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Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

HR Tech Weekly

Episode: 15
Air Date: April 9, 2015

 

This Week

  • Leaders and co-founders of HR Tech organizations
  • Lumesse’s TalentObjects Platform
  • Health & Benefits Leadership Conference from HRA Magazine
  • SalesForce

About HR Tech Weekly

Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 8AM Pacific – 11AM Eastern, or catch up on full episodes here.

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Transcript

Begin transcript

John Sumser:

Hey good morning. Welcome to HR Tech Weekly: One Step Closer with Stacey Harris and John Sumser. That’s me, John Sumser and we are coming to you from my end of the call from beautiful downtown Occidental, California. How are you Stacey?

Stacey Harris:

I’m doing good. How are you doing John? I’m coming from gray and rainy North Carolina today. That’s okay. It’s spring and the trees are budding and the birds are out. It’s a very good time here. Lots of exciting news going on as well.

John Sumser:

Great. Great. What are you seeing? What do see that’s going on out there?

Stacey Harris:

Well, this has been an interesting week for the HR Tech space. One of the things that you and I thought might be a good conversation to talk about is the idea of the leadership and co-founders or founders of the HR Tech organizations. Some of those things have been changing or moving around this week. I thought there might be some interesting conversation there.

We also saw this week the launch of Lumesse’s TalentObjects Platform which is their platform based off of salesforce.com. There’s some interesting things there. For a lot of the organization they’ve been away this week at one of the events of the year which is the Benefits Conference that HRA Executive Magazine puts on, the Health & Benefits Leadership Conference.

Those are the 3 things that I pulled out of the news today. I don’t know if you had any other things to chat about today as well.

John Sumser:

No, those are great topics. Let’s talk about CEOs and Founders. What did you see? Who was bored and who was busy dying, who came back?

Stacey Harris:

There was I think a couple of things. There was an announcement made that Charles Jones is returning to PeopleFluent. I had the opportunity to work a little bit with Charles Jones previously at PeopleFluent. He’s coming back to lead some of the new changes taking place at PeopleFluent. He’s part of the Bedford Funding Group which had owned PeopleFluent.

Also which I thought was really interesting, Achiever’s announced a new CEO, Eric Lochner. I did know Eric from his days at Kenexa. He worked with Kenexa which was then picked up by IBM and headed up their talent acquisition and learning group. We had some interesting conversations with him back in the days about those topics. You may have probably even talked with him about them.

I think it makes an interesting spin that two large talent management groups are seeing some new leadership. Particularly for the Achiever’s conversation they’re bringing in a CEO who has a lot of talent management experience. I know I’ve recently had a couple of conversations with Achiever’s and a couple of other vendors in the rewards and [inaudible 00:03:06] space about how they’re really hoping to move more into that space. This I think signals some of that.

Then probably on the sadder side of things, Klaus Tschira, who was a co-founder for SAP just passed away on March 31st. Klaus had retired in 1998. He’s been on the board until 2007. He was no longer involved in the day-to-day SAP environments. I think his name even me as someone who was not in the industry at that point in time, his name was well known and people understood some of the work that he had done.

 I thought these were interesting topics because you and I have had a lot of conversations about how important is the CEO? How important are the founders in an organization when a person is looking to buy technology from that organization. What should they be looking for from the total leadership group? Are any of those things worth a conversation for you, John?

John Sumser:

Oh sure, sure. I’m a complete believer in the idea that the culture of the organization is determined by the founder. What you see in organizations once they’re up and running is they have all the quirks and issues of the founder’s personality and everybody who tries to leave his organization is stepped in a game that is a compare and contrast with that personality.

You see over and over and over that the quirks of the founder are the quirks of the product and the quirks of the organization even 10 years after the founder has gone.

Stacey Harris:

Yeah.

John Sumser:

Go ahead.

Stacey Harris:

Well I was going to say what I think is interesting is some organizations make that transition effectively. Some of it is because of succession planning. Some of it is because of how well the founder says this is what we need to keep and this is what was flexible. Have you seen any organizations who have made that transition well? We’ve seen two organizations here who are going through with their different types of transitions, some done well, some not so much.

John Sumser:

I’ve never seen it done well. I’ve never seen it done well. I’ve seen lots of really interesting attempts but they always come up short at the end of the day. The starts early founders who are in venture based operations are often replaced as the company grows because the skills necessary to run a small company are not the skills necessary to run a large company. That transition is always hiccupy. It’s often fatal. When you see changes like the Achiever’s change or PeopleFluent change you have to wonder what the underlying issues are.

