How can medium enterprises lay the foundation for growth as they also strive to be more efficient and agile? Hint: data is important. I talked to Jason Averbook, author, analyst, and CEO and co-founder of Leapgen, to get his advice. Take a listen:
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If you’re more of a reader, below you’ll find the transcript of our conversation, edited for clarity. You can find our other Workday Podcasts here.
Greg Thomas: Medium enterprise companies form a third of the U.S. GDP. Not all medium enterprise companies aspire to get bigger, but they all need to run efficiently and remain agile. And to do that, and to grow, they need the right foundation. I’m Greg Thomas from Workday. Today on the Workday Podcast, how does a medium enterprise company lay that solid foundation for growth? To find out, I’m joined by Jason Averbook, CEO and co-founder of Leapgen, author, and analyst. Welcome, Jason.
Jason Averbook: Thanks so much for having me. It’s exciting to be here.
Thomas: You’re very welcome. Thanks for coming in. So, maybe just before we really get started, what drew you to this topic in the first place? How did you become a guy who thinks about medium enterprises?
Averbook: I think the thing that drove me to this topic is not as much medium enterprise but the thing that drives me to the top: I guess the love and the passion around innovation. Really, when you think about medium enterprises, medium enterprises make up the majority of the growth not just the U.S., as you mentioned in your intro, but globally as well.
So, when you look at organizations that have been around for 50, 70, 90 years, there are 50, 70, 90,000 employees. It’s hard to innovate. There’s a lot of fossil there buried within those organizations. Tribal knowledge, stale tribal knowledge, et cetera. When we look at the medium enterprise space, one of the key and most exciting components of that is the combination of innovation, optimization, and imagination.
For me, when you can actually tie that into the concepts of people management, delivering people capabilities in a new way, and truly thinking about how to use technology in ways that have never been thought of before, that creates a really, really fascinating dynamic. So, it’s not as much the medium enterprise as a label that excites me as much as the possibilities for innovation in that area.
Thomas: Almost what ME means, right? I love that: innovation, optimization, imagination. So, you wrote a book. What inspired you to write the book?
Averbook: This is my second book, actually. My first book was HR from Now to Next. No matter where you are now, there’s going to be a next. How do you prepare for the next? This book was all about experience. One of the things that really drove me to write the second book was that, specifically within the last five years, organizations are behind when it comes to the technology that their workforce has in the palm of their hands or on their wrist, or in their contact lens in their eye. Whatever it is.
We’ve got this major opportunity within organizations that’s a combination of thinking, “Hey, you’ve got better apps that you use as a person than what the company gives you to work with. You’ve got better technology in your pocket than what the company gives you to work with. And, you’re used to a consumer experience because you’re using your app 10 times a day before you get to work.”
So, because of that, there’s this chasm. Really what I noticed as I continued to work with organizations of all sizes in this space is that we disrespect the year we live in within business. It’s 2018, but inside many companies, it feels like it’s 1998. We haven’t hit Y2K yet. That’s a disaster waiting to happen.
I have two boys ages 14 and 11. Digital natives. Didn’t grow up with fax machines, didn’t grow up with phone books, or any of that stuff. As they’re going to be preparing to enter the workplace as part of the workforce, there’s this mega chasm. That chasm to me is why my latest book is all about how to truly create experiences for those workers as opposed to providing people transactions. That’s what’s going to engage them, that’s what’s going to keep them, that’s what’s going to grow them, and that’s what’s going to make them help you grow your midsize enterprise organization to the next level.
Thomas: So, you talk about this notion of the antifragile core. What is that and why is it so important?
Averbook: Within any organization, within any business, there are two types of data that make up your core. There’s structured data and unstructured data. When we think about that, the more solid our data foundation is, the more we can attach augmented technologies to it.
For example, if I have a good data foundation, I’m able to personalize an experience to someone because I know you like blue shirts. I know that you like your glasses a certain way. I know you went to this school. So, I can create an experience that’s personalized to you. If I’ve got bad data, I can’t do that.
Thomas: You make bad assumptions.
Averbook: Right—if I’m trying to make sure that I deliver policies and procedures to you about what it’s like to work in your organization. But if I don’t have good data and knowledge documents around what it is like to work at your organization, how do I do something? How do I finish something? I can’t deliver that to you.
If I think about our artificial intelligence, it’s cool stuff, but if I don’t have good data, it’s like talking to Siri or Alexa without any connection behind the scenes.
