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Please welcome William Uranga to the HRExaminer Editorial Advisory Board. William Uranga is the Director of Talent Acquisition at TiVo, Inc. William loves to explore and deploy new technology that makes business sense for and magnifies the best of his company’s culture. William has worked in not-for-profit, retail, software, web and consumer electronics over the past 15 years in the Silicon Valley. Full Bio »
Hiring Manager Problems Require Therapy
by William Uranga
I’ve been at a loss over how to effectively parent one of my four kids. My youngest adopted child is 7 years old according to the calendar, but she is behaving like she’s 4. I’m not the problem, but I’m the one in therapy. Go figure.
You learn a lot in therapy. Age 0-3 years is where kids begin building up their brain as it relates to survival. The most basic question is: “Will my needs be met?”. Normally, a stable family environment is sufficient to address a child’s needs. In other environments, such as an orphanage, survival is different. Survival delays a child’s development in areas of long-term memory, cause-effect correlation and the ability to predict.
You can’t run before you walk. I’ve learned that my expectations were unrealistic. I’m treating her by her calendar age (7yo), when she can only function at her developmental age (4 yo). I’ve had to unlearn my assumptions and go back to the basics – covering things my child hasn’t learned. There is no class to send her to, no pill she can take, and no short cut. It simply requires a different perspective – and a lot of time and attention.
Figuring out how to handle people challenges usually requires a different perspective, time and attention.
Does your recruiter have a challenging hiring manager? Note that I’m not talking about a difficult search – but client management problems. Most managers operate in a survival-mode; they are hiring to solve a problem, not necessarily to build a world-class team. Being stuck in a downward cycle of frustration, complaints, and no future change in sight, may be sign that “therapy” is in order. If so, prescribe some to your recruiter before you lose the client, your recruiter, and your street cred.
I’m not a therapist, but I play one when teaching and coaching recruiters. Here are some areas to discuss with your recruiter when you sit down with them:
- A different perspective. Assumptions can hurt. Just because you have a hiring manager doesn’t mean they have hired at all, let alone hired well before. They may be in pure survival mode at this time. They may have had the worst experience with previous recruiters, or never been taught the right way to interview someone. No matter how experienced they appear to be, the title they hold, or how eloquent they speak – you cannot assume they know how to be a contributing partner in their hire.
- Time. Perhaps, you’ve been a student of recruiting. Now you need to turn your challenging manager into your thesis. This involves time. When was the last time you sat down with them over coffee or lunch? Do you know what their world looks like from their perspective? Attend the team meeting with his/her peers. Take a class in their discipline – my team found a project management helped us communicate better with our employee population who are mostly engineers. Being able to speak their language or use processes that are familiar can make a big difference in understanding the skills needed for a new hire and how everyone works together.
- Attention. Recruiters take off running with their req hell-bent on the offer finish line. The problem is they can only go as fast as their hiring manager—so it’s more of three-legged race. John Chambers, CEO of Cisco, vblogs because he cannot do as well penning his communications. What impediments does your hiring manager have in your recruiting process? Are they constantly travelling? Not clear on their vision for this role? Don’t think they need to sell the role to candidate? Prefers voice communication to email (harder to document)? Address those details. Help them to walk better before you start the flurry of candidate slates.
As you help your recruiter handle those challenging hiring managers, both you and your recruiter(s) will be sought after more and more. That’s good – no matter what economy we’re in.
Last night, I started working on the next iteration of my research into recruiting and HR. If you’ve been following over the years, you’ll know that I don’t think much of best practices and big generalizations about our profession. Black and white lines and big universal statements are inevitably mistaken.
The world, while divided at the top level by national boundaries, is really a set of cultures defined by culture, demographics, age, costume and another 8 or 10 factors. In the united states alone, there are 400 cities with unique enough cultures and geographies to merit separate radio stations and news outlets These burgs exist on a spectrum.
Recruiting practices that work famously at Google are recipes for disaster in a factory near Macon, Ga. What works as personality assessment in Minneapolis is downright dumb in Baton Rouge. The dress codes and costumes of LA are the stuff of ridicule in DC (and vice versa). Appropriate language, the relative density of college degrees, religiosity, ethnic heritage, the role of immigrants and the embedded managerial culture all vary by region.
In this note, I’ll offer you the slides from a recent presentation on the subject. The coming weeks will be rich in the exploration of the topic.
