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It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall

It's better to
do a few things
really well than
than to do
a lot of things
If you can't
make the necessary
commitments of
time and energy
to your
scale back
your plan.
John Sumser

© 2013 interbiznet.
All Rights Reserved.

Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

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Ain't It Grand
(April 14, 2000) The human spirit is nothing if not resilient and able to adapt to the toughest of circumstances. At lightning speed, people and their organizations are able to rationalize their way into believing that the sow's ear they hold is just about to be converted into a silk purse. The most dismal third world tenement can be seen as a palace if you can just find worse circumstances to compare it to.

An old favorite comic strip of ours shows a picture of a Midwest family emerging from the storm shelter. All that is left of the house and barn is wobbly ruins and damaged foundations. With a smile on his face and a gleam in his eye, the father surveys the tornado damage and declares, "Ain't it grand, ma, the wind has stopped blowing."

This kind of self-justifying rationalization is useful when denying the presence of alcoholism. It's a real asset when the chips are down and the future takes patient building ("We're on our way"). It's a fundamental mechanism for coping with tragedy while continuing to meet responsibilities.

Unfortunately, it is a particularly useless tool for business managers.

With the recent stock market convolutions (HotJobs is trading at $10 today, down from a high of $40; CareerBuilder has fallen to below $3; Hire is back around $10), our "Electronic Recruiting Index" has fallen to the point that $1500 invested last summer is only worth $1750 today. At one point, the investment was worth nearly $3500.

This turnaround has prompted a spate of morale-lifting meetings in the old school companies. "See," the CEOs all say, "We're still really viable. The market has figured out that those dot coms are radar blips, not real businesses." Dredging good news from the daily disaster feed, these poor fools are stuck with selling their employees on the notion that a competitor's troubles constitute a victory.

That's the way it is in outmoded enterprises. They are forced to rely on the resilience of their employees when they have no sustainable market play. The message is simple. "We're better than they are because we only got one broken bone in the car wreck while they got two."

We've always imagined that there should have been a second frame in our favorite cartoon. Just after the father proclaims the good news, the wind picks back up and blows him off his feet. Nature (and the market) deals with early braggarts in that sort of fashion.

We're of the opinion that it's a good time to buy into the market. There is no question that the tide has turned and Electronic Recruiting is the start of a brand new era of Human Resource Management. In the near future, we expect more gloating from old school johnny-come-latelies. The truth is, however, that they'd be better off figuring out how they'll ride this sort of wave if they're ever successful enough to have the problem.

- John Sumser © TwoColorHat. All Rights Reserved.

Performance Insurance (From the Vault)

(April 13, 2000) The difference between a novelty and an idea with lasting impact is a nuance at first glance. Usually, powerful ideas look incredibly obvious in retrospect. Often, they involve a simple reframing of a nagging question. Brilliance, you might say, is a nuanced move from common sense to an enlightened perspective. The most significant shifts in thinking and doing are often modest adjustments in the point of view.

We talk frequently these days with people who are absolutely certain that the Recruiting Market requires a revolutionary change to really take off. Every time we hear the word 'revolution', we conjure images of mobs carrying torches through the night. Few revolutions have been bloodless. The status quo, an easy target for frustrated citizens, takes the heat in a way that is usually out of proportion to the problem.

Do we need to tear down the current structure? Should Recruiting be pulled from the loving arms of its long term home in HR to a universe more suited to manage the problem? Are Recruiters and HR Managers really the nincompoops behind the problem? Is it really true that the green grass on the other side of the fence is the promised land in which tortured marketing claims are easily understood by thoughtful customers who are instantly ready to trust and buy? Will it all be better once the need for a Chief Talent Officer is broadly understood and accepted?

