Full Transcript: Laszlo Bock, Former SVP of People Operations at Google, on Sequenced

On the first episode of Sequenced, Laszlo Bock, former SVP of Google’s People Operations who helped transform Google’s workforce and culture, discusses how health and wellbeing benefits can make for a happier, longer-lasting workforce.

We’ve posted complete transcript of the podcast below. You can subscribe to Sequenced on Apple Podcasts, SoundCloud, Stitcher, SoundCloud, and Google Play.

Interviewer: Welcome to Sequenced. In today’s segment, we are going to talk about employees and health, and healthy employees. And to do that, we have with us Laszlo Bock. Laszlo recently resigned as the SVP of People Operations at Google. Laszlo is also the author of the New York Times Bestselling Book, “Work Rules”. Laszlo, welcome.

Laszlo Bock: Thank you. It’s great to be here.

Laszlo, we’re excited to have you. We, as employees, work for companies and we always think about the benefits we have. How do companies think about the health of the people who work for them and how should they?

Laszlo: Well, there’s a couple of different ways. I was at Google for over a decade. I was at GE before that. But I started my career at a company with 50 people and not in an HR job. The size of the company you’re at the industry impacts all of it. Broadly, there’s a couple of ways. One is there’s a philosophy of it’s a cost to be managed. We’ve got to keep it as low as possible. The other is the more we invest in our people, the more we’re going to get. And it drives very different health care programs and very different ways of caring for the people on your teams.

Google sort of set this tone for what it means to take care of employees well. What have you learned building out benefits programs for Google and how can that be applied to in places that aren’t Google?

Laszlo: There were a couple of things. First of all, credit where it’s due, Google wasn’t the first in a lot of things. I think we got a lot of attention but there’s a lot of companies that did really, really interesting things in terms of caring for people, I mean, it goes as far back as pensions. Pensions were actually kind of a good idea in a lot of ways, and a lot of people have stable retirements now because of them. But I think there’s a few big lessons and a few big things to think about.

One lessson is that most programs that make your employees happiest, healthier and more productive actually don’t cost money or they cost very little. There are ways you can architect the way that your work space is set-up, whether you have a million bucks to spend or nothing to spend, to help people make better health decisions.

The second is, in general, the more information you give people, the better decisions they make.

Third, there are some things where life’s just rough and you have great things happened, you have a baby, you have bad things happen, you lose a member of the family. And the biggest thing you can do as company is, at those extreme points, do things to celebrate or support your employees. Those moments can cost a lot of money but they actually, on average, don’t cost that much because, thank God, the terrible things don’t happen that often.

How do you communicate that these things in place?

Laszlo: One of the challenges when you think about benefits generally and what you’re offering to employees is, as an HR professional, you do all these amazing things and you think you’re doing all these things for your people. And most of the time, they have no idea what you’re doing. There’s this issue of salience of is it relevant to me? So the trick is you actually want to have a decent range of things that when people need them, they can plug into it and go really, really deep.

For example, as an employee, if you’ve had one of these great or terrible [life events] happen, there’s a human being a couple of buildings away who can just talk you through it and support you and go really, really deep with you. And then eventually, we got better doing that with technology. But initially, just having another person who can explain to you what is most relevant and helpful to you at the time goes a long way.

How did you know that things were working? Did you see a change in the culture of the place? How do you know that what you’re doing is the right thing?

Laszlo: Well, it depended on what the program or intervention was. For example, when we expanded maternity leave. It used to be 12 weeks and we took it to 5 months with full pay, salary, bonus, stock vesting, everything. What we realized after that was women had been leaving the company after maternity leave at twice the rate that men were leaving the company. And when we went to five months with full pay, all of a sudden, the difference went completely away. So sometimes, it’s in the data.

Another example of a program and it still exists, is if, God forbid, you pass away while you work at Google, all your stock vest immediately, which is a little unusual outside executive ranks. But then your surviving spouse, dependents, gets half your salary for the next decade. And if you have children, they get $1,000 a month until they turn 18 or 24, depending on whether they go to college or not. And the evidence that that was a good program has nothing to do with retention or attraction because nobody joins a company because they join and go, “Oh, my God, I hope I die there.”