This is a guest post from Ed Goodwin. Ed Goodwin is Managing Partner of Demand Facts Inc, a Massachusetts-based consulting practice he founded in 2000. Ed has over 30 years of hands-on experience providing marketing and customer research & analysis solutions for leading providers in several industries. During the past 10 years, Ed has specialized in helping HRM and other B2B providers effectively increase their sales and profits through use of advanced market opportunity analysis, sales win/loss analysis, customer bonding/retention analysis and other demand-related intelligence solutions. Prior to founding Demand Facts, and after obtaining his MBA in Marketing, Ed spent several years as Vice President/Group Manager at Burke Marketing Research before becoming the Executive Director of Analytical Services for Sutherland Global Services.
Customer Bonding—Retain More Customers Longer
By Ed Goodwin
Customer retention is a matter of survival for nearly all businesses. The higher the customer retention, the more successful your business becomes. It’s simple math that lost customers equals lost revenues and profits. So your goal is to prevent your current customers from switching to your competitors because your customers are:
- Not happy with something you did or didn’t do (i.e., product, support and/or price related);
- Attracted to a seemingly superior competitive offering.
Of course, some customers are lost due to circumstances that are beyond your control. Some stop needing your service, go out of business or merge with another company.
If you sell multiple offerings, it’s particularly important to prevent the loss of customers who purchase several or all of your products. But it is also important to understand and manage customer retention for each individual offering.
Good Solutions – The Most Common Approaches to Retain More Customers Longer
Customer Attitude Tracking Programs: Many companies conduct surveys among their current customers to measure their overall satisfaction (CSM), recommendation (NPS) and/or stated loyalty levels. In addition to overall attitude ratings, most of these programs include open-ended questions and a few ratings on general performance dimensions or touch-point areas.
The purpose of these customer survey programs is to measure the opinions of a representative group of customers for each major product/service in order to  identify improvement priorities and related insights for increasing success on the survey subjects; and  set performance goals and corresponding compensation awards for certain employees.
The goal is also to increase future customer retention rates. However, having customer satisfaction information alone will not likely lead to acceptable customer retention levels because:
- General attitude ratings are often weak drivers/predictors of B2B customer retention
- Programs rarely include the specific dimensions which are significant retention drivers/predictors
- When key specific retention drivers/predictors are included, they are often ignored because they are usually found to be relatively weak drivers/predictors of the overall attitude ratings
Customer Feedback Systems: Some companies use various processes to obtain customer-related intelligence from their account or customer service reps and from customers themselves. However, customer feedback has similar weaknesses in driving/predicting customer retention over time because:
- Feedback is not representative or conclusive across customers (self-selection, low response, etc)
- Feedback is usually too general, incomplete and misleading to be useful (rep misinterpretations, not confidential, self-administered, etc)
Better Solutions – More Effective Ways to Retain More Customers Longer
While feedback and surveys provide important and useful information, they are usually insufficient to prevent most customer defections because the information is too general. The following specific types of information will lead to greater customer retention success:
Segment-level Focus: Retention-related intelligence must be separately analyzed and acted-upon for distinct customer segments because retention rates and significant retention drivers/predictors usually vary widely across specific customer groups– especially among users of different offerings.
Different retention rates and drivers/predictors are also likely to exist for the same type of offering from your competitors. So category “benchmarks” and other retention-related results for competitors are only useful to identify opportunities for new customer acquisition activities.
Problem Detection & Resolution Tracking Process: Monitoring the incidences, frequencies and resolution status of the problems your customers encounter is an excellent way to learn about the customer experience and why they may leave. Problem tracking can uncover “low incidence/high retention impact” dimensions that are often excluded or ignored by customer attitude tracking programs. “Invoice issues” is one good example.
Lost Customer Analysis Program: This type of confidential survey program obtains accurate and indepth intelligence from:  open-ended questions on the reasons for defections; and  provider & product ratings from representative groups of lost and loyal customers. This data provides a solid basis to identify the most effective priorities to prevent additional defections and to win-back lost customers.
Best Solution – The Most Effective Way to Retain More Customers Longer
The “Good” and “Better” approaches can produce valuable guidance on how to prevent many customers from defecting. However, performance-related perceptions and feedback only go so far to explain why customers stay or leave. It is natural to believe that defections are solely due to poor performance or the availability of better options; but that is only sometimes true.
If you look closely enough, you will find evidence in your own customer data and first-hand experiences that tell you why customers stay or go.
- Many customers who claim to be very satisfied, loyal and willing to recommend, actually switch each year.
- Many unsatisfied customers stay as customers for years.
- Many customers who do not switch despite paying higher prices than they would from competitors.
