Events

As many of you can see from the headlines, yesterday’s Qualtrics IPO was incredibly successful, with the stock closing 51% above its initial price, and the end of day stock price on Thursday valuing the company at $27.3 billion.

What we wanted to think about, though, is: What does this really mean for Qualtrics, SAP, and the broader employee engagement / experience market?

Let’s start with Qualtrics.

For those of you who have been following the story, you know that SAP bought Qualtrics for $8 billion before its intended IPO in 2018. They held the company for roughly 2 years, and then, as of yesterday, raised approximately $27 billion from the public markets. While that is a phenomenal return on investment for SAP (more on them later), Qualtrics also got a lot out of this little detour on its journey to IPO.

First, Qualtrics achieved a scale it would have struggled to reach on its own. SAP took Qualtrics leaders under their wings, expanded Qualtrics’ international offerings and capabilities, brought Qualtrics into verticals (e.g., supply chain) they were not in previously, and generally taught them the ropes of being a public company. This mentorship – if we can call it that – of Qualtrics leaders means the company is likely more prepared to execute at scale than at least some of its competitors.

Second, the last 2 years have given Qualtrics an opportunity to broaden its strategy and focus on being much more of a platform player across the entire process of designing and executing customer or employee experience, as shown by Figure 1. We imagine that the SAP experience has encouraged Qualtrics to dream bigger when it comes to knitting together their platform with a combination of partners who can deliver the services aspect of their work.

Finally, SAP’s obvious focus on human capital (among other factors) may have influenced Qualtrics to focus more on their people experience business (which they call EmployeeXM) moving forward. While Qualtrics has been saying they were making this shift to focus more on EmployeeXM for some time, the reality of the shift was most recently exemplified by the move of Jay Choi, formerly leader of EmployeeXM, to Chief Product Officer over all Qualtrics products (CX, EX, PX, and BX).

Critically, the last two items underscore why it was increasingly important for Qualtrics to become more independent. If the company was going to make a broader platform play and focus more on employee experience, it needed to build beyond the SAP ecosystem and expand to a broader set of potential partners (including SAP competitors such as Workday, Oracle, and some of the HRIS systems targeted at SMBs).

Net-net: the road through SAP to IPO gave Qualtrics scale, a broader experience management strategy, and a greater focus on employee experience — plus a ton of cash.

But the big winner in all this is SAP.

First, there’s the crazy amount of money SAP just made from this IPO. We couldn’t find a public source for their exact profit, but given that they bought the company for $8 billion and it just got valued at north of $27 billion, we think SAP did more than just *alright*.

But here’s where SAP was really smart.

SAP gets to pocket those billions AND it retains financial control over Qualtrics. “Wait…WHAAAT?!?” you might be thinking (especially after having read above about the importance of Qualtrics’ independence).

Yeah, right at the top of their S-1 (the financial document a company has to file to go public), is the statement that Qualtrics was offered with two levels of stock: Class A and Class B.

“SAP will own all 423,170,610 shares of Class B common stock…Each share of Class A common stock is entitled to one vote and each share of Class B common stock is entitled to ten votes…This means that, for the foreseeable future, investors in this offering and holders of our Class A common stock will not have a meaningful voice in our corporate affairs and that the control of our company will be concentrated with SAP.”

Buried on page 47, the S1 states:

“As a result, SAP will have the ability to control all matters affecting us, including:

• the composition of our board of directors and, through our board of directors, any determination with respect to our business plans and policies;
• any determinations with respect to mergers, acquisitions and other business combinations;
• our acquisition or disposition of assets;
• our financing activities;
• […a whole bunch of other things, omitted for brevity…] and,
• the strategy, direction, and objectives of our business.”

So, SAP made a ton of money and it still – in legal terms, even if not in day-to-day operations – maintains control over Qualtrics.

Is this (not so tiny) distinction going to matter? We give it a cautious “maybe.”

As we wrote about before, we’d been hearing that Qualtrics already had an incredible amount of autonomy for an acquired company before this spin-out. Further, we’ve also been told that the primary reason for this spin-out is a need for greater independence.

However, things can change fast. The spin-out was at least partially due to leadership transitions, initially precipitated by former SAP CEO Bill McDermott leaving (now CEO at ServiceNow) and reinforced by the sudden departure of SAP’s American co-CEO, Jennifer Morgan. While founder Ryan Smith plans to remain as executive chairman and Zig Serafin as CEO, they can’t stay forever. Should SAP leadership change or become dissatisfied with Qualtrics’ leadership, they could certainly make significant changes.

Change is not the plan for now, but plans change.

In short, SAP made a ton of money and still has the keys to the castle, though they say they aren’t involved in the running of the kingdom.

Perhaps the biggest story is how much money just got put into the EX tech market.

Perhaps the biggest news here, though, is that through this IPO, BILLIONS of dollars just got put into the hands of SAP and Qualtrics – and they will use them. Sure, there will be product innovations and maybe customer service improvements. But what is most likely to happen?

You guessed it: acquisitions.

(Read here for more on our thoughts on why acquisitions are going to be the name of the game for the people analytics tech market in 2021.)

Let’s just focus on Qualtrics (SAP is too wily a beast to make these types of predictions). If we look at where we place them on our people analytics tech 2×2 (see Figure 2), you can see there’s still quite a bit of room for them to move to the right on our “continuous analysis” axis. In short, this means we think there’s still a lot of opportunity for Qualtrics when it comes to using digital exhaust and unstructured data to understand employee experience. Qualtrics have themselves called out (in Figure 1) their intent to focus heavily on continuous listening (#surveyfatigue).

Given this, I’d expect Qualtrics to potentially push into the always-on employee listening space or passive organizational network analysis (ONA) — which could be paired nicely with active survey-driven ONA (again, see Figure 2).

Another area they might go into is the multi-source analysis space. These vendors pull in data from a very wide set of sources and provide detailed and complex analysis capabilities, primarily for people analytics practitioners and HR business partners, but also HR leaders, business leaders, C-suite execs, and employees. Given Qualtrics’ desire to be a data hub – and to understand the entire employee experience – we could see this as another reasonable direction.

Finally, the employee experience starts with talent acquisition. Labor market analysis capabilities would fit nicely into Qualtrics’ overall focus on end-to-end employee experience. Both of these latter two areas would jive really well with Qualtrics’ social science-heavy roots.

Despite all our conjectures above, it is worth noting that Qualtrics’ strategy is very much an ecosystem play. Therefore, Qualtrics may choose to invest instead in collaborating with a system of partners in these areas – or at least do that before acquiring or building the tech themselves. But invest they will – this money has to go somewhere to continue to fuel their growth.

What now?

Well, as observers of all this stuff, this is when we break out the popcorn and watch the show. Because we’re certain it WILL be a show in 2021. What do we expect to see?

• This IPO will allow Qualtrics to be MUCH more competitive in the employee experience / engagement market, as they invest this money into their product and services
• The employee engagement / experience tech ecosystem is likely to change, either via acquisitions or through intentional partnerships
• We’re going to see even more institutional / external investors in the HR tech space, given how well Qualtrics performed – which will fuel more growth in the broader HR tech vendor market – starting the cycle anew

For now, let’s all have a good weekend… and take that popcorn out of the microwave as we look to February to provide the next segment.

Just yesterday, we presented at the People Analytics & Future of Work Global Conference, and told the audience: “In 2021, we are going to see a lot more market consolidation.” And here we are, with example number one: Workday’s announcement today of its acquisition of Peakon (a Danish employee engagement provider).

Though smart, this is an unsurprising (and not market transforming) move on Workday’s part. Why?

Let’s start by examining why we expect market consolidation.

First, there have been huge investments in HR tech over the last decade – one estimate is that investors put nearly $5 billion into the industry last year alone – and that’s resulted in a highly fragmented market of specialized players across our entire HR tech industry.

This is nowhere more prevalent than with employee engagement and experience – the single largest (36%) and fastest growing category in our people analytics tech study. And that isn’t going to change:  due to COVID-19, social justice movements, remote work, etc., employee engagement and experience was by FAR the most in-demand people analytics area last year, with 63% of people analytics practitioners telling us they focused in this area in 2020 (a number we expect to see rise in 2021). Highly fragmented, lots of external investors, and quick growing = market ripe for consolidation.

Second, across the last year, we’ve recognized that we need more and higher quality data on our people. That requires that the data be easier to integrate. That can be done through an ecosystem that plays nicely with each other (similar to what Visier, Medallia, EMSI and others are doing with their “People Intelligence Alliance”) or by acquisition.

Right now, employee engagement / voice solutions are amongst the easiest to buy and implement (despite what some might tell you), as evidenced by the fact that a lot of these vendors went to a freemium model during the earlier parts of the COVID crisis and allowed potential customers to just turn the tech on themselves. However, what isn’t easy is the data integration piece: connecting engagement / experience / voice data to other data that can tell you something more meaningful.

So why did Workday acquire an employee engagement provider?

The most obvious reason is that Workday needed an employee engagement solution. As you can see in our people analytics tech 2×2, Workday has solutions in most of the other areas we cover, but it didn’t have an explicit employee engagement solution. (As an aside, to my knowledge they also don’t have an organizational network analysis solution – so you ONA providers might want to see if there’s any more Workday M&A budget available for 2021!)

But why wouldn’t Workday just build out their existing capability, instead of buying a company? A few reasons:

• High-quality engagement solutions are deceptively hard to build;
• There are a lot of really good independent engagement vendors open to being acquired (even after this acquisition!); and,
• This allows Workday to meet customers’ needs now, not in a few quarters’ time.

Further, the acquisition enables Workday to reinforce their single data model approach, as opposed to doing the ecosystem play – which we all know isn’t their main jam (though Prism allows data integration from external sources). By purchasing an engagement provider, they can ensure a single source of data truth when it comes to engagement data, which will make all the rest of their data offerings stronger.

There are lots of employee engagement vendors. Why Peakon?

Many of you may not know who Peakon is – I didn’t until about 18 months ago – but there’s a lot to like about them. First, Peakon is a high-quality platform, with engaged customers and devoted employees (similar to Workday).

Second, in addition to the engagement capabilities, Peakon brings two other offerings that will bolster the Workday toolbox: Grow (a performance solution) and Include (a diversity, equity, inclusion & belonging (DEIB) solution).

Let’s start with Grow. As we’ve written many times (such as here and here), we see performance and engagement becoming ever-more intertwined. Peakon’s solution is a primary example of how performance development and engagement can be bundled together effectively. This offering will surely bolster Workday’s performance solution, which is lacking in some of these capabilities.

Include will also strengthen Workday. This solution allows leaders to integrate DEIB analysis with the engagement offering. In some ways, these capabilities mirror Workday’s recently announced VIBE Index, which is a good thing, as there is overlap in vision. However, Peakon supplements Workday’s existing offerings in important ways:

• In-product features to safely report misconduct;
• Flagging of sensitive (including violence, criminal behavior, safety and wellbeing, etc.) comments for anonymous follow-up by HR; and,
• In-product links to micro-training on building more inclusive teams.

Finally, Peakon checks other important boxes:

• Financial: They completed a roughly $36 million Series B just under two years ago, which means they had significant funding, but not nearly as much as some of their competitors – and so were relatively affordable at the $700 million price tag. Given Peakon’s pricing, customer numbers, and growth rate, I imagine that the ROI on this investment will be very strong for Workday.
• Technical: Peakon is roughly 6 years old (depending on when you start counting) and thus has a modern tech stack and likely less tech debt.
• Cultural: There’s strong cultural and values alignment.

So, to sum it up, this is a good – but entirely predictable – buy for Workday. It doesn’t signal significant shifts in the market. It doesn’t fundamentally change things for the other engagement providers.

This deal is sound. It is smart. Well done, Workday and Peakon. We look forward to seeing how this works in practice.

 

Q&A Call Video

TRANSCRIPT

Introduction

Stacia Garr (00:00):

Okay. So once again thanks everybody for joining us today. We are going to be talking about people analytics technology here in our first, really our first kind of people analytics focus session of 2021. This is based on research that Priyanka and I did across really the last two years, but more specifically, the study that we published at the beginning of December on the people analytics tech market has, they said this is designed to be highly interactive and a discussion. We do record just so you know, and we put the recording up on our site for our red thread members so that they can view this in the future. So if there's anything that you really, really don't want anybody else to hear maybe hold that back, but otherwise we hope that it is an open and engaging discussion.

Stacia Garr (01:09):

So for those of you who don't know who we are I think most of you do because you're here and you found this, but we're red thread research where a human capital research membership we're focused on a number of practices most relevant obviously for today is people analytics and HR tech, but we also cover DEIB, employee experience, performance learning and career. And and we offer our research through a membership and then we also do advisory services and events and all sorts of good stuff. So that is us. All right. So as I said, this study is based on what we did across the last year, had incredible support and participation from our vendor community, and some of who are on the phone today. And we we published this, as I said in December, 2020. It's kind of funny. I keep on tripping over 2020, 2021, but that was it.

Stacia Garr (02:03):

And so here's the high-level findings of what we found in the people analytics tech market study. First is that we saw some pretty incredible growth in the market. And I will give you all some specific numbers around that second, we saw a much more thoughtful approach to differentiating capabilities in this year's study. So in 20, in the 2019 study, we spent quite a bit of time kind of talking to folks about, Hey, y'all are saying the same thing. Could you maybe be a little bit crisper on what it is that you're offering to your customers? And we were so thankful that we actually saw that happen with with vendors last year and being much more specific about this is what we do, this, how we do it. This is who we work with which, which I think was really refreshing.

Stacia Garr (02:49):

A third thing was kind of vendors responding to customer needs. And we'll talk a little bit more about specifically what that meant, but in general, it meant responding to the pandemic. As well, as the social justice movements of 2019. For us we saw ease of use and user-friendliness remaining high on customer's list of needs. And that was important because we feel like back to this differentiating capabilities topic, a lot of vendors say, Oh, we are easy to use. We are user-friendly. But when we talk to customers broadly and we did a poll of, I think, what was it Priyanka, 150 some-odd customers participate in the poll. And so they said, Hey, look, this is actually still a differentiating feature. So even though everyone is saying that they do it, that isn't necessarily the case. And then finally people analytics practitioners are the key users.

Stacia Garr (03:42):

I actually pulled this slide out because I didn't want to spend too much time talking about it today. But the headline here is, is that in the 2019 study the vendors broadly said that people analytics, practitioners were their key users, about 76% of them said that. And then here, when we moved to 2020 and kind of given everything that happened, that number actually jumped about 20 percentage points up to 96%. So almost every vendor is now saying in our study, it's now saying that people analytics practitioners are there key user. So that's a pretty big shift in terms of what we were hearing. I'll stop there. Cause as I said, this is interactive. Any general questions about this before I share a little bit of additional details or anything that you want to spend a little bit more time talking about?

Speaker 1 (04:33):

I had a question about you, you mentioned there's a approach to differentiating capabilities. Perhaps you're going to delve into that a little bit more, but curious what approaches you've seen. So far.

Stacia Garr (04:47):

Yeah, we, we have a site on that. So we'll talk about that one a little bit more we'll make, and then please, you know, if we don't get to what you're looking for, go ahead and ask some more questions once we get to that slide.

Stacia Garr (05:01):

It looks like you might've just come off of mute.

Speaker 2 (05:04):

Yeah. I was just going to confirm the, the year. So you mentioned going 2019 and then 2020 is this something that was conducted in 2020?

Stacia Garr (05:14):

Yes. 2020. Yeah. So we published a study in 2019 which was kind of the foundational study. It was two actually studies, a very big, very long. And then the 2020 study we did, we tried to kind of condense and focus more on the highlights, but yeah, the, what we're sharing today is based on 2020.

Stacia Garr (05:34):

Anyone else?

To what extent did your org continue existing / make new investments in people analytics tech in 2020?​

Stacia Garr (05:44):

Well then for those of you who are practitioners online, we would just love to kind of understand what perspective you're coming from around the amount of existing or new investment you made with people analytics in 2020. So we just have to kind of hear, did you make any new investments? Did you continue investments? Did you expand them? What was kind of your approach?

Stacia Garr (06:18):

Or if you're a vendor maybe share kind of what you sell broadly with, with your, with your customers?

Speaker 2 (06:25):

From a company perspective, I would say in 2020, my company at that time I was doing data analytics, people analytics for HR, and we did make a good amount of investment in expanding our capability. We didn't change what we're using, but we sort of brought in capacity and, and, and the scope of use.

Stacia Garr (06:55):

And when you say you broaden your capacity, kind of what, what roughly did you go from and what did you go to?

Speaker 2 (07:02):

So we moved, we moved a lot of the backend storage and workings into the cube make for easier access because of a lot of data and a lot of use. We were moving a lot of data on projects onto the database. So we had to make changes at the backend so that performance is not compromised.

Stacia Garr (07:31):

Okay. Makes sense. Thank you. Anyone else want to share what they did in 2020 or what they saw their customers do?

Speaker 3 (07:42):

Thank you for, I mean, for explanation on behalf of the demeanor, let's say in Turkey, so I'm in the last year was a tremendous for companies to session for great tools. So the difference between the main region and the North America is we having access to great tools. So they actually, they wanted to invest, but, you know, there is a blur line between half to find out how to get access to this. So roughly there are great potential. And I mean, my company and I'm a researcher, but a lot of companies reached to me and asking how we can get access to this source. So there's a huge increase, I mean, the willingness, but you should create a good connection with other regions like me.

