Sramana Mitra: You mentioned that there were a few things that you zeroed in on. You had very good access to validate your idea. In fact, your decision to start this company came out of people coming to you on this topic. What were those nuggets around which you built the product?
Greg Besner: Let me describe the problem a little bit and then I’ll describe how we solved it. The problem that companies were having was that we have a new generation of employees that make up the largest cohort in the workplace today. All employees now are able to give and get feedback on almost all parts of their life now. The paradigm for generations and decades leading up to today is to get a performance review once a year and to give feedback to your company once a year, which is often called the annual review.
The challenge was most organizations didn’t have an infrastructure in place to be able to give and get feedback much more rapidly and what some companies call continuous listening. If you’re going to be able to give and get feedback more frequently, you need to have a solution that can be very rapidly deployed. Most of the solutions that existed weren’t built for speed. There was a process leading up to that annual process.
We recognized that if people wanted to give and get feedback much more frequently, there needed to be a very rapid deployment opportunity. With modern technology, we were able to build a platform that could be rapidly deployed. The second part of it is deploying a very customized assessment. The other challenge companies were having is that some of the solutions that existed were very much inflexible. It was structured to ask the same questions and provide the same feedback. Your organization and my organization have very different business and culture goals.
The second thing we wanted to do was have a platform that was incredibly flexible. With modern technology, we can build for speed and flexibility. Also, being able to assess and understand their culture in a way that they really care about. The third part is, if you’re going to give and get feedback more frequently, you need the results right away. With a modern platform, we are able to have immediate real-time analytics. Organizations are more sophisticated than ever. Having that also in real-time is very desirable. It was rapid configuration and design, rapid deployment, and real-time analytics. That was the initial feature set that we were solving for.
Sramana Mitra: Very interesting. The key insight is to go from annual appraisals and feedback processes to a continuous feedback process. It’s a gigantic shift in HR organizations because it changes the whole workflow of the organization. As you rightly point out, it changes the culture. Getting HR, as well as the managers, to adopt that workflow is a big deal.
Greg Besner: It is a very big deal. There are some recent statistics that show that two-thirds of companies are looking to change the way they collect this type of feedback and respond to it. We’re in the middle of the movement to revolutionize the HR world. We’re trying to do our best to be a key partner in this. That’s what we initially built.
Another key inflection point is, as we started signing up customers and providing what I just described, something kept happening over and over again. When that happens, you realize there’s more opportunity. Every time we would deploy, they would get back all this wonderful data. They would come back to us and say, “What does this mean and what do I do?” A year and a half into our business, we hired our first strategist.
Most software companies like mine have customer success professionals that help people use the product. We realized that we had an opportunity to go beyond not just helping people use this analytics tool but also helping them understand the results and thinking about action. Now we have a team of strategists. Instead of being just a technology vendor, we like to think of ourselves as their partner because we’re not just licensing them technology. We’re actually engaging with them. We’re helping them design their culture program to match their business goals.
Most importantly, we’re helping them understand the results and figure out what actions to take. That was a key inflection point. Over the last year and a half, we have a much deeper relationship with our customers.
Sramana Mitra: You charge for that service right?
Greg Besner: It’s part of the subscription. We can command a premium but when people engage with us, they’re subscribing for our software and our strategy together.
Sramana Mitra: In implementing this kind of a strategy consulting component, how much of that is technology and how much of that is pure human intervention? Are you able to take unstructured data and turn that into some sort of conclusion that the strategy consultant can then work off?
Greg Besner: We don’t do traditional consulting where we go on site and help a company transform their culture. Instead, we have our strategist work closely on the data side and help them understand the result. It involves taking all the data and determining how all their culture and employee engagement data correlates with their business data. One of our core values is to respect data but make human decisions. That’s what it boils down to.
We wrote our core values three years ago, so we didn’t even have the strategy team that time. We have a software team and data scientists. They work hand-in-hand with our strategist to make sure that we help our customers understand what the data means and having the data point towards action. We service hundreds of customers. If we were to have a truly consulting organization, we’d have to have dozens of consultants. This isn’t a six-month consulting engagement. This is a real-time strategist that helps understand what to do right now.