E269 | Rethinking People Ops & Transforming Employee Experience with Jessica Zwaan
Fully remote work isn’t for everyone. For instance, some people get their energy from having a community at work, whilst others get it from elsewhere. Some can deal with the ambiguity that comes with working remotely, and others struggle with it. Our guest this week believes that working remotely is not just a decision over having an office or not, but an operating system. And that means that you need to curate every aspect of your people operations.
This week on The Melting Pot, we learned from Jessica Zwaan, author of Amazon Best Selling, Built for People, and founder of Being People consultancy. She’s also the Chief Operating Officer at Whereby, a calm and user-friendly video call solution that integrates directly into your platform using our API or SDK.
In this episode, Jessica joined us to discuss the importance of cultural responsibility and effective performance evaluation within organisations. Shed delved into the different spectrums of responsibility at different levels, emphasising the crucial role of HR leaders in driving strategic success. She also explores the challenges of traditional HR practices and shares the innovative strategies they’re implemented at Whereby to encourage the team to book holidays in advance.
Download and listen to learn more.
On today’s podcast:
- Working fully remote. Does it work for everyone?
- Creating a sense of community remotely
- The three spectrums of responsibility
- Calibrating the role of managers in assessing performance
- The philosophy behind Built For People
Follow Jessica Zwaan:
Jessica is a hands-on Chief Operating Officer at Whereby. She finds joy in diverse, kind, and world-changing companies of incredible people. She has a first-class honours Law Degree and a background in Operations, Legal, People and Talent, and leadership in scaling technology, e-commerce, and SaaS businesses.
Jessica is a regular panellist and speaker presenting at local and international events on how to strategise your business operations, positively influence culture, and generally think about your company as a commercial product.
Over the years, Jessica has helped start-up and scale-up founding and executive teams, focusing on People, Culture, and Talent strategy and operations.
What is Whereby
A world in which anywhere works, Whereby is the super simple way to connect over video. No apps, downloads, or long meeting links. They know that great culture is key to building a great company. Their user base and team of Whereby is worldwide – having been used in nearly every country worldwide by millions of users.
“We basically make video APIs. So if you’re building a mental health app for therapists to speak to their patients, and you don’t want to go through all of the labour of building video comms into your tool, we will provide that software for you and then you can integrate that into your platform. And we also have a consumer product, kind of like a Zoom equivalent, but I personally think much more beautiful, easier to use.”
With a team of about fifty people around the world, Whereby has been fully remote from its inception. In fact, they were one of the companies that people looked up to during the pandemic, as they’d been doing it for about four years by that time.
The reason behind operating remotely is that the Whereby team has always been very good at thinking strategically about the culture they’re trying to build in relationship with the product.
“We’re building a product with a mission to literally to imagine a world where anywhere works. And if that is your company mission and your whole purpose is there to try and enable people to connect across borders and work from anywhere, then it seems a little strategically muddy to say to the team, we need you in an office to do your best work.”
How do you make a fully remote team work?
“I really believe that remote working is an operating system, not just an office decision. It means that you need to change almost every single aspect of your people policy, your ways of working, your culture, of how to deal with problems and come up with solutions.”
From a people’s policy perspective, Whereby’s compensation methodology has to be cross-border. Jessica argues that it would be incongruous to create a methodology that is based in one place. This requires them to think more globally about emerging markets and how they interact with them ethically. From a decision-making hierarchy perspective, they have a system they call ‘hours agnostic’.
“If we are a team that’s fully distributed and we can ostensibly work from anywhere, then the times you’re working don’t actually really matter because if someone’s working from nine to five, it’s not someone else’s nine to five. If you’re in Ghana, it’s not the same nine to five as I am here in New York. So then we say, well, we need to have hours agnostic working, which means that people are put in control of their own working hours with the expectation that output matters more than input.”
Because of that, Whereby’s team is given a huge amount of autonomy and freedom but also really high expectations that they’re going to have to be flexible, just like they are flexible as a business.
Creating a sense of community in remote teams
Originally from Australia, Jessica has been living in the US for the last eleven years. All of her family lives in Australia, so her relationship with them has been remote since she moved to the US. However, she has a strong relationship and a sense of community with them. She argues that, although workplaces aren’t families, the same can be applied to companies.
“You can have strong relationships with people and a community with people you want to have a relationship with and community with at work remotely. It’s not that it’s impossible, but the other thing is, think a lot of our team don’t get their social energy from their work environment. They, like me, have lunch with my husband or go out to watch a play in the evening. That’s where I get that social energy.”