For example, I handled a customer satisfaction program for Lotus 1-2-3 many years ago. I was surprised by the large number of customers who did not defect, and did not plan to, despite their very low satisfaction ratings — especially given the level of marketing activity for a new competitor called Excel. To make a long story short, 1-2-3 retained many unsatisfied customers for years until Excel finally offered the ability to use 1-2-3 data, tables and formulas. Then there was a mass shift to Excel. Thus, the customer bond was the substantial cost/effort needed to switch to a competitive software program.
Customer bonding strategies, practices and relationship dimensions
In general, customer bonding can be a powerful strategy to differentiate you and your offerings from your key competitors, especially for delivering “best total solution” and “customer intimate” value propositions.
The most effective customer bonds are structural and woven into the basic fabric of your offering or delivery system. Such bonds are based on the features or conditions that are impossible, difficult or expensive for customers to do themselves, or for competitors to copy. Most customer bonds produce meaningful benefits or advantages for customers, but some do not.
Customer bonds are generally one of three types:
- Switching Costs – the most well known and easy to notice bonds. Implementation fees fit into this group.
- Switching Losses – unique features or benefits that are impossible or very difficult to replace or copy. Trusting relationships and specialized expertise/experience are two possibilities.
- Prevention Bonds – practices that effectively reduce the chances or ability to switch. A legal contract is a clear example.
In summary, customer bonding strategies and practices are:
- An effective means to retain more customers longer than traditional approaches alone.
- Easier and less expensive than  attracting and winning more new customers to replace lost customer revenues and profits;  cutting prices or giving special deals to save current customers; or  trying to achieve 100% performance perfection.
- Particularly useful to hold customers against highly aggressive/attractive competitors, to earn needed profit margins, and to implement “best total solution” and “customer intimate” strategies.
Seven years ago, this review appeared in the pages of the Electronic Recruiting News. It’s reprinted in honor of the final arrival of the movie. In the intervening years, some elements of the HR and Recruiting world have paid attention and begun to use metrics to figure out hiring problems. It’s not another exercise in debating the Time to Hire or the Cost of a Hire. Rather, the pioneers are figuring out how to think about the organizational improvement that a single hire brings.
Now that Moneyball will be a part of our global consciousness, maybe it’s time to revisit the way we think about people and their contributions.
Get your hands on a copy of Moneyball by Michael Lewis and devour it this weekend. It’s a tremendous read. It’s about baseball. More importantly, it’s a story about the triumph of rational recruiting over big budget spending. It’s a breezy look at what happens when conventional wisdom is shed for a more scientific understanding. It’s a meaty source of inspiration as we consider the coming changes in recruiting.
The central character in the story is a fellow named Billy Beane, the general manager of the Oakland As. By rethinking the performance and economic fundamentals of baseball, Beane has been able to consistently deliver nearly the same performance as teams with many times the cash. The trick coupled a deep look at the existing measurements of the game with a view of the whole sport as a marketplace.
Like many industries, baseball is a relatively contained universe. Almost all of the talent is known and quantified. The only way that Beane could prosper was by figuring out how to value the talent differently than the norm. His team (composed of economists, not ball players) ruthlessly analyzed existing information to discover ideas and meanings that were overlooked by the mainstream view.
The central question was “What will be the marginal contribution of player X?” The recruiting strategy asked the question “How do we replace or improve the performance of the team?” not “How do we replace an individual player?” Measurement and a belief in hypothesis testing were the underlying elements of Beane’s success.
The recruiting team evolved a statistical method by which a player could be precisely valued for the contribution he was forecast to make. The core measurements were derivatives of baseball’s standard statistical set. Opportunities for recruitment became the moments during which a particular player could be acquired for a value far under market potential. By learning how to spot undervalued talent and build on the unacknowledged strengths, Beane’s crew singlehandedly redefined the management methods and financial footing for a baseball team.
There’s a great scene in which the traditional recruiters are discussing their picks for an upcoming player draft. Beane methodically undercuts each traditional choice while unveiling his personal list of the right talent. The group he proposes do not vaguely resemble traditional baseball talent. It becomes the core of his winning franchise.
There’s another telling scene in which all 600 players under Beane’s control are listed on one white board. The 1200 players who could possibly be recruited are listed on the other. The recruiting team had some level of statistical insight into each of the names on the lists.
Moneyball is all about questioning your assumptions and replacing them with data. It’s about the power of ruthless talent management on the smallest budget in the competitive playing field. It suggests a range of opportunities for the rest of the Recruiting industry to rethink some basic ideas.
Really, get a copy. It’s inspirational.