It’s a complicated and not necessarily positive message when the old CEO comes back. It’s time for adult supervision or something like that. I don’t know everything about the PeopleFluent circumstances. It’s a big deal that the investors thought their head that operate the company after a year or so be gone. That’s a PPO.

The Achiever’s story is if you hire a CEO who’s got expertise in an adjacent market that you look like you fit in, what you know is that there’s some growth trajectory problem that’s trying to be solved.

Stacey Harris:

That’s true. They’re very different stories there. I think the other piece of this picture is that the talent management HR Technology space in many cases has one challenge. As much as we talk about succession planning, as much as we talk about being prepared for the leadership as our business and our industry, it is an industry where we have a lot of organizations that aren’t really building up the next generation of leadership in their organizations. They pull people from outside. It’s common in many industries. Particularly in this industry it seems like we do it quite often. There’s real opportunity to start thinking about if you do understand succession planning about you build that in a company.

John Sumser:

Do you know examples of places where succession planning really works anywhere?

Stacey Harris:

I was thinking about that the other day. I have seen organizations. A lot of them similar to what you had mentioned where they went from small companies to large companies who have made transitions by developing certain people, bringing people into junior roles. Junior is probably not the right word. Bringing them into supporting roles to the CEO with the idea that those people who then move up. They’ve been in retail industries I’ve seen it happen a little bit.

The past organization I was with at Joann Stores. I’ve seen it happen at organizations in other areas like financial. I haven’t seen it in the tech space very much. Maybe it’s because tech companies grow too fast. Maybe it’s because the tech industry generally looks outside. I’ve definitely not seen it as much in the tech industry.

John Sumser:

You don’t have in the kinds of places that you talked about, there’s a large [inaudible 00:09:24] middle management. If you’re wooing retail store managers to become district managers, that’s career development maybe as opposed to who’s going to replace the CEO when he goes. Who’s going to replace the CMO when they go? I’ve not seen that.

The military does a fairly good job of figuring out who is going to replace who. I haven’t seen it in any commercial setting in a way that works at the top of the organization.

Stacey Harris:

What do buyers do? That’s the question, right? If a buyer is tightly connected to the culture of an organization and the system that they’re selecting, should they have an understanding of what the next level of management is doing? That’s something I always tell buyers when I’m talking to them. Make sure you understand who the leadership is and are you comfortable with the various levels of strategy and approach at every leadership level. Do you think that’s something that is valuable or do you think, based on what we talked about, that that may not even be helpful if the succession planning isn’t working in some of these technology companies.

John Sumser:

It’s a really interesting thing. While I think that formalized succession planning is a laughable thing, at the very same time believe that organizations are extremely good at succession planning. It’s not a procedure. It is a version of King of the Hill maybe. I think that politics work and I think that politics produces interesting, a little bumpy, but interesting leadership transitions. When you try to end run the political process you get messy. I think without HR’s interference, organizations are pretty good at succession planning. It’s only when you try to formalize it and make it transparent that it gets to be problematic.

That said, I think and this is weirdness in the difference between how things formally work and what actually happens. I think that HR practitioners purchase relationships and HR tech vendors sell software. They’re operating at cross purposes already.

Stacey Harris:

Yeah.

John Sumser:

There’s this silly emphasis on the RP process without adequate resources with the RP process. You need to level the playing field and choose between these equal competitors is a great theory. You have to know those competitors well enough to do that and you can’t afford to get to know them that well. You end up with a process that can’t actually be done properly and people choose in the final analysis based on relationships. Being more disciplined is important.

Stacey Harris:

That’s very, very true though. We don’t oftentimes think about it. I think you’ve made a great point there that they are at cross purposes. As much as I think the vendors say that relationships are important to them, what we often see is that their bigger focus is on how can we address what’s happening. On a features function what do they need? That seems to be where their heads are often at. The relationships are important but they’re definitely more focused on how do we handle all of the requirements and requests that are coming into our organization. If relationships were really that important they would definitely focus a lot more on who is touching those clients on a day-to-day basis.

The end users, when I look at the data that we got last year just on what organizations found most valuable from their vendors across the board I think you’re finding the same thing: the relationship was the number one thing. Right? That was what had the biggest impact they felt on a vendor accomplishing what they wanted them to accomplish within their organization.

John Sumser:

Yeah. I think that what this means is that the purchasing process probably will undergo some changes over time. If that makes sense because SAP’s software is different and you need to buy it with a different mindset. It’s still in the evolutionary stages.