For example, “Hey Siri, what’s three plus two, minus seven, plus eight?” That’s the way my 11-year-old does his math today, but Siri can’t give an answer. Why? Bad data. So, to me, that antifragile foundation, no matter what you’re doing, is the core to innovation and growth going forward. If you don’t have that, you’re at a huge competitive disadvantage. Not to mention analytics and reporting.
Thomas: I like the way you described it as a foundation. Because if you think about what a foundation is in a house, in a building, everything’s on top of that, right? The way you described it, if it’s not solid, things are going to go sideways in the future.
Averbook: People have heard me in the space, globally, talk about this concept of frosting on top of a moldy cake. You could take AI, you could take analytics, you could take workflow, you could take any of these technologies that augment what we’re already doing today and put them on top of bad data and at the end of the day, it’s going to taste bad. It might look sweet for a second, but at the end of the day, that bite of cake is not going to be good.
These frosting technologies on top of a bad foundation—not a good taste in your mouth.
Thomas: That’s a very visual metaphor. I love it.
Averbook: Makes you hungry.
Thomas: So, it really comes down to having that confidence in your data and the clarity around what it really is telling you, what it contains, and what it entails so you can then do something with it.
Averbook: I think the other thing that goes along with that is this whole concept of data as a responsibility, not a regulation. It is everyone’s responsibility in the organization to maintain data, to look at data, to visualize data. It’s not the function of HR, finance, or IT to make sure the data is right. It’s everyone’s responsibility. If your LinkedIn data is wrong, what do you do? Fix it. If your Facebook data is wrong, what do you do? Fix it.
It’s everyone’s responsibility. So when you think about that, we have to put a mind-set in place within the organization that says, “Hey, I might have great technology, like Workday, so I need to clean the data and make sure it’s constant and core” versus “Hey, HR or finance, my data’s wrong, what should I do?” Those are two opposite mind-sets.
It’s not only important to make sure that the data is right, but also to make sure that we’re putting the responsibility concept in the minds of all workers that the job belongs to all of us. Just like if it’s our job to keep the oceans clean, it’s our job to keep our data clean.
Thomas: So, what you’re really talking about is the idea that we are all stewards of some of the data, at least within our own organizations. I am responsible for updating my mobile phone. If I’m in finance, I need to make sure that the data finance is using is in good shape.
Averbook: Think about Amazon and reviews. We’re responsible for creating content. Think about Facebook and Instagram, if none of us created content. So, not just making sure the data is correct, but also augmenting the data with collaboration, ongoing discussions, and things like that.
That is a mind-set. If you take a technographic of an organization and say that no one trusts HR, well, guess what? If I put out these new policies and new capabilities to drive collaboration and no one trusts HR, what are the people are going to do? Nothing. It’s not just the technology. The technology is solid. But a lot of times it’s the mind-set and building the trust in saying, “This data is for you, it’s not for us. We’re not going to use this as ‘big brother.’”
You are going to use this to make workforce decisions. You are going to use this to be placed on the best career ladder as possible for you. That’s the value to them. And too often we market the value to us in HR and finance, and not market the value enough to the employee and the manager. In a midsize enterprise, that is truly important because we don’t have the head count to maintain. We need to start small and get that mentality built at the beginning that we’re all data stewards.
Thomas: There’s a lot to unpack in that. So, I can see in a larger organization maybe it’s a little bit easier to get some of these things done. Maybe not, but as you just put it, when there aren’t that many of us, when we’re in a smaller organization when we perhaps need to be more nimble, when decisions might matter more because we’re dealing with smaller numbers.
How do you instill that notion that we all are in this together and we all need to take care of this stuff?
Averbook: You know, it’s value. It has to be tied to value. Why do you update your LinkedIn profile?
Thomas: So somebody will find me.
Averbook: There’s some value to you, right? Why do you put something on Facebook, why do you put something on Instagram? There’s some value to you. A transaction, like changing your address, is that of value to me? Maybe. Is it a value to me if while I’m changing my address it also takes me to my credit card sites where I can update my address, and to the postal service, and so on? Is it a value to me if at the same time I’m changing my address I’m offered discounts and perks about things that are happening in my new zip code?
Now suddenly there’s more value to me in doing that. So, we have to think like marketers and say, “How do we get people to engage with these tools?” Not just to do a transaction but to truly have an experience. And that’s what the book talks about—how to create something that’s going to drive people from adoption to addiction. We want them to be addicted to using these tools and know that if they’re addicted to this place where they can get work done, that’s where they’re going to go, no matter what they need to do.
There’s a ton of magic in that.
Thomas: What you just described is not how most people probably think about the systems that they use at work, right? They don’t love them, they’re not addicted to them, they’re not on them 10 times a day. What needs to happen at the technology level and with the company adopting technology to get to that experience?
