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July 2014

PERFORMANCE: How Nine Inch Nails Destroyed Soundgarden...

head like a hole
black as your soul
i'd rather die than give you control
bow down before the one you serve
you're going to get what you deserve

-Some dude in a Spandex kilt

As some of you know, I took a little trip to Vegas to attend the 2014 NBA Summer league earlier this month.  Full review post here, lots of lessons in Talent for those willing to look.

But it wasn't all hoops - thanks to Matt Stollak, we were able to score great seats to Soundgarden/Nine Inch Nails at Planet Hollywood on our last night in town. 

I'm a huge Soundgarden fan.  But they didn't win the contest for best performance that Saturday night.  Nine Inch Nails secured the victory by understanding that the performance is as important as the music. 


1.  I really didn't give two ###ts about Nine Inch Nails coming into the show.

2.  I was pissed that Soundgarden opened for NIN instead of the other way around.

3.  Soundgarden came out and did what they were supposed to do.  Here's the video I shared earlier of the opening to "My Wave".  Not bad (email subscribers click through for video)...

4. All of the fans to these bands are my age.  Remember the mosh pit with kids churning around back in the day?  Not so much these days.  Look at the heads in the crowd.  Lots of investment bankers trying to not get beer on them.

5. When Nine Inch Nails started, I thought Trent Reznor was a roadie.  He just walked out and started playing his synthesizer or whatever the #### it is that he plays.


Nine Inch Nails put the beatdown on Soundgarden by understanding people come for a show.  While Soundgarden did the rock band thing - just played their set with a big LSD influenced screen behind them, Nine Inch Nails was much more visual.  Examples:

1. They started out with the stage in that classic minimalist industrial that I actually like a lot.  Picture below (email subscribers click through for photos).

Photo 1-1

2. Reznor just walking out and starting to play is also a choice.  Bonus - he wears a kilt.  Not a kilt like the guys are used to at "Tilted Kilt", but a goth version that's probably performance gear like Under Armor.

3. All of the people in Nine Inch Nails play a variety of instruments.  They mix it up every 2 or 3 cuts to keep you on your toes.

4. They did stuff with lighting to create big shadows intially.  Interesting, and even if you didn't know their music, it held your attention.

Photo 2

5. Once the big shadows were in, they started moving LED screens in to create smaller shadows.  Pics below.

Photo 3

It might not sound like a lot, but visuals, performance and marketing matter.  I loved Soundgarden and didn't really care about Nine Inch Nails.  Yet I declare them the clear winner of the night.

Don't mail it in.  Make your peformance in HR and recruiting an art show to the extent you can.

It will convert people who don't expect to be converted.

Operational Discipline: What It Looks Like

OK HR Pros - Lots of you end up in leadership/operations meetings where it's a cattle call of reports delivered via PowerPoint.

You know the ones I'm talking about - the all day meetings you have monthly or quarterly, where the Director/VP department heads march in their teams and it's a game - who's reporting what and based on the geopolitical situation at your company, who gets savagely attacked and who is left alone.

Anyway, you see a lot of bad charts that don't mean s##t. So maybe it's time you saw one that is profound.

I'm here to help.  Below is a chart that shows the run rate for Amazon's revenue and net income.  I want you to look at it and then we'll talk about after the jump.

Screen Shot 2014-07-29 at 11.25.46 AM

Here's what it means: Amazon has incredible focus and discipline when it comes to reinvesting all of their revenue back into the business. Revenue has grown from 5 Billion per quarter to 20 Million plus in five years.

Net income - steady at zero.

Wall Street wants earnings?  **** Wall Street.  Amazon reinvests it all and wants to run the world. All of the world.

You're going to penalize the stock?  Fine.  They don't care.  They'll see you in hell, which they'll own most of or certainly run the technology infrastructure that exists there.

Amazon has operational discipline.  Share this chart with the geeks in Finance to score "HR might get it" points with the nerds.

How to Create Fear Through Your Headcount Budgeting Process...

It's going to be budgeting time for a lot of you soon.  The time of year that brings hope.  The time of year that lets you think about what's possible.

The time of year for sandbagging.

Any time I think of the budgeting process, I always think of the headcount game that goes on between departments of all kinds and finance.  You ask for 5 additional headcount so you can get 2.  You know the drill all too well.

As it turns out, if you're engaged in meaningful conversations about expanding your presence in any market through expanded headcount, the budgeting game I've described above can also cause people to freak out a bit, especially if an inexperienced leader goes back to his team with the expanded headcount he/she is going to present in the budgeting process, only to see it hacked to 20% of what was originally submitted.