If you are a person that really needs the community of people around you built from your workplace, she adds, then you’ll find remote working difficult. Many people say that they want to be able to work fully remotely. However, Jessica believes that not everyone who says that has the skills or personality to do it effectively. Sometimes when they’re put in that position they realise that there is a level of ambiguity that they find difficult to swallow. For instance, they’ve had people at Whereby who have left the team because they’ve found that level of isolation hard.
Recruitment: are you fit for remote work?
So, how does Whereby make sure that the people they hire are fit to work in a fully remote environment? What’s their screening process?
Jessica explains that everyone who comes through their recruitment process does a paid practical test with an element of ambiguity baked into it. She gives the example of their Sales Development Reps. They’re given three inbound emails and they’ll have to pick which one they’d like to respond back if they were at Whereby. Within those three emails, there are reasons to choose or not as a potential sales-qualified lead. However, they don’t get all the context they need to be able to perfectly make the decision. There is no real right answer. It’s about how they justify it.
“If we find someone’s responses back to that piece of work is kind of riddled with self-questioning or they’re finding it very difficult to process the level of ambiguity of which they have to make a decision in order to have this role, we will usually test harder on ambiguity later on in the interview process because it’s a sign to us. If somebody is, for example, an SDR working by themselves for 4 hours a day because nobody else is online or people are doing other things, they’re going to have to be able to still work through those kinds of glass ceilings of ambiguity and make what they think are fully rational decisions.”
Managing expectations remotely
Gallup suggests only about 34% of people fully know what’s expected of them every day in their organisations. So whilst most people are in offices, their knowledge about what a good day looks like is often actually pretty rubbish. So how has Whereby solved this problem that plagues businesses, whether they’re remote or office-based?
Jessica believes that there is a belief among some CEOs that it’s easier to work out whether employees are working if they’re physically in the office. At Whereby they have a very structured approach to explain what performance looks like and to measure and calibrate that performance as a management team so that they are on the same page. They have a progression framework; that is, what do they expect? What are the different layers? In a simple document, they’ve laid out three spectrums of responsibility.
The first is the cultural responsibility. No matter which level you’re in or which role you play in the business. So, at the most junior level, that is contributing positively to the company culture. At the most senior level, it’s about being an exemplary example of the company culture. It permeates through the entire business and has a positive effect on all the conversations you have.
Then, resourcing and planning responsibilities, which comes down to setting the roadmap, and being able to identify what is an appropriate output metric for the quarter. And for most junior people, that’s just participating and contributing to those conversations and all the way at the very top, it’s being able to set the full-year strategic objectives for the entire business in a way that’s understandable and repeatable.
The final set of responsibilities is around PNL. For sales, it would be how much revenue they’re responsible for bringing in. For finance, it’d be how much revenue they’re capable of looking after to a certain degree, how much budget you have to play with at different levels and the way that you resource your team effectively.
“We look at those things, we have some pretty clear examples of what behaviours look like what we expect. We’ve tried our very best to use both behaviours that are somewhat evidence-based that contribute to the company’s top-line performance. So, for example, delivering impact and then also behaviours that are reflective of the kind of company we want to build. Being ethically ambitious is one of the values we have behaviour set out for. And then we have something similar to a nine-box grid.”
“What we look at is your independent growth. So we say, rather than performance, basically because of the fact that our team is pretty much autonomous and distributed, in order for you to progress within the organisation and do a good job of growing, you can’t be expecting your manager to golden hand from the sky come out and say, you should read this book or you should do this thing. So one of the expectations that we have is that if you do want to grow and you do want to progress, you have to be effective, independent and consistent in your own growth.”
Linking pay with OKRs. A good idea?
Jessica does a lot of advisory work on helping companies build a mechanism to measure performance. She admits that pretty much after every workshop she has ever done, even if a founder or VPHR comes in absolutely sure they want potential, she has never walked out of one of those workshops with them sticking to potential as being the measure.
“What you do and how you do it is based on your valued behaviours”. You may be an incredibly skilled engineer, but if you’re not using that to produce the outputs that the company requires, you’d be in the bottom quadrant (of the nine-box grid). This example, adds Jessica, is really tempting for many CEOs that will pick that reason, thinking it’s all about the outcomes and they love OKRs. The problem comes when they start linking OKRs to compensation and you don’t have clarity on those OKRs.
“Your whole company starts getting really upset because they’re like, well, we’re bad at setting OKRs; we never come to fruition on them. They all have dependencies that we can’t control. And now you’re telling me that my compensation is not going to go up because my OKR performance wasn’t strong enough. So that is a word of warning.”
