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Netflix Prize: Stories in Stories Part IV

In my continued following of the Netflix prize story, I've uncovered a few additional facets of the event that are interesting. 

My previous posts regarding this topic are here:

Post 1 , Post 2 , Post 3

First, there's an entire community of prize contestants hanging out in a forum that Netflix sponsors.  You can visit the forum here and read through some of the commentary that participants are talking about.  It's interesting reading if you are a follower of this story.  I didn't notice any overt recruiting efforts going on, but I'm sure they are.

Second, I decided to contact the current leading contestant, as listed on the Netflix Prize leaderboard.  I reached out to the leading team wxyzconsulting.com.  It's interesting that they are gaining substantial marketing exposure through their position on the leaderboard. 

I asked them some questions, here is how they responded:

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1. What made you decide to enter the contest? What motivated you?

We've been in the machine learning and personality discovery area for a long time. We are exciting about the Netflix opportunity since it provides us a real scenario to test and proof our innovations. Another major reason is, Netflix competition enables such a worldwide platform that we can benchmark ourselves with other top researchers in the world.

2. I've noticed that wxyzconsulting.com is a new web address as of October of 2006, I presume you formed the company after you entered the contest? What's the history with this venture?

Actually, the .com was formed at the same time as we entered the contest. The reason to have wxyzconsulting.com is, we hope we could find some consulting opportunities by showing our expertises in this field. But we rethinking our goals and targets given the very positive responses received from various sources.

3. Are you the same Yi Zhang that teaches as UCSC? (http://www.cse.ucsc.edu/~yiz/ )

You're right, yes, Yi is the professor in UCSC and she is one of the partners.

4. Have you garnered any consulting business from your status as the frontrunner on the leaderboard? You've had a fair number of hits to the web site since launch just a few short months ago (16,000+ hits to their website).

We're in talks with some companies for possible consulting opportunities.  And yes, as the frontrunner of Netflix contest, we do get good exposure.

5. There's been a lot of discussion regarding "gaming the game"; in other words, delivering solutions with a strategy attached to ultimately win the $1M, as opposed to simply solving for the best solution and submitting your results along the way. What is your opinion on this, and how does that tie into your motivation for entering?

Gaming is reasonable given the structure of this game. But gaming itself cannot guarantee the No.1 position. It is the innovation that will make the ultimate difference among so many contesters.

6. Can you verify that your Los Gatos address (the home town of Netflix) is purely coincidental?

Pure coincidence-:) And thanks for your remind, I just realized that Los Gatos is the home town of Netflix.

7. How big is the team that you are working with to solve the puzzle?

Very small, the core technology team consists of only two experts.  We're individuals who interest in this field. And we don't have any assistants or computing labs around.

8. Do you think this contest has generic implications for how talent is employed to get work done? Is this a new paradigm that you think will be replicated in the future?

The contest itself is not new at all. topcoder.com, Google and many others have been using such paradigm already. But we do think the problem Netflix wants to solve has huge potential.

9. What do you make of this 'open-source-like' approach to solving a business problem?

We think it has very good potential. The contest at least demonstrates some level of problems big companies are facing right now--- in house R&D usually lacks of real innovation.

10. What would you do with the money?

Well, the money is still in Netflix's hands. To be honest, we have not thought of it yet. We're still 100% focusing on keep innovating and improving.

11. What's your favorite Starbucks beverage?

cappucino

12. Why do you go by Tiger?

My English name is Tiger. In Asia, people think tiger is the king of the jungle. And we want to be the king of the personalized discovery.

13 Anything else you'd like to add?

We think Netflix competition itself is a strong indication that the industry is moving from search to a new era -- discovery. The recommendation is one important piece of the personalized discovery service. We believe we can do much more with our innovation and technology.

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It is pretty cool that after a few short months, the teams have made significant improvements on Netflix's own algorithm, and seem to be moving forward at a brisk pace. 

This story is worth continued coverage.

I am feeling pretty Googley...

As you might have noticed, my posting rate has been substantially reduced over the past few weeks (not that it was acceptably frequent before), and one of the primary reasons is that I've made the difficult decision to leave Starbucks and have accepted a position as the leader of recruiting for Google's Global Online Sales and Operations group, which is led by Sheryl Sandberg.  She will be my primary internal customer. 

