Ep 9: When the Mission Matters

Speaker 0 (2m 11s): Yeah, that’s really a good point because two of our featured CFOs Beth climber of job case and Scott Duso of work human are both from companies that provide offerings in the human capital space. And that’s something of a departure for us. Again, we want to discuss the evolving mindset of finance leaders when it comes to human capital and not about not talk about specific offerings really, but I was tempted to do so because when they discuss their offerings, you sense how passionate they are about the space.

And I thought this audience actually might find these two companies somewhat interesting,

Speaker 1 (2m 59s): You know, I’ve observed recently. I’m sure you’ve all seen this, that, yeah, it looks like dog owners look like their dogs are or vice versa. And often the organizations that we choose to work in as CFOs resemble our personal belief system and values. Yeah. And what’s interesting about what Beth and Scott have shared with us is their perspectives of, you know, their sense of values or sense of what type of organization that they would want to work for. Both of which are, are working hard to almost emulate the CFO’s values in the services that they offer.

Speaker 0 (3m 32s): Wow. I wish I said that. Or maybe I did. Maybe I forgot. No. Now should I move to our first CFO is now a good time.

Speaker 1 (3m 44s): Well, on the, the general side of things, before we talk about what we’re up to, there’s a recent study from McKinsey released yesterday that said basically 70 to 80% of CEOs think that we’re going to be going back to the office in a significant way and less than 30% of employees feel the same way. So in COVID we’re experiencing this big disconnect between what a leader’s perception is and what the general employee is.

Now, there may be reasons why that might be the case. Doesn’t matter. The fact of the matter is, you know, we’re not back at steady state. Hey, we’re seeing, as you say, based on what’s going on currently, the Delta virus is giving us a resurgence. I think what we’ve all learned in the last year is better agility that, you know, we don’t have these long-term plans of when we go back to the office or what work-life looks like. I think we’re all beginning to recognize. We need to be agile and you know, be adaptive.

And we may be back in the office for a couple of months. Then we might be out of the office and we might be back in again, like it’s, it has changed everything about the work life.

Speaker 0 (5m 2s): Yeah. Well, just to expose the divide that much more just as the CEOs were about to put the accelerator down for us, September return companies, such as Lyft said this week, it was pushing back it’s September return to office date all the way to February and Google of course was already extending its work from home policy to mid-October and Uber did the same as well.

Recently. Meanwhile, it’s obvious many millennials are finding the new work-life equation to their liking. And it’s not just parents with kids at home who like it. So regarding the McKinsey data points, maybe it’s no longer what the CEO says goes, there could be some serious pushback coming or maybe it’s happening already. W what do you, what do you think?

Speaker 1 (6m 4s): I, I, I think that the palace revolt is a foot, so no longer can the CEO lead with authority because the employees won’t just walk and we’re in an employment world now where we do have a shortage of competencies, and we do have demographic issues going on in terms of the worker age profile. So yeah, no people would just walk in and partly is this, the COVID thing is such an emotional issue, you know, fanned by the popular press, that emotion wins over logic every single time.

So in this case, the employees are going to go, no, I’m not going to go back in that office and possibly die. I’d rather flip hamburgers or deliver packages for a Purolator, then go back into that environment. So I think that, and we’re already seeing this, that organizations are taking a more cautious journey back to office rather than being dictatorial. I merely think it’s interesting from that survey that these antiquated perceptions still exist.

Speaker 0 (7m 20s): Well, thank you for bringing up the topic. I think the back to work is so timely here. As we sit in the beginning of August, looking towards the fall, things are not as we thought they would be once again, so we can touch on this subject again. I think after we here, after we share a few clips from our CFOs, perhaps I’d love to pick your brain a little more Brett, but right now I wanted to share my clip of CFO, Beth climber of Jobcase Jobcase.

Very interesting company. Beth’s going to explain it, but it’s really, it’s sort of a, a blue collar, LinkedIn. That’s my words, not hers. She explains it much better. And again, this is Beth climber, CFO of Jobcase

Speaker 3 (8m 15s): Of cases. The only social media platform dedicated to empowering workers and workers across the United States use Jobcase and other sites. We operate to get access to jobs, use tools and resources, and come find a supportive community to help them get ahead in their work life. It’s an incredibly meaningful site that we get a lot of feedback, positive feedback from our members about what a massive difference it made at a really pivotal important point in their work life. We have today about 20 million monthly active unique users, and over 110 million registered members.

