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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 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions here.

HR Tech Weekly

Episode: 58
Air Date: February 18, 2016


This Week

This week John and Stacey discuss:

  • SAP SuccessFactors Adds Continuous Performance Management Link
  • Cornerstone OnDemand Announces Q4 and 2015 Fiscal Year Results Link
  • Ultimate Software Reports Q4 and Year-End 2015 Financial Results Link (PDF)
  • Who’s in charge of AI in the enterprise? Link
  • Gearing Up for the Cloud, AT&T Tells Its Workers: Adapt, or Else Link
  • Topics: #AI, HR API, Continuous Performance Management, Quarterly Results

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 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions here.

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Begin Transcript

John Sumser:                        God morning and welcome to HR Tech Weekly: One Step Closer with Stacy Harris and John Sumser. Today we’re coming to you from beautiful Carey North Carolina where the sun is shining and they have those big, puffy clouds in the air. How are you, Stacy?

Stacey Harris:                        I’m doing well. I’m doing well. It’s nice to get a chance to show you my wonderful town and the area here. If you haven’t guessed, John and I are in the same location here this week. We’re in Carey, North Carolina as he said, which is where I usually call out of at my home base here. We have lots of fun stuff to talk about, lots of quarterly updates and businesses telling people how they should be keeping their skills up to date, and people talking about artificial intelligence, John. I think it’s going to be a fun conversation today. We’ll get to continue it on after the call today, too. It’ll be good.

John Sumser:                        Okay. Let’s go. What’s in the quarterly updates?

Stacey Harris:                        Every vendor sends out, at least most of them have started anyway, sends out to the analyst group, if you want to call us influencers, analysts, the group that we all participate in, a set of content that sometimes is market specific, function specific, about what they’re doing at each end of each quarter. It usually coincides with their financial analyst updated because they want people to have a good insight into that it’s not just finances, it’s also all the other things that are going on. We get an interesting look, I think, from our perspective that we get to see both sides of that. Sometimes, financial analysts only get one picture, which is the financial update. SAP did their update in the last week. We also got one from Cornerstone On Demand for their fourth quarter fiscal year 2014 financial results. Then we also had Ultimate doing one.

A lot of interesting, I think, information, and what I think was most interesting to me is that all of them feel they’re doing fabulous on the cloud-based business around HR technology. They all say their numbers are growing, and generally we’re still seeing 30 percent, I guess if you look at the various different types of numbers that they’re showing, whether that’s revenue or bookings or year over year; I think you’re seeing those numbers in there. All of them seem to be focusing pretty heavily on some talent management conversations this week. Maybe we want to talk a little bit about SAP and their performance management update. Did you have a chance to look at their update in that, John, where performance management, they’re changing that too performance and goals that are continuous performance management? That was their big update in their quarterly announcement this year. Did you sit in on that or talk to them at all about that?

John Sumser:                        I haven’t talked to them. What do you suppose continuous performance management means? That sounds like something out of Office Space.

Stacey Harris:                        Yeah. Well, I-

John Sumser:                        You can never escape the conversation now?

Stacey Harris:                        A little bit, yeah. That’s it. I did sit in on a bit of their presentation yesterday, that we’re to walk through what they’re saying is that their continuous management, and really … Four SAP and success factors, which is the tools this is being built around which is their cloud-based success factors, performance management tool. Success factors was one of the earliest performance management tools to the game. They had what I would say is one of the most in depth goals and performance management modules on the market, but it was built off of 10 years ago, 15 years ago approach to doing performance management.

What they really have probably done is just updated it to modernize it in a way that we’re seeing from a lot of the other small talent management solutions in the market these days, newer ones, which is the idea that you’re not just doing an annual review, but that you’re continuously tracking a list of activities and topics and coaching and achievements.

That’s all being integrated into some ongoing history. Then you’re getting notifications on a regular basis. There’s no once-a-year or once or twice-a-year annual performance review. There’s this continual conversation that, at the end of the year, can be rolled into some analysis of the person’s performance. That’s what their take on it is, I think, and I think what we’ve seen in the market here in the last year or so.

John Sumser:                        What do you think it would be like to work under those circumstances? Would you like to be managed that way?

