Episode 183: How to Prove the ROI of a Positive Company Culture (an interview with Didier Elzinga)
In an era where the financial justification for HR initiatives are scrutinised more than ever, proving the ROI of culture and employee engagement initiatives is a critical challenge that many HR leaders are facing. However, demonstrating the financial impact of these initiatives is essential if we are to achieve board buy-in and ensure the sustainability of organisational culture in times of change and economic uncertainty.
This pressing issue is at the heart of this episode of the Digital HR Leaders Podcast, where host David Green is joined by Didier Elzinga, CEO of Culture Amp. Together, they will be discussing:
The pivotal role of a thriving culture in driving business growth;
The challenges businesses face in cultivating and maintaining a strong company culture, alongside practical strategies to address these challenges;
Key findings from Culture Amp’s research (link below) on the impact of organisational changes, such as layoffs, on employee engagement, and the lessons learned about engagement recovery times;
The remarkable resilience of employee engagement in regions like the UK and GermanyEffective approaches for HR leaders to demonstrate the financial impact of culture and engagement initiatives to the C-suite;
Guidance for HR professionals on measuring the ROI of their culture and engagement efforts.
This episode is an essential listen for HR leaders, chief people officers, and people analytics leaders looking to navigate the complexities of fostering a positive workplace culture in today’s economic climate. It offers not just insights and data but real-world advice on aligning culture and engagement initiatives with financial success.
Support from this podcast comes from global platform leader for employee experience, Culture Amp. Learn more about how Culture Amp can help you create a better world of work at http://cultureamp.com
[0:00:00] David Green: Didier, welcome to the show. Probably, I should actually say welcome back to the show. Can you believe it's been five years since we recorded that episode in the Insight222 office in London in those halcyon pre-pandemic days? I know Culture Amp has grown significantly over those five years. As you introduce yourself and Culture Amp, please tell us about your growth journey and what you've been up to as a CEO of Culture Amp in the past five years.
[0:01:45] Didier Elzinga: Thanks, David. Yeah, I mean what a five years to try and recap. I mean, it really has been pretty incredible. So, yeah, for anyone that I don't know who's listening, my name is Didier, I'm the CEO and founder of Culture Amp. And our mission today is the same as it was when we spoke five years ago, it was the same as it was when we started, which is to create a better world of work. And so for us, that's about helping customers drive intentional culture at scale so they can deliver on their mission. That's our mission and we want to help our customers deliver on theirs. I was thinking actually before this, where were we when we last spoke? I was trying to remember how I think we had about 1,500, 2,000 customers, something like that at the time. So, we're now over 7,000, we're almost 1,000 Campers, who are building and delivering the Culture Amp platform, and helping customers grapple with all sorts of questions.
I think what's been so interesting about the last five years, and I'm sure we could spend a lot of today talking about, is just how varied those questions have become now. Ten years ago, everyone was like, "Are my people engaged? What is my culture like? And now we're thinking about, "How should we approach remote work? How do we define our performance culture? How do we build a development driven culture? What makes our organisations more inclusive? How do we become more diverse? And so, our journey has been a journey with all our customers, exploring those questions, and then bringing the data to bear either individually or en masse in the research that we do, to try and really drive that. So, where are we five years later? I would hope to think wiser. I'm not sure we've actually got answers to all the questions yet though.
[0:03:17] David Green: No, I don't think we'll ever have the answers to some of those questions. I think the answers evolve over time as well, don't they? Given how far Culture Amp has come, and certainly if we just look at customer size, you've quadrupled in that since we last spoke on the podcast. What would you say is the one thing that has kept your culture thriving during its growth?
[0:03:39] Didier Elzinga: It's a really interesting question and it reminds me, I often get asked, when we get new intake of Campers, and I'll do a Q&A or I'll talk to them, and I often get asked the question of, what are we going to do to maintain our culture? Because people come to Culture Amp because they see this culture and they want to be part of it and they believe in what we believe in. And I always think that's actually the wrong question, because the goal shouldn't be to keep what you have. Obviously, it's important and it's got you here, but I really think it's about, as we continue to grow and as we continue to scale, how might we be even more what we aspire to be? We're not perfect, no organisation is. So how, as we grow, do we keep getting better?
The thing that I'm kind of obsessed with is, what is the kernel of that culture? So, people will go, "Oh, I've spoken to all these people at Culture Amp and they come across in a certain way and they're definitely Culture-Amp-type people". And if you went to anyone at Culture Amp and asked them, "What makes this place Culture Amp?" they could list a whole bunch of things off. But the most important part is, okay, but how does that create value for the customer? What are those kernels of the culture that create value for the customer and how do we do more of that? And there's just a million things that get in the way of it. And so if anything, I think it's just that constantly coming back to, what is it about our culture that actually creates value for customers, and how do we continue to lean into that?
