People First
On October 10th, 2018, Amazon, the e-commerce giant made a surprising announcement in scrapping its AI recruiting tool, bucking the trend of using AI in the hiring process. With a global headcount of 575,700 and rising, it’s only logical that the Human Resources (HR) in Amazon pursues AI as the solution to a faster, more efficient and robust talent acquisition process. AI has been hailed as the holy grail amongst HR practitioners whereby AI would be able to process the thousands of job applications data, regurgitate them and produce in ranking the top 5 must hire candidates. In the case of Amazon, similar to the “recommendation list” or the “inspired by your shopping trend.”
Amazon’s algorithm, however, pulled the wool over their eyes when it consistently showed disdain against women candidates. Amazon’s AI was displaying a temperament of a six-year-old boy who typically exhibits the “I don’t like girls” syndrome. The algorithm had failed at the fundamental function it meant to do, to bring in the best talent for the job objectively.
In its effort to create a more robust and fair selection system, Amazon automated the selection process of software developer and technical position by training its AI neural networks with data of resumes submitted over ten years. Based on those 10-year data, Amazon expected its AI to rank candidates in a one to five stars ranking and to be gender neutral in those ranking. Unfortunately, for the past ten years and even today, the technology industry is still a predominantly male-dominated sector causing the AI to learn this aspect as part of its selection algorithm. This was despite the massive effort to ensure that neutrality is maintained; 500 computer models, focusing on specific job functions were created with each model trained (machine learning) to recognize close to 50,000 terms that showed up on past candidates’ resumes and to assign significance to all skills. Much to the chagrin of the Amazon team, the computer models “favored candidates who described themselves with verbs that are commonly found on male engineers’ resumes, such as ‘executed’ and ‘captured’” (Reuters 2018).
Despite the massive popularity of AI in recruitment with the likes of Goldman Sachs and Hilton pursuing similar technology to aid hiring process, Amazon made the bold move to scrap its AI recruiting tool as it had shown that it was discriminating against women. Although Amazon had taken considerably care when the system first showed signs of such biases by editing the AI program, there was no guarantee that the trained machine will not device new ways to discriminate women. Therefore, Amazon pulled the plug on its AI selection to remain consistent to its belief system, to be fair and gender neutral in its selection for the best person for the job.
Amazon’s phenomenal growth to being the second largest employer in the United States of America can be traced to Jeff Bezos’ obsession with what he termed as “high standard culture” whereby Amazon sought to retain the highest possible standard in all areas of their work.
Bezos’ further explained in his 2017 Annual Report letter to shareholders that,
A culture of high standards is protective of all the ‘invisible’ but crucial work that goes on in every company. I’m talking about the work that no one sees. The work that gets done when no one is watching. In a high standards culture, doing that work well is its reward—it’s part of what it means to be a professional.
Scrapping the AI recruitment tool, is part of this invisible work and readily admitting that the technology does more harm than good, is being professional. Amazon is to be commended for being consistent in its approach to the AI recruitment tool.
In a survey conducted by workplace insights platform kununu.com in 2018, Amazon rated higher than the US average in all but 5 of 18 categories with Gender Equality and Diversity being the top two categories. On a scale of one to five, Amazon scored a 3.99 versus a 3.90 US average for Gender Equality while Diversity obtained a score of 3.96 against the average of 3.71. These ratings are nods of approval from current Amazon employees when they are asked to compare their current view of the company as compared to two years ago. Again, it is evident that Amazon has been consistent with its belief system, hiring the best talent for the job regardless of gender or ethnicity.
As technology takes center place in our workplace, it is imperative that companies continue to put people first in all its decision-making process. Christian Lous Lange, a Norwegian political scientist, historian, and Nobel Peace Prize winner in 1921 put it aptly when he said, “Technology is a useful servant but a dangerous master.” Lange was also the foremost proponent of the theory and practices of internationalism, and his work of Histoire de l’internationalisme was widely accepted as the basis for the formation of League of Nations post World War I. He was often called upon with issues regarding disarmament and arbitration.
Although we do not live in Lange’s turbulence time, technology can still be a dangerous master if we become subservient to it. The best illustration of that scenario will be if Amazon decides to continue to use its AI in candidate selection when it has critically shown that it is detrimental to job seekers specifically and the society in general. Companies must continue to ask the pertinent question: how adoption in any form of technology will still put its people first? People here being its employees, customers, shareholders, the society and the world in general.
