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Celebrity Deathmatch: Simplicity vs Complexity

Time flies when you are having fun…

I’ve been thinking some more about the state of the recruiting industry, the intersection of technology in augmenting talent acquisition solutions, and some of the ‘big issues’ that we face in our efforts to deliver the right talent to organizations for the lowest cost in the shortest amount of time. 

Technology creates complexity, and complexity is an often a vastly underestimated factor when it comes to executing a plan involving multiple human stakeholders.  I think it’s one of the ‘big issues’ and a trend that must be addressed by recruiting (and HR) leaders to be competitive in the growing war for talent.   

I think of the recruiting sphere of influence that I can affect as an ecosystem.  This would be my department, my internal customers, my candidate pools, etc.  Within that ecosystem, one would find recruiters of various levels, administration staff, recruiting managers, as well as a collection of HR generalists, hiring managers, vendors, and other ancillary but critical cast members.  In recruiting terms as the leader of a chunk of the Starbucks recruiting engine, anytime I consider injecting complexity into the ecosystem I need to think very carefully about the return I might have on the investment, and what components of the ecosystem it is going to affect. 

The challenge in all of this is that the people in the ecosystem are in a constant state of motion.   Some are going, some are staying, some are getting promoted (or worse) and there’s no standardized set of skills and tools that are required in recruiting (or HR for that matter).  This, combined with added complexity of recruiting tools, strategies and other tactics creates a much steeper learning curve.  This steeper learning curve dramatically erodes the ROI of any piece of technology and creates a higher hurdle for it to drive true economic value into the organization/business.

Add to this the human elements of acquiring talent:  Candidates make career decisions by comparing value propositions between companies, but they also make career decisions based on very human principles such as how the process makes them feel valued.  Because of this, the hurdle for technology based solutions gets even higher.

I think “feature creep” has a stranglehold on the HR technology space.

There’s a great short piece in Business 2.0 magazine this month from the founders of Google on the merits of simplicity. 

I think simplicity is and will continue to be a key tenet in building robust recruiting departments that win.

An Interview With NetFlix Recruiting: Stories in Stories, Part III

So I've made several posts (here and here) on the Netflix Prize Contest that you should read before this one, if you haven't already.  The contest is designed to improve the Netflix technology that recommends titles to their customers (NY Times Article) and I think there are a couple of interesting stories playing out behind the scenes.  So rather then continuing to speculate, I decided to go to the source and put on my recruiting hat to find someone inside of Netflix that would tell me what's really going on.

A quick search, some emails, and later that day Jessica Neal, the head of technical recruiting at Netflix, was gracious enough to call me and chat.  Here are the notes from that conversation:

Where did this idea of the contest come from at Netflix?   It was a cumulative effort by a couple of people, with several standouts being Jim Bennet, the VP of Recommendation Systems, Stan Lanning, a long-time Netflix employee, with support from our CEO Reed Hastings  They think the algorithm is the best on the Web, but that it could be better, and couldn’t help but wonder: isn’t there someone out there that can beat it?  It’s also a chance for Netflix to put themselves on the map and compete with other technical companies in the Silicon Valley.  Until people see Netflix from the inside, many people don’t understand how many really cool but tough challenges Netflix has and the technical hurdles that they face.  The whole thing that makes the company work is the technology that the engineers have built, and it’s highly complex from a variety of different facets.  Netflix is a very technically sophisticated company, but many people don’t see that from the outside.

Cinematch is designed to get customer to rent titles they might not choose otherwise.  Netflix has 65k titles, and most video stores only have 3,000, so you don’t see people renting the long-tail movies, unless they come in and search for those titles specifically.  It’s the movies ‘in the center of the video store’ that no one browses because the titles are not mainstream or are older.  Unless you are looking for Caddyshack for some reason, you are not likely to rent it.

How did you come up with the $1M prize as the right amount?  It makes a big impression (laughing).  They wanted people to know that they were really serious about it.  It’s a lot of money, but also this is something that can compete with the other technical contests of the world, the guys from Stanford and Berkley who are working on getting unmanned vehicles across the desert, they had to get those talented people's attention.   The smartest people in the world have lots of problems to solve, so you have to make it compelling.

What are you doing to engage and build relationships with the software developer group that is participating?  Not sure yet.   To be honest, they know who they are at least.  You have to be genuine about what you do, and its about the prize, and not about recruiting.  Could it lead to hires?  Sure.  Possible future collaborations?  Sure.  Right now they are focused on the prize, and seeing what they can do with that.  They didn’t do it to recruit, they did it to solve the problem and keep the contest pure. 

I write about transparency a lot, particularly as it relates to recruiting.  How does this more transparent world that we all live in play into the contest?  The Contest is completely transparent, we aren’t doing it to create a recruiting channel or for any other hidden agenda.   We are going to keep it pure, and about the prize, and do the work and see what progress people make.  It’s not about recruiting.