I think obviously being a people-centric and a culture-first organisation, the heart of that realisation is you've got to create that space for your own people before they can do it for your customers.
[0:05:14] David Green: And what are some of the things you do to evolve that culture? I know obviously you're based in Melbourne, Australia, that's where Culture Amp started, but you've got Campers in the UK, you've got Campers in the US I know, probably in other countries as well. What are some of the things you do to keep that culture thriving?
[0:05:33] Didier Elzinga: So, I think it's a mixture and this is obviously a challenge that all organisations wrestle with when we think about things like diversity and inclusion. On the one hand, you get really focused on what are the values that underpin your business, because those values bring people together. It doesn't matter who someone is, where they come from, what their background is, what their gender diversity, whatever, they believe in our first values have the courage to be vulnerable. So, that transcends across all sorts of things. And people come to Culture Amp because they believe in that, and they want to be in an organisation that puts that to the fore. So, you start with your values that brings people together. As my wife, who's actually a bit of a specialist in the value space and is doing her own startup on that -- a little plug for that, which is theCompass.ai --but she said, "Beliefs separate us, but values bring us together". So firstly, you bring people together.
But then the second thing is, you've got to learn from those people too. Every time you bring someone into the organisation, it's an opportunity to bring something you don't have, knowledge you don't have, experience you don't have, insight you don't have. And so, it's like balancing those two things of staying core to what it is that started the company, but then actually creating space for those new people to come in and share their stories in a way. And actually that's some of the stuff I'm the most inspired by now. When I meet somebody who's joined Culture Amp and I hear why they joined and what they want to go do, that creates so much energy and motivation for me.
[0:06:55] David Green: What are some of the common challenges that organisations face with creating and maintaining a positive and thriving company culture? I know you and your team have done a lot of research on this as well.
[0:07:07] Didier Elzinga: So, I think there's ones that we've known about for years and for decades. What I'm really interested in is the things that we've really seen come to the fore in the last few years. So, one challenge that a lot of organisations are facing is just the pure economics. They were in an environment where everything was a war for talent and you couldn't hire fast enough, and now they're in a situation with frozen or declining headcounts. And so, that's changing the way they're interacting and talking about people and culture. So, that's a big challenge: how do we mount the case for that in that argument, in that world? There's the ever-present conversation of remote versus in-office work, and what does that mean for culture? Are we an all-remote; are we hybrid; are we in the office? Should we; shouldn't we be? Who does that reward or make it easier for and who doesn't it? And I don't know anyone that's solved that, but it's ever-present and it finds its way into everything. You think you're talking about one thing and then people are like, "Oh, that's because people aren't in the office", or that's because this, that's because that.
Then the other one, which I think is in some ways the hardest, but also the root of a lot of the challenges that we're seeing people face, is what I would call a threat-based mindset. And it's this thing that because of all of this pressure, people are right at the end of their tether and they're under a huge amount of pressure. And when we're under a threat-based mindset, we show up in a different way. We're, "Protect what's mine. I have a profound sense of not enough and a profound sense of, I've got to protect what's mine". And yet, what we're trying to do with our culture and what we're trying to do in our organisations is, "We over me". We have to help people understand that at the end of the day, we've got to do this together. And so the challenge, I think, for a lot of organisations is how to have that conversation. And what's happening is instead of everyone having one conversation, we're having two different conversations. So, leadership is talking about a sense of entitlement and how they think people have just got to suck it up, because this is the new world and they should be happy to have a job; and then you've got employees on the other side feeling a profound sense of betrayal because they're like, "I don't think I'm being treated like a person anymore, I'm just a number". And that, I think, is the heart of most of the challenges for most companies right now.
[0:09:22] David Green: This remote versus in-office, how do we get away from the conversation being the number of days people spend in the office, and actually start talking about the work and how it gets done and how culture can thrive in many different setups of teams and maybe it's best to leave it to the team? I don't know. I'd be interested in what your research shows around that, Didier.
[0:09:43] Didier Elzinga: Yeah, well I think that's actually one of the good things at the moment, is that we asked a whole bunch of questions that we didn't have answers to, but slowly over time, we're actually starting to get more data. And so, we're actually able to see, well, what difference does it make, and does that hold or does it not hold? I think the first thing that people have to do is get away from this idea, which is actually a pre-COVID issue, of this dichotomy, that either you work from the office or you work from home, or you're a remote worker or you're an in-office worker. I think what we've learned now is that we're all of the above, just at different times. And what that means is when you accept that, you then have to think about work in a more fluid way. And it also potentially creates the opportunity for us to change some of the traditional ideas.
