This is the second of two interviews with Jeff Saperstein. In this interview, Dart recounts stories of applying the principles of Work for Humans, and goes deeper into how to quantify the value of the employee customer. Jeff is a marketing professor and co-author of a number of books with Hunter Hastings, most recent of which is The Interconnected Individual. Find the original podcast here.
Today, we’re talking with Dart Lindsley, head of Global Process Excellence for Google human resources. Dart has held numerous high level positions at Cisco and now Google in organizational design and empowering employees for better engagement in their work. He believes that workers are customers, as critical to the success of every enterprise, as those who purchase products and services. We’ll discuss how Dart views employee engagement and the workforce experience opportunity, both from an organization and worker perspective
So let’s begin. Thanks again Dart for coming back after our first interview, which has been very popular. I want to bring you back for a second interview in part because you recently told me of a practical example of applying your management philosophy that I thought listeners might find very interesting and also to fill in some gaps you feel you left in our last discussion. So first of all, remind us of the premise behind your management philosophy, especially for those who have not heard the first podcast.
My talent management philosophy is based on the idea that we’ve gotten talent wrong in business. And I think that we as workers get the idea of what we are in relation to the business wrong.
Most business people and most workers consider labor to be a factor of production, like raw material or capital equipment. Businesses assume you buy that thing in order to produce some good or service. I believe that workers should be considered full customers of every enterprise, and that they should be equal in standing to the customers for whom we produce goods and services. So every enterprise should consider itself as having two product lines. There’s one product line that is sold to customers for goods and services, and there’s another product, which is the work experience product that’s sold to workers. So that’s my premise and, and that’s where I come from.
You and I were talking and you mentioned a practical example. I thought it might be interesting to have as part of this interview.
Here’s that example that I just went through. As a manager under this model, I believe it’s a manager’s responsibility to win the kind of work that your team wants to subscribe to. I walked through one example the last time we spoke. That was the example of realizing that there were members of my team who were really creatives but were in analytical roles. And so they weren’t happy in those roles and they didn’t feel whole and alive in those roles. So we went out and we won a different kind of work. We set up a new business and that business was experience design and we started signing up projects for it. We productized it. And that business is thriving inside my old company. And those people are still really happy doing that work.
Well, I had a similar situation like that just recently. This was in the last six months. I joined my current company a year and a half ago, and I found myself and my team in a very difficult position, which is we were between two large and powerful organizations. One was an engineering organization and one was a business organization and our job was to essentially take the business demand and translate it into what engineering could understand.
But the challenge was that the team’s capabilities were largely redundant. The engineering team was very good, very talented, and they had Product Managers who did exactly that. Their job was to take the business needs and translate them into engineering requirements. And we weren’t more expert in staffing than the staffers – that was the business team we supported, and we weren’t more expert in engineering than the engineering team.
I was particularly unhappy, but my team was also not happy. And the way the team expressed it was by complaining, accurately, of a lack of role clarity. But for me it ran deeper.
What I hire my job to do for me, what I come to work for more than anything else is to discover. That’s what really drives me. I like to discover. I like to invent. And I am not in love with building, which is what engineering is. That’s not what makes me feel whole and alive.
Let me be more specific about that. I don’t mind if I’m doing the building. If I’m building things myself, that I enjoy, although it’s not my main driver in the world. But if I’m directing somebody else to do the building and they get to do all the fun stuff and I’m just directing it, it’s just not that much fun. So what I did is I took a looked around and I looked for this: is there a business that my team could go into in which we would be providing unique value? Could we essentially back out of this intermediary role allow those two large, powerful and capable organizations to interact as directly as possible? And could we back out of that role and go do something in which we could provide greater value?
And what I realized is that there was actually a large opportunity. Nobody was really doing process improvement. It wasn’t an easy sell because there wasn’t a lot of understanding of what process improvement was good for in this organization. But if we could set ourselves up in that function, we could start to provide unique value.
Over time we were able to change the operating model. Not all of the team went to this new process team about half of it did. And I now lead that new process team. But I’ll tell you it’s really changed our lives. And I am now doing something that I just love as opposed to something that was making me feel dead, and something that was making me feel as if, I mean, honestly, it was a huge status threat to not be able to provide value inside a company. Not as much value as I thought I should.
As a result of this change, we now have degrees of freedom that we didn’t have before. So it used to be that we were between these two mighty organizations. And basically what we worked on was defined by those two mighty organizations. Now we are providing a service to all of HR. We have so much demand that we get to pick and choose things based upon how much they fit our mission. And our mission is designed around really where our passions are. So we’ve set up a new business and we have a lot of freedom to actually choose what we do.
