SuccessFactors drives top line growth

Zak

Hello, and welcome to People Performance Radio, sponsored by SuccessFactors, the global leader in performance and talent management software solutions. Without further ado, please allow me to introduce you to Jim Matheson.

Jim

Welcome back to the show everybody, this is Jim Matheson, I'm here today with Stacey Epstein, we're going to talk about some interesting research that recently came out in the market about top line growth coming from performance and talent management, specifically folks using SuccessFactors. Welcome to the show, Stacey.

Stacey

Thanks Jim. I'm excited today to have with me Jay Larson, who is our Vice President of Global Sales for SuccessFactors, welcome Jay.

Jay

Thank you Stacey, it's great to be here.

Stacey

You're looking pretty rocking here in this DJ booth we have.

Jay

I am ready to rock.

Stacey

Excellent. So SuccessFactors has been talking a long time about the impact on financial performance of using a tool like SuccessFactors for performance and talent management, and recently Saugatuck came out with a research study that really proved it. So Jay, tell me a little bit about this study —what do you think about the SuccessFactors' true impact on financial performance for a company? —a lot of people are skeptical out there.

Jay

Well, I hear you, and I think that we're in a situation where, on one level, people are skeptical, but on a completely different level, it just makes a tremendous amount of sense, because at the end of the day, if you think about just these four things: if you had a suite of applications that helped you get everybody in your company focused on the right work, and that gave you the ability to get your employees coached up, so they were doing the right things as effectively as they possibly could, and you were doing a good job of retaining your top performers, and a good job of losing your bottom performers, people that weren't adding value to your business, if you could do just those four things, what would it be worth to your business?

Clearly, it would be worth a tremendous amount to your business, not only in terms of being able to run your business better and more effectively, but in terms of the financial performance of your business, it's almost analogous to, if I come in and I say, "Hey —you know what? I'm going to put you on a diet and I'm going to fix your eating habits and you're going to stop smoking and you're going to stop drinking, and you're going to start exercising every day, you're going to feel better and you're going to live longer" —well, of course, it's almost the same thing with us; the analogy I think is very powerful, because on one level, two to three percent gain sounds like a tremendous impact on financial performance, but if you just think about the logic, it makes a tremendous amount of sense, because we can do a lot more than just these four things, but again, if it just comes down to, you've got people focused on the right things, the things that drive your strategy into execution in your business, and everybody is working on those things as efficiently as they possibly can, you're taking good care of your top performers, and they're sticking with the organization, and you're doing a good job of losing the bottom performers, there's tremendous value there, it just makes sense.

Stacey

OK, so let me get this straight, the four things: getting employees focused and aligned, ensuring employees are doing the right things efficiently and effectively, identifying, developing, retaining top performers, and weeding out bottom performers? —it seems like a total no-brainer?

Jay

It absolutely is, the top executives that I've worked for, not only in my career, but I've seen in action at other companies, they are very concerned about the number of people that they have, and what those people are working on, and most importantly, how they take this business strategy that has been crafted and actually drive that into execution. It seems like in many organizations there is a frustration among people at the top of the organization that, you know what? —we've made a tremendous investment in people, in our workforce, in many organizations labor costs are 50, 60, 70% of operating expenses, so on one hand there's a tremendous investment in people resources, but on the other hand I think that there is also some frustration around, so what am I getting out of that investment —what's the return on that investment, and are people really working on the right things, the things that are a part of my goals and my business strategy that are going to be really difference-makers for my company in the marketplace.

I think that the beauty of what we do is we address both of those things, we're in a position where we can help close the gap between strategy and execution of that strategy in the organization, and we can really optimize the work that people are doing, and make sure that they're doing that work as efficiently as possible. So I think that we can deliver benefits in both areas, very big benefits.

Stacey

So I know in your role you spend a lot of time talking to prospective customers who might not yet be convinced, and when they push back on you and say, "I still am not buying it —show me the hard ROI, everything you're talking about sounds intangible and soft, tell me where the true ROI comes" —how do you respond to those questions as you're talking to these prospective customers?

Jay

Well, typically, it's the conversation that we just had, where I would ask somebody, "Are you doing these four things well in your business? Are you focused on the right things, are people working as efficiently as they can, and are you taking good care of the top performers, are you losing the bottom performers", and I just ask them, "Are you doing these things as well as you possibly can today?", and almost without fail, the response is, "It's a mixed bag, yeah, we're doing well in some areas, not so well in other areas", and then the next question is, "OK, if you were doing these things well, just these four things, and our products can drive so much more than these four things, but if you just focus on those four, what's the value of doing those four things well? —what's the value to your business?" And almost without fail, when people really think about it, they come to the conclusion that, you know what? —two to three percent is, if anything, it is conservative, it just makes a tremendous amount of sense that if you can do those four things, and those four things well, you not only end up with your business running a lot more efficiently, you end up with a business that is run much more profitably, so that's kind of the going in point.