AdSense, AdWords, future revenue-generating product offering "X", you get it.   In foundational form, it is the business unit where lots and lots of revenue flows from people outside of Google to people inside of Google, in exchange for the best advertising solution in the world.  I am pretty sure talent acquisition fits into that equation somehow.

Google's recruiting department has taken a few knocks, as recently reported in the Wall Street Journal.  Too many interviews, too much process, lack of a competency-based model for selection, attitudinal issues as they engage in the talent marketplace and similar concerns.  It's refreshing that Google has chosen to be transparent about it.  It seems like the organization is ready for change.  The most interesting descriptor I found was the reference to the Google recruiting process as 'glacial'.  I'm not an MBA, but that can't be good for business.  Despite all the criticisms, I would suggest that in recruiting they are still winning.

While I was working out in the gym this week, I discovered a new term in an article in Newsweek magazine that really resonants with me, and is applicable to my new job at Google:  Radical Transparency.  I've been talking about this theme and for a long time in previous posts.  There's a great post on this topic by Chris Anderson of The Long Tail fame on his blog from last month. 

Recruiting departments that leverage radical transparency will win more than their fair share of talent.   As a leader of recruiting departments at some of the world's most well-known companies, I should point out that I am really in the business of telling people "no".  Unfortunately, most people who want to work at Starbucks don't get hired.  I'm sure this is the same at Google, and other well-branded companies with reasonably solid employee value propositions and certainly for those that are market-leading.  It is a supply and demand equation, and companies with particularly high bars (like Google is notorious for having) but also huge talent requirements due to growth tell people 'no' on a grand scale. 

Given this, one strategy is to tell candidates "no" and do it in a way that is better than your competition:  more authentic, with more sincerity and respect, and in a way that inspires them.  Yes, inspires them.  It is a wortwhile value proposition in a 'radically transparent' world to inspire the innumerable numbers of candidates who aren't selected for a job at your company.  The chasm of technology and process that has been created between organizations (ie, groups of human beings) and their potential future workforce (ie, other groups of human beings) can be bridged by simply exceeding people's expectations through the interview process:  making every impression (in the marketing sense of the word) through the recruitment process uphold and strengthen the brand and the promise represented by the employment value proposition. 

This is true because people make decisions to join companies based on the value proposition that is offered (salary, culture, stock options, brand, job) but also because they make decisions based on how the process made them feel, and the connection and engagement it creates between themselves and the people they interact with during the interview process.

If organizations do this well, the talent market becomes inundated with talent who did not 'get into' your company, but still greatly aspire to.  This is smart business.   

Under my leadership, we were able to do this well at Starbucks: recruiters wrote hand-written thank-yous to candidates who were not selected, sent them Starbucks Cards preloaded with a few dollars, and made the interview process unique by doing things like coffee-tastings with candidates, which incidentally most of our competitors couldn't really do.  But really, it came down to what kind of an organization did we want to be. 

This is a particularly useful strategy if talent becomes scarce.  It is also a useful strategy given the real potential that the desirability of your offering (employment brand, general company brand, etc) may fall out of favor with the free-agency-minded workforce of today.  And make no mistake, there is always this potential - this is a risk that all companies face, and now more than ever. 

Lest we forget that company success is not an entitlement, historically there are very few companies who remain in the top spot, by any measure (whether financial, market share, or 'best place to work'), for very long.  Success is tenuous at best, and recruiting strategies related to this topic should plan for the long run with regards to how you engage with talent.  Reputations are hard (and expensive) to change. 

This is not to be confused with the difference between available talent and qualified talent and the issues with scarcity.  There still may be issues with relative shortages of qualified people to meet business requirements.  The point is that even the unqualified people have a voice and impact perception, brand, and the perspective of qualified talent. 

In the case of Starbucks or Google, most everyone that wants to work at the company is also a customer.  Or a future customer.  Or in the case of a radically transparent world, will inform a customer or a thousand customers or a million customers depending on how well they are able to extend their reach.  To change the game, an organization needs to, each and every time, exceed candidate/applicant expectations (which are at an all time low anyway) in a way that inspires them.  As I've said in other posts, the big things matter, but the little things (like how you treat people, whether they be inside or outside of your company) are also critically important in a radically transparent world.

