What Analytics Do Startups & PE-Backed Firms Need? - Andrew Bartlow - #180

[00:00:00] Hello, friends of the podcast and welcome to Directionally Correct, a People Analytics Podcast with your host, Cole Knapper, and today's guest, Andrew Bartlow, co-founder of the People Leader Accelerator and operating partner at Altamont Capital Partners. In this episode, we will cover what private equity backed companies and startups actually expect from HR.

[00:00:25] If you're a leader at a startup or a PE-backed firm, what HR metrics does your CEO need to know how HR is performing and which ones do they not need? Why traditional HR metrics alone are less useful than you think. Help other HR people build, like build that contextual awareness.

[00:00:48] The story behind the People Leader Accelerator and what it's like building the next generation of HR leaders in startup land and much more. Your list of graduates is impressive. You, and I don't know if they were impressive before they joined the program or not. I don't know causality there. Now, let's get down to business. Hey, Directionally Correct fans. This podcast is dedicated to you to help democratize people intelligence for the world of work.

[00:01:15] If you're looking to support the podcast, please make sure to listen weekly. Subscribe to the Directionally Correct Substack newsletter. Sign up for the Data Driven HR Academy at datadrivenhracademy.com. Purchase Cole's book, People Analytics, or check out everything else at colenapper.com. Before we get into it, a quick word about HRBinch, the company powering this podcast.

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[00:02:32] You know, one of the things I was thinking about in preparation for this is I've spent a non insignificant portion of my career now kind of in the startup world, but I don't think I've ever had a guest on from that segment of my career. And Andrew, you've been a pretty influential character in that saga. So I'm really happy to have you on today. Well, thanks a lot. Glad to be with you. It's not it's not only accolades.

[00:03:01] It's also, you know, I mean, I feel like you and I have like this funny history and it's a lot of fun. You know, one of the things in prepping for this I thought was super interesting is you have a background in mechanical engineering before kind of getting into the HR world per se. How do you think that colors what you're doing now?

[00:03:25] Because I know you had worked, you know, back in, you know, big companies back in the day, but now you're in kind of the PE startup space for, I don't know, the last decade or so. Yeah. Tell me tell me about that evolution. Well, boy, that's really rewinding the clock to MechE. That was my undergrad major at University of Illinois.

[00:03:50] And of course, I ended up completing in industrial organizational psychology and then a master's degree in labor and employment relations. But I think that probably gives some indication as to how my brain is wired. More of a builder, more analytical, maybe more concretely oriented.

[00:04:19] Like, what are we trying to do here? Can I see the thing? Can I touch the thing? Can I get a little bit more hands on? Yeah, you're not fluffy at all. A lot of HR people are fluffy. There's no fluff with Andrew. Well, I think that's a compliment. It is a compliment.

[00:04:41] Although at the same time, I feel like in the human resources world, there is a lot of emphasis on the softer side, on the human connection. And so I've actually intentionally worked on that. You know, I went through the Berkeley Executive Coaching Institute where we we rang bells and there were crystals and hugging.

[00:05:09] And, you know, that was like so not my M.O., but I but I sought that out to try to balance myself in this space that I've that I've chosen. So, yeah, I'm more analytical and I'm more financially and business oriented than than most HR people. And that's a strength in a lot of ways, but it's also, you know, potentially an over an overused strength.

[00:05:39] So I've I've been conscious about trying to balance it out. And you're a well adjusted individual, too. What's not the like, Andrew? I try. I try. I try. I try. Well, I do have to give a quick thank you to the guy who introduced me to you. Brad Harris used to be a professor at TCU. He and I used to collaborate on things. And when I moved into the startup world originally, he got me connected to you. And then a few of the other kind of names and activities in this space.

[00:06:07] I think about things like there's a whole set of conferences and organizations that many of the listeners that work at large organizations won't be familiar with. But thinking like instead of going to HR Tech or Unleash, you go to Transform instead of, you know, being a member of the conference board, you join startup experts instead of, you know, going to, I don't know, getting a master's from University of Illinois, which you did. And then you go to a people leader accelerator and you learn about some of these things.

[00:06:35] And so can you talk a little bit about that world and what role HR plays in startups? And because they're kind of almost used synonymously now, like there's a lot of firms that are backed by private equity as well. There's a lot of firms that are VC backed. Some of these terms like venture capital, some of these terms might even not be familiar to my audience. So can you talk about that? Yeah. Yeah. And I'm glad that we're talking about this topic. I feel like it's mysterious for a lot of folks.

[00:07:05] Like my background was, you know, small town, Illinois and went to a big 10 university. My mom was a teacher. My dad worked for a subsidiary of Caterpillar. Yeah. So our world was not private equity and venture capital. And, you know, they didn't even really know what HR was. There's like one HR person that worked at a company my dad was at. And, you know, going through the University of Illinois, you know, master's program, it was all big companies.

[00:07:34] It was Exxon, it was Pepsi, it was GE. And that's that I think is the mass of the world in human resources. And then, and then I found myself, you know, following my career at mostly big companies, found myself out here in the San Francisco Bay Area. And this is the, I don't know, 2008 up until present.

[00:08:01] And my eyes were opened to the world of tech and startups. And there was a lot happening in that space. You know, it, SAS, the SAS revolution was fully on all sorts of companies were getting funded, founded and funded, and trying to grow like crazy. And, and there was this role for, for HR that was evolving pretty quickly.

[00:08:26] Like if you're in those days, anyway, a lot of success was, was measured by the head count and the, and the talent that you were accruing to your org. And so there was lots of focus on talent, attraction, TA. And then the retention of these like highly skilled, highly sought after software engineers. Like the world is a little different now in vibe coding and software engineering. And, but you know, we'll probably touch on that, but like it, it was the big thing.

[00:08:56] Software was truly eating the world and HR was in high demand. And so I found myself here in financial services and CPG observing the tech world. And I said, I want to be part of that. Like I want to be where the action is. And so I begged my way in to people tech partners.

[00:09:20] You know, thanks to, thanks to Robbie and Kara and the founders of people tech that, you know, gave me an opportunity to be part of this like really wonderful group. And what is it again? Like this is a shrouded kind of community. Like I'm familiar with it, but it took me years to figure it out. Yeah.

[00:09:41] Well, it, it started a decade ago as a group of HR people that worked at tech companies that were, you know, based in the, in the Bay Area, San Francisco Bay Area. And we would gather, you know, downtown occasionally for a happy hour to commiserate and talk about what we were working on. And we, we knew that we were, and, and, you know, I had been in, you know, some, some tech businesses by, by this time.

[00:10:08] Um, we knew that we were in, you know, somewhat unique roles where we were dealing with crazy founders. We were dealing with super high growth organizations that were different than the enterprise publicly traded companies that my early career had been in. And so there was this, there's this bond, there's this connection between the HR people that worked at these types of orgs. And it was, and it was, it was boom bust.

[00:10:35] I don't think we'd really felt the bust much of the time. It was still, you know, boom time in, uh, in SAS. Um, and, and that group has been through, you know, quite a wild ride, uh, over the last decade plus where, you know, many of us have had some great exits. Many of us are on our third, fourth, fifth, uh, tech company and startup.

[00:10:58] Um, a lot of us have left operating roles and are now advisors and operating partners and consultants and, you know, doing other stuff like I'm doing. Uh, but that, that was really the, the entry point for me, uh, was people, tech partners in, into this world of venture backed tech HR, which is this really interesting little niche. And there's a, there's a conference, you know, HR transform is now on year, I don't know, six or seven.