More from Ben Horowitz:

"Another subtle problem with this process is that when I asked my team what they needed to achieve their goals, they naturally assumed they would get it. As a result, my team deeply socialized their ideas and newly found money with their teams. This has the added gaming benefit of inextricably tying their demands to company morale. When the VP of marketing asked me for 10 headcount and $5M in program expenses, then shared that plan with his team, it changed the conversation.

Now a major cutback to his plan would alarm his team because they had just spent two weeks planning for a much more positive scenario. “Wow, Ben greatly reduced the plan. Should I be looking for a job?” This kind of dynamic put pressure on me to create a more expansive expense plan than was wise. Multiply this by all my managers and I was on my way to burning up all my cash and destroying my culture." 

Just another example of job #1 for any leader - Control The Message.  You think your senior leaders with budget responsibility would know enough not to socialize a big headcount request to a broad team.  You'd be wrong.  They socialize it for one of three reasons:

1. Because they need the team to do a lot of the work involved.

2. They truly want to engage their teams and think this process provides a great opportunity to do that.

3. They're sneaky bastards.  They using the process to become martyrs to their teams.  Soundgarden explained this in their underground hit "Jesus Christ Pose".

Don't assume the people leading departments can mitigate damage caused by your headcount budgeting process.  If you want to prevent people from assuming the martyr pose, you'll have to be very specific related to how information is shared.

You call it control freak.  I call it smart.

Why Startup Founders Shouldn't Forgot About HR...

Checkout this article in the Wall Street Journal about the value of HR in startups.  I'm quoted along with my friends Laurie Ruettimann, Mark Stelzner and Libby Sartain.

A taste:

"The biggest mistake [startups] make is to hire someone who's a cop and who thinks it's enough to have an employee handbook and just enforce the rules."

Click here to get the whole article, including the thoughts of Ruettimann, Stelzner and Sartain. Good company to keep!

Your Company Likes Hall and Oates? Yes, Please...

A company pinged me at Kinetix to learn more about how we could help them. I found out through extensive research that the company in question has Hall and Oates links up at their corporate site.

We've got Aerosmith references at the Kinetix site.  Aerosmith is good. Hall and Oates references might be better.


The end of my email sending them some stuff to look over looked like this:

PS - tell <president's name> my favorite Hall and Oates song is "Sara Smile".  "Rich Girl" isn't bad either.  Who am I kidding?  I celebrate their entire collection.  If you ask us to come visit you to talk shop, we'll even incorporate Hall and Oates videos into our presentation.  We're creative and nimble like that.

Say money, but it won't get you too far... (video below)

High Performing Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less Over Their Careers....

Did you check that title?  That's the reason you see the following:

--Your best talent, especially early in their careers, will be looking to switch companies to get the equivalent of multiple promotions rather than wait on you to do whatever it is that you can do related to career progression.

--Any turnover prediction worth it's salt would say that the biggest flight risk comes with high performers in the 1-3 year mark.  The newness has worn off, and you gave them a 4% raise.

Goodbye.  Nice to know ya.

I didn't come up with the title of this post - it came from Cameron King over at Forbes, and here's some of his reporting:

Bethany Devine, a Senior Hiring Manager in Silicon Valley, CA CA -1.02% who has worked with Intuit INTU -0.72% and other Fortune 500 companies explains, “I would often see resumes that only had a few years at each company. I found that the people who had switched companies usually commanded a higher salary.

The problem with staying at a company forever is you start with a base salary and usually annual raises are based on a percentage of your current salary. There is often a limit to how high your manager can bump you up since it’s based on a percentage of your current salary. However, if you move to another company, you start fresh and can usually command a higher base salary to hire you.

Companies competing for talent are often not afraid to pay more when hiring if it means they can hire the best talent. Same thing applies for titles. Some companies have a limit to how many promotions they allow each year.

Once you are entrenched in a company, it may become more difficult to be promoted as you may be waiting in line behind others who should have been promoted a year ago but were not due to the limit. However, if you apply to another company, your skills may match the higher title, and that company will hire you with the new title. I have seen many coworkers who were waiting on a certain title and finally received it the day they left and were hired at a new company.”

