Stop trusting your guts on people issues

We can finally stop trusting our guts on people issues. In this interview Laszlo Bock provides details on how Humu is making work better for everyone using more data, more love and the concept of nudging. Furthermore, he shares his view on the single most important task leaders should spend their time on and about what developments in HR he is currently most excited about.
We had a talk with Laszlo Bock, Founder and CEO of Humu and former SVP of People Operations at Google. He is the author of the book “”WORK RULES! Insights from Inside Google to Transform How You Live and Lead” which has been named one of the top 15 business books of 2015. Laszlo built up and led Google’s people function for 10 years and during this time Google received more than 100 awards as an employer of choice and was named the Best Company to Work For more than 30 times around the world. Laszlo is one of the most influential and known HR leaders around the world and has been named “Human Resources Executive of the Year” by HR Executive Magazine in 2010.
What problem did you set out to solve when founding Humu in 2017?

My co-founders and I created Humu because we saw that work could be better, everywhere. There are 4 billion people on this planet who work, and too many see their work as just a job, or a means to an end. We spend more time working than we do anything else. If we’re devoting most of our lives to work, that experience should (and can) be meaningful, impactful, productive. That’s why we created Humu.

The two biggest opportunities I see in the human resources space are more data and more love. First, bringing more data and science to the practice that has for decades been characterized by “What does my gut tell me, what does my experience tell me?” There’s a lot we can learn from behavioral science and behavioral economics to make work better by making better-informed decisions. The second is remembering to put a little love into the practice, because we often get focused on process and operations rather than remembering that we are all human beings.

When it comes to putting all this into practice, and changing the way people work, it’s become clear to me that training doesn’t always work—and just talking to people doesn’t always work. There are a lot of things that make it hard to get human beings to change their behavior in a way that both makes them happier and serves the organization better.

Cass Sunstein, a professor at Harvard University and the coauthor of Nudge coined the phrase “nudges” for small interventions that help people make better choices with his partner Dick Thaler. At Humu, what we focus on is using these tiny, tiny, interventions—the smallest we can possibly make—to make people happier and more productive and more innovative and more inclusive. And overall to create workplace cultures that are strong, resilient, and adaptive to the changing business world.

And what we find is the smallest intervention often has the biggest result if you know what intervention to send to what person at exactly the right time.  

In Humu you emphasize on the importance of data backed decisions and Machine Learning in order to reach your goal of creating a more productive, innovative and happy workplace. Can you elaborate on this?

For the first time, leaders can know what’s going on in a way that’s not filtered by perception, but by data that they can trust. And we can finally stop trusting our guts on people issues; bias-riddled gut decisions are to blame for so manymarkers of an unhealthy culture: discrimination, bad bosses, and ineffective workers.

The union of computer science, people science, and a strong foundation in ethics and privacy, can help leaders make measurably better, more fair decisions. And organizations that leverage these advances are seeing the kinds that we’ve all hoped for for decades.

To make organizational change easier, we send people small, scientifically-backed suggestions and reminders called nudges. When we’ve nudged employees about how to build a better culture, we’ve seen employee retention intention, happiness, and the belief that leadership is taking action on good feedback all go up.

The union of computer science, people science, and a strong foundation in ethics and privacy, can help leaders make measurably better, more fair decisions.

And we’re not the only ones. At companies with great cultures, employees understand the broader impact of their work. Long before he became an advisor to Humu, Wharton professor Adam Grant demonstrated that by helping people find meaning in work, you can improve productivity by more than 20%.

Culture done right can improve productivity by 10%, 20%, maybe even more. One tangible example: at Google we designed a nudge to help new hires get settled. That single intervention was worth 2% productivity—or about $400 million per year at the time. Not a bad ROI on a cultural intervention.

Prior to founding Humu you built up and led Google’s people function for over ten years. In this time you published one of the worlds most recognized business books “WORK RULES! Insights from Inside Google to Transform How You Live and Lead”. Here you describe that HR given limited resources should always invest first in recruiting. Why?

Your people are your most important resource. I knew this when I wrote the book, but I feel it even more acutely today as a part of a team of just over 50 team members at Humu. Every new hire makes such a difference to the work we’re doing, and the culture that we’re creating. There’s no single more important way for leaders to spend their time than on recruiting.

Picking up on another “work rule” of yours, why is it advisable to pay employees unfairly?

That rule certainly got a lot of attention! But I stand by it. When I say “pay unfairly,” I mean “pay unequally.” Top performers should be compensated for their value. Would you argue that Steph Curry’s contract with the Warriors be equal to another player who spends his time on the bench? Of course not.

In my time at Google we had many cases where people at more “junior” levels were making far more than average performers at more “senior” levels. It’s a natural result of having greater impact, and a compensation system that recognizes that impact.

Before you introduce lots of variance in how you pay, you need to first make sure the underlying system is just.

Now it’s important to call out that this mindset on compensation isn’t a mechanism to ignore true gaps in compensation—like between genders or for certain minority groups who historically are underpaid. Before you introduce lots of variance in how you pay, you need to first make sure the underlying system is just. This is something I’m particularly passionate about, always have been and always will be. And at Humu we take steps to review and re-review compensation on an ongoing basis to make sure there’s no room for this kind of injustice.

In Google and Humu you managed to build a people oriented organization. Why do you think so many companies still struggle to follow this example?

Exploitation has long been profitable. Take Foxconn, whose reported working conditions have included high worker suicide rates, corrupt pay practices, and exploitation of child labor. Foxxcon is valued at over $85 billion—and is the largest electronics manufacturer in the world.

Squeezing labor out of people while disregarding their quality of life has been a productive model for short-term growth—and for the workers of companies like Foxconn, is still a harsh reality. But now more than ever, competition requires organizations to leverage the expertise and experience of their people in a way that puts long-term benefits over short-term gains.

But there’s another, better way—and now that I have the chance to talk to more and more companies in my position at Humu it’s clear to me that this is the more prevalent way of looking at people: as a value that needs to be cared for.

At Humu, we see a clear financial return to investing in a healthy culture.

What developments in HR are you currently most excited about and on what topics should HR leaders focus on?

#1 – Invest in culture

In the 1980s, management scholars coined the term “corporate culture,” noting that companies tended to be more alike in beliefs, values and behavioral patterns than society in general. Corporate culture came to mean how the organization achieves its goals, from the ethos of the corner office to the treatment of individual employees.

But that “culture” lived exclusively inside the company’s walls.

Corporate culture came to mean how the organization achieves its goals, from the ethos of the corner office to the treatment of individual employees.

Those days are over. Now, Glassdoor lets any employee publicly rate their CEO, LinkedIn allows your competitors to ransack and pillage your top talent, and news outlets regularly publish stories exposing the internal workings of corporations.

The most successful cultures are based on what researchers call companionate love. That means treating people with respect. It means including individuals whose backgrounds may be wildly different than your own. It means hearing out an idea that you hadn’t thought of—or might buck the status quo that you so carefully built. This means you get access to the cool talent before anybody else. It also means you will retain people, as you are the cool place to work.

#2 – Invest in culture differently tomorrow than you are today

Poorly executed engagement surveys and training sessions are ineffective—and even detrimental. Leaders should scrap programs if they don’t have evidence that they work, and invest in new technologies that promise transformation. But they should dump those too if they don’t deliver! Keep going until you find tools and processes that you can prove work.  

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