Inspired by Tony Fadell – inventor of iPod, iPhone and nest - this is a shameless plug for his book “Build. An Unorthodox Guide to Making Things Worth Making”. Also, a thank you to Chris Evans Breakfast Show on Virgin Radio for bringing this man’s thoughts into my life through the radio!
Some days I really miss my commute. The time in the car when I can’t work normally, no emails, no WhatsApp, no Slack, no Teams, no Zoom, the phone on silent to avoid non important calls – just me and my thoughts. This is when traditionally I do my version of blue sky…but today I listened to Virgin Radio on my drive to the office. Today I listened to Tony Faddell and a lightbulb came on. Amongst other things (worth a listen all the way through) Tony was talking about whether you are vitamin or a painkiller. The concept being that some people buy vitamins to help themselves stay healthy and to prevent ill health; most people will buy painkillers to stop something hurting.
At Stratigens we have spent many thousands of pounds developing value propositions that are meaningful and we thought we’d got close. To make good decisions you need good data. Yet leaders are constantly making decisions with less-than-ideal information. They're forced to make choices with incomplete data, or worse, no data at all. Stratigens changes everything. We give business leaders access to the richest data set on the planet – the skills and roles of people in the workforce and we combine that with data on places, risk and economics. With this data, they can finally make informed decisions about where to invest, what to hire and how to grow their businesses.
Sounds good right? It must be as we are working with some of the world’s largest brands. And not just on a project basis, but long-term embedded relationships with Stratigens data informing major strategic decisions around their real estate, their growth, and the diversity of their businesses. I am incredibly proud of what we have achieved to date and who we are working with. But the insight is in those four letters – we are working with ‘some’ of the world’s largest brands. We are presenting Stratigens as a vitamin not a painkiller – so some people are buying us to make smarter decisions and reduce their risk.
So, this got me thinking - Is Stratigens a painkiller? Damn right it is – we’re just not brave enough to talk about it. So, this blog does that! Let’s look at our core user cases:
- Skills supply optimisation.
Stratigens helps companies understand the global skills picture: how many people are there in certain roles with certain skills, where are people with certain skills, who do they work for, how many years’ experience they have, are they in a hot or warm market for talent, which industries employ people with these skills. A wealth of data and insight, used by our clients to proactively review their workforce planning, understand their competition and think ahead, rather than reacting to what’s in front of them. A vitamin to getting the human capital they need in their business.
So, what happens if they don’t do this. What is the pain involved with being reactive? Let’s look at a simple example – an Enterprise Sales Exec in company ABC hands in her notice. She is a high performer, she consistently hits her target of $1,000,000 per annum, she is paid $150,000 with a decent commission scheme. She is on one months’ notice and is going to a competitor. This is not an unusual story…it is a pain. It’s a pain for her Head of Sales who now can’t see steady performance, her prospects who will lose continuity, her clients with whom she has a relationship and for the talent team who need to find a replacement. Even assuming the talent team have an up-to-date job spec, an up-to-date advertisement and have built a proactive pipeline of talent this is a pain. The average time to offer an enterprise salesperson is 32 days, the typical notice period is 30 days, the typical onboarding is 30 days and the typical time to get up to speed and build a pipeline (clearly this varies massively based on sales cycles) is 60 days. So that’s 152 days at best before a new salesperson starts to produce revenue. The average recruitment fee for an enterprise salesperson is 15%. The calculation is simple – a recruitment fee of $22,500, and 152 days of lost opportunity cost - $416,438 (annual quote / number of days). $438,938 total cost of an empty seat from just one hire.
And this is only going to get worse. The problem now, and in the future, is not unemployment – it is a shortage of skilled people in the workforce. So, let’s take this up a level and looking at a real scenario created through ISAAC (Try our skills cost calculator (stratigens.com)) and based on one of our prospects. In this scenario, their data engineering team of ten people is based in Warsaw. They pay industry average salaries around zl 175,000. Their average time to hire is 48 days. 25% of their team work virtually, and they have one contractor and one woman in the team. They need to increase the team by 6 people in the next twelve months to meet the current work demands (assuming no increase in demand) They anticipate needing to grow the team by 15% year on year to meet future demand. Their voluntary attrition rate is 19% (pretty good going in today’s market!). Using a very sophisticate in house talent model, their average cost to hire is zl10,970. Taking these simple inputs shows they need to fill 15 roles in the next three years. If we then consider the cost of office space, and co working space in Warsaw and apply a moderate strategic importance to the role, and a reasonably hot talent market the annual impact of those vacancies is zl 12,323,527- the empty seats create cost but also failed to add value. Worst still these roles equate to 740 unproductive days per annum- the strategic impact of the unfilled work is impacting their business. (As a point to note Stratigens will cost them less than 7% of their current vacancy cost to help them understand their skills market, reduce time to hire and add value to their already great strategic sourcing team.)
If the number of vacant roles continues to increase and at the same time there are fewer and fewer available employees, for companies this means i becomes more difficult to find (read – expensive!) employees. So, if a company is already losing revenue giving how long it takes to hire, they will have to invest in proactive, data led talent intelligence to understand their markets better, because that is the only way they can ensure their competitiveness in times of a labour shortage. And it is only going to get worse….