So, I think pre-COVID, we thought about the office as a place where we would come together to work, but if we wanted to create or collaborate, we would go offsite because you couldn't really do that on site. And the truth of it is for a lot of people these days, if all you're doing is answering emails and doing Zoom calls and so on, not for everyone because not everybody has space at home, but for those that do, it may be more productive to do that at home without the commute. But if you want to create and collaborate, come into the office, that's a place where we can do that. So, if we're going to do that, we're going to redefine and redesign the way our offices work. And so, I think that's where the interesting stuff is happening, where people are taking some stuff that's been away for a long time and saying, "What if it's not like that? What if we think of a new fluid space?" And that stuff, I think, is actually really exciting, what happens if we redesign our offices not to be a place that people are chained to.
So, we have an acronym which is FOMO over ROBI. And so what we mean by that is, you want to create a culture of fear of missing out, which is why you go to the organisation, not a requirement of being in. You want to see the pictures of people having lunch together at work, or of seeing somebody they haven't seen for a while. That's why you go in, not because somebody said, "It's important for your development, for you to be in the office five days a week".
Let's move on to the first one you mentioned, which is the economics and the volatility that we've seen over the last, I'd say, probably since the start of the pandemic, because obviously that created some volatility in itself. These are major concerns for organisations. As you said, there's much more focus now on developing the talent that you've got rather than continue going out and hiring, which is interesting, seeing lots of things around internal mobility around that. We're seeing more organisational restructures, we're seeing downsizing and I know that Culture Amp has recently published research on the effects of layoffs on the employee engagement over a four-year period, so I'm really interested to dig into that.
One of the most compelling insights that resonated with me was the contrast in engagement recovery time following layoffs during the COVID-19 pandemic compared to those that were initiated in 2023. And I think that just the period required for employee engagement to rebound after pandemic-related layoffs was significantly shorter, at 12 to 18 months, than the recovery time that you observed last year for layoffs, which was 18 to 24 months. So, I'd be interested, tell us a little bit more about this research, Didier, but maybe start with why you think that is.
[0:14:06] Didier Elzinga: It's been obviously a massive shift and you've seen it happen all over the world. So, that's been scary for a lot of people involved. When you approach it as a social scientist, it's also a great opportunity to learn, and so we've been looking at it. And one of the things that I myself am always interested in is, there's a lot of narrative around layoffs, particularly at the senior leadership level, that it's of the kind of, "Well, great leaders make tough calls. And actually, most of these businesses are better off on the other side because they're trimmer and meaner, and they've increased their talent density. And yes, it was hard, but it was the right thing to do, and actually you'll be happy you did it". And that's never really stuck with me. I've always found that quite objectionable, like when you sit around the board table and somebody says, "Look, this is just what we have to do. And actually most people will be happy when you do it". They won't, and they don't. The truth of it is sometimes you have to do it, and then you do it and you do it to survive, but enough of this false bravado.
So, one of the things that was really important for us was looking in the data and go, "Well, what actually does happen? Are there business consequences?" Because everyone just looks at the bottom line and goes, "Well, you're more efficient now, so you should be better". And what our data showed was that there are, there are very long consequences. And now that we've had these multiple rounds, what we're seeing, and you just mentioned at the beginning, is on the second rounds of layoffs, 18 months later, people have still only recovered to what they got to in 6 months the first time. Now, why? It doesn't matter which way you dress it up, it doesn't matter if it's the right thing to do from the business point of view, I hope it is, it's still an act of betrayal. And even the ones that are left, survivorship guilt is real. So, people are sitting there going, "Well, two people I know really well got laid off and I didn't and I don't really know how to feel about that", and it creates a lot of challenges. And then they look forward and they go, "Well, next time, what the decision might be?"
It's like anything, you injure yourself once and you recover, you're okay; you injure yourself again, you're going to take longer to recover because your body's not fully healed, and I think that's what we're seeing. And I think it's an important counterpoint to the language that goes around at the moment, because the language that you hear at the moment is from people who are basically doing cognitive dissonance, "We had to make a terrible choice, we made a terrible choice, and actually we're okay". Well, you're probably not as okay as you think you are.
[0:16:28] David Green: And it'd be interesting that more of this type of research, as it comes out and people start to see that there are longer-term, medium-term impacts, not just on people within the organisation, but presumably on business performance as well, and maybe there's more research that needs to be done on that, then maybe that will make companies think a little bit differently about these layoffs. Because I mean again, it's in the press so I always take it with a pinch of salt, you see companies making announcements about layoffs and suddenly their share price goes through the roof, and on the betrayal side, you wonder if that's why some companies are making those decisions which doesn't seem ethical to me.