Here's some math cited by King:

"Jessica Derkis started her career earning $8 per hour ($16,640 annual salary) as the YMCA’s marketing manager.  Over 10 years, she’s changed employers five times to ultimately earn $72,000 per year at her most recent marketing position.  This is approximately a 330% increase over a 10 year career.  Derkis’ most recent transition resulted in a 50% increase to her salary.  Derkis’ is a great example of how “owning your career” can make a huge difference in your income and career path."

It's the oldest game in the world related to high performers.  Pick up experience on your company's dime, then cash in by changing companies at the 2 year mark.

Don't hate the player, hate the game.  It's the game we create inside our companies, and it's the biggest issue going related to keeping the talent you really want.

CAPITALIST WEBINAR: How to Use Company Reputation Sites Like Glassdoor For Good - Not Evil...

Hey Fellow HR Capitalists - When my team over at Fistful of Talent (FOT) put together our July webinar, we were thinking of you – someone looking to stay on top of how the talent market is changing.

You've been conditioned to hate sites like Glassdoor, right?  Well, reptuation sites like Glassdoor have Fot reputationgained enough traction and functionality that you might want to get in the mix.

Join the Tim Sackett and I for How Smart HR Pros are Becoming Better Marketers – By Using Company Reputation Sites Like Glassdoor.” on Wednesday, July 30th at 2pm ET, and we’ll hit you with the following: and we’ll hit you with the following goodies

 - How the the yelp-ification of America—the trend towards consumer-based reviews in almost every area of our economy—is changing the way employees and candidates think about job search and employer brands. It’s second nature for your employees to rate a restaurant, a book or a movie online. That means that employees of all types (not just the ones who want to complain) are more willing than ever to participate in your brand through user review.

Why the explosion of social media and deep coverage of every aspect of our lives through video and photos is changing the willingness of smart companies to increase their transparency.  Every employee and candidate who interacts with your company is a potential reporter, and they expect you to share the good, bad and ugly about working with your firm openly and honestly. Old versions of employment brands won’t cut it—you”re going to have to give up some control to maximize your brand.

We’ll cover the 5 Biggest Myths about company reputation sites like Glassdoor and tell you which ones are completely BS and which ones you actually perpetrate by not fully engaging on sites like Glassdoor.  We’ll hit the usual suspects here: “The only comments are from the bad employees”  and “The salary data out there isn’t factual,” and tell you why things have changed. More importantly, we’ll cover how you actually may make the myths a reality by not fully engaging on reputation sites.  Think about that last sentence: You’ve got to be in the game to influence the game.

Last but not least, we’ll give you a 4-step playbook on how to engage on reputation sites and become more of a Marketer as an HR/Recruiting Pro.  It’s true—you wouldn’t have read this far if you didn’t want to learn more about how to use reputation sites like Glassdoor to maximize your company and your career. We’ll help you get started.

The outside world now has a huge say in how your company/employment brand is perceived, whether you engage or not. I think you should engage.  Join us for How Smart HR Pros are Becoming Better Marketers – By Using Company Reputation Sites Like Glassdoor” at 2pm ET on Wednesday July 30th and we’ll show you how.


My Vegas Weekend with the 8-Man Rotation (Featuring How Pro Hoops Misses On Talent - Just Like You)...

Went to Vegas last weekend with a few bloggers of note - Steve Boese, Lance Haun and Matt Stollak. Our destination had a nerd quality to it  - The NBA Summer League, where professional basketball hopefuls convene to prove they have what it takes to be one of 450 players that play in the best hoops league in the world.

Now - you should know that only about 20% of the players who attend and play in the Vegas Summer League are actual NBA players - the rest are draft choices and free agents who are scrapping and doing whatever it takes to impress the teams. 

Why go to this event? First, we like hoops.  More importantly, I go because there's a huge morality play on talent going on at the Summer League.  If NBA veterans are the best 450 players in the world, what we saw is 451-1000, and the differences are pretty small between spots 350 to 450 in the NBA and the better players in the summer league.  Who decides? What makes the difference between making a NBA roster and going to Turdistan to play next winter?  

As it turns out, the NBA's probably no better at evaluating talent than the rest of us - and there's a lesson in that.   He's the story of the weekend as told through my Instagram account (enable pictures if you viewing this in email or just click through).

Snapshot of Vegas #1 - It All Looks Serene From 2,000 Feet

You have a to have a great picture of Vegas in any series like this, right?  Well, considering the fact there were two shootings within a half mile of the Trump hotel (where most of us stayed) during our 3 days in Vegas, the safest place to view Vegas is from up high.  Steve Boese got the best picture flying out on Sunday.  He had to get up and get to the airport at 3:45 am to get it.  I was in bed at the Trump when Steve, the hardest working man in HR Tech, snapped this beauty.  Thanks SFB!