Stacey Harris:                        I’m in a unique position. It’s interesting, in the last three organizations I’ve been in, performance management has not been as structured, I think, as we see in many of the large organizations. I was in a very large corporation before I got into being in an analyst role, and performance management was very structured in that organization with a continuous performance management model. They had ongoing coaching and mentoring and everything. I think this isn’t really anything different than what people are used to doing, anyways, if they’re talking to their managers on a regular basis.

All this really is doing is tracking more often the things that are already happening for most good managers and most good employees. The challenge, I think, where this becomes an issue is that it might start to highlight how often people aren’t talking to their managers. Then the question becomes, is that bad or good? I don’t know that we know the answer around that. I don’t think it’s whether or not you like to be working under these conditions. The question is what did the … I think this is harder, going to be on the managers, than anybody else right now.

John Sumser:                        What I mean is, I’ve always thought that the way that a relationship with the boss goes is the better you get at your job the less time you have to spend with the boss. Good or bad, the better you are at your job, the more autonomy you get. For me, one of the big rewards for doing well at my job is I get to do my job. I don’t have to talk to somebody about it all the time. It’s like if you’re good at your job you don’t have to get the same stuff approved that you have to get approves when you’re beginning the job.

It would seem to me that a continuous performance management system would make that possible, rather than burdening seasoned people with the administrative stuff. I don’t know. I think that’s probably a great question to start asking everybody. I’m sure that somebody’s operating a view of performance management that accounts for people who know what they’re doing.

Stacey Harris:                        Well, that, I think, depends on how you plan to use systems like this. Are they meant to track the check-ins from, “Are you doing well?”, or are they meant to start driving the conversation about where you want to go. I think that’s the other side of this picture that we’re seeing in today’s work environment, which is that you’re never just doing your job. You’re always preparing for your next job. If you’re always preparing for your next job, you want to be thinking about that with someone in the organization. Does that have to be your manager? I don’t know. That’s the conversation that we’ve seen in the market as a whole, right?

John Sumser:                        That’s interesting. Do you think people do that? Do you think people spend their time preparing for their next job and talk to their boss about that? I would guess that that’s a privileged few who get to do that. Do you think that’s something everybody wants to do?

Stacey Harris:                        I wouldn’t say it’s common state, but I’d say it’s one of the things we’re seeing that is being requested; people want to do. I shouldn’t say “want to do.” You think about those of us that are on a continuous learning path, we enjoy doing it, I guess, sometimes. It’s interesting. One of the articles that I pulled this week was from AT&T, and AT&T has this big article this week about how their CEO is telling their workers that they need to adapt or else. Basically, they’re telling them if they aren’t working in some way on improving their skill sets, then they will not have a future in the organization. They’re not going to get rid of them, but they won’t have future opportunities. If that’s the direction of many of the large corporations, does it matter if you like it or not?

John Sumser:                        Yeah, probably. Probably. I don’t want to go down to the specifics on this thing today, but it seems to me that there’s a broad range of stuff. When you talk about the AT&T thing, it’s an interesting problem that they have because the way you framed it was, if you don’t start learning you won’t have any future opportunities. Right?

Stacey Harris:                        Mm-hmm (affirmative).

John Sumser:                        I would imagine that somebody who isn’t interested in learning also isn’t interested in future opportunities. Isn’t that right?

Stacey Harris:                        Well, I guess that … Yes. The question becomes how long does the current job that you’re in … how long will it exist in the form or shape that it’s in? That’s the bigger question for many people, which is if you don’t want to invest in what your next job is, how long can you bank on the fact that the current job will exist? I think that’s part … In the changing technology, the conversation about artificial intelligence, the conversation about automation, we’ve made some assumptions about how long certain jobs will be around in the market. I think the speed at which we’re seeing certain roles change and, in some cases, completely be removed from the market-

John Sumser:                        Oh, oh, oh.

Stacey Harris:                        -is happening quickly.

John Sumser:                        Okay, so I didn’t understand that. What the CEO at AT&T is saying is, “If you don’t help yourself get better at your job, we won’t help you when your job changes”?

Stacey Harris:                        Yes. Yeah.

John Sumser:                        Well, that seems fair, don’t you think?