[0:17:06] Didier Elzinga: And I mean, it's also because there's a constant flow of capital in different ways and in up markets, the companies hold the whip hand and so they can reward people, and in down markets, they don't and they struggle. And so, I think it's a fascinating push-pull, but as you said, you can see the business consequences of it. And I think what it exposes when you really dig into it, and people are like, "Well, yes, but we finally were able to make some of the changes we should have made years ago", and the real takeaway from this is, "Yeah, you should have made the changes years ago". Like, "You needed to restructure that department". Okay, well you should have actually addressed that rather than going, "Every year, we're just going to drop 10%", because that's a really crude way of doing organisational change, and one that has consequences, which is what the data shows.
[0:17:57] David Green: Is it true to say that, if you think about the evolution of Culture Amp over the years, you're getting deeper insights now from the work that you're doing from the platform, which really supports your clients to really understand how employees are feeling and then actually take action on some of those, the appropriate action on some of those things as well?
[0:18:15] Didier Elzinga: Yeah, because it allows you to go beyond just the average and look into the details. You're saying it's temporal, so we can look at it and go, how's that changing month on month or quarter on quarter, but also across different areas. So, you might look at it and go, "Actually, the customer-facing, sales side of the organisation rebounded quite quickly. But in engineering, we've got a much longer-term issue that we have to deal with". And those are things that weren't always there before for people to see what they needed to do with. So, yeah, you're right, much more fine-grained data. And then, I'll probably talk more about this as we keep going, the challenge for most people is not that they don't have enough data. They have more than enough data, as you well know. And the question is, what am I going to do with it; and, how can I make sense of what I'm seeing? And that's where the concept of, you want to be able to see your own data, and then you also want to see what's going on elsewhere.
So, when we share out the layoff data that we share, when people have to go through that process, it allows them to go, "Okay, we now know that engagement is going to come down, and then we expect engagement to come back slowly". And so then, if they're doing really good work and really leaning into the things that can help rebuild morale on the other side of layoff, then they can actually go, "Hey, engagement is still lower than it was, but if we're tracking ourselves against what everybody else is doing, we can actually see the progress we're making". And that's super-important when it comes back to getting leaders to continue to do the things; you need to validate what they're doing as being worthwhile.
[0:19:41] David Green: And actually, I think as an example of that, one of the insights in the research you've done at Culture Amp was around the resilience of employee engagements in certain regions, such as the UK, where I am, and Germany. I just wonder, what are the key factors do you believe contribute to this resilience? Is it what you say, is it companies being a little bit more intentional, a bit more mindful about it, or is it something unique in those markets?
[0:20:06] Didier Elzinga: The first thing is, I don't know. It's a hot topic internally, we're trying to figure this out too. We have some theories, and I'll share our theories. The first theory is a little bit what you just talked about: intentionality. If you look at the regulatory regimes in places like Germany and the UK versus, say, the US, there are a lot more employee protections. And so, one reasonable theory is that even though layoffs are still happening everywhere, those layoffs are less of a betrayal in that place, because at least people are looked after in a better way, and even the consultation process is longer. Whereas in the US, it's not uncommon for the CEO to send out the announcement and people to be gone before they get back to their desks, and so you can see a bigger gap.
The other thing that's quite interesting is that the UK and Germany were less engaged to begin with. And so, one of the things you see is, the higher the score, the further it falls. And when we did our first round of layoff data, that's one of the things we showed, which was that the companies that had highly engaged workforces actually had some of the biggest drops after layoffs, not surprisingly because people are like, "Hey, I thought you cared". If you're in an organisation where you're like, "Well, I'm not sure you cared anyway, this just proves that you don't care". The actual change, the numbers don't change much. So, maybe there's a little bit of the stiff upper lip that the British are famous for.
[0:21:32] David Green: I mean, all this really just goes to show, Didier, how important the culture is, especially in turbulent times. Proving to C-suite can often be a challenge for HR leaders. As you're well aware, the board's main focus is usually around improving the bottom line, and it can often be difficult to quantify the financial impacts of your company culture. I'd love to hear your thoughts on this, as a CEO and also a CEO of a company that helps companies improve culture. And then also, maybe as part of that, how can chief people officers and other HR leaders get CEOs and the board on side when it comes to culture?