[00:11:29] Um, there's a whole ecosystem that's, that's grown up around tech companies that serve, um, HR. Then, you know, maybe it's an HRS, maybe it's a talent management platform, uh, you know, lattice culture amp. These are some of the big winners that have come out of it. Um, yeah. And, and we've stayed in close touch and, um, that community continues to grow and evolve.

[00:11:56] And there are other little splinter groups that are, that are part of it. And, and startup experts is one area that I think I introduced you to early on, Cole, and you went, you went all in, uh, and yeah. What wonderful group, uh, Jesse freeze has become a good friend of mine. I think I was one of the very first speakers and part of the very first leadership team of startup experts. Yeah. And, uh, all right, let me define a little bit more.

[00:12:22] So people tech partners is about 200, 250 heads of HR at venture backed tech companies. We've had some people change in and out and, you know, but, but it's, it's kind of capped at that number. Um, and so we got to know each other over time and we had some in-person gatherings, but we've had this, this sustaining Google group distribution list where we continue to talk and commiserate and share job opportunities and, and, uh, what we're working on.

[00:12:52] Um, startup experts started maybe five or six years ago, um, pre COVID. Um, and, and that was smaller, earlier stage companies, you know, think companies that might be on a PEO, um, where they don't even have a hundred employees. So they need to find a benefits aggregator, um, and, and HR tech stack.

[00:13:15] And the idea there was let let's gather as a group commiserate, share what we're working on. Um, you know, so kind of a slightly different niche than people tech partners, which tended to be post funding a little bit bigger. Startup experts is a little smaller seed stage, maybe some bootstrapped companies and that, and that's really taken off. It's a free community, both are free.

[00:13:42] Um, and both have really developed strong followings and, uh, you know, it's, it's been great to see you, uh, build relationships and, you know, share and support others along the way. Cool. Yeah. I appreciate that. Um, it's, it's a fun community to give back to because there is so much giving back as the ethos of the community. I would say it's, it makes it a really enjoyable experience. Um, I I'm going to get you to define a few more words here for a second.

[00:14:10] Some of these words, I actually found out for myself through your book, scaling for success. This was, I tell you, if you're, if you're getting into the HR space at a, you know, early stage through maybe like series D type of company, it's like the playbook that's out there. I mean, I, I learned a lot of this stuff through you, so I wanted to say thank you for that, but like, what's an exit? What's bootstrapping? You know, what's a PEO? Like all of these words and terms for people who might not be familiar. Yeah.

[00:14:40] It's, it's, it's a lot. Yeah. The lingo can be, um, a barrier. Like I always thought exit was a bad thing. It's not a bad thing. Yeah, exactly. Exactly. It can be, it can be really scary when, um, you know, a frontline employee hears that the investor is trying to make an exit, you know, is the company going to close down? Am I, am I going to lose my job? And the answer is, the answer is maybe, uh, depending on the situation.

[00:15:04] But, um, yeah, and, and exit would, uh, would refer to an investor transaction. So a venture capital investor would put money into a company, usually get 10, 15, 20% of the company, a board seat, um, and anticipate it's going to be 10 plus years before they ever see any return on that investment. How does the return happen? How does the return happen?

[00:15:32] Well, it happens when the company is sold, which is usually not the outcome that everybody's looking for. Or when the company goes public. So an IPO offering, you can then sell those shares on the open market and presumably they've gone up like massively along the way. Presumably about to see a bunch of those happening in the next few months too. That's right. That's right. Yeah. So it, so an exit is a financial transaction in private equity.

[00:15:58] And, uh, it, it happens more often and more reliably with, you know, kind of a smaller variation, uh, in venture capital, the power law, uh, concept, uh, applies. So like one out of a hundred investments will be a massive win. And you expect most of those to just totally go out of business and maybe a significant chunk muddle along and do okay.

[00:16:25] And, you know, never, certainly never IPO, but ultimately end up getting acquired for a small, uh, a small return in private equity, um, different type of investment. You expect a much, much higher hit ratio, um, tends to be a shorter time horizon, you know, call it three to seven years.

[00:16:47] You know, five years is the median and you're looking for a three X return on your investment, um, on pretty much every company. So you're looking for like every company to triple versus in venture capital. It's like gasoline and rocket fuel on your investment. And, you know, maybe it explodes and, you know, is, is a fireball and turns into nothing. Um, but every once in a while it goes to the moon.

[00:17:12] And so, and understanding, um, what the people that have the power and the power is the money are trying to accomplish and what their, what their calculations are can help you understand the influences that are on your, your C-suite. Your executive leadership team and, and your founders, uh, and that can and should help you as the HR leader understand what should I be working on.

[00:17:41] So it, it, it, it all kind of goes upstream and I think it's really valuable to demystify these things so that your, your listeners, a lot of HR people, uh, a lot of business people in general can understand like it's different depending what the investors, what the board, what those in power are, are trying to accomplish. And it may not always be, it's certainly not always the same thing in every one of those environments. Yeah.

[00:18:09] Like when I, when I joined booster fuels, um, that was the smallest startup I'd ever worked for that wasn't on the vendor side. Um, you, you really get deep into this space. And one of the things that I realized I try to kind of do as a public service, it's very thankless because nobody ever thanks me for it. Um, is try to educate people on some of these things. They're not necessarily secrets. They're just not widely known. Um, and there's like this whole lingo that happens just in the Bay area that happens nowhere else, as far as I can tell.

[00:18:38] And a lot of this is that ecosystem that you've been describing. So I appreciate you doing that. I know this is like an analytics podcast, but I think that education serves people well, who aren't in the Bay area, whereas it's just kind of like breathing in the air when you're out there. That's just like how people talk. Um, but one of the things that you did, which I thought frankly was crazy, um, is you started a performance management startup. It was crazy. It was crazy. Yeah. Who, who, who hurt you? What made you want to do this, Andrew?

[00:19:08] And how did that go? Um, well here I'll, I'll, I'll be really authentic about it. And it was arrogance that drove me to do my own software project. Like I, I saw founders getting funded that were building products that I didn't think were that impressive.

[00:19:31] I attended dozens scores, maybe hundreds of, of demos of products that I thought, you know, this person doesn't really get it. Like, and so I kind of semi retired after my last in-house job, that company went public and, you know, I, I had my equity vest and, you know, I had a, had a nice financial result, which gave me some flexibility.

[00:19:55] And so I was thinking about like, what can and I, what can and should I do with myself? And so I, with my arrogance, I thought, well, I can do this better. Like, what does the world need? The world needs companies to perform even better. The world and the investors want companies to make more money. Well, how do we do that? Kind of the root of HR is we help the, the teams perform better, be more productive.

[00:20:24] So I thought I could, little old Andrew with some technical help, build a product that, that would meet that need. And boy, I've learned a lot along the way, a lot of empathy of the founder journey. A lot about how complicated the tech can really be. It's not just have a good idea. It's not just have a good network.

[00:20:53] It's not just be a domain expert, but you actually have to build the thing and you got to sell the thing. And frankly, I wasn't prepared to do either one of those, build it or sell it. So I think there's still, I think there's still a need out there. I think there's still. There's a huge need. Yeah.

[00:21:13] I think there's still value out there and helping companies to manage their people better and perform better and get insight into what people are working on and what's going well and what's not. To the extent that, you know, 360 reviews and performance reviews like absolutely can't touch like that's, that's, you know, not good, not good, but it's the best thing that we have right now. So I was looking for the 2.0 version of that.

[00:21:42] Um, but the world wasn't ready for it yet. And I don't think I was the right, uh, solo founder to drive it, but along the way, Hey, maybe I can be helpful to some other people sharing, you know, some of the learnings that I've had through a three year journey and hundreds of thousands of dollars out of my own pocket. Um, learning, learning some, uh, lessons along the way.

