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Silicon Valley Workforce Performance Secrets

A Snapshot View Of Silicon Valley’s Secrets For Creating the World’s Most Productive Workforces

1 of 97
On the Leading-Edge of High
Performance:
A Snapshot View Of Silicon Valley’s Secrets
For Creating the World’s Most Productive
Workforces
© Dr John Sullivan
97The most current version of these slides can be found at www.drjohnsullivan.com
2
I’m from the Silicon Valley…
so I will move fast today
But please interrupt with questions at anytime
3
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, innovative 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!
A message from the CEO’s of RadioShack, Kodak, Sears, Good Guys, Xerox, Oldsmobile etc.
4
Let’s quickly define high-performance (hp)
• HP is being in the top 5% of ranked results
• Or HP is at least 50% above the average results
5
It’s usually a good idea to “follow the leader”
Here are some reasons why you should follow the
Silicon Valley
We dominate market cap
6
Top market cap value
in the world
1.Apple - $729 b
2.MS - $399 b
3.Exxon - $366 b
4.Google - $365 b
11 Facebook - $220b IPO 5/2012
Source: Weblists
Global product brand
1. Google
2. Apple
3. IBM
4. MS
We dominate product brand
Source: Millward Brown

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Silicon Valley Workforce Performance Secrets

  • 1. On the Leading-Edge of High Performance: A Snapshot View Of Silicon Valley’s Secrets For Creating the World’s Most Productive Workforces © Dr John Sullivan 97The most current version of these slides can be found at www.drjohnsullivan.com
  • 2. 2 I’m from the Silicon Valley… so I will move fast today But please interrupt with questions at anytime
  • 3. 3 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, innovative 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! A message from the CEO’s of RadioShack, Kodak, Sears, Good Guys, Xerox, Oldsmobile etc.
  • 4. 4 Let’s quickly define high-performance (hp) • HP is being in the top 5% of ranked results • Or HP is at least 50% above the average results
  • 5. 5 It’s usually a good idea to “follow the leader” Here are some reasons why you should follow the Silicon Valley
  • 6. We dominate market cap 6 Top market cap value in the world 1.Apple - $729 b 2.MS - $399 b 3.Exxon - $366 b 4.Google - $365 b 11 Facebook - $220b IPO 5/2012 Source: Weblists Global product brand 1. Google 2. Apple 3. IBM 4. MS We dominate product brand Source: Millward Brown
  • 7. We dominate retail sales 7 Apple retail is #1 “More than twice as efficient ($5,600 per sq. foot ) as the 2nd place Tiffany and Co. It’s also more than 7 times the median of the top 20” http://www.foxbusiness.com/industries/2012/02/23/most-profitable-stores-in-america/
  • 8. 8 We also dominate employer branding Poachable Top 10 firms that employed people admire Company Desirability rank 1. Google 1.0 2. Apple 0.61 3. Amazon 0.30 4. Facebook 0.26 5. Microsoft 0.21 6. Uber` 0.17 7. Twitter 0.15 8. LinkedIn 0.09 9. AirBnB 0.09 10.Netflix 0.07 12. IBM Source: https://poachable.co/ Only at #12 does the first non W. Coast firm appear
  • 9. Which firms have the highest workforce productivity? McD $63,571 HCA $164,080 Wal-Mart $220,750 Coke $260,000 Kodak $287,945 Rite Aid $298,072 United Air $462,060 .(MarketWatch.com 5 6 15 ) 9 Calculate the value of the output of your employees (rev per ee)… by taking your yearly corporate revenue and dividing it by your number of employees
  • 10. SV firms also dominate in workforce productivity (Employee output value) Average rev per ee $208,000 Expectation: Talented firms will have a 50% higher Rev. per Employee # Yahoo $221,000 (Only 5% above average) IBM $238,000 (14% above the average) HP $363,000 (Nearly 1 ¾ times theaverage) Amazon $577,000 (Nearly 2 ¾ times the average) Microsoft $737,000 (Nearly 3 ½ times the average) Google $1,270,000 (Nearly 6 times the average) Facebook $1,470,000 (Nearly 6 ½ times the average) Apple Key learning – Apple could produce the same revenue as IBM with almost 1/10 th. the workers (From 5/7/15 data from www.MarketWatch.com ) 10 $2,290,000 (Nearly 10 ¼ times the average)
  • 11. 11 Key learnings 1.Silicon Valley (west coast) firms dominate both business and Talent Management results 2.Realize that your TM function, just like mobile phones, banking, supply chains, finance, TV and the internet will not be different at your firm 3.“We are different” is just an excuse not to change
