The Human Capitalist

According to Gartner, IT Product Selection No Longer Matters

I'm not sure if Simon Hayward is trying to create controversy for controversy sake but I find his recent blog entry and research note to be quite dumb (and not just because Gartner is a competitor...Jim Holincheck, my counterpart at Gartner that covers HCM, is brilliant!). 

In summary, he suggests that selecting a specific IT vendor no longer matters and what really matters is the skills wrapped around the products.  In his analogy comparing IT with his hobby of furniture making, he states...

"...One thing you learn quickly, however, is that it matters very little which brand of tools you buy — good furniture comes from the skill of the maker far more than the tools he or she uses."

I absolutely disagree with Simon's thesis.  What makes artists, technologists, fashion designers, and even furniture makers great, or even world-class, is their use of unambiguous tools, equipment and products that suit their needs, style, budget, and ultimate objective.  To blindly suggest all IT products are commodities, which he is essentially saying, has zero basis of fact or reasoning.

I recently assisted in an enterprise clients short-list, and ultimately select, of a talent management vendor for their 15,000 employee organization.  The process went from 4 potential vendors to 2 down-selected vendors.  Each vendors was quite different in their approach, capabilities, framework, cost, service delivery, etc.  If I were to tell the client it really didn't matter which vendor they selected and what is more important is the skill-set of the people involved in the project itself (not to discount individual skills) they probably would have laughed before black-listing me and my entire company from ever entering their office again.

Jeff Nolan in our Enterprise Irregulars discussion board used a great analogy recently...

"...I was thinking of my brother-in-law who works for a Mercedes dealership as a mechanic. He still spends his time getting his hands dirty, but today he spends about 1/2 of his day doing electronics troubleshooting and configuration. As cars have become more reliable and maintenance free, parts last longer, and feature a boatload of electronics under the hood, his job has changed and I have to consider that CIOs are facing quite a similar consequence as enterprise software is going through tectonic shifts due to enterprise 2.0."

Is Kenexa Buying BrassRing?

Let me preface by saying, I continue to expect further consolidation in the talent management market as I have written more recently here.   

Now, a certain website is reporting that Kenexa has offered to buy BrassRing and the deal expires in 2 weeks.  My initial response to this speculation is mixed.  Kenexa has been quite acquisitive during the past year, buying smaller niche businesses in addition to the Webhire acquisition about 9 months ago.  Their growth and profitability continues to be quite healthy. 

BrassRing, on the other hand, has seen decent growth and continued to build out its recruiting services offering to compliment its ATS foundation.  BrassRing still garners strong brand recognition yet I would view the acquisition as overlapping in functionality versus complimentary (as with Webhire, Kenexa got new functionality (onboarding) and vertical expertise (Healthcare).  BrassRing, though, has a solid Tier-1 client list that will be quite attractive if they truly were an acquisition candidate. 

The next two weeks should be very interesting.

Just When You Thought the Airline Industry Couldn't Get Any Dumber

Northwest Airlines just sent out a handbook to laid-off workers.  What they failed to notice in the list of "101 things the average person could do to save cash" was the actual content on the list....

• Take a shorter shower
• Write a letter instead of using the phone
• Buy spare car parts at the junkyard
• Search the internet for freebies
• Move to a less expensive house
• Don't be shy about pulling something you like out of the trash

No...I am not making this up!

On The Bench This Week

On a much-needed vacation in California this week (although the vacation has turned into partial work and client visits).  After the "Boston Massacre" during the past few days, the Giants game on Wednesday should provide some much needed relief.  By the way, I just downloaded Qumana so hopefully I will be able to write a bunch of posts on the return flight this weekend.

Talent Management Must Be Mutually Benefitting for Employer and Employee (or Candidate)

I was watching NBC Nightly News last week (I really don't watch that much TV) when they featured a segment on MTV turning 25.  As they went through the segment, they talked about how MTV helped influence modern pop culture throughout the years including showcasing new pop icons like Michael Jackson and Madonna in the 80s, the launch of reality TV with The Real World in the 90s, and now Celebrity TV with The Newlyweds and Cribs more recently.