Stacey Harris:

Very interesting. Instead of talking about that SAP purchasing process, I think it’s worth having a conversation about the announcement and the final launch. Lumesse has been talking about this in HR Tech last year. They just sent out as of last week that their first I think what you would call an object or first module is now available and their talentobject-salesforce.com platform which is not even just doing SAS technology. It’s in the cloud, right? Now you’re building it off of the platform as a service concept from a purchasing perspective.

You had some long conversations with Lumesse in the early days about what they were doing here. Do you maybe want to give everybody an overview of at least from your understanding what this new TalentObject new platform by Lumesse is and what it might look like in the future?

John Sumser:

Sure. SalesForce, let’s start there. SalesForce is reaching saturation in its core markets. Any place where you could possibly use a customer relationship management tool in all of its complexity, they’re there. They have an amazing SalesForce. They have an amazing product. They have grown at ridiculous levels over time but that [inaudible 00:16:15] flattens out. They need to find other ways to engage with their existing customers because there’s not lots of new customers you have any longer.

They tried several times over the years to have HR-related functionality in their ecosystem and having an ecosystem is not natural to SalesForce. They had some trouble making their tools in HR work. There have been interesting initiatives like work.com.

Lumesse and SalesForce last fall came to an agreement that Lumesse would take over the assets associated with work.com and build a fully-featured HR talent management platform inside of the ecosystem. What’s come to market right now is the recruiting component of that operation. The first thing is, it’s remarkable to think that somebody started in early November and here at the 1st of April has a product in the market.

Stacey Harris:

Yeah, exactly. I was surprised it came out quickly.

John Sumser:

I don’t recall seeing anybody do that before. This is brilliant. They’ve got a team of people who are entirely capable of understanding how to streamline the recruiting process and they’re doing it inside of this platform. I am really excited about what’s possible here. We’ll see pretty quickly whether or not this is a great tool for recruiting in sales or in [inaudible 00:18:14] agents or something larger than that.

There’s a new player and it’s TalentObjects and it will be interesting to see how they develop. What do you see?

Stacey Harris:

Yeah. Pretty much I heard the same thing you heard when I spoke with the Lumesse team at HR Tech last year. I had some conversations with their group probably in January. They were still talking about when they were going to launch. They hadn’t given any exact dates yet. I think one, they were very careful about saying we’re going to launch this. That was the conversation I had with them, with something to hold onto. They were trying very hard not to use their smoke and mirrors.

As you said, they were working off of the already existing stuff that work.com had had which included the ripple content which had some performance management and some compensation and then a rewards component to it all wrapped into it. Not having seen the new tool, it’ll be interesting to see how far it is away from what is originally the ripple content material.

From my perspective, at least it seems like they’re following a pattern that seems to be working in the HR Tech space. What they were struggling with was Lumesse had a big brand issue plus they had all these legacy technologies that they were wrapped around previously. A lot of their clients who I’ve worked with many of them were struggling with, are we on the old platform? Are we on the new platform? What’s these objects you guys are creating?

This concept of coming out new with almost a completely new solution from the ground up, which is basically where they’re at that’s being funded separately. That much we do know. That’s being funded separately from what’s happening on the broader Lumesse organization side. It will be interesting. I think they’re going to probably make some news this year. Particularly as they wrap up the year and as they add other modules to it. It’s well worth keep an eye on.

John Sumser:

There certainly seem to be a lot of emerging next generation players in the recruiting space and it’s been specific. I think this is probably the first announcement of 10 or 20 this year that start to actually actively change the face of the recruiting marketplace. I’m psyched to see that. I’m really psyched to see that.

Stacey Harris:

I’ve had a lot of conversations with organizations about the recruiting space and what is happening this year. John, you’re a little bit closer to it than I am. Do you think a lot of these organizations are going to try and build out their own solutions or are we going to see a lot more acquisitions coming up in the next 12 months? What do you think? There’s a lot of small guys who have gotten bigger right now. They’re in industry focuses, or they’re in specific area focuses. Where do you see this going over the next 12 months?

John Sumser:

The thing that’s really important to remember about recruiting is that at the hyper-competitive front end of recruiting, people are always looking for a speed advantage. Right? What matters in recruiting in the final analysis is how fast you can do it. There’s all sorts of quality-related stuff around the edges of that. The fundamental thing is how fast can you get people in the door?

Recruiting, if it wasn’t for recruiting, there would not have been a fax industry. Recruiters saw immediately that they can beat their competition by having a resume faxed. Recruiters always bought fax machines in twos: one for them, one for the customer. They’ve continued to do that over the following 30 days just getting ahead, staying ahead, doing the next thing.