  • 12. 12 Examples of Silicon Valley best practices for generating high- performance
  • 13. 13 High-performers are attracted / retained by different things than the average employee In the Silicon Valley we get high- performance by realizing that… In lieu of… a paycheck job
  • 14. High-performers demand different things to take a job… and stay in a job Criteria for top performers 14 1. High pay 2. Guaranteed pay 3. Exceptional benefits 4. Security 5. Time off with pay 6. No surprises/ predictable 7. Seniority matters 8. Equal treatment 9. Minimize risk and stress 10.Work/ Life balance Criteria for average workers Doing the best work of your life 1. “Can’t put it down” exciting work 2. Proud of their impact 3. Work with top co-workers 4. Great managers 5. Learn new things rapidly / growing 6. Opportunity to innovate & take risks 7. To be constantly challenged 8. Freedom, a choice of projects 9. Opportunity to implement ideas 10.Be an expert / mastery of an area 11.Input into schedule / location 12.Opportunity to make decisions 13.Measure & reward performance >
  • 15. 15 Have a large reward differential Laszlo Bock VP at Google Why – Equal pay under-rewards high-performers
  • 16. Apple is much different than many SV firms 16 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 (we are on a mission)
  • 17. Facebook has the same 2 factors Ranked the # 1 employer by Glassdoor.com 17Source: Glassdoor.com 2013
  • 18. 18 Google’s top 2 attraction and retention factors Top people are attracted and stay for the following two reasons 1. “The quality of the people they work with” 2. “The feeling that the work they do is meaningful” Laszlo Bock VP of HR
  • 19. 19 High performance tool “Walk them downstream” excitement tool Goal – to help employees to fully understand the impact that they have… by “walking them downstream” Proactively take employees to see the product work and it’s impacts Let them interact with customers and users
  • 20. 20 BTW – Performance comes from 20 key factors 1. A great manager 2. Effective plans & strategies 3. Clear and prioritized goals /activities to focus the work 4. Rapid learning / sharing 5. Right motivators /engagement 6. The right employee skills 7. 2 way communications 8. Performance metrics 9. Quality team members from great hiring & retention 10.Collaboration for innovation 11.“Right job” placement 12.Processes are integrated 13.Information for decisions 14.The right tools/technology 15.Qualityinputs/materials 16.Enough budget/ resources 17.The work environment is designed for productivity 18.Time devoted to the task 19.Outside of work factors 20.ID & removing barriers to productivity/innovation
  • 21. 21 Nobody makes a better business case for Talent Management than us In the Silicon Valley we get high- performance by getting more budget… In lieu of… doing more with less
  • 22. 22 The business case starts with knowing the differential The best firms have one more thing in common they’ve all calculated the performance differential (between a high-performer vs an average performer in the same job?) - 25 times more than average employee - 300 times more than the average - 1000 times more than the average BP convert HR results into $ - 300 times $1.2 million rev per ee = Netflix & Yahoo - Apple Google Microsoft 10 times the average employee
  • 23. What is the performance differential between a weak manager and a top performing manager? 23 “Removing a poorly performing boss and replacing him or her with a top performing manager Is roughly equal, in terms of productivity, to adding an extra person to the team.” Source: National Bureau of Economic Research
  • 24. 24 The business case for focusing on high-performers Calculate the output differences in the segments of your workforce  The top 1% of your workforce produces what % of your total output ?  The top 5% produce  Bottom 5%... 5% 26% (5X) cost up to 2 ¼ X salary / 1 day/week U of Indiana study
  • 25. 25 High performance tool Pay employees to leave At Netflix... “cutting smartly” means:  “Adequate performance gets a generous severance package”… Why?  “Managers feel too guilty to let someone go”, so you must pay the employee to leave “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)  The goal is to encourage folks to take a moment & 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.”