And we’re the third largest career resource, according to comScore behind, and indeed and ZipRecruiter. When you look at where people look for jobs. And so this is the point that, you know, those of you who can’t see Jack right now, he’s making a surprise face. This is the reaction I always get. When I cite those, those scale. People say what I’ve never heard of job case. Why is that, you know, two reasons, one, we’re still a rapidly growing business, and there’s a lot of work we’re doing right now to build a consumer facing brand. But also we are focused on the non-professional workforce.

The 80% of the workforce that is not your CFO’s or your private equity operating partners, or your CPAs, et cetera, but rather is the individual that manages the store down the street, or the individual that, you know, works on a construction site or at the water treatment plant near you. Where that, that, that is that part of the workforce represents 80% of the workforce. People like to throw around words like blue collar hourly, and we do serve blue collar and hourly workers, but not only that, many of our employees are, our workers are hourly, but many are also salaried.

Many of our workers do not have college degrees, but 15% of them do. So the most common thing people use to describe us as the LinkedIn for everyone else, which is an imperfect characterization, but really probably helps you understand the world we serve for people is when you need help and support in your work life, whether that’s find a job or other things, job cases, the place to come, it can happen.

Speaker 0 (10m 28s): So I thought I’d pause here after Beth shared her overview of the company and get your thoughts on it. Brett, I’d be curious to hear what you have to say about this type of approach and business model. And then I have a clip regarding her workforce and why talent is top of mind for her as well. And I’ll share her thoughts about that, but right now, tell us, tell us what you make of this, this company.

Speaker 1 (10m 57s): No, it’s, it’s amazing how many, you know, niches you see in the marketplace. Cause as soon as you hear her talk about it, go, that’s obvious what a brilliant business model, you know, what’s interesting about Beth is she said that, you know, what, what made her choose this company is because it’s about, you know, enlightenment and about, you know, and people join the company. They hire people who like that connection with helping peoples, you know, live a better life and, and have better jobs and how it contributes to a better life.

As you know, I’m a big fan of Daniel pink and his book drive. He talks about the five intrinsic rewards that motivate and engage employees. And number one, and the most important is purpose. People feel a need to connect to a higher purpose. They’re throwing their lives at something. Please let it be something that’s a value. And that’s exactly what she’s talking about. She describes the attributes of the intrinsic motivator of purpose has Daniel pink describes it around that contribution to the greater good.

And I thought that was intriguing because she wanted that personally. And that’s what a job case does for the general population.

Speaker 0 (12m 16s): Okay, well now I ask her really about her own mindset when it comes to talent and the workforce, and here’s what you shared.

Speaker 3 (12m 38s): And we all want to wake up every day doing something that has meaning. And I think that’s why we all work at Jobcase is that we feel that Jobcase has the ability to help our, our workers get ahead in the world and help our employer partners. We haven’t talked too much about where we make our revenue, but a lot of our revenue comes from employers and other types of companies looking to connect with our workers. And so we want to help our employer partners get their ups truck staff so that they, you know, packages can, can be delivered and keep the economy humming. And we want to help our workers, you know, get, get to work.

And so people come to work every day because that work has real meaning. And so that’s the first thing I, you know, I don’t know if you call it enlightened, but it’s really important. And I think we try to keep that at the forefront of what we do at Jobcase. And the second is then if you believe in that work, really understanding how your work contributes, your day-to-day activity contributes to that. So we spend a lot of time really making sure our teams understand how their work, you know, work contributes to the strategy strategy of the company contributes to the impact we have on members.

We do quarterly culture surveys to really, and we ask questions like that to pressure test and keep ourselves honest of where we’re doing a good job and where we’re not. And you can break down the results of those surveys by team so that you can identify, you know, weaker spots and work to grow on them. So I think that’s, that’s really what I’d call our, if not enlightened, but our philosophy is just ensuring everyone kind of knows why they’re waking up in the morning to come do the work. They do knows how they contribute and then works hard and has fun.