[0:22:09] Didier Elzinga: Yeah, I mean these are my favourite questions. I think the first thing, so as a CEO, I get frustrated at times because people are like, "Oh, we need to create an ROI business case for this and then the CEO will be forced to approve it". And when you're a leader, you get positive ROI business cases all day, every day, but you can't fund them all, otherwise you run out of money, and you also develop a fair amount of healthy cynicism about most of those models too. So, somebody comes and goes, "Look, I can make $3 million for the business, and you're like, "Yeah, okay, maybe". So, I think the first thing is to not temper expectations, but to focus them the right way. And so, one of the challenges that I think I see often on the P&C side, or people and culture side, is that we're too focused on, "We need to prove empirically that there's a five-times return on this project for the bottom line". And I'm like, "That will probably get laughed out of the room". If the leadership fundamentally doesn't believe that culture matters, no amount of spreadsheets or business model or anything are going to prove it to them.
Most leaders do believe in culture. Most leaders know that culture is the heart of their business, but the problem is they have no idea how to wrap their arms around it, and they have no way to size it. So, I think the real thing is what you want to do is not prove that culture has an ROI, but show how it has an ROI and help people understand the return. And, we did some work with Forrester, and there's a report that they've just put out where they went and interviewed a bunch of companies using Culture Amp and created a composite company, decent-sized, 3,000 people, 500-million-revenue business. And they looked at, "Well, what are the benefits that it creates?" And of course, there's lots of nice ROI numbers in there where it's like, "This generates, 300% ROI on the project". But what I like about that and what I take away from it is, it helps people understand the quantum of the problem that you're solving. It allows you as a people leader to go, "Hey, at the moment, we just have our data everywhere and we use anecdotal information to drive our people decisions. We want to put in a structured listening tool like Culture Amp because we want to drive employee engagement, and we know that if we do that, we can improve our attrition".
A good leader then will go, "Okay, what's that going to cost us? Okay, it'll cost us this amount of money. And what benefit do we get for that?" Well, this is a multi-million-dollar problem. It's not a $10,000 problem, it's not a $100,000 problem, it's a $2 million, $3 million problem, and that's what we're playing with. And that's the conversation that you want to start having with people. So it's, how do we use data; how do we bring it to bear? So, you can use something like the Forrester report that at least shows somebody that might be sceptical, "Look, other companies have actually generated these savings". And you can usually do that through looking at attrition. There's an easy way to empirically determine what the results might be. But it goes much deeper than that too, because it's management productivity, it's engagement and the relationship it has to the results you have for your customers. So, you can sort of show that at the macro level, but then at the micro level, you want to be able to turn that into the organisational context and say, "This is the investment I want to make. This is the size of the return that I think we can do".
What's so good with all the extra tools that we have now, like through a platform like Culture Amp, is that you can also bring data to bear in different ways. So, if you think about what's the gold standard of doing data research, you do split tests and you show what happens when you have a control group. So, rather than coming to me and saying, "Here's a paper from somebody out in the world that says that we get a three-times return for investment in coaching", come to me and say, "I scrimped $10,000 out of my own budget and invested it in a coaching programme for a cohort of leaders and I want to show you the data from what happened. Here are the leaders that I put through my coaching programme, here are the leaders that didn't go through the coaching programme. Here's the 10-percentage-point increase in engagement in the leaders that were coached. I would like another $100,000 so I can roll that programme out across the rest of the company". You've A/B tested it for me, you've shown me the return, you've shown me you can implement it and you've given me an opportunity to invest in your idea.
So, I think that's the core of what we need to get better at doing. And the great thing is we have all these tools now to help us underpin that. And you won't always know what the answer's going to be. Most leaders don't know what the return on investment is on their training, but they can.
[0:26:39] David Green: Yeah, and I think you highlighted a really important point, Didier, that maybe we need to get better at in HR, and I think it has been happening: experimentation, test things, as you said. A/B test it, so you've got a control group, you've got a group that's effectively been being treated with the leadership development in this example, and actually show what the difference is. Because, if it mirrors what we're seeing in academia or what we're seeing in other studies, by the likes of Forrester and other analysts, then surely that presents quite a compelling story for any leader or CEO that then thinks, "Okay, I want to actually invest some of what I can invest in that and see if we can multiply that across the organisation", or in one part of the organisation first, perhaps. So, yeah, I think it's that experimentation. And I guess with people analytics teams, platforms like Culture Amp and others in that way, and maybe more behavioural scientists coming into the HR space, we can actually start to set up these experiments and learn from them.