As usual, the problems aren't as polarized as the rhetoric suggests. True, the labor shortage has changed the skills required for successful Recruiting. Certainly, the management of Human Resources as a 'no-shucks', really valuable asset needs to be rooted in the asset acquisition process (Recruiting). There is no question that cheapskate CFOs put their companies at risk when they eliminate solutions for shortsighted reasons. Obviously HR, slow to change by design, is going to have a tough time becoming a profit center. No CEO in his/her right mind is going to give real 'make or break the business' authority to someone who happens to be sitting in the right chair at the right time.

But, burning down the house is a bit of overkill.

It's much more likely that the right, simple, obvious-in-retrospect answer has not yet been articulated.

We think it will be something along the lines of 'Workforce Insurance'. The idea, which has been bubbling in our cauldrons for a while now, is easy to understand. Since successful navigation of company growth objectives requires a well executed staffing and retention program, the process can be highlighted and managed in a way that can be priced as insurance of the performance objectives. Assuming that workforce projections are sensibly articulated, that organizational development issues are managed effectively, that compensation and benefits are somehow pegged to the market and that recruiting is executed with a results bias, it ought to be easy to build an insuring operation that manages the integrated problem. By design, an approach like this would have to integrate the obvious components: Workforce Analytics, Fit Assessment, Continuing Education, Targeted Attraction Programs, Leveraged Referral Operations, Quick Hire Recruiting, Just In Time Management of Human Inventory and so on. Once the first policy is written and executed successfully, Wall Street would demand that any CEO making big commitments buy one for their company.

We raise the issue of 'Growth Insurance' as a way of pointing the way to a real market improvement. The innovative reframing of the Electronic Recruiting question, which is the key to the future, has yet to emerge. While we can hear the grumbles from the well-intentioned risk averse managers who worry out the details of an integrated reframed approach, one thing is clear.

No one yet has marketed their Electronic Recruiting Solutions as risk management tools with performance guarantees. At the very best, we've seen clones of the staffing industry and its contingency placement approaches. Real players, with skin in the game, willing to bet heavily on themselves, their consequences and their customers have yet to emerge. Like old time merchants, we see lots of people who are willing to bet all the way to the end of the money that their customers might spend. None are betting all the way out to the consequences of the transaction.

While the answer almost certainly won't be growth insurance or revolution, the need for a simple, easy to understand, innovative idea still plagues the industry. We're unlikely to see the full potential of our universe until that simple idea is uncovered.

- John Sumser © TwoColorHat. All Rights Reserved.

Why Site Flipping Is Important

(April 12, 2000) Forget the greed. Forget the variations in the NASDAQ. The Internet is so important to the changes coming in our economy that the past weeks' stock market adjustments are just a 'hunkering down' for the long haul.

These days, many recruiting researchers use a technique called "site flipping". We've been teaching people how to do it for five years now. "Flipping as Site" is a way of getting a good look at the links that point to a web page from elsewhere around the web. Any good search engine (AltaVista or HotBot) will allow you to execute this simple but telling procedure.

On AltaVista, begin the query with "link:". So, if you want to see many of the links pointing to Ford's website, you'd enter the query "link:" into the AltaVista search window. The query shows over 37,000 links.

The same drill can be executed on HotBot using pull down menus (which shows only 5,000 links).

Recruiting researchers use this technique because the people who are likely to link to a company's website are: employees, vendors, distribution players, and so on. It's easy to target potential employees once you understand how likely it is to target them using this technique.

There's more to it than that, however. Increasingly, analysts, potential employees and other sophisticated web users are beginning to use this web of inbound links as a way of judging the credibility of a company. Investigating the web of links that point to a company's website will give you a clear sense of the range of perspectives that various people have on the company. The raw number of links is a solid indicator of traffic volume.

In the web based world, the networks in which companies (and individuals) operate are becoming increasingly visible. While the technique is imperfect (largely because the search engines do such different things), site flipping is an indicator of a new way of judging a company's credibility.

- John Sumser © TwoColorHat. All Rights Reserved.