My last point on this is that I’m still managing both teams and it’s almost like I’m a different manager. Like when I manage the first team, I’m dull. I’m not passionate. And I’m not a good manager. But on the newer team, the process team, I’m passionate, I’m excited. I’m the kind of manager people should want to have. So in general it was a case where we are able to go find the work that made us feel whole and alive.
Dart, it’s a wonderful story. And if we could drill down a little bit you know, many years ago the Japanese management consultants, Kenichi Ohmae, I don’t know if you had ever read him. He was considered way up there with Peter Drucker, Ohmae came up with some models about strategic degrees of freedom that every business or every unit, has a certain amount of strategic degrees of freedom, which enable you to expand or contract or redefine, what is your role and your purpose and your line of work. And that companies that were going through transformation could transform from a product driven to a service driven company, for example, right?
What you’re talking about is different than going from a product driven company to a service driven company. First, being at Google, that culture is one that may have more pliability and flexibility than say a traditional product management company like Clorox. And to you, being in the HR function where you are and in a service capability to the internal rather than to the external client. Those two factors of strategic degrees of freedom within a company like Google, might give you more elasticity. And the fact that you are servicing within therefore your value proposition can be redefined within without having to go to stock analysts and looking at sales, for example, can you talk a little bit about those factors being in your favor relative to say, somebody who works at Walmart or runs a trucking company saying, “Well, that sounds terrific, but I can never see doing that. With, you know, the contract I have with Amazon to redo my, my trucking business to be more whole and alive that way.”
Yeah. That’s a good question. I do think that Google, to a greater degree even than Cisco, allows this kind of opportunity. There are more degrees of freedom here than most companies. But I have to say also that we were able to be successful with it in a company that didn’t have those same degrees of freedom. And to some extent it was through stealth and subterfuge. There’s a little bit of the subversive in saying, you know what, I’m going to set up an organization and I’m not going to tell anybody about it until it’s successful. And when it’s successful, then I’ll start talking about it. In fact, I was told in my last company that I couldn’t set up a new organization. They said, you can’t just set up a whole new service and without actually figuring out how you’re going to fund it.
And you know, my response is, well, could I train my existing team so that they get better at their job and it included this new capability and they said, well, sure you can train people in your existing service. And so that’s what I did. I called it training, not a whole new service. And then once it was established, I was able to move it over. So I do think there is something to being willing to break the rules a little bit.
Yup. Yup. You know, when you think about the military and now Matis has just written a book about his military mind, the ability to take a lot of history and yet be improvisational and break the rules was part of what made him successful. And so there are certain situations where I think there is an expectation of breaking the rules and creating something. And then there are organizations or cultures where that’s not quite as true.
I have to admit it actually made the team pretty uncomfortable to know that we didn’t have top end support for that change. The change that I’m doing now, we actually have solid support for it.
Right, right. Well, being someone who has the trust of management, I think, also is important. And that gets to my next question. In our last interview, you felt you didn’t fully answer the question about how to persuade management to invest in workers as customers let alone to redefine the mission of the unit. Can you explain why you feel that way?
Yeah. Well, you know, what I spoke about last time is, the question that you asked last time was, how do you persuade management that this is a good idea? How do you do that with measures? And what I said was, well, it’s always hard to support design. Design is so inherently qualitative. For instance, it’s often hard to get an investment in user experience because it’s so qualitative or for that matter marketing. So all of these things have a hard time attracting investment. But what I forgot to mention… let me actually start with what a customer really is. And because once you realize what that is, you can make this better pitch.
I think we’ve forgotten what a customer is. If you actually go back in history and you look at the origin of the word “customer,” the word comes from the word “custom.” It was coined in about 1409. And what it meant was it was the person whose custom it was to come to your shop and buy something. And by custom it just means habit. They make a choice, on a routine basis, to give us their custom. A customer is someone who chooses to exchange value with your enterprise. And those are the two key components: exchanging value and having the choice to not do that. So the first part of that is let’s talk about exchanging value.