Stacia Garr (08:41):

Okay. So just to recap what I think I heard, it sounds like there's a lot of interest and enthusiasm around this, but not necessarily a lot of investment quite yet. And from what you saw is that fair to say?

Speaker 3 (08:55):

For sure, because, you know Yeah. Are like behind of the technology, you know, so we did pride a funny some technology here, but the difference is I in the local market, you should know how the culture of to get access to this market, but there's a great potential insight.

Stacia Garr (09:14):

Okay, great. Thank you. Anyone else want to share?

Speaker 4 (09:20):

So we work to support customers with transitions and we saw quite a lot of change just due to events. So we saw HR suddenly become very operational again. So some of the longer term projects have been parked and everyone was operationally running around, certainly in the UK seeking data to try and get through things like furlough, to understand that you said there was more of a request for staff, but it wasn't a tool was strategic. It was very reactionary, which I understand. And we saw many of the longer term aspects of HR teams put on furlough in lots of businesses as well. So it's almost like a bit of a pause in some of the strategic projects, but other companies maybe I think we'll come out of this realizing they couldn't very…they couldn't lay their hands on the data to even do the reaction we stuff very well.

Speaker 4 (10:15):

So, but it still feels I can. The UK, every time someone starts to put their head above the parapet to try and get to something more longer term, suddenly we're locked down again and HR running around like headless chickens, trying to deal with things internally. So we, we, we've just seen number of our longer-term projects. And again, you know, regardless of whether they're very analytical based keep getting kicked back as operational reaction becomes sort of the main thing at the moment. We're hoping things settle down and people actually learn some of the lessons of what they really need in place. So that's what we've seen through 2020 and the first month of 2021 so far.

Stacia Garr (10:58):

Yeah. And I imagine that the current severe lockdown has made it even even more signified.

Speaker 4 (11:05):

Yeah. I think everyone came out, you know, if you don't know what happened in the UK, we literally went back to work for one day and then got locked down so I can keep on going in expecting to sort of hit January and maybe things be a bit better or some people were, and then we were locked down and lots of people are homeschooling and stuff here as well, which is just sort of means that people are barely keeping the wheels on the car at the moment, rather than doing anything else. So, so we've just found that a number of times through the last year, but I think there is a non-independent that people realize, you know, more of the strategic importance, they just can't get there yet.

Stacia Garr (11:44):

Yep. Okay. That's helpful. Thank you. Anyone else want to share?

Priyanka Mehrotra (11:50):

I would just jump into HSA and say that from windows also aligns with what was just said to a point, because if you remember, when we started talking to vendors early on in the year, last year, they, a lot of them told us that their longer term contracts were starting to get put on hold as the people are going into lockdown and considering their budgets. And then later on in the hell, are we heard from some vendors, specifically employee engagement, experience vendors, starting to say that they're starting to see some contracts come back and get renewed. But I think that was specifically for those particular vendors because companies wanted to do those particular things really to employee engagement, keep a pulse on pulse, check on how employees are doing. So I think those, those investments probably saw a rebound versus compared to what Speaker 4 was saying, the longer term strategic investments, I think.

Stacia Garr (12:39):

Yeah. Yeah. And I think, you know, maybe we might need to check in with our engagement vendors now to see what's happening too, because so much of the world has gone back into a hard lockdown. And so it'd be interesting to see if it's mirroring what we saw immediately, you know, last March, April may, or if it's a different situation. Yeah. Great point.

Growth: even in times of crisis

Stacia Garr (12:51):

Okay. I'm going to go ahead and move you, move us along and show you all a little bit of some of the data from this study. So just kind of the high level and building off what Priyanka said, we did still see quite a bit of growth last year even in times of crisis. And so this is this is our market sizing efforts based on the revenue numbers that vendors share with us during the study.

Stacia Garr (13:26):

And you can see here that we, we still saw a pretty impressive 35% growth rate from, from roughly 2019 to 2020. Should be clear here, you guys, I'm sure. Facet math and saying, Hey, wait, that doesn't look like 35%. The differences is the 35% is actually calculated on the revenue that we revenue numbers we actually have. Whereas this is an estimate kind of taking into account all the parts of the market on the left hand side of the slide that all the parts of the market that we know exist, but we may not have had revenue numbers for. But anyway, nonetheless, no matter how you cut it, it's still quite impressive, quite significant growth in the market across the last year and continuing you know, the overall strong growth that we've seen in the market.

Stacia Garr (14:15):

We've got 55% CAGR (Compund Annual Growth Rate) for the last four years. So and, and, you know, just to kind of pause, I think, you know, a lot of this has been driven as Priyanka said by, you know, some of the engagement vendors also by some of what we call the multi-source analysis vendors. So, so folks like Vizier cruncher, I know we've got some busier folks on the line today who have, have been in those more in those larger, more strategic organizations and who, where the situation in, in the expectation of data being available, you know, maybe resulted an expansion of the capabilities and the offerings within those organizations. So, so still saw kind of a healthy growth from that sector as well.

Speaker 3 (15:07):

Can you explain, CAGR?

Stacia Garr (15:08):

Oh, I'm sorry. Compound annual growth rate. So instead of just kind of doing growth rate for year to year, it's the compounded growth across the four-year period.

Stacia Garr (15:23):

Thank you. Any other questions?

A crowded market landscape

Stacia Garr (15:33):

Okay. so this is our market landscape two by two. And one thing that's important to note is that unlike some other analyst firms are two by two and our two by two, up into the right is not necessarily better. This is really just trying to help folks understand what the market landscape looks like. And a lot of the vendors who are in each of the different quadrants offer different capabilities and they kind of play together well. So if you think about the folks who are on the left upper side, so the accumulated analytics group, they would generally play pretty well with the folks over here in the upper, right. And they would be kind of part of the overall integrated tech stack. Same thing with the folks down here on the lower right and targeted analytics. Those tend to be engagement vendors and, you know, they would play well with some of the vendors up here in the upper, right, who are, again like there's multi-source analysis platforms.

Stacia Garr (16:29):

The way that this vendor, this two by two is organized is on the X axis. We talk about the type of, or frequency in the finale axis and do this is gonna be the frequency with which somebody might be using these tools. So you kind of go from a quarterly or monthly analysis over here on the left-hand side over all the way to on the right hand side, it might be a daily or even hourly type of analysis, or are folks accessing it critically accessing it more frequently. And then on the data integrator versus creator side in a creator on the bottom is they're actually, you know, primarily survey tools, but basically pulling in creating data directly. Whereas on the top we have integrator tools which are those that are pulling in data from other sources. And part of the reason that we do it this way is one to help folks understand what some of the relative complexity might be for implementation.

Stacia Garr (17:26):

So for instance, down here on the data creators side an engagement tool is a relatively easy rollout. Whereas on the data integrator tool, it could be more complex because you're pulling in data from more sources and having to deal with, with everything involved in that obviously, you know, these different tools here at the top are very heavily focused on making that simpler. And that's a real often a real strength of theirs. But, but it's still, there is a higher level of complexity in general. In the middle we have vendors who are doing both. And so this is kind of one of the big shifts that we saw this year, which is the number of vendors who are kind of in this middle section. So really kind of, let's say from jigs, so on down here to the two, just above the x-axis that, that space is really compressed.

Stacia Garr (18:16):

Meaning a lot more vendors are in that space now. And then we had a lot of vendors who kind of showed up and are now there that we didn't have in, in 2019. And the reason for that is, you know, we've been talking as others about the importance of bringing in more data sources in order to get a more holistic understanding of what's happening. And so we're starting to see vendors who are both, you know, surveying employees for instance, but then also integrating data from different sources. Priyanka, did I miss anything on that?

Priyanka Mehrotra (18:46):

I think the only other point to add is that we saw a lot more vendors shift towards the right this year. So a lot more of we saw vendors improve their capability to providing data more frequently and also seeing users access that data more frequently. So we had a few, one vendors that shifted towards the right, and we had some engagement and experienced vendors who also shifted more towards the right. So that's, that's another difference that we saw from last year.

Stacia Garr (19:15):

Yeah. What questions do you guys have on this? Do you all have, if any?

Priyanka Mehrotra (19:26):

Oh, it looks like we have a question in the chat. How should, how should one understand when a window like Visier and work, they show up more than once in this chart.

Stacia Garr (19:38):

Yeah. So the let's take Visier as an example. So Vizier has an analytics platform or an analytics offering, excuse me, in addition to a workforce planning offering. And so with this group of vendors over here in the accumulated analytics are the ones who are kind of most likely to show up twice. And that's because they have a distinct workforce planning offering. That's separate from the others. Workday is a different case in that Workday has kind of three different analytics products. So they have a their, their Prism product, which is appear in the upper, right. They have their overall people analytics product, which is is kind of available. It does. So with Prism, you can pull in data from external sources with, with people analytics, you cannot and then they have their HCM analytics product, which basically provides a analytics on top of just their HCM data. So each of these kind of represents a different product offering for those different vendors.

Differentiating capabilities according to vendors​

Stacia Garr (20:52):

Okay. well we'll go ahead and keep moving then. So there was a question earlier about the differentiating capabilities according to the vendors and wanted it to kind of highlight what we saw as the differences. So in 2019, we saw that folks were saying things like ease of use customizable short time to implement scalable and flexible is their primary differentiators. And as I said, we were clear in our in our 2019 report that, you know, if everyone's saying the same things, they're not really differentiators. And so folks were quite a bit better in clarifying what their different capabilities were here. In 2020, we heard quite a bit more about domain expertise. So saying, you know, we bring this specific set of capabilities from a knowledge perspective or an industry or a sector or a geography perspective to bear on this particular problem aligned to that, the methodology and science.

Stacia Garr (21:48):

So we saw a lot more people kind of talking about if they had it, the underlying scientific basis on which their analysis was based. And that I think was really I helpful thing for, for vendors or for customers because it helps them understand, Hey, this, this is where this is coming from. This is why it's sound. This is, I think also important when we're thinking about things like AI or machine learning and helping people understand, you know, a little bit more of what's underneath the hood, as it were. Actionability was something that we heard a lot of vendors increasingly focus on. How do we actually go from the, the information to insight and that insight to action. And that I think is something that vendor sync that some vendors are differentiating here. There's a huge amount of opportunities still within that particular item. And then finally we did here still scalable and flexible and, and for some vendors that, that really is still true. Some of them are more scalable and flexible than others. And we didn't hear that. You can see it's kind of number four there. We didn't hear it quite as broadly as we did in 2019, which I think is, is good because it's a little bit more accurate, I think in terms of what's actually out there. Priyanka, did I miss anything there?

Stacia Garr (23:14):

Okay. Any questions on this? I know we had a question earlier,

Speaker 3 (23:20):

Actually. It's not a question. I mean, I just want to add, I mean, some mentions, let's say maybe we have more microservices. I mean, next year, because the people are just some go goes growing increasingly. And we have a lot of maybe microservices in this field because, you know, even we can give wide employee experience in many collaborative tools. So I think for this year we had immediate expertise.

Stacia Garr (23:54):

Yeah, no, I think that's a good point.

Speaker 1 (23:59):

I asked the question before, so thank you for sharing this. I think it makes sense as this market matures you it gets a little bit more specialized, I would say. So domain expertise and the methodology and science and some of the social science research that is so fundamental to HR and people analytics should make more of a hopefully, you know, the make a presence in, in the applications or the dashboards.

Stacia Garr (24:36):

Yeah. Yeah. I was, I was having a really interesting conversation with a people analytics practitioners this morning, actually about this, but this, this need for getting more of our you know, IO psychology and kind of general psychology, quite frankly insights into, into some of these tools and, and how important that is. It is broadly, but also particularly around the skills conversation that we're hearing come up a lot more with people, analytics technologies because, you know, with all of this, we're, we're looking at people. And so that, that strong basis in that science is an important aspect.

Speaker 1 (25:13):

Yeah. That's very true. I think because when it comes to actionability, that's one of the issues you really cannot be very prescriptive when it comes to people it's much more nuanced than let's say a sales application or a finance application.

Stacia Garr (25:35):

Yeah. I agree. And I disagree in that. I think that there is an opportunity for many solutions to one, Change level of expectation of kind of the type of the way people will interact with the system. So, so right now, in general, there is an underlying assumption that the user of these people analytics technologies will have the time energy inclination, whatever to go and kind of do some of the digging to find the most interesting insights. But the thing is, is particularly as we start to expand our base beyond our people, analytics practitioners, and maybe some are savvy HR leaders and obviously the data savvy HR leaders is a small percentage of those folks. I think that there's more of a need to kind of bubble up what some of the, what may be happening?

Stacia Garr (26:36):

So for instance, just to choose an example, if we know if we have a high, we may have a hypothesis, you know, black women are less…are staying at the organization for a shorter period of time than other, another population. Right now in a lot of these systems, you have to have that hypothesis and go digging for it. You have to cut by it. And in, even in the ones where that isn't the case where they might show that they don't necessarily show you what you could do. So, you know, maybe we need to look at compensation. We need to look at levels of engagement, their sense of inclusion, et cetera, et cetera, that group sense of inclusion. I think that there's an opportunity for the technology to make suggestions about this might be what's causing it, or this might be what you could do, not necessarily because it's right, because it may not be right, but what we all know that it's easier to react to something than it is to necessarily come up with the idea a whole hog new on our own. And so I think there's an opportunity to kind of show what could be happening, what could be done in the instant, in the hope that it will drive more action,

Speaker 1 (27:47):

One hundred percent agree. I think you know, full disclosure, we, we take all of our users up to that point, meaning showcasing what the the causes are, so that when the decision-makers are able to see what are the possible levers or the drivers that I need to focus on, I think that's the fundamental role of an analytics application, right. You really need to get there. And as you said, there, depending on the cause whether it is a promotion rate or compensation or something else it's up to them, the HR business partner or the business leader to take the required action.

Stacia Garr (28:27):

Yeah. Great. Any other comments or thoughts?

Vendors responded to customer needs

Stacia Garr (28:40):

All right, let's keep going then. Okay. So the other, the other kind of high level findings that we'd shared with vendors for needing to respond to customers, and they did it in, in five ways. First was it focusing on employee engagement experience kind of already touched on that point? Diversity, equity, inclusion, and belonging. So we saw particularly after the social justice movements of last summer an uptick in the focus on DEIB. That though I think is and, and we actually just published, what was it Tuesday Priyanka this week has been so long Tuesday our DEIB tech study. And, and we talk about this in that study as well, because it kind of goes both ways, but we saw an increased focus on that on people analytics. But we think there's actually quite a bit more room to focus on this topic within people analytics, and we're planning to study that here in Q1.

Stacia Garr (29:39):

But, but that was the second, second high theme. Third is getting the basics, right. So I, I pulled the specific slide out on this point, but really what we saw was a focus from our customers saying that their vendors were kind of focusing on some of the core elements, things like surveys, filtering, et cetera, that would enable them to use this solutions effectively. But some of the more sophisticated things like what we were just talking about we saw less effectiveness from, from vendors the fourth one being integrating and analyzing data from multiple sources. So, you know, just to kind of level set HRIS is, is the thing that everybody integrates with. I think it's 90% of vendors integrate agent with HRIS data. But then it kind of really starts to drop off in terms of some of the other talent solutions that are out there.

Stacia Garr (30:30):

And also some of the other technology, so sales or finance or other work cloud technology. So it's still something that focus folks are focused on, but it's just not as high as HRIS, but we did see kind of a greater focus on this in the last year. And then as I already highlighted people, analytics practitioners saw a much bigger focus on that audience. And less of a focus on some of the other audiences though, that said, we did see that when vendors were talking about what they were going to do moving forward. Most of them said that they were primarily going to focus on business leaders and C-suite leaders and that they going to focus on managers much more in the future.

Stacia Garr (31:14):

Priyanka did I miss, anything there?

Priyanka Mehrotra (31:16):

Nope.

What should users keep in mind before buying new people analytics tech?

Stacia Garr (31:19):

All right. So now we're gonna jump into the questions that we received from folks in advance of this call. And this was the first one, which was what should folks be keeping in mind before buying new people, analytics tech? And this was like a perfectly planted question because we wrote about this in this study. And so what we found in this study was this folk need to focus on first identifying your needs. If you're, if you're a buyer, you know, what is it, what's the problem that you're actually trying to solve? And these are the five challenges that we've heard from vendors that they were trying to solve for their customers. And so we would advise, you know, figure out what really is the underlying challenge that you're looking for and can this vendor actually meet those challenges?

Stacia Garr (32:07):

You know, we see some vendors who are really great at, for instance, in play engagement experience, but they may be kind of more of a tech platform first and may not be focused as much on enabling action. Kind of underneath that too, is that we saw about a 60, 40 breakdown between the percentage of vendors who say that they have consulting included with their platform or some level of consulting to help get you off the ground and to give you support throughout the year. So that was about 60% of vendors and then 40% said they, any consulting is kind of add-on beyond, beyond what they're doing. So it was just important to know what your, what your needs are and whether the vendor can realistically meet your highest priority needs. Second looking beyond the basics. So I'm going to just build this real quick.