[00:22:06] Well, and here's another kind of crazy thing that's in the water out in the Bay is there is so much cache and being a second time founder versus a first time founder. And that is seen as like a good thing. Like, Oh, you failed on your first one. Great. You know, now you have all of those learnings and you're probably going to be more successful this time. And, and so it's, it's just like a different, again, ethos that's out there. And I think it's so interesting because, you know, me, I'm on like my fourth startup now.

[00:22:35] And there's just things that I know that I don't have to relearn. And, and you do have to somewhat be sort of a crazy person that has aspirations of like, Hey, you know, this problem that no one's ever tackled. Guess what we're going to tackle it. And, and it's, I don't even know if it's necessarily arrogance. Like, I think it's just, it's like a maniacal belief in yourself. And, and, and you really have to have that to a certain extent. Otherwise you wouldn't, you wouldn't take the risk, you know? Yeah.

[00:23:01] Well, I, I, I sometimes think, uh, or, or create, let's use an analogy. Um, people leave companies. Attrition is all about alternatives. Mm hmm. And so you're not going to leave your, you know, good job. If it's going well, unless there's something massively better, you're probably not going to invest a ton of your own money and a ton of your own time. Unless you, um, really think it's going to work out. Yeah.

[00:23:31] Um, or unless you don't have something better to do with your time. And, and maybe I was, uh, feeling a little bit of, uh, both of those at the same time. Um, but I figured out, I do have some better things to do. I'm probably not the best person to do it. Um, and, and so anyway, it definitely some, some, uh, lessons from the school of hard knocks as I tried to build my own thing.

[00:23:57] Well, can I actually want to rewind to something you just said, because again, I'm almost 200 episodes deep into this podcast. And you said something nobody has ever come on here and said, and we've talked about turnover a great deal, which is turnover is about alternatives. Right? Most people again, in the analytics school of thought think of turnover is like a turnover prediction problem or a turnover diagnostic problem. Or it's about what is happening within the four walls of your organization.

[00:24:27] That's causing people to want to leave. Is that the relationship with the manager? Are they not being paid enough? Do we not have the right employee value proposition? Yeah. You just said turnover is about alternatives and it, that has nothing to do with any of those things I just mentioned. So can you just please talk about that mindset? Because I am very much in your camp in this respect and I hear nobody talk about it. And so please talk about that. Yeah.

[00:24:53] Well, I don't think, um, I don't think it's a single variable, um, equation. So if things are going well for someone, they're getting, you know, good merit increases. They have prospects of promotion. They like the work, their, their boss, their, their coworkers. They'll be less likely to consider things outside.

[00:25:17] They probably won't be picking their head up, looking around actively applying for jobs, might not take the time to return a recruiter's phone call. Um, and if some of those things are not true, if things are not going super great, they'll be more active in the marketplace. So they'll be more aware of their alternatives. Um, but boy, we, we observed this during COVID and the, uh, stacking of talent and then the, the quiet quitting.

[00:25:47] And, you know, as the, um, unemployment rate has, uh, seesawed, uh, in the U S. Um, you know, some people have, have been kind of stuck in their jobs because they haven't found great alternatives elsewhere. So there might be some factors that, um, encourage people to be more or less active looking for alternatives. But let's be honest.

[00:26:16] You're not, you're not going to leave unless there's a good reason to. And that good reason is some better job, better opportunity, less commute, um, more pay, whatever it is. You're, you're not going to leave unless you have a good reason. And so that, that's what I would tie back to alternatives.

[00:26:37] And I don't think that a lot of people analytics captures that inside companies like the Bureau of Labor Statistics will, will capture some of the macro elements. Um, but that might actually be useful, especially if you're an, at an enterprise company, that's maybe more affected by the macros than a 52 person, uh, startup. Yeah.

[00:27:02] Might, might be a useful indicator as a, uh, attrition risk gauge. Well, I think there's a lot of wisdom in what you just shared. And I'm going to want to talk a little bit in a second about some of the HR metrics that you think are valuable or maybe less valuable in this space. But one of the things that I think being in kind of that, that, that startup ecosystem teaches folks that people outside of it don't realize is that.

[00:27:32] Like the dynamism in that market is at 11 on a scale of one to 10. And most of the time when you're working at big companies, dynamism is like on a two out of 10. Yeah. And so you just don't see a lot of things. And what you, one of the things you realize in the, in the Valley is that talent is fungible. And there's always somebody who's doing better than you growing faster than you, you know, more desirable than you. You may be the hot thing this week, but wait till next week. And there's just so much dynamism there.

[00:28:01] You always have to have an outside in sense of what is, is valuable about working where you are and what is valuable to your employees about working where you are. And how do you get them to buy into your culture, buy into your mission, buy into the equity that you're providing all the tangibles and intangibles that go into this. And so it really gives you kind of the cycle time that many folks that do analytics at big organizations just don't have the cycles. They don't have the reps.

[00:28:29] They get, you know, the annual merit increase, the annual performance review. And that's my, maybe the only kind of, kind of key trigger that impacts, you know, people's decisions to stay or leave at that organization. Whereas it's happening every day at a startup. Yeah. Well, the, the stakes are different. The cycles are different. So when, when there's a challenge at a startup, it is pretty much always existential.

[00:28:59] Like we're, we're burning cash at almost all startups. That means we're unprofitable. We have labor costs and we're paying for AI tokens. And, you know, we, we are losing money to try to build a product and build a market. And so you have a short lifespan if you can't figure it out during that time.

[00:29:23] And, and really all the investors are pouring money in expecting you to be losing money as you're ramping up. And so if there's an issue with your startup, all of a sudden the people that work there, they, from a self-preservation perspective, should be considering their alternatives.

[00:29:44] And so there's this like really strong focus on culture and engagement in startups because let's be honest, it's a lot about belief. If you lose that belief that this is going to work out, then your stock options will be worth nothing. And like, again, it's a 1% chance, even if you've been institutionally funded, that your stock options will ever be worth anything.

[00:30:11] So there's this belief that the company is going to be around and I can grow and I can learn and somebody will have eventually heard about this place and the work that I'm doing. You know, will it matter or not? That's very different than, you know, places where I spent my early career at Pepsi selling colored sugar water or General Electric, where we had rail cars that we were leasing that were full of green.

[00:30:39] And so, you know, we had grain and oil moving all over North America. The physical aspect of this mature, sustainable business. Are we going to hit goal or not? Yes, that will have something to do with your bonus. Yes, that will have something to do with the health of your business. But it's not nearly as existential as startups.

[00:31:03] And so that leads to much bigger swings in terms of the speed that decisions need to be made at. Everybody's busy. We get it. Everybody works long hours. Yes. Everybody thinks they move fast, but the magnitude of the enterprise level decisions are bigger in startups and in part because they have to be. Yeah. So those are some dynamics at play.

[00:31:31] So what if you're a leader at a startup or a PE backed firm, what HR metrics does your CEO need to know how HR is performing and which ones do they not need? Yeah. Well, I guess I'd first separate startup like a venture backed company from a mid market, lower mid market private equity backed organization.

[00:31:57] And let's say a third category is a publicly traded enterprise. Mm hmm. Those are three distinct types of orgs with three archetypal different metrics and measures that they would typically care about. All right. So we can decide how deep to go on this. As deep as you want, Andrew. We got all day. All right. All right. Great.

[00:32:27] So let's say venture backed tech. Let's describe that situation. So again, burning cash, trying to build a product very quickly, trying to show that they have commercial traction very quickly, trying to prove that they can attract talent to build the thing in the market along the way.

