Essentials to employee engagement & developing high-quality managers - Qualtrics' Russ Laraway

[00:00:00] I use the metaphor. If you've ever seen a space movie, there's always a gravity assist launch out into the far reaches. It's an every space movie. Uh, we don't have enough fuel to get to Mars, so we better do a Slingshot around the earth. And then I say to the managers, that's your job here. You only have this human being for a very short period of time over the full span of their career.

Your job in addition to everything else is to help make sure your, that gravity assists Slingshot that launches them out into the far reaches of their career.

[00:00:39] Welcome to in-depth a new show that surfaces tactical advice, founders and startup leaders need to grow their teams, their companies, and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups like notion, roadblocks, Uber, and square tackle company building firsts.

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today's episode. I am really excited to be joined by Russ Laraway. Russ has an incredibly interesting career. His journey started in the Marine Corps, or he was a company commander overseeing 175 Marines. That means he's been managing people from day one of his career. After leaving the military, Russ started a supply chain consulting company before heading off to Wharton.

He landed at Google in 2005, where he spent seven years leading sales partnerships and enterprise services teams, and was recognized as one of the company's best managers. Russ then went to Twitter where he founded and ran the SMB advertising business, growing it from zero in revenue to hundreds of millions.

After leaving Twitter, Russ teamed up with Kim Scott to co-found candor, Inc. To help people implement the concepts from radical candor and ultimately have better relationships at work through this work they consulted with over a thousand companies, big and small. And in 2018, he joined Qualtrics as the chief people officer, when they were preparing to go public a position, he stepped away from this past January to focus on helping the company's customers think differently about employee experience.

Russ also has a book on this topic coming out soon, and we can't wait to read it in today's episode, Russ and I dig into how startups can drive employee engagement and develop high quality managers. He shares several incredibly helpful frameworks and strategies with us, including his direction, coaching career framework for managers, that's backed by research and designed to really boost employee engagement for us.

There's two key parts to a manager's job description, delivering an aligned result and enabling the success of the people on your team. We spend time unpacking each of those from where companies go wrong on OKR and the debate around stretch goals. To his tried and tested framework and coaching methods, he gets really tactical as well.

Sharing the typical phrases he relies on when delivering feedback his go-to questions for soliciting what folks really think on his team and underrated questions to include in your own employee engagement surveys. And at the very end, Russ gives us 13 recommendations for leadership reads. Every manager should add to their bookshelves from what he picked up, coaching little league to the leadership lessons.

He still leans on from the Marines to what he's learned, obsessing over employee engagement surveys at Qualtrics, Russ reaches across his career to serve up some incredible wisdom for founders and managers, whether you're a first timer or a seasoned pro. I really hope you enjoy the episode. And now my conversation with Russ, well, Russ, thanks so much for joining 

Thanks so much for thinking of me and for having me on the pod. 

[00:04:34] So I thought it might be interesting to start talking about what are the areas in and around people, people management, org, design, employee experience, a lot of the stuff you spent at least the last number of years obsessed with. What do you think are the areas that are under discussed or explored?

What are the things that you're surprised people don't spend more time thinking about learning about or discussing in this domain? 

[00:04:59] That's a really good question. I've got, I think a very clear answer to that. Take this idea of employee experience. The primary measurement of that. There's lots of ways to think about employee experience, of course, but the primary measurement of that is employee engagement.

And the first thing just to mention about that is I'm actually surprised how few people know what engagement even is. It tends to be a pretty standard looking five to eight question, composite scale. You can actually measure engagement. I say that because a lot of people think it's like, what does engagement mean to me?

And that can get pretty arbitrary pretty fast. Anyway, the reason it matters to get clear on what engagement is is because what lots of companies, research companies and things have discovered. Is that engaged employees drive better results. And that sounds very intuitive, but it's the only major measurement.

I think that we've been able to look at over a long period of time. That seems to have a very strong relationship to real results. Like I'm not talking about attrition, which matters. I'm talking about earnings per share revenue or margin. And so, for example, in Gallup's 2017 global engagement study, they found that.

Companies in the top core tile, top 25% employee engagement had 17% more productivity and we're 21% more profitable. I say that because I do hear a lot that people think engagement is a soft measure, and I just think that's bunk. It leads to better results. And there's a lot of intuition we could explore that starts to make that much clear.

The second thing that people are not focusing on enough and it's downright surprising to me is what, what we also have learned over many years, decades, even of IO psychology and studying engagement, is that the manager more than any other factor by a long shot is most likely to explain whether engagement is good or bad.