[0:27:38] Didier Elzinga: Yeah, and I think if I can offer the listener a trick, if you will, it's always tempting to try and make things look more impressive, but that's often less believable. So, for example, when Forrester did this work with us and they modelled the returns and the value, one of the things you're looking there is the cost of replacing the employee. Now, you and I would know, and many of the people on the call would know that in the industry, most people would use somewhere from one to one-and-a-half times someone's annual salary as the true cost of replacing them. What Forrester did is they went, "Yeah, that's fine, but we're going to use 20% of their cost as the replacement cost, because that's just a true, out-the-door money spent, you cannot argue with that number". And so, when somebody comes to me and says, "This is going to save us $300,000", I'm like, "Oh, how did you work that out?" you're like, "Well, a lot of people would quantify it like this, but we're just using this much smaller version of it because we want to make sure this is almost risk-free". "Okay, now I'm listening to you because you actually know what you're doing. You're not just taking the two biggest numbers you can get, putting them together, and then trying to impress me with the fact that you can save me $1 million. I'd much prefer a well-thought-through plan to save a $100,000 than a pie-in-the-sky one to save a $1million".
[0:28:49] David Green: We hope you're enjoying this episode of the Digital HR Leaders podcast. If you are looking to continue your learning journey, head over to myHRfuture.com and take a look at the myHRfuture Academy. It is a learning experience platform supporting HR professionals to become more data-driven, more business-focused, and more experience-led. By taking our short assessment, you will see how you stack up against the HR skills of the future. Then, our recommended learning journeys guide you every step of the way, helping you to close your skills gap, deepen your knowledge, and press play on your career.
For those HR leaders listening and thinking putting together a business case is a bit of a challenge, it's not something I've got a huge amount of experience in, and maybe when they're thinking about how to measure a potential ROI of their investments, do you have any advice on how to do this? Is it a case of maybe partnering better with finance for example?
[0:29:59] Didier Elzinga: Yeah, I mean finance is always a great partner for this. They love doing it, they do this all day, every day. They have good instincts for what's a good threshold, what should we be accepting; what shouldn't we be accepting? The thing I would offer people is, oftentimes we get stuck in these things trying to figure out what might happen or what will happen if we do this thing. Where I would often start is, what's the cost of doing nothing? So, what is the data that we already have? And just project that forward so that you're not walking in saying, "I need you to spend this money to do something". What you're doing is you're walking in and going, "Given all the data we know, this is what is going to happen. So, if we look at our retention insights in our engagement survey, and we know that no one in that area intends to be here two years from now, then you know they're all going to leave and you're going to have to replace them".
It's much more powerful to sit down and say to somebody, "If we do nothing, this is what the future is going to look like. Are you happy with that?" And the leader will probably say no. And you're like, "Okay, well I'm glad you said that because here are three alternatives for how we can avoid this".
[0:31:10] David Green: Yeah.
[0:31:11] Didier Elzinga: So, finance is super important, but also, it's all storytelling.
[0:31:15] David Green: So, Didier, before we head to the question of the series, I'm curious, what excites you about the future of work, if that's not a nebulous term, and do you foresee any trends that will change how we view workplace culture, maybe if we're doing this interview in three or four years' time, for example?
[0:31:33] Didier Elzinga: So, I mean, we've already talked about a lot of the stuff that's going on in the world, remote work and hybrid work and, all of these challenges. I think the thing that I'm excited about, particularly if we think about just the rise of AI and the role that it's playing in everything, is it sort of forces us to really think about, what does it mean to be human at work, and why is that important and how does that create value? And I think for a long time, from a management and leadership point of view, and even to a lesser degree from a HR point of view, we were the complete end of the spectrum. It was all about, how do we move the human? How do we systematise everything, process-ise everything? If you can systematise it, you can probably automate it, which probably means it's going to be done by AI. So, where do we need humans? And how do we engage them and embrace them and lift that up? And whilst it's somewhat terrifying, it's also really exciting to think about what work might look like with human truly at the centre and being the thing that we're building our organisations around.
[0:32:43] David Green: Yeah, and I think from listening to what you say there, and again, listening to many people in our space, I think what we're talking about here is augmentation, not automation. Yes, automisation of maybe some of the more onerous tasks, or not onerous tasks, but easy tasks, repetitive tasks, and then actually, hopefully freeing people up, whether they're workers, whether they're HR professionals frankly, to do more interesting work where the human element is paramount.
[0:33:12] Didier Elzinga: Yeah, yeah, exactly. And I mean, if you read a lot of sci-fi, they always talk about this thing of like, the real power of technology is simulation. So, before you go into the actual thing, we can run it 1,000 times and go, "What's likely to happen?" And simulation doesn't tell you what to do, it just gives you a sense of probability, and I'm excited by that idea of what we can do and work with those tools around us.
[0:33:34] David Green: So, in a way, it's bringing your old world of working in film, back into the people's space?
[0:33:40] Didier Elzinga: Yeah, exactly.