[00:32:51] So what types of people metrics does a tech startup care about? One, they can pause you there. I'm sorry. I just have to give a public service announcement. I just have to give a public service announcement because this stuff drives me crazy. And so I always talk about where you have to have business acumen as an HR person first. And how I define business acumen is, can you explain how your business makes money to your CEO and not feel embarrassed? Right. That's my definition.

[00:33:20] And when I asked you what HR measures matter, you define three different business circumstances. And then you started talking about the business problems that would be relevant in those business circumstances before you even set foot talking about the HR measures. And I just want to say thank you. Like, just thank you for that. Because I find that so few people take what matters in the business and the context of what's going on.

[00:33:46] They just say, how many times I've been asked to write a, I'm trying not to curse here, a freaking article that said, what are the top 10 HR measures that you should be considering for your business? And it just drives me crazy. So thank you for doing that and continue. I know I interrupted you there, but like this, like this mind, the mindset you just put forward is worth a million dollars to somebody who's early in their career. So thank you for doing that. Well, and thanks for highlighting it. I guess I don't even recognize it so much anymore.

[00:34:15] And that's a lot of what I try to help other HR people build, like build that contextual awareness. Like what's a right answer? What's a wrong answer? What do I want to have for dinner? Like the answer is it depends. What does it depend on? It depends on your circumstance. Yeah.

[00:34:37] Um, and, and so these business circumstances will and should drive what you work on in HR and what metrics you track. They should. Um, and if they don't, then you're probably doing something wrong or maybe you're overgeneralizing. Yep. Yeah. Um, all right. So the, the startup environment, you're trying to prove that you can grow. You're trying to prove that you can do something. You're trying to prove that you can accrue talent.

[00:35:05] So you might want to, uh, track head count, head count growth. How quickly can we ramp up? Hey, we're trying to build our first sales team. How's that going? You're probably also head count to plan in the Delta. Huge. Yep. Um, you're probably also looking at some discrete key jobs along the way. So this is less of a metric and more of a critical area to track.

[00:35:35] Like, Hey, we need to hire a director of engineering. We need to hire a, uh, machine learning engineer. And we've been working on that for three months. Like when's that going to close? Every one of those key hires is particularly critical in an early stage high growth. Yep. And the board will want to know about it. Like, Hey, how's that machine learning, uh, search going? Yeah. Um, yeah.

[00:36:03] So those, those are two like head count to plan critical roles that you're trying to fill. Um, lots of other stuff is measured, but how much of it really matters? Uh, I'd say not a lot. Like there, there might be, uh, ENPS measures that, that we can debate. You love ENPS, right? Not really. I, yeah, you, you're just dangling that in front of me. I'll chew on it.

[00:36:32] We'll talk, we'll talk more about ENPS. Generally. I think it's, uh, it's not a useful metric at best. It's a secondary or tertiary metric. That's super far removed from any meaningful impact to a business. I get why we in HR have tracked it. Um, but it, it, I'd be hard pressed to come up with a situation where it would be one of my top five things that I cared about.

[00:36:59] The, the, the counterpoint that I make to this sometimes is cause I'm actually probably more in your camp than you might imagine. Um, but I try to, you know, call balls and strikes where I can is there's this concept in the military called morale. Yeah. Right. And you think of like, who are the most buttoned up, probably least empathetic people out there, like military drill sergeant type leaders. And yet a very key variable in the military is morale. Yeah.

[00:37:27] Right. And so you realize like leaders at, in that organization start to realize we probably can't achieve our objectives if morale is too low. So it's kind of a threshold effect. Right. That's right. Now, does it matter if it's 61.2 or 62.1? Probably not. It just matters. Is it too low or is it high enough for us to get by? And what's the trend? Is it stable or has it dropped precipitously? Is it directionally correct? Perhaps.

[00:37:57] I don't know. Right. Right. And, and, and so I think where organizations, if you feel like you probably need to measure it, it's probably because you're already sensing morale is low. Okay. And, and maybe, maybe it is worth measuring, but perhaps if, if it's not a day to day issue at your firm, maybe, maybe it's not the most important thing ever. Yeah.

[00:38:20] Um, well, it could be part of a basket of metrics, but when, when it pops up as the number one, most measured thing and, and, uh, so much effort around action planning and implementation and these fake goals that pop up from, Hey, we're at a 75 ENPS. And our goal for next year is to hit an 80. Do you actually know what it takes to get to an 80? And is that going to do anything for you? No.

[00:38:50] And how many calories are you going to burn? And how much distraction is that going to cause in your org to try to get from 75 to 80? And if you miss your sales goal along the way, nobody cares. Yeah. And by the way, that'll impact your ENPS because you'll be laying people off or turning over the sales team or, or what have you along the way. So that's not a goal on its own. It is what I would argue. Um, ENPS is not its own goal.

[00:39:17] Um, but to your point, like, Hey, a directional indicator, um, that could be useful and it, and it becomes more useful. I think as you get to some sort of critical mass for startups, I'm broadly lumping them into sub 100 people. You should probably know who those humans are and have some contact with them and not rely on some sort of survey mechanism to, uh, to, to gauge it.

[00:39:46] You can, but no. Actually, can I ask you a question about this? Yeah. I get asked this a lot. I have a very particular answer that I give, but I'm curious what your thought is. How many people do you need before you start measuring analytics more generally speaking, rather than just managing humans as humans? Cause if you've got 15 people, you can just manage 15 people. You don't need analytics. That's right. How many people do you need at a firm before it's relevant? Yeah.

[00:40:11] I I'd say it's not even at a, at a firm it's in it's at a job type in some sort of similar grouping. Um, so for example, I, I work with, um, private equity backed, uh, healthcare organization, actually a bunch of them, but one, one I have in mind in particular, 8,000 employees in five states. Um, a hundred and 27 job titles.

[00:40:39] I'm doing a comp benchmarking and leveling thing with them. So I know, I know this off, off the top of my head. Um, in the 127 job titles, 7,000 out of the 8,000 employees are in 10 of those job titles. Pretty much everybody else is in kind of one off corporate jobs or like upper level management. So it's those 10 job titles that have a ton of people in them. Um, you get, you get this, you've worked in big organizations like finance.

[00:41:09] You're giving my answer. I say, you got multi-incumbent roles. That's the only thing. Yeah. So it's, it's not even how many people work at the company. It's where do you have a multi-incumbent population? Yep. And, and so like, okay, let's narrow it a little further and say, okay, how big of a multi-incumbent population does it need to be to care about tracking? And I don't know.

[00:41:30] I mean, you, you can get statistically significant data around 30 people, but it might be worth it to track some stuff even smaller than 30. Um, maybe you have an inside sales team with 15 people and it's worth tracking productivity and ENPS and some other stuff with your inside sales team because it's that critical of a group. Yeah. Um, yeah.

[00:42:00] So I, I think the answer is it generally becomes more valuable to track the bigger that multi-incumbent population becomes. And another factor is the criticality of the group. What about, um, what about talent density? That's a hot concept nowadays. What do you think about it? It's kind of a fuzzy concept too. Like it's defined a hundred different ways.

[00:42:24] Um, I feel like the concept of ensuring that your organization has highly skilled, highly productive people is broadly reasonable. That applies to all orgs of all types. Where it gets messy is when you start trying to break that down and say, what does that mean?

[00:42:47] And you say, oh, well, we have this percentage of our people are rated a three or above on our five point performance rating scale. Or we have our own shadow rating that sits alongside the performance rating scale that is potential or what the CEO thinks of them. Um, or maybe it's percent of your sales team that met quota.