Renewal of the Minds
Up to the 16th century, the cradle of learning and inventions had always been the Far East. Notably, China was one of this cradle with her Four Great Inventions namely the compass (206 B.C.), gunpowder (1044 A.D.), paper (100 B.C.) and printing (206 B.C. to 220 A.D.), stretching back to the early centuries of civilization. These inventions lifted humankind to a new era of intellect, communications, history, politics, state of socio-economy and above all prosperity. The Four Great Inventions were also instrumental in the development of a new capitalism Europe in the later centuries, creating empires and colonies which spanned the world with the British Empire being the biggest.
After the Chinese, then came the Islamic Golden Age, dating from the 8th to the 14th century, which saw the explosion of science, knowledge, economic and cultural works. The contribution of the Islamic Golden Age, especially in the area of science, mathematics, geometry, physics, chemistry, pharmacies are still evident until today. One notable discovery is in optics through the work of Alhazen (HasanIbn al-Haytham), the modern “Father of Modern Optics.” Alhazen was the first to correctly argue that vision occurs when lights, traveling in straight lines, reflect off an object into the eyes. And the common knowledge today that vision occurs in the brain rather than in the eyes is also the discovery of Alhazen.
The question that begs an answer is why the “Great Enrichment,” the prosperous modern age which started in the 16th century till today did not occur in Beijing or Baghdad but instead in London, Paris, and Rotterdam? How did Europe overtake the centuries of intellectual work and prowess of the east?
While the Far East was cultivating a culture of intellect pursuit, cultivating scholars of all fields, Europe was still obsessed with the learned ways of the old. Classical learning of ancient Greek scholars Aristotle, Galen, Ptolemy and more, dominated the learning culture of Europe to the point of restricting intellectual growth. “As late as 1580, an Oxford don could be fined five shillings for teaching something that was contradictory to the writings of Aristotle” (Mokyr 2017). The belief system of that time in Europe is that the truths or facts have been revealed to humankind through the classical text and to challenge these truths are heresy.
It took several mavericks such as Robert Boyle of Boyle’s Law, the modern astronomer Tycho Brahe and the polymath Paracelsus to kickstart a new era of discovery and innovation by initiating a transformative cultural change in learning science and technology. In short, these “modern” scientists seek to challenge the underlying belief system in Europe especially amongst the intellectual circles on the issue of science and technology. “Driven by new observations and information, intellectuals ripped to shreds the classical texts in physics and medicine, and subjugated them to what they believe to be persuasive evidence and logic” (Mokyr 2017). Now, every theory or hypothesis must be backed by evidence either through observation or logic. Science discovery must be evidence-based. With the new culture of learning, Europe embarked on a modern age of prosperity which lasted till today.
Similarly, companies today are enamored with short-term, quarterly financial performances to the point of sacrificing the company’s long-term growth. Public listed companies are put under higher scrutiny with quarterly announcements affecting its share prices, directly impacting the value of the company. Under such condition, it is only natural for companies to pursue less risk-taking in strategy, making incremental innovation and some might start lowering quality to increase profit margins. And in that process, companies began to lose the values that first made it great.
In the quest for profits, companies began to adopt unethical practices that harm not only the clients but the company’s image itself. Even the mighty Apple had indulged in questionable practices of slowing down older iPhones to compensate for decaying batteries thus forcing clients to upgrade to newer models. Wells Fargo’s, the fourth largest bank in the U.S. by total assets of US $1,870 billion was mired by scandal after scandal in 2017. Wells Fargo admitted that it had charged up to 570,000 consumers for auto insurance that they didn’t need and consequently repossessing 20,000 of vehicles. Further adding to Wells Fargo’s woe was an admission of the creation of a total of 3.5 million fake accounts without consumers’ permission to inflate financial results.
According to the Edelman Trust Barometer, the world has entered a trust crisis in 2017. The general population trust in four key institutions that were measured namely; business, government, NGOs and media has declined across the board, a first since they were being tracked in 2012. Trust in business dropped to 52 percent globally, just 2 percent shy from the tipping point of distrust. 13 countries, amongst them G7 nations such as Japan, United Kingdom, and Germany had earned the dreaded title of “distrusted.”
There is an evident need for a paradigm shift in the current practices of companies putting profits first or for them to be measured that way. A new cultural transformation such as that experienced by the learned scholars of the pre “Golden Enrichment” must occur, otherwise businesses will face the consequence that befell the East. Companies must go back to the fundamental reason of their existence which is to serve society and serve they must, by prioritizing people that form those societies.