Snapshot from Vegas #2 - I'm going with the Trendy Choice and Hiring Dante Exum (or someone from Google)

The first thing you need to know about how the NBA evaluates talent is that it wants potential over past performance.  Potential means that you have a chance to uncover the next Kevin Garnett.  Past performance means that you're drafting proven college stars.  The problem with drafting college stars is that after you've played for a couple of years in college, the NBA has had a chance to pick over your game and decide what it doesn't like - as opposed to what it does.

So college stars are undervalued in the NBA draft.  Talent that no one has really had a chance to see gets overvalued, because again, the NBA wants the home run when it comes to talent - not the solid hire. 

With that, meet Dante Exum below.  Dante Exum was drafted 5th overall by the Utah Jazz.  He looks like an NBA player, but there's just one little issue - no one has really seen him play much.  He played in one international tourney and then returned to Austrailia.  He never played in the US.  He got drafted that high on potential alone, and because no one ever had a chance to tear him down via the college evaluation process.  

Snapshot from Vegas #3 - G-Rondo Was Last Year's Dante Exum, and It Doesn't Feel As Great This Year

Pictured below is Dennis Schroder, a 20 year old drafted in 2013 by the Atlanta Hawks. Dennis is from Germany and was drafted in the first round by the Hawks based largely on a single positive performance in a US tourney/camp. He never played college basketball in the USA.  We saw him last year and nicknamed him "G-Rondo" because he's a minuture version of Rajon Rondo of the Celtics.  

G-Rondo is what Dante Exum looks like in year two when you're not sure the pick (or hire in your case) is going to work out.  He was in the Hawks playing rotation last season until he famously punched a Kings player named Boogie Cousins in the nuts coming off a screen.  The new Hawks management, which is basically a bunch of hires from the Spurs and professional in nature, froze him on the bench for the rest of the season.

I love the way he plays, but the Hawks have figured out he can't shoot, which is a problem in the NBA. He's got 2 years to figure it out (length of rookie contract).


Snapshot of Vegas #4 - It's 8pm on a Friday Night in Vegas - Where Are You?

It's 8pm in Vegas on a Friday night, last loser's bracket game of NBA summer league. Guess who the guy at the top of the gym is? Danny Ferry, Hawks GM, Duke legend, former 1st overall pick. Grinding. Looking for a nugget...

I like Ferry.  I work in Atlanta a lot, and he's basically trying to create a version of the Spurs organization in the ATL.  The NBA Summer League is a huge social scene for the executives and people who work for the teams, and you can tell some things about the way people carry themselves.  The Hawks didn't even play on Friday, yet here he is, trying to be alone and watch some meaningless game to see if there's a nugget/undervalued asset he can steal from someone.

Ferry drafted Dennis Schroder, by the way.   So it's good to see him looking for value.

Snapsot of Vegas #5 - Four Years in College? That Guy Has to Suck

This picture below is Adrian Payne, recently drafted rookie of the Atlanta Hawks we watched a couple of times at the NBA Summer League.

He stayed at Michigan State for 4 years and saw his draft stock stall or fall because that's what the talent system in the NBA does. If he stays healthy, he'll have a better career than at least half of those drafted before him, most of whom played 1 year in college.

He can shoot the 3, has size (6'10") and seems to get it in all aspects.  He was drafted in basically the same position as G-Rondo.  Hmmm.  Maybe that's Ferry creating a learning organization.

Snapshot of Vegas #6 - We All Hate The New Process

Change is hard for everyone.  Even in the NBA.

Two of the Four Knicks pictured here are in the wrong spots. In a league famous for isolation 1-on-1s, the Knicks hired coaching legend Phil Jackson, who believes in an offensive system called The Triangle.  This picture is a summary of that transition.  If you look closely, you can see the big guy in the middle has his palms up in classic "what the f are you doing?" mode.  Except he's in the wrong position, not the guy he's looking at.  Change is hard.  Fingers are pointed.

The Triangle emphasizes spacing, reads and ball movement. In other words, they're changing their whole culture. It takes time...  For more on the triangle, click here.  

Best way to get invited to the Knicks' training camp out of the Summer League - show you're smart enough to run this offense and be willing to do it.  Unfortunately, most of the players pictured haven't grown up in a system to prepare them for what they experienced with the Knicks in Vegas.