  • 26. 26 A great bus. case will get you abundant resources Google has double the recruiting budget of an average firm (Laszlo Bock) Google has the world’s lowest employee to recruiter ratio. The industry average is 577:1 Source: Google recruiting 3/17/15 & Fortune Mag. They have “a ratio of 58:1”
  • 27. 27 It takes a great bus case to justify outrageous referral bonuses ThoughtSpot offered a $20,000 referral 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”
  • 28. 28 Freedom, choice and time to think Hire mature adults and let them decide how to be productive (Freedom is free) In the Silicon Valley we get high- performance by offering… In lieu of orders, rules and structure
  • 29. 29 Learn from Google – Freedom for employees Laszlo Bock VP at Google
  • 30. 30 High performance tool “20% free time to work on “your project” From an employee’s perspective, under the rule.... “Nobody can tell you that you can’t experiment” Larry Page CEO
  • 31. 31 Our policies reveal our true level of trust --------------------- Facebook does not track employee absences ---------------------------- Google’s office dress code “You must wear clothes” “There is no policy or tracking”
  • 32. High performance tool 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) 32
  • 33. 33 Google sends a message that they want you to think Massage chairs
  • 34. 34 If you don’t like the massage chairs… try this!
  • 35. 35 Collaboration & interaction, which lead to innovation In the Silicon Valley we get high- performance by maximizing… Instead of walls and hierarchy
  • 36. 36 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)
  • 37. What is required to increase innovation? Google has a formula for increasing innovation (Algorithm) 37 Innovation = Discovery + Collaboration +Fun! Source: K M World Magazine Webinar 2008 (i.e. learning)
  • 38. Innovation and risk-taking go together Facebook managers encourage employees to… 38
  • 39. Steve Jobs understood the need for mixing 39 Collaboration comes from mixing at Pixar Steve Jobs “insisted there be only 2 bathrooms in the entire Pixar studios” creating a 15 min. walk “He wanted there to be mixing”… “so his design was to force people to come together” Source: Jonah Lehrer - I MAG INE
  • 40. How does this compare to your office? 40
  • 41. How does Amazon’s new HQ compare to yours? 41
  • 42. 42 A view of and access to the SF bay
  • 44. 44 Open space/ standing desk for collaboration – “swing your arms and hit someone”
  • 45. 45 A Google conference bike for collaboration
  • 46. A scientific approach to the work environment Why does Google do this? To enhance collaboration 46
  • 47. 47 Facebook is focused on innovation 47 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)
  • 48. 48 Can we be frank? 1. We manage this way because it creates innovation, which makes us a boatload of money 2. 3 out of 4 of the most valuable firms in the world manage this way… and Radio Shack, Sears, Kodak, Xerox, GM and the government do not 3. You might feel that you can’t afford to manage this way but the opposite is true… you can’t afford not to 4. Forget being different, catch up, you owe it to your shareholders/ customers to manage this way
  • 49. 49 Recruiting the very best “A” players that work across the street… using the boldest approach possible In the Silicon Valley we get high- performance by… In lieu of… an active job seeker approach
  • 50. Understand exactly who your talent competitors are 50 You compete with Google for the best talent in:  Technology and engineering  HR  Finance  Marketing  IT  Social Media  Accounting Lesson to be learned: for most jobs, you compete with every firm that has an employer brand better than yours!