And so, again, just using Gallop for consistency, they found this is going back a few years. That the manager explains 70% of engagement and okay. If you're like that's nonsense and you want to arbitrarily drop it down to 50%, go ahead. The manager is still half, but if we just say 70%, it means that the manager is at least twice as powerful and explaining engagement than any other factor.

And by the way it would explain means in this case is in large data sets. When you observe a positive variance in employee engagement, 70% of that variance is explained by commensurate variance in manager quality, both up and down. And so the manager is holding the keys and I'm surprised at how not seriously.

We tend to take that. What's even more nuts to me is most people are pretty familiar with that. We'll probably get to this, but I wrote a book and the core model that I developed is just very simple leadership engagement results. And I'm really surprised in the end, how many people are familiar with that research that I just cited.

They know it. But they don't operationalize it at all. Everything else you're doing around the employee experience has to come second and I'm not talking about close second, I'm talking about distant second to making sure your managers are great, making sure your managers are leading with leadership behaviors that measurably predictably and reliably produce better engagement, which we already know tends to lead to better result.

[00:08:26] so many directions to go from here. So I'm pretty excited. So let's pick up the last thread. First, a founder reaches at you and says, Hey Ross, we're 75 people. We haven't really thought that much about management. What makes a great manager, manager, training, et cetera, et cetera, what should we be doing?

What are the highest leverage things to increase the quality of our managers, the blocking and tackling the work to be done in that area. 

[00:08:54] A little bit of context here. When I was working with Kim, I got to talk to a thousand companies in one form or fashion, uh, showed up and consulted with, I think like a hundred, 150, something like that.

And what's interesting is I would do lightweight discovery with these folks. They work their way into my inbox. I'd get on a call. And I, the very first question I asked was always, why do you think we can be helpful for obvious reasons? Sure. We actually can be helpful. I want to make sure that this is going to be a good use of our time, et cetera.

And thousand companies give or take said the exact same thing. They used all different words, but they said large company, small company, tech banking, us Australia, UK didn't matter. So said the same thing. We have an engagement problem related to low manager's skill. Well, there's only one thing to say next, which is what's the nature of the skill gap.

And so I asked the thousand companies and there are a lot of, a lot of things they said, but I sort of have this word cloud. And there were three words that were gigantic in the middle of the word cloud, and then everything else was significantly smaller. And those three words are direction, coaching and career.

Each of those is robust and complex and important. And if you think about this, so in writing my book, I really think the world has conspired to confuse the average manager. So all these big names, they're driving really great research, actually, they're, they're just putting more out and more out and more out.

None of it's a system and the average manager doesn't know what the heck to do. They don't know which should I pay attention to that research or that research or this research or that research. And so we're just confusing managers with actually great research. I think that's an interesting paradox. So part of what I felt like I had to do was to get to the essence of the job.

What is the job of the manager in the simplest terms possible. And I came up with the following two-part job description. First job of any manager is to deliver an aligned result. The key word there is aligned, but deliver an aligned result. This is before you think about one other thing, you need to understand exactly what your part of the company's results, what part you own, make sure what you're planning to deliver, what you want to deliver, the goals you've set, align, and then you have to make sure each person on your team understands their portion of the aligned results.

So that's number one, deliver an aligned result. And then number two is enable the success of the people on your team. And it just turns out that success has two distinct parts. One is short-term success. I E delivering the goals, the aligned result inside this organization this week, this quarter, this year, but there's also another version of success that comes up a bunch, which is long-term success, like thinking about my longterm career, which by the way, may not be at this company.

And so if your managers don't have a clear framework, let's say to set direction for their teams, it's less likely that they are going to be able to deliver an aligned results. If your managers cannot work up the gumption to deliver tough coaching so that people can improve. And also remember to give praise.

We're positive coaching so that people know what to repeat. Folks won't be getting course corrected along the way. They won't know what to invest more in or what to change and then career. Um, you know, I think a lot of people convince themselves that the person sitting across from them as an employee and our shared interest is about what we do here in this company today and tomorrow.

And I think what I've learned is that the best managers say no, no, no, that person sitting across from me as a human being and I need to play a role in not only helping them achieve the success that they envision for themselves or the success as we define it within this company, but also whatever they envisioned for themselves over a much longer horizon in their career.

I use the metaphor. If you've ever seen a space movie, there's always a gravity assist launch out into the far reaches it's in every space movie. Uh, we don't have enough fuel to get to Mars, so we better. Do a Slingshot around the earth. And then I say to the managers, that's your job here. You only have this human being for a very short period of time over the full span of their career.