What got me thinking was not only how MTV became extremely successful in the process but how they developed a truly successful ecosystem that benefited all participants.  The channel master, MTV, benefited by increase revenue and advertising spend.  The artists benefited by broadened exposure (actually allowing an audience to see an artist for free versus spending money on concert tickets) and increased CD/DVD sales.  The video directors and production staff gained new business and clients.  Even the artists' "entourages" benefited by more freebies.  They were all motivated and benefited equally.

Which leads me to my point and the comparisons with talent management solutions.  Like any good ecosystem, talent management must find a way to benefit  the entire ecosystem including enterprises, employees and everything in between to be truly successful.  This needs to be the mantra of both enterprises deploying HR products and services and vendors that are building talent management technology.  Talent management solution must ultimately benefit the organization but, in the process, must gain employee and candidate acceptance, and continued adoption, to really get the true benefits.

So...how do you do this?  Its quite easy.

1. Make it simple for the employee/user.  HR can be complex.  Delivering HR services and technology shouldn't be. Changing regulations, policies, standards, technology, etc should be seamless and simplified. 
2. Force an "outcome" for the user.  Whether its the job applicant, the line manager or the executive, every step of the talent management lifecycle should have an outcome leveraging data and intelligence.
3. Make the outcomes motivating.  All outcomes should have incentives, financial or otherwise.   Users must have a vested interest to ensure continued adoption and use.

Are you building your talent management ecosystem?

Poll Results - How Good is Your Recruiting Process?

Not very good according to the poll on this site.  Over 80% of poll respondents state their recruitment process is either fair or poor.  In fact, less than 5% stated their recruitment process as "world-class". 

By no means is this poll scientific, but nonetheless hints at what I had expected.  Recruitment, as a process, continues to be inefficient, burdensome, cost-draining and ultimately not effective for most. 

Yet Another Meaningless List of Top Outsourcing Vendors

I have come to despise the so-called outsourcing "awards", "superstar lists", and "rankings" of the top vendors.  (Don't mistake this for an attack on any of the panelist themselves as most are highly knowledgeable).  What I actually hate are those awards, rankings, "lists" that provide no methodology and factual basis in which they are created. 

My most recent example is with The International Association of Outsourcing Professionals (IAOP) and their list of Top 100 Global Outsourcing Services Providers (give me a second to get my head out of the toilet).  They list four generic criteria as the source for evaluation.  Here is the problem...

1) They do not outline the ranking model in terms of criteria importance, weighting and actual performance drivers (factors such as profitability or customer satisfaction). 

2) They do not identify any evidence-based reasoning behind the rankings.  One example...they list ExcellerateHRO at #25 and Hewitt at #33.  How is this possible when Hewitt has twice as much market share as ExcellerateHRO, 4 times the number of clients, and what most would consider a more robust offering?

3) The list is basically a hodge-podge of vendors that do everything "outsourcing".  Does it really make sense to compare a HRO vendor with a facilities services and apparel vendor or a document management vendor?

4) On some of their lists, such as the HRO providers list, they don't even mention some vendors that most would consider some of the top vendors based on market share and capabilities such as Convergys or ACS.   Instead they have highlighted vendors like Cartus?

My personal opinion is that these lists create a tremendous dis-service for the industry and are only useful for the vendors PR staffs that are looking for anything positive to announce.

Do You Know Who John Juanda Is?

Last year I wrote about "great jobs" and featured a friend of mine who has a great job --- NFL kicker.  I found my new favorite profession --- Professional Poker Player. 

I had the chance a few months ago to briefly meet John Juanda on a flight from Providence to NYC.  John is recognized as one of the best poker players in the world.  He was en-route from Foxwoods to NY for a few days (underground games) and then on to Monaco to play in a huge poker tournament (for those that don't know, Foxwoods is the largest casino in the world, located in of all places, Connecticut.  With over 6 million square feet, Foxwoods generates nearly $500 million in tax income for the state and employees over 20K employees...I digress).  Although our conversation was short it was very interesting to hear about his lifestyle, ideas thoughts about this poker phenomenon (more corporate sponsorship), and this new emerging "profession".