[0:33:42] David Green: And any sort of concerns about the future, about AI and what do we need to be careful about, particularly as we apply these types of tools in the workplace?
[0:33:53] Didier Elzinga: I mean, I think when we spoke five years ago, I remember we were talking about the ethics around statistical learning and how people use that data and the conclusions and inferences that they draw from data. And so, I think that's only going to become even more so. And AI technology, all these things are amplifiers and reinforcers, so they will keep extending us in the direction we're already going. And we've seen this in a lot of the conversations of the data sets that these things are trained on, the answers will only be as good as the data sets that we have. If the data sets are biased, which they all are, then we will get biased outcomes. And so it's itself not going to improve. And so I think that's going to require some really interesting work to be done for us to figure out how to keep all of this power but not have it go the wrong way and reinforce the very system that we're trying to fix in the first place.
[0:34:51] David Green: Yeah, I mean I could have Didier-bot on the podcast and I wouldn't know, would I?
[0:34:55] Didier Elzinga: Well, I don't know if you've played with any of those things where you just take footage, two minutes of video, and I just write the text and it's me talking on screen.
[0:35:03] David Green: I know, it's incredible.
[0:35:05] Didier Elzinga: And it has powerful uses too, like I saw, I can't remember which company it was, maybe it was one of the large ad agencies I think, anyway one of the large companies, the CEO sent a personalised video to every person in the company thanking them for the work that they'd done the year before. Now, of course it's using AI, but still, that's really interesting. And it's a little off-topic for today, but one of the things when I think about AI, I think the mistake people make is they keep going, "How do we use AI to solve our biggest problem right now?" and that's interesting. But I think the real value that I've seen unlocked in so much of AI is where you can now do stuff that used to be medium cost, medium return. And those projects that are medium cost, medium return never get done in an organisation. You only do the low cost, high return or sometimes the high cost, high return, but that stuff gets killed. But if you can make that low cost, medium return, you can unlock a huge amount of value. So, would you ever actually have the CEO do a recorded video to every person in the company? No. Is it the most valuable thing that you can possibly do? Probably not. But it's actually quite powerful. And if you can do it relatively easily, that opens up a whole bunch of new ways of thinking.
So, that's going to be the challenge and the opportunity for everyone in the people and culture space is, how does AI unlock stuff that you don't do today because it's too expensive, either because of time or whatever else, and what might that unlock? Rather than, how do we use it to solve a really hard problem, like should we promote this person or should we hire that person?
[0:36:34] David Green: So, Didier, just penultimate question, talk to us a little bit about Culture Amp. Is there anything we should be keeping our eyes open for around developments that you've got coming up?
[0:36:44] Didier Elzinga: Yeah, well, I mean we just, was it last week? I think it was last week. Time's a blur at the moment. We just announced our first external advisor in Esther Perel. And so, been talking to her a little over five years as well, but super-excited to have her on board, partly because she's just the most incredibly wise woman. I love talking to her and her ability to take complex ideas and render them in useful ways. But also for us, it really speaks to this idea of, we obviously have a strong I/O psychology background, but psychology comes from all these different disciplines. And I love the fact that she's a psychotherapist who's coming at it from the relationship side, but at the end of the day, what is work other than relationships? And so we're really excited about what she can bring, what her audience can bring, what we can bring to her. So, that type of thought leadership is something that it's exciting to share with the world, and certainly there'll be more of it.
Then, if I think about what we're doing with the product and where we see the space going, there's a lot of focus at the moment on consolidation. So, there's a lot of companies going, "We're going to build an HRS, we're going to be an ATS, we're going to do whatever because it's getting harder and harder to stay where we are". And whilst I understand all of that, that's not really what we're interested in. We started life helping people do organisational feedback, so helping understand hundreds of thousands, of tens or hundreds of thousands of people. And then, we extended into individual feedback and really thinking about, what are the conversations that need to occur at every level of the companies? It could be performance reviews, could be development conversations, could be one-on-ones. What are the conversations that drive performance in organisations?
Now what we're finding when we're working with our customers, and going back to what we were talking about earlier, is they, for all the richness in the data that we have, I think Culture Amp has probably some of the richest intent data that we have, there is data we don't have that needs to be brought to bear to help the organisation to solve its questions and its problems. So, how do we bring that data together in an opinionated way, in a thoughtful way, in a way that allows customers to make, to answer the questions that they need to answer? And so, one of my favourite things at the moment is to go to a company and talk to them and say, "Who are your best leaders? If you look over the last five or ten years, who are the best leaders you've ever had? Why, and what data underpins that?" The truth of it is, no one has access to that data because you need pre-hire data, you need post-hire data, you need operating data, you need engagement data, and you need to be able to draw a line through all of that so that you can learn from it. And that's a problem we're really interested in solving.