[00:43:15] That could be another way of defining talent density. Um, so there are a bunch of different ways to do it. And it's not defined as the number of your employees you hired from strike. I feel like that's how it's sometimes defined as right. Yeah. I mean, that that's a, that's a massive bias in so many orgs is, um, name pedigree. Um, are you from central casting? Did you go to Stanford? Did you work in investment banking?

[00:43:43] And did you then like take an ops job at some place that we've heard of that's had massive success? Now I write about this in the book, um, that there can be a real mismatch in stage appropriate leadership.

[00:43:59] So if you're at a startup, do you really want to hire somebody from Stripe that like ran a big organization, but didn't build it and didn't deal with the messiness of being an individual contributor and, you know, building up something in a, in a product that's pivoting like crazy. Um, I think of, uh, a senior leader from Walmart that went to Figma in the early days, like that, that was probably going to be a stretch.

[00:44:28] Um, yeah. So, you know, trying to find the right, the right stage, um, and not just be blown away by name. Uh, I think that's becoming better known now, like once upon a time, the mag seven, you know, we, we want to hire somebody out of Facebook. We want to hire somebody out of Salesforce. Now there's some healthy skepticism when those people are being interviewed at early stage companies. Yeah, absolutely.

[00:44:53] But I feel like we neglected, I got you derailed, but what, what metrics matter in a private equity environment? Yeah. Um, in PE valuation of the firm is typically measured by EBITDA earnings before, uh, interest EBIT taxes, depreciation and amortization. So let's think about that as profit. Um, so it's about profitability.

[00:45:22] The investor puts money in five years later, they want to sell that, that company to another private equity investor. That's typically the play. It's only at the very, very large, uh, sizes, you know, much more rare where you might have an IPO. So it's usually moving from one PE sponsor to another PE sponsor. And what you're trying to do is drive up profit. Um, and how do you do that? Yeah.

[00:45:48] So you, you do that by increasing sales and reducing cost. And ultimately what you're trying to do is get to an efficiency ratio. Uh, so that gets me to my answer, my long winded answer. Uh, I think one of the most valuable metrics to track for PE and enterprise public companies is labor cost as a percent of revenue. Mm-hmm labor cost as a percent of revenue.

[00:46:18] That's a little different than, um, revenue per head count. Mm-hmm. Uh, when I was at general mills, once upon a time we used to track that and we're very proud of it, but there, there are too many ways to game that system. Um, head count all the, people off the books, you know? Yeah. Yeah. You, you have contractors, you have temps, you have vendors that you start to make it really squishy.

[00:46:42] But if you look at labor cost in terms of dollars, then you can start to roll in contractors, vendors, temps, part-timers, that sort of thing. Uh, so your labor efficiency is a really useful metric in private equity, who tends to be highly leveraged. I mean, they've got big loans out against the, uh, the business. There's a lot of debt service. Finances are tight in PE. Profitability really matters.

[00:47:11] So labor efficiency. And I think the best way to do that, I'll say it one more time is labor cost as a percent of revenue. Yep. And is that trending up or down over time? Um, I, I won't say that there's a magic number that you need to hit depends on industry depends on lots of different things. Yeah. I feel like there's like two levers that institutional investors and private equity are really looking for.

[00:47:38] And you can supplement one with the other is your profitability and your growth. Yeah. Right. If you're growing high, it's okay. If your profitability is just okay. And if you're, you know, not growing a lot, but your profitability is great, you're fine. But you know, labor costs as a percent of revenue plays into both of those equations. Yeah. But it depends on kind of what, again, I'm using that. It depends the contextual variables as to what's going on at your organization at the time.

[00:48:08] Yeah. That's fair. Yeah. It's, it's profitability and multiple. So multiple expansion is the way a lot of money is made in private equity. And that's often through lots of mergers and acquisitions and a roll up strategy. And you have a, a stronger centralized platform with a bigger business. And so you might buy some little mom and pop, um, hardware shop at four times their EBITDA.

[00:48:34] Uh, and then you put a bunch of them together and then you sell it at eight times their EBITDA. So that, that, that's multiple expansion. And so. Accretion. Yep. Yeah. Yeah. And so the, the labor productivity matters there, the higher your labor productivity, um, the, the better that looks from a multiple perspective for sure. Yeah. Yeah. Yeah.

[00:49:02] I don't know why I'm enjoying the heck out of this conversation. Um, I just, I talk to people, analytics folks all the time and I, I just, I get sometimes a little disenchanted with how few people can have this conversation. Right. It's because I think it's like, um, I don't know, they call it like the Fox versus the hedgehog. You know, the Fox knows a little bit about everything, but the hedgehog knows one thing really well. And I feel like there's a lot of hedgehogs in analytics and not a lot of foxes and you're very much a Fox.

[00:49:32] And I think that's to your credit, Andrew. Well, well, thanks. Call me Foxy Cole. That was not a pickup. I apologize.

[00:50:09] Yeah. him. That's the, for sure. I mean, if you ask a lot of hedgehogs, you know, I would like to see that up at the top of his What is he, what's so important to you? Is he, what's a big deal to be doing? Is he, what's a big deal with this? You know, the, what's a big deal for him? Is he, what's a big deal for him?

[00:50:36] Is he, what's a big deal for us? Is he, what's, a big deal for us? made some. Yeah, he was papering over some excuses, but I'm trying to have like the discussion in principle. This is what, yeah, this is what you're fishing for. I will, I will offer the spicy take that that happens sometimes. HR can often create problems. If we wear the hat of employee advocate

[00:51:02] so strongly that we become adversarial with the business, we're doing nobody a service. We start to act like union stewards. Yeah. And, and that means that we're, we're pushing back against things that the organization needs to do to be healthy and thrive and survive. And it might be with high minded good intentions. This is the right thing to do. Like that, the right thing to do, those good

[00:51:30] intentions can get, can get us into lots of difficult and awkward situations. If we approach our work with too much high minded morality, we can be at, at best a distraction to the business. At worst, like a true adversary standing in the way. So I don't think it's crazy to say that,

[00:51:56] you know, some HR people cause more problems than they solve. But I also think that it was probably handled in a really hand handed way. Oh, it's just like all the CEOs saying that AI caused layoffs. It's like, yeah, pretty sure that there's other reasons these layoffs are happening, but it's great that you got this excuse queued up and ready. You know, somebody to blame. And I think that was probably the case in this case, but I appreciate you sharing that. I do want to talk

[00:52:18] for a second about people leader accelerator. Um, it, I think, and you won't say this, so I will, your list of graduates is impressive. You, and I don't know if they were impressive before they joined the program or not. I don't know causality there, but you, in terms of a legacy of people that are out there in the Bay area, for the most part, they're doing really great work. And I could name names. I'm not going to, there's some really, really talented people that have come through people

[00:52:48] leader accelerator. Can you talk a little bit about that and what, what you're really trying to create, um, of that next generation of HR leaders? Well, thanks for the kind words about the, the program. That's my, you know, passion project and, you know, has been the, the highlight, I think of my career. Um, I I'm just so proud and privileged to be able to work with other HR people

[00:53:15] that want to grow, that, uh, want to be, want to be really effective at what they do. And, um, I think we, we have a positive selection bias. The people that want to do a program like people leader accelerator, and there aren't a whole lot like it, um, are people that know that they, that their success

[00:53:40] will be dependent upon their ability to understand and align with the businesses, uh, that they, that they work with. And so they want to grow, they want to develop in an area and they're looking for a deeper, intimate learning experience and community. And so the people that sign up for that, uh, and, and I put lots of hurdles in their way. It's, it's hard to apply. You've got to go through

[00:54:07] an interview. You've got to speak with alumni. You've got to watch, you know, videos and fill out an application. And, and that's because we're not trying to be a great business. We're trying to be a great learning experience and a great community. So it's not easy. Um, and the people that want to do

[00:54:28] that are the people that end up doing it really well and engaging deeply. I simplify it by saying you get out of PLA, what you put into it. And so with that is this expectation of like really strong engagement and commitment in, in the learning experience and in the community. And so I think we had great people coming in and then hopefully we've polished some diamonds along the way.