Stacia Garr (32:57):

So these are some of the, the kind of additional capabilities that we saw that vendors can offer in some of the new areas that they're, that they're looking into. So for instance, machine learning for, for deep learning about 40% of vendors are doing that about a third. Are you looking at digital exhaust? About 26% are looking at advanced NLP, and that is important to distinguish a lot of vendors say that they offer NLP, but advanced NLP allows you to take into account things like your, your organization's culture and maybe specific language that you use within your, within your organization. It can allow you to group together prescriptive comments. So not just this is what's happening, but this is what we should do. And to understand that. So there's kind of a lot more nuanced underneath NLP than a lot of vendors will say, they'll say, Oh yeah, we've got an NLP.

Stacia Garr (33:53):

We can, you know, group your comments. You're fine. But there's quite a bit more that can be done than that. And then finally we're starting to see the use of voice channels as a, as a thing that folks are experimenting with. And so using that, for instance, to allow folks to either submit video or to do recordings of things that they'd like changed or better, et cetera. And then potentially as we start to see more more information about or the more ability to kind of bring in digital conversations, maybe meetings, et cetera that might be another way that folks are potentially using this in the future. Any other questions or any questions on this?

Stacia Garr (34:51):

Okay.

Stacia Garr (34:56):

And then it's kind of gets at that understanding vendor support and services I had highlighted a moment ago. So, so you can kind of see here that the data that I, that I mentioned about, you know, I actually think I flipped it, but so 60% of vendors say that they do not provide any sort of consulting services as part of their annual subscription and about 40% roughly so that they do. So understanding that level of, of support, and then also the frequency of customer check-ins by the vendor. So how, how engaged is the vendor and asking you what you need about 60% of vendors are doing that monthly. But you can see that, you know, 17% are quarterly and 15% are only at twice a year in terms of checking in and providing support. So you can understand what it is that you need.

Stacia Garr (35:40):

And then the final thing we mentioned is in terms of folks who are thinking about buying, they need to think about is, is clarifying the ethics expectations. There's a wide range of levels of support that vendors expect to have to provide when it comes to ethics. And you can see here that, and also, I should say it also varies by the type of category for, so for instance, multi-source analysis platforms as a group, as a category, scored the lowest on the amount of, kind of support that they give around ethics compared to, let's say, in play engagement platforms, which are amongst the highest. So you need to understand kind of what your organization's stance is on data ethics, and to make sure that it's either aligned with what your vendor is offering or that you're able to kind of guide your vendor in a way that is aligned to what your organization prioritizes.

Stacia Garr (36:31):

Okay. So I'm going to stop there. That was all in the considerations of what to think about before buying new people, analytics, tech, does anybody have any questions or thoughts or things that you're thinking about when it comes to buying tech that maybe we didn't cover?

Which people analytics tech vendors are focusing on addressing the needs of business and people leaders?

Stacia Garr (36:58):

Well, we'll move on to the next question. Okay. So which people, analytics, tech vendors are focused on addressing the needs of business and people leaders. So this is, I'm Just going to share this data here as a starting point. So vendors are generally planning to invest in non HR users. So what we have on the left-hand side is the current end users. And you can see kind of the, the groups, so business and C-suite people, managers and employees, and in red, we have 2020 data and in purple 2019 data. So you can see, for instance, right now about 55% of our vendors said that they're highly focused on business and C-suite leaders.

Stacia Garr (37:45):

And then on the right hand side, you can see what they said, where they plan to in the, the groups that they think will use their solution more frequently in three years. So you can see, again, 80% of solutions expect business and C-suite leaders to use their solution more in three years than today. So that means that they're planning to build for those folks. So you can see again, you know, business and C-suite leaders and then people managers, and then finally employees are the areas that are expected to see growth in. And we had a whole bunch of other populations on here, including people HR practitioners, HR, business partners, HR leaders, et cetera. Those either held steady, or actually they, they said they didn't expect to see more growth or more use of those the solution by those groups in the future.

Stacia Garr (38:32):

So these are the three that we saw the growth. So in general rule of thumb is, is people, vendors are planning to go after particularly business and C-suite leaders and people managers more in the future. In terms of the specific, you know, vendors, I think we've got, you know, whatever it is, 50 some odd vendors in this study, I hesitate to call out individual vendors and kind of a list. But I think, you know, if folks have a specific question around specific category, happy to answer that one offline. But I think the general expectation should be that, you know, roughly half of them today are focused on business and C-suite leaders and people managers, and that in the future, it's going to be quite a bit more.

How are people analytics tech vendors helping customers with their DEIB challenges?

Stacia Garr (39:22):

Next question we got was how are people, analytics, tech vendors, helping customers with their DEI B challenges? And so for this one, I don't think we put together some data. But I can tell you there, there are a few ways and Priyanka, please jump in here because I'm sure I will…because we just published this study this week. I might, might not have my talk track straight here. But so, so there are a number of ways, you know, one of them is just through, through kind of your, your pure analytics of, of what's happening for these different groups. So this might be looking at retention rates. It might be looking at promotion rates, representation, et cetera, with, with different populations within the group within the organization, excuse me. We are attending to in really until last summer the big focus was on gender for a lot of organizations we've since then seen a big shift to, to race as you would expect.

Stacia Garr (40:21):

But I think we're going to start to see some other demographics come in as well. And so sorry. I see you need to jump off, the recording and slides are only available to RedThread members. So the live event is what's available to anybody, but the recording and slides are available to red thread members. Thanks for the question. In terms of kind of some other ways that we're seeing people, analytics, tech vendors help, you know, one big area has been around organizational network analysis. And so that has been looking at the networks of different populations and understanding where we might be seeing some populations who are maybe not as well connected or included within the organization as others. That's one way that we're seeing it. Certainly other ways we're seeing it are looking at things like within talent acquisition, kind of what what might be happening to different candidates in terms of them dropping out of the pipeline or what actually interestingly might be happening with interviewers.

Stacia Garr (41:22):

So do certain interviewers tend to have a bias towards selecting one type of person or another? So I think they're, they're just a number of different use cases. I mean, in the, in the people that are in the DEIB tech study that we just published, we basically have vendors across all four areas of the talent life cycle. So talent, acquisition engagement, and retention, advancement development, and then people analytics, but fundamentally all those solutions are in, most of them, not all, most of them are or some sort of analytics solution Priyanka, what did I miss? Because I'm sure I missed a bunch.

Priyanka Mehrotra (41:57):

I would just add a thing that we saw the same, a lot more vendors. Talk about inclusion and belonging. So for example, and we mentioned this an our DEIB report, like 40, for example has in its solution tries to capture belonging through its survey for candidate experience as an employee experiences and has that built in, into its culture and hiring tool that they offer to their customers. You know, similarly Workday had released their Vibe, which is their inclusion and belonging index. And some of the employee engagement experience when results are starting to talk about inclusion quite a bit more. So PeakOn for example, that's another example that we had shared in our DEIB study that is working with customers to really understand the different experiences of the underrepresented groups inside the workforce. I think the other thing that we talk about is looking at retention rates and I know leadership among different groups, for example, Visier allows cohort analysis of different groups to see how different groups are progressing through the development and looking at their career progression and where they're falling off in the leadership cycle.

Stacia Garr (43:12):

So I think those, those were some of the examples that really stood out this time in our study.

Stacia Garr (43:19):

What are you all seeing? Are you seeing the technology being applied in different ways or different use cases where you would hope to use?

Speaker 5 (43:31):

Yeah. That that's interesting from the perspective of the survey, because I was thinking about it that I know there was a lot of requests from, from the company I was doing last year. I know that was a big focus for us, was being able to look at the data and, and performance, just like what you just explained, being able to look at that, but I didn't feel like we got that. We're able to get that. That was a request we made to our vendors. I didn't feel like we were able to get that. So are you saying that you saw a lot of requests or are you saying that a lot of the analytics companies have this capability already?

Stacia Garr (44:13):

A number of them, I'm not sure I would go with a lot of them. So a number of them have that capability, for instance, Priyanka just mentioned Visier. Visier has that capability. Workday launched in November I want to say maybe that timing might not be quite right, but their Vibe index which allows for it. She mentioned PeakOn, which is an engagement provider. They allow for a pretty robust DEIB analysis. So a number of them do that, that said kind of, if we think about what we saw in our DEIB tech report that we just published one of the big shifts was that we saw a lot more of what we call DEIB feature vendors. And so those are vendors who do other things, but have recently added DEIB features to their offering and that number Priyanka.

Stacia Garr (45:06):

Do you remember the exact percentage increase we saw, but it's big. My recollection and maybe Priyanka, you can look it up while I'm talking about. My recollection is it was an increase of 136% is what's the number that sticks in my head. So we're seeing a lot of existing vendors add on DEIB features. And what I expect to still see that here in 2021, because the DEIB energy is still very much so there. And I think that given a lot of the commitments that were made by companies in 2020, they're going to be asked, there's going to be some accountability. I think quite a bit more than there has been before in 2021 as to what they've done. And then analytics component of that is fundamental to being able to answer that question.

Speaker 5 (45:57):

Right. So I have one more question. So this research that you did was based on existing vendors, did you also notice a lot of new entry in terms of tech companies that are bringing new technologies for D&I?

Stacia Garr (46:13):

In general, we have. So we had been seeing a significant growth rate of new vendors into the space, both people, analytics and DEIB for, you know, years, but we have seen a bit of a slowdown and we think that was related to the, you know, the financial impact of COVID in 2020. That may shift here in 2021, now that we have a vaccine and kind of a perceived way forward, we also see broadly VC investment in this space is still really high and really growing. So my gut is that it will probably pick up here in 2021, but we did in general, see a slowing of the pace of new vendors in 2020.

Speaker 5 (47:03):

Okay. Thank you.

Stacia Garr (47:09):

Any other questions?

Stacia Garr (47:15):

One thing I realized I did not say, but should have said is compensation analytics is obviously a really big space here. I kind of think of it as like obvious, but it's not necessarily.

Stacia Garr (47:31):

For people who are newer to the space, but the compensation side of, of this has been particularly driven by, by places like the UK who are requiring gender compensation report outs and the like, and, and then that has a ripple effect because if you're gonna do it from large multinational companies, for many of them, if you're gonna do it in one place, you should probably do it in all places. And so we're seeing that broadly across people analytics. So I just should have, I should have mentioned that earlier.

How can people analytics practitioners discern which emerging tools and trends will gain long-term adoption?

Stacia Garr (48:00):

Okay. so this was kind of an interesting question. So how can people, analytics, practitioners discern which emerging tools and trends will gain long term adoption. Now, if I really truly knew the answer to that, I can just shut down red thread and call it good.

Stacia Garr (48:20):

Cause I spend my life as was Priyanka trying to think about this night. I don't necessarily know the answer, but here's how I would start to think about it. One, is it solving a real problem that organizations have? I think that it's really easy for us in people analytics. I include myself in this to say, Oh, we can do this really cool thing. And then to go searching for a problem, you know, a hammer in search of a nail. And sometimes that nail is not really the nail that needs to be hit for the business. And so I think, you know, where I would start is, is a really, truly a problem for the business. Not just something that people analytics or even HR is excited to solve. So that's, that's thing. Number one thing. Number two is, can we actually solve it? And so by this, I mean, is it a problem that we, that is not so complex that we can solve?

Stacia Garr (49:19):

So for instance, I had a great conversation with someone a few days ago where we were talking about skills and now I believe that there, that skills has the potential to be a really powerful thing. But this practitioner was saying, look, I think this is all just hype. Like this whole skills thing is overblown because people are much more than their current skills. There's their potential, there's their interests there's, you know, their lives, the rest of the things that are happening that can impact their performance and skills themselves are really hard and complex. And so if you are trying to solve the skills question, like the level of complexity is so great that I don't think you can get there. I don't know that I have an answer to that point, but the, but the point around the level of complexity and the fact that we're trying to measure things that are very human and influenced by other things that we can't necessarily measure, because we can't measure every single thing about a person.

Stacia Garr (50:15):

I think it does beg the question is, you know, in this example is skills a trend or will it be something that actually gets baked into our organizations and drive long term? So, like I said, first thing, is it solving a real problem? Second thing, is it a, is it a problem that we actually can solve? And then I think third, is do we have the reach to, even if we have the right answer to influence the people who can drive action. So for instance, you know, a lot of solutions are trying to get, as we saw more into the hands of C-suite leaders and and people, managers and employees, which is great, but if we develop a solution now or a feature now that requires those people to do something, but they are not, the reach of the solutions are not broad enough to actually get that information into those people's hands. It's going to end up being a trend that fails a fad that fails. Now it may be that in five years, it comes back and we've got the broader reach and we can get to those people. But if we can't get the right information to the right hand to the right people to make the right decisions, then I think it tends to fail. So that's, that's my thinking on it. Priyanka, do you have anything to add?

Priyanka Mehrotra (51:31):

I think I would just reiterate the first point that you made about the business challenges, I think and that also ties to what the employees need. You know, one of the things that we are hoping to see in, we expect to see for this year is people analytics really move into the development space. And I think that's really crucial from the employee side, as well as from the business side as well. And we know from, from 2020, one of the biggest challenges that businesses and employees face was shifting to this new paradigm of working and suddenly everybody did, needed to learn new things while working remotely. And people analytics really saw an opportunity to come into play over there. So I think marrying those two things really finding out what is it that employees need aligning that with the business needs. I think that's very real see the trends and long-term adoption of what people analytics can really do.

Conclusion

Stacia Garr (52:22):

Great. I see that some folks are having to jump. So I think that's probably a good place to, to end. There was one more question, but I think we'll just stand right there. The overview is available on the site for folks who are not members. The full study is available for folks who are members and also the tool, which gives information on all the vendors who are in this study. A kind of lightweight version is available on the site for everyone and a heavyweight version that has a lot more details on it is available again to RedThread members. So thanks so much for spending some of your time with us today. I know everyone is really busy and so we appreciate that you did. And if you have any follow-up questions, feel free to reach out to Priyanka or me. You can certainly get us at [email protected]. That's probably the easiest way. All right. Thanks so much everybody. Thank you!

 

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Guest

Celia Berenguer, Chief Learning Officer at Sanofi

Details

Celia Berenguer, since November 2017 Chief Learning Officer at European-headquartered Life Sciences giant Sanofi, couldn’t have been more excited getting ready to press the ‘Go’ button a new Sanofi University. As we hear on this latest episode in our on-going look at Purpose in the modern enterprise, a certain novel coronavirus decided to mess with her plans. This is a story, then, about not just how she and her L&D team had to help flip the company to remote working, but what to do about that whole corporate Learning endeavor.

Celia—a graduate of Tufts who’s held senior Learning roles in organizations including Barclays, BP, and the Harvard Business School—tells us how a renewed Sanofi focus on Purpose driven by its new CEO, Paul Hudson, helped her work through many of her most difficult issues during the pandemic.

A way we decide to understand all this is that COVID’s been a way to help L&D see that what it needs to offer is access to skills and support for talent mobility that makes sense for the individual, the company’s and their own Purpose of ‘Empowering Life:’ Purpose, perhaps, as more bottom-up than top-down, compared to other companies we’ve profiled in our exploration of ‘Is Purpose Working?’

Expect to hear a lot of honest reflection for Celia on the first steps of an amazing journey. The fun and challenge of working with 140 nationalities working hard on everything from general medicines to consumer healthcare to vaccine creation.

This podcast interview covers topics like:

• How she’s seen the Pandemic throw out the talent rulebook and end standard career pathways
• How Learning at Sanofi has a new focus, aligned to getting products out there to help patients
• The contribution to making Purpose explicit by her new CEO
• Why she sees L&D as the source of all the support mechanisms and development tools that can bring that Purpose to life for people
• Democratizing and sharing Learning in a crisis

Resources

• Celia Berenguer LinkedIn profile
• Celia's employer, Sanofi's website
• Sanofi’s ‘Empowering Life’ Purpose statement
• RedThread’s on-going Purpose work

Webinar

This season will culminate in a live online gated experience (a webcast) where we'll review and debate what we've learned. Seats are limited. Secure your place today, over at www.novoed.com/purpose.

Partner

We're also thrilled to be partnering with Chris Pirie, CEO of Learning Futures Group and voice of the Learning Is the New Working podcast. Check them both out.

Season Sponsor

DEIB Tech: Its Time Has Come

Global pandemic. Protests. Elections. Riots. (And whatever else happens between when we publish this article and you read it.)

Needless to say, the last year has been rough. It laid bare our differences in stark relief. Showed how events impact diverse people differently. Perhaps it caused you some measure of disgust, despair, or even depression. At a minimum, it likely contributed to exhaustion.

But, at the same time, the last year has also revealed our underlying humanity. The extent to which we care about other people. The depth at which we hold our beliefs about our country. The potential we have when we work together (hello, COVID-19 vaccine!).

Given all this, there's never been a greater need for a focus on diversity, equity, inclusion, and belonging (DEIB)—both in our society and in our organizations. We have a need to understand each other and to work together, more than ever before.

Organizations throughout the world have recognized this, from top leaders to DEIB leaders to managers and employees. It’s for this reason companies are talking about DEIB more in their earnings reports than ever before (see Figure 1¹) and why the number of DEIB job openings has skyrocketed (see Figure 2²).

