Nathalie McGrath (Director of People, Coinbase), Justin Anguswat (VP of People, Thumbtack) and Farah Kassam (Director of Talent Development, Reddit) join Jack Altman (CEO of Lattice) for a conversation around how to companies should think about retaining and growing their employees.
Favorite questions and quotes from the conversation.
Nathalie McGrath: I run People Operations at Coinbase. Coinbase is a digital currency company in which you can buy and sell Bitcoin Litecoin and Ethereum.
Farah Kassam: I am at Reddit, the front page of the Internet.
Justin Angsuwat: I lead the People team at Thumbtack. Thumbtack is a platform that connects customers with local service professionals like DJs, plumbers, wedding officiants, whatever you like. Been at Thumbtack for six months now. Previously at Google. So I’m bringing some of that experience across as well.
Nathalie: Coinbase is currently at close to 200. I joined the company when we were 10 people, that was three and a half years ago. We're currently on a really big hiring spree. So if you're interested or if you know of anyone else who’s interested, please let us know!
Farah: Yeah. I've been at Reddit for about a year and a half. And when I joined the company was 80 people and we’re just crossed 260 people, on our way to 300 by the end of 2017. So also gone through a massive growth spurt and continuing to grow.
Justin: We're about 600. So I joined six months ago, and it hasn't changed that drastically in six months, but three years ago we were about 50. So we grew from 50 to about 600 in three years.
Justin: This is my view only. I don’t think it’s necessarily been over the past 10 years. The thing that really stands out to me in the last 5 years is the pace of change and uncertainty. So every time I turn to the newspaper there's something new, something different, and something that creates a lot of uncertainty. I think a lot of it's positive, but unfortunately, every psychological paper we read shows that humans are uncertainty-intolerant. And what I've noticed is a shift over the last five years from people expecting governments or large institutions to really help provide that type of certainty for them and looking more to their employers as that voice of certainty or that space that where they can find certainty, where they can feel safe, where they feel like they can just be themselves come to work bring their whole selves to work and do something meaningful and impactful.
Employees turn to us more often to respond to these things -- like you have these world events and now our employees are looking to us to say, “How do you respond to them? How do you think about them?” And that didn't happen five years ago.
Farah: Adding off of that, I think that people spend most of their time at work and they want a sense of meaning. I think there's a bigger responsibility on us to give that sense of meaning not just about the product but also the people they're working with and the larger mission of the company. And that's what we stand for. So at least at Reddit that's a pretty big thing and people who are drawn to Reddit are there because they want to be part of something bigger and that for us that's about human connection.
Nathalie: I totally agree with what’s been said. I think from my own personal experience what I'm also finding is a very significant push towards growth and development. I think that's always been important but even more so just employees along with the meaning and sense of connection. The idea that they're moving forward and that they're going to continue to contribute to both the company and their own career as they move forward.
Farah: Absolutely. In interviews I asked them, “Hey what are the top three things that are super important to you in the next two to five years?” But often they do say meaning. And for us that's something that's aligned with us so that I'm like, “Great. Come on in.” But then also at Reddit we have our ups and downs and so I'm very honest about who we are and I say, “Great, come on in. And are you ready to come on in and do some work? Some actual work and not just like get your shit done but also emotional work.”
Nathalie: So it's difficult for me to compare that directly just because I've been at Coinbase for these past three years. We have a turn around at around the two year mark, for reasons that range anywhere from needing more personal growth to starting their own company. The latter seems to be a really big one for us recently. A lot of our individuals are choosing to leave because we are now entering a new stage and that's no longer the type of company that they want to be working for.
Farah: For us, we're going through so much growth. Because we're going through so much change, people who wanted to be part of the company at 80 people might not want to be a part of the company at 400-600 people, which is where we're going.
Justin: I've seen it very a lot actually between countries and just sectors. So I’m originally from Australia. So when I was growing up in Australia and I worked at the start at a Telco, people were life-ists there, people had 60 years of service which was unbelievable if you do the math. And then I went to New York and in the financial services industry I did see a lot more attrition. We did studies and hundreds of companies and we found that generationally, yes, Millennials and Gen Xers are more likely to leave at a shorter period of time than some of the other generations. But I feel it especially here -- I think in the tech sector in San Francisco, it’s just more pronounced.
Farah: This is like the magic number. I feel like I've constantly been like how do we measure costs per hire? How do we do it? Is it the cost of the recruiting team's time? Is it the cost of training? I'm sure there's lots of other ones but those are some of the things that we've tried to measure or tried to at least get people to understand time recruiting and onboarding. But yeah I think it's a hard number. If you find it, let us know.
