HRx Radio – Executive Conversations: On Friday mornings, John Sumser interviews key executives from around the industry. The conversation covers what makes the executive tick and what makes their company great.

HRx Radio – Executive Conversations

Guest: Stacia Garr, co-founder and Principal Analyst at RedThread Research
Episode: 318
Air Date: March 15, 2019

Transcript

Important: Our transcripts at HRExaminer are AI-powered (and quite accurate) but there are still instances where the robots get confused and make errors. Please expect some inaccuracies as you read through the text of this conversation. Thank you for your understanding.

SPEAKERS
Host: John Sumser, HRExaminer
Guest: Stacia Garr, co-founder and Principal Analyst at RedThread Research

Full Transcript with timecode

00:00:14:00 – 00:00:18:18
Good morning and welcome to HRExaminer’s executive conversations.

00:00:18:18 – 00:00:32:15
I’m your host John Sumser and today we’re going to be talking with Stacia Garr who is one of the founders of a company called Red Thread Research. Great name and I’ll let Stacia tell you all about it. Morning Stacia, how are you?

00:00:32:15 – 00:00:34:22
I’m doing well. How are you John?

00:00:35:06 – 00:00:39:14
I’m great. Would you take a moment and introduce yourself to the audience please?

00:00:40:00 – 00:00:47:11
Yeah. My name is Stacia Garr and as you mentioned I’m the co-founder and principal analyst with Red Thread Research.

00:00:47:28 – 00:00:57:03
And, tell me how you got here. You are a new firm in age in HR and HR technology, what is it that makes you think you’ve got something to say here?

00:00:58:29 – 00:01:41:26
Yes. So Red Thread is a new firm as you mentioned. We’ve just crossed our one year birthday if you will but I’ve been in the space for close to 15 years before I founded Red Thread with Danny Johnson. Both of us actually were with Bersin by Deloitte. I led the talent management research there for eight years. So for five years after the acquisition and three years before that and then before that I was with the Gartner is doing research on talent management and also actually designing learnings. So how do you transition to insights from the research into learning for HR, legal, and IT professionals. So I was there at Gartner for about five years, so I’ve been in this role for a while.

00:01:41:26 – 00:01:49:29
Wow, well you are an extremely seasoned, would you call yourself an industry analyst, or researcher how do you describe what you do?

00:01:50:12 – 00:01:54:08
Yeah I would say both. So industry analysts and researcher definitely.

00:01:54:11 – 00:02:00:29
So at this point you must be one of the senior people in the industry analyst universe, yeah?

00:02:02:08 – 00:02:07:20
Yes. Along with you John and some others. Yeah I’ve been doing it for a while.

00:02:08:09 – 00:02:17:12
Yeah it’s it’s it’s been I’ve got over the years so. So tell me about Red Thread research. Let’s start with the name. How did you do get to red thread research?

00:02:19:09 – 00:04:20:06
Yes. So a red thread there are lots of different definitions as you and I were discussing just before we jumped, but a red thread is a connection between two seemingly unrelated things. And so the what we’re trying to do with a research firm is to really look at what we see out there and make those connections that maybe others are. So some of the less obvious connections and trying to bring to light new information that folks may not be seeing today. This report that we’re in the talk about today I think is is a prime example of trying to do that. So. That’s really where the name originated. I mentioned to you also another variant of the name is this concept of what’s called a red thread circle. Which is money that is common or we’ve been told is common within Native American populations. And or at least some of them obviously not not all but with the idea being that folks come together often women but not always come together. In this red thread ceremony to share their worries or their concerns and what they do is they take a red thread and they tie a loose loop around each person in the circles wrist. And they read thread and symbolizing them coming together around the shared concern. And then at the end of it after they’ve had the conversation maybe maybe have prayer. They will cut the threads and tie a piece of it around the wrist and take that away. And so the symbolism of coming together sharing concerns looking for solutions and then going away with a piece of that shared experience. Is also what we’re trying to do with the firm. So between those two concepts we thought that red thread really seemed the right. Symbolism for what we’re trying to do with the photos. Should you go to a new report or what is yes we have a new report out that is on diversity and inclusion technology. Paul DNI technology the rise of a transformative market. And we did that in partnership with the good folks over at Mercer what’s really what it’s about.

