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  1. 1. A quick tour of… 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 107sl
  2. 2. 3 I’m from the Silicon Valley… so I will move fast today LISA - Learning, Innovation, Speed & Adaptiveness
  3. 3. 4 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
  4. 4. 5 The talent areas that I will cover today 1. Productivity and business impacts 2. WOW physical features 3. WOW employee benefits 4. Aggressive recruiting 5. Prioritization 6. Metrics 7. Internal movement 8. Retention 9. Learning 10. Innovation 11. Speed 12.Adaptiveness
  5. 5. Productivity and Business Impacts 6 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
  6. 6. 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” 7
  7. 7. 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 8 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?
  8. 8. 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 ) 9
  9. 9. Does a top “best place to work” ranking correlate with business success? Employer brand 1. Google 2. Apple 3. MS 4. Facebook Market cap value 1.Apple - $478 b 2.Exxon - $406 b 3.Google - $403 b 10 4.MS - $315 b 13 Facebook - $211b 5/2012 Product brand 1. Google 2. Apple 3. IBM 4. MS Do you see the similarities?
  10. 10. 11 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 5% A top performer produces how much more than the average employee in the same job? - 10 times more than the average GE & Yahoo - 25 times more than average employee - 300 times more than the average - 1000 times more than the average Apple Google Microsoft 26% (5X) - U of Indiana study
  11. 11. 12 In the Silicon Valley we have… WOW Physical Facilities Recommended actions • Don’t give employees a reason to leave the building (Casino) • Enhance collaboration with serendipitous meetings
  12. 12. How does this compare to your office? 13
  13. 13. How does Amazon’s new HQ compare to yours? 14
  14. 14. 15 A view of and access to the SF bay
  15. 15. 16 Can you match this? The Sweet Shop
  16. 16. 17 Can you match a BBQ smokehouse story?
  17. 17. 24/7 technology access Every building has 24/7 IT supply and repair 18
  18. 18. Google sends a message that they want you to think 19 Massage chairs
  19. 19. 20 If you don’t like the massage chairs… try this!
  20. 20. 21 Google Bowling Alley
  21. 21. Google wants going to a meeting to be fun Slides in Google offices (they see no compliance issues) Regular slide Long slide Fireman’s pole 22
  22. 22. 23 Open space/ standing desk for collaboration – “swing your arms and hit someone”
  23. 23. Improving decision-making speed at GSK Open-office design improves decision-making speed More interaction & cross-functional collaboration increases decision making speed by 45% Source: Forbes 2012 24
  24. 24. 25 Video games for collaboration and fun
  25. 25. A scientific approach to the work environment Why does Google do this? To enhance collaboration 26
  26. 26. A visible business plan keeps everyone on the same page 27 LISA means you won’t catch us
  27. 27. 28 They even use their strategic plan as a recruiting tool on a bus in Seattle
  28. 28. Google makes you look forward to going to work 29 “It's like… going to Disneyland everyday” Source Google employee on
  29. 29. 30 Even our approaches to a conference are different
  30. 30. 31 A conference room at Zappos
  31. 31. 32 A Google conference bike
  32. 32. 33 In the Silicon Valley we have… 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”
  33. 33. 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
  34. 34. 35 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
  35. 35. Would this feature attract top workers? 36 Free Wi-Fi shuttle bus and ferry to work… 7,100 stops per day (Google, Facebook, Apple, Yahoo, Genentech etc.)
  36. 36. 37 Google offers a different band everyday
  37. 37. 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” 38
  38. 38. 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) 39
  39. 39. Apple knows the value of a great job title 40
  40. 40. Your policies can reveal the true level of your trust 41 “There is no policy or tracking” --------------------- Facebook does not track employee absences Key lesson - If you focus on, measure and reward performance… you won’t have attendance issues
  41. 41. Apple is much different than the rest 42 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
  42. 42. 43 In the Silicon Valley we do… 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
  43. 43. 44 Proximity recruiting Tokbox parked a taco truck across from Yahoo's HQ
  44. 44. 45 Yahoo raised the recruiting bar even further Coffee cart recruiting at Google’s bus stop
  45. 45. 46 Bigcommerce “proximity” recruiting At the same bus stop… this startup firm gave out “poached” egg sandwiches and coffee
  46. 46. 47 Would this be an aggressive poaching? EA vs. Radical entertainment (ASK-EE)
  47. 47. 48 Google Code Jam – Zombie smashers 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
  48. 48. 49 Employee generated videos (film festival) Make “finding the excitement” at your firm easy for outsiders (200 films)
  49. 49. 50 Videogame practice – My Marriott Hotel game
  50. 50. 51 Video job descriptions provide a competitive advantage A video job description Can reveal the excitement behind a job (Quickstop, Accenture and Deloitte)
  51. 51. 52 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
  52. 52. 53 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
  53. 53. Apple careers website 54
  54. 54. Boomerang re-hires - DaVita = 16% of all hires and Yahoo 14% “You’re always welcome here” e-card + alumni group
  55. 55. 56 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”
  56. 56. 57 Halfway Any questions at this point?