Justin: At Google we were very tuned to this. We were able to measure down to the nth degree how long it took to make hires and the impact that a specific hire would make. What I've noticed going into the startup world is where Google is very optimized, we’re probably very unoptimized. We don't really measure it. We talk about it a lot. It's a lot of work to get to that number. We can argue about the right number. But at the end of the day we're just looking at how much product we're able to ship and with less people with certain key talent out we just instinctively know that it's going to be harder for us to ship product. And so it's painful and so I think the number that matters the most to our business is our ability to ship product versus a dollar value around optimizing the funnel because we can do that in a number of different ways.
Nathalie: Have nothing major to add, except the engagement of the employees has a pretty positive impact on our ability to ship product.
Farah: It's one of the actual challenges for us because we're having such massive growth. One of the things we do to lengthen the lifetime of our employees is give people internal mobility. And we have an internal mobility program where it’s not just people going from product team to product team, but also from sales to product or to engineering. We’re saying, “Hey, we are investing in you. We want you to grow but stay at Reddit, but we get that you're done with this particular thing, or you want to explore this other role.” So we also have a lot of people who are just switching managers because they're switching teams. That is a challenge that we're facing. One of the things we're doing right now is just really focusing on making sure we are building a lot of skills and tools for our managers.
Nathalie: I actually very much agree that individuals do leave managers because, and it's not as though they don't like their manager, it's just that the manager has such a large responsibility in being able to translate the activity that's happening across the organization into something that's meaningful for that individual. And the ability to set context and frame what’s happening in a group and the company is a really important skill, that I think a great manager possesses. In terms of what we do specifically, we obviously have manager training -- we partner with LifeLabs, and they provide some really great specific things that are around how to have feedback and how to have one on ones and all those kind of very tactical skills. One thing that I highly recommend is coaching circles. We basically take a group of managers, teach them the Socratic method -- which is about how to ask questions and use coaching as a way to engage your employees.
Justin: Just to add onto that as I think about managers I think about them as the single biggest leverage point I have as a people leader to impact the employees experience at the company. Because one, you influence a couple of hundred managers all in a larger organization or a small organization, and you impact the employee experience of your entire company, which is huge. Managers make up 70% of the variance of how an employee feels engaged at work.
We’re doing the foundations now with our managers which is, how do you set expectations? Which I think we’re generally pretty poor at doing. How do you measure against them? How do you get performance feedback? And then, how do you coach? How do you coach a manager to coach the people on their team? And one method that I found was really helpful is anonymous upward feedback, all the time. We measure our managers on that and that is part of that. It doesn't have to be a negative tool.
And finally, what we end up doing is identifying which managers are really good at certain things. How do we have them help teach and coach other managers? Because managers often find it more helpful to be hearing it from another manager than from us lecturing from a textbook as to how to give feedback.
Justin: They’re slightly separate. We have people who are new to managing, period, and people who are new to managing at the company. It’s about having them ask themselves,who am I as a manager?And I know it's a pretty amorphous question but I ask my managers about this a lot, especially new managers because they struggle to understand that their role is moving from a strong subject matter expert to a manager. If you're operating as a general manager, you have a broad set of direct reports. You have like 10, 15 direct reports. You're probably operating as a router, like you’re just connecting dots. So that's your job. Like how do you become just the best router you can and just help them connect the dots. Versus if you've only got two direct reports then maybe you’ve got to be deeper in your subject matter expertise. So how do you show that to your two direct reports without meddling and getting in their way? And so that's more of the foundational side of management.
Nathalie: Happy to jump in on that. There are a number of instances why this may occur. The first is that management tends to be the promotion that's most easiest to see across the organization. And this is so unintentional but a mistake that we made was announcing when managers are or individuals are going into a management role and we do this for a communication purpose right? So this manager is now a contact for multiple individuals, they're usually owning some kind of subject and so we want the company to know that this is in fact the case. It's not intentionally to do it as a promotion but it often comes across that way. So then what happens is we have this recognition of an individual who's changing roles and we don't have that same situation on the IC track.
So that's been something that we've been very thoughtful about in our more recent time in terms of when we are communicating out -- how are we doing that messaging? Can we do the same thing for individual contributors who are also taking on a new project or now point of contact for something? So it's a very subtle thing, but it actually makes a pretty big difference and that helps us build out that IC track. What we've also done is we've identified individuals who we found as high potentials and we have intentionally put them in front of the camera or in front of the company more often than we normally would just to really highlight the fact that they are an individual contributor that is owning a lot and influencing the organization. I would love to say that this was like natural but it was actually something very intentional that we did so that we could highlight that the individual track is really important.