[00:54:57] Absolutely. And you used to have a pretty, pretty excellent analytics faculty. I don't know what happened to that, but, uh, yeah, yeah. Well, Brad, uh, uh, yeah, our mutual friend, Brad Harris started doing the analytics and I have a natural bias towards it as well. And then at some point he said, oh, I'm moving to Paris and be the Dean of the top business school in, in Europe. Uh, there's this guy, Cole, I know who's really into analytics. Maybe he could help out with that class. And you, you were

[00:55:26] kind enough to do that a couple of times for us. And then you got too big and too important and too busy. Uh, and so we've, uh, we've continued to work with some other, uh, some other folks after you. No, no comment, no comment at all. But, uh, uh, well, Andrew, do you want to join me in Cole's corner? Sure. Let's do it. Welcome to Cole's corner. All right. Let's start out with some

[00:55:52] rapid fire questions. If you weren't doing what you're doing now, what would you have done with your career? Oh, wow. Um, like early stage, I thought I was going to be an attorney. Really? I applied to law school. You went to mechanical engineering school and thought you were going to be an attorney. Yeah. Yeah. I, I applied and got accepted to Cornell law school.

[00:56:18] Oh, wow. And the, the math I did at the time told me that the HR career paid better. The internet was not fully up and running at the time. Okay. A study in comp benchmarking that we could have here. Um, what's the place you've never been to that you most like to go and why?

[00:56:39] Oh, what? Um, my, my partner, Lindsay and I are talking about taking all four kids to Tuscany, um, next summer. And, uh, I've been, I've been to Europe. I've been to Italy, but I haven't been to an environment like, like some, some big, uh, historic place in the countryside that the kids

[00:57:08] who are 10, 11, 12, and 13, four, four kids in that age group, we can see Rome. We can see Florence. We can get the family time together. Um, I really want to do that with them as a family trip, bonding experience, learn the history. Um, that's, that's what I haven't done. And what is absolutely on my

[00:57:32] short list. Absolutely. If you were a character in any book, TV show or movie, who would you be and why? Oh my goodness. Um, I did not prepare for this one. The one that pops to mind, um, um, is Alex P Keaton from family ties. Okay. Why? Remember that old sitcom wore a tie was a member of

[00:57:56] the young Republicans. Like I'm not, I'm not talking, uh, politics stuff, but like he was this buttoned up kid of a, uh, kind of hippie family. And I feel like I am kind of the, the businessy, uh, person in the midst of the HR universe. And I also used to watch that show like every day after,

[00:58:22] after school. And I wanted to be Alex P Keaton, the overachiever perfectionist, uh, that is him. Yeah. All right. I got one big question for you. All right. I think you're the perfect person to answer this. There's a few hyperscalers now in the AI space. So thinking of like the anthropics, the open AI is a few other players that are really kind of living that old life of Silicon Valley when you were just growing at incredible rates. And frankly, they're the fastest growing companies

[00:58:51] that have ever existed. If you were leading HR in these companies, what would you be focusing on from a data, uh, leadership and metrics, uh, culture perspective? Oh, that's really interesting. Um, yeah, I know some folks over at open AI pretty well, just, um, interviewed the head of HR and TA lovable, uh, big vibe coding place. I don't know anybody over at anthropic that, that I'm aware of.

[00:59:19] Um, what would I be looking at from a people analytics perspective? Um, in these orgs, they're high growth. So I look at head count, head count versus plan. I would want to know what are all these people doing as well? And how does that stack up to the goals and initiatives that we're trying to tackle? So a lot of the work that I do in HR is

[00:59:46] trying to help business leaders identify what are the most important goals and priorities for the org. And then I want to try to stack up. Um, are we meeting the needs against those goals and initiatives? So like if we're trying to build out an enterprise sales team, how's that going? If we're trying to build a new large language model, um, do we have the talent that we need to do that? So I'd be looking

[01:00:11] at something around like talent availability as, as paired against company level key priorities. Um, from a strategic talent standpoint, why would you name all of your engineers, member of a technical staff?

[01:00:29] Um, a couple of reasons. One, it, it hides their, uh, level from the outside world because they're being poached like, like crazy. Um, two, it, in theory reduces the hierarchy, um, inside the organization.

[01:00:57] I have a different opinion on that. I think if you don't, if you don't provide the hierarchy, it creates itself, which often ends up being subversive and unhelpful. Um, like the old Zappos holacracy where there was a hierarchy, but nobody can say that. I know way too much about the Zappos thing. I've got a strong opinion on that specific situation.

[01:01:20] Sure. I want to hear it. Well, so, so Zappos, for those that are less familiar with it, they sold shoes online and they were famous for having this, um, flat organization without really any managers. Here's what people didn't realize. 95% of that organization was call center reps under one roof in Las Vegas.

[01:01:44] Call center reps, multi-incumbent job, really easy to measure and manage what they do. You can track number of calls and dropped and, you know, the surveys that go out to people.

[01:01:55] And so can you have a big span of control in that environment? Yeah. You can have supervisors that aren't supervisors. You can have the metrics manage them. Um, and so the, the idea of a self-directed work team, you know, popped up in the 1950s and, and industrialization.

[01:02:17] And, and, and that's all that, uh, Zappos was doing with different wrapping paper. Um, I think at today's AI companies that are trying not to give out titles. I think that's probably just trying to avoid, um, hierarchy and encourage curiosity and encourage more peer behaviors, but I suspect that it will lead to more internal friction and conflict over time.

[01:02:44] Um, and they'll, they'll end up backpedaling from that. Welcome to ghosted by machine, the podcast about work, hiring, and all the things no one explains. After you click submit application, we talk about broken hiring systems, AI filters that eat resumes for sport, recruiter ghosting, and the very real humans trying to survive it. Each episode features real stories, honest conversations, and just enough sarcasm to stay sane.

[01:03:13] No buzzwords, no thrill to announce, no advice written by an algorithm pretending to be a thought leader. If you've ever wondered where your application went, you are in the right place. This is ghosted by the machine. No resume required. I love it. This is so fun. You actually answer my questions. I love it. Um, I'm just, I'm just tickled right now. Yeah. Well, I don't have like the politician line where I keep trying to go back to something to sell it.

[01:03:42] Um, I'm not trying to sell anything. It's trying to be helpful along the way. This is what exits do to you guys. So go get some exits. Yeah. All right. All right. Um, I'm going to go into the, what am I reading section? So I'm going to combine two together really quickly first. And again, this is, I'm like deep in this space, but I never get to talk about it on the podcast.

[01:04:03] So following firms like, you know, a 16 Z or sometimes called Andreessen Horowitz, biggest kind of like factory of venture capital in the, in the bay. Um, Ben Horowitz, one of the co-founders wrote rules for running great HR master. Uh, so there's just a list of seven. I'm going to read all seven, uh, master process design above all else.