In a global survey done by The Economist in February 2018, Josselyn Simpson of the Intelligence Unit found out that young innovators and entrepreneurs are placing greater emphasis and growing importance to social responsibility. 70 percent of these young entrepreneurs say that it is more important to be socially responsible now compared to five years ago and a further 66 percent agree that social responsibility is essential to business success. And the areas that they care about passionately are education, social justice, and equality. Fortune 500 has a learning lesson here with these young Turks who are turning around the concept of business on its head. They also believe that there is a trade-off if they pursue social responsibility first and they are agreeable with that trade-off. Not contented only to have this belief within their startups, these young entrepreneurs and innovators also want customers and potential customers to know their values and belief system.
Fundamentally, the objective of any startups is to impact lives, and the founder’s belief system is to make the world a better place, believing if they do that first, the market will reciprocate. Increasingly, the market is beginning to sync with this belief. In the same survey, The Economist found out that 60 percent of consumers will buy a product or a service from a socially responsible company even if it costs more. The millennials, as discussed in the earlier chapter, are most likely to form part of this group of consumers. Millennials, also known as Generation Y is by far the largest generation with more than 70 million individuals in the United States of America alone. With such large representation and its ensuing spending power, “Millennials are at present the most influential and promising consumer and promising group in shaping the modern world” (Lifehack 2018). Millennials believe in shaping the world in their spending habits, choosing to buy from socially responsible company bringing positive change to the world.
The message is clear. Companies are now required not just to be seen in putting aside some budget for a CSR program but would to start using its business as a force for good. B Lab, a non-profit organization, started by Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy in 2006 dedicates itself in harnessing the power of business for good, to solve social and environmental problems in society. B Lab provides an overall impact assessment of a company on its operation and business impact to its employees, community, environment, and customers, leading to a B Corporation or B Corp certification if all standards are met. A certified B Corp certified companies gain trust from the consumers as it is verified to have “meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose” (BCorporation.net 2018). The concept of B Corp continues to grow, and it begins to see more prominent organizations such as Patagonia the American clothing giant joining its rank.
Concurrently, a handful number of Fortune 500 which had heeded this new phenomenon and began to focus on their Corporate Responsibility Program (CSR) and sustainability program have also shown the positive progressive result in winning over consumers especially millennials. Fortune 500 such as Unilever, Coca-Cola, PepsiCo, AT&T, and IKEA had successfully employed social media and online channels to communicate their environmental and social sustainability program effectively, winning consumers especially the social media savvy millennials.
The market is renewing its expectation of a company, measuring it against standards that do not put profit above social responsibility thus it is wise for Fortune 500 and businesses alike to start responding to that demand.
Speak My Language
“If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language that goes to his heart,” a famous quote by Nelson Mandela, the son of a Xhosa-speaking Tempu chief, who brought to an end the apartheid South Africa and becoming its first black president. Perhaps what that made him truly great was when released from 26 years of political imprisonment, he was greeted rapturously by both black and white South African. He became a reconciliatory factor for the new nation, putting hate aside and by speaking in a language that harkens not only to a South African’s head but also his or her heart.
As much as languages are building blocks to communication, it is above all a window to culture. Communication happens when a common language is spoken, but real connection only takes place when one speaks in the “culture” of which that language commands. Language is a crucial component of cultural identity and with it the function of communicating values, belief system, and tradition. To speak to someone’s heart is to acknowledge his or her belief system, values, and customs and to draw common ground from the depth of these manifestations of culture. This “language” is what Mandela alluded.
Language is an intrinsic component of culture, and scholars such as Hofstede and Brewster have widely acknowledged that. In Hofstede’s “Dimensions of National Cultures,” language is a good gauge of the dimension of individualism versus collectivism (IDV) whereby the index explores if one society is more favorable toward the interest of an individual over a collective group or vice versa. In a nutshell that would be if the “I” is bigger than the “we”, or the other way round. Yoshi and Emiko Kashima, the former a psychologist while the latter a linguist, studied the relationship between language and culture through the concept of pronoun drop, the omission of the singular pronoun “I” from a sentence. They found through a sample of thirty-nine languages in seventy-one countries that in an individualistic culture (e.g., United States of America), the language spoken would require the speaker to use the pronoun “I” while it is dropped when it is a language spoken in a collective culture (e.g., Japan).