Averbook: So, what I talk about in the book a lot is that there’s a concept of digital and there’s a concept of technology. The digital equation is mind-set, people, process, and tech, with tech being 10 percent of your success. So, mind-set, people, and process are key.
So, what do organizations need to do? They need to have a vision as to what’s going to make sense for the organization. Everyone has their own unique DNA and signature. They have to make sure that they know their people—how they work, how they like to work, how they like to consume information. Are they mobile, are they at a desk, do they like paper? They need to make sure that their processes are designed for the worker first, not for the HR or finance department first.
Once they do that, then they fuel it with the technology. But so many start with the technology and push it out to people without doing that up-front work and say, if we push it to them, they will come. That’s not what happens. So, then who gets blamed? The technology vendor, which is so backwards.
To me, it’s more about how we go from creating transactions to creating experiences. The formula that we use for that is transaction plus interaction. So, the more that I can put on my screen, not making it busy, but the more content to be able to help me complete a transaction and show me the V—the value—the more that’s going to create an experience.
How do I shift from a transaction mind-set to an experience mind-set? If I do that, thinking about my audience that I’m trying to create the experience for, my success ratio has gone up exponentially already.
Thomas: People talk about how every company is a technology company today. What you’ve just said is also perhaps suggesting that every company also needs to think about being a marketing company. How do you talk to your employees? How do you get them to come along on that journey with you?
Averbook: I think every company is a digital company today. I think that technology fuels digital. And I say that on purpose, as a response to what you said, because technology is just the fuel. It’s all that up-front work around what our mind-set is, who our people are, how our processes work, that actually will allow that technology to either set fire and really create a burning addiction or fall flat.
I think every company is a digital organization today and has to determine if they have the technology to fuel it.
Thomas: So, what’s the biggest barrier you see to getting there? The way you described it, it’s not about the technology. It’s about how we get the things in place so the technology can almost do its job, if I could put it that way.
Averbook: So, the biggest thing is mind-set. And I hate to keep using that mind-set, but it the biggest thing. It’s people that are used to putting in transactional systems, it’s people that are lifting and shifting from one system to another, it’s people that are thinking, “If I get to the cloud, all my problems are going to be solved.” And all of a sudden their workforce is going to love this stuff.
Like I said earlier—in the last five years, the world of apps, the world of devices, has changed. And I’m only using five years because that’s really when mass penetration has happened. Now, there’s almost not a worker in the world that doesn’t have a smartphone. There’s almost not a worker in the world that doesn’t install their own software. There’s almost not a worker in the world that has been exposed to a piece of technology through an app and deleted it within eight seconds because they didn’t like it but then go back later to see if it improved.
That is the world we live in today—where often when we’re deploying and implementing software, we just want to lift and shift, or just celebrate the go-live party. And then we take all of our good people off the project and let it die.
The “go live” needs to equal a “go begin.” That’s really key for every organization that moves to a cloud model of continuous improvement—once live, it’s like when you finally get your new car onto the pavement and you’re ready to really have some fun. Getting to the live can often wear people down to where they just need a break. And that’s where the momentum drops really quickly.
To me, what gets people there is the mind-set of continuous innovation, the mind-set of going beyond the lift and shift, and the mind-set of realizing that if processes haven’t been refined in the last five years, more than likely they’re broken because they were designed for the HR and finance department, not for the workforce.
Thomas: Back to your foundation analogy: I’ve built a foundation, there’s a house on top of it—when that happens, that’s the beginning of my life, not the end.
Averbook: Right. But I want to explain one of the things that’s really important about that foundational concept in one more step using the house analogy. So often what organizations do is say, “We need a four-bedroom house, we need two bathrooms, we need a kitchen, we need a living room, and we need a place where the kids can play in the back.” That’s what organizations do when they look for requirements for a piece of technology.
But what organizations don’t do enough of is think about how they’re going to use that house. How they’re going to live in that house. Let’s say I have a mother-in-law living with me who can’t go upstairs, and I want a backyard designed so the kids can pitch a baseball, and because I entertain a lot, I need a kitchen that opens up to a big living area. All these requirements determine how an organization is going to use its foundation.
That’s what so many organizations don’t do. They just put the technology in “four bedrooms, two bathrooms, and a backyard,” versus thinking “This is how we’re going to live in it, this is how we want our employees and managers to use it based on who we are as an organization.” Those are polar opposites toward success.
Thomas: And if I extend the housing metaphor, that’s why I love my house, but maybe I don’t love your house because we live differently.