And, and, and doesn’t one of our cultural principles is don’t forget to laugh. We work very hard. We’ve all in the economy, been through a really crazy last year and a half, but we’ve had a lot of laughter along the way that I think helps the team stay motivated, you know, through the, both the ups and the downs. Jack, I mentioned at the beginning that I think a lot of my, my training prepared me to think about the CFO role as a primary place. You can drive equity value in the business and a big finance strategic moment I had relatively early in my time at Jobcase was really about helping the organization, crystallize the strategy they already had, which isn’t spectacular strategy and to how it was going to drive equity value.

It’s very easy for people to sometimes hear, okay, job cases about empowering workers. That sounds like a, a little charity thing off to the side. But in fact, it’s quite the opposite, right? If we do our job right of making job case, a great place, people can come to get help in their work life and feel like they got support from the community to move ahead, they’re going to tell their friends and their friends are going to come back and, or their friends are going to come join us. And our business is going to grow right. And that flywheel that’s created by creating a great, a great site for people is a massive driver of the economics of our business.

Similarly, because our revenue comes from employers and other partners in the ecosystem. If we can use that, the power of that community to focus on advocating on behalf of workers, we raise the profile of Jobcase as a worker access platform. And that means that there’s a lot of other organizations that want to partner with us, whether it be large scale employers or a large enterprise technology systems, like the folks at Workday have et cetera. And so Fred, our founder and I spent a lot of time early in my career and kind of translating that, you know, for our, our, with our board into what does that mean for equity value.

And ultimately it became really clear to all of us that the valuation that we’ll be able to earn on a bit on the business is significantly accelerated by this, this investment we’re making in this job case platform and this investment, we’re making a worker empowerment. So it’s not, you know, generate enough revenue that you can go do some stuff off to the side, focus on worker empowerment. It’s, it’s both, it’s drive the growth of the business, drive how we support and empower workers. And that then becomes the fuel that drives the business.

And so we talk about this, you know, quarterly and our internal OKR processes annually when we refresh our strategy with our board, that, that, that flywheel and the, and the multiple growth that we can see as well as the, as the economic we growth growth we can see in the business is core to why our mission really matter.

Speaker 0 (17m 11s): Okay. Beth climber of Jobcase, who a quick career fun fact, Beth was a operating partner at Bain capital. She was there at Bain for nearly a decade thought that might be interesting, but what did you make of her workforce philosophy and what she shared with us, Brett,

Speaker 1 (17m 36s): Man, the line I’m going to steal from her is do not forget to laugh. You know, if you think of the customer, she’s dealing with some of which, you know, thrived June COVID. So she used the example of Purolator, a driver, but many of which didn’t, you know, people who worked in restaurants and service industries and, you know, to keep that off uplifted perspective, you know, don’t forget to laugh. I thought was terrific. And, you know, I like the fact that they’re paying attention to their employees through things like culture surveys and so on.

And so it’s interesting that, you know, there’s this expression from the UK that says, you know, the cobbler’s kids have the worst shoes. And often we see, you know, HR companies have the worst HR practices, but it seems like with job case, not only do they have an awesome offering, but they, they use that tool on themselves as it were to, you know, keep themselves in line and performing well, which I enjoyed hearing about,

Speaker 0 (18m 44s): Well, we were pleased to have Todd McElhatton a CFO of Zuora and CFO thought leader recently, Brett, and you’ll be proud of me. I really pressed down on the talent management questions, asking him how he goes about valuing human capital. And he, he connected the dots for us very well. I have to say, I think you’ll agree. Here’s Todd, McElhatton CFO of Zuora.

Speaker 4 (19m 24s): You know, we have our systems that track our open recs. We have our total head count and it’s really super important for me to understand head count, not only their costs associated with it, but as I start thinking about my top line, if I don’t have my business development reps in place, you know, six months before that growth occurs, I know I’m not gonna have enough time to get things through the pipeline, the same thing with sales reps. So, you know, not only am I interested in the standpoint of the pure numbers, but I’m interested in the detailed functions to make sure that we’ve got the capacity in place to be able to deliver on the growth that we need to deliver, to hit the objectives that we’ve set with our shareholders.