[01:04:26] Be a diplomat, never a tattletale, help managers win, forget the credit, never hoard knowledge or play politics. Stay deeply networked in industry, earn the CEO's full trust and backing and read what goes unspoken. And I'm going to combine this really quickly. Um, cause Gartner just published their HR BP ratios number.

[01:04:50] Um, so they said that a firm should have one HR person for every 423 people, but they're projecting it's going to move to one person for every 1200 people by 2030. So in four years, it's going to triple.

[01:05:04] Um, and so I wanted to combine those two together for you and just say, first of all, what do you think about the rules for running a good HR from a non HR person and a key tech leader, but also how the AI presumably is going to impact how many HR people a firm should even have. Um, well, when you pulled up that post from Ben Horowitz, I, uh, I, I remembered I commented on that post.

[01:05:33] Oh, did you? Yeah. I didn't see that. Sorry. Yeah. I'm trying to remember what the heck I said. Um, I can actually read it for you. I just pull it back up. Yeah. I said something along the lines of like, I don't disagree with any of these points, but what you left out Ben was make sure you're working on the right things. And, you know, that ties back to the concept of understand what your company is trying to accomplish, tie all of your, you know, HR initiatives.

[01:06:03] Um, processes, programs to that. So he, he had more qualitative, uh, things generally within that list. Oh, there it is. Yeah. I found it. That's really funny. Coincidence. I actually did not realize that, um, shows how much research I do before these podcasts. There you go. There you go. Like really deep research where you knew. Are there any of them in particular that stood out to you as helpful or unhelpful? And what did you think about the Gartner number as well?

[01:06:34] Um, well, yeah, let's, let's talk about the Horowitz one first. Um, I think great HR is different if you are in the HR service center versus if you're the CHRO. Mm-hmm. You're in the CHRO. What's the way that you can impact the organization the most? Like org design is probably a big part of that. Like clarification of goals and priorities and org design are on the short list.

[01:07:03] But then the other qualitative things about like how to interact with the org. Yeah. And that probably matters a little bit based off of the culture of your, uh, company as well as the style of your senior leaders. So put, put that one aside. Like strategy work sometimes gets a bad name. Like I don't want to work with an HR person that's in strategy all day. I want to work with somebody that's actually doing stuff. Yeah.

[01:07:32] Um, yes, but clarification of goals and priorities and making sure that you have a team aligned to be able to deliver against those, uh, that might be the highest and best value that anybody in HR can, uh, can deliver. Um, all right. Set that one aside. Um, the Gartner number. It's funny. We used to talk about one to a hundred, um, 100 employees per HR headcount. Mm-hmm.

[01:08:00] Um, Gartner's talking about this in terms of an HR business partner. Right. And I've got beef about business partner titles as well. Like I, what's your beef? Well, the beef is that everybody's calling all these HR roles, business partners, but very few of them actually are like most of the people they're called business partners are actually generalists. Um, or sometimes a coordinator, like generally HR business partners.

[01:08:28] Um, are air quote, just, just running broader programs and providing mid-level manager performance management advice, doing a lot of employee relations and an annual process rollout. A true business partner, a Dave Ulrich style business partner is someone working with a, a policy making

[01:08:56] decision maker that, that has P and L responsibility that can have different processes and programs across their org. And they, they help them decide what processes and programs and policies will help us meet our goals. And that's a true business partner, not just like running a, a, another program or doing ER.

[01:09:27] So I think some clarity around what a business partner really is would be helpful along the way. And that, that's my big beef there. Um, the idea though, that you can have a broader span that a, a business partner can support more people. Sure. I get that. Like, especially as you have some tools that can help managers deal with employee relations, they can answer the policy questions that these, you know, what, what's the term, uh, uh, a business partner in name only.

[01:09:57] Um, if you're a B, if you're a BP, I know, uh, if you're a BP in name only, and you're doing a lot of policy and process answering, and you're doing a lot of employee relations, a lot of frontline performance management support, then yeah, like AI can step in and do a ton of that. Um, and so that should change the ratios.

[01:10:19] Um, I worked on a lot of that at, uh, at Wells Fargo and Wachovia, uh, Wells, even though they had 300,000 employees had generalists. And when I was there, when we merged with, uh, with Wachovia, we moved to a shared services model, uh, segmented services.

[01:10:42] So we, we had true business partners, we had employee relations consultants, and we had, uh, service center, uh, representatives. And so by segmenting, we were able to massively change the ratios. And so we were at like one to one service center rep per 500 employees, one business partner per 2000.

[01:11:11] But it wasn't based on employee ratio. It was based off of decision-making policy-making leader ratio. And it was like one to one on that. You know, um, the reason why I brought up those two articles together is actually to kind of get to your point about they want business partners, not business partner.

[01:11:34] I knows, you know, the name only because, uh, I had, uh, Jennifer Wilson on the podcast a while back. She's the head of the CHRO practice at Hydric and Struggles. Yeah, I know Jennifer. Yeah. And she was talking about one of the key things, uh, kind of giving advice for analytics people who might want to become a CHRO someday, um, was that you need to become a consigliary. Right? Yeah.

[01:11:58] And I look at Ben Horowitz's list and, and the Gartner research combined and saying like, look, I don't need a bunch of you guys that are HRBP I knows. I like AI is going to help a lot of the, with the generalist stuff that you, frankly, I shouldn't have been paying for this whole time, but now at least I won't have to. But if you look at his list, there's one about process.

[01:12:19] And then there's six others about essentially being a consigliary, you know, be a diplomat, never a tattletale, help managers win, forget the credit. Don't hoard knowledge or play politics, stay deeply networked in the industry, earn the CEOs full trust and backing and read the room for what goes unspoken. All of those are essentially, you know, be a great HR business partner. Just don't be a sociopath. You know, like that's essentially what I see there.

[01:12:47] And, and it's, and that's what leaders are looking for. And it seems like, again, we do sometimes get derailed on these side quests of know what the business leaders are really looking for is for us to improve our EMPs score. And we're going to get it figured out for the business. And then everybody's like, why is HR running around and doing all this walkie stuff? And so that's why I brought it up. And I just wanted to get your perspective on it. Yeah.

[01:13:15] I, I think I'd push even a little bit on that and say most leaders, including Ben, I don't think know what good HR looks like. So Ben's list, you're right, was, was most, mostly about what not to do as phrased in a what, what to do list. Like don't be a sociopath is largely what the takeaway was. Yeah. Right. Well, and it's implicit within that is he's probably encountered a bunch of sociopaths. For sure. As have I. Yeah.

[01:13:44] Frankly, and we're kind of like saying, Hey, can we get out of here, please? Yeah. So there's a lot of power play that, that tends to happen. Like HR might view themselves as the orchestrator of, of moves behind the scenes. And should we replace this leader and, you know, who's, who has conflict with whom? And, you know, the, the, the interpersonal conflict stuff is not super helpful. Generally.

[01:14:13] I find if you'd like that stuff too much, we're probably shouldn't be friends, you know, because there's people out there that really like that stuff. Right. Right. Yeah. Yeah. I think where we have an opportunity as a function, we human resources professionals, I'll extend that to the people analytics folks. Oh, thank you. That's very generous of you. Is by, is by showing others what good looks like.

[01:14:39] Let, let's ask less what you want me to do. And use more of our own judgment, not being an advocate, not being a advocate for the common good or employee wellness, but being an advocate for the, for the business's health and success.

[01:15:01] Use our own judgment about what those things are that can contribute the most and, and show, and show what we can and should do. And when we, when we show that, that's when the leaders really get it. And, and then it's less about the bedside manner and it's more about the medicine. Yeah. I had one other that I was going to cover, but I'm just going to skip over it because I'm, I'm kind of now bored by the topic.