00:04:20:06 – 00:04:22:17
Have you ever heard about technology.

00:04:22:28 – 00:06:43:18
Yeah. So like is this kind of goes back to that concept of seeing maybe some uncommon connections or other connections that other folks may not be seeing. When we started the firm and I was trying to think about what do we what do we see happening out there that isn’t really being talked about let’s come to some new area that we think is important. And this topic of diversity and inclusion and technology really came to mind. And the reason for that was that when I was at my previous firm I had led Diversity Inclusion research at that point for about five years. And when I started that research I asked folks like I did when I did any research on any talent practice. You know I said What. What are you doing with regard to technology to enable this practice of ethical performance management with employee recognition with talent management etc.. And there’s always an answer. And with DNI when I started asking this question people literally gave me blank stares like what are you talking about. And I said Well you know are you using any technology to enable. And they said well we use e-learning and we might use some technology to make computers more accessible. So you know reading out loud what might be on the computer for instance for somebody who is visually impaired but nobody had any answer. So I thought at the time that that’s pretty interesting. And we went on our way. Fast forward to the beginning of 2018 and we were post to mean to we were post. Some of the technological developments John that you and I see in these in other spaces so natural language processing and sentiment analysis and you know everybody is talking A.I. whether they actually do it or not of course is a different conversation. But you know there’s all these changes. I said I wonder what’s out there. Until we just put something on LinkedIn and said Hey is anybody doing anything related to DNI and technology. And it was like my LinkedIn exploded with people who wanted this Tell me about what they were doing and seen. And so I said Oh apparently there is something here now. And so I think the first blog post on this I called it a question becomes a question because it became this crazy quest to find all these companies. Who were doing something in the space to this report that we published here in February. Was really the culmination of that experience.

00:06:44:19 – 00:06:48:10
That’s your receipt. So tell me what you mean by device technology.

00:06:49:09 – 00:07:36:11
Yeah. So when we when we talk about diversity and inclusion technology we define it as an enterprise software. That provides insights or alters processes or practices at either the individual or organizational level in support of an organization’s effort to become more diverse and inclusive. So the key points there. It provides insights that alters processes or practices it can be at the individual organizational level and it focused on supporting the organization’s efforts to become more diverse and inclusive. So it’s not about compliance reporting. Or compliance software but it’s really about inflicting decisions processes practices. For the organization more broadly so that a lot of things can fit into that. And I know we’ll talk about that in more detail but at a high level that’s what we mean.

00:07:36:15 – 00:07:40:23
What’s interesting so how we cope is defined doing so good.

00:07:41:00 – 00:08:02:11
Do we have one hundred and five in the report and the interactive online tools that we built which allows folks to come to search for companies. And since I published work since we published the report we have come across at least 10 or 15 more so. Well I’m sure that more will kind of come out of the woodwork as we continue to do the work. But one hundred and five is the official number at the moment.

00:08:02:28 – 00:08:13:03
So to be so slightly more concrete ideas about what the ship flows a hundred and five others produce a diversity a little cheat that’s just the ship.

00:08:14:02 – 00:10:06:00
Yeah. And so I think one of the important things to think about with regard to the spaces is the way that we define it. So we define it a high level. Three different types of vendors. The first is what we call a DNI focus vendors to that center. That type of vendor is primarily focused on helping organizations address their DNI challenges. An example of that might be a vendor whose product focuses only on reducing unconscious bias during hiring. That is all that they do right. That is their entire reason for existing. A DNI feature vendor is another type. And we define those vendors as offering features or functionalities that cater specifically to DNI needs. But that’s not their primary business. So an example of that might be a recruiting a vendor whose product can make all the resumé names or identifying information blind as I call it. So they remove it. To minimize unconscious bias. That’s the DNI feature under. The final type that we include in the report is what we call the DNI friendly vendor. To to address DNI as their primary focus. And they don’t necessarily have a feature devoted just to diversity and inclusion. Reasons. If you will. But what they do could positively impact DNI in an organization. So an example here might be. A recruiting software vendor who uses a I or some way to automatically recommend appropriate candidates to hiring managers that could potentially reduce some of the bias that happens at the beginning of the recruiting funnel. That that’s the way of that taxonomy really of thinking about vendors is important to understanding the space because you know it’s not that there is one hundred and five who say this is the only thing that we do but there’s a hundred and five that we think are doing something related to this topic.