Soft Where (From the Vault)

(April 11, 2000) On the web, software is transparent, with revenues from sales or licensing approaching zero at all times! It's hard for most of us to remember that the old school software business is simply a short term convenient analogy (like 'horseless carriage'). There is almost no question that software will behave like a medium (disks, film, video cassettes, TVs, paper, radio, the stage) and not like a product (shrink wrapped retail) over the medium term. In all cases, the media is free or nearly free. Software is a media for dynamic content.

From our perspective, software is a giveaway and results are where the value is. Any producer of services for the web will have to eat the software development cost while figuring out how to guarantee results. The notion that software without content and value-specific results will be anything more than inexpensive infrastructure is pretty outdated. We're extremely tempted to see Enterprise Software companies (SAP, ORACLE, PeopleSoft) as the early indicators of the change. While software licenses and development were important to these companies, the bulk of revenue associated with them was always in the "customization" (or enterprise services) component of their sales process.

After all, tools are a modest component of the sale price of any product.

We still hold the notion that the ultimate Electronic Recruiting Tool will behave like a radar. It will identify potential candidates at long range and get clearer about them as the combination of need and proximity increases. The billing model, however, will be based on usage, at first, and results, ultimately. In the 21st Century, selling a tool without a results stream will be considered irresponsible.

Most of the current players in the ASP market (many more are coming) are really Application Providers. That is, they rent software on something resembling a monthly fee. The approach is no more than a modest revision to car leasing as a business model. The "Service" component of the equation is, at most, an afterthought. Where we come from, the most important part of the equation is "service", not applications. Unfortunately, most of the ASPs are thinly disguised software operations aggressively pursuing yesterday's tired and unworkable business model.

In the ASP market, the bet is whether or not software pricing will hold. Given the number of competitors, we'd say "not for long". We can assure you, however, that all of their business plans make the assumption that the unique technical ability they deliver will make that the fate of all of the other competitors. Everyone agrees with the scenario. But, they all think that they are the one exception.

So, if you are confronted with a vendor who tells you that the business is an "ASP play", ask them about their service guarantees. If they tell you about server reliability and instant software upgrades, run. If they tell you that their job is to make you a success and that they bill in increments that are directly tied to your success, you've found a service provider.

Let us know if you find one.

- John Sumser © TwoColorHat. All Rights Reserved.


(April 10, 2000) We took everyone who works at interbiznet to Tucson for a retreat last week. The core team is bigger than we ever imagined it would get. Sometimes, bringing the entire crew together is what it takes to realize how far you've come. A change of scene, a change of pace and a change of perspective seem to be the prerequisites for realizing the impact of growth.

In Tucson (population 480,000), we found a broad range of job boards and recruiting services. While the city is admittedly hipper than some others, a quick reading of the local media delivered a dozen demographically targeted services (from Christian to Hispanic to High Tech to Manufacturing). The local newspaper carries a listing of the top 200 employers while the other services specialize in smaller, local businesses. We checked. They all claim to be profitable and we believed them.

Growing at 5% per year, the Tucson workforce is a polarized universe of University graduates and recent, barely legal immigrants. The growth keeps local unemployment well above national averages at 5.4%. Growth and a modest labor surplus seem likely to fuel Tucson's continued growth. The largest employers are government and educational institutions with mining running a close second. The projections suggest that mining is in decline while the service economy is exploding.

That places Tucson right at the heart of the labor force question we'll all face in the 21st Century. How do you migrate talent from one active sector to a rapidly growing alternative without destroying the local economy? Tucson is in better shape than most with the buffer of a slightly higher unemployment rate. But, time is running out.

Were we in the business, we'd consider using Tucson as a test bed for cross-cultural fit testing. The question of which (not whether) resources to invest language training in would be at the top of the pile. Clearly, Tucson's growth has been and will continue to be driven by moving candidates with the right potential to positions they grow into.

It's a non-baby boom way of managing employment. It's the problem we're all solving together.

- John Sumser © TwoColorHat. All Rights Reserved.

© 2013 interbiznet.
All Rights Reserved.

Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

Mill Valley, CA 94941
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