  • 51. 51 Learn from Google – Hire only smart people Laszlo Bock VP at Google
  • 52. 52 Make hiring the #1 priority “Hiring is the most important thing you do” (Google gets nearly 3 million applications a year)
  • 53. 53 A quick example – comparing average recruiting with strategic recruiting actions Normal – hire active jobseekers into currently open jobs Strategic recruiting is much bolder! Team liftouts - hire the entire intact team Acqui-hiring – buy a startup firm primarily for its intact teams of talent (Yahoo and Facebook) Hire to hurt – poach their best… so that “they won’t have them”… and we will (Uber recruiters book short rides on Lyft to make their recruiting pitch) Can you see the difference in boldness/ impact?
  • 54. 54 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
  • 55. High performance tool 55  “Over 93% of the top performers in their field find a job by being “referred by someone they know” , they do not find their jobs through a job posting”…Source: Forbes 8/03/2014  Facebook and Twitter hire more than 50% of their hires from referrals and the average for top firms is 46% Source YesGraph  Referred workers are more productive during their first 400 days (Source: Evolv)
  • 56. 56 Quick examples of aggressive recruiting
  • 57. 57 Would this be aggressive recruiting on Craigslist? Searching for 2 F**king Great Developers ($115k - $140k / yr) (San Diego) If you're a great f**king developer who wants to make a bunch of money working somewhere awesome then keep reading. We're a San Diego Tech Company (relocation covered for the right candidates) that's looking for not one but two awesome developers. So digest this ad, accept your fate, and take one last lap around your office to say goodbye to your friends because you're about to upgrade. What You'll Be Doing: This quarter you'll be adding kick ass new features to our already massively successful products. Afterwards depending on your ability, interests, and attitude you'll be working on any number of projects like new products, internal tools, improving our already f**king great scalable architecture, or skunk works machine learning data analysis for new product R&D.
  • 58. Let’s look at how a single firm, Yahoo is targeted A competitor that shared the building posted this in the restrooms at Yahoo's think tank” From valleywag 58
  • 59. 59 Would this be aggressive recruiting? Tokbox parked a taco truck across from Yahoo's HQ
  • 60. 60 Aggressively e-mailing a competitor’s employees Hi I am a member of Microsoft's marketing staffing team… I know a lot of people from Yahoo! have been reaching out to us lately because they are nervous about the pending layoffs… You've read this far so you must be at least a bit intrigued by what we may have to offer... Global Central Sourcing Team, Microsoft > We’re Hiring! Silicon Alley Insider 1/08 60
  • 61. 61 High performance tool Directly target individual competitor firms? The CEO of Yammer, David Sacks, directly targeted Yahoo with… a bounty offer to any frustrated Yahoo employee “Quit your job within 60 days and Yammer will give you a $25,000 signing bonus” Yammer received 70+ resumes
  • 62. 62 Yahoo raised the recruiting bar even further Coffee cart recruiting at Google’s bus stop 62
  • 63. 63 Bigcommerce “proximity” recruiting At the same bus stop… this startup firm gave out “poached” egg sandwiches and coffee 63
  • 64. 64 Data-driven decision making in Talent Management In the Silicon Valley we get high- performance by… In lieu of… intuition, feelings and historical practices
  • 65. 65 Learn from Google Laszlo Bock VP at Google
  • 66. Being data-driven allows you to focus your resources on HR tools with the highest impact 66Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012 Which HR function normally increases revenue & profit the most?