Often we do have individuals who come in and say, “I want to now manage. I think that's the next step in my career.” And this is again where the manager of that individual becomes so important, because they're going to know the strengths of that individual and be able to talk them through this decision, like, why is that important to you? Are there other ways that the company can provide that or that you can get that recognition or value? Do you really see this?And this doesn't even happen just on the engineering side. I find that this happens like in legal for example where individuals want to take on management because they believe that's the next step. In reality it's not what they really want to do. So actually having that conversation -- it takes a lot more time but it actually ends up being a fundamentally better outcome.
Nathalie: It's ongoing. I would say that it's much better than it was two years ago. We of course have the IC track which is like, here, you can move up the levels this way. But I found the biggest positive impact was having them in front of the company. So we have ICs for example leading our ship show which is the product demo, we have ICs who are reporting out on the projects that they're contributing to and I find that that is the biggest positive impact.
Farah: A year and a half ago we didn't even have the IC or a manager track or any tracks at all. But when we built them out, we really we were thinking very intentionally about this. And so we've been doing a lot of education for the most part and we also ran into a similar thing and what we’ve actually just doing this this week where I'm telling everyone, “Hey, you’ve got to announce everyone's promotion.” And it's really important the language that we use for ICs and managers and we have people who have just switched tracks. There was no promotion, but we still need to communicate it from a communication standpoint so we've just used “organizational changes,” not promotion so that we are able to say, “Hey, there's career growth regardless of whether you just decide manager’s the right track or continuing to grow as an individual contributor.”
Justin: I don't think it's the answer to solving it but I think it's one step in that direction. I do truly believe that comp is only one element of how we retain people. We recently ran a regression analysis on our own team to find predictors of attrition and comp didn't appear in the top five. Even though it's one of the lowest scoring items on an engagement survey. But if we assume that it is pretty important, I think it is to a lot of people, my perspective on it is that we pay pretty disproportionately to our top performers. So I'm of the view that we focus the lump sum of our money on our higher performers and we just pay them disproportionately more, not even as a linear scale, but more an asymptotic scale.
And I think it's the right thing to do. It's investing where we most need to and it might seem as unfair but I don't consider it unfair. I think it's the best way for us to use our salary increases versus an across-the-board.
Justin: I would like to be public. We're about to go through, we just went through a very light cycle. We're about to go through a proper compensation cycle and in this cycle I intend to be pretty explicit about that but we're still learning as a startup like I think it's really hard to just flip that switch and do that instantly because to be fair we haven't put a lot of the infrastructure in place. We haven't really defined what great performance is and if we don't do that then bias can start to creep in and if you're playing around with those sums of money it's kind of hard to unwind. So I think as our performance management ability to better assess performance improves so will our ability to then start ratchet up what our top performers are making. But I truly believe in disproportionately paying top performers.
Farah: Well, I can just talk a little bit more about our mobility program. So that's something that we say, “Hey look when you come in you're going to start with this team.” But you know there's going to be lots of new products, lots of new projects you can work on. You know if you have an X project you want to do on the side that becomes actually something that goes into production. So there's lots of ways for the employee to actually take it into their own hands. Additionally in one of our internal mobility programs, we've had a few people who've been a year in sales ops role or a marketing role or comms role working very closely with another team and then they get mentorship from people. So it's also just literally people reaching out, people saying, “Hey yeah, I'll mentor you,” and then making the switch and then building in like you said some sort of expectations and checkpoint to make sure that we're supporting people through that so we can say, “Hey, we've done that before and we'll continue to do so again as long as you are able to be successful we are able to support you.” And it makes sense for the business.
Nathalie: So we're really, really lucky right now as we’re continuing to grow and scale. We have so many hard problems to solve across the organization that it feels as though anyone who wants more opportunities to learn has it. So that's kind of a nice, I mean it's the pro about scaling very quickly. As a I think back in 2015-2016 that wasn't the case, we were much slower growth and as such we did have a lot more challenges with development and I found that there were a number of things that were helpful in that we tried things like 20% time, when we said Fridays you could work on whatever you wanted. That didn't really work. We had a variety of other things. We always encourage employees at any time you hit two years we actually actively have a conversation with, “Would you like to move to a new team? Would you like to have a new function? Would you like to try something different?”