Language is also part of a culture that can be learned which modifies the human nature (e.g., fear, anger) of a particular group of society. Thus, human nature such as fear or anger which is universal could be expressed differently in a different society. Japanese tends to be known to be a good listener, and if one is to observe a Japanese conversation, one could not help to wonder in awe on how patient the listener is, keeping quiet with a slight nod of acknowledgment and responding only when the speaker has finished. Apart from the fact that the Japanese society places a high premium on politeness, unbeknownst to many, the Japanese language is designed with the “verb” being placed last in a sentence. A typical example of an English sentence would be, “I go to school” but in Japanese, it would be “School I go” with the singular pronoun “I” being omitted in a conversation. What essentially has happened is that the listener would have to listen all the way to the end to know what the speaker intends to do, either he or she intends to go to school or otherwise. Henceforth, Japanese might find it rather rude if they are interrupted midway in their speech when they speak in English, the lingua franca of the world, as it is not culturally done in their native language.
Similarly, many found it odd for Koreans to ask for their age in their first meeting when most individuals, especially of the fairer sex, would instead like to keep it a secret. The reason is that culturally Koreans is a highly hierarchical society where one is accorded respect due to their seniority. The Korean language has built-in titles for each depending on his or her standing in the hierarchy corresponding to the speaker. Needless to say, there are formal speeches which are reserved for someone higher in the hierarchy.
Henceforth, the fastest and most effective way for any individuals to understand a new culture of a new market is to learn its language.
In today’s connected world, where businesses, Fortune 500 and startups alike operate in multiple countries, understanding culture is a “must have.” To err in that area had proven to be costly such as the failed merger of Daimler (German) and Chrysler (American) of the late 1990s which ended with losses and layoffs. The clash of culture resulted in Daimler selling off Chrysler to Cerberus Capital Management in 2007 for US $6 billion when it had paid US $37 billion for Chrysler nine years earlier.
Startups face a similar dilemma today but at a quicker pace, as many a time startups focus on a niche market and often that niche market is too small domestically. Startups are forced to look at similar niche markets overseas early on its growth trajectory.
Fortune 500 and startups alike must begin to take language learning for its employees seriously to thrive in today’s global market. “Think global, act local” anchors on a strong foundation of cultural understanding and that begins with learning the local languages. If there were only one training program required, it would be language courses.
However, companies should take a broader approach and not restrict its employees to learn languages where it intends to do business in but to allow employees a freehand to learn any languages of their choosing. An employee learning any foreign language is good as it helps them to open up their mind and to gain a new perspective in business communication. Additionally, psychologists have also found that speaking a foreign language improves one’s cognitive ability by challenging one’s brain to recognize, make sense and to communicate in a different language system.
Lastly, The University of Chicago has also found that bilinguals are able to make more rational decisions as they tend to use their second language to reconfirm decisions made in their native language to avoid biases, prejudices, and nuances which may slow down their decision-making process.
Hire by Culture
In their final day of lecture, in spring of 2010, Harvard Business School graduating class asked HBS Professor Clay Christensen to address them on how to apply the business theories that they had learned from him in their personal life and career. Professor Clay Christensen proposed three questions to be answered, and they are (1) How can I be sure that I’ll be happy in my career? (2) How can I be sure that my relationships with my spouse and my family become an enduring source of happiness? And the last one (3) How can I be sure I’ll stay out of jail. Though the last question seems to be distant for most of us and even more so for highly intelligent individuals such as a graduating class of Harvard Business School, Professor Christensen was quicked to put that to rest with evidence. Two of his 32 Rhodes scholar classmates spent time in jail, and Jeff Skilling of Enron was a classmate from Harvard Business School.
For all of the aforementioned questions, Professor Christensen applied business theories but underlying these theories were the need to build the right culture. And in some cases, hiring the right culture.
The answer to the first two questions lies with deliberately designing desired values and behaviors into an organization’s or family’s culture and allow it to evolve voluntarily. Employees and children alike build desired behaviors such as self-esteem by trying over and over again at tasks and learning what works from it.
As for the third question, the answer is found within oneself. Do you have within yourself the integrity and moral compass that would keep you out of jail? Professor Christensen advocates building a culture within oneself that avoids the “Marginal Costs” mistake. Marginal Costs model points to a practice in finance and economics whereby one is taught to evaluate alternative investments by looking solely at the marginal costs and marginal revenue each alternative provides. The decision should ignore all the other aspects such as fixed costs or sunk costs. When applied to the question of how do I stay out of jail (how do I live a life of integrity), often one would employ the marginal cost model when choosing between right and wrong. In Professor Christensen’s own words, he explained the concept marginal cost of “just this once.”