But I got this beautiful letter sent anonymously to the benefits team from an employee who talked about how he had had cancer. And he was in remission but part of his treatment was every six months, he went and got a full body MRI to make sure the cancer was still in remission. And he wrote how, every six months, he would lie in that MRI machine and he’d mentally compose a note to Larry Page, saying, “If my cancer comes back, please take care of my family. Please, please, please take care of my family.” After we rolled out this program, he sent this email saying, “Last week, I went in for my sixth month, I’m still free of cancer. I didn’t write a single email in my head.”

That’s amazing, wow. Let’s focus on health care. It’s a little bit trickier, like who am I to tell you to be healthy? Who am I to tell you to start taking the stairs and eating your veggies? How should employers approach the issue of health with employees, you know, and how should they walk that line?

Laszlo: Well, the implication of your question is correct, that people hate being told what to do. And the company, yeah, I work there but, you know, they’re not my parent. They shouldn’t be telling me what to do. And the more we try to tell people what to do, the more they resist. One of the things that happened at Google was we had a couple of the cafes, and we had 30 or 40 cafes on campus, free meals, free lunch, free breakfast, everything. Couple of them decided to do something called meatless Mondays because they thought, “Well, it’s National Chef Movement. It’s healthier for people. We’re not gonna serve any meat.” So they did serve fish but otherwise, all vegetarian. And a bunch of Google employees revolted. They said, “This is crazy. You know, you’re taking away my choice. Never mind the food was free.” Never mind there were cafes across the street they could go to. They were like, “This is upsetting.” They held a protest barbecue.

People react really badly when you tell them what to do. They react much better when you give them information and give them options. So one of the things, for example, we did around health was the food in the cafeterias was color coded, red, yellow, green, depending on how healthy it was so people could make an informed decision.

Another thing we did was the way you, as a company, design space has a big impact on how people behave and how they feel. And one of the problems with this argument about paternalism is, without meaning to, we’re changing people’s behavior and conduct all the time. If you have like bad fluorescent lighting, it’s gonna put people in a bad mood, that’s a choice you’re making. And their customer service is gonna be worst as a result. So we, for example, when it came to health, said we want people to eat healthier food. And there’s a little micro kitchen there as we can get snacks all over campus or imagine vending machines except they’re free. And in our New York office, we said, “We’re gonna take all the sugary stuff,” the M&Ms and jelly beans. And rather than having them sitting out, we’re gonna put them a little higher, a little harder to reach, and in opaque containers. So it still says M&Ms on the outside but you don’t see the M&Ms. Over a 12-week period, our New York office ate 3.1 million fewer calories.

Oh, wow. I thought you’re gonna say 3.1 million fewer M&Ms.

Laszlo: We go through a lot of them. But it was wild because when you do the math, that works out to 850 pounds people didn’t gain just because we made the M&Ms a little harder to get to. So now, if you go to any Google cafe, the sugary drinks are behind frosted glass and they’re lower in the refrigerator cases. And so you can design the space in a way that helps people make better choices. And I know I’m going on but the same thing happens like in your house.

If you think about your pantry, you open it up and what’s in front of you? You’ve got the pudding cups. You’ve got the Jell-O. You’ve got the fruit juice which is all sugar. And then, where are the fruit and vegetables? It’s hidden in the bottom of the refrigerator. If you switch those, it’s gonna be that much easier to grab an apple instead of drinking a jar of orange juice, and you’re actually gonna be healthier. So those kind of architectural things you can do have a huge impact on health outcomes without taking away choice.

That’s a great point. I’m surprised that from a design perspective that, you know, appliance manufacturers haven’t gone there yet. That we sell you this refrigerator and six months later, you’re going to have eaten X percent fewer calories.

Laszlo: I think that’s the next great Silicon Valley startup.

You heard it here first. Somebody go do it right now. What have you seen outside of the Google world that maybe you guys borrowed from and adopted at Google? Also, what were some things that applied to health care outside of Silicon Valley and outside of the United States for that matter that you thought were really smart and we should all pay attention to?

