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

107slwww.drjohnsullivan.com

A quick tour of…

I’m from the Silicon Valley…

so I will move fast today

- Learning, Innovation, Speed & AdaptivenessLISA

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

Uneducated

Inexperienced

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

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

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?

Where was HR ranked on the list?

“the least strategic function”

Source: DDI Survey - Simon Mitchell 2014

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 )

Does a top “best place to work” ranking correlate with business success?

Employer brand

1. Google

2. Apple

4. Facebook

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

Do you see the similarities?

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

GE & Yahoo

Google

Microsoft

26% (5X) - U of Indiana study

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?

How does Amazon’s new HQ compare to yours?

A view of and access to the SF bay

Can you match this?

The Sweet Shop

Can you match a BBQ smokehouse story?

24/7 technology access

Every building has 24/7 IT supply and repair

Google sends a message that they want you to think

Massage chairs

If you don’t like the massage chairs… try this!

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

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

More interaction & cross-functional collaboration

increases decision making speed by 45% Source: Forbes 2012

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

http://roger.kaywa.ch/files/innovationatgoogle.pdfhttp://roger.kaywa.ch/files/innovationatgoogle.pdf

LISA means you won’t catch us

They even use their strategic plan as a recruiting tool on a bus in Seattle

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

Even our approaches to a conference

are different

A conference room at Zappos

A Google conference bike

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

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?

Free Wi-Fi shuttle bus and ferry to work…

7,100 stops per day (Google, Facebook, Apple, Yahoo, Genentech etc.)

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”

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)

Apple knows the value of a great job title

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

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

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…

Proximity recruiting

Tokbox parked a taco truck across from Yahoo's HQ

Yahoo raised the recruiting bar even further

Coffee cart recruiting at Google’s bus stop

Bigcommerce “proximity” recruiting

At the same bus stop… this startup firm gave out

“poached” egg sandwiches and coffee

Would this be an aggressive poaching?

EA vs. Radical entertainment (ASK-EE)

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

Employee generated videos (film festival)

Make “finding the excitement” at your firm easy

for outsiders (200 films)

Videogame practice – My Marriott Hotel game

Video job descriptions provide a competitive advantage

A video job description

Can reveal the excitement behind a job (Quickstop, Accenture and Deloitte)

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

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

Boomerang re-hires - DaVita = 16% of all hires and Yahoo 14%

“You’re always welcome here” e-card + alumni group

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”

Halfway

Any questions at this point?

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

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…

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

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

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

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…

What areas does HR do well & poorly? (KPMG)

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

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

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

For most… just knowing that information…

causes them to change their conduct”

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)

Improving internal movement

Recommended actions

• Faster and more impactful movement for retention,

development and productivity

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

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”

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”

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)

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

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

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

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

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”

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

Develop a “bad manager identification program”

Improve retention with a More of / Less of list

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

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%

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.”

Influence the influencers for retention

4,000 showed up

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

Learning ability is the #1 competency

“… learning ability is the key determiner in deciding

among candidates” (across all jobs)

Laszlo Bock VP of HR

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

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

Innovation

Recommended actions

• Calculate the business impact of innovation over

productivity (5X)

• Develop processes for hiring and managing

innovators

What is required to increase innovation?

Google has a formula for increasing innovation(Algorithm)

Innovation = Discovery + Collaboration +Fun!

Source: K M World Magazine Webinar 2008

(i.e. learning)

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

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

Innovators see things as “broken”

Innovators add great value because… they see most things as “broken”

The best employees assume continuous obsolescence

and leaking

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)

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

Recommended actions

• Hire “fast” employees

• Be first.., so that you can give your firm a

competitive advantage

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”

Innovation and risk-taking barriers

Facebook managers encourage employees to take

more calculated risks…

Why – risk taking means either rapid progress…

or rapid learning from your failures

Adaptiveness

Recommended actions

• Hire “adaptive” employees

• Everything must be quickly “scalable” up and

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

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

JohnS@sfsu.edu 107

Did I make you think?

And give you a few takeaways?

www.drjohnsullivan.com

PEOPLE MANAGEMENT PRACTICES FROM GOOGLE, FACEBOOK AND APPLE

Recruiting & HR