You know, you can look at it two ways. You can look at it, as you said, is, is it more of a challenge? And I think one of the things that I’ve really been working with here is look, you can measure it with some of the typical metrics. Hey, what does my attrition look like? You know, how quick are we hiring? How long are people staying in their roles? I like to look at it as how engaged are employees. And we’re really trying to measure how engaged is the workforce. And we, we survey our people. We spend a lot of time doing. One-on-ones making sure that people understand what are the opportunities within the company.

And look, we’ve got areas where we can certainly improve and do better, but we’re really working hard to understand that if you come in and this was one of the things I told a lot of our young talent is if you go to like some of the companies that you talked about, where I started, whether it be an SAP and Oracle fantastic companies, you’ll get a really good training there, but you’re going to go into something and it’s going to be pretty narrow at Zuora. You can come in and four or five years, you can spend time in our accounts payable. You can spend time in FCC reporting.

You can spend time in or financial planning. You can spend time in helping us put deals together. You can spend time in investor relations, and those are opportunities that you just don’t get at a large company. And so I think we’re really trying to change the entire dynamic of saying, look, I can give you, you give me four or five years here. I’ll give you 10 or 15 years of experience that you would have gotten somewhere else. So I think actually a mid-sized company, if we make sure that we’re selling the right value proposition to our employees can really help people expedite their career because of all the things that we’ve got to do, even though, you know, my revenue is just over 300 million, I’ve got to do the same thing that a $5 billion company it has to do from a standpoint of investor relations for managing my treasury from reporting our results to the sec.

And so you can really get some fantastic experience and you also get an opportunity to be much closer to the business and really see how the wheels grind in churn and see what makes things happen. So I think it’s a great opportunity for people and we’ve been working really hard and I think we’ve been pretty successful of showing people those opportunities. And I think quite frankly, with the less bureaucracy that we have, it can be a whole lot more fun working in a company like Zuora than a company that’s, you know, five or 10 times our size

Speaker 0 (22m 26s): CFO, Todd, McElhatton talking about the virtues of building your career in a mid-sized company like Zuora. So Brett, what did you make of what Todd shared with us?

Speaker 1 (22m 39s): Yeah, there’s, there’s no doubt that got a very humanistic view of, of his job and employees. You know, again, what I liked about his perspective is about using indexes about engagements in surveys. And certainly we see that to be a universally powerful tool. And now that said, and I, I like what, what Todd and Beth have talked about.

I want to put a spotlight just while we’re here on what we’re seeing emerging in this market. And what we’re seeing emerging is what I’m going to call employee engagement by the numbers. So instead of doing surveys three sixties and peer reviews, which is what I call dirty data, it’s dirty because it’s biased by the perspective of the person that’s answering the question, it’s biased by recency. You know, I’ll remember better. What I heard yesterday than I heard six months ago, it’s biased by my perception of control.

And there are eight other biases, but th the net is, is very dirty data. And at the end of the day, many performance reviews and conversations are based on that dirty data. But what if instead, we looked at breadcrumbs artifacts of people as they were doing their jobs. So for example, engaged employees tend to, I don’t know, show up to work early or stay later or tend to work over the weekends. I’m not encouraging those things, but maybe also they’re the ones in meetings who we asked to go do things, right?

We all sit in meetings and we always ended up going back to the same people. It’s like baseball, where I’ve got a very narrow bench. I keep going back to the same five players. So I can actually look at who the team goes to, to get stuff done. Now that’s not a survey that’s based on the team, freaking out how the heck they get work done. And then I could take a look at who actually get those tasks done that were assigned to them in the meetings. And so I can begin to use numbers to assess people’s potential. One of our clients do use is the velocity of learning.

So I take a look at a person and see how quickly they can learn how to manage a new product line, how to manage a new region, how to manage a new opportunity and use that as a, as a predictor of who my high potential players are, or who am I engaged in players are. So moving away from survey based, which is dirty towards more fact-based numbers. And that has a knock on effect. It becomes a fair deal for the employee because they know the numbers speak the truth.