Your job in addition to everything else is to help make sure your, that gravity assists Slingshot that launches them out into the far reaches of their career. Those are three big areas. That's again, kind of the essence of the book by the way, which is that listening to thousand companies big and small, by the way, not just small ones, but began small and then started testing those quantitatively, those leadership behaviors, quantitatively against employee engagement and against results, real results, revenue margin, things like that.

We discovered that those three areas are the most leveraged areas. In fact, I think it's all, any manager ever needs to be totally honest to get happy results. People who are doing incredible things achieving on behalf of your company or on behalf of your organization. And their site while doing it. And I think that's the bar we need to hold ourselves to.

[00:14:18] So let's start with aligned results. What does that look like? Can you share a story or share an example when that's being done really well, and then maybe the opposite of that would be what are the most common traps in this first big bucket? 

[00:14:35] Yeah, the easiest example for aligned results is quota sales quota.

It's a layup, but, but I think it's instructive. And if you think about how sales quotas are cascaded through an organization, the rest of the organization is as analogous. It's just a little harder to align things and it gets a little trickier, but conceptually it's always the same. What is the CTO responsible for delivering.

And each of the CTO's reports, what are they responsible for delivering and making sure that the work down to the, every single person organization carefully aligns to what each of those people is trying to get done. It's sort of obvious where I think companies go really wrong. So many companies are far more focused on activity than they are on outcomes.

And so what that looks like is when you recognize someone for nights and weekends, you are inherently rewarding someone or recognizing someone for an input that is really not particularly relevant, who cares if they work nights and weekends, it doesn't matter. Um, and so John Doerr wrote the book measure, what matters a bunch of companies in the values.

Okay. Ours. Okay. Ours are quarterly objectives and key results quarterly, or sometimes. Semi-annual sometimes annual expressions of work and really well-written okay. Ours are highly measurable. They're measurable are binary. There's no wiggle room for you to convince yourself at the end of a quarter that you did well when you really didn't.

And so if you just adopt that simple rule, that if I were to drop the paper with my OKR, if I had it my back pocket and I was in some random building, that's not mine. And I dropped that on the floor and it gently fell like a feather and landed on the floor and then some other random person comes up an hour later and reads it.

That person with no context should be able to tell exactly how I'm determining success or failure, whether I will be successful or, or, or whether I will fail because the OKR is written so clearly, so accountably, so measurably that they can tell. And so I think the bit that's the biggest trap is you start focusing on, well, what does it mean about my startup?

You know, if, if people aren't here for 18 hours a day, well, I don't know. It might mean a lot of things, but for sure, I would put that question aside and say, what are the measurable objectives you're working toward and then, and focus much more on that. And then ultimately divvy up those measurable objectives so that every single person understands their part.

[00:16:59] Our OKR is the right goal setting framework for all companies, 

[00:17:03] Brett, I do not deal in right and wrong, true or false. I think. Pretty much everything in businesses, much more complicated than that. I think we can barely get to right and wrong and physics. We're not getting there and startups and business, but I think it's real good.

Unless the founder of a company has some experience where they had a lot of success with something else. I would say don't reinvent the wheel. It works. You know, it works really well. And I think too many companies, I don't even know why they convince themselves that they're too early for this kind of organization and this kind of structure.

And I just, I think that's just wrong. So I'd say don't outsmart yourself. Don't reinvent the wheel. It's sitting right there. Just go get measure. What matters, you know how to do it the next day and move on. 

[00:17:46] Why do you think even a lot of companies that have studied okay. Ours, if you ask most executive teams in the valley, are you happy with your goal setting process?

I think most people say no. Maybe you disagree with that. But if you do any theories as to why people are chronically unhappy with some variant of OKR or whatever they're doing. 

[00:18:09] So a couple of things I'd say there. So by the way, OKR is if not trained, people will systematically write poor, okay. Ours. And that's probably a factor.

So that's one factor. You have to show people what good and bad OKR is. Look like. Otherwise they will write bad ones. They don't have experience or they'll tend toward less accountable, less measurable. Okay. Ours on the executives. If you're unhappy with how your goal settings going, then you need to ask yourself, what am I doing wrong as a leader, that my people don't know how to set goals and I'll offer you two things.

And they both come from the Marines. By the way, first is never forget every manager at every level in the company, by the way, you are responsible for everything your organization does or fails to do everything. No wink, wink, nudge, nudge. There's no pointing the finger at somebody else. If the goal setting in your company stinks.

