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April 2024

InFullBloom Archives


Speaking Engagements

Predict and Prepare sponsored by Workday 12/16

The Bill Kutik Radio Show® #171, 2/15
The Bill Kutik Radio Show® #160, 8/14
The Bill Kutik Radio Show® #145, 1/14
Workday Predict and Prepare Webinar, 12/10/2013
The Bill Kutik Radio Show® #134, 8/13
CXOTalk: Naomi Bloom, Nenshad Bardoliwalla, and Michael Krigsman, 3/15/2013
Drive Thru HR, 12/17/12
The Bill Kutik Radio Show® #110, 8/12
Webinar Sponsored by Workday: "Follow the Yellow Brick Road to Business Value," 5/3/12 Audio/Whitepaper
Webinar Sponsored by Workday: "Predict and Prepare," 12/7/11
HR Happy Hour - Episode 118 - 'Work and the Future of Work', 9/23/11
The Bill Kutik Radio Show® #87, 9/11
Keynote, Connections Ultimate Partner Forum, 3/9-12/11
"Convergence in Bloom" Webcast and accompanying white paper, sponsored by ADP, 9/21/10
The Bill Kutik Radio Show® #63, 9/10
Keynote for Workforce Management's first ever virtual HR technology conference, 6/8/10
Knowledge Infusion Webinar, 6/3/10
Webinar Sponsored by Workday: "Predict and Prepare," 12/8/09
Webinar Sponsored by Workday: "Preparing to Lead the Recovery," 11/19/09 Audio/Powerpoint
"Enterprise unplugged: Riffing on failure and performance," a Michael Krigsman podcast 11/9/09
The Bill Kutik Radio Show® #39, 10/09
Workday SOR Webinar, 8/25/09
The Bill Kutik Radio Show® #15, 10/08

Keynote, HR Tech Europe, Amsterdam, 10/25-26/12
Master Panel, HR Technology, Chicago, 10/9/012
Keynote, Workforce Magazine HR Tech Week, 6/6/12
Webcast Sponsored by Workday: "Building a Solid Business Case for HR Technology Change," 5/31/12
Keynote, Saba Global Summit, Miami, 3/19-22/12
Workday Rising, Las Vegas, 10/24-27/11
HR Technology, Las Vegas 10/3-5/11
HR Florida, Orlando 8/29-31/11
Boussias Communications HR Effectiveness Forum, Athens, Greece 6/16-17/11
HR Demo Show, Las Vegas 5/24-26/11
Workday Rising, 10/11/10
HRO Summit, 10/22/09
HR Technology, Keynote and Panel, 10/2/09

Adventures of Bloom & Wallace

a work in progress

A Tale Of Two Perspectives — Customers Of And Investors In HR Technology

Cover of serial Vol. V, 1859

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way. . . .”