The thing is this: Organizations can't just talk about DEIB and hire people to lead it. That's a good start, but it’s not enough. Organizations need to change their systems, practices, and behaviors. The change cannot just rely on individuals—it has to be baked into how the organization operates.

This is where DEIB technology can help, as it has the potential to build in practices, behaviors, insights, and recommendations that address bias. It can also provide insights about what is actually happening with people (versus relying on anecdote-based understanding) at the moment of critical decision-making about talent.

DEIB tech is no longer a brand new market—but still many have not heard of it. With that in mind, let’s do a quick review of where this market came from and why it's now ready to meet this moment.

Tripping down memory lane

When we first began studying the D&I tech market in 2018, the #MeToo movement had thrust diversity and inclusion in the workspace under a spotlight. Stories and accounts of workplace discrimination, harassment, and unethical behaviors toward women in the workplace led numerous businesses to pledge to change their policies and take action.³ As a result, organizations began to feel a greater need for systemwide solutions.

In 2018, we launched our first research study on this topic, and we published a comprehensive report, Diversity & Inclusion Technology: The Rise of a Transformative Market, in February 2019. The study included a list of all the D&I vendors (105) we identified and was accompanied by a detailed vendor landscape tool (with 2 updates since). As we shared in our initial report, tech can play a transformative role.

Today, we’ve expanded the topic’s breadth to now span diversity, equity, inclusion, and belonging—increasing our coverage to 196 vendors (and counting!). And while we cover the market trends and changes extensively in this report, the complete list of all the vendors and the details around their capabilities are included in our online tool.

We believed in 2019 that tech may be the missing link which—along with a combination of strategies, goals, practices, policies, and behaviors—could bring about systemic changes for DEIB.

Fast forward to today

We (still) find ourselves in the midst of health, social, and economic crises. 2020 was not an easy year for anyone, but it especially impacted diverse people in many significant ways, including:

• Women left the workforce in record numbers
• Lower-income earners saw their jobs evaporate
• The murders of George Floyd, Breonna Taylor, and others disproportionately impacted the Black community

The rise of the Black Lives Matter (#BLM) movement in the U.S. and around the world has forced people to pay greater attention to issues surrounding racial diversity, equity, inclusion, and belonging. As a result, businesses are increasingly expected to take a stand on social justice issues, remain true to their values, and treat their workforce in an equitable manner.⁴

Many companies have responded by making pledges or promises in support of the #BLM movement.⁵  A large number of them have focused on increasing diversity levels within the companies, both at the employee and leadership levels (for examples of such corporate pledges, see Diversity, Equity, Inclusion & Belonging: Creating a Holistic Approach for 2021).

As the pressure to follow through on these promises increases, leaders must develop strategies to achieve them—and we believe that DEIB tech represents one of the critical components of the process (see Figure 3 further down). Sophisticated tech—such as artificial intelligence (AI), deep machine learning, natural language processing (NLP), and organizational network analysis (ONA)—can help leaders manage DEIB better and more easily, and are increasingly becoming more accepted as essential tools for people practices.⁶

Orgs that are serious about implementing systemic change and seeking to achieve a lasting impact should look to DEIB tech for capabilities that enable them.

Specifically, DEIB tech can help:

• Improve the org’s understanding of and complexities surrounding DEIB
• Promote objective decision-making
• Flag and mitigate bias
• Ensure equal access to opportunities for all within the org
• Create transparency and accountability
• Scale DEIB efforts throughout the org

We believe that leaders must have a clear understanding of the DEIB tech available (internally and externally), and how it can help them achieve their business’s goals.

Through this report, we aim to achieve 4 things:

1. Help leaders understand the role of DEIB tech
2. Provide insights on the state of the DEIB tech market
3. Highlight the talent areas focused on by vendors
4. Guide leaders who may be looking to make tech investments

Key Findings

1. 3 major shifts punctuate the current DEIB tech market. To start, in 2017-2018, when the #MeToo movement was at its height, leaders were especially focused on gender; in 2020-21, the emphasis has evolved to include a focus on race and ethnicity. Next, and as a result of the first shift, the social justice movements and conversations around discriminatory workplace policies and behaviors have led to greater attention to inclusion than ever before. Finally, the role and impact of AI on mitigating bias to enhance DEIB has come front and center, and is being more readily addressed.
2. The broader HR tech world is responding to these market shifts. The number of HR tech vendors offering features or functionalities that cater to DEIB as part of their solutions has increased by 136% since 2019. We believe this reflects a growing need among organizations for HR tech solutions that incorporate a DEIB lens into all areas of talent.
3. The DEIB tech market is hotter than ever. The total number of vendors in the market increased by 87% as we identified a total of 196 vendors in the market for 2021, as compared with the 105 that we included in our research in 2019. The overall market size is $313 million, having grown at a CAGR of 59% since our last study in 2019.
4. People analytics for DEIB has arrived. Lack of analytics and insights on DEIB is the primary challenge that the majority of vendors are helping their customers solve for. Data and analytics are becoming more important for DEIB as organizations measure and track their efforts.⁷ As a result, a number of solutions providing DEIB analytics capabilities is growing (28% in 2021 vs 26% in 2019).
5. Smaller organizations and knowledge industries remain the main customers of DEIB tech. The largest customer category is small organizations (those with fewer than 1,000 employees), who represent almost 30% of all DEIB vendor customers. However, these small organizations represent a smaller percentage of DEIB vendor customers in 2021 than in 2019, and there was an increase in the percentage of customer organizations in the 10,000-50,000 employee range. As companies recover from the events of 2020, we expect to see orgs of all sizes increase their use of DEIB tech.

DEIB Tech: So Critical Now

Before we dive into the latest about DEIB tech, we need to establish a foundation here for some of the terms and concepts we use. We also offer a brief explanation of why DEIB tech is important to your organization.

Let’s take a step back and define our overall terms. Readers of our previous report will notice that we’ve evolved our terminology from “diversity and inclusion” (D&I) to “diversity, equity, inclusion, and belonging” (DEIB). The events of 2020 resulted in a focus on conversations around the workplace experiences of diverse and underrepresented people.

Specifically, they shed light on the uneven playing field that many individuals are faced with, as well as how it impacts their sense of belonging and being part of an organization. Due to this, we’ve seen a rise among both orgs and vendors that consider equity and belonging as part of their holistic understanding of this issue, and are including them as part of their programs and offerings.

What is DEIB?

Figure 3 features our definitions for the DEIB abbreviation—diversity, equity, inclusion, and belonging.

Now that we’ve defined the terms, it’s time to understand why DEIB is so important.

The great divide: Why is DEIB important NOW?

The events of 2020 have resulted in a sense of urgency and accelerated conversations about DEIB. And we’re seeing an unprecedented and greater willingness among leaders to engage and push for change. So, while cultural injustices have happened throughout our global history, why does there seem to be a greater push to change things now?

A key factor: Underrepresented people have been impacted disproportionately by the health and economic crises brought about by COVID-19—inequalities that have shined a discriminating spotlight on the many differences that continue to exist in our social structures.

For example: Job losses hit Black workers in far greater numbers than for Whites. Both Black men and women saw their unemployment rates go up to more than 16%, while White men saw theirs rise to a comparatively lower number of 12.8%, in April 2020.⁸ This gap didn’t improve once businesses reopened and companies began rehiring later in the year. While by August the unemployment rate for White workers was down to 7%, for Black workers it was much higher at 13% and the gap even larger.⁹

Additionally, as a result of the events of summer 2020, #BLM movement, and the following protests, many employees found themselves navigating difficult conversations around these issues at the workplace. Leaders, on their end, found themselves facing greater expectations to provide “safe spaces” for employees to do that, and have more open and honest discussions with them.¹⁰

Companies are under increasing pressure today to act on issues around discrimination and systemic racism. Leaders must seize this opportunity to make good on their claims and enable meaningful change to happen. And designing an overall approach to DEIB is a really good place to start.

Leveraging DEIB tech as part of an overall approach

Given the heightening expectations of DEIB that orgs are facing, leaders need to design a holistic approach to DEIB which includes all people practices and impacts all stakeholders. As we learned in our recent research,¹¹ when designing their new DEIB approach, orgs must do 6 key things:

1. Clarify their purpose or reason for doing it
2. Establish goals
3. Develop a strategy to meet those goals
4. Identify critical levers and activities that impact those goals
5. Leverage technology
6. Use data, analytics, and metrics to embed accountability and transparency

Technology forms a core part of a holistic DEIB approach. The next section explores what DEIB tech can offer. For more details on the other components of a holistic DEIB approach, please refer to our report, Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021.

What is DEIB tech?

When we talk about DEIB tech, we’re referring to …

… Enterprise software that provides insights, or alters processes or practices, at the individual or organizational level, in support of an organization’s efforts to become more diverse, equitable, and inclusive, and to enable belonging.

For the purpose of our ongoing research, we focus on tech that impacts decisions related to people. While there are other types of technology, such as those focusing on accessibility for people with a range of abilities and disabilities, these aren’t covered in our report as they don’t impact people decisions directly.

When we think about DEIB tech, we identify 3 types of vendors:

• DEIB focus vendors. The primary business for these vendors is helping orgs address their DEIB challenges. An example: a vendor whose product focuses only on reducing unconscious bias during hiring.
• DEIB feature vendors. These offer features or functionalities that cater specifically to DEIB needs, but their primary business focus includes more than DEIB. An example: a recruiting software vendor whose product can make all resume names / identifying info “blind” to minimize unconscious bias.
• DEIB friendly vendors. While these vendors neither address DEIB as their primary focus nor market themselves specifically as doing so, their included features or functionalities could positively impact such efforts in organizations. An example: a recruiting software vendor using AI to recommend appropriate candidates to hiring managers.

Essentially, DEIB tech should impact people decisions in a manner that helps orgs meet their DEIB goals. It should help transform fundamental and structural qualities of the systems that are in place in order to bring about lasting change. The key point here is that it must help drive systemic change in the organizations.

DEIB tech must impact people decisions by transforming fundamental and structural qualities of the systems in place in order to drive systemic change in the organization.

Some of the ways DEIB tech can do this is by:

• Uncovering existing policies, practices, and programs that may be biased, discriminatory (in reality, if not in design), or in conflict with the company strategy, and which need to be changed
• Identifying existing gaps between goals and the actions taken to meet them
• Measuring and tracking progress toward those goals
• Analyzing data and information for greater insights, and identifying areas of interest
• Making recommendations on next steps
• Scaling these efforts and the impact of these activities for the benefit of the entire organization

Now that we’ve covered the fundamentals around what DEIB tech is and why it’s important for orgs, let’s dive into this market.

State Of The DEIB TECH Market

Since we published our first report on the DEIB market, we’ve published 2 additional updates (here and here) that feature several new vendors as well as our overview on the market itself. In addition, regular conversations with vendors and users of these technologies allow us to keep a pulse on the DEIB tech market changes over time.

Four ongoing trends caught our attention and results from our recent vendor survey confirmed these findings. Overall, the DEIB tech market is:

1. Experiencing 3 big shifts in its approach to DEIB
2. Hot and growing with more vendors offering DEIB capabilities than ever before
3. Largely comprised of customers from small orgs and knowledge sector industries
4. Getting serious about analytics

Let’s examine these market trends in more detail.

3 big shifts

Our research and conversations reveal that the events of 2020 significantly impacted how organizations are thinking and approaching DEIB. Specifically, we find the following 3 big shifts that play a role in this market’s evolution:

1. Focus shift from gender to race
2. Stronger spotlight on inclusion
3. Impact and role of AI at the forefront

Focus shift from gender to race

The #MeToo movement in 2017-2018 brought conversations about sexual harassment and gender discrimination in the workplace under a spotlight. Similarly, the twin crises of COVID-19 and the social justice movements in 2020 highlighted discussions about workplace discrimination—with the focus now shifted from gender to race. The events of 2020 have had a disproportionately greater impact on diverse and underrepresented people. And, as conversations around DEIB have increased and demanded attention, there’s more emphasis around the issue of ending systemic racism.

Our interviews with DEIB leaders revealed a greater openness among orgs to have honest conversations about race than ever before: To a large extent, this is due to the expectations that people have. Eighty percent of the U.S. population want brands to help solve society’s problems, while 71% trust their employer to do what’s right on systemic racism and racial injustice.¹²

DEIB tech providers also noticed this shift. Our findings revealed that vendors:

• Added specific questions regarding race in their surveys and analytics
• Offer resources that cover issues about racial injustice
• Provide capabilities that allow users to measure and compare employee experiences through a race lens

A stronger spotlight on inclusion

As we mention in our report Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021, our research showed that the pandemic and #BLM movement led to an expansion of DEIB efforts by orgs. In particular, remote work, the disproportional effect of COVID-19 on certain populations, and uneven caregiving responsibilities all threatened to disrupt ongoing efforts to keep employees engaged and connected. Many organizations evolved their efforts to meet those challenges: Some revisited their policies and practices around employee lifecycles and updated them to meet these changing needs.

One such example comes from Ph.Creative, a brand agency that updated its strategy to better focus on inclusion.

Solution providers, too, have noticed this growing focus and are responding to it. For example, we’ve seen a significant rise in the number of vendors focused on employee engagement and development (43% in 2021 vs 31% in 2019). These activities, including employee experience, learning, career management, and wellbeing, drive and impact inclusion. Several vendors we spoke with shared that they’re offering products to help customers:

• Check the overall employee pulse and wellbeing
• Ensure continued engagement even in remote environments
• Enable flexibility to meet the differing needs of their workforce

Economic uncertainty caused by the pandemic also impacted this market. Budget cuts and low spending meant that talent acquisition (TA), and as a result diversity hiring, didn’t receive as much focus as it has in recent years. Organizations became more focused on retaining their existing workforce by ensuring they remain safe, engaged, and connected.

Finally, the racial injustice movements and conversations brought to the forefront that Black employees don’t feel a sense of inclusion or belonging at the workplace.¹³ People in general are more aware of a racial divide now as a result of the events of 2020: This has been instrumental in orgs realizing that they need to do more to ensure their diverse employees feel included.

Impact & role of AI at the forefront of DEIB

As the impact  and role of AI on DEIB has increasingly made news over the past few years,¹⁴ users as well as solution providers have been working to better understand the problems and address the resultant issues.

AI: The impact

While AI can identify and ferret out instances of existing bias in current systems and policies, it can also perpetuate it, for example, in job descriptions, hiring or promotion practices, or workplace communications. A main reason why: The data used to train algorithms is biased to begin with and, without correction, the algorithms simply replicate those biases. This can be due to such algorithms having been trained on a data sample that’s based on an over- or underrepresented population—thereby rewarding or penalizing other groups.

While AI can identify and ferret out instances of existing bias in current systems and policies, it can also perpetuate it.

Another big reason: The training data contains human biases and inequities reflective of those who created it. As a result, technology developers are increasingly adapting approaches that ensure the training data used for machine learning algorithms is free from human bias through stress testing and experimentation.¹⁵

AI: The role

While the impact of using biased algorithms has become clear, the role AI can play to mitigate existing biases has also received greater attention. The key point for users: The technology is used for the right problem and not seen as a cure-all.

For example, an AI interviewing software would be of little help to an org looking to increase its diverse candidate hiring if very few diverse candidates have been applying for roles to begin with. In this instance, the organization should consider why diverse candidates aren’t applying. It might be a sourcing problem. It might be a job description problem. It might be an employer brand problem. (There are tech solutions for all those problems.) Whatever the problem is, the AI interviewing software won’t help. The algorithm must be directed at the right problem.

In sum: 3 big shifts

These 3 shifts together can propose what may come as the DEIB tech market matures. They also offer hope that the words and pledges made by orgs in 2021 will be followed by respective actions as the understanding and focus around these 3 issues grow.

DEIB market growth

The market grew in 2 important ways in the last few years: both the number of vendors and market size as measured by revenue increased.

DEIB growth: Vendors

The overall number of vendors in the market (as identified by us) increased from 105 in 2019 to 196 in 2021. That’s an increase of 87%.

At first glance, you might think this increase may be due to the addition of new vendors. In fact, our research revealed, however, that many established vendors, not previously offering any DEIB functionality, have added new features / functionalities that customers can now use specifically for DEIB purposes. When we compared the total number of DEIB feature vendors in 2021 vs 2019, we saw an increase of 136%.

Our research revealed that 40% of vendors fall under our DEIB feature category in 2021, as compared with 30% in 2019. DEIB friendly vendors comprise a smaller percentage of the market than they did in 2019, while the percentage of DEIB focus vendors remained mostly unchanged at 32% (see Figure 7).

As shown in Figure 7, we believe these changes are a reflection of 2 interrelated developments.

• In the last few years, a large number of DEIB friendly vendors added or developed features that cater more specifically to DEIB needs—thus, they’re now counted as DEIB feature vendors.
• New vendors are finding more value in offering solutions with a DEIB lens embedded in their talent areas of focus, rather than only addressing specific DEIB challenges (i.e., an ONA or learning solution that’s able to provide insights on employee networks or learning, respectively, which can be broken down and analyzed by gender and race).