00:10:06:17 – 00:10:11:12
So do you imagine you know you’ve got more technology involved for a time.

00:10:11:16 – 00:10:34:29
Do you imagine that this evolves should be a sort of a functional area of enterprise so let’s address any of it for us. Chuckles You’re going to look closely at these are questions do you want to be a solo work day or Oracle.

00:10:34:29 – 00:12:45:26
Yes and no. So to answer your urgent into the kind of side comment there were a couple of enterprise companies and three enterprise companies in there so I take these success factors in their work phase in there as is. Well what was people fluent. They actually spun off a group. They were acquired by LTTE but then they spun off a group. Called affirmative which is focused just on one DNI. But they were kind of the enterprise or they aren’t enterprise to sue. But to answer the other question I think the space could go one of two ways and from that perspective. One in which is that they do continue to go in kind of this to develop a siloed set of options or features or resources whatever you want to call it. And the other is in the case of the technical capabilities are increasingly woven into existing approaches. And I think that for the market for the technology to make them biggest impact. The latter is probably where we’re eventually going to go where where the capabilities and the features are woven into other. Software. That I think similar to what we see today with other technologies. There’s going to be a use case for a lot of these kind of more. We call into an I focus. But in other problems that we might call. Best of breed solutions. We’re going to continue to have kind of both of these things sitting together. The reason that I think it’s good to have some of the interweaving is. In all the research I’ve done on diversity inclusion in the past. What I have seen is that when you can make the biggest impact and when you have seen it as a part of your other decision making processes and practices of how you do business. If it’s a you know we have to step back and think about the DNI angle or did we run the DNI analysis if that’s always the second thought it’s going to be a thought that isn’t always talked about. And so it’s important to have it wasn’t it. I’ve never thought about this before but it seems to me that what you do with the company is no doubt all of your attempts to reduce bias in the organization shoot

00:12:46:04 – 00:13:09:25
That those are serving as far as you role she could manage the. You see that. Questions like Are we being or is it something that really shouldn’t bias in situ or issues shooters should be collect data who afford it is a data show. So you’d imagine that this gets a little bit more showy to shoot first.

00:13:10:27 – 00:14:03:21
Yeah it definitely is going to get more scientific. And you just because capabilities are woven into practices and technology. Does that mean that you don’t help us like we do in the rest of nature a single point of contact who is basically responsible for making sure that these things happen. I mean this is certainly going to be the chief diversity officer and her his team is absolutely going to get more scientific. The two areas that are of the greatest interest for practitioners. And customers of this technology as well is where we see the most technology is in talent acquisition and in analytics. So I think the reason for that is it’s both of those are spaces that are relatively prone to. Metrics into being or metrics driven into. People can actually see what the impact of the things that we’re doing.

00:14:03:25 – 00:14:15:27
So if they want to repeat it because its recruiting is more than that issue. I think we’re going to jump a before.