Stacey Harris:                        Possibly. Now, part of the conversation, and so taking a look at what’s going on with Cornerstone on Demand … Cornerstone on Demand’s fiscal years, their numbers are looking pretty good for where they’re at, currently. There were a couple things they missed, I think on the financial side, that people were paying attention to. Some of their growth is decelerating based off of financials but I think where it was I was interested is how much their international growth is continuing to grow and when we think about jobs, whose role is it to pay for, or I guess invest in your future, I’d say in the United States it’s very easy to say that you own your own destiny. That’s definitely the mantra that we have here in this market. Outside the United States, if our HR technologies are going into international markets, I’d say that conversation is a little bit different, right? If you’re a large, corporate global organization who pays for and who owns your development might change dramatically once you go across the borders, right?

John Sumser:                        That’s interesting. That’s interesting. The social contract is different enough that you can’t apply the AT&T principle globally; you have to apply it on a market-by-market basis how you’re going to handle the way that employees take responsibility for their own growth. Is that what you’re saying?

Stacey Harris:                        Possibly. Particularly if you’re looking at European organizations or European-based employees or even employees in countries that are growing rapidly right now. You see a lot of conversation right now about the fact that employees will work for a year to get a bonus and some sort of development and if they don’t have development within their current positions then they’ll move on to another job in a lot of developing countries. I’m wondering if that’s what’s driving some of the growth of these talent-management systems and HR systems in some of the international markets where they previously have not have some of that growth.

John Sumser:                        Hmm, well it’s going to be interesting to see what happens. In Cornerstone’s case, they’re starting to approach the place where growth levels off, anyhow. It’s really hard to sustain growth over time; although, Ultimate’s doing some interesting stuff there. Organically, you’d expect that a company like Cornerstone would start to level off and so they’re going to have to change themselves in order to continue to do what they want to do.

Stacey Harris:                        Mm-hmm (affirmative), yeah. I think it’ll be interesting to see this year what Cornerstone comes out with. They mentioned a couple things, not only in the international growth this year but they also mentioned, which I thought was interesting, was their redesign of their goals and management system this week. I haven’t had a chance to look at theirs and I didn’t get a briefing from them at all so I can’t say other than the few pictures they’ve shared but I thought that was interesting that both a large talent-management system and a large, [inaudible 00:14:00] with the talent management solution connected to it were reworking completely their performance management, goal-management models this year.

John Sumser:                        I think it’s the thing. I think we’ll see a lot of that happen as the next … If this year was analytics at the trade show season, next year will be performance management at the trade show season. We’re going to see a lot of differing approaches. I haven’t heard anything that makes me go, “Oh, yeah. That’d work.” Mostly, it’s complicated systems that say, “If you try this, it might work.” I haven’t had the experience of jumping for joy over the way that somebody’s articulated their position on performance management. We’re going to learn some stuff this year in that arena.

Stacey Harris:                        We will. I think some vendors will take that as a challenge, John, to see if they can make you go, “Wow,” for performance management.

John Sumser:                        Oh, great. That would be nice because wouldn’t it be amazing to have a piece of HR technology that, when you went to work in the morning and you punched the button, you were excited about what you saw? I was really busy yesterday and didn’t get to look at email at all. This morning, I opened the email and there were, in the sorted pile of stuff that I absolutely have to pay attention to right away, there were 40 pieces of mail. I don’t work in some big bureaucracy where you have to file thousands of things that don’t matter along the way. When I think about what the performance management solutions look like, it sounds like another application that feels like opening email. “Here’s your amazing, impossible list of stuff to do.”

What I’d like is to turn on my machine and open something that goes, “We’re having a lot of fun on the way to Cleveland and we’re going to be stopping in West Virginia today and it’s going to be a great day,” and none of these do that. None of them are encouraging. None of them are, “I’m better off if I turn it on than if I don’t.” I think that’s what Josh Bersin was trying to talk about when he talked about systems of engagement; something that you would look forward to doing in the morning like you look forward to the first cup of coffee or whatever the thing is that you like to start your day. I’d love to have a piece of software that behaved that way and to have it be-

Stacey Harris:                        I thought-

John Sumser:                        Go ahead.

Stacey Harris:                        Sorry, go ahead. What does system engagement actually look like? Not only that it makes you excited but what does it do for you, then?

John Sumser:                        Well, it helps me remember stuff that I really want to remember but because I’m committed to this big thing that I’m doing, little things drop along the side. It helps me remember that stuff. It also helps me remember that the big thing that I’m working on is more important than those little things. It would help me feel good about prioritizing the work that I have to do because some days, maybe even most days, you can’t do everything that you have to do. You have to make decisions about those things and when you make the decisions some people get disappointed; some outcomes are rearranged. Going through the process of navigating that every day is a grind. It’s just a grind. It’s hard to be delighted about the opportunity to reschedule a bunch more stuff because you didn’t quite get the prioritization right. Nobody’s perfect enough to get the prioritization right so everybody’s got that problem. The software’s unforgiving. It’s unforgiving. It doesn’t know how to go, “Oh, man! Look at the day you’ve got today. You might want to have a bottle of water by the desk because you’re not getting up.”