Are you surprised that it took only 30 days to get to a ~5% progress point?  Some are surprised, and some aren’t.  I’m sure there are different opinions inside the company about how long it will take.  It’s certainly easier to solve the first 5% as opposed to the last 5%.

Has anyone in the group of contestants raised their hand to apply for a job at Netflix?  Nope.  Not a single person.  She thinks it’s a mutual thing, NetFlix is going to keep the contest pure, so the contestants are too.  People realize what one thing is and what another thing is, which makes the whole experience more rewarding.

Does Netflix intend to hire the winner?  I have no idea.  Not sure what we will do with the winner.  And it might be 10 people that win from a country halfway around the world.

What’s the most surprising or unexpected thing about the context?  She thinks, for her, the surprising part is that the response it got from the amount of people around the world that joined.  Within the first hour after the contest was launched, there were 51 different countries represented and over a 1,000 people joined.  It reached national recognition quickly, which they expected, but also got global recognition right away.  She didn’t expect it to happen as fast as it did. 

Do you currently operate internationally?  No, in the US only, which is also interesting.  So even though Netflix doesn’t have a footprint in any other country, over 115 other countries fielded contestants. 

Anything surprising about the news media coverage?   We were not expected it to be as widespread as it was.  Once it got picked up, it went everywhere, and it was on CNN, the front page of the newspapers, literally everywhere.   I was even on vacation in Hawaii, trying to get some R&R time, and then low and behold, there it was on the front page of the newspaper (laughing).  Global coverage... it was a great surprise. 

So, since this is a recruiting blog, why should people want to work at Netflix?  If you go to the website, there are the top 8 reasons to work at Netflix. 

But what are Jessica’s top 8 reasons? 

1.) Amazing problems to solve in software engineering. 
2.) Work on applications and software that are going to touch millions of users. 
3.) Great values. 
4.) Creative environment. 
5.) Rules annoy them. 
6.) We only hire really senior level people. 
7.) Oustanding staff. 
8.) Amazing future ahead. 

How large is Netflix?  Only 300 people at corporate, and 1200 people across the country.

Are you looking for recruiters?  Yes.  Great recruiters should contact me.  Our bar is very high for recruiting professionals. 

I'm grateful for the time that Jessica spent with me, and look forward to following this story as it continues to unfold.

Stories in Stories, Part II

Now that the Netflix Prize story has subsided from the mainstream news media, I think it warrants revisiting.  I wrote on this story about a month ago in this post.  At that time, I suggested that the mainstream media had buried two leads of the story.

To summarize, the goal of the contest is to improve the Netflix collaborative filtering engine by 10%.  For this, Netflix will pay $1M.  Collaborative filtering technology enables Netflix to predict whether a customer will enjoy a movie based on how much they liked or disliked other movies and also their rental histories.  Netflix uses these predictions to drive consumers down the long tail of available titles to both increase profitability and customer satisfaction.  Cake and consumption, all in one.  This is worth a lot to Netflix, but the problem is tough to solve.  Hence the contest with a sizeable bounty.

Story #1:  A valuable and captive pool of talent

As of this post, there are now 14,280 contestants on 12,000 teams from 115 different countries competing for the $1M prize.  This is over 50% more participants then when I reported on this topic 30 days ago.  From a recruiting perspective, I remain thoroughly impressed with Netflix's capabilities in 'name generation.'  I continue to wonder how Netflix is choosing to engage with this captive talent pool of software developers.  I suspect that this asset is being under-utilized and under-valued.  Clearly, any future hairy technical challenges that the company might face have become decidedly less hairy, knowing they have this resource pool to draw upon.

Story #2:  The Solution > $1M

The discrete goal that the company wants solved is a 10% improvement in recommendations, but they have paid out "progress prizes" of 50k apiece to 6 teams in the last month.  You can check out their leaderboard for more details. 

What's most remarkable is that the leading teams have nearly reached the halfway mark in less than 1 month.   Clearly the 2nd 5% improvement will be far tougher to solve than the first 5%, but a materially better solution in 30 days is remarkable. 

The top 6 teams have delivered a 4% or greater improvement in the recommendation results.  The economic value of these solutions to the broader B to C marketplace is worth far greater than the $1M that Netflix is offering to the winner.  Consider that the silver and bronze medalists (and others with viable but less optimal solutions) will certainly offer these solutions to other B to C online retailers.  Net result:  the worldwide overall ecommerce engine that relies on collaborative filtering becomes more efficient.  The value creations for consumers and retailers alike is huge.

I continue to believe that we HR people will look back on this as an inflection point in the paradigm for how talent is deployed to solve problems.  This is a story worth following.

Finally, I couldn't help notice that Netflix has a Sr. Staffing Manager job open today, but that the focus seems to be on hourly staffing (not technical jobs). 