Snapshot of Vegas #7 - Sometimes Nailing "Black Hole Sun" Isn't Enough

All hoops and no play makes KD a dull boy.  Thanks to Matt Stollak, we were able to score great seats to Soundgarden/Nine Inch Nails on Saturday night.  Video clip below of the intro to "My Wave" from Soundgarden - take a listen.

I'm a huge Soundgarden fan.  But they didn't win the contest for best performance Saturday night.  Nine Inch Nails secured the victory by understanding that the performance is as important as the music.  More on that in a post later this week.

Stuff the Capitalist (aka KD) Likes - The NBA Summer League....

Who am I?  Who cares?  Good questions.  It's my site, so I'm going to tap into a Friday once in a awhile by telling you more about who I am - via a "Stuff I Like" series.  Nothing too serious, just exploring the micro-niche that resides at the base of all of our lives.  Potshots encouraged in the comments.

Talent. You think you know it when you see it.  Maybe.  

Probably not.

The difficulty of evaluating talent (along with a big preference for hoops) is why I'm in Vegas today, watching the NBA Summer League.  24 NBA franchises put a team in, with all the teams basically comprised of the following:

-2 draft picks from this year.

-3 guys that did time on the end of the bench last season.

-5 guys that have never played in the NBA, but are still among the top 1000 players in the world.  They're just not good enough for the show (the NBA).

That last piece is really why I've been here 3 times on my own dime.  Those guys are among the most talented you'll find, and they'd throw a tourist off the Bellagio for a contract in the league.  They scratch. They claw.  They're trying to do what it takes.

The NBA's just like you and I - they miss on talent all the time.  I'm here to watch the drama as number 500-1000 in the world try and find a way to picked up by a team.

Here's another reason you have to love this scene.  Early this week, a player got ejected after getting shoved to the ground, then turning to the referee and saying, "Really M*********er".  See the story here.

Pressure.  Queen wrote about it.  Vanilla Ice ripped it off.  I'm in Vegas to see how people who have been working there whole lives toward one goal react when it looks like their goal may be out of reach.

MBA Oath? How About an HR Oath?

Capitalist Note - Got the call to hit the road unexpectedly. Enjoy this classic on the Capitalist HR Oath until I get back.  --KD

Where there's a need, you'll find a provider.  That's how the free market works.  And that reality holds true for ethics as well as widgets.

Case in point: Over 2,000 MBA graduates have taken an MBA oath.  Modeled after that Hippocratic oath thing, it's a call for MBAs to do the right thing first, rather than automatically deferring to the thing that benefits them most.  As you mightPromise-poster expect, the event that created the market for an MBA oath is the Wall Street meltdown of the last couple of years. 

You can find the full oath by clicking here.  Here are a couple of tasty bullets from the oath:

--"I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society."

--"I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity."

Wow.  That kind of stuff sort of brings out the cynic in me.  The kind of cynic that says that you could save some trees by simply saying "I promise not to screw others, or at the very least, have reasonable assurance that they plan on screwing me before I attempt to screw them."  Now, that's an effective MBA oath, don't you think?

Of course, it reminds me that what the HR profession really needs isn't respect, more business savvy or better metrics.  We need an oath.  With that in mind, I present the following HR Oath for your consideration, which is to be taken when someone passes the PHR or SPHR, or if they think that stuff is BS, they take it anyway because they believe.


I, <state your name>, member of the HR community, promise to:

1. Never say the phrase "seat at the table", unless I say it in the voice of the Church Lady or Samuel L. Jackson. (The Samuel L. Jackson voice from Pulp Fiction or Snakes on a Plane is preferred).

2. Avoid dumping 50 candidates that I secured via the "post and pray" model to the hiring manager in question, encouraging her to "take a look and see what she likes".

3. Take off my SHRM Convention badge before I'm seen vomiting on a main street of city hosting the annual SHRM convention.

4. Carve out 2 hours per week of project time designed to do nothing but figure out a way to add value to the business.

5. Refrain from spending my entire personal development budget on the always challenging "Employment Law Seminar 20XX" - for the sixth straight year.

6. Speak up at the possible risk of my job when I see my boss or a peer doing something that blatantly runs counter to the people mission of our company.

7. Never own or wear a sensible pair of shoes that make me look like a fool.  Or an Aztec.

8. Ship product regularly. (if you don't know what this means for a HR Pro, click here for the description)

9. Give a s###.  Every day. Or get out.

This oath I make freely, and my electronic signature in the comments of this post represents my pledge to the HR profession and the business I support.