Thus opens “A Tale Of Two Cities,” a master work by Charles Dickens that I’ve read several times and truly loved.  But I have never appreciated it more, the ying and yang of it, the creative tension between the forces of enlightenment and those of privilege, than right now.  But, although this applies in spades to our current political life as well as to world affairs, I’m going to focus much closer to home, on the HR technology and enterprise software industries, in this post.
Reading all the coverage, first of SAP’s acquisition of SuccessFactors, then Oracle’s acquisition of Taleo, and most recently, albeit on a much more modest scale, Saleforce’s acquisition of Rypple, I’m struck by the VERY different reactions to these events across Twitter, all the blogs and articles, and amazing discussions on the LinkedIn group for the HR Technology Conference.  Even among the well-informed opinions (so excluding all the nonsense — always remembering that social tech gives everyone a voice), what you see in this grand industry consolidation, in this rush to own a piece of the HCM and/or SaaS action, depends on where you sit.  And therein lies a tale of two perspectives.
Businesses are not charitable organizations.  They exist to make money.  And unless they are successful financially, they cease to exist.  But businesses are also started and led by real people, people who bring a range of KSAOCs, ambitions, life experiences, values and more to starting and running businesses.  I wrote a while back about the importance of matching the ambitions of your vendors to the needs of your organization when evaluation HR technology products and vendors, and that post is worth a reread now.  But what that post didn’t do was to dig further into the dynamics of our market and to highlight the tale of two perspectives.
Investors, from angels to VCs to private equity firms to institutional investors and right on to individual investors, don’t start and run businesses.  They risk their capital in exchange for a return on that capital.  And while many to most of these folks (and I’m one of them, but definitely not within our industry) are honest enough, their first allegiance is to the return on their investment rather than to the customers whose purchases generate those returns or to the workforce whose accomplishments are the basis for those customer purchases.  And while the founders/CEOs/leadership of the firms thus funded may be true visionaries who are passionate about serving their customers and delivering breakthrough products, money talks.  So looked at from the perspective of an investor in Taleo or SuccessFactors, the payoff from these deals looks pretty positive.
Customers, on the other hand, are less interested in making investors rich than they are in meeting their own business needs.  And they know very well that M&A is, at a minimum, disruptive and, all too often, destructive.  They also know — or they should know — that their needs are not always top of mind with business owners and investors.  They should be, of course, because (at least in theory) satisfied customers are good for business.  Unfortunately, in our world of HR technology, customer lock-in occurs with such frequency and depth that customers will often put up with what would not be tolerated in other settings just to minimize the perceived pain of change.  So, all too often, dissatisfied customers keep on paying for software/services with which they are much less than thrilled, reinforcing the bad behavior of some vendors who really do put management and investor interests ahead of serving their customers.
Capitalism is a wondrous thing, and I’m all for it.  And there are some amazing visionaries/executives in our industry who are totally straight up in their dedication to customers.  Interestingly, some of these individuals are both rich and good, and their reputations precede them.  Show me a serial entrepreneur whose customers have bought from him/her several times, and I’ll show you a serial entrepreneur who’s been able to achieve financial success even as they’ve brought innovation and great value to their customers.  And show me one who’s a talent magnet, not only of great sales people but also of great product visionaries and developers, and you’ve found that rarest of founders/CEOs/executives.  I’ve had the pleasure of working with a few, and they are one reason I’m still working. 
Investors and customers may well benefit from the same business strategies — that would seem to be the case with Apple — and we have good examples of same within our own industry.  But buyer beware; the investors can look out for themselves.

4 comments to A Tale Of Two Perspectives — Customers Of And Investors In HR Technology

  • Naomi,

    Pretty much dead on, but I think you are missing a type of business, albeit a smaller group. There are many businesses, where the visionaries/executives started the company with their own money and are self funded, meaning they don’t have to answer to outside investors. Granted, they don’t generally grow to the size of VC funded companies, but if run properly, they can still thrive, and most importantly, serve the needs of their customers. These types of businesses tend to fall under the description you talk to regarding what customers care about. The well run ones know if they satisfy their customers, business will take care of itself. They also tend to run the businesses more for the long-run, meaning they know they have to take care of customers or the business will not be sustainable. This is in contrast to investor funded businesses whose sole goal is to get the business to a certain size, meet certain parameters, such that they can maximize their returns via a liquidity event. This doesn’t necessarily equate to a long-term sustainable profit margin, or taking care of customers. This is often shown by growth companies who spend a lot of money on sales and marketing to grow revenue, and don’t spend as much on customer service and R&D.

    I know we don’t tend to talk much about these companies because they don’t have the following that larger companies do, but I believe that many of them do serve some major needs of businesses (even in HR), and shouldn’t be completely excluded. Obviously I am bias in this regard since Dovetail Software fits under this category.

    Stephen Lynn

    • Naomi Bloom

      Stephen, Many thanks for your thoughts on this. I’ve actually written before about what I’ve called (perhaps badly named) “lifestyle” companies, and they absolutely fill valuable niches in our market. Unfortunately, without considerable funding, these firms aren’t able to address broader market needs, e.g. broader functionality or geographies, and are limited, therefore, to quite small but potentially important niches. Lots of innovation can happen inside these companies, both as to product and customer focus, but customers also struggle to piece together their HRM delivery system if they rely too heavily on integrating and managing a large collection of niche vendors/products rather than on a smaller collection of more robust/broader/global offerings. Trade-offs all around, and no one answer is right for everyone. The good news is that our market has attracted many niche players, some of who are self-funded.

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