DEIB growth: Market

While many industries suffered setbacks with investments and contracts on hold during the pandemic, the DEIB tech market grew considerably. We had initially estimated the overall market size to be $100 million in 2018. However, our research this year turned up even more vendors that existed in 2018, so we have revised our 2018 overall market size to $124 million (see Figure 8). 

We estimate the overall market size to be $313 million, with a 2-year CAGR of 59% (and a 4-year CAGR of 82%) for the overall market. This growth is commendable, given 2020 was a year when almost all orgs looked to limit their spending and avoid unnecessary new investments.

We estimate the overall market size for DEIB technology market to be $313 million, with a 2-year CAGR of 59%.

Much of this growth was driven by the renewed calls for commitments to DEIB, once the #BLM movement gained momentum in the latter half of 2020. Given that we expect internal and external stakeholders to increasingly demand that orgs “walk the talk” in 2021, we expect demand (and thus market growth) to remain strong in the near future.

Customers of DEIB tech

When we looked at the customers of DEIB tech, two main findings caught our attention.

1. In general, small businesses comprise a greater percentage of DEIB tech than large orgs
2. Customers from technology, financial, and healthcare / life science industries have increased

Customer size

A real opportunity exists for the largest organizations to leverage DEIB tech. When we calculate the mean for customer sizes, we find that almost 30% of DEIB tech customers are small orgs with less than 1,000 employees. This is a lower number than in 2019 (see Figure 9) and likely represents a maturing of the market, since we see vendors increasingly selling to larger enterprises, notably organizations in the 10,000-50,000 employee range. That said, for the largest organizations—those with more than 50,000 employees—we haven't seen any notable movement in the percentage of them becoming DEIB customers.

This relatively low level of subscription to these technologies represents a real opportunity for the largest organizations because, as our research indicates, they're the ones which can use the help most, for 2 reasons:

1. Trust in large orgs is low. This is especially telling when compared with small businesses. A September 2020 Edelman study found that 43% of Americans trust large corporations to do the right thing in responding to issues of systemic racism and racial justice, as compared with 62% trusting small businesses. Corporations, in general, are believed to care less for their employees and share too little of their success with them.¹⁶ In addition, several recent instances of employers monitoring or tracking employee activity without their knowledge have appeared in the media.¹⁷ Employee fears of privacy invasion became more serious once the majority of the workforce shifted to remote work during the pandemic.¹⁸
2. High expectations exist for large orgs to do the right thing and take meaningful actions on DEIB. Seventy-seven percent of Americans state that it’s deeply important for companies to respond to racial injustice to earn or keep their trust.¹⁹ And while words matter, actions that lead to change matter even more. This was made clear when several leaders of large corporations received criticisms and backlash from consumers and media for their public stances in support of the #BLM movement: People saw them as stating empty words and pointed out the leaders’ failures to address discrimination within their own companies.

As the largest organizations look to put real money in 2021 behind the statements they made during #BLM, we expect to see them turn to tech more to help them address the systemic challenges they have with DEIB.

Industries

When we look at DEIB customers by industry, as expected, we see that technology and financial services / banking / insurance comprise an even larger portion of DEIB tech customers than they did in 2019 (see Figure 11). Also, customers from healthcare, pharmaceuticals, life science, and chemical industries increased by almost 3%. Although this may not seem like much, our conversations with vendors revealed a growing interest from these 4 industries.

Again, we believe the COVID-19 crisis played a role as it highlighted the need for organizations to support underrepresented and diverse groups, which comprise a significant percentage of healthcare workers.²⁰

Customers from the knowledge sector, including technology, financial, banking, and insurance industries, grew by almost 10% for each of them. This isn't too surprising as the technology industry tends to be more open to using tech to solve challenges. Also, given that the technology industry has been under the spotlight for its lack of progress when it comes to diversity in the recent years,^21,22 this is a welcome sign. Although DEIB tech is not a silver bullet, combined with a comprehensive strategy and practical goals, it can help enable continuous positive change.

Analytics takes centerstage

“ turn data into information, and information
into insight.”²³

This phrase is certainly gaining traction in the DEIB tech market. Over the past 2 years, we’ve noticed a growing emphasis on using analytics and insights to understand DEIB—and our survey findings confirm this. Fifty-two percent of vendors listed it as the primary challenge their solutions are helping customers solve in 2021, as compared with 33% in 2019 (see Figure 12).

52% of vendors listed analytics as the primary challenge their solutions are helping customers solve in 2021 (as compared with 33% in 2019).

As we mentioned in our recent report, Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021, identifying, analyzing, and democratizing DEIB data is becoming a critical focus among forward-thinking organizations. Leaders are now trying to:

• Understand the experiences of diverse populations
• Identify and understand networks among different groups
• Analyze these data for deeper insights
• Build greater accountability

In response, DEIB tech vendors are also building on their capabilities to help orgs enact and scale these efforts. Twenty-eight percent of vendors cater to analytics as a talent management area in 2021, as compared with 26% in 2019.

This brings us to our next section on the different areas of talent management that vendors target.

Talent Areas Vendors Focused On

The talent areas served by DEIB tech vendors have shifted considerably during the last 2 years (see Figure 13). As you may notice, the distribution is more evenly spread across the 4 talent categories today than it was previously. The biggest difference: The percentage of solutions that focus on talent acquisition, which declined to 29% in 2021 from 43% in 2019.

We believe this shift is due to at least 2 reasons:

• A significant number of (both new and old) vendors focused just on employees have introduced features that enable them to serve DEIB needs—thus, now making them a DEIB “feature” vendor, whereas, before, they may not have been in the market at all.
• The economic uncertainty brought on by COVID-19 has resulted in much lower levels of hiring, potentially decreasing the number of vendors focusing on DEIB in talent acquisition.

Let’s look at each of these talent areas in more detail.

Talent acquisition

About 30% of the 196 vendors identified in our research focus on talent acquisition (TA). Of those, 25 participated in our survey, with 60% of them offering solutions that help customers with candidate sourcing and selection (see Figure 14).

Readers of our previous report will note that we broadened our TA category this year to include new subcategories for onboarding, employment branding, and labor market analysis. This is because we noticed a rise in new capabilities and products among several vendors. Each of these subcategories have within them several areas that solutions focus on. For example, vendors under candidate selection offer capabilities that help customers create blind assessments, match diverse candidates to job descriptions, and / or help reduce bias during the selection processes. Similarly, a solution helping customers with sourcing candidates can do so by accessing diverse pools or changing job descriptions to reduce bias.

While we haven’t listed all of the different types of capabilities that vendors offer under each TA subcategory, readers can access a complete list of all TA vendors and find which capabilities they offer through our DEIB tech tool.

One of the ways DEIB technology can help customers improve their candidate selection process is by helping them match candidates to job descriptions, as we illustrate with the following story.

Development / advancement

The number of solutions that target development / advancement as a talent category significantly increased from 19% in 2019 to 26% in 2021. We believe this growth is due to the changing needs of the orgs. As we mentioned earlier, due to the shift to remote work and a slowdown in hiring new talent, orgs have shifted their focus to developing their existing workforce.

The largest subcategories within this area are leadership development (LD) and learning (L&D). Of the survey participant vendors that target development / advancement, 50% of them focus on these 2 subcategories (see Figure 16). New subcategories in this area for our 2021 study include recognition, talent mobility, and compensation / total rewards.

A significant finding this year is the number solutions that focus on LD. Readers of our previous report may recall this: Even though a big diversity challenge was representation at different levels of leadership, we identified only 16% of tech solutions that targeted this particular subcategory. In 2021, that number rose to 26%.

One of the ways DEIB tech vendors help organizations enable LD is by providing insights on leaders’ behaviors. The ability to provide insights on leadership behaviors and communication patterns became especially crucial once the pandemic hit and employees began working remotely. An example from McKesson, a healthcare company, provides an example of how important such insights can be.

Solutions can help customers in many ways under the different subcategories in this talent area, including:

• Orgs looking for vendors that help with L&D will find such capabilities as delivering training within existing employee workflows, offering virtual reality training, and helping design civil conversations.
• Vendors focused on mentorship and career management offer capabilities, such as enabling diverse talent to search for mentors, providing networking opportunities, or personalized career pathing.

For a full list of vendors that focus on development / advancement and the capabilities they offer, please visit our DEIB tech tool.

Engagement / retention

Seventeen percent of all DEIB tech vendors focus on engagement / retention. Of the survey participants that target this talent area, 75% are currently focused on 3 subcategories: employee experience, employee engagement, and employee voice. By employee voice, we mean how an employee communicates or speaks to the organization. (See Figure 17.)

New subcategories in this year’s study include employee wellbeing and employee engagement. We added employee engagement so that we could differentiate between solutions that help customers understand the unique experiences of employees and perceptions versus those that help customers with initiatives to improve employees’ engagement levels with their work.

Some of the newest additions in this category include:

• Capabilities that focus on employee voice, by allowing anonymous reporting and confidential conversations around sexual harassment.
• Vendors focused on employee experience to help customers understand diverse groups’ work experiences and to ask questions to better understand employee inclusion.

For a full list of vendors that focus on engagement / retention and the capabilities they offer, please visit our DEIB tech tool.

Analytics

As we mentioned earlier, analytics is a growing focus among DEIB tech providers. Of the survey participants which selected analytics as a talent area of focus, 57% offer capabilities for analysis and monitoring of DEIB activities by conducting representation / KPI analyses, enabling pay equity analyses, assessing network inclusion, analyzing TA processes, and providing DEIB dashboards (see Figure 18).

Our survey also revealed that the number of solutions helping customers calculate the business case for D&I initiatives rose significantly to 30% in 2021 from 17% in 2019. This is most likely due to a growing need for DEIB leaders to quantify the impact of DEIB on business, and show the value of their initiatives and investments by tying them clearly to business outcomes.

The number of solutions that conduct ERG management and analysis also increased slightly to 13% in 2021 from 10% in 2019.

The number of solutions helping customers calculate the business case for D&I initiatives rose 13%, from 17% in 2019 to 30% in 2021.

For a full list of vendors that focus on analytics and the capabilities they offer, please visit our DEIB tech tool.

Moving forward, we expect that DEIB tech vendors will continue to improve their capabilities while also growing and developing new ones—to meet the unique and changing needs of the market. Buyers and potential investors need to be aware of these capabilities and use the success stories from other forward-thinking organizations to understand how to leverage these technologies for their own purposes. Additionally, other equally important considerations exist for you to keep in mind before investing in DEIB tech.

In our next section, we cover some of the crucial considerations that potential buyers should be aware of.

What Buyers Should Consider Before Investing

While it’s important to understand the market and the different talent areas of focus, leaders interested in DEIB tech must keep a few critical considerations in mind before making any investments:

• Be aware of the benefits and the risks of using DEIB tech
• Be clear about your own needs
• Audit existing in-house tech that can potentially be leveraged for DEIB purposes

Understand the benefits & risks of using DEIB tech

Organizations must be aware of both the benefits and risks associated with DEIB tech before purchasing it (see Figure 20).

Identify your organization’s needs

Once the benefits and risks are understood, DEIB leaders must reflect on their organization’s needs. As a DEIB leader, you can do this by:

• Understanding your organization’s DEIB journey
• Identifying if the vendor can meet your needs for support
• Determining whether any additional services besides the tech may be required

Your organization’s need for a particular type of tech will depend to some extent on:

• Where you are in your DEIB journey
• What your level of understanding of DEIB issues is
• What your specific goals are

Different leaders and organizations are at various stages in their journey to understand and embrace DEIB. When it comes to selecting DEIB tech, orgs first need to be clear on what they want to accomplish, where they currently stand, and what remains to be done.

“The tool allows everyone to begin their DEIB’s learning journey from where they are—curated content is delivered in weekly snippets that don't feel overwhelming.”

A small technology company for a DEIB focus vendor

Another critical factor to take into account is the amount of support your organization might need from the vendor. One way to gauge if the vendor can meet your needs is by looking at the vendor’s size and whether it has the in-house expertise needed.

Currently, most vendors are relatively small, with almost 70% employing fewer than 50 people (see Figure 21). These small vendors might be better suited for organizations with less complex needs (e.g., smaller, limited number of locations / geographies). For orgs with global operations looking to roll out initiatives on a wider scale, larger vendors might be better able to meet your needs. That said, vendor size is clearly not a direct determinant of capability, so it's critical to fully understand the vendor’s offerings.

“ Still very small team—needs more manpower—is not a global solution.”

A midsize financial company for a DEIB focus vendor

Your organization may also require additional expertise or services beyond tech, such as consulting services, or access to resources or communities. From our survey, 42% of vendors offer additional services beyond their tech (see Figure 22). Orgs just starting on their DEIB journey can leverage such solutions to better understand the complexities of the issues around DEIB or to seek additional customer support if needed.

Of the 42% of vendors which provide additional services, about one-third offer services for the assessment and diagnosis of your current state and D&I maturity (see Figure 23). These solutions can be leveraged by orgs looking to expand or reenergize their DEIB efforts, and are in need of insights on where they currently stand.

Almost 30% of those which provide additional services, offer training and resources around D&I learning, which can be of particular use to those looking to solve challenges like unconscious bias. About 40% of vendors help customers manage companywide efforts around DEIB or can help you develop a strategy—ideal for orgs that are just beginning on their DEIB journey and need some extra support (See Figure 23).

“ is a great way to assess where a company stands in their D&I understanding, commitment and strategy, and provides the feature to track and measure D&I activities to develop a roadmap to achieve the desired outcomes to support the organization's goals and objectives.”

A small professional services company for a DEIB focus vendor

In the following checklist, we offer some key questions to help you better understand your organization’s needs. Use these questions as a checklist when beginning your DEIB tech selection to determine where you currently stand regarding your DEIB needs and to kick start your discussions on technology selection.

Auditing in-house tech

As we mentioned earlier, many vendors have added DEIB features to their products in the last 2 years. Given this development, your organization may already have some capability in this area. Thus, your org may already have a “feature” or “friendly” technology that can be leveraged for DEIB purposes.

Your organization may already have a “feature” or “friendly” technology in-house that can be leveraged for DEIB purposes.

For example, some of the new vendors in our study are people analytics tech solutions that have developed DEIB features—allowing users to analyze different cohorts, genders, or groups of employees to understand their levels of engagement, development, and overall experience. Orgs with existing people analytics solutions may find such capabilities embedded in the technology.

Another example of existing tech that has developed DEIB features is HRIS / HCM tech solutions, such as Workday, SAP, and ADP:

• In 2020, Workday launched its Value Inclusion, Belonging, and Equity (VIBE) Central, a dashboard that brings together a company's diversity and inclusion data, best practices content, and reporting. The company also launched the VIBE Index, a metric that allows users to gauge their performance.²⁷
• SAP (via SuccessFactors) offers users the capability to monitor recruitment and management position data for women and underrepresented people, attrition and retention rates, and supplier diversity statistics.
• ADP offers a pay equity tool within its HCM suites.

The following checklist includes a few key questions to consider when auditing existing in-house technology. Compare your results with the list of available tech in the market to help you narrow your choices.

What’s Next

Given the findings from our study, we offer a few trends that we expect to see in the coming 12-18 months.

1. Continued integration of DEIB tech into all areas of talent
We expect to see more HR tech vendors add DEIB features / functionalities to their solutions and, thus, address a wider range of talent areas. And, while we did see a shift away from a heavy focus on TA and toward more solutions addressing more areas, we expect to see this trend continue and grow. Moving forward, more orgs will be looking to address all talent management activities, such as recognition, performance management, and talent mobility, through a DEIB lens.

2. More focus on inclusion and belonging
Recent research reveals that 52% of people choose culture as the primary reason to work at a company.²⁸ The recent addition of D&I ratings and demographic information for companies on Glassdoor also reflects the growing importance that job seekers place on these issues when considering new roles. We expect to see more orgs leverage DEIB tech to measure and improve their inclusion and belonging.

3. Greater expectations to drive DEIB actions
As orgs feel the pressure to take a stand, and act against systemic racism and gender discrimination, they’ll no longer be satisfied with technologies that only go so far as providing data on the current state of DEIB and identifying gaps. DEIB tech must be able to:

• Make recommendations, and highlight and prioritize specific actions for leaders
• Connect these actions to business outcomes
• Offer scenarios for how it may impact the org if those actions aren’t implemented

4. More accountability and transparency at all levels
Related to the point on actionability, we also expect to see tech drive greater accountability and ownership for DEIB at both the individual and organizational levels. Democratization of insights on actions around DEIB can encourage individual employees and leaders to take greater responsibility and ownership to monitor and change their behaviors accordingly. Tech can help employees and leaders understand how their daily actions may affect DEIB outcomes and make appropriate recommendations.

Conclusion

The events of 2020 have shifted the emphasis for organizations to act on DEIB from “need to do in the near future” to “need to do it right now.” The call for orgs to act on these issues and the urgency to show results have never been greater. The tech market is responding to these changes, as is evident from the growing DEIB market and capabilities: It’s time for organizations to step up and do their part, too.

DEIB tech can play a crucial role in helping org move the needle, provided it's leveraged thoughtfully. Today's buyer has more tech choices than ever before, which also comes with greater associated risks. However, leaders must remember that DEIB tech is only one part of the entire process—and, without proper alignment with the overall purpose, a comprehensive strategy, and a degree of accountability and transparency, technology in itself won't be able to bring about any lasting or meaningful change.