We know that if somebody comes to your shop and buys something, they’re giving you revenue. We know that’s value. The kind of value that you see when somebody gives you a dollar is the kind of value that’s necessary for your company to survive. If you don’t have a revenue stream, your company will cease to exist. So it’s survival value and it’s absolutely critical, but not all the value that comes into a company comes in the form of revenue. And there are kinds of value that come into a company that are equally critical to survival, but are not currency and are not revenue. And one of those is the labor of the workforce. And so when the workforce comes in and works for an enterprise, they are exchanging the value of their labor. And in exchange for the value of the labor, they’re getting a working experience.
Well, it’s possible to estimate at a high level, the value that workers are bringing. I figure that at Cisco – this is a very round number – it’s about 18, a billion dollars. It fluctuates from year to year, but it’s about in that range. And that’s a very, very large number for Cisco. It’s almost as large as all Cisco’s sales to Asia and Europe combined. If Google were in the same ballpark it would be Google’s second largest revenue stream. If you were to consider that value as revenue, it’s right after ads. So when it’s converted into dollars, it’s an enormous amount of value that that employees are bringing to the company.
And everybody always wants to know, how do you calculate that? You take a look at your operating margin. So if your operating margin is a 25%, it means that for every dollar you spend operating your company, you make a dollar twenty five. So I’m sitting at a table right now. We bought this table probably for a thousand dollars, right? That means the value that this table brings to us is $1,250 on average. That’s exactly basically what you do with the workforce. You look at the total cost of the workforce, you multiply it by your operating module margin, and it tells you how much revenue they’re bringing to you.
Is it perfect? No, it’s probably a low number because the kind of value that that workers bring to your enterprise is qualitatively different than what a table brings to your enterprise. Because only workers make decisions and tables don’t make decisions. You can see a company as being the sum of its decisions, and the success or failure of a company as being the sum of its decisions. And you can imagine a company without tables, but you can’t imagine a company without workers.
So that’s the value side of the statement that is derived from standing back and looking at, at the kind of value that that labor brings to the table. Now let’s look at the second half of being a customer choice.
When I buy a table, the table has no choice. Basically I bought the table. Now it’s sitting here, it can’t leave this room unless I decide it’s going to leave the room. Workers clearly have choice. They have choices when we decide to join or not join a company, but we also have a choice every hour about how much of our attention and how much of our work is going to be allocated to that company.
And so, that’s why I see workers as customers. Because they satisfy those requirements. And when you’re selling the idea of workers as customers, it’s really important to start selling the value of the workforce. And talking about how, as customers with choice, and bringing so much value, we need to create the kind of infrastructure necessary to deliver the work experience that they desire
Dart, this is a fascinating area of inquiry because so much of what workers have been looked at is as an expense. Not an investment or not something that can have multiple returns.
There was a book that came out maybe 10, 15 years ago called that that was by a guy named Thomas Davenport. And I can’t remember exactly what it was called, but it framed workers as investors. It took a step down the path toward thinking of workers, not as an expense, but as an investor. And the reason I don’t like that as much as I like thinking of employees as customer is that when someone’s an investor, it’s purely like a monetary exchange. But when they’re a customer, you have to suddenly think about what’s the product I’m building and selling for that customer that they are going to subscribe to. And so when you, when you, when you use the, the term customer. It invokes whole different patterns of investment in their needs.
You’ve identified this and you this term, and you’ve used it in our interview today, whole and alive, which is very intriguing because we’re mostly, we look at workers as being productive, right. But for the worker to feel whole and alive, like a customer they need to feel you’ve exceeded expectations. There is a certain amount of loyalty. They may give you the same amount of money, but their value to you increases as they feel that their expectations have been exceeded.
Can you talk about a worker who is whole and alive and what that means, and the value component of that relative to the worker who is disengaged, maybe producing the units, meeting the quotas or meeting the, what the requirement is, but their attitude and their, what they bring to the job is very, very different. And what they receive from the job is different. So can you explore this a little bit with us?
So, yeah, and there’s layers and layers around those words. So I use the word whole and alive very specifically. It was originally coined by Christopher Alexander. Christopher Alexander was an architectural theorist – a philosopher really. He’s still alive, he’s at Berkeley. And he and a handful of collaborators pointed out that there are ways of building – repeated patterns in buildings – that cause people to feel whole, and they went out and they catalogued 250 different patterns that you can see in architecture that just work. The problem is we don’t have names for them. And so they set out to give them all names and they went all the way from ring roads and scattered villages down to mixed chairs in your living room.
