Episode Transcript
[00:00:00] Hello everyone.
[00:00:01] This week I'm going to talk about a really astoundingly interesting meeting I had with Microsoft. And I'm going to share a little bit about what they're doing as customer zero, as they call it, for the HR technology and the new employee experience strategy within Microsoft. Now, most of you know, Microsoft is a larger, global, sprawling company with many, many business units. You know, it is the number one market cap company in the world, or very close to that, and very exceptionally well managed as an organization, which is a witness by the number of products and features and things they do. They are very, very successful and very, very agile as an organization. And the HR function they are led by Kathleen Hogan is very good at looking at things that can be done better and iterating. It's very experimental, it's very innovative, it's very creative. They visit a lot of companies. They are not afraid to try new things. They have a growth mindset of their own.
[00:01:12] And so in some ways they're a good role model for that. That even though there are many tech companies that don't do a very good job of HR, by the way, I think Microsoft's pretty good at it. And you can tell that from not just talking to the HR leaders, but also looking at the way the company behaves, meeting the people, looking how quickly products come to market, looking at the types of people that go to work there. I mean, I know a lot of people that have come from smaller companies and have moved to Microsoft for an exciting career at a larger company, which is usually the other way around. So they're doing a lot of things well. They've done a lot of looking at leadership and the need to move people around. They're very agile, they're very dynamic. According to the execs that I met this week, there are 660,000 projects going on at Microsoft, which sounds ridiculous, but when you think about a big company, that's the way things get done. Things don't get done in rigid, hierarchical teams. They get done in cross functional projects.
[00:02:20] They're basically saying to themselves, how do we take advantage of the trends in HR to build a skills based employee experience, an agile developmental model, leverage teams and the copilot and their infrastructure to do this and also prototype and exemplify what we're trying to sell to customers, which includes Microsoft. Viva the copilot, Viva learning, and all sorts of other things like that. So I met with Perna Perna.
[00:02:56] So I met with Perna Ajmera, who has an interesting title, the general manager of HR digital strategy and innovation at Microsoft. Most of you would probably like to have a title like that and most of you don't have even job titles like that in your companies. But basically her job, she works in the digital strategy group in Microsoft. HR is to put together a prototype and a long term strategy for this new employee experience.
[00:03:22] So what are they doing? So as you know, or you may not know this, Microsoft introduced a feature in Viva called skills. And what they do is when you use Microsoft tools and we're a Microsoft shop and so I know a lot of you are, all of the Microsoft 365 products have little icons of humans. When you mouse over your email, when you mouse over your calendar and other parts of the system, it brings up information about that person.
[00:03:53] Well, under the covers of that is something called the Microsoft graph. The Microsoft graph is the metadata system of information about the people and information about the documents and the meetings and the other things that are in your Microsoft system, which is a lot. I mean, there's probably things in there I don't even know about.
[00:04:13] And there is a profile of each individual in the Microsoft graph. They are extending that profile to have skills and other things. That means the Microsoft graph will have information about skills about every individual in your company and about you. And it will have other information about your job, your role, your level, and things that would normally be in nature in an hrms. Now Microsoft's not trying to build an hrms, but they want to use the information that's buried in your HR system for better information and better decisions at work. So for example, if you're going into a meeting with your boss or you're going to a meeting with a bunch of peers, and the system knows your skills versus their skills and maybe knows some other things about your career and your trajectory and maybe how long it's been since you promoted, et cetera, why wouldn't the AI in the Microsoft 365 system give you some tips on how to have that meeting and to prepare for it? That's the kind of thing they're working on. Now, Microsoft Viva has a feature that does that for well being. And I get an email once a week from Microsoft Viva giving me coaching on how many meetings I had this week. I'm probably in the red, but whatever, at least it's there and I know a lot of people get value out of that. So they're going to be extending the Microsoft user interface using Viva. You have to use the Viva functionality to get it to bring skills into your daily life. The reason this is so big for all of us that are involved in HR technology is that even though there are dozens and dozens of skills platforms under the COVID in virtually every HR technology that's being invented right now, most people don't use it because they have no reason to go and log in. So, you know, it's very nice that maybe your LXP has a skills model or your talent marketplace has a skills model or your recruiting tool as a skills model. If you're not logging into that system, you're not using it. Maybe the HR person who's doing some sort of an HR project is, but how do we use it as individuals? How do I get information on what I need to know that I'm not aware of, that I need to know more of? Where do I go, by the way? I don't have time. I'm too busy working. So I would like the system to tell me when I need the information or maybe when I have a few minutes free, some things that I could do to make my job better, to make my productivity higher, to make my career better, to make me a better manager, to make me a better leader, etcetera. So what Perna and the team are doing is they're using Viva skills, which is a product. I think it's out there or it's coming out there. It's been announced and they're building a skills infrastructure under it. They happen to be using Eightfold to do that. You know, we're a big fan of Eightfold. You'll be probably hearing more about this from Eightfold. But essentially what the Eightfold engine does is it collects the skills information from all of the information in the Microsoft environment in the company and information from the labor market and gets better and better and better skills information for recruiting, for job matching, for internal mobility, for coaching, for development, etcetera. So for example, if you have 5000 courses in your course library in your LMS, most companies have more than that and then you've got a bunch of third party content. Would it be nice if the front end system you're using advises you and coaches you on what courses you might want to consider? And you know, the LXP was supposed to do that, but lxps have sort of fallen out of favor because people are too busy to go log into the LXP just like they're too busy to go log into the LXP, the LMS. So those are some of, of the use cases that they're working on now.