A voice in our head says ‘Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s OK.’ The marginal cost of doing something wrong ‘just this once’ always seems alluringly low. It suckers you in, and you don’t ever look at where that path ultimately is headed and at the full costs that the choice entails. Justification for infidelity and dishonesty in all their manifestations lies in the marginal cost economics of ‘just this once’ (Harvard Business Review 2010).
The current practice of hiring focuses on the “right fit for the job.” Candidates are typically assessed via competency matching to find the best fit candidate who will be successful on the job. These competencies are derived from the assessment on one’s abilities, behavioral profiling, and skills acquired from education or work experiences. On the other hand, each job would have its own set of competency profiling, and a typical “best fit” candidate would have a high competency matching ratio. This practice of competency matching or competency assessment has its merits as it is very useful in selecting a candidate with a strong aptitude to excel in the job. However, it had ignored the candidate as an individual and put the focus on the job. It had overlooked the culture of the candidate, and the subsequent cultural fit to the team and organization.
A company or an organization is built up of people, and the culture that is inherent in the person and the team is highly critical in moving the company ahead to reach its goals. Thus, the current practice of hiring must prioritize the candidate and not the job. The practice of hiring by culture should be given much more weight over the hiring on job fit.
Angel investors invest at the very early stages of startups when they are also at the riskiest. Often the startup would be burning cash to build the business with no clear sight of breaking even, and most startups would not survive. However, angels investors are continuing to invest, and almost certainly, most angel investors invest in the founder of the startup and not the startup per se. A good angel investor would prefer to dive deeper into the founder and his or her co-founders instead of the business plan. “Pivoting” an action of changing the course of the business model frequently happens in the startup, but the founder and the founding team remains constant. It is in them the angel investors put their trust—the culture within the founder and the founding team; how the team works on the difficulties they face, to overcome them and to build consensus together. Edgar Schein described this process as the fundamental mechanism of building a culture. With experiences of successes, the team would begin to embrace priorities and act with instincts when faced with challenges. That in any sense, in the authors’ opinion include the amalgamation of personal culture into the team.
The next question that begs an answer would be what is then the anatomy of hiring by culture?
First and foremost, companies should present a clear picture of what transformative change any candidate can expect if they choose to join them. The current job profiling on which the job description is based on, focuses on the present self of the individual candidate. Almost all job descriptions demand years of experience in a specific area before the candidate is being considered, but none share the potential growth and transformative change the candidate will experience while working on the job. If an organization is looking to break into a new market or an innovative change, it might be profitable to hire someone with no experience but with the qualities of exploration, adventure, curiosity, and perseverance.
Secondly, companies must become who they want to hire. By building the desired culture within the organization first, the right candidate with the right cultural fit will be attracted to apply. According to Schein, organizational culture is made up of three levels layered on top of each other; (i) artifacts which visible, readily observable but could be hard to interpret. Artifacts’ cultural elements include behaviors, traditions, products, languages and such. (ii) values and beliefs which consist of elements such as values, justification, mindset, the cognitive process, that are less observable but could be inferred from how employees justify their actions. (iii) underlying assumptions, the foundation of culture which is so widely shared that many are not aware of it. The cultural elements are assumptions, ideologies, philosophy, worldview, ethics, thinking and such. To design and to bring about a desired organizational change, companies must set out to understand the underlying assumptions that are driving the company. Once that is completed, the outward change would be noticeable to the outer world through the top layer of artifacts.
Last but not least, is the focus on values and beliefs in the selection and recruitment process with an understanding of the national culture of the candidate. The use of psychometric assessments such as personality or behavior questionnaire continues to be a good guide, but measurement should be made to focus on behaviors that distill the right values. Whereas aptitude, skills, and experience ought to take lesser weightage in consideration of the candidate where possible.
The ultimate aim is to understand the candidate’s basic assumption of his or her values and belief system. That can be further derived from the interview process by learning from the candidate’s experiences in overcoming difficulties, challenges at work and what the candidate perceived to be the “best” way to meet his destiny; quoting Albert Camus.
Hiring is not about poaching the top talent from a rival, but to find a good match to the company. Startups continue to rely on this to attract top talent by promising not material gains but appealing to the belief system or the culture of the individual candidate.