  • 67. Mid and lower impact HR functions 67
  • 68. 68 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" “You can measure everything”... “we measure revenue, productivity, engineering” Eric Schmidt “The best thing about using data to influence managers… is that it’s hard for them to contest it”
  • 69. 69 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, onboarding & weight) Connecting office space color and productivity
  • 70. 70 “Data driven” TM approaches at Google  A predictive metric for forecasting hiring success  90% accuracy in predicting promotion success Algorithm to increase hiring, promotion and retention of women engineers
  • 71. 71 Google’s “project oxygen" data showed the 8 most effective management/leadership practices 8. Have key technical skills to advise the team 7. Have a clear vision and strategy for the team 6. Help your employees with career development 5. Be a good communicator & listen to your team 4. Don’t be a sissy; Be productive / results-oriented 3. Show interest in their success & personal well-being 2. Empower your team and don’t micromanage 1. Be a good coach – hold regular one-on-one’s & provide personalized constructive feedback
  • 72. 72 High performance tool Google uses predictive metrics to ID 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”
  • 73. 73 High performance tool Each new hire’s manager is sent a JIT on-boarding email reminding them to do these 5 things 1.Have a discussion on their role and responsibilities 2.Match your new hire with a peer buddy 3.Help your new hire build a social network 4.Set up onboarding check-ins once a month for their first six months on the job 5.Encourage an open dialogue Result – 1 email causes a 25% increase in productivity Source: Laszlo Bock
  • 74. 74 Shift to data-driven decisions in retention I Source: Entelo 2015 Turnover seems even… until you add December Data reveals when you should you start retention efforts When do salespeople quit?
  • 75. 75 Accelerated internal movement In the Silicon Valley we get high- performance by offering… In lieu of talent hoarding or limited movement
  • 76. High performance tool 76 6 week on-boarding boot camp  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  At the end… “Bootcampers choose the team and the project that they will join”
  • 77. 77 High performance tool Hackamonth self-directed movement  Any engineer after 1 yr. can select any new project for a month, and if they like working there… “they can stay”  Picking your own next job… increases the likelihood that you will be doing “the best work of your life”
  • 78. 78 High performance tool Develop an “Intra-placement” recruiting team An intra-placement team… proactively identifies employees who need to be moved and then accurately places them in the highest impact job. Talent Connection
  • 79. 79 High performance tool Workers can tag themselves within Magnet as "looking for new opps" if they want to be considered for open positions Employees can self-nominate themselves for promotions Employees can see what specific careers paths other employees have taken
  • 80. 80 Continuous self-directed bleeding edge learning In the Silicon Valley we get high- performance by… In lieu of… classroom learning
  • 81. 81 Learning ability is the #1 competency “… learning ability is the key determiner in deciding among candidates” (across all jobs) Laszlo Bock VP of HR
  • 82. 82 High performance tool Development over training at Google “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 Source: Google HR director Liane Hornsey
  • 83. 83 High performance tool “Testing on the Toto toilet” www.flickr.com/photos/gubatron/246489031 83
  • 84. They recruit “makers” not degrees They can’t require a college degree Because 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…” 84
  • 85. 85 Dozens of reasons to come in early, stay late and to have fun In the Silicon Valley we get high- performance by providing… In lieu of work/life balance “The dirty secret of all these perks is it doesn't actually retain people or even attract people” Laszlo Bock
  • 86. 86 Google makes you look forward to going to work “It's like… going to Disneyland everyday” Source Google employee on Glassdoor.com
  • 87. Would this get workers to come the work early? 87 Free Wi-Fi shuttle bus and ferry to work… 7,100 stops per day (Google, Facebook, Apple, Yahoo, Genentech etc.)
  • 88. Google wants going to a meeting to be fun Slides in Google offices (they see no compliance issues) 88Regular slide Long slide Fireman’s pole
  • 89. 89 Google offers a different band everyday
  • 91. Google’s “policies” keep you at work 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” 91
  • 92. 92 Can you match this? The Sweet Shop
  • 93. 93 Can you match a BBQ smokehouse story?
  • 94. 24/7 technology access Every building has 24/7 IT supply and repair 94
  • 95. 95 Video games for collaboration and fun
  • 96. 96 Let’s end with some final high-performance tools 1.Facilitated best practice sharing 2.ID the barriers to productivity (why can’t you produce 25% more?) 3.How to best manage me 4.What motivates / excites me 5.Distributed ranked metrics to increase competition 6.Gamification of work 7.No meeting Wednesday “for makers” Be careful with Performance appraisal Performance management Engagement
  • 97. JohnS@sfsu.edu 97 Did I make you think? And give you a few takeaways? www.drjohnsullivan.com