It makes performance conversations, those quarterly annual performance reviews, slam dunk easy. And most importantly, it makes performance never a surprise. Every employee always knows how they’re performing with even before they have the one-on-one meeting with their boss. So they’re interesting views, but I’m going to say a bit dated. And as we take a look at other companies we’ve talked to, I think Jack we’ll see more and more organizations moving towards a sort of employee engagement by the numbers.

Speaker 0 (25m 48s): Well, Scott Duso CFO of work, human, no doubt agrees with you, Brett, regarding employee engagement, we’re humans offerings, or so he tells us are all about employee engagement. We’ll see what you think after we hear from Scott do sales, CFO of work human,

Speaker 5 (26m 18s): Right. We’re acumen is a, is an interesting company. We’re human. As a company that’s been around for 20 years. We started in Dublin, Jack. I turned, you know, when I was looking at what I wanted to do next, I turned 50 back in may, you know, and I’m not, you know, and, and as I thought about what I wanted to do next in my career, you know, to me working at a company and helping lead a company, that’s got not just a purpose, that solves problems, but also as mission driven was important to me when I met Eric Mosley, who’s founded the company in Dublin in 2000 that came through in spades.

You know, the, the mission of the company and our mission is to make work more human. It’s very simple. And you know, the, when you, when you, when you talk to folks inside this company, we have a software platform. And our goal is to keep employees more engaged, to make sure that they’re happy at work, to make sure that they feel belonging included. It’s a really terrific message and mission. While at the same time, we’re providing a real business value to our clients, to our customers. So let me explain what we do.

We are a we’re disrupting employee recognition. Employee recognition is a $30 billion market it’s been around forever, but it’s also very tactical it’s it’s hierarchal. It’s mostly mostly manager to peer recognition. It’s typically in cash format. It doesn’t really help engagement and doesn’t really help employee employee satisfaction. And so what, what we’ve done here is we’ve created a social platform. So when you think of human resource applications, right?

Most human reefs, that resource applications today are administrative applications that solve process problems. So think of companies that solve payroll problems or recruiting software, it’s all about process. We’re a human application, that’s all human problems that benefits the human. And the problem that we’re solving is engagement in retention for companies, which is a $1.1 trillion problem in the U S today. So the cost of the cost of employee engagement in the U S that is about $600 billion a year.

Gallup polls show that only about a third of employees are truly engaged in their work. So, so, so there’s huge room for the other two thirds of the employee workforce to actually be more engaged, be more productive and be better employees and bring their whole selves to work. The other issue is employee retention, turnover costs American companies, a half a billion dollars a year, right? The cost of turnover is anywhere between 50% to 200% of an employee salary. It’s incredibly costly when an employee leaves. So our platform is designed to create a social recognition, crowdsource peer to peer recognition program that allows employees to congratulate.

Thank appreciate one another on a continuous basis throughout a year, and a continuous cadence throughout a year. And therefore keeping them engaged, keeping them more motivated, productive, and staying longer. And we’ve been around for 20 years, we’ve got 380 customers we’ll, we will do almost a billion dollars in billings this year. And what we’re doing is we’re actually creating those connections. We’re aligning employees with the employer’s goals, objectives, vision, and values, right?

So that’s, and that’s pretty powerful. So, you know, and I, and I’ll, I’ll give you this one metric and then I’ll, and then I’ll pause and let you ask a question on us, but you know, one of the things that I love about this company is that we’ve now collected 70 million data points, 70 million appreciation moments, and appreciation moment happens every two seconds on our platform, across our customer base. And we’ve been able to collect those 70 million appreciation moments. And with our work human IQ intelligence can provide data back to our customers and back to our clients about how their employees are working and what metrics are working.

So an employer can see if I give a, if I give, or if an employee receives five or more recognition moments during the year, they’re two times less likely to leave than an employee that doesn’t receive five or more a year. And that is important because I want to retain that employee. And, and the same thing in the same thing can be said about productivity, right? If, if there’s more, more words and more recognition moments happen within it, within an employee base, they stay with the company longer. Turnover is lower. So there’s real business value and real, tangible ROI that our customers get, you know, through the platform.

