
Innovation is critical in a fast-moving world
“Creativity” is the most important factor for the
successful company of the future
CEO survey conclusion from IBM’s Capitalizing on Complexity
Innovation is replacing productivity as the #1
business goal (as a result of the success of the Apple
approach)
The impact of innovators in mid-level jobs is
becoming… greater than the impact of many
executives
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Google wants employees to aim high
A 10 % improvement rate “means that…you are guaranteed not to succeed wildly”
Google expects it’s employees to… “create products and services that are 10 times better than the competition”
A “1000% improvement requires rethinking problems entirely, exploring the edges of what’s technically possible, and having a lot more fun in the process” Larry Page
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Innovators see things as “broken”
Innovators add great value because… they see most things as “broken”
The best employees assume continuous obsolescence
and leaking
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Facebook is focused on innovation
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Hackathon one night project
Anyone can propose an all night session on a novel
idea to create a prototype (Facebook Chat, Type ahead search and
Friend Suggester came from one)
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Measure if your firm is innovative
How do you measure if a firm is innovative?
If more that 25% of it’s revenue (or business)
comes from products and services that were
developed within the last 18 months
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Speed
Recommended actions
• Hire “fast” employees
• Be first.., so that you can give your firm a
competitive advantage
In the Silicon Valley we focus on…
Speed is essential quotes
Speed is essential for business success
Speed allows your firm to be “first to market”
“If you never break anything, you’re probably not
moving fast enough”
“We’re less afraid of making mistakes than we
are of losing opportunities”
“Done is Better than Prefect”
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Innovation and risk-taking barriers
Facebook managers encourage employees to take
more calculated risks…
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Why – risk taking means either rapid progress…
or rapid learning from your failures
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Adaptiveness
Recommended actions
• Hire “adaptive” employees
• Everything must be quickly “scalable” up and
down
In the Silicon Valley we focus on…
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We live in a fast-changing unforgiving VUCA world
It is no longer… the big and established firms that dominate the small ones…
it’s the fast and adaptive firms that now dominate the slower firms
Warning: If the speed of change outside your firm exceeds the speed of change inside your
organization,
your end is in sight,
and unfortunately… insiders will probably be the last to actually see the end coming
Dr John Sullivan
Focus on those that are comfortable with VUCA
When we hire talent, “we look for Googliness …
people who are comfortable with ambiguity”
Prasad Setty
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Expect resistance and criticism
Be bold… to attract innovators
Recruit where they currently work
Prioritize your jobs and employees
Make decisions based on data
Speed, learning and collaboration
Provide a competitive advantage
Recruiting/retention are critical
Focus on referrals for top talent
Move people internally to excite
A final check list of action items