Appendix 1: Methodology

We launched our study in summer 2020, with a vendor survey that ran from June-August 2020. A total of 45 vendors completed our survey: One vendor offers 2 DEIB-focused solutions and another vendor offers 3 solutions—thereby, bringing the total number of solutions in our study to 48.

Once we collected the data, we reached out to vendors for reviews, clarifications, and to collect any missing data. We combined this with publicly available data on vendors that we found through our own research, bringing the total number of identified vendors to 196. We conducted our analysis in November 2020 and the report was written during December 2020-January 2021.

For this report, we added a customer poll, so that we could better understand the challenges and areas that DEIB tech is being used for, and user satisfaction levels with the vendors. We also created a robust evergreen DEIB tech tool, which serves as the repository of vendor-specific information. This new tool includes updated data and info on every vendor that participated in the research, including their capabilities and customer NPS scores.

Vendor Demographics

The majority of vendors (80%) that participated in our study have their headquarters in North America. Of the remaining, 16% are based in Europe, and 4% in Asia-Pacific or Australia (see Figure 24).

In 2021, the majority of investments in DEIB tech came from 5 industries—technology, financial / banking / insurance, healthcare, professional services, and pharmaceutical / chemical / life sciences (see Figure 25).

 

DEIB Tech: Its Time Has Come

Global pandemic. Protests. Elections. Riots. (And whatever else happens between when we publish this article and you read it.) Needless to say, the last year has been rough. It laid bare our differences in stark relief. Shown how events impact diverse people differently. Perhaps it caused you some measure of disgust, despair, or even depression. At a minimum, it likely contributed to exhaustion.

But, at the same time, the last year has also revealed our underlying humanity. The extent to which we care about other people. The depth at which we hold our beliefs about our country. The potential we have when we work together (hello, COVID-19 vaccine!).

Given all this, there has never been a greater need for a focus on diversity, equity, inclusion, and belonging (DEIB) – both in our society and in our organizations. We have a need to understand each other and to work together, more than ever before.

Organizations throughout the world have recognized this, from top leaders to DEIB leaders to managers and employees. It’s for this reason companies are talking about DEIB more in their earnings reports than ever before and why the number of DEIB job openings has skyrocketed. The thing is this: organizations cannot just talk about DEIB and hire people to lead it. That is a good start, but it’s not enough. Organizations need to change their systems, practices, and behaviors. The change cannot just rely on individuals – it has to be baked into how the organization operates.

This is where DEIB technology can help, as it has the potential to build in practices, behaviors, insights, and recommendations that address bias. It can also provide insights about what is actually happening with people (versus relying on anecdote-based understanding) at the moment of critical decision-making about talent.

Tripping down memory lane

When we first began studying the D&I tech market in 2018, the #MeToo movement had thrust diversity and inclusion in the workspace under a spotlight. Stories and accounts of workplace discrimination, harassment, and unethical behaviors toward women in the workplace led numerous businesses to pledge to change their policies and take action.¹ As a result, organizations began to feel a greater need for systemwide solutions.

In 2018, we launched our first research study on this topic, and we published a comprehensive report, Diversity & Inclusion Technology: The Rise of a Transformative Market, in February 2019. The study included a list of all the D&I vendors we identified and was accompanied by a detailed vendor landscape tool (with 2 updates since). As we shared in our initial report, tech can play a transformative role.

Fast forward to today

We (still) find ourselves in the midst of health, social, and economic crises. 2020 was not an easy year for anyone, but it especially impacted diverse people in many significant ways, including:

• Women left the workforce in record numbers
• Lower-income earners saw their jobs evaporate
• The murders of George Floyd, Breonna Taylor, and others disproportionately impacted the Black community

Many companies have responded by making pledges or promises in support of the #BLM movement.² A large number of them have focused on increasing diversity levels within the companies, both at the employee and leadership levels (for examples of such corporate pledges, see Diversity, Equity, Inclusion & Belonging: Creating a Holistic Approach for 2021).

As the pressure to follow through on these promises increases, leaders must develop strategies to achieve them––and we believe that DEIB tech represents one of the critical components of the process (see Figure 2 further down). Sophisticated tech––such as artificial intelligence (AI), deep machine learning, natural language processing (NLP), and organizational network analysis (ONA)––can help leaders manage DEIB better and more easily and are increasingly becoming more accepted as essential tools for people practices.³

Through this report, we aim to achieve 4 things:

1. Help leaders understand the role of DEIB tech
2. Provide insights on the state of the DEIB tech market
3. Highlight the talent areas focused by vendors
4. Guide leaders who may be looking to make tech investments

Key Findings

The study covers three major areas and how they have changed since 2019: the DEIB tech market, talent areas vendors focus on, and what buyers should consider before investing. We also address what we see coming next. Some of the key findings from the study include the following:

1. Three major shifts punctuate the current DEIB tech market
   • In previous years, leaders were especially focused on gender; in 2020-21, the emphasis has evolved to include a focus on race and ethnicity.
   • Social justice movements and conversations around discriminatory workplace practices and behaviors have led to greater attention to inclusion than ever before.
   • The role of AI in mitigating bias to enhance DEIB has come front and center, and more approaches have been introduced to address this issue.
2. The DEIB tech market is hotter than ever
   • The global market size is estimated to be $313 million and growing, up from $100 million in 2019.
   • The number of HR tech vendors offering features or functionalities that cater to DEIB as part of their solutions has increased by 136% since 2019.
   • The total number of DEIB tech vendors increased by 87%, with a total of 196 vendors in the market for 2021, compared with 105 in 2019.
3. People analytics for DEIB has arrived
   • Lack of analytics and insights on DEIB is the primary challenge the majority of vendors help their customers solve, hence the growing number of solutions. providing DEIB analytics in 2021 compared to 2019 (28% vs 26%, respectively).
4. Small-sized organizations and knowledge industries remain the main customers of DEIB tech
   • The largest customer category is small-sized organizations (those with less than 1000 employees), who represent almost 30% of all DEIB vendor customers.
   • However, these small organizations represent a smaller percentage of DEIB vendor customers in 2021 than in 2019, and there was an increase in the percentage of customer organizations in the 10,000-50,000 range.
   • The industries most likely to be DEIB tech customers are concentrated in knowledge industries, namely technology, financial, banking, and insurance.

Check Out the Full Study and Tool

The full study (available to members) has lots more information than what we’ve detailed here, including many more details on the market, customer quotes and feedback, and checklists for leaders interested in DEIB tech.

In addition, we encourage you to check out the brand new, fully redesigned DEIB Tech tool, which is available both to members and non-members. You can look at the 196 vendors in each of the four talent areas and their relevant sub-categories. RedThread members can click through and see details on individual vendors.

 

 

RedThread members can see the areas of talent vendors focus on, the top industries served, vendor capabilities, strengths, challenges addressed, and customer feedback (see Figure 3). We provide the maximum amount of information we can, based on what vendors shared with us or what we were able to find publicly available. This tool is designed to be evergreen, so it will be updated continuously as we conduct briefings throughout the year.

 

A Thank You

This study involves a significant time investment from everyone who participated in its development. We want to thank all of the vendors and customers who gave their time, energy, and expertise to make this such a robust study and tool.

If you have any questions about this research or about becoming a RedThread member, please contact us at [email protected].

 

 

Our study into the people analytics technology (PAT) market explores the current vendor landscape and how the market has changed since 2019. The year 2020 provided people analytics technology (PAT) with an unexpected opportunity to show its value and technology vendors shifted their focus to help customers meet their most pressing challenges. As a result, the PAT market saw continued growth. This infographic summarizes the customer challenges that vendors helped address, the changes in the overall market size, and provides considerations for buyers to keep in mind before investing in PAT.

Members can access our full report People Analytics Tech 2020, and the tool here. Non-members have access to an overview of the report here.

DEIB Technology Tool

This tool provides information for leaders, their teams, and their orgs on DEIB tech vendors, the capabilities they say they offer, and their company details. To learn more about the DEIB tech landscape, read the
DEIB Tech 2021 Overview of the report.

 

Explore the tool

• Click to select the boxes. The vendors that offer solutions in the selected categories will display in a list below the tool.
• To search for a particular vendor, click the magnifying glass icon.
• RedThread members who are logged into the website can click on vendors' names to view more details.
• Click twice on the circular arrow to clear filters and start over.
• Hover over any field to see a definition of that term.

New vendors

If you would like to be included in our tool, please take our survey!

Existing vendors

If you are already included in our tool, but would like to share updated information, feel free to reach out to us!

Give feedback

We'd love your suggestions for how we can improve this tool.
Or just email us at [email protected]!

This tool provides information for leaders, their teams, and their orgs on DEIB tech vendors, the capabilities they say they offer, and their company details. To learn more about the DEIB tech landscape, read the
DEIB Tech 2021 Overview of the report.

 

Explore the tool

• Click to select the boxes. The vendors that offer solutions in the selected categories will display in a list below the tool.
• To search for a particular vendor, click the magnifying glass icon.
• RedThread members who are logged into the website can click on vendors' names to view more details.
• Click twice on the circular arrow to clear filters and start over.
• Hover over any field to see a definition of that term.

New vendors

If you would like to be included in our tool, please take our survey!

Existing vendors

If you are already included in our tool, but would like to share updated information, feel free to reach out to us!

Give feedback

We'd love your suggestions for how we can improve this tool.
Or just email us at [email protected]!

Q&A Call Video

TRANSCRIPT

Introduction

Dani Johnson (00:00):

You don't want anybody in the world to hear what you're going to say, then, then we when we record so that we can provide this to a wider audience to our members. And so yeah, feel free to feel free to share, but please keep it friendly, especially after yesterday. So welcome to our first Q & A call of the year, which is coaching. I've been waiting to do this call for a while now. We've stationed and Heather and I have all had spots on coaching for about six months because we're seeing so much go on in this space. And so we're pretty excited to talk about it. And we're really thankful for those of you who submitted questions which will get us something to talk about here. Just a couple of things before we jump into your questions, this is RedThread.

Dani Johnson (00:50):

If you don't know us, then you should get to know us. We're awesome people. We're a research and advisory firm and we focus on these things. Our latest offering is a membership that we kicked off last fall. It gives you access to all the research. It gives you access to some analyst hours and makes sure that you're staying on top of everything that we're doing. So if you want more information about that, contact us and we'll be happy to share it.

Coaching & Mentoring: Differences?

Dani Johnson (01:14):

So a couple of things to start with, one of the questions that we always get is what is the difference between coaching and mentoring? And I forgot to put the source on this, but this is actually from Kent State University. Coaching is more performance driven, designed to, to improve the professionals on the job performance. If you think about executives, that may be a completely different skillset than somebody on the front line, but coaching is for performance to help people perform better on their job.

Dani Johnson (01:42):

Whereas mentoring seems to be a little deeper and a little broader, it's more development driven looking not just at the professional's current job function, but actually beyond that. And so it takes a much more holistic view or what would you like to do, you know, where would you like to go? Where are your skills? Have you, can I contact for you those types of things going on? So before I sort of, before we move past this slide, I'd love your thoughts on these two definitions. They seem to be the most common out there, but in your organizations, are you using different ones?

Speaker 1 (02:13):

You know, it's interesting I've coached different people on performance, but I've also coach different people on their development career. So for me, I didn't really look at it differently. It just depending what their needs were.

Dani Johnson (02:34):

Yeah. I think that's really fair. And, and quite frankly, I hadn't really considered the differences. And so until we started looking into the organizations vendors often, well, until we started looking at it a little differently vendors and organizations sometimes really separate those two things. And sometimes they're the same. What are other people saying or how are defining coaching and mentoring differently or are you?

Speaker 2 (03:02):

And we are. I'm just looking up. Cause, cause we're actually rolling out a program next week called developing a coaching mindset. So I have that. I have like kind of three things on the side of their vendor. It's a Venn diagram of mentoring, coaching, and feedback. Because I think people get those kind of confused with one another. And so you know, for mentoring what we're saying, we're positioning it as more of a longer tail engagement with somebody where it's focused on, you know, kind of helping somebody through, whether it's, whether it's a performance or development thing. Whereas coaching is more goal oriented and has a shorter kind of life cycle, if you will, where it's really focused on a specific goal or task that you're trying to get people through. So I'm actually, I'm just looking at my notes to see what my definition, is in it, excuse me, when I find it, I'll put it in, I'll put it in the chat just to share. But what, what we're saying is when we talk about coaching here a lot of people do confuse it with mentoring and they any kind of are using it interchangeably. So, so part of our educational program that we're rolling out next week is it's trying to get that delineation between the two. And when you, as a manager are putting on your coaching hat versus when you're either putting on a mentoring hat or recommending somebody to a mentor who is more of an expert in a specific field of study or specialty,

Dani Johnson (04:34):

That's really interesting. So, so you're looking at it as sort of longevity, like sell this immediate home versus longer term. The other thing that struck me about what you said is well, the question that I had was are they often the same people? Are you focusing on the manager, given that you're rolling out this thing as a manager that is doing the coaching and the mentoring?

Speaker 2 (04:55):

I think it's, we're coaching or we're educating managers on how to have more coaching conversations and, and be more of a facilitator in asking open-ended questions to help people drive the answers themselves rather than you being directive and giving it to them. And I think that's the nuance of a mentor. And I was just looking at my notes here where, you know, what, what you're saying is a coach asks open-ended questions to drive job performance, whereas a mentor answer answers, direct questions based on prior experience to support development. So I think a coach is more open-ended they may know the answer, but they're not going to give it to you right off the bat, whereas a mentor it's, it's much more let's cut to the chase and get you to know quicker proficiency.

Dani Johnson (05:39):

That's really interesting. So you're also looking at it in terms the manner in which it's still delivered. That's interesting.

Speaker 2 (05:44):

Yeah, we're trying to, yeah. We're, we're trying to start with the manager and then a manager. If they recognize a coaching opportunity, they would go into coaching mode. Or if they, if they've recognized, Hey, this person really needs some additional support or that support of an expert, they may, you know, which may not be, you know, if I'm a manager and I'm like, and there are people asking me about finances, you know, maybe you should go find a mentor who really specializes in finances. It may not be me as a coach. I mean, a manager coach. It may be me pointing someone to a resource that they might connect with to help them through.

Dani Johnson (06:14):

Okay. Others.

Stacia Garr (06:21):

Okay. Can I, can I share something in here? Oops, sorry. You go first.

Speaker 3 (06:25):

Oh, no, I you know, I am three days into a new role with a company called coach hub. And so this is really an opportunity for me to learn from you all. But it's very interesting to hear Kelly, you know, kind of how you've been thinking about those three different pieces for coach hubs specifically right now, our focus is on leadership development coaching but democratizing that capability across organizations and not so that it's not just an elite you know, kind of opportunity. And that being very similar to what you described goal-oriented although not necessarily short term where a coach can help an individual, whether they're leading others or even an individual contributor or you know, someone that's got high potential to help them understand where their areas of opportunity might be and just decide what they would like to focus on on a long-term basis for growth. And then kind of see how they're doing and measure that over time.

Dani Johnson (07:55):

Yeah. I think that's an interesting observation. Debbie, congratulations on your new role as you, as we go into the next slide, that's one of the things that we're seeing is it's coaching really is being scaled at a level that we haven't seen before. So that's a really interesting observation. Any other comments on this one before we, we click over?

Stacia Garr (08:13):

I just want to add something. Yeah. And, and, or a question maybe for the group, which is, you know, I do a lot of our work on diversity, equity, inclusion, and belonging. And a lot of times we see sponsorship kind of being in the mix here of coaching, mentorship, and sponsorship. And so I'm wondering if you all are thinking about that kind of in this, this cluster of concepts, or if that in your organizations tends to kind of live over within the diversity and inclusion group where it's not something that you're focused on at all.

Speaker 2 (08:51):

I'll just, I'll jump in and just say it's being, it's being brought up more of kind of organic grassroots topic from our employee resource groups specifically from the women's network and, and black employee networks. And, you know, so they're bringing it up as, Hey, you need to find a sponsor. You need to find an advocate, kind of create your own board of directors, et cetera. We haven't taken an ethic, so I sit at the corporate level and we haven't taken it on as a specific discrete project with resources and programs around it. In my, like how I view it is that's all part of social learning, what I would bucket under social learning. So to me, social learnings, you know, that peer learning that includes, you know, your mentors, your coach, your expert, your advocates, your sponsors. And so that's how I categorize it, at least in my brain, but we haven't created a specific program around it. That's putting it in people's development plans or, or even compensating people for, for being a sponsor,

Stacia Garr (10:01):

Any others or any thoughts on this?

Speaker 4 (10:05):

Just one thing I mentioned, just a flavor of coaching that hasn't been mentioned is because we see it along with our clients with like process roll out. So if you're implementing agile or project management or six Sigma or something like that, there's typically a coaching component. I think it fits the definition. You have, it is performance driven. But it's not strictly like you know, your manager is your, is also your coach. It's a, it's a separate role.

Dani Johnson (10:34):

Okay, cool.