And they said, these are patterns that work, and you can tell they work because people are attracted to them and, and use them. And that there are these recurring events that happen in them that actually, result in people feeling whole and alive. And I’ll give you an example. My favorite example from Christopher Alexander is I think number 203 or something like that, was the child cave. He says, look, this is a recurring pattern. It’s, it’s a place where children can go. Young children can go that is their private space. That excludes adults. They make it out of blankets. They make it out of pillows. They put it under the stairs, wherever it is they find caves. It’s this recurrent architectural pattern that causes children to feel whole and alive when they engage in it. You can remember that feeling.
And he said, look, there’s these recurring design patterns. It needs to be about five by five so that it can hold one to four kids. It needs to have a small door so that adults can’t get into it. And he went through all of these different attributes.
So anyway, Alexander coined the phrase whole and alive. I can’t say all of the reasons why Christopher Alexander chose it, but I’ll tell you why I use it. Twice in the last couple of months in talking on this topic, people have wanted to summarize all of the design attributes of work experience that are good into high-level terms. One person said it’s basically everybody wants meaningful work. And somebody else said, basically everybody wants fulfilling work. And the reason I don’t like those terms is because both of them are somewhat abstracted from the, in the present experience of the work itself.
So like, let’s take meaningful. Years ago I was a criminal defense investigator. I understand intellectually the importance of criminal defense investigation and the importance of working for the public defenders, because it supports the rights of people and it supports the constitution. It was clearly meaningful work, but tactilely, in the moment, meaningful didn’t matter. The actual phenomenology, the actual experience of being an investigator from minute to minute was not an experience that I enjoyed. I had a fabulous manager who I’m friends with to this day and learned a ton of things, but minuteby minute, not what I wanted.
And so the reason I use whole and alive as opposed to meaningful or fulfilling, or one of these abstractions is because I’m trying to get to the, to the phenomenological, the, the internal experience of the minute by minute of that work.
You know it when you feel it, and that’s a lot of what I think, you know, Christopher Alexander did when he talked about these patterns. It was interesting – Christopher Alexander’s first book was mostly formulas. You know, it was high theory. Then but he wrote these very practical books, and he just said, look, we need names for these things. I can point to it. And when I point to it, you know what I’m talking about.
We’re taking an enormous amount of energy to make a worker happy, or make a ha a worker feel whole and alive. You and I discussed this as it relates to you being an older manager and millennials who are coming along, who may have different value systems about what work is and how they feel about work. So I guess there’s two questions: can work really rise to that level to be whole and alive and yet create the value that’s necessary for the enterprise to thrive? And then to do the millennials who are coming in, have a different set of expectations, particularly ones who are coming from right from school.
You know, it’s, it’s interesting. I actually find I, I don’t know. I can’t answer it specifically for millennials, but I find that in general we are all working through a mental model of workers as a means of production. It’s basically workers as an input. And we are so steeped in that experience, in that mental model, that we don’t even consider ourselves customers in many cases. And so the language that we use for ourselves is often not the language of a customer and the language we use when we talk about our work is not the language of a product. So there’s ways in which we all are essentially accepting, this other mental model. And we don’t take the time, I think, often to understand what are the design attributes of the work that really feeds us.
And then you also ask the question of, you know, is it possible for people to feel whole and alive and serve the needs of the company? I don’t think they’re mutually exclusive. I don’t even think that they are non-overlapping. I think if you were to take a Venn diagram there’d be a very, very high overlap between the work that needs to get done and the work that makes people feel whole and alive. It’s just a question of allocating the work in such a way that the kind of work that each person is passionate about and that really, and really works for them is available to them. And then designing the work in such a way that it does that for them.
There’s a funny Venn diagram, which I think I can say in an interview without drawing a picture: one circle is valuable for the business. And one circle overlapping that one is valuable for the worker. And so those are highly overlapping. And then there’s a third one that overlaps both of those that represents expensive to deliver.
There are some kinds of value that go to employees that don’t provide any value to the enterprise. One of those is salary. Salary is something that when a company gives a dollar to a worker, that company no longer has that dollar. And so that’s something in the Venn diagram that falls into expensive and valuable to the worker, but not valuable to the enterprise. But there’s this large category of overlap, which is things that are good for the worker, good for the company and are inexpensive. And one of those is
It’s not that expensive to allocate work to people who are passionate about that work instead of allocating the work randomly. And so that’s an example where the argument for design is, design is not that expensive. And and yet it provides enormous value down the road. And then there are things that are good for the worker and inexpensive, but that the company doesn’t care about. And that’s another place where design can actually deliver value to the worker-customer at little cost,
It’s fascinating because what you’re saying, if I understand you correctly is you do not have to make greater investments in salary or bean bags or free lunch, or taking dry cleaning for the worker, which are transactional elements, but in redesigning their work to match what makes them feel whole and alive, you’re giving them something that is an intangible, very valuable, but it doesn’t cost very much for the organization to do so.