So, is Stratigens a painkiller? Damn right it is!
That leads us to user case two:
- Real estate optimisation.
If companies are going to be competitive in a world of labour shortage, they need to make sure they are in the right place to attract that labour, whether that be physically, or virtually.
The global location intelligence market size was valued at USD 14.0 billion in 2021. Traditionally this market has been served by strategy consultancies, niche consultancies and, more recently, with software players such as Gravy Analytics, Purple and then companies like HqO. What NONE of these players do is connect the dots between choosing the right location based on risk, economics, tax, health, logistics, cost and availability of real estate and TALENT. Stratigens does just that – in fact they very reason I built Stratigens was listening to the CEO of a global pharmaceutical business who was about to invest millions of dollars building a new R&D facility (on the advice of a major strategy consultancy) in a location an hour and a half away from the nearest university that had R&D graduates and 45 minutes further away than their nearest competitor (look out for a book in the future “100 coffees in 100 days, why coffee 78 changed my life”!)
He pulled the decision based on a coffee with me – he had never looked through the lens of people, skills, talent and strategic intent. That’s how Stratigens came to be – the brining together of the richest dataset in the planet – the roles, skills and diversity of people in the workforce, with data on the talent market, the location, the economy and risk. We talk about joining the dots across functions, about making decisions that are no longer siloed, about looking through the lens of financial capital and human capital to avoid making costly mistakes.
What if that CEO hadn’t pulled that decision? What would the pain have been? Using Isaac again to build a team of 50 researchers in the location they had identified with the growth rates anticipated meant hiring 64 research roles in the next three years. With their metrics that left them with 3,687 lost productivity days and a £3.8m bill for not being able to fill roles fast enough. But that doesn’t touch the over whelming cost of building a facility in a wrong location – set up fees, millions of dollars invested, brand damage, the cost to unwind a strategy. All of these are hard to give ‘average’ costs for – let’s be honest, companies and CEO’s are unlikely to publish anywhere the costs of a bad decisions – but it is, without a doubt, always in the millions. Does that hurt? Yes!
So, is Stratigens a painkiller – definitely.
User case number three:
- Turning the dial on diversity.
To attract people, companies need to be diverse. TO attract consumers, companies need to be diverse. TO build product, companies need to be diverse. To build technology that is not biased, companies need to be diverse. To be competitive companies need to be diverse. Yet we hear that companies can’t find or attract diverse talent, they set arbitrary targets based on their past experiences and not on data, they try (and they really do try) and they creep forward and ultimately fail to achieve results fast. Why? Because they don’t move forward at pace, they put in place huge initiatives and incentives (all worth doing) that will only impact on the long term and not the here and now.
There is lots of published research about the impact of diversity on company results. Their latest research showed in the US alone they can add $12tn in additional GDP if the gender gap is narrowed by 2025 and $2bn in potential revenue if financial inclusion efforts broaden services for black Americans. Their previous research showed that companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn these companies were more likely to outperform those with even fewer women executives, or none at all. A substantial differential likelihood of outperformance—48 percent—separates the most from the least gender-diverse companies. In the case of ethnic and cultural diversity, their business-case findings are equally compelling: in 2019, top-quartile companies outperformed those in the fourth one by 36 percent in profitability, slightly up from 33 percent in 2017 and 35 percent in 2014. As we have previously found, the likelihood of outperformance continues to be higher for diversity in ethnicity than for gender.
Stratigens breaks down the roles, skills and diversity of people in the labour market and we map this to locations and population data. With this data our clients can see if they are above or below market availability for diverse talent, they can see if there is an opportunity to turn the dial now, and, in association with our partners, they can make tactical interventions along the hiring process that means they can make sure they match market availability (at a role and location level) to tactically turn the dial whilst their longer term initiatives have the time to have a real impact. This doesn’t have to be a slow burn – they can win on diversity now.
(Yes, we know it’s about much more than diversity. Inclusion - equality, openness and belonging - must go hand in hand with turning the dial. That’s why on this topic we deliberately partner with some amazing companies doing great work here).
So, what’s the painkiller Stratigens needed for? Companies without diverse team make less money. Is making less money painful, in a highly competitive market, changing economic winds and global challenges for leadership team – yes!
SO maybe we need to spend yet more money on our positioning. Our vitamin positioning – use data to make radically smarter decisions – is resonating with ‘some’ of the world’s leading brands. Is this because they are more forward thinking? Would our sales accelerate is we were a painkiller? According to Tony Fadell and his brilliant book – yes… so maybe we should go for something along the lines of:
To make good decisions you need good data. Yet leaders are constantly making decisions with less-than-ideal information. They're forced to make choices with incomplete data, or worse, no data at all. Stratigens changes everything. We give business leaders access to the richest data set on the planet – the skills and roles of people in the workforce and we combine that with data on places, risk and economics. With this data, they can stop making ill informed, gut feel decisions that cost them money, put their businesses at risk and slow down their growth. Does that feel like a painkiller needs applying?
Answers on a postcard please…