Help­ing firms track own cor­po­rate cul­ture

HR start-ups’ soft­ware puts finger on pulse of worker sen­ti­ment.

Los Angeles Times - - BUSINESS - tracey.lien@latimes.com Twit­ter: @traceylien

Amy Er­rett wanted to gauge em­ployee hap­pi­ness at her e-com­merce start-up, but sur­veys weren’t work­ing. Re­sponses were of­ten vague, un­help­ful or, worse, de­ceit­ful. And even if she promised anonymity, some work­ers didn’t trust the process.

“It just never had con­sis­tency and ob­jec­tiv­ity,” said Er­rett, who runs the 75-per­son San Fran­cisco e-com­merce hair care com­pany Madi­son Reed.

So she called in out­siders for help.

A new breed of hu­man re­sources start-ups is crop­ping up to help com­pa­nies fig­ure out how their em­ploy­ees feel. By build­ing and li­cens­ing soft­ware that has the spe­cific pur­pose of mea­sur­ing em­ployee en­gage­ment, they al­low com­pa­nies to do snap polls, tar­get spe­cific teams and de­mo­graphic groups, of­fer em­ploy­ees anonymity and com­plaint hot­lines, and in some cases al­low whistle­blow­ers to by­pass C-suite ex­ec­u­tives and go straight to the board of di­rec­tors.

“You’ve now got tools such as Strava and Fit­bit for track­ing your health, but where’s the Fit­bit for your com­pany?” said Jim Bar­nett, co-founder and chief ex­ec­u­tive of Red­wood City, Calif., start-up Glint, whose soft­ware an­a­lyt­ics tools are used by com­pa­nies to mea­sure em­ployee en­gage­ment.

Er­rett said she gained more in­sight into what her em­ploy­ees were thinking and feel­ing in three years us­ing Glint. In ad­di­tion to the snap sur­veys and polls of spe­cific teams, it of­fers a

heat map of the com­pany show­ing at a glance which units have the most complaints and which man­agers have low ap­proval scores — en­abling her to drill down on why.

Com­pa­nies are com­ing to re­al­ize they must stay on top of their work­place cul­ture, lest they be­come the next Uber, which has been en­meshed in scan­dal since a for­mer em­ployee de­scribed a cul­ture of ha­rass­ment, or the next Google, which is reel­ing af­ter an en­gi­neer de­rided the com­pany’s di­ver­sity ef­forts in a widely shared memo.

For start-ups such as Glint, this de­sire for over­sight is a lu­cra­tive busi­ness op­por­tu­nity. The global gov­er­nance, reg­u­la­tion and com­pli­ance in­dus­try could be worth more than $118.7 bil­lion by 2020, ac­cord­ing to fi­nance tech in­sights web­site Let’s Talk Pay­ments.

Den­ver start-up Con­ver­cent, which helps com­pa­nies pre­vent and de­tect bad be­hav­ior, saw an uptick in in­ter­est and ac­tiv­ity ear­lier this year amid Uber’s fall into dis­re­pute. Con­ver­cent has nearly 600 clients, in­clud­ing Airbnb, Mi­crosoft, and Tesla. Uber re­cently signed up as a client. Like Glint, Con­ver­cent lets com­pa­nies send cus­tom­ized “pulse” sur­veys, gather con­fi­den­tial re­sponses in real time, and view heat maps of its prob­lem ar­eas. It also of­fers an anony­mous tex­ting hot­line that lets em­ploy­ees re­port bad be­hav­ior. And if the chief ex­ec­u­tive is im­pli­cated, complaints go straight to the board of di­rec­tors.

“The court of public opin­ion has usurped reg­u­la­tors,” said Pa­trick Quin­lan, the founder and chief ex­ec­u­tive of Con­ver­cent. If a com­pany is found to treat its em­ploy­ees poorly or be­have un­eth­i­cally, even if reg­u­la­tors don’t step in, it can face costly con­se­quences from con­sumer boy­cotts, em­ployee at­tri­tion and law­suits, Quin­lan said.

Ruby Tues­day, the restau­rant chain with more than 25,000 em­ploy­ees across 500 lo­ca­tions, has used Con­ver­cent for more than a year to en­sure em­ploy­ees are aware of poli­cies and pro­ce­dures and of­fer an easy way to reach its cor­po­rate head­quar­ters.

Pre­vi­ously, if an em­ployee wanted to re­port a prob­lem, he or she had to find a phone num­ber or email for cor­po­rate head­quar­ters, lodge a for­mal com­plaint, and hope it was taken se­ri­ously. It was of­ten an in­tim­i­dat­ing and un­com­fort­able ex­pe­ri­ence, said James Vi­trano, Ruby Tues­day’s gen­eral coun­sel, who said there was no good way of track­ing em­ployee complaints.

Now that the com­pany is us­ing Con­ver­cent, though, prob­lems that were pre­vi­ously hid­den from ex­ec­u­tives who sat in of­fices cities or states away — such as dis­crim­i­na­tion, ha­rass­ment or un­fair wage prac­tices — can be more quickly iden­ti­fied and ad­dressed.

“I can get closer to that holis­tic, 360-de­gree view into the em­ploy­ment ex­pe­ri­ence,” said Vi­trano, who over­sees Ruby Tues­day’s risk man­age­ment group. “And we’re pro­tect­ing our share­hold­ers from em­ploy­ment lit­i­ga­tion.”