For Jessica, linking pay to performance is a ‘hard knot to untangle’. And in response to that, a lot of people will look at the problem and how difficult it is and say there’s no way to do this. So, instead, we’re just going to give people raises based on their managers’ subjective rating.
“So every manager gets a budget and they distribute it how they see fit, which is to me wild. Or they go wildly down the other path, which becomes like, we will set your OKRs and then we will give you a compensation outcome on that despite any kind of checks and balances that need to be in place. And they become overly draconian with how they connect the two things. But I think there is a middle ground that could actually work”
Also, Jessica thinks there are a couple of shortfalls in being completely numerical and it’s just based on quarterly business performance. An extreme version of this is Amazon warehouses’ performance, which is linked purely to quantitative outputs (i.e. how many boxes you pack, how many hours you’re standing).
“And of course, what you see in that circumstance is this very widely criticised position that what ends up happening is people feel like human capital. They can’t have bathroom breaks, they feel entirely pressurised because just your quantitative outputs are not actually a reflection of your value to a business. So, you have to be more nuanced. But I don’t think you have to be completely nuanced and just say managers decide we can’t manage this.”
Calibrating managers’ decision over pay
The way they calibrate things at Whereby is by tiers of management. They try to do it cross-functionally, so product and engineering will be together, and marketing and sales will also be together. For example, each manager needs to submit their proposed ratings for their team in the grid. If they exceed expectations they’re a D or an E. If they’re growing at an unexpected rate, they’d be a one or a two. So, there could be someone that’s a D1. The manager would put their ratings and come to a meeting where they’re expected to have evidence to back that up based on the documentation used to describe their performance. An important thing from this meeting is that is chaired by managers, not HR, which gives the managers a sense of ownership.
During this process, they’d start with the outliers. So, people with the highest performance where there is a lower chance of controversy. Then, they start on the other end of the outliers, the people who are clearly underperforming. If they agree with the evidence presented, they start looking for ‘funny bubble populations’, which are the places where managers tend to put people where they don’t feel they’re making a decision.
“That’s like just on the cusp of expectations or just underperforming. And we start really interrogating them and asking questions about performance, asking questions about the evidence. Now, one of the key kind of golden rules of our calibration is we are not there to move people in the framework. We are there to guide managers to better understand the framework together collectively.”
Whereby salary policy
Whereby’s compensation philosophy is public. Their paybands are divided into two regions: US and London. Their salaries are paid per level, per function, explains Jessica.
“We don’t have a top band, we only have a bottom band. So we will hire, if we publish a role, we say the minimum salary you’ll receive is, say, if you’re an account executive, it’s 55,000 pounds. Now, if we advertise that out to the world, we will say that that’s our starting salary and have a discussion with us. One of the things is we do not negotiate. So as we go through the recruitment process, the manager does have a 10% discretion that they can move within.”
That 10% discretion is there to capture things like everyone else in the team is already paid slightly higher than that because there has been a performance change or inflationary changes or if the individual has a very specific experience that actually is more than the rest of the people in the team in a certain way.
Jessica also explains that there might be a case when someone asks for a higher salary than 10% above the threshold and they’ve allowed it. For example, when somebody comes from a competitor, where their experience is incredibly valuable or if someone is genuinely more senior than the role they were originally offering.
At Whereby salary changes several times through the year – at least twice, and often three times–.
“Very often, people will get a salary change when they didn’t even expect one. It would just be, hey, we brought in a new recruit into the team. We’re bringing up your salary to match them because we think actually your experience at this point is equivalent to theirs.”
The philosophy behind Built for People
In her book, Built For People, Jessica lays out the hypothesis that people operations should be more like product management. She thinks that every company is building three products. First, the product you’re selling to your customers. You have a whole team and a mechanism set up to serve them and to increase your customer’s lifetime value. The second product you’re building is your company as a financial instrument, which is generally built by your executive team. The better quality financial instrument you are, the better quality investment you can get, and the better product.
“The final product you’re building is the experience you’re selling to your employees. So I analogise your employees as being customers to a subscription product where every month they are consciously or subconsciously deciding to continue that subscription until the day that they decide they would like to churn, they hand in their resignation and then they leave your team. So, if you treat your employees or your team like customers, and you think about the funnel and the journey and the metrics and the outputs in the same way, you’re able to think, I think, a bit more commercially as a people leader because you’re no longer saying we’re here to facilitate people having lovely times. No, you’re here to facilitate a higher employee lifetime value to acquisition cost ratio.”