Stacey Harris:                        I get what you’re saying and I definitely get Josh’s commentary on system of engagement but I guess there’s this constant pull with HR technology that we’re always seeing, which is the need to manage the administrative work and maybe in a better way than we would if we were trying to manage it in a spreadsheet in our emails. In a way that’s a bit more interesting that pops up the things that are maybe most relevant, most prioritized, versus managing out total work environment. One of the things that [Ulti Pro 00:19:14] put forward in their quarterly update was some new layouts to their screen environments and similar to what you’re saying. They’ve got the whole, “Here’s what you do today. Here’s your pay,” which is always one of the first things I like to look at when I have to deal that. Expenses, right? My last pay stubs, the time off; what I have, where I’m at, when I’m going on vacation. They’ve built this into … and most of the systems have done this widget, box model. I think they’re doing a refresh of it that they were sharing.

I think part of it is that looking at someone like Ultimate, who’s done a steady, progressive growth year over year over year, and every year shown numbers, at least over the last few years, that have continued to go up, their focus has been much less on some of the more engagement things that you were just talking about. I would say that if you looked at what they talked about this year it was all AC offerings, net suite integration into … so that your operations, if you’re doing net suite, connect appropriately, global languages. Really on the ground, areas that are such a frustration for HR environments. How things connect; how they’re dealing with requirements and regulations and global issues. As a community, the engagement thing sounds great. Yes, it’s wonderful to be able to have a tool that does all that for us but isn’t it okay just to have the next step of things? Something that makes at least the work that we have to do a little bit better?

John Sumser:                        Well, so this is probably a great segue into the artificial intelligence conversation. The answer is of course what you’re saying is absolutely right. That at some level I just want to be a super user and plow through all of this stuff. Some days, I don’t know about you, but some days I sit down for a couple hours with email and I’m writing poetry and it’s amazing and it’s fun and I’m having a good time. Then, other days it’s like taking a shovel out to a swamp and digging the swamp out; it’s not fun and it’s not interesting. On those days, when I want to get a lot done and I’m already hyper motivated I don’t need any assistance but having a little angel sitting on my shoulder going, “It’s okay, John. You don’t have to kill him. It’s okay, John. You can get through today. It’ll be …” because some days are like that.

I think it’ll be fun to have that maybe that’s the assistant that helps me with my job all the time and not an HR function. I was thinking this as you were talking, if I start the day by looking at how bad my expense balance is and how few days left I have to take off this year because something happened and I [hadn’t taken 00:22:12]the time off, I would just start feeling bad. Employees who are feeling bad are sometimes less productive than employees who are feeling good. When I’m feeling grumpy and out of sorts and haven’t had enough coffee or something, I don’t work quite as well as when I’m smiling and happy and cracking jokes. It would be nice if the software helped me do that, but you’re right. In terms of just basically getting stuff done, that’s an unnecessary piece of the equation.

Stacey Harris:                        Yeah.

John Sumser:                        Many employers wouldn’t want their people to have that.

Stacey Harris:                        Yeah, yeah. It’s not at the top of the priority list but I think of artificial intelligence-

John Sumser:                        Yeah, I’d say you’re not allowed to be happy.

Stacey Harris:                        Well, not exactly that, I think. Every owner or CEO or executive would love to figure out a way to help employees become more productive. If they could figure out a way to do that and it wouldn’t cost them extra money, right?

John Sumser:                        Right.

Stacey Harris:                        That’s the trade off you’re always balancing. The conversation here is how far do we need to go towards that engagement side? Is that the job of HR and HR technology or is the HR technology a stepping stone towards what is the artificial intelligence conversation that we’re heading towards in the future? The Isaac Asimov world that we’re all heading towards with robots that will be running the world. One of the articles that I picked up that you’re referencing is that there was a big question put forth in a couple articles about who’s in charge of AI in the enterprise? AI being artificial intelligence.