At the innovative edge, at the Silicon Valley healthcare, maybe even trucking industry, to gain there’s always new things emerging. What doesn’t happen is the new things emerging and consolidating. Those new things emerge and some of them work and some of them don’t work. You see in recruiting a lot of really great ideas that don’t actually go anywhere. Talent communities might be one of those, right?

Stacey Harris:

Communities and talent polls, yeah, a lot of new announcements there. They’re not taking off as interesting as they might sound. Video interviewing on the other hand now is being embedded in everything from every system that I’ve been talking to. If they don’t have it they’re talking about how they’re embedding it. That’s one you think at least from what I’m seeing is taking off.

John Sumser:

Yeah, that one is an interesting one. If you stop to think about what video interviewing can do, it can revolutionize and shrink the overall recruiting cycle. Most of them are being sold right now as a way of cutting travel expenses. If the process works, you get the resume, you screen it, the person is in. You call them, you schedule the interview, you have the interview, you put the report to give it so the hiring manager can see what happens in the interview and the decision is made. You can cut out all of that middle stuff by having a video to hand to the hiring manager. Instead of having to read an assessment, they can see for themselves and that gets you higher value at a lower price in a way that shrinks the schedule associated with recruiting. That’s pretty cool.

Nobody is selling it that way exactly yet. Video will transform the way recruiting is done. People are starting to grasp that.

Stacey Harris:

What about the assessment side? That’s the other side I see almost all the vendors playing with right now. There’s a lot of tools out there that does various forms of assessment. Some technology tests on the fly, some that do behavior assessment, some that have always done through the skills assessment. You’ve got the big assessments around leadership and team building and those type of things.

I just talked Marcus Buckingham the other day about their type of work. More and more I’m seeing that tied to not just can they do the job but are they a fit in our company which oftentimes can lead to both positive and negatives in the organization. Are you seeing that that’s being adopted? I see it being adopted, but being carefully adopted in a lot of organizations. Do you think that’s going to become a bigger topic this year, or do you think organizations are going to leave it as a “nice to have?”

John Sumser:

I think the vendors are going to aggressively assert that fit is something that you can actually account for. I’ve never heard a dumber idea ever. What makes a group work is not the replacement of people as if they were components that fit together. The whole idea of fit is people are like hats. People are not like hats. People are not like hats.

Stacey Harris:

It’s kind of the idea that talent management is like manufacturing or distribution centers. That everybody’s a box that you can put a scan and a SKU on right, and that will tell you about them.

John Sumser:

Let me give you a hypothetical example of fit. Imagine that there’s a person in an organization who is cantankerous and nasty, but they really get stuff done. They have a good career and the company profits. They’re a little toxic but they’re getting stuff done. It comes time to replace them and everybody who has worked with them thinks, “Oh let’s not have any more of that. That was really unpleasant.” Right? You pick the opposite because it’s a better fit. That never works. It never works. We’re really back on the CEO replacement stuff. It’s really hard to get these decisions right because it isn’t the question. You put somebody who is at all capable into a job and the first thing that they’re going to do is change the job.

Stacey Harris:

They have to change things around, yeah.

John Sumser:

If you hire them for fit what you’re essentially saying is don’t do that. We want you come in and not rock the boat. We want you to fit in. It’s bad juju for me to make that the hiring criteria. It’s the thing and people are selling it and because hiring is such a risky thing, practitioners will buy it.

Stacey Harris:

I think they’re going to buy it. To me this is a risky business, definitely a slippery slope. I think where it has a place is more along the team dynamics and the relationships within the organization. I think that’s a much harder sell. It’s definitely a less direct impact sale. That’s something that takes a much longer time to see. Unfortunately a lot of what I think are really good things that happen inside a company they’re going to try and take and assign to how you select people. To me that’s the dangerous part of it is that we’ll lose the value of some really good things because we’re trying to build them into a talent acquisition.

Well, I think we’ve come full circle John. We went from talking about CEOs and leadership and what’s happening in the market all the way into new technologies and how they might be changing the conversation to the talent acquisition space and some of the new concepts and ideas and how they’re being accepted. I think we’ve had a pretty good conversation today.

John Sumser:

Yeah, thanks. It’s always great to spend this half hour with you Stacey. Out there in listener land, you’ve been listening to HR Tech Weekly: One Step Closer with Stacey Harris and John Sumser. We’ve certainly had a lot of fun talking. Hope you enjoyed the conversation. We will see you again, same bat time, same bat channel next week. Thanks Stacey.

Stacey Harris:

Thanks everyone. Bye-bye.

John Sumser:

Bye-bye.

End transcript



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