Speaker 5 (10:35):

It's definitely a separate for coaches and it has been quite a firm as we're trying to position the term coach within different roles. We've developed internal coaching as well as professional coach. So the target disease is very much in developing, not an individual, but it can be teams or it can be organization as well. And it's differentiating the role and this case because you can learn and demonstrate coaching skills without being a coach per se. So that's quite a key difference as well.

Dani Johnson (11:22):

So it sounds like, you're building it into the culture. So it's not just, it's not just a role that somebody has, you're actually building it deep into the culture so that everybody has that skill.

Coaching & Mentoring: What We See

Dani Johnson (11:38):

All right. Let's switch over to some of the things that we've seen in the last little while, which is why we're talking about this. Cause I would like to research it a little bit deeper this year. The first thing is that we're just seeing more of an emphasis than we ever had before. So it's existed forever.

Dani Johnson (11:54):

I mean, yes. And since we all use the apprenticeship model but there seems to be much more of an emphasis on it. And with that, we're seeing it being pushed down to the lower levels. It's not just for senior leadership or executives anymore. It's actually being pushed down quite far in the organization. And we're seeing vendors like better up and others that are providing an offering that allows this to happen at a much more scalable level. And then we're seeing more of it and I wrote this slide, so Stacia please jump in, but we're seeing more and more handled by the L&D functions. It's, it's being considered part of the learning process rather than a standalone thing. Some of it's still exists in executive development and leadership development, but a lot of it is being wrapped into just L&D Hey, you know, coaching is part of what we do to learn in this organization.

Dani Johnson (12:45):

So like how do we, how do we integrate it into the culture? So it's part of how we learn versus a separate standalone thing to peoples feel special. And it costs a lot of money in order to implement in the organization. And then we're also seeing more emphasis on different kinds of coaching. So we talked about integrating it into the, and we'll talk about these a little bit further because some of the questions that were submitted, sort of talk to these, but we're seeing different types of it. So peer to peer coaching, manager coaching, external coaching, all of these different types of technology, technological coaching coaches on the shoulder, the technology we're seeing a lot of those sort of being handled differently in organizations that you've seen before. It used to be, you got a coach from the outside, you brought it in, you sat it in front of this EO and they talked and they figured out what you needed and then pick up everything was magically better.

Dani Johnson (13:39):

We're actually seeing, you know, as organizations are starting to figure out how to scale this, all these different ways of doing it, we haven't necessarily seen it before. We're also seeing different topics of coaching, so used to be just performance coaching. But in the last couple of months, things like financial coaching, financial wellbeing coaching, we've seen wellbeing coaching, we've seen health coaching. And so a lot of these things are being offered as benefits to organizations, to help with burnout, to help with stress, to make sure that that we're taking care of the whole employee, which I think is really interesting. And then the last one is we're also seeing just a ton of tech. And we'll talk about that in a little bit that is enabling some of this stuff. So let me talk, well, let's stop again on this slide. What are, what are we missing? What else are you all seeing when it comes to coaching and mentoring? Or do you have comments on anything on the slide?

Speaker 1 (14:34):

Yeah, I'm interested in more either discussion on the tech side. That's kind of an area where I got interested in, in it last year with the app from noom and, and and then I have seen it a little bit work with reemphasizing some of the learnings you take away from a, say a class or whatever, and then reform some of those learnings automatically whether by text or email so that, you know, all the things you forgot in the class you remember, and then you start practicing them. So I'm interested in that cause I'm I'm wanting to pilot something next quarter in our company around that. So anything around that would be interesting.

Dani Johnson (15:28):

Okay. Yeah. We'll, we'll definitely hit that question. We've got some data and some slides that'll, that'll help understand that space a little bit better. What else?

Speaker 3 (15:38):

Yeah, just to kind of follow on that, I happened to have spent a lot of years in the space of learning analytics. And you know, one of the things that I know from that time is that the effective application of what's learned in any program is largely driven by the support that they get on their job. And it's always been a tremendous challenge for organizations because they have to first give visibility to the managers into, you know, that program and what is expected. And then the manager has to have the time and attention to be able to follow along. And that's always been a challenge. And so, you know, I see, you know, with the tech companies you know, part of the opportunity is to help elevate your return across your learning investment. You know, with kind of supplementing that with having a coach, be able to support your people to actually apply those skills and make actual behavior change.

Dani Johnson (16:50):

And I think that speaks to kind of maybe why L&D is taking a lead on integrating some of this into the organization because we are seeing it sort of be a carry on from the formal learning experience in ways that we haven't seen before. Kelly mentioned that something that may be missing from this is non-human coaching and I've lumped that into tech. We'll talk about some tech.

Speaker 2 (17:13):

Okay. When I looked at tech, I was thinking for some reason in my brain, I was thinking re-skilling people like moving people from one position to another and that the distance thinking technical people. So if that's it, if that's what that means, then yes, that's great. And then the other point that I put in was it's also being outsourced, which I don't know if that's something that you would capture under different kinds of coaching, because it's obviously it's going to take me a lot longer to get the culture, to adopt coaching as part of a mindset and, and practice. Whereas like you mentioned some external lots And lots of people are cropping up in this space to provide that coaching service for us. So, and that's definitely something that we're rolling out this year for us at our companies.

Dani Johnson (17:59):

Outsourcing it? Interesting. That's interesting.

Speaker 2 (18:02):

Yeah. Cause our, our theory is that you can to really understand what coaching is. You need to experience it for yourself. So we're rolling it out to our people managers first.

Stacia Garr (18:17):

One thing I wanted to add here, Dani, cause you were talking about more of an emphasis than before and why that's happening is maybe just kind of a little bit of a zoom out. And we think about the changes that have happened with performance management and the focus on kind of a much more continuous focus on conversations and, and ongoing conversations and the like you know, when we were at burst and we used to talk about the competitive assessment model of performance management and the coaching and development model of, of performance. And I think, you know, we've now seen just the complete domination of the coaching and development model of performance. And so that's then cascading down into, well, how do we make sure that managers can have those conversations or the entire organization can, can support in these conversations? So I think that's another reason why we're seeing this just so much more broadly than we did, you know, even five years ago.

Dani Johnson (19:06):

To that point, Stacia, I also think we're seeing the expectations of the employees change. So they're in a lot of cases they're forcing these conversations where they didn't force them before. And the messaging from the organization is you should be having these conversations with your manager which again, sort of forces it or encourages it in ways we haven't seen. Yeah, absolutely. Other thoughts on this, what else? Or what else are you all seeing that we, that we missed?

Stacia Garr (19:36):

Okay.

Speaker 5 (19:37):

Maybe not that you missed, but definitely, you know, having a coaching accessible to nearly everyone in the organization is definitely something that is happening.

Dani Johnson (19:50):

Yeah. Yeah. I definitely think so. We are doing a podcast on skills and we had a really interesting conversation yesterday about sort of the equalization that, that, that organizations are trying to do, offering opportunities to everybody in all levels of the organization where it used to be just reserved for, for those that they were investing in in quotes, that's in quotes for those of you who are not watching. I think that's, I think that's really interesting that coaching is sort of following that as well. It's it's following employees all the way to the bottom of the organization, not just being held at the top.

Speaker 5 (20:26):

With something that is still not completely clear, I think, you know, in, in behind the term coaching, what do we mean by coaching? I think that quite various understanding underlying what coaching is.

Why is the coaching and mentoring conversation important right now?

Dani Johnson (20:41):

Yeah, yeah. I think you're right. We, we throw out some definitions that are fairly common at the beginning, but every organization of handled it differently. Yep. Yeah. All right. Let's get to your questions. The first question we got is why is the coaching and mentoring conversation so important right now? And I want to, I want, before I, before we take a stab at that, I'd love to open it up to you all. Why do you think this coaching and mentoring conversation is so important right now? And maybe, maybe I'll start by throwing out a couple of reasons. I think the first one is we've seen the workplace radically changed in the last nine months. And some of the connections that we used to have with peers and with the organization have been lost or diminished just because of the way that we're working with with folks now.

Dani Johnson (21:36):

And so even though we saw sort of a wrap up to coaching and mentoring before it has become a very, very important thing, particularly with respect to managers and how they connect the individuals back to the organization. So I think one of the reasons is just, just the, just the environment that we're in has, has forced us to think a little bit more about how we are coaching and how we are mentoring individuals and how are we getting to know them given that we don't see them every day. We're not meeting in the, in the break room, et cetera. So I think that's one of the reasons do, do people have other ideas,

Speaker 1 (22:10):

You know, job roles and skills are just rapidly changing. So what you may have graduated and come in with over the years tends to really drastically change now. And, and so I think people in some people are, I wouldn't call them lost, but you know, don't really understand all their options and are struggling to, you know, kind of develop their own career paths. And so they need some support from others that may be, can give them some guidance, ask those right questions, because if you don't, they tend to languish in the same position for years and tend to become obsolete almost in their job roles.

Dani Johnson (22:54):

I think it's a really interesting point. We're doing some research right now on mobility and I'm actually writing the final paper right now. And one of the things that we've realized is that most of the organizations that we talked to said, well, I don't know, you know, we, we want high employee ownership of their own careers, but none of the systems and processes that are in place to support high employee ownership of their own careers. And so I think what you're sort of alluding to is that exact thing, they need help to figure out what their options are and they need the connections of their managers and other people to figure out how to get from point a to point B if we really want them to own their careers. Other thoughts?

Speaker 2 (23:31):

So two things for me with coaching, I agree with what Stacia was saying earlier in terms of a lot of companies have moved to continuous performance management and being able to coach in the moment, give feedback in the moment.

Speaker 2 (23:46):

So to me, that coaching aspect of it, I think it's, it has become more important for managers to kind of play that role and really recognize what their role is in, in that kind of new framework. So for us, that's why we're, we're talking about it is to, you know, help drive high performance and get to that high performance culture, which is which coaching is a cornerstone. For mentoring, for me, what I was thinking is, you know, there's, there's a lot of experts internally that aren't being tapped and a lot of knowledge that's about to potentially walk out the door. And so I think mentoring and especially having kind of a formalized program around mentoring that helps people to connect with one another in an easy way, really helps get to that knowledge transfer from one generation to the next potentially, or even a generation upwards. Right. So I think mentoring is just a good,

Dani Johnson (24:44):

Oh no, we lost, you lost your sound.

Speaker 1 (24:51):

Follow on to some of the discussion. Maybe you had earlier around coaching and asking questions. You know managers in the past, I find you know, when I started as a manager, I thought I needed to be the smartest person in the room, and I needed to tell people what to do. And over the years I realized that's really not the right formula, especially when you have really smart people working with you. And so being a coach and asking the questions and being more facilitative I've become a lot better in that area. And I think, you know, other managers should emulate that type of behavior where they're asking questions and empowering their people versus telling them what to do. And I think you know, our employees of today are asking for that.

Dani Johnson (25:49):

I think that's a good observation.

Speaker 5 (25:52):

Yes. I would agree. I think under there's as well as the complexity of the environments we are in now more than ever, but usually, you know, it's getting things are getting more complex and there's not someone having the answers you're looking for and when they expertise are as well, you know, very deep and complex you need people to be able to come up with novel solutions to problems and coaching can really help to tap into people's own potential and expertise, and not only for their own growth, but as well to help them develop their own and new solution again for the individuals, but as well for the teams in terms of a team coaching, for example. Yeah. Yeah.

Speaker 1 (26:44):

I agree.

Who are the main recipients of coaching, and what are the trends on that?

Dani Johnson (26:48):

Let's just in the, in the interest of time, let's move on to the next question, which are, who are the main recipients of coaching and what are the trends on that? I think we've already talked mostly about this in the introductory area, mentoring and coaching, unfortunately still resides at the top of the organization. It just does. But we're seeing it, we're seeing it creep down more and more, and we're seeing technology enable that and make sure that it is, I think you called it democratized, which I'm assuming, you know, it takes advantage of those within the organization to, to make it happen. But then again, there are vendors that we'll talk about in a second that are doing all kinds of things to make that scalable and approachable, even for people on even the frontline level. Any other thoughts on this question?

Speaker 4 (27:36):

Yeah, I think you hit the I mean, executives, we also see a lot with new people leaders get some kind of coaching intervention, but like you talked about, it's just getting pushed into more and more places in the organization and the more and more it's getting democratized use your time for sure.

Dani Johnson (27:55):

Be a lot less sort of thing as well. It's not as formal and stayed and kind of yeah. Formal as it used to be. It seems to be creeping into all kinds of places, which I find.

Speaker 1 (28:08):

Yeah. The other thing is, I mean, the recipients, you know, executives tended to be the ones with who are receiving it and they still are today. In our company, we tend to outsource to, you know, high end coaches for our executives. But we can't do that for everybody in the company. So that's why we're looking for ways to make it more affordable to give everybody the opportunity, maybe not, you know, valet you know velvet glove treatment, but some access to some type of coaching for everyone. Yeah. I think also you know, the younger generations perspective is a lot more around PR personalized experience in general. And so the appeal for them is, you know, a high focus on development of course, in their careers. And so I think that also plays a role in organizations being motivated to expand upon who is the recipient of coaching, especially now, as you mentioned earlier just given the environment, the concern over mental wellbeing you know, kind of supporting a diverse culture and, and all of those factors are kind of leading organizations to start thinking about how do we, you know, better support our people.

How can technology enable coaching conversations for performance and engagement?

Dani Johnson (29:41):

Yeah, I like that A lot. All right. Let's move on to the next question, which is how can technology enable coaching conversations, board performance, and engagement. So this is a question that it seems like most of you have around the technology behind and Heather Gillmartin has done a ton of work on our technology landscape or learning technology landscape, which encompasses a lot of these things. And so I've included three, three slides from that discussion. Heather, if you wouldn't mind walking through it, that would be very,

Heather Gilmartin (30:17):

So basically they're, we've seen tons into, as you guys know that we've seen tons of tech providers jump into the space too, as we've talked about democratized coaching in various ways. And they're kind of some, some of the providers do things like just match employees with a human coach, others do more of kind of a coach, Oh, I think this is jumping to the next slide. But yeah, yeah, but basically, yeah, so we're seeing just, just lots and lots of new functionality coming up and basically three different types of coaching that are coming out. So the first is, as I mentioned, if you can go.

Dani Johnson (31:05):

Would you mind if I just stop on this side for one second. I think one of the really interesting things is if you look at some of the, so the nameplates on this slide, you wouldn't necessarily consider them coaching softwares. So some of them you've got your traditional ones like river and Kronos is in there and Everwise. Ones that you would, would associate with traditional coaching. But when we asked them, Hey, do you do some sort of coaching? Every single one of these vendors popped up. And so we're seeing it, we're seeing new entrance for sure, but we're also seeing some of the old guard say, Oh, this is becoming a really important thing. And so we need to add this, this functionality somewhere in here, so that we're covering that part of our learning.

Stacia Garr (31:45):

I would, I would also add some who are kind of crossing over from what would be their traditional area to include nudges that are designed to help with coaching. So you think about Humu, you know, they're an engagement platform fundamentally, but you know, they're real different from other engagement platforms is, is the nudges and the way that they're trying to get people to change their behavior. I think actually I think that one's a really interesting one.

Dani Johnson (32:09):

I'm glad you brought them up. Stacia because they are an engagement platform. That's how they, that's what they say, but the way that they're doing it as they're nudging, both the manager and the individual at the same time, Hey, Susie, doesn't speak up in meetings, Susie, you need to speak up in meetings. But at the same time saying to the manager, Susie, doesn't speak up in meetings, do what you can to focus, needs to speak up. And so it sort of hits it from both sides, which is a different way of doing it. But yeah, so, so coaching is sort of being a station mentioned that's being implemented or integrated all of these other things that we wouldn't necessarily consider coaching in the past. Okay. Sorry, go ahead.

Heather Gilmartin (32:45):

No yeah, I think if you can go onto the next slide. So some, as we, as we talked about some vendors pair, a pair of humans, human with human interaction. And I think this is obviously this is not going to go away because there's certain kinds of, there's certain conversations and types of conversations that you can't have with with technology. And so the, the, the interesting thing that's happening here is that these platforms are allowing scale or they're, they're allowing that matching at scale which is something that traditional coaches we're not, we're not able to do. Right. just as, as, you know, sort of a single coach or a coaching consultancy type organization would not be able to sort of reach out into the organization and say, Hey, these people should talk and these people should talk and these people should talk. So that's really the power of, of these kinds of matching platforms.

Dani Johnson (33:51):

Yeah. And this, this one, particularly like these, the brands that just that you're seeing on the screen are ones that pair external coaches with internal people. And so they're not necessarily using the peer to peer, they're actually matching external to internal, which is the most traditional way that we think about coaching, which as has everybody here on the phone has mentioned is definitely not the only way to do it. And we're seeing much more internal coaching and culture building than we've seen before.

Heather Gilmartin (34:16):

Yeah. And then the, the other type of coaching is sort of a coach on the shoulder, sort of you know, examples might be a Fitbit. That's telling you, you know, how you're doing in your performance. Your, you know, how, how you're, how you're doing it on a moment to moment basis. Another might be you know, a platform that sits on top of email and, and gives you feedback on how, on the language that you're using with your teams. The one, that's the one that pops to mind, my husband just got like a golf simulator and it gives them all kinds of really great feedback on like, was his club head open or closed. And what I love about about these platforms and Dani, you mentioned, mentioned sort of put, you know, pushing down the information to the people that can take action on it.