That's because of you. The second is the Marine Corps has what's called leadership steps, which, and of course has an acronym. The acronyms, bam, SIS, bam C I S it starts with begin. The planning arranged for reconnaissance, make the reconnaissance complete the plan, issue, the order, none of those are that important, but the S stands for supervise.

And there's a little cliche that we used all the time in the Marine Corps, which is supervision is the most important leadership step. So I'm in talking to my boss and the Marines. I'm like, man, I can't believe such and such did so-and-so. And my boss would just look at me and say, captain Laraway supervisions the most important leadership staff, this idea.

It's not what you expect. It's what you inspect. And so I'll give you a positive example right now, our CEO of Qualtrics Zig Serafin. The first thing we do as a company is we set our company objectives. They are measurable, they are clear, they are focused and that is something Zig personally. Saul too, as the CEO of the company, and then Zig has absolutely supervised and insisted that every person in the company has their own.

And we happen to have a system where we can sort of evaluate whether that's happening. And this causes managers who go through, by the way, a training where they learn explicitly, how to write good, okay, ours. Now they are better equipped to go look at what their teams are writing for their own goals and to adjust I've joked over my career.

The only time I'll ever get accused of being a micromanager is around goal-setting time because I pay very close attention to this moment in time and to make sure my team understands their portion of the aligned result, and that permits me to grant them autonomy, to go figure out the best way to achieve that goal, and really allows me to capture their creativity along the way.

So if they're not happy with their goal setting, it's just, they're not doing a good enough job, making sure there's quality goal setting happening. End of story. 

[00:20:43] What's an example of what a really good OKR looks like. And maybe what a bad one looks like, and maybe in an area that's a little bit trickier to your point, that there are things that lend themselves to being particularly quantitative and clear.

And there are things that aren't maybe it's in product or zero to one stuff, or what have you, are there any examples that come to mind or good or bad ones maybe in some of these more tricky areas? 

[00:21:12] Yeah. So measurable, for example, might be a relative usage improvement of some products. So that would be a good goal.

Binary might be launch a product and those would both be fine. It's very clear in both cases. Exactly what success or failure looks like a bad OKR would be very input driven. So if an engineer said, write five lines of code a day, or there's a lot of things that people do, which were, they'll say they need to coordinate with such and such a team.

I know you need to go coordinate with such and such a team. That's not a goal. It's not measurable. There's no clear accountability. There's no. Binary. Did you know, you did it, or you didn't like, who cares? It's just an input to achieve. Like, why do you need to go coordinate with that team? Not some big subscriber to the five why's, but it does help when you sort of write your goal, coordinate with the team.

Why? Well, because I can't launch this thing without their help. Ah, okay. Now we're starting to get to what the real objective is here and objectives. By the way, I probably should have cleared this a little sooner. I don't need to rewrite John's book, but objectives are, can be not met. They can be unmeasured.

They are sort of generally a natural language description of what you're trying to get done. The key results though, need to be measurable or binary. And so you might have a goal as a company. You might have a market share goal and that's totally fine. Just let's say what that is. Don't say increase market share.

That's okay. Don't tell me the activities. They're not goals. The activities that are leading to increase market share. Tell me exactly what you want your market share to be, and it's less look you'll hit it. You'll miss it. That stuff matters, but most important is. When you have a clear sort of call your shot moment where you say what I want it to be, and then you have a clear accountability moment where let's say it wasn't, it didn't turn out.

Like I wanted the most important thing that happens next is not that head's role, but that you can have an honest discussion about what's working and what's not working, getting toward our goals. So maybe you have one very successful product and you're launching a complimentary product and adoption goal around that complimentary products.

That's measurable. You have X number of customers, and you'd like to see 50% of your customers adopt the new product by mid year. That'd be an outstanding goal. It's not that complicated. I just, if people would just build a simple habit of avoiding input, oriented language and go toward output oriented language, their OKR is overnight will become much better written and much clearer and the level much better chance at shared success.

[00:23:44] What are your thoughts on the classic Google concept of, okay. Ours as they should be effectively stretch goals that in, you know, 70 or 80% of the cases you don't hit it or hit it, I guess, depending on how you're thinking about it versus achievable goals. 

[00:23:58] Yeah, I like it a lot. And by the way, with the stretch goals, sometimes they're achieved, you know, I there's so many cliches around this.