Com­pa­nies started tak­ing ethics, val­ues and em­ployee en­gage­ment more se­ri­ously in 2002 af­ter ac­count­ing firm Arthur An­der­sen col­lapsed be­cause of eth­i­cal vi­o­la­tions from the En­ron scan­dal, Quin­lan said. But it wasn’t un­til “so­cial me­dia came into its own” that com­pa­nies re­al­ized they couldn’t stop their dirty laun­dry from go­ing vi­ral on­line.

“Prior to us­ing tech­nol­ogy to mon­i­tor ethics, peo­ple used hope as a strat­egy,” he said.

Both Glint and Con­ver­cent of­fer their soft­ware as a ser­vice, charg­ing com­pa­nies re­cur­ring fees to use their prod­ucts. It’s a busi­ness model and op­por­tu­nity that has the ap­proval of ven­ture cap­i­tal in­vestors, who have propped up both start-ups. Con­ver­cent raised $10 mil­lion in fund­ing in Fe­bru­ary from firms such as Sap­phire Ventures and Tola Cap­i­tal, bring­ing its to­tal cap­i­tal raised to $47 mil­lion. Glint se­cured $10 mil­lion in Novem­ber from Besse­mer Ven­ture Part­ners, bring­ing its to­tal fund­ing to $60 mil­lion.

These in­vest­ments hardly come as a sur­prise, given the in­ter­con­nected na­ture of com­pa­nies, cul­ture and ven­ture cap­i­tal.

There’s a grow­ing body of re­search show­ing to­day’s em­ploy­ees ex­pect more from their work­places than be­fore. In com­pet­i­tive mar­kets such as Sil­i­con Val­ley, high salaries and in­ter­est­ing projects are merely ta­ble stakes. Em­ploy­ees want to feel that they’re ac­cepted and val­ued and that they’re giv­ing their time to a com­pany with a pos­i­tive mis­sion.

“When peo­ple are happy to be at a com­pany, feel their voices are heard, and that the work they are do­ing is re­ward­ing, they are more com­mit­ted to mak­ing that com­pany suc­cess­ful,” said Nina McQueen, vice pres­i­dent of global ben­e­fits and em­ployee ex­pe­ri­ence at LinkedIn, which uses both Con­ver­cent and Glint.

In­vestors achieve re­turns when their port­fo­lio com­pa­nies do well; com­pa­nies do well when em­ploy­ees are com­mit­ted and en­gaged. If third-party an­a­lyt­ics tools prom­ise to in­crease em­ployee com­mit­ment and en­gage­ment, it’s no won­der they’re find­ing back­ing.

Hav­ing data on em­ployee en­gage­ment is im­por­tant, ac­cord­ing to work­place cul­ture ex­perts. But the data are use­less un­less a com­pany’s cus­to­di­ans take ac­tion. In fact, if a com­pany asks em­ploy­ees for their feed­back, it can set an ex­pec­ta­tion that change is on the way. And if change doesn’t come fast enough, or at all, it can breed dis­ap­point­ment and make em­ploy­ees disen­gaged.

“If you’re go­ing to ask for 4,000 sug­ges­tions, you need to be pre­pared to have 4,000 con­ver­sa­tions,” said Rus­sell Raath, pres­i­dent of con­sult­ing at busi­ness man­age­ment firm Kot­ter In­ter­na­tional, who has seen com­pa­nies make the mis­take of re­ly­ing too much on data col­lec­tion. “Be­cause if you don’t fol­low through, em­ploy­ees will won­der, ‘Did you re­ally hear me? Do you care? And if you don’t care, why should I care?’ ”

Madi­son Reed, which now con­ducts monthly em­ployee sur­veys, has been able to take ac­tion the same day a prob­lem is re­ported on Glint, ac­cord­ing to Er­rett. And, af­ter gath­er­ing feed­back from em­ploy­ees frus­trated by the speed of de­ci­sion-mak­ing and the qual­ity of com­mu­ni­ca­tion, she was able to re­or­ga­nize sev­eral teams within the com­pany and add com­mu­ni­ca­tion train­ing to ad­dress the is­sues.

At Ruby Tues­day, the com­pany is get­ting new in­sight on its em­ploy­ees, and it’s hop­ing that in the long run, this will lead to bet­ter re­ten­tion of work­ers in an in­dus­try known for high turnover.

“If you’re not com­mit­ted to cre­at­ing a cul­ture of trans­parency, you’re go­ing to lose peo­ple,” Vi­trano said. “And if you lose peo­ple, you’re go­ing to lose cus­tomers. And when you lose cus­tomers, you’re go­ing to lose com­pa­nies.”

Glint By Tracey Lien

GLINT’S SOFT­WARE an­a­lyt­ics tools are used by com­pa­nies to mea­sure em­ployee en­gage­ment. Above, a con­fer­ence room at the start-up’s head­quar­ters.

Glint

“YOU’VE NOW GOT tools such as Strava and Fit­bit for track­ing your health, but where’s the Fit­bit for your com­pany?” says Jim Bar­nett, Glint co-founder and chief ex­ec­u­tive. Glint has raised $60 mil­lion in fund­ing.

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