Laszlo: One thing that I saw at an industrial company years ago was basically, we now call it gamification. They had a health program and they wanted people to sign up to do…you know, it was one of these like five a day things, so five fruits and vegetables plus 10,000 steps plus a few other things that are sort of indicators of healthy behavior. And rather than just rolling out an educational campaign, what they said was, “We’re gonna form teams and we’re gonna track everybody how they’re doing.” And it’s all self-reported, all voluntary. And there’s prices for the teams that do best.

And the ones that lose the most weight and the ones that go the most steps and eat the most fruit and vegetables, as we now know and as you would have expected, they had much higher compliance with the program. People lost more weight than when they just said, you know, “Here’s an offering from our benefits department.” Turning something into a game, making the scores public, organizing in the teams goes a long way in terms of shaping behavior.

And it sounds to me also that, you mentioned this was an industrial company, but there’s no like we all want this, right, like there’s no, “Oh, you’ve got to be some groovy company out in California to do it.” It sounds like it can happen anywhere.

Laszlo: Yeah, absolutely. If you’re trying to make people healthier, the way most of us think about is, “Oh, we gotta have this massive program, and weight-loss programs are tough and smoking cessation is tough.” And all these things are really, really hard to do. People don’t like taking medications so it’s hard to get them to comply with like a diabetes regimen. People don’t know enough about their own health status and so they don’t know what decisions to make. What’s crazy is giving people little information and creating feedback loops goes a long way to changing performance or changing a health behavior in really, really meaningful substantive ways.

When you say giving them information, how does it show up? And how do you keep people kind of in the game if it’s gamification? How do you keep them connected and engaged?

Laszlo: Well, some of it is relying on cognitive errors we have. So as human beings, we’re more afraid of things than we should be and less afraid of certain things than we should be. So for example, if you think about it, everyone goes to the beach, everyone’s worried about sharks, right, even if you’re not afraid. In the back of your mind, you’re a little afraid. But what’s actually a lot more dangerous once people hit their 50s, 60s, 70s is falling down. And so because what happen is you hit a certain age, your bone density decreases, you stumble, your hip breaks. And then you have all these negative consequences that come from being immobile.

You’re on your back and you got all these circulatory issues, bed sores. All these following conditions happen. So the lesson is sharks actually aren’t what you should be afraid of. What you should be afraid of is having weak ankles. Because the reason people fall is they take a step and they can’t stabilize.

Especially if you’re walking into sharks, though.

Laszlo: Exactly, exactly. So coming back to health care, people are terrified rightly so of, for example, cancer. Cancer is an awful, terrible thing to go through. Statistically, a large minority of the population will and we will be killed by it. So it’s really rational in a way to be scared of cancer, but not so much when you’re 25 or 30. But it turns out the research is if you give people information about their predisposition to get cancer, whether its genetic, whether it’s environmental or what have you, the rates of compliance with healthy behaviors more than doubles. And it’s not because when I’m 20 years old, I’m likely to get cancer. It’s because when I’m 20 years old, just like everybody else, I’m terrified of this thing. And if you give me a little bit of information, my healthy behaviors are gonna change. So that’s kind of a negative example where you sort of key into something we’re all afraid of but there’s positive examples, too.

And I think what you’re describing in some ways, too, is that the role of employers to help you know yourself better, know your predisposition, know, you know, what’s coming.

Laszlo: Well, it’s a huge opportunity because one of the challenges with health care in terms of getting people to be healthier and have healthy outcomes is the things that seem to have the biggest impact on health care outcomes are not rocket science. But they’re kind of boring and pedestrian and they take changing your habits a little bit. So I’ll give you a couple of examples. One is when people have information about their genetics, they make much better health decisions. And, as we just discussed, it’s because we have a sense that our genetics are mutable and, you know, so this is destiny, so we over-index on the behavior.

Another example is the Framingham Heart Study, which was a study started in 1950s in Framingham, Massachusetts. And every 5 to 10 years, they gather all kinds of data on the population for Framingham. And so you have this 60-year longitudinal data set of what’s going on in terms of healthy outcomes for people. And they really wanna just understand heart disease. One of the things they discovered is if you want to lose weight or if you wanna quit smoking, the single most effective thing you can do is change your social group. Hang out with different people.