Averbook: Exactly. While it’s good to say we want a cookie-cutter deployment, or we want a vanilla deployment, that might meet the needs of the enterprise, but it often doesn’t meet the needs of the worker because no two organizations are alike.
Thomas: What are some of your favorite examples of either places where you’ve seen this mind-set really take hold or where it’s fallen flat? What have you learned from looking at the companies you’ve worked for?
Averbook: So we work with a major airline that’s known for its high-touch model. And one of the biggest mind-set shifts for this airline has been that digital can be high touch. So there’s high-touch digital and high-touch human.
When people start to think of it that way, all of a sudden they want high-touch digital. They prefer a high-touch digital over actually picking up the phone…
Thomas: Much more efficient.
Averbook: … and calling someone. So, that’s one example of a mind-set shift; another example is that digital kills silos—it truly kills silos. In HR and finance, we operate in silos, so there’s a recruiting function, a learning function, a performance function, an expense function, a GL function. But when an employer or manager interacts, they don’t want to know which silo.
Think about talking to Siri. You don’t say, “music, rock, ’90s, female band,” and then all of the sudden name your band. You just say, “Play me a song.” So, digital breaks silos. If we truly design our foundation and our experience right, our employees should never know how to navigate into eight different cliques or nine different functions. They should have one experience. I call it “One IV.” They should have one IV that if I’m trying to shoot some performance management capability through, it goes through that. If I’m trying to shoot some new recruiting or internal mobility capability, if I’m trying to do my expense reports, it goes through that one IV so I don’t have 184 IVs in my arm. I’ve got one IV.
But the organization’s able to deliver capability when they need it in an agile way. That’s an experience through an employee lens, not through a business function lens.
Thomas: Yes. I would certainly much rather have just one IV in my arm than 184.
Averbook: You can tell I love my analogies, right? Sorry about all the analogies.
Thomas: No, they’re perfect because that paints the picture, right? That’s what it can feel like if the systems and the experience are not set up for the person who’s intended to consume the experience.
Averbook: Yeah, and we’re in a dangerous spot right now because people are starting to build bots in silos. And the last thing I want, which is where the one platform really comes into play, is someone going to a recruiting bot, someone going to a performance bot, a learning bot, an expenses bot. For a midsize enterprise, that is just not sustainable because it won’t have the resources to do it. Mid-enterprises need to make sure their foundation is like a bike with training wheels so they don’t fall. Because these are awkward times. Enterprises are growing fast, the strategy is changing very, very rapidly. If you have to build integrations to all these different things as your training wheels, something’s going to break and you’re going to fall off.
So how do you keep as much as you possibly can with those training wheels on and add to that over time versus trying to integrate a bunch of stuff together on your own? Like I said, mid-enterprises just don’t have the ability to do that.
Thomas: I would think even purely from a staffing perspective, you can’t have someone who’s dedicated to recruiting, someone who’s dedicated to learning. It’s not sustainable.
Averbook: Right. And that’s what’s really hard. A lot of people think that mid-enterprises are different. The only way they’re different is that they don’t have the resources. But you still hire people, you still fire people, you transfer people, you have to keep your finances, you have to do expenses, you have to make sure you’re doing inter-office transfers from a funding standpoint.
It’s the same thing. You just have fewer resources to work with, so the last thing you want to worry about is your technology integrations. What you want to worry about is how to actually fuel the organization with fewer resources than what big companies have available to them.
Thomas: Yeah, how do we do our jobs, right? How do we service our customers and have the systems and mind-set in place to help us get that done.
Averbook: Yeah. And because of that, a lot of people think their deployments need to be mega-quick. Once again, “medium enterprise” doesn’t mean “mega-quick.” For medium enterprises, because there are fewer people, may mean things need to be thought out more. Things are changing faster. Medium enterprises need to make sure they have three pit stops within three years, versus one pit stop within three years because that’s how fast the business is changing.
Thomas: I would also think that you might have less margin for error.
Averbook: Oh, yeah. For sure.
Thomas: Those decisions are much more critical. You have to get them right.
Thomas: That’s all the time we have for today. My thanks to Jason Averbook for joining us at the Workday Podcast. If people want to learn more about this topic, where should they go next?
Averbook: Follow me on Twitter at @JasonAverbook. Our company’s website is www.leapgen.com; follow us there. The books are on Amazon, just search my name on Amazon and you can find my books.
Thomas: Thank you so much, Jason, for coming in and thank you for listening to the Workday Podcast. If you like what you heard, please subscribe. Thanks for listening.