Perhaps they need to run another contest...

Are You Ready for a Game of Leapfrog?

I read a lot.  Today, it was thematically a bit about frogs. 

For example, I just finished reading Finklehopper Frog to my 3-year old daughter tonight.  It's a great book (although it didn't make the cut for the list at right) and even I think the illustrations are entertaining.  If you have kids under 4, I recommend it. 

I was also reading The Economist this morning, and read an interesting article on leapfrog technologies.  I will summarize:  These are technologies that leapfrog older technologies in the adoption cycle.  The article cited LED (light emitting diode) technologies, that have been growing in their utility because they are becoming cheaper to produce, becoming significantly more efficient (producing more light output per watt of power consumption), and also last substantially longer than incandescent bulbs.  A significantly large percentage of the world's power is consumed to create light. 

Because of all these factors, emerging markets are not required to build out the same level of power utilities infrastructure because they can rely on solar cells to power these new, highly efficient LED-based light sources...in essence, leapfrogging incandescent lighting altogether as well as traditional power-grid mechanisms that would normally be required.  Another example is cellular phone technology: it is cheaper than installing LAN lines, and therefore is becoming the standard in emerging markets as traditional phones and related infrastructure are not needed.   

In the coming years, as talent grows more scarce and organizations compete more fiercely for this  capital, I believe we will see a leapfrog effect as entire talent segments 'skip over' organizations that do not adapt quickly enough to the evolving talent market paradigms.  I think this is happening today to companies that were once talent magnets but are now being leap-frogged by top talent who choose to bypass them into organizations that have reinvented what a value proposition needs to be for top talent.  I can cite examples of corporate HR departments who even today are scrambling to respond.

This will happen in all industries and be fueled by the newly transparent world, and also by the scarcity issues that create more choices for job-consumers.  Augmenting this will be generational differences as Generation Y further stakes its claim.

Few organizations will have the leadership capabilities, courage, and insight to respond in time.  Organizational inertia is so very tough to suspend.  This relates to my post on measuring the flow of human capital through organizations.  Without measures of quality attached to the measures of inflow and outflow of talent, lagging indicators such as turnover rate, hiring rates (time to fill), and similar HR data will only raise a flag once the battle has been lost.

Organizations that embrace a sophisticated level of authenticity with both their internal talent segments (current employees) and external sources will win the game of leapfrog by adapting their value proposition along the way.  Transparency, transparency, transparency.  Significantly, how those organizations are measuring the flow of talent through their organization will also be critical. 

I see very few examples of organizations whose employee value proposition is truly dynamic or evolving.  Indeed, most are entirely static (until a crisis hits).  By authentically engaging one's workforce and responding accordingly, the employee value proposition can be molded and shaped; cultured to grow organically as both the company evolves, and importantly as the talent marketplace changes around us. 

Without an understanding of these elements and the proper mechanisms in place, many organizations will learn too late that they've lost the game of leapfrog. 

Call for Submissions: your 'decencies in recruiting' stories.

I recently connected with an old colleague John Kador, who is writing another book, as a ghost writer for Steve Harrison, the founder of Lee Hect Harrison.  The topic of the book is  'decencies' in business, and is titled The Manager’s Book of Decencies: How Small Gestures Build Great Companies.

Some of the examples Steve cites in his book as common decencies:

• For meetings you convene, be the first to sit down and the last to get up.
• Engage the receptionist
• Welcome guests by name
• Don't keep guests, including sales reps, waiting.
• When you meet with a colleague, bring a notebook and open it up.
• Answer your own phone (unless you are with someone)
• Convey bad news in person

As you might suspect given my zealousness around the candidate experience, this topic really resonates with me.  One of my internal clients at Starbucks, a Vice President of Operations, once said to me, "The only decisions that really matter in business are the really big decisions, and the really small decisions.  Everything in between isn't really that important."  I agree with this sentiment. 

Clearly the big decisions matter:  Strategy, market focus and positioning, brand components and sustainment... one can easily pick out the big rocks.  But the small things matter just as much:  how are you going to treat people (um...such as in the interview process...), how are you going to lead people, what values will your organization hold as prized?  In fact, our approach to our customers at Starbucks and the relationships we build with them every day is a large part of our success as a company, particularly when one considers the relative ubiquity of good quality coffee nowadays.

Sometimes the most impactful decisions on a company or leader are the small ones you choose to make; the decencies you choose to provide to stakeholders you engage with. 

So, here's my request: 

Comment on this post to submit a story or anecdote regarding a 'decency in recruiting' that you have provided, or witnessed, as John is looking for examples to cite in his book. 

As an added incentive (doubtful that you need one), I will randomly select 5 or 10 submissions to receive a free bag of Pikes Place Blend coffee, (which incidentally you can only get by visiting our original store in the Pikes Place Market in downtown Seattle). 

I look forward to your comments.