If somebody is still skeptical, the next thing that we would talk about is this research that you alluded to that's been done by an independent group, a third party, called the Saugatuck Group, and the study that they did of 157 of our customers indicated that not only was the two to three percent correct, they validated that two to three percent top line gain. They also showed that over time, as customers were deploying our products on a larger scale, and they were adopting more of our application suite, that the benefit grew, so I think that the good news is not only that we have an independent, a third party, that has validated that two to three percent, but we have also shown that over time the benefits that somebody gets from using the SuccessFactors' family of applications actually grows.

I think the better news still is that a third major finding that they had was that, over time, the gap between our customers and their competition in the same industry, that the gap between our customers and their competitors actually grew over time, so I think that this is very very powerful validation, it's a very powerful study that confirms that yes, our products drive top line growth, it confirms that the two to three percent is in fact real, that that two to three percent grows over time, and we're also in a situation where adopting our products can help our customers put distance between the financial performance of their business and their competitors in the industry. So this is a very very powerful bit of research.

Stacey

So it sounds to me, from all you talk about, that it's virtually a no-brainer? I mean, there is no leader of an organization that wouldn't want to achieve those four things? It's probably what got them to be in their leadership position, is knowing how valuable those things are. So do you think, over time, that applications like SuccessFactors will become ubiquitous, and every company will just, it's a no-brainer —of course you need something that helps you align goals, of course you need something that helps you identify top and bottom performers, and over time every company in the world will be using SuccessFactors?

Jay

I think that's exactly where we're headed, I think that we're really at an inflexion point in our market where, what we have been doing over the last six years of our company's existence, I would characterize as primarily focused on HR process automation, we've gotten to be very good at helping people in HR automate a series of processes that are important to running a business, and frankly I think that's a good business, we like that business, we can do that business better than anybody else in the industry, but I think that's just the starting point, and that has created a platform for us to go out and to play a much larger game, and that larger game is really around driving business transformation, and helping people run their business better, and in a more profitable way, and that's really the opportunity that we have at hand, and whether it is for existing customers, where we're eager to go in and talk to them about how we can help them leverage our products in a much bigger way, or net new customers, our message is incredibly powerful, because what we're talking about is a business transformation and helping people run their businesses better and more profitably.

You're absolutely right, what's not to like about driving two to three percent top line growth, and helping our customers reduce their costs in the process, which we are in a position to do. It really is a no-brainer, every company in existence wants that set of benefits. The good news for us is that we really and truly can deliver those benefits. The challenge, I think, for us is to make sure that we are working with our HR partners to go and deliver that message to their own customers on the business side of the house, and that we're showing up both in HR and on the executive side of the house with net new customers, or companies that haven't done business with us in the past, and delivering that message, because I think there are a tremendous number of executives out there that would want to benefit in the way that we can help them, but frankly don't know anything about our company, our products, our space, the kind of benefits that we can deliver, and so I do feel like, in many respects for us, half of winning is showing up, and when we show up, especially at a senior level, and talk about how we can drive business improvement and an improvement in the performance, the financial performance of the business, good stuff happens, it happens without fail, but I think in many respects we're still a relatively well-kept secret across not only our customers in the US and businesses in the US, but especially globally.

But are we going to get there from here, at some point in the future? Is every senior level executive going to have a dashboard with HCM metrics that talk about the health of their human capital, and how to optimize the return that they're getting on that investment? —absolutely, that is absolutely where we're headed, and I think that at some point in the future every company on the planet has got a suite of these applications, because they want the benefits that we are delivering to our customers today.

Stacey

I think that's a very exciting future, and I'm absolutely looking forward to being part of it.

Jay

Well, so am I, and I think that we're off to a terrific start, and I'm eager to be a part of the organization that is not only the leader in this space, but is a pioneer in making certain that we can do not only a good job of addressing the process automation needs of our customers in HR, but we're positioned to go out and to play a much bigger game around helping drive transformation and business process improvement in other parts of the other company, especially since there is such a compelling return on that investment. I'm really proud to be a part of SuccessFactors, because I think that we're doing some very important things in the industry that are beneficial not only to HR customers, but also to our business constituents, and employees in every one of our customers as well. I think it's a very compelling story.

Stacey

Absolutely. Well, thanks for your time today Jay, it was great to talk to you, back to you Jim.

Jim

Thanks Jay and Stacey. The report's actually available at successfactors.com/research/financial-advantages, and you can get a free copy there if you're interested in reading more about the two to three percent top line growth that is achievable using SuccessFactors' solution. For those of you who are listening for the first time, our podcast is available as a weekly download from iTunes, if you just go into the iTunes Music Store and search for either "people performance" or "SuccessFactors", we should pop up and you can subscribe right there. You can also listen on our website, at successfactors.com/podcast. On any typical week, you'll probably hear myself ranting along with Dr Steve Hunt, who's our resident expert, and we often, especially in the coming weeks, have some great interviews coming up, including Bob Sutton, the author of "The No Asshole Rule", so I'd urge you guys to take a look at the podcasts and give us a try. See you guys all next week.

Speaker

If you would like to be a guest on the show, or sponsor, please drop us a line at podcast@successfactors.com, or you can leave us a message at 650-425-7474. This podcast is copywritten by SuccessFactors. The views expressed are the individual’s own, and do not necessarily represent those of SuccessFactors, SuccessFactors’ partners or customers. See you next week.