Right. Right. I mean, one way I say that is the most expensive way to pay people is with money. You know, earlier you asked the question of setting up a relationship between the worker and the enterprise. You know, I have two terms that I believe in. I believe that there are enterprises that set up a take-take relationship with workers, and there are enterprises that set up a give-give relationship.
The take take relationship is – I’m going to be the enterprise speaking – I’m going to give you as little as possible. And the workers thought is: I’m going to give you as little as possible because that’s our relationship, which is we’re both optimizing our personal value.
The other one is an enterprise, where you exceed the expectations of the worker. It doesn’t have to be all through pay, but you’re exceeding it in terms of your concern for their experience, for instance, and exceeding expectations. In which case workers in turn often feel that that’s the relationship. It’s a relationship where you give me more than I expect and I give you more than you expect.
And so, you know, these are fundamentally different dynamics that can be set up. I’ve been lucky to work for companies where we are in a give-give relationship, in pretty much all of them. But I don’t think that that’s usual.
No, it isn’t usual. And as we’ve discussed the transition from school to work, university to work, you articulated it so well. I would like you to say it rather than me, that initial work experience does not meet the expectation of what the student who got used to the university experience of what work was going to be.
I’m going to articulate it from, from the enterprise perspective. When I worked for Cisco: Cisco has a fabulous employer brand. It’s been in the fortune 100 top companies to work for since the list was formed. It’s the only high-tech company that can say that. So it’s got this great employer brand but it’s not a consumer brand. And so when you’re just leaving university and you see two different companies who are recruiting, and one of them is called Apple, or one of them is called Google, which are huge consumer brands, and you know exactly what it is that they do, it’s an attractive idea to go work for those companies. As opposed to a company that you haven’t heard of like Cisco. One of my proposals was we shouldn’t invest so much in university recruiting because it’s a hard sell to new college grads, but what we found is across all enterprises, is that there’s a statistically higher turnover for university students two years into their first job, it’s a much higher turnover than any other population inside the enterprise. And that’s because they’re in their first job and it’s not living up to their expectations.
So my proposal was let’s go and actually recruit in the second year of their new job. Let’s collect all the names of everybody when they are at the universities. Let’s not hire them out of school, but let’s keep track of them. Let’s find out where they go and let’s recruit them two years later. So, and at that point, they’re, they’re thinking, wow, I know I’m looking for something different from my current employee experience. And then Cisco can go with a pitch that’s about their employment brand, and what it’s like to work there.
Yes. You know, it reminds me of intimate, personal relationships. When people start dating and they’ve never dated before when they’re kids, they have all these expectations of what a relationship should be. It takes quite a while before one matures to actually appreciate what a loving relationship is, which is not what you see in the movies.
It’s a good analogy.
Yeah. Well, Dart we’re going to have to wrap this up because our time is up, but I would love you to leave us with some summary from what you’ve talked about regarding whole and alive and the worker as customer. What would you hope that the impact on people would be of having this insight? Maybe we can look at it from a higher perspective than just the enterprise. What would you like to see in terms of the workers themselves?
Well, what I find, which is very interesting is that whenever I give this talk to a bunch of HR practitioners or academics, they immediately reflect back on their own experience of work. I had a large group of university professors say, you know, the problem with my work is that the students are not as intellectually curious as I’d like them to be. There’s a lot of careerism going on. I explained that then their university is attracting the wrong kind of work. When I looked at how the university of Chicago was recruiting, I thought that they recruited exceptionally well for curious students who really wanted to learn things. They sent out puzzles for everybody to solve and various brain teasers.
So if there’s just one thing that I hope that workers think about themselves as customers. And they think really hard about what are the design attributes of the work that you want to, that you want to subscribe to and recognize that there’s a great deal of freedom that you have in any organization, with enough chutzpah, to craft a work experience that meets your product design requirements.
Wow. That is a great way of thinking about work in terms of how we navigate our own careers and knowing what you want rather than just fitting yourself into whatever requirement companies come up with as a job.
This has been great Dart and I hope that people will enjoy listening to this, and we will put it up along with your first interview. And we look forward to seeing where you take this in the future.
Thank you very much, Jeff, a real pleasure talking to you again.