Once you read that or hear that, it’s kinda like, “Well, I guess that make sense because if I’m not going on a smoking break outside with the same people every day, I’m gonna go eat an apple or do something else. And it’s gonna be easier than if I’m hanging out with all those people who are smokers or drinkers or what have you.” That’s a behavior that is, in a way, not that hard to change, but it’s something where a company can be incredibly helpful, right?

So instead of paying for like a five-year smoking cessation program, explain to people like, well, this is driven by social groups. So we’re going to have a volleyball league and we’re gonna mix people up randomly so you get to know different people. At Google, we used to have something called random lunch. You just randomly get assigned to sit with different people and you build different connections. Makes it easier to quit smoking and lose weight.

What is the relationship between data and helping people make better choices?

Laszlo: Well, the data is important because in all these issues, as the company, as the employer, you want to be honest and truthful and you want to be correct. The only way to do that is if you start with actually reliable data. Companies are in this unique position today to actually have that because they know the health care industry, they know the employees, and these people are on your site 8 to 10 to 12 hours a day. So, they’re right there. And if you know you have an employee population that’s more likely, you know, they’re older and so they’re more like they’ll be diabetic, or they’re, you know, younger and they’re more likely to have, for whatever reason, higher incidence of complicated pregnancies or what have you.

As an employer, you see that in your benefits data. And then you can turn around to the employees and design the environment and nudge them in ways that give them better options, help them make better choices, and make them actually healthier, which is great.

If you’re not a computer scientist, you’re not a data scientist, I think it’s interesting how you need to have a different approach to take that data, to take what you learned with your visibility and turn it into something different that will help employees in different ways.

Laszlo: Not everyone is gonna react to like a data dump and go like, “Oh, now, I understand, you know, in a robotic way what to do differently.” And you also don’t wanna cross the line into being too paternalistic and controlling of your employees. What you wanna do is give them information that is correct, which starts with data. And there’s a whole bunch of noise in the medical industry about what works and what doesn’t so sifting through that is a meaningful thing. And then you wanna make it easy for them to make their choices. And part of the way you do that is, again, it goes back to this question of salience.

If you know an employee is pregnant, if you know an employee is dealing with something, how do you get the right information to them at the right time? And the way you start often is you just have human beings in the benefits team who are like, “Oh, I saw this is gonna happen.” But there’s also now, even setting Color aside, a whole bunch of companies and startups that wanna make these connections and make things easier, and you should take advantage of that as much as possible.

Not every company clearly is Google or Facebook or some of the large scale company. How do we start? How do we, as companies and as employees, kind of advocate for changes within companies and for the things that could do us some good? And if I’m a small company, if I’m a company and an industry that doesn’t have a history of this kind of stuff, how would you advice that people get going?

Laszlo: I think there are two places that you start with at the same time. One is you look for the extreme cases, the births, the deaths, the amazing moments, and the horrifying moments. And you make sure that you’re there for your people at those extremes. Word will get around and that sets the tone that, as a company, you actually care for them as human beings, not just units of production. I think every company should do that, even very, very small companies. I mean, if you have a three-person florist job, you’re not gonna have the economics to do like 10 years of salary, right? But once you have 20, 30, 40, 50 people, the bad stuff doesn’t happen that often and it’s worth sending that message. One is focus on the really good and really bad moments.

The second thing is: look at what your biggest cost are and start there. And typically, there’s sort of an industry standard of care for whatever those biggest costs are and typically, it doesn’t include things like pro-active health care outreach. There is a hospital chain in Texas that rather than having people wait till they come in for service, they sent nurses out twice a week to check on patients with chronic conditions. And what they found was not only did drug compliance go up dramatically and not only did the patient health outcomes actually get better, but they discovered all this other information about the patients that help them solve additional issues. So they’re visiting a diabetic and after four or five visits, this visiting nurse finds out the diabetic also has an alcohol issue, they start treating that. Mass reduction in cost for the hospital.