  57. 57. 58 In the Silicon Valley we… 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
  58. 58. Identify and then prioritize the people management programs that have the highest business impact (BCG) Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012 59
  59. 59. Mid and lower impact HR functions 60
  60. 60. 61 Make hiring the #1 priority “Hiring is the most important thing you do” Source: Eric Schmidt, Former CEO of Google
  61. 61. Prioritize top performers and know what they care about An average employee at firm xyz want these things… But top performers at the same firm want these factors… 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 62 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
  62. 62. 63 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
  63. 63. 64 In the Silicon Valley we make… Data supported decisions Recommended actions • Utilize metrics everywhere • Convert talent results into revenue impacts • Utilize predictive rather than historical metrics
  64. 64. What areas does HR do well & poorly? (KPMG) 65
  65. 65. 66 The most advanced… and the non-users of 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
  66. 66. 67 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
  67. 67. 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” 68
  68. 68. 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 & weight)
  69. 69. 70 In the Silicon Valley we focus on… Improving internal movement Recommended actions • Faster and more impactful movement for retention, development and productivity
  70. 70. 71 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”
  71. 71. Employee choice internal movement practice – A new employee selects their own path 72 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”
  72. 72. 73 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”
  73. 73. 74 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)
  74. 74. 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 75
  75. 75. Other firms can learn from our focus on… 76 Retention Recommended actions • Prioritize your employees and jobs • Personalize your retention plans • Find out why they leave with pre-exit interviews
  76. 76. 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 77 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
  77. 77. 85% of the employed would consider a new job. Source: LinkedIn 2014 Almost everyone is available
  78. 78. 79 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
  79. 79. 80 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”
  80. 80. 81 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
  81. 81. The #1 Gallup lesson on retention “No one ever quits a company… they quit their manager!” Conclusion of the Gallup Survey 82 Develop a “bad manager identification program”
  82. 82. Improve retention with a More of / Less of list 83 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
  83. 83. 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 84
  84. 84. 85 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%
  85. 85. 86 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.”
  86. 86. 87 Influence the influencers for retention 4,000 showed up
  87. 87. Other firms can learn from our focus on… 88 Learning Recommended actions • Make employees own their personal development • Offer on-the-job projects because they are the best ways to learn
  88. 88. 89 Learning ability is the #1 competency “… learning ability is the key determiner in deciding among candidates” (across all jobs) Laszlo Bock VP of HR
  89. 89. 90 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
  90. 90. 91 Constant learning is important that Google “Testing on the Toto toilet”
  91. 91. They recruit “makers” not degrees Obviously 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…” 92
  92. 92. 93 In the Silicon Valley we focus on… Innovation Recommended actions • Calculate the business impact of innovation over productivity (5X) • Develop processes for hiring and managing innovators
  93. 93. What is required to increase innovation? Google has a formula for increasing innovation (Algorithm) Innovation = Discovery + Collaboration +Fun! 94 Source: K M World Magazine Webinar 2008 (i.e. learning)
  94. 94. 95 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
  95. 95. 96 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
  96. 96. and leaking 97 Innovators see things as “broken” Innovators add great value because… they see most things as “broken” The best employees assume continuous obsolescence
  97. 97. 98 Facebook is focused on innovation 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)
  98. 98. 99 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
  99. 99. 100 In the Silicon Valley we focus on… Speed Recommended actions • Hire “fast” employees • Be first.., so that you can give your firm a competitive advantage
  100. 100. 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” 101
  101. 101. Innovation and risk-taking barriers Facebook managers encourage employees to take more calculated risks… 102 Why – risk taking means either rapid progress… or rapid learning from your failures
  102. 102. 103 Adaptiveness Recommended actions • Hire “adaptive” employees • Everything must be quickly “scalable” up and down In the Silicon Valley we focus on…
  103. 103. We live in a fast-changing unforgiving VUCA world It is no longer… the big and established firms that 104 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
  104. 104. Focus on those that are comfortable with VUCA When we hire talent, “we look for Googliness … people who are comfortable with ambiguity” Prasad Setty 105
  105. 105. 106 A final check list of action items 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
  106. 106. Did I make you think? And give you a few takeaways? 107