We could use, you know, you shoot for the sun and hit the moon. That's better than shooting for the moon and crashing into the Atlantic ocean. That's actually my version of that metaphor. And so I just like it, conceptually, I think in sales, it's a little tougher stretch goals are a little tougher in sales, but everywhere else, my general experience is a very general comment has been that when we have pushed ourselves to orient or a stretch goal, it really has changed how we fundamentally thought about the problem and put us on a path to achieve more.

Sometimes the stretch goal, depending on the makeup of your team, does a little more than inspire a little more hustle also. And I don't think that's really a bad thing. So I like it. I think there's a lot of art in there. I sometimes maybe we might decide not to set a stretch for any number of reasons.

[00:24:49] I'd say the biggest critique is that human beings like to sort of. Set a goal and hit it and it feels like you're winning. And when you feel like you're winning, it tends to be, get more winning. And so, you know, the classic we're at the bottom of the mountain, look at the top. This is why we got to get up there.

Here's how we're going to get up there. And then when you get up there, man, that feels really good. And then you kind of start that over again. And when you orient around stretch, you maybe get some of the benefits of you think bigger, you think about the problem differently, et cetera, but you constantly feel like you're not hitting it.

Like you're getting three quarters of the way up the hill, which can be demotivating. And that's what I've noticed as the biggest critique. Do you just find that that's not really the case or the benefits that way, that, or have other thoughts on 

[00:25:36] that really, really good push. So I think that's a real risk and adjacent or complimentary to the idea of stretch goals is you need to know how to manage an organizational psyche in the case of great performance that misses the goal.

I'll give you example, we, for the first time back in. 2019. I think we set targets for representation at Qualtrics diversity targets, not quotas, but just targets. And we set them stretch and I met, I'll never forget. I was in a working group with our CFO and he did some back of the envelope math. And he said, I don't think we have any chance of hitting those.

So we kind of knew from jump. It was massive stretch goal, but we stuck with the stretch anyway. And we, you know, we set like a three tier goal, total representation, representation at the manager level, and then representation at the executive level fast forward to the end of that year. And we missed our goals and that's certainly one way to evaluate what happened.

But another way to evaluate what happened is in that year, we six times our previous tenure average for representation change at the company six times. So while we missed our goals, the fact that we set stretch targets, we sent a strong signal to the company. This matters to us, by the way, just by having them set as company goals.

We were able to achieve six times what we'd done the previous 10 years in terms of representation change. So it's five times for total representation, six times at the manager level. Now you tell me, was that a success or a failure? And you tell me how easy or hard it is to communicate to the organization that was on point to drive that change.

How is your heart? Would it have been for me to help them feel excited and proud about what they've done? I don't know. What 

[00:27:15] do you think to your point? It's probably the way that you deliver it. Some of the stuff is hard to AB test. I guess you could run it year two and try to see what the impact is and a feeling of if we won or lost or what have you.

[00:27:28] Yeah, I agree. There are no simple answers here. If you're asking me to evaluate a set of complicated, trade-offs. That ultimately require me to make a decision between using stretch targets or using actuals. Generally speaking, I feel like those trade-offs when carefully evaluated lead me toward stretch targets 

Is there anything else that you've observed or learned about in this big bucket of alignment and 

[00:27:51] goals? I think that should be very familiar to a lot of first round listeners is the idea of standup and I love stand-ups. I sort of taken the ideas I've stolen a little bit. So just below OKR is in the hierarchy of a direction framework is prioritization.

And I think most people are really confused about prioritization and it's this simple prioritization is an exercise in subtraction, not an exercise. In addition, privatization means focus. It doesn't mean juggle a thousand balls. That's not prioritization. I always say three is greater than two. So if you have three priorities, that's more than two priorities.

Three is greater than two is greater than four. Because if you have more than three priorities, you have none. So four is effectively equivalent to zero something. We do a Qualtrics, but I've been doing for a lot of years, really important part of my routine. And my team's routine is a daily prioritization exercise and a weekly prioritization exercise.

So I do not start a week. In fact, it's usually, I usually do this on Sunday night and I will write down the three most important things. I must get done that week. And by the way, they are a function of my, okay. Ours always are also, why am I doing them? And if I'm doing things that aren't reflected, my OKR is I need to go back and figure out why I wrote crappy.

Today's episode is with Russ Laraway, a seasoned leader who's been at Google, Twitter, Candor Inc, and Qualtrics, where he recently served as Chief People Officer before shifting into a new role helping the company's customers think differently about employee experience. Russ shares his frameworks for driving employee engagement and developing high-quality managers, including tactics for leading career conversations, giving feedback and approaching OKRs.