[01:15:28] So I've got one last article to cover with you. Um, and it's from friend of the podcast, you and son, uh, from her amazing work sub stack. And it's called your best engineers don't want to write the skill.md file. And so she goes through this journey of trying to talk about the tacit knowledge that she has as an analytics professional and realizing it's really hard to write down the tacit knowledge that we have about how to do effective analytics.

[01:15:58] And then she pivots into, because many engineers and many firms are being asked to kind of document their whole job and turn it into a skill.md file that you can then have train AI on essentially how to do that engineering job. And she asked the question, um, that the fear of most engineers is if I write all this down, what do you need me for?

[01:16:21] And, um, I, I feel like with a lot of the AI transformation stuff that's going on right now, and she gives some, like what organizations can do about this in terms of incentives, knowledge, formalization, modularization, and a few things. But I mostly wanted to hit on this point of kind of the, I don't know, the karmic trauma that we're doing to folks that are like asking them to document their jobs so that AI can do it for them. But what did you think about this article? And then, and just in general, this trend that seems to be going on.

[01:16:52] And it seems like it's straight out of office space, the old, the old movie. Right. And it's not far off from industrial organizational engineering, like trying to map out internal processes, trying to map out workflows, trying to understand volume of what, what happens. That that's always been uncomfortable.

[01:17:16] And companies like Bain and BCG have been doing work like that for decades, decades and decades. And yeah, does somebody like to be asked to document how they do their job? No.

[01:17:33] But if it's in the interests of trying to figure out how your organization can operate better, and if Cole does something one way, Andrew does it another, and Brad does it a third, then we might want to understand those differences. Um, I guess I'm like, get over the trauma.

[01:17:55] If, if you're, if your organization is trying to understand how work gets done, help them out, understand how work gets done. And then it's up to the organization not to run with scissors and do something stupid with that. What do they do if they run with scissors? Well, then you might want to make another decision about where to work.

[01:18:18] Like if, so if that organization takes your skill.md file and says, thanks, now we have an AI agent that can do what you do. Like, eh, I don't think it can replace the judgment and all the nuance. And there's so much, it depends. Like how could you possibly, um, build out in, in written format, all of the, you know, if then, uh, choose your own adventure paths that, uh, that could apply. Maybe.

[01:18:47] Um, but then maybe you go do that for some other place. Now you actually hit on the direction I wanted to go with this was to talk about judgment. Um, cause I was reflecting on it, um, about union's point about the tacit knowledge associated with doing people analytics. And, you know, I've got my own academy, the data driven HR Academy, and I've taught in multiple formats. I've taught at PLA. I've taught at the MBA level multiple times at multiple universities.

[01:19:13] I've been a guest speaker at probably 30 different universities to talk about people analytics over the years. And, and writing it down in my book as well. Well, and the one thing, like I keep getting these questions, which is people want to formulaic approach to how to do these things. Right.

[01:19:31] And the more technical and the more senior you become rather just not just if you become more technical, not just if you become more senior, the more you realize that it's just the kind of the taste and the judgment. Yeah. And you can't write that down and there's not a formula. Right. Like what makes like, I rail against dashboards all the time, but there are, there is such a thing as a good dashboard, but what makes for a good dashboard is usually taste and judgment.

[01:19:59] Obviously understanding the business, obviously it needs to have a good UI UX. Obviously like there's some bare bones things that you can do from a formulaic standpoint, but the reality is the difference between a good dashboard and a great dashboard is usually taste and judgment. Right. And it's really hard to figure that out in organizations. And that is the value that the engineer is bringing to, to the organization. That's not going to be in the skill.md file. Right. Right.

[01:20:26] And so I do think that there's a long future for people who have that taste and that judgment. And really it becomes a question of how do you build that when you might not get the formative experiences that the junior engineer or the junior people analytics person used to have that AI is now doing. Cole, I agree wholeheartedly. Had a few thoughts pop to mind as you, as you talk through that and maybe some analogies.

[01:20:55] Um, after I wrote the book scaling for success, I would get a lot, you know, questions. Um, Hey, what's it about? Like what, give me the synopsis. And what people wanted was the elevator pitch, you know, 15 seconds, you know, tell me. And I struggled with that a little bit because there's, there's a lot to it. And, you know, it's 200 pages of footnotes and references. And like, what, what is the like core salient takeaway?

[01:21:25] And I feel like a lot of, uh, organizations ask that of HR as well. Like, Hey, what's the right org design for my company? Mm-hmm. And they want a elevator pitch. They want in 15 seconds, tell me whether I should have a standalone sales leader separate from a marketing leader. And how does that, you know, compare to product versus engineering?

[01:21:55] And what you'll get instead is a, is probably an unsatisfying answer that says something along the lines of it depends. It's nuanced. We'd need to get it. Here are a few concepts. Here are a few principles that you might want to consider. Um, and, and so I think that ties into, as you get more senior, as you get more technical, you understand more of the nuance. Um, Kelly Dragovich said something once that, um, that pops to mind.

[01:22:24] She said, those who don't really understand tend to generalize. And I think the opposite is true. If you understand deeply, then you understand all the nuance and all the ifs and thens, and you want to do it right. And so like a very senior, very technical person can go in and build your great dashboard, but they're not going to do it in 10 seconds on the spot without knowing the context and all the things that it depends on.

[01:22:53] So I think you're exactly right. Like the more, you know, um, the harder it is to give the right answer on the spot without context. Yeah. Well, I will do this. I'm going to give you a 15 second clip for why your book scaling for success is great that we can clip up for the after this. So you don't have to, which is if you're new to HR and you're in the series B adjacent space in tech,

[01:23:23] this is the one true book out there. That's going to help prepare you for what you're getting into. You even used to have a firm called series B consulting for just this reason. And it is the tome out there for, for getting into that space. It teaches you everything you need to know and more. So it's a really great book. Thank you. Cool. You're welcome. I also wanted to give a quick plug, uh, for your podcast as well. Um, do you want to talk about that for just a second before we wrap up? Um, well, sure.

[01:23:53] Yeah. Uh, Jess, you win and I, who Jess is, um, a former McKinsey consultant and software engineer and chief of staff at Khan Academy and head of HR at, uh, at Gusto. Um, she's like you Cole been a, uh, uh, adjunct faculty member for people leader accelerator.

[01:24:14] She and I, uh, have been doing a podcast since, uh, mid 2025 weekly releases where we talk with executives, CEOs, investors, HR leaders, uh, for our audience of mid to senior HR leaders, um, about things that might be helpful for our audience, you know, with a specific lens on how to help HR leaders grow their careers. So what are the things that they should know that would help them grow?

[01:24:45] When you, I graciously got to be a guest the other day. So thank you for having me on. It was like a walking pop quiz. I appreciated it very much. It was awesome. I appreciated you being willing to like follow the rabbit holes with us. Yeah, absolutely. And maybe this has been, uh, kind of similar today because I think we've gone in a lot of really fun directions, but if people want to reach out to you and learn more about the variety of things that you do, Andrew, what, where, how can they find you and what should they be aware of? Yeah.

[01:25:12] Uh, well, one central place is the people leader accelerator website. It's www.peopleleaderaccelerator, all one word.com. Um, and I'm on LinkedIn. I'm noisy on LinkedIn. Just look me up. Andrew Bartlow. There aren't a whole lot of us with, with this name. Yeah, absolutely. Well, you've been listening to Directionally Correct, a People Analytics podcast with your host, Cole Knapper and today's guest, Andrew Butler.

[01:25:42] Thanks for joining me today, Andrew. Thanks, Cole.