Heather Gilmartin (35:10):

What I, what, so for me, you know, if you think about coaching, you think about a coach. And I think I might've been Kelly that mentioned this, or maybe it was Debbie that mentioned this early on, right. That you're asking, you're asking open-ended questions and you're helping people get to their own solutions to a problem. That's sort of the fundamental ethos of what a coach is. And I initially had this assumption that only a human could do that. And what I realized, especially, especially by watching this golf software, which is weird, but was that, that in simply providing the data back to the person, to whom it is most relevant, that is sort of prompting the same type of 10 prompts, the same type of self-reflection and, and iteration and practice that, that yields really good improvement that that's sort of what a coach is for. So I would say you know, it's not, obviously it can't solve all problems, but I think this, this, these types of technologies are really, really powerful in prompting behavior change in the people who are most interested in doing so with facts.

Dani Johnson (36:25):

I think a lot of these solutions are super elegant. So Cultivate, as Heather mentioned, it sits on top of your email and sort of reads your email for the last six months and helps you understand how you interact with your teams. So it can provide famous tribe.ai has all kinds of functionalities, but one of the things it does is it listens in meetings to tell you how much you talk versus how much you've listened to the questions that you answered. Cogito I think Stacia knows a little bit more about, but it does something similar. And it's geared toward sales folks and you're on mute, but yeah, sales folks and especially customer service representatives, make sure that they're, they're gaining these skills as they go along as a part of the work. And then if you haven't checked out, Mursion, it's one of my favorites, part of it's.

Dani Johnson (37:09):

I just like the people over there. But they they're using avatars and situations. I remember when they first briefed me, they basically got on the phone and they said, okay, we're going to put you in this situation. Then it was a coaching situation where I was supposed to coach an employee instead of just using the technology, they actually have an actor or someone that sits behind. So it's a combination of this technology versus, you know, expertise on the backend to sort of make it better and clearer, but it reads your facial expressions. It measures your pauses. It helps you understand how you're reacting, how are you being perceived to somebody on the other end, which technology isn't quite good enough to do. But we also don't see a lot of that kind of role-playing happening with the real live mentors. And we definitely don't have the data that goes across different people in those same situations. So we don't know what's going on if we're not using a software like this. So I think these are incredibly fascinating. I've had several conversations with organizations that say, if there's not a person involved in it, can't be real coaching. But I'm kind of in Heather's boat. I think these types of softwares can offer just all kinds of data that people can add on that, that make it incredibly scalable for your organization. So we've talked about trying to remember if we.

Heather Gilmartin (38:31):

Kelly, what is Bravely?

Speaker 2 (38:32):

So briefly is kind of up and coming On the market for coaching. So, you know, when I think of BetterUp there, probably like top shelf, right? Bravely is more of an emerging platform that does connect people to external coaches. That's actually who we're going forward with. So we're, we're planning on rolling this out next month. Or also, I'm also trying to bring in cultivate as an AI coaching system as well. So so Bravely is much more accessible when you think in terms of cost per person per month. And it's unlimited coaching that you can provide for people, right? And they really try to align with the key moments that matter and the mostly around probably the performance management cycle, right? So they see a spike during goal setting, career development planning. But they're kind of pitch really is to make it more accessible to all employees.

Speaker 2 (39:29):

And how I've been positioning this since I'm doing kind of like human one-on-one coaching and AI coaching is, you know, I think about like a coach can tell you the things that you should be doing and all of us know probably what we should be doing, whether it's for our health or fitness or whatever, like you mentioned a Fitbit, but an AI is actually catching you in your behavior and it's passively listening and it's being able to show you those blind spots. Right. So, so that's how I'm trying to position it. You know, here is, you know, we're bringing in this whole coaching kind of philosophy and approach and, you know, one-on-one coach, you know, work with them and then you take it away and you, you know, you forget it potentially the AI can really help you catch whether or not you're actually applying it. So, so for me, it kind of marrying those two. And it's funny, DanI, that you mentioned Mursion as VR. That's another thing that we're planning on bringing in later on this year to practice with them, inclusion and diversity type things. I don't think it's probably what we're planning on doing. Isn't as sophisticated as being able to read facial expressions and things like that, which I think is pretty fascinating, but yeah, that's, it's very cool to see, you know, these kind of put together we're doing the right things. I'm happy. Like that makes me happy.

Dani Johnson (40:45):

Two questions for you, Kelly, first of all, you don't know Bravely, if you wouldn't mind facilitating an introduction?

Speaker 2 (40:52):

Yeah. They've been, they've been fantastic with us. Yep.

Dani Johnson (40:56):

That's the first and then the second is toward the end of the year. Can we check in again?

Speaker 2 (41:01):

Dani you can call me anytime, but yeah, of course. Yeah. I mean, yeah, cause I'm not really struggling right now and maybe we'll get to challenges and things. And I think I submitted a question on the confidentiality aspect of coaching. Cause that is one where I'm putting a pretty big investment in this. So how am I going to prove, am I going to prove it out right now? Like I'm, I am really struggling with thinking how we're going to do that, but yeah, there you go.

How can we prove coaching is having an impact?​

Dani Johnson (41:28):

There's a question for your question. Thank you. This is the question, that's the question for all of L&D it's a question for all pretty much everything that we invest in as far as people. And I think it's a really good question. I know Stacia probably has an opinion on this. She's our people analytics person. Do you want to take a stab at it first Stacia and then I'll follow up with a little bit?

Stacia Garr (41:54):

Yeah, sure. I mean, I think like anything we need to be clear in the beginning, what, what we're trying to impact, right. So are we trying to impact that, that employees feel like they get better feedback or that we trying to impact actual performance metrics? You know, what, what is it that we're trying to impact and, and starting with a baseline before we, we begin the intervention and then measuring over time. I think, you know, obviously the, the challenges is that many of the things that we're trying to impact can be qualitative. And so that can be hard to measure. But what I have tended to see organizations doing more of is, is things just like my manager gives me actionable feedback, or I understand the feedback that my manager wants me to, to do, or they actions they want me to take.

Stacia Garr (42:41):

And then doing that as, as a baseline and then you know, basically happening, good old experiment, you know, control group in an, in another group that you're trying to see if the intervention actually made a difference. So that's what I've tended to see on this. Because I think, you know, just a like, you know, do I like bravely, you know, the smiles shades is just, it's not gonna, it's not gonna be so helpful. One thing I have heard of though actually in regard to one of these vendors, I'm not going to say who it, who it was was that but it was one of these coaching vendors was then it's important to make sure you understand that along the longevity of the engagement. So was talking with one organization that said, Hey, look, when we asked how people felt about this vendor, the initial response was actually great.

Stacia Garr (43:33):

But then when we correlated that against some of those metrics that I just mentioned around people feeling that their manager gave them great feedback, or even their manager's assessment of the employees change in performance. They found that those who had done, I think it was three or fewer coaching engagements. They actually, they actually performed force on all those outcomes. But when they had gotten up to a threshold of, I think it was six or more of those interactions, they performed dramatically better. And so kind of having that sense of the longevity and the potential impact in doing a bit of a deeper dive on the analytics of what's happening with people could make a pretty big difference. So what they did is they went back to the vendor and they said, Hey, you know, w the three up to three is not acceptable. You need to be able to ensure that we're getting at least six reps with each of the people who are engaging with the coaching platform, blah, blah, blah. And they changed their whole approach based on that analysis of, of what was actually happening. So I think, you know, if you need to kind of be thoughtful in terms of what may truly be driving, changing behaviors and over what time period.

Dani Johnson (44:41):

Yeah. Kind of, kind of tag onto that. I know L&D particularly, but HR in general has a tendency to go after the, the all important ROI. I don't, this particular thing lends itself to very well to an ROI. I don't actually think anything does, but particularly this one first of all, because it's too easy to gain. And secondly, because the ROI is a lot of times, as Stacia mentioned intangible and qualitative versus quantitative. And so understanding that the behaviors that you want at the end, and then looking for ways to create actionable metrics rather than dead metrics like an ROI, we don't want to know how we did. We want to know what we need to change in order to continue to, to drive those behaviors is a much deeper problem and much harder to sell, but that actually gets you where you want to go.

Dani Johnson (45:32):

I think the other thing to maybe take into account is understanding what the expectations are from the organization. So what, what do they mean by having an impact? What are they trying to change? How, how, what kinds of metrics that they like to see that are going to help them get where they are? And so a lot of it is communication and making sure you're on the same page, but a lot of it is also relationship making sure that you're constantly checking in with them, making sure that any other thoughts here on this one, has anyone else tried this?

Speaker 5 (46:07):

Maybe there's also, you know, the beginning of the coaching, the contractual realization part where you decide and I'm with the coach, but with the managers as well. And maybe with someone with the HR for example, doing a, quite a PR what we call in France, quite we partied sessions where you have the coachee, the coach, the manager on someone from the HR where you, you, you discuss what would be the objectives of the coaching and you discuss upfront what could be the KPIs, so that you've got your reference points to come to otherwise, you know, it's going to be very subjective and it is in the subjective part of it is. So you want to objectify something, you, you need to have two reference points to see the difference. You know, even if it's in perception from the coach and the manager, do you do perceive that changes happened? How can you see that? What has been demonstrated? So it's qualitative, but observable. So in some way, you, you, you can see the manifestation of changes.

Dani Johnson (47:13):

I think that's a really interesting point now that we've been talking sort of meta what the organization gets out of it, but you should always take it down to the individual level as well, and figure out what those metrics are. Those KPIs that you're trying to hit and have that conversation to make sure that it's at its meaning.

Speaker 5 (47:29):

That's a starting Point. I think, you know,

Dani Johnson (47:31):

Particularly where a lot of organizations are implementing coaching specifically for engagement really, really important thing. Thanks for bringing that up.

Speaker 2 (47:40):

I think that's where I'm struggling though, is getting down to that personal individual level cause right. So I have people analytics team who's really annoyed at me for bringing in a vendor that will allow us to get individual data because of the confidentiality, because we want to be able to say, okay, the managers who have higher engagement scores, you know, on our annual survey report have done these things, you know, and we're kind of locked out of being able to see and less people opt in. And so that's one of the things I'm going to be discussing is if somebody, if the people who are participating in it, if they want to opt in to let us know that they're actually using the service or not.

How do we tackle the issue of confidentiality and privacy?

Speaker 2 (48:20):

So I think it's just, you know, culturally it's, it seemed very different, you know, from, in our folks, in APJ area, they, they see it as am I being punished? Is that why you need a coach? Right. So they don't want people to know it, you know? So I think there's so much around this that we just haven't, we haven't fully been able to crack yet. So I can take the aggregate and be pretty happy with being able to see, you know, return users, activations re you know, things like that to see whether or not it's actually working, but in terms of getting down to, is this really helping a person become a better manager? And if I'm gonna be able to get that?

Dani Johnson (48:58):

A really interesting point flipped over to the next question, which I think was also yours. How do we tackle the issue? Of course. Yeah, no, it's a really good question. Are others dealing with this?

Speaker 5 (49:12):

But definitely I think the confidentiality issue is key. But it's a question of distinguishing, isn't it? What is being shared between the coach, if we're talking about the human coach or, you know, other kinds of data, but in, in what happens in the interaction during the interactions between the coach and the coachee. So, and this is absolutely confidential. Otherwise it's going to impact the quality of the conversation themselves on the progress, because if you know that at any time or any point what you are to shared, you know, and if even more, if it's sensitive and if it's sensitive that there isn't, it's all very likely that it's going to have an impact on you and your performance. So the most sensitive, the more confidential it has to be. But if you agree from the beginning, you know, on, on some KPIs with the managers, you you're, you've got two different things, isn't it? The KPIs is something that it's, it's the ROE somehow the expectations of engaging into the coaching. So that's, what is maybe the agreement that you can get some that done, not in the content of what has been shared doing the parties.

Dani Johnson (50:43):

Yeah, I think, I think this is a really interesting question because the organization is providing the service and so they need some data to show that it's working or not working. We've seen that addressed in a couple of ways. Some organizations are choosing external coaches for this very reason. Like they want, they want that confidentiality to be in place. And so they're less worried about getting the data, then they are making sure that the individual has a sounding board or some, someone to go to, to talk about things that may be difficult to talk about with a manager and an internal mentor. So for example, if somebody, if your organization isn't really good with you moving on or moving to a different position, it's much easier to talk about an external person than an internal person, because you're worried about job security and all kinds of other things.

Dani Johnson (51:24):

The other thing that we're seeing is for some of these vendors that are like the coaches on the shoulder there is an opt in, and the reason that there is an opt-in is because they get enough good information to help them themselves, that they're okay. Sharing that at least at an aggregate at an aggregate level going up. So for example, cultivate, I'll just use them as an example, cause they're a top of mind right now. They, they aggregate information based on a set of competencies or skills that they're trying to build with and managers. And so instead of looking at the individual and saying, this person, you know, is bad at this, they, they kind of take a look at all of the information across everybody, and it is an opt-in, it's absolutely an opt-in, but those managers are willing to opt in to share their data.

Dani Johnson (52:10):

If there are five or more people that sort of go into that, that bucket because they want the information out so bad, that information is very helpful to them to become a better manager. And so it's a, it's a trade-off. And so I think a lot of times it is sort of looking at that trade-off, it's not, it's, it's the way that we communicate in the way that we message about what we're doing here. Hey, we're only using this information for, you know, the better measure of society in general, versus to captivate you when, when we know that something's wrong with you specifically. And it really, really depends on the trust that the organization has with its employees. And that can be a hard pill to swallow in some organizations. Other thoughts on this?

Stacia Garr (52:50):

I would just add in here, you know, the kind of the other option is to do dedicated, you know, match pairing, study focused just on this and just on the specific questions you want to understand, you know, did you, did you practice, or did you focus on these things through your coaching practice, you know, XYZ things asking the same question of the employee, you know, did your manager improve at these things? Did you feel like you got what you needed in, in limiting it? And so you're not getting the data from bravely or from whoever, but you're getting it directly from them. And, and, and at least even if you're not even if it's confidential, so you're still at least getting the pairings. Even if you don't know exactly who the pairings are, if you need to address that level of confidentiality.

Dani Johnson (53:41):

Yeah. Any other thoughts there? All right. We obviously did not get to all the questions left but this has been a really, really good conversation. And we'll be talking about this more this year. We'll be looking into coaching and mentoring and how it's changing and what we can do to implement it better to organizations. So thank you so much for the initial call. We'll be putting out a recording for those of you who are members of red thread. And as always, if you have questions or additional insights, please feel free to reach out and contact us would love to have a chat. Thank you all. Thanks everyone.

Stacia Garr (54:20):

Have a good rest of your day and a good new year. Thank you. Happy new year to everyone!

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Clint Kofford, Global Head of Talent Development at Johnson & Johnson

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In this episode, our guest tells us, “My Purpose is to bring hope to every employee of Johnson & Johnson.” We have no doubt he means it—and what makes this even more interesting is that he’s working in an $85 billion enterprise that many see as being one of the very first American brands to publicly commit to Purpose. The company is Johnson & Johnson, a brand founded in 1886 that develops medical devices, pharmaceutical, and consumer packaged goods, and the individual we’re speaking to about Purpose is its Global Head of Talent Development, Clinton Kofford.

Today, we’re going to delve into what Clint means by his statement—as well as how Johnson & Johnson’s Purpose statement. Their famous Credo feeds into what he and all other 135,000 team members do every day. As you may know, the Credo, written in 1932, lays out how it is “responsible to our employees who work with us throughout the world.” That managers must always strive to “provide an inclusive work environment where each person must be considered as an individual”—but just as importantly, “When we operate according to these principles, the stockholders should realize a fair return.” Amazing stuff for 1932; still pretty cool to today—which is why we knew J&J had to be a big part of Season 7, where we’re working to understand Purpose in modern American business… and why Clint is convinced the Credo’s more than just a moral compass, but a recipe for business success. And we do a great dialog with him, not from a line-by-line analysis of any Purpose statement.

This podcast interview covers topics like:

• His day to day role leading of Johnson & Johnson’s management and leadership development work
• What the mechanism is for doing that at the company, the Human Performance Institute, and its roots in sports psychology, and how the Institute is now the new internal J&J ‘brand’
• Purpose and L&D and how new personalized career paths are starting to energize the team
• How, as a Learning professional, he’s doing what every Learning professional wants—harness the unique talents of everyone in the organization to bring out the best
• How he thinks Purpose is the glue that holds Talent together—but how internal paradigms may need to shift around the status of non-full time employees first

Resources

• Clint Kofford LinkedIn profile
• The Human Performance Institute at Johnson & Johnson website
• The Johnson & Johnson Credo in full
• The Purpose of non-full time W2 team members. Clint recommends LinkedIn founder’s Reid Hoffman et al’s The Alliance: Managing Talent in the Networked Age
• RedThread’s on-going Purpose work

Webinar

This season will culminate in a live online gated experience (a webcast) where we'll review and debate what we've learned. Seats are limited. Secure your place today, over at www.novoed.com/purpose.

Partner

We're also thrilled to be partnering with Chris Pirie, CEO of Learning Futures Group and voice of the Learning Is the New Working podcast. Check them both out.

Season Sponsor