Figure out what the big cost items are and then put a person against helping getting it resolved, right? And that could mean going and visiting people. It could mean changing around peer groups. It could be signage. It could be giving people more information about programs of the company or about their own health condition. And you know, very depending on what the issue is but pick the biggest one, start there, make it better, and then work from there.

When we talk about benefits, we talk about benefits for people but what are the benefits for the company?

Laszlo: First of all, there’s obviously an employer brand benefit. If you get known as a company that actually cares about your people, there’s a lot of benefit. It’s very visible. People actually see it. And you attract higher quality people to your company which then has productivity benefits and so on. The second big benefit, though, is cost reduction. If you can prevent some of these chronic conditions, that’s where all the costs are for companies. Treating chronic diabetes, treating cancer cases, treating these things that are awful but that persist for, you know, months and months or years and years. And if you can avoid that just once or twice, it saves you the equivalent of dozens of employees in terms of total cost.

If you invest in health care and if you invest in taking care of your employees in this way, what ends up happening is everybody gets a little bit healthier. So somebody goes from eating zero apples a day to one apple a day. Or, you know, they take the stairs now instead of taking the elevator. Let’s imagine that person was never gonna get diabetic or never gonna get cancer or what have you. But that person is still actually gonna be healthier. They’re gonna be sick less. They’re gonna be more energetic. They’re gonna be more productive. They’re gonna be happier when they engage with your customers and co-workers. That’s really hard to measure but it’s a real tangible benefit.

And my sense is if you get a workforce that’s a couple percentage points healthier than your nearest competitor, you’re actually gonna outperform them as a business as well because you won’t have all these losses related to sick days or lower productivity, bad attitude, things like that. So there’s real value there, but nobody measures it.

I think we can all agree that as an employer, we want to treat our employees as best we can. But let’s be honest, employees don’t stick around forever. So how long of a responsibility do I have toward them? And why should I sort of think 30 years down their lives when they’re not gonna be with me 30 years down the road?

Laszlo: Well, it’s a great question because obviously, they’re not gonna be your employee, why should you care, right? They’re not your person, why spend any money? I think there are real reasons to invest in that. Number one is this is a classic tragedy of the commons kind of situation, right? Tragedy of the commons is: there’s a public grazing field that everybody puts their cows on it and the free resource gets abused and then it gets ruined for everybody. Similar your health care has this element. For every single company, what they know for a fact is when people retire, when my employees retire, they’re gonna be less healthy than they are when they worked for me. So what do I care, right, about what happens when they’re 60 and 70?

Number one is that’s a really bad way to run our society. If everyone chooses to do that, what ends up happening is we all get sicker and we’re all going to be old at some point and we’re all gonna be worst off, including me, a former head of people operations, right? So as an HR professional, as a benefits person, as a CEO, it’s actually in your interest to get every company to care about these issues because it’s actually gonna benefit us when we get older. We would have gotten all these training and exposure of better health practices.

Second reason is all these people move around all the time. Wouldn’t you rather be getting people hired into your company who already have good health behaviors and awareness of their own health condition and know what to do and how take care of themselves? You obviously would. I mean, you ideally want people to come in and never get sick and are super healthy. The way you get there, though, is each of us as organizations need to say, “I’m gonna do this for my people.” And, yeah, the next company over will benefit. But if enough of us do this, the inflow of talent will also benefit from this kind of system.

The third reason to do it and invest in things that happen after they’re no longer my employee is, at the end of the day, you have to ask yourself, “What kind of person am I? What kind of leader am I? And what do I care about?” And you wanna take care of your people. That’s the right thing to do. In Silicon Valley, you’ve seen this crazy arms race about how people are treated, right, and so those free food and free shuttles, and all these amazing exceptional stuff. The reason is, in part, you just wanna do right by people and you want to attract them. The best people will come to those environments.

Whatever your industry, whatever your margins, you can make a lot of money by treating people really badly. But you can also make a lot of money and sleep better at night by treating people really well even though they’re not gonna be with you till they’re 99 years old.

You wanna take care of your people. That’s the right thing to do. Laszlo Bock, thank you so much.

Laszlo: Thank you for having me.

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