It came up because IDC had really been … and a couple other Gartner and Forrester had been really pushing this concept of artificial intelligence is going to grow. It’s more than a fad. By 2018 they’re saying that it will be incorporated into half off apps developed and by 2010 their AI-enabled efficiencies are expected to total the estimated 60 billion for U.S. enterprises. That’s pretty big numbers that they’re sharing there. What I was wondering is, is that an employee issue? Is that a HR ownership? Is it a IT ownership of AI? Is it a strategy in CEO? Artificial intelligence? Based off of what you’re saying, it might be HR who owns this or is this your CEO and is there a group that owns it underneath that?

John Sumser:                        Well, so as I read about the coming wave of voice-based interfaces, the next thing is all of the stuff that we’ve been doing on screens is going to start to disappear into some sort of voice-based interface. In voice-based interfaces the common, accepted view is that there’s no such thing as one artificial intelligence; that you have applications with specific intelligences and that what you do is organize those plugins to your Siri or your Alexa or whatever the thing is that you’re using.

AI is not one thing but it like we have today; it’s a bunch of different apps and a bunch of different niches. My guess would be that the choice of the standard AI, although, you can imagine that Google, Apple, Amazon, Facebook, Salesforce might offer open interfaces so that you could have Siri in one place and Alexa in another and whatever they’re going to call the Google guy somewhere else. You just plug in your success factors app to the AI and the AI then knows the success records stuff. It looks like little game cartridges based on the things that you have to get done that you plug into the console and the console takes on all of those attributes.

Stacey Harris:                        Does that mean that functional groups own it, then and, much like we have with the applications today, IT is getting more and more into final … is just basically owning the infrastructure that it runs on? The highways that it runs on. Is that basically what IT will be turned into and each functional area is going to have to own, on some level, their own artificial intelligence models?

John Sumser:                        Yeah, yeah or each … so, I believe in the HR department application programming interface. The HR department API. In the HR department API, H&R would be responsible for buying all the stuff that makes HR smart. That might be a good name for a company. That was a joke.

Stacey Harris:                        Someone’s going to take that to heart, though. I can hear it’s going to be … The next blog’s out there.

John Sumser:                        Then, get mad at me for plugging somebody. Anyhow, I think that it doesn’t probably look, structurally, that different from what we have right now. It’s just smarter.

Stacey Harris:                        Hopefully, more integrated, do you think? Do you think it’s going to be just as separate as it is today because that’s the biggest issue right now, is that Outlook doesn’t really talk to what’s going on HR and HR doesn’t really talk to what’s going on in our operations side or the management side or the marketing side. Do you think the artificial intelligence is going to help these connect a bit more?

John Sumser:                        No. No, but this is an hour-long conversation. We’ve spent so much time getting specialized in the culture. The reason things don’t talk to each other is because they’re so specialized. The experts in one area can’t talk to the experts in another area and don’t know how to make the data that they share be the same. The theory might be that you could have one great, big, giant company that did all of that stuff but if you look at how it works in the great, big, giant companies they weren’t able to do all that stuff with the stuff that they bought that everybody’s using now, so why would they be able to do it for the next generation of technology?

Stacey Harris:                        John, that sounds like a very gloomy picture. I think I’m going to take the hopeful view that maybe we’ll get all of this integrated-

John Sumser:                        How is it hopeless?

Stacey Harris:                        -in the next ten years.

John Sumser:                        Listen, I was just talking about that happy software that makes you want to go to work. What do you mean, “gloomy”?

Stacey Harris:                        I know, but when it’s not integrated it doesn’t do me any good. At least, when the data’s not talking to each other.

John Sumser:                        Well, I think I’ve told you my theory about what happens when all the jobs are automated.

Stacey Harris:                        Oh, no. Oh, no. Is it enough time to say it in a minute?

John Sumser:                        When all the jobs are automated, we just push email around.

Stacey Harris:                        Oh, that’s right.

John Sumser:                        We’re actually well into the future where nobody does any work. We just push email around.

Stacey Harris:                        I don’t want anybody to judge my amount of work I get done by how much email I’ve pushed around these days so I will … We’ll leave that conversation, I think, right there.

John Sumser:                        We’re at the end. It’s another fun conversation. Thanks, Stacey. This is always great. Thanks everybody for listening.

Stacey Harris:                        Yep. Thanks everyone. Have a good afternoon and good week. ‘Bye.

John Sumser:                        All right. ‘Bye-bye.

End Transcript

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