[00:08:01] Under the covers of that, Microsoft is starting to grapple with the issues we all have, which is what is the taxonomy? There are multiple taxonomies in Microsoft. There's one in LinkedIn, and there's the one that Microsoft is building. They're going to harmonize those together. And one of the jobs that Perna has is figuring out how to make that taxonomy work for the Microsoft company, which means that information that they figure out and that architecture will eventually make its way into products that you buy. I was telling her yesterday that in my experience, the word skill is somewhat of a misleading word. And she knows this because if the skill says Java or C or Python or whatever it may be, as a technology or a tool, we don't really know how the person, what the person knows how to do with the tool. We just know that they know something about the tool or the language. So there's this concept of what we call a capability.
[00:09:03] It's also called a workload by drop that Microsoft's experimenting with and investigating. And I've also been talking to her about how they're going to assess leadership and other things, but they're just getting involved in this now. The nice thing about Microsoft doing this is I'm sure they will share what they learn. I'm sure it will make its way into their products, and I'm sure they will also push the vendors they do business with to work a little harder on the things that Microsoft wants them to do. One of them, by the way, is SAP. SAP is one of SAP's largest customers is Microsoft. Microsoft may be one of the largest users of success factors, and we've done a whole bunch of case studies and analysis of success factors at Microsoft and is exceptionally well integrated. And they really run it as an enterprise wide system with workflows and experiences designed into success factors as much as possible. They try not to drift away to too many third party products, but there's many other. What is the HR technology pieces in the Microsoft infrastructure. So anyway, that's what's going on there. But there's more. What about Galileo? What about the AI agents, like the one we have, or the copilot itself? Well, Microsoft is not stupid. They know what's going on out there with the copilots. Their vision is that the copilot will be your interface to many of these tools. Now, that doesn't mean that Microsoft's going to reverse engineer every HCM platform in the world and put it into Copilot. No, they're going to do something different. They're going to release, and they are releasing more of it's coming out next week, a series of development tools in the Copilot studio to allow you to connect your product or your tool or your system or your content for that matter, into the Microsoft copilot so that your employees can get access to the information you need. Unfortunately, of course, they're not the only copilot in the world. Our system, Galileo, which we're announcing a whole bunch of things on Monday about, so stay tuned for that, will be a part of the orchestration system of the copilot. The copilot is not capable of knowing everything on the planet, and it certainly can't keep up with the vertical domain specific copilots like the one we're building or Joule from SAP or the copilot that some other vendor builds. So the strategy within Microsoft is to work with vendors like us and others to build an interface so that the Microsoft Copilot can point you to and find information in these other copilots. There was actually a demo last week of Microsoft integrating the servicenow agent called now assist into the Microsoft copilot. The now assist agent is really good at it service delivery and, you know, support tickets and knowledge management and things that typically we have an IT and support systems that ServiceNow does. So they built an interface into the Microsoft Copilot so that Microsoft users can get access to that. Just like Galileo will be exactly the same way. If you ask the copilot a question about HR or any of the new things we're announcing next week, we'll have an interface for it where it'll go to Galileo, it'll get the answer, and we'll present a beautiful screen or a beautiful box of some kind so you can get that too. So this is another big thing that Microsoft's doing. And the reason that I think this is an interesting project worthy of the podcast is not only is it interesting from a technology standpoint and a product standpoint, but I really do think it's an example of what you're going to have to do in your company. Now, if you're a small company and you're not very technology oriented, you can wait until products are available. But for the most part, most of the AI related problems you can solve or solutions you can build have to do with your systems, your content, your training, your business practices, your combination of front end user interfaces that you've given to your customers. And no two companies are really identical. So while the Microsoft project has some pretty heavy hitters on it, I mean, there's a lot of technology gurus working on it with them. I think what they're doing as customer zero for the skills based organization implementation of AI within Microsoft is an example of what you have to do. I was on the phone just a few minutes ago with the CHRO of a very large hotel chain and we were talking about a whole bunch of things and then we were talking about AI and she said, we need to build an AI strategy for HR. We really aren't really sure what it should be yet. She can wait to