Given our space in cryptocurrency there's a lot to learn there, so we have a lot of education around that. Two things have been particularly I found very helpful. One has been really empowering employees to create their own type of development opportunities. So I will admit I made the mistake in the very beginning of trying to have everything come through people ops or say like, “Okay, we'll put on this program for you.” When we really stepped back and said, “Okay, who wants to own something? Who wants to take the ownership to move that forward?” We have this really powerful upswing of them not only taking more developed opportunities by creating programs of many which had not done in the past but we had a whole new plethora of type of development opportunities that we wouldn't have even thought of.
And so it was a really neat way to get them more engaged and involved. And now we have a very deep trench of educational opportunities across the org. So that's been probably one that's been really powerful. Another is that we have partnered with having individuals mentor each other across the organization. So we set our values and our values almost every one of them have a sub bullet that talks about either mentoring others, supporting others, teaching others, giving them feedback, etc. And as such we've created a culture in which people can rely on each other. So there is a lot of learning we had for example our controller on our finance team really wanted to learn how he could start building some of the connections between the finance and the product.
He partnered with one of our engineers, and when he first proposed it to the engineer you know the engineer was like, “Oh my God. This is so much a waste my time. I don't really want to be doing this.” And he said, “Actually you have an expertise that I really want and I'm really actively learning and you teaching me would be really helpful.” And it shifted his mindset and he was able to see this as a growth opportunity for him as well to teach someone else and that's been really powerful for us.
Justin: It's not as much of the job as I'd like it to be right now. So I'm still six months in. So still in the build phase but hugely powerful and I think this is one of the big things that's also changed in the last five years as I imagined engagement surveys 5-10 years ago was essentially just an advance SurveyMonkey link, like, “Hey, let's capture the answer to some questions. Let's report out how we did versus last year and versus some arbitrary benchmark.” And as I've seen that progress we've gotten better at identifying insights, finding correlations, and what I'm most excited about now is our ability to start to predicting human behavior which is kind of crazy because I don't think that we'll ever get close to being able to do it but we can start to find indicators. And so one thing I was really excited about was with our recent engagement survey we got the results back and we had some of the correlations that drove certain items but I asked a question of my team and I said, “Look, I'd like to work backwards.” Like what are the two things I really care about right now? And there were two things. One was engagement, one was retention. I said, “Great.” So we understand they’re the two things I really care about. How do we find the top five drivers for our organization for those two items.
So we can hold those as dependent variables you run regression analyses on them and then out come the top five variables that actually drive retention. And so no longer are we guessing which questions should we tackle or what drives retention in my organization based on a couple of anecdotes. We can now surface, statistically, what are the top five things that drive retention in my specific organization with the people I have today. So it takes a lot of the guesswork out which is kind of cool and there's a lot more you can do on that information and you can start building it into more predictive analytics. So you can start to predict who's likely to attrit and who's not likely to attrit, reasons for attrition that are likely. And then you just measure that year on year where we’re accurate, where we’re not. If we weren’t you adjust the algorithm and you run it again.
And I think that's kind of cool and you can run that on performance like, what's the biggest predictor of performance based on interviews? What's the biggest predictive question in the interview to assess that particular trait that you know is predictive of performance? And I think the list goes on. So I think there's a ton of available information out there to play around with.
Justin: Yes, technically but it's more cohorted than that. So it's which groups are likely to attrit based on what reasons but we won't point to a specific individual and say, “That person is likely to attrit,” because the data is still a little bit noisy. The signals are a little noisy. So I think it's pretty dangerous to point at one person.It's possible but I don't do it. I don't think it's a great practice.
Nathalie: Yeah I agree with a lot of what was said. In addition I find that the data that we collect and use is actually a really good tool for messaging. So it's a great way to get execs on board with certain initiatives that you're doing. It's a great way to communicate out to the company on how things are going. It's a great way to make decisions. But even more so it's a great way to share kind of what is the health of the organization right now. I think you can get up and you can take kind of like things are going well because I feel like people are really happy. It's great when you actually have something to show in a graph especially. I don't know about your companies but my company is very analytical and it's a great way to speak the language of the organization.
Nathalie: So specifically the way that we do it we have an engagement survey that we sent out every quarter and every quarter we look at the results. We analyze it and we have an executive level look at, “Okay what are the initiatives that we want to tackle for that next quarter. And then we bring that down a level and we take it to the managers and so the managers each have the results for the engagement score as well and they each identify two or three initiatives that they're going to be doing within their team to prove it the next quarter and we continue to do that.