An illustrative anecdote:  Years ago, before the Lexus LS400 automobile was introduced by Toyota, they developed a mantra towards customer service that went something like this:  "We will treat customers who walk into our showroom as if we had invited them into our home".  At the time and in many cases still to this day, this approach was and is exceedingly divergent from the norm of a car sales or service experience. 

Lexus has since gone on to lead the car industry in customer service satisfaction scores (which of course have been proven to positively correlate with profitability and revenue... um...yeah).  It is inarguable that this mantra helped shape their entire company and played a huge role in their overall company success. 

Smart companies that want to win in the new game of talent, in a radically transparent world, will need to adopt a similar philosophy and talent market strategy.  It is smart to be rigorous and have a high bar in recruiting, but the key is to do so with graciousness and humanity. 

And that is smart business.

On a personal note, I will be moving from Seattle to the Silicon Valley sometime around February/March and am looking forward to the changes this will bring.  Given the weather that we've had in Seattle recently, I must say the whole earthquake thing is beginning to seem a little mundane.  Falling trees, frozen roads, downed power lines, massive flooding... those have real entertainment value. 

My first day with Google is January 22nd. 

Holy Negotiation, BATNA!

So much in life is negotiated, yet I find that few people are highly skilled at it.  This is of course is true in recruiting and candidate negotiations. 

I would go so far as to say that nearly everything is negotiated in life.  I negotiate with my 3 year old daughter multiple times per day (would you like to brush your teeth first, or read books first before bedtime?).  It’s a one-sided negotiation for sure, but make no mistake about it, it is very much a negotiation.  I presume when she gets to be a teenager this will become much more challenging.

One of the key errors that I see people make in negotiation is not understanding the BATNA:  The Best Alternative To a Negotiated Agreement.  In other words, what is the next best alternative for one of the negotiating parties should agreement not be reached in this negotiation?  Understanding this is the single biggest key to successful negotiation. 

In an employment setting when someone is changing jobs, the strategy should always be to understand your BATNA really well, but also what the other parties BATNA is, in order to optimize the outcome.  In a scenario when a candidate is negotiating a job offer, there are some dynamics to corporate recruiting that are helpful to consider when negotiating.

Employers generally try and interview 2-3 candidates for any given role they are trying to fill.  That said, when they make the final decision and decide on the finalist, the other 1-2 candidates (silver and bronze medalists, if you will) are generally voted off the island and no longer considered at all.  This is very important for candidates to understand.  This is rooted in human nature, hiring manager fantasy of always choosing only the best candidate (who wants to be known for hiring the 2nd or third place finisher), and the fact that most selection processes are not tightly controlled to select for competencies that actually manifest job performance. 

All of this being said, if a candidate is able to proceed to the final step in the interview process (job offer) and is actually in a position to negotiate the salary for the job, their position in the negotiation has exponentially improved from previous points in the process.  This is often counter-intuitive because most interview processes put candidates into a state of being in the weaker negotiation position and candidates don't recognize when this changes in the process.  Candidates are trying to win the job against other competitors, after all.  When you couple this with the most common negotiation mistake: underestimating one’s own position, and also the opportunity cost of a company not filling a position with an identified finalist, there is generally always room for a candidate to negotiate successfully and get more out of the deal.  Not surprisingly, I find that few candidates negotiate well in this process. 

On the flip side, savvy recruiters build an understanding of a candidate’s BATNA through the recruiting process, so they fully understand what it will take to close a candidate should that candidate be selected.  A recruiter should never extend a job offer that they don’t know will be accepted.  It is unproductive to do otherwise.  Additionally, one has to fully understand a candidate's BATNA, including the intangibles beyond salary and job scope, so as to optimize the outcome.  Sometimes the best option is to not extend the job offer.  Indeed, the most sophisticated recruiters help the candidate develop their BATNA through the process, in part by treating every interaction as an opportunity to sell the finer points of life at their organization.

When it comes to negotiation, it’s all about the BATNA.  This is true for candidates, and also for recruiters.