00:14:16:24 – 00:17:05:20
Yes. There were there were five big findings. The first one was with regard to the market as a whole. To do this is you can tell from where you talked about the market is fragmented it’s growing. And it’s large. So we we estimated based on the revenue numbers that we were given and the audit sizes all the rest that we estimate that the overall market size is about 100 million. Today. But what’s interesting is it’s just that we saw significant growth in the size of the market. So you know a lot of those those companies are small companies. And they are growing rapidly. So I think over half of the organizations were. The vendors when growing at over 100 percent year over year growth. So that was one big finding. Second one was we categorize the solutions according to. The traditional talent management categories that we have used in the past of talent acquisition and development advancement engagement retention and then analytic. And. When we looked at kind of where the technology is allow amongst those as I mentioned that the biggest was talent acquisition and then that was followed by the analytics space. So. What was interesting though John and I think you’ll really really get into this is when we asked folks what are the outcomes when we asked the spenders what are the outcomes against which your technology will be measured. What is success. They said increased employee engagement with the primary one but only 12 percent of solutions are actually targeted at employee engagement flows kind of an interesting distinction or the dichotomy really. Between what people said with success and what they were actually doing. Disclosure I think it’s because employee engagement is so hot right now. And so everybody says oh we’re going to drive engagement which is then going to drive productivity. And so it’s an easy way to say that we’re going to make an impact. The question that I have then is are you actually making like is there a direct connection between your software does and employee engagement. And some of them probably would make an argument. Well if we have a more diverse inclusive organization we’re going to have higher which there is a connection there. But it’s a bit fuzzy in terms of what many of these solutions do. You know a lot of it’s kind of like what we’re now going to be able to make that are visions that will enable us to potentially be more diverse and inclusive. But it just seems like come a long string of ties to get to engagement. Whereas. For instance a more direct tie would be we make we help an organization of more diverse talent pipeline. That would be a very direct connection that people I think actually could be national. Vendor can be measured on versus what they’re saying.

00:17:05:24 – 00:17:33:01
What we’ve done with this is going to have to take a lot of these vendors are sloppy in their short answer for this issue because they don’t know anything about the industry or really about this particular customer and what it means an idea it’s a belief but I think I think some of us and in this space I think it’s interesting because it comes it’s really becoming a market.

00:17:33:01 – 00:18:32:09
And so folks are trying to figure out where who their customer is right. Diversity and Inclusion Chief Diversity Officers historically have not had much budget. So when I was actually at Epperson we did a study and we found that. Half of the budget available for DNI per person per year John was fifty dollars per person. And when we looked at for instance how much a company spends on coffee per employee it was more than that. You know these these vendors are really doing well for the chief diversity officer because because there is a lot of budget but then H.R. is only starting to become interested in this space and to see it as part of their purview. And so this is a little bit of creating a new line item for them which we both know is a hard thing to do as a Category 4 for a technology firm for a technology space. So I think that that is part of why these vendors like positioning themselves that way it’s just because the buyer is not totally clear.

00:18:32:09 – 00:18:37:23
GROSS So much of the emphasis here as I understand it is on reducing bias.

00:18:37:26 – 00:18:42:06
So I was yeah that’s a that’s a fair amount of the emphasis. Yeah.

00:18:42:16 – 00:18:55:06
Yeah. So do you think you could do that with technology. That’s that’s that’s the real issue here is this is turning out to have an impact on those who do. And what does that cause.

00:18:55:07 – 00:20:34:07
Well I think it comes down to how do you think about how do we think about addressing biased. Right. So in the last few years one of the big focuses. OK. And the space has been unconscious bias training. Right. And we’re going to teach people that they all have unconscious bias. And that’s an important thing to do. But a challenge that I think we come up against. There is that individualized solution. So what has to happen in that situation is I have to go through the training and then when I’m confronted with a situation and I have to think to myself am I engaging in unconscious bias. Like am I making a decision here based on my you know to Daniel Kahneman. You might find thinking fast and slow on my kind of thinking fast or what’s happening and then I have to make a different decision and that requires a lot of focus on the individual. The technology I think can come in. Is it can highlight for folks where bias their conscious or not is happening in flag it for people and say hey something might be happening here and then it is entirely incumbent upon the individuals and told. To understand and to do something different. And if they don’t have an appetite or an openness to understanding that bias might be occurring in that instance. They know the technology isn’t going to change it. But if that’s where it can potentially change it is if people didn’t think that there might be bias there or didn’t think to think about the bias

00:20:34:24 – 00:20:51:08
And it it for them and helps them see that something might be occurring then yes I think you can have a positive impact on addressing bias issues that we saw where that does something other than looking for is associated with protected classes with boys.