[0:39:18] David Green: Yeah, well it sounds fascinating. And Esther Perel, that's a real coup. I mean, I think I've seen so many conferences over the years, but I always remember one of the speeches she gave at UNLEASH in, I can't remember if it was in Amsterdam or Paris now, but she literally had the audience eating out of her hand. And you're right, her expertise around relationship is so important in the workplace. It's all about relationships, isn't it at the end of the day? So, really good.
[0:39:47] Didier Elzinga: So, that's what we want to do, is go full circle. Gather all that data, bring it all together, but at the end of the day, it comes back into a human conversation. So, how do we bring AI? How do we bring everything else to our customers so that they can actually have those human conversations?
[0:40:00] David Green: What are your top three ways that, and you don't have to restrict yourself to three by the way, what are your top three ways that HR can play a pivotal role in creating a thriving organisational culture?
[0:40:11] Didier Elzinga: So, I think the first one we kind of just hit on at the end, which is, bring data to bear and help bring that data to answer important questions. So, I just shared the question which I think a lot about, which is, who are your best leaders? And how do we accelerate that? In some ways, if you think about leadership and great leaders and the value they have in organisations, if you had no HR, none at all, somebody starts as a first time being manager and then over a period of time, as long as they're surrounded by some other good managers, they'll eventually get better and it might take 10, 15, 20 years for them to be able to create real value as a leader. As a people and culture team, how do we accelerate that? How do we make that three years or five years? So, in our organisation, people accelerate through that learning and through that process. That's a lot of the leverage that we bring to the org. So, that's one thing.
I think in terms of that, bringing data to bear, we've been doing quite a bit of work around what board reports can and should look like for the people and culture area, and the key insight there is -- and we can share like, here's what you should present and here's what the data should be, and all that sort of stuff. But the core thing is to help the Chief People Officer for example, move away from, "Here's what's happening in the people side, here's the programmes we're rolling out, here's the things that we're doing, here's the things that have been done. Here's our engagement survey, etc", and instead look at it going, board reports are a lens on the performance of the company. And people and culture is the most important lens that they should have and very few companies have it.
So, they get to see the financial performance of every part of their business, they might get to see the customer performance of every part of their business, but they don't get to see the people and culture performance. So, it's not P&C's deck, it's the organisation's decks through a people-and-culture lens. And you're giving them something that they really, really want. And so, I think that's the second part, that conversation. Whether it's the executive team or at the board level, how do you help the organisation understand itself through a people and culture lens, not your area and your programmes?
Then my last, to stick to the three, my advice, I guess, is the scarcest resource that organisations have is not money, it's not time, it's the attention of their leaders and managers. So, when we are thinking about those programmes that we want to roll out, how are we thinking about that resource, and how are we thinking about what we're prioritising to put that resource in front of? And too often, I see the conversation being, "The poor head of people has to go to the other execs and say, 'I need you to tell your people that they have to do this thing because it's really important'". That is a losing battle. Instead, we have to sit down and go -- we actually did this internally where we looked at it and we said, at each level of leadership, how do we hope that they are spending their time? How much of their time do we want them to be spending having one-on-one conversations with their team? How much time do we want them to be spending on their time thinking about development plans, or whatever it might be? And that's different at different levels. But if we can pre-plan that, then we can actually make that more effective. So, it's that whole idea of, how do we train the attention of the organisation not to do all the things we want to do, but to do the most important things?
[0:43:35] David Green: Didier, really enjoyed the conversation. Before we part ways, could you let listeners know how they can follow you and all the work that you and your team at Culture Amp are doing?
[0:43:43] Didier Elzinga: Yeah, absolutely. We love community. So, I mean you can go to the website cultramp.com and find everything there, but join the Slack channel, listen to the podcast, the Culturefest podcast. Esther Perel's our highest ever rated show, it's a good one to start with. And also, the Culturefest chapters we have. So, these are self-organising groups. There's over a hundred of them around the world where probably, in the city that you're in, you can go join a Culturefest chapter. So, any one of those you will find a community of people like you that care about this problem and want to create a better world of work. So, follow us on LinkedIn, follow us on Instagram, Facebook, everything, but most importantly talk to the humans.
[0:44:21] David Green: I think that's a great way to end our conversation, Didier, today, talk to the humans; I like that! Thank you very much for being on the show.
[0:44:28] Didier Elzinga: Thank you David and hopefully, only be a year next time, not five. Let's make it not five when we speak again.
[0:44:33] David Green: Let's not make it five, no!