Speaker 0 (30m 46s): So I should mention CFO, Scott Duso of work human. His episode will be debuting later this month. It’s not yet up on a CFO thought leader. So this can be a little bit of a teaser. It’s certainly, he’s got an interesting background and it’s quite compelling to hear him tell the work human story. So please tune in for that one. But Brett, meanwhile, what did you make of what Scott shared with us?

Speaker 1 (31m 16s): Well, a couple of things, thing, one is I, I love the fact that, you know, he chose work Schuman because it met his values, right about a mission driven company about purpose. And we’re seeing that more and more that people are choosing organizations based on the organization’s purpose. And I mentioned earlier in the podcast vote, Daniel Pink’s book drive. And again, he says, the foremost intrinsic reward is purpose, and we’re finding more and more people are choosing the companies they work for based on purpose.

So I thought that was interesting, but you know, by far, the more interesting conversation is about what the heck work human does, because it’s so germane to what you and I love to chat about. And human capital

Speaker 0 (32m 3s): Does again, recognition and engagement. It’s like a straight line. Do you see it that way?

Speaker 1 (32m 13s): It does. But part of the dilemma we have in this space is the recognition part. If it’s based on money or monetary reward, Pavlov told us a long time ago that you know, our behavior changes once we understand what that motivator is. And our concern is always that if something is linked to a reward system, people are to gain the system. So if I know I earn more money by making more sales calls, I’ll make more sales calls.

If I make more money by solving more problems, I’ll solve more problems. When you begin getting into recognition, peer to peer, what we’ve seen is people gaming it by having all their buddies, give them a high score this month, and I give you a high score next month. And so a bunch of behaviors like that. So you have to be careful on how you craft these things. Now that’s not to say you can’t include them. So John Doerr who wrote measure, it matters.

You know, the, the Seminole book on a current Seminole book on OKR is he suggests that as we set up our objectives and key results, we should not use that for compensation. Well, that’s equally ludicrous. You can’t say to someone, here’s the corporate strategy. Here’s how that cascades down to what you do, but I’m going to reward you for something different. So you can’t ignore it, but at the same time, you need to be careful. And so when you begin getting these recognition systems, there’s some criteria you should use for the metrics.

So they include repeatable, reliable, which means if you did the activity in the Tallahassee office, and I did it in the New York office, we’d get roughly the same results. Otherwise I could do the same thing and get a better compensation and recognition than you have. Secondly, it’s gotta be auditable. So someone from the outside needs to be able to take a look at it and make sure that no one gained the numbers. And that’s, that’s important for what I call the fair deal for the employee. A third thing is often it’s, we’ve got to make sure that the recognition is related to something that you have control over.

In other words, I can’t reward you for what someone else in the team does or what a different department does. So I need to be able to compartmentalize it all. This means it’s often a lagging measure. I have to wait till an event has occurred, and then I can count the score. And the dilemma with that is in service organizations, you manufacture the product at the same instant as it’s delivered, just like this conversation. I come up with the ideas. They come out of my mouth. If I said something embarrassing, I can’t take it back.

So it’s hard to recognize when their production cycle is nanoseconds inside someone’s brain. So there’s a lot of attributes that have made these reward systems challenging. And so I was listening carefully to Scott story, other organizations like bonus lay have linked rewards achievers that like there’s many, many companies in this space, and many of them have tried to deal with what’s called the observer bias, which causes people when there’s money involved to have a bias and how they see the world.

Speaker 0 (35m 32s): Well, thank you again, to, to Brett Knowles for your commentary and for sharing opinion upfront there regarding the September back to work orders and how CEOs are likely to get some,

Speaker 1 (35m 49s): As I said to you many times, never think for a moment that I don’t have opinions on any topic,

Speaker 0 (35m 56s): Never promise, cross my heart, hope to live till next time. Brett, thank you for joining us. Have a good weekend. Hi, it’s Jack. If you haven’t yet subscribed to workplace champions, you’ll find us on apple podcast. Or if you’re an Android user,

Speaker 6 (36m 22s): Check us out on Spotify.

Speaker 0 (36m 25s): If you like the show, please recommend it to a friend. Thanks for listening to workplace champions, a CFO thought leader production