00:20:52:01 – 00:22:29:20
Yeah. So I mean you know when we when we think about some of the issue it’s one of the most common examples that I hear. Is is around sourcing right and particularly sourcing female technical talent. So you know I live in the Silicon Valley and we hear a lot about about this challenge and put air quotes around challenge but see what we hear insists we can’t we can’t find these people they don’t. Well there’s quite a bit of technology out there that will help you either look at their foreign sources of talent so whether it’s some of these different groups that kind of gather people who are of different backgrounds and a lot of heat to search by search for them. There’s other ones that will filter their technology that will actually change job descriptions to help you address potential bias that you are getting a bigger flow of of individuals in. And then there’s other technologies that have in there A.I. and I kind of hesitate to use that word. That’s their matching algorithm. Have developed ways to potentially account for what may be happening in terms of the regimens or even just who’s applying for the different roles. And so to bubble up people who want you know in this example women. With technical talent who may not have shown up right at the top or who may not have even thought to apply to. None of that has to do with conscious bias. It all has to do with how do we get more people into the talent pipeline and who are of a different background than what we would what we have historically seen. That’s one. One example

00:22:30:25 – 00:22:55:20
That’s correcting the problem for boys to be applied to shoes. Yeah that’s right. That’s infrastructure. We just move through time and I want to be about this because I wouldn’t be sure that you’re entitled to make sure that people get sober in 14 years as if it were two shows. You won’t miss your takeaway.

00:22:56:24 – 00:24:28:08
Yeah I think the most important thing is that the world of diversity and inclusion is shifting. I feel like we’ve been saying that for a while but. But with some of the developments across the last 18 months I really am seeing massive changes if nothing else just the sheer interest in this report. Reinforces that. But in one of the things we’ve seen historically that has been a reason that folks will not so will make me more cautious about getting into this space has been a concern about. The legal issues that might arise out of doing this type of work. And what this research has shown me is that there are organizations that are figuring out a way to manage that risk successfully. Effectively. And that right now because so many organizations are grappling with it and there’s so many changes from a legal perspective like for instance in the UK they pass this gender pay equity law last year there’s so many changes that people are into. It’s a rare opportunity I think to kind of get your house in order if you will. And there’s new technologies that can enable you to do it. So I would just encourage people to take this opportunity to make those changes. Because at some point it’s going to become an expectation that this stuff is fixed and I don’t think that’s far away. So hopefully folks can read the report. I don’t know if you could be posting a link to it but but it’s on our site https://redthreadresearch.com/ and hopefully this will help advance that for folks.

00:24:28:09 – 00:24:32:14
That’s great. That’s great. So what’s the best way for someone to learn some more?

00:24:32:28 – 00:24:46:06
Yeah. So folks can certainly reach out to me on LinkedIn and on Twitter. But I do want to reach out and email me directly. I’m Stacia, which is S-T-A-C-I-A at Red Thread research dot com and I’d love to hear from folks.

00:24:46:20 – 00:24:48:20
So, thanks for taking the time to do the Stacia.

00:24:48:20 – 00:24:55:18
It’s been a great and blistering conversation. It was surely interesting for me.

00:24:56:15 – 00:24:58:09
and that’s a big deal!

00:24:58:12 – 00:25:01:04
Well thank you John for the opportunity. I appreciate it.

00:25:01:28 – 00:25:07:12
Well good luck with Red Thread Research. It’s a great idea. This is a great report.

00:25:07:22 – 00:25:17:29
You’ve been listening to HRExaminer’s Executive Conversations, which we’ve been talking with Stacia Garr, who is the co-founder and principal analyst at Red Thread Research.

00:25:18:00 – 00:25:22:10
Check her out. Thanks very much. We’ll see you back here next week. Bye bye.