Farah: We do something relatively similar. We run an engagement survey every quarter. Again it's been super helpful for us to just be able to speak the same language as the rest of the organization. But additionally we've also had to do a bit of education on how to actually interpret people data because our teams are very analytical. They love data but they're used to looking at things that don't relate to humans in the same way. And so there's always like, okay well, we can't know everything because our data is not as robust as anything that Justin’s describing. We're dreaming about having predictive analytics and about being able to connect all the human data that we have. So from performance reviews to our ATS to our engagement surveys.
That's something that I'm actively working on right now but we don't have that yet. So right now it's more about like, “Hey, we do. We're small enough that we have a sense of the people plus here’s the data,” and this helps us actually focus and prioritize and say, “Okay these are the cohorts that really need a lot of work on certain initiatives or these are the things that really make sense given our business priorities and we're going to focus on these.” Like, “Yeah, cool like we could improve all of these things but we're still doing pretty good here. Let's make sure we focus on what makes sense.” So it's been super helpful. And we're still getting to the point of having our managers actually be more involved in creating the initiatives. Currently it's still very much our team teaching them how to do that.
Farah: For everyone to be growing, learning how to be better and having honest direct conversations. So we want to move towards a more continual feedback sort of culture and we see this as a tool for that. There are obviously aspects of it that are very much for the employee and aspects for the manager and the company as well. One of the biggest things at Reddit is growth and development is like, “How can we make sure that we're learning from each other? Whether that's our manager or our peers or whoever it is cross-functional teams and how can we build a tool that actually helps that and builds that type of behavior in that habit?”
Farah: We're working on it. We're not there yet. It's a work in progress but that's something that we're aiming for, yeah.
Nathalie: So we made the mistake in the very beginning, where our L&D seemed as though it was more for the company than the individual. I would say when were very small that we used a system where we asked two questions: what is this person doing well, and what could this person be doing better. And then we asked basically it is like 2D chart which is like ranking behavior versus results and that ranking box thing.
That created a really big challenge across the organization for us. A lot of problems in terms of people feeling as though that was the only thing they focused on. So you have all this qualitative feedback you put a number in and bam, that is what they focus on. And so one of the things that we did really carefully this past performance review cycle is that we flipped this on its head. So what we said is that the performance review cycle is all about the employee. We're not having any kind of numerical rating that we're using as a result of this. We are still asking the questions around what is this person doing well? What could this person be doing better? We then had the managers look through all of the feedback they condensed it into themes and we tie this to our values.
And then there was a growth and development part of the conversation. So in the conversation where they talked about performance, were those two questions - the themes and then the growth and development plan - and the intention was that they did that together. And we found that that worked extremely after we gave out the messaging there was a lot of communication from my team around how this is intended for the employee. We said that both to the managers as well as the employees and the individuals and by holding the managers accountable to that we found that the messaging changed pretty significantly in the conversations and that was a huge. We do a survey. We love surveys. We did a survey after the performance review. We saw like a significant increase in terms of the benefit of the performance view.
Farah: I’m just going to say one more thing about performance management in general. I think that you're going to have to know where your company is at, what your goals are, and then meet them where they are. And still, the changes are very incremental. And also you know a year ago, we didn't have managers. So we ran performance reviews but our execs were doing everything. We didn't have managers. So it was very different from where we are today. And so there is some amount of change that we can do. So I think in terms of performance management I see that as a tool for helping culture change not to sound super fluffy but like culture change in terms of how are people actually getting to the goals of how we want them to feel at the company and also in their careers. So by no means are we perfect and we definitely have gone from being more manager heavy to more employee heavy to trying to figure how to balance and then also figuring out where is the company right now and what realistically can we do.
Justin: I think these guys summarized it pretty well. I think it's highly context specific. And so as I've seen companies scale and grow how we do performance management changes. At Google, when I first arrived, we had a 41-point rating scale. We rated our employees on a scale of essentially 1 to 41. So that worked at the time. And as you kind of outgrow that system you look at other systems that might work for you. So working backwards from what are you really trying to assess for, what's the purpose of performance management which gets to your question. I do think a lot of it's employee centric rather than company centric because it helps give employees a signal as to how they're doing. And I find that one of the most frustrating things as an employee is not having any idea how you’re doing. You don't get that feedback regularly.
Performance management is just one way of ensuring that you give that feedback and it doesn't have to be in an old annual traditional way. And I think also it helps us reduce bias in other parts of the systems. So how we think about compensating people is kind of hard to do if you don’t have any consistent way of doing performance management because then how we allocate raises, how we allocate bonuses, will be highly dependent on how the manager feels at the time. And that's a little subjective. So I think there's also the added bonus for employees that we can introduce a lot more fairness and algorithms into how we do compensation and other parts of employee expense.