buy something when it comes along. But that's not a strategy because in some sense AI is a fundamental technology, like the Internet and digital and HTML was too. There will be AI products and AI enabled products over the next year or two that'll get better and better and better, but you have to get familiar with this technology and use it. And funny enough, I was on a panel with actually another one of the Microsoft execs at the conference the week before, and we were talking about that very issue, that the most valuable sort of interfaces that you put together for your employees in your company will be a combination of your vendor selections. And as I said, everybody's is different. And your ability to create an experience that works for your workers. If you're a hospital and people are running around in the nursing population, if you're a retailer, if you're a manufacturer, if you're a white collar company, if you have all sorts of remote people, if you have all sorts of people, people in the office, etcetera, you get to make the decision on how to do that. The other story I will be telling you about that's related to that is Dropbox. I had a fantastic call with Melanie, the Chro of Dropbox, and I want to talk to you about their virtual first strategy, which is another example of you taking this seriously. But the Microsoft story is really an interesting one. They have offered to share this information with you guys, and I'm sure they'll be promoting it a lot as it comes along. But this to me is an indication of how significant AI technologies will be in the redesign of what we do inside of HR. One more thing is it's just a minor little plug for Galileo. So on Monday we're going to announce a whole bunch of new things in Galileo. You'll hear about that pretty quick. But I will tell you what I've learned about AI is that it is in some sense smarter than you thought it was our AI, because it's very vertical, it's very deep. We have a lot of content in this one domain of HR and management. We don't have a bunch of stuff on software engineering and CRM or anything like that. We added a bunch of new data to it over the last couple of months and we expected that we were going to have to do a significant amount of reformatting the data to get it to behave properly in the system. And you'll know what this data is next week when you hear about it.
[00:16:32] We didn't have to. The system, once we tagged and labeled the data correctly, the system figured out what the data was, correlated it to the other information we had in the system, and all of a sudden got smarter. For example, if you go into Galileo and say, I'm the head of recruiting or I'm a nursing manager, I need to hire five nurses and three supervisors. What should I be looking for relative to their skills? How should I be assessing them? Where should I be sourcing them from? What would you give me as advice on how to best hire them and hire people that will probably stay with our culture. It will literally tell you the skills of the nursing team, the likely cultural issues to address, the likely employee experience issues to address. It will produce a behavioral interview for you. I mean, we didn't tell it to build a behavioral interview tool. It just did that because it learned it from our case studies. And then it will give you examples of companies that have done this and then you can read or listen to the stories. So these AI systems are very powerful. I would also just sort of point out that the announcement by Micro, by OpenAI and Google this week about the omnichannel AI that's coming out now, multi channel voice and visual recognition is going to be standard part of the system. So not only will the system be really good at generating text content and reading things, but you will be able to talk to it and it will be able to talk to you and eventually you'll be able to just point the camera at things and it'll figure out what they are. I'm not going to spend a lot of time trying to figure out what that will do relative to HR, but you can guess as well as I do than the areas of call centers, employee support, training, education, leadership development, coaching. It's all going to be done by these AI platforms. So I just want to celebrate really what Microsoft's doing. I think it's, it's just, it's a big investment on their part, by the way. You know, they're spending a lot of time and money on this, but I think they're going to be a role model for us. They're going to learn a lot. We're going to learn a lot from them. Product groups are going to get smarter about the market that we're in and it's an indication of the investment Microsoft is making in our domain. When I first started talking to Microsoft about this seven or eight years ago and we did our first chief learning officer forum up there, you know, they weren't really sure what they were selling to HR, to be honest. It was video tools at the time. Look how far they've come. And you know, I think one of the reasons that they understand the HR market so well is they have a deep respect for HR within the company. So that's a little bit of what's going on there. Some things to think about. I will see 450 of you next week in LA. Those of you that aren't able to come, I hope you come next year. We'll be putting a lot of highlights together for you as the conference progresses. Irresistible is way down the track. All sorts of great things are happening and stay tuned for more. Hope you guys have a good weekend and I'll talk to you next week.