More digression....I would love to see the job requisition for "Poker Player"...

"Must be able to work long hours and capable of absorbing large risk that may affect your compensation.  Desirable attributes include lying and coercing for personal gain.  Can wear cowboy hats and sunglasses while working.  Drinking on-the-job optional..."

Buy, Build or Acquire - The Question Every Talent Management Vendor is Asking Themselves

With many M&A discussions in process and deal announcements continuing, such as the Kronos acquisition last month of Unicru, technology vendors throughout the human capital management space are once again re-evaluating their options.  Rapid growth among the vendors, and enterprises desire to expand their HCM and talent management investment, is creating a ripe opportunity for consolidation within the market.

The question ultimately that all HCM software vendors must answer is...do we buy, build, or partner in the respective talent management and workforce management towers currently missing from our offering?  So here are my thoughts are the respective options:

Why Build?

Building is what I would consider as the best option for most vendors for many reasons.  The talent management suite market still does not have a clearly defined market leader and time is not necessarily a critical success factor...yet.  Core capabilities for process like applicant tracking and performance management is quickly becoming commoditized and as such will be fairly easy to build quickly and cost-effectively.  Building allows vendors to focus on the feature/function priority that provides the best integrated capabilities with existing solutions.  It additionally allows companies to create unique differentiation in their products through enhanced usability and streamlined integration.

Why Buy?

Buying will be the likely option for many of the larger more established vendor with access or availablility of cash to spend.  Some of those companies include ADP, Kronos (although I don't see them active in M&A for the next few months), Lawson, Oracle, SAP, Monster and even potentially even a dark horse like Salesforce.com.  Buying provides a quick market entry and immediate market share gain.  For publicly traded companies it also shows investors the willingness to enter new markets and spend their cash wisely (in most cases). 

Why Partner?

Partnering is the least expensive but most difficult option to execute.  Partnering requires limited integration and defined rules of engagement .  The challenge with partnering is that both parties want to own the customer.  In the talent management suite, the most likely partnerships will occur in the learning tower as most vendors will not want to invest R&D dollars in a LMS/content management system and the content itself, whereas it can easily be supported by a partner.  Today, some performance and learning partnerships today generate 5-10% revenue for both parties.

A few months ago in a report titled, "Fueled by Strong Demand, Worldwide Talent Management Market Will Surpass $2.3 Billion in 2006", I discussed the market consolidation...

"...Yankee Group predicts continued consolidation of talent management vendors for at least the next 2 years. Consolidation will occur in two areas: one to increase market share in a certain category and the other to expand capabilities that compliment existing capabilities and fill gaps in the integrated talent management approach. As we noted [in Exhibit 2], 2005 saw more than 12 mergers and acquisitions in the talent management space. Yankee Group forecasts that number will increase in 2006, with increased acquisition activity from vendors that no longer have the capital resources to survive as an independent solution vendor."

Corporate Simplicity & Employee-Centricity

I was watching 20/20 on Friday night (...when you have an infant, the excitement of a Friday night becomes 20/20 and Scrabble with the wife). The segment was dedicated to "Secrets & Strategies From the New Rich" and featured the CEO of Costco, Jim Sinegal, and his pro-workforce strategy in building Costco.   

His workforce profile. in fact, is quite startling...

• Turnover is the lowest in the retail industry, some 5x lower than it competitors
• The average employee makes $17/hour significantly higher than the industry average and 40% higher than his closest competitor, Sam's Club
• Nearly 100% of promotions are from "within"
• Over 90% of the workforce qualifies for healthcare benefits, unheardof in the retail business

From a corporate perspective they are amazing as well.  They only carry 4,000 SKUs compared that to the over 100,000 SKUs at Walmart.  They focus on mostly the highest quality items which accomplishes exactly what he is looking for in terms of reaching the affluent demographic.  They also have no PR staff and the CEO himself only makes only $350,000/year in salary (although he's got about $150 million in stock options).  His employment contract, in fact, is less than one-page long. 

Pretty amazing stuff.