“Fantastic work culture” with David Verhaag CCO of Degreed

As a part of my series about about how leaders can create a “fantastic work culture”, I had the pleasure of interviewing David Verhaag is the Chief Customer Officer at Degreed, the award-winning learning platform built for the way today’s workers really build skills and grow their careers. David has spent his career building and scaling teams in the software industry and has established a successful track record of transforming legacy talent management practices for hundreds of companies around the globe. David first realized the incredible potential of software-as-a-service to revolutionize the employee experience when he joined SuccessFactors and helped scale multiple client facing functions as the company grew from a startup through IPO and acquisition by SAP and through his role at HireVue where he helped disrupt recruitment and assessment technology. Today, David is a member of the executive team at Degreed leading the global client experience team. When he is not looking for new ways to drive organizational change, David chases his Alaskan Malamute around the mountains of his home in Park City, Utah.

Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

I started my career in the human resource function working as a high-volume recruiter in New York City. This was back when we were still running job ads in the newspaper and getting resumes by fax and physical mail. I quickly worked my way through various roles in the HR department and moved from NYC to San Francisco to Dallas before becoming the Director, Human Resources and Corporate Communications. Like many HR professionals, I was spending the majority of my time on employee relations issues and after a couple of years was ready to make a change. One of the biggest non-people problems I saw in HR was just how manual everything was. Talent management technology at this time was really basic and focused on core HR operations like payroll and benefits, while everything else in talent management — performance reviews, succession planning etc. — was on paper. So, I started looking around and was fortunate to come across SuccessFactors.

SuccessFactors, at the time, was a startup of about 120 people and was transforming performance management in the enterprise with an innovative software-as-a-service platform. SaaS was just starting to get traction in the enterprise and the opportunity allowed me to combine my talent management experience with an innovative software solution. I spent a little more than eight years at SuccessFactors, starting as a professional services consultant implementing the software and consulting with clients on talent transformations, then grew my role and impact by helping to start the business transformation services team, and ultimately helping to build the customer value function. This was the start of my current career path building and scaling customer experience teams and what led me to my role as Chief Customer Officer at Degreed.

Can you share the most interesting story that happened to you since you began leading your company?

One of the most interesting days in the last year happened when one of the Microsoft data centers we use was hit by lightning. Unfortunately, this was one of the larger data centers and the nature of the event led to a Microsoft outage that had a cascading impact on other services including our ability to quickly fail over to our back up data centers. This event was felt across a variety of cloud based services and our Engineering team spent most of the day working to restore service. Fortunately, none of our customers’ data was impacted and we were able to learn from the event, putting in place new tools and processes to reduce the potential for this type of event to impact our otherwise stellar up time. We had a strong disaster recovery and communication plan in place which helped to keep our customers informed and our team aligned but it was definitely the most interesting surprise of the last twelve months.

Are you working on any exciting projects now? How do you think that will help people?

Degreed recently launched our Skill Review product which helps individuals measure and drive learning and professional development against specific skills. The “skills gap” is this huge and well-known problem around the world and it’s incredibly exciting to see a solution that provides the individual, as well as organizations, with a practical way to start closing it. My team at Degreed has been focused on working with our clients to include skill measurement in their talent management programs and starting to transform the way organizations think about the skills they have and the skills they need to develop in their people. I believe that individuals will ultimately see this as a benefit of working with specific companies because they will be able to continuously develop and improve their skill set and marketability.

Ok, lets jump to the main part of our interview. According to this study cited in Forbes, more than half of the US workforce is unhappy. Why do you think that number is so high?

I see a combination of factors that negatively impact employee engagement and our workforce. Our social media driven culture paints an often unrealistic image of other people’s work lives. We see the best Instagram ready moments and not the hard work that went into earning those moments. We see the IPO celebration but not the hundreds of startups that fail. It is easy to get fixated on the image of success — because they appear in our Facebook and Twitter feeds — and ignore the incredibly long hours, the high rate of failure and the constant stress that came with earning that success. Our natural inclination to compare ourselves with others sets us up to be frustrated when we learn it’s not as easy as it looked on social media. This is one macro factor that I see at play.

I also believe that the changing role of work plays an important part in the US workforce unhappiness. Our focus on work in the US, often at the expense of family and leisure, has increased our emotional connection to the workplace. For many it is no longer just a job, it is an identity. Silicon Valley and New York City are extreme versions of this but I believe the same work driven identity is true around the US. This strong emotional connection, while it can have positive benefits, can also have a negative impact on our happiness. When employees lose sight of the fact that jobs often mean hard work, that constructive feedback is a not a personal attack or that building and delivering exceptional products and services can require hard, boring, and tedious work it can lead to frustration and unhappiness. Some jobs can be rewarding, fun, and inspiring to the world around us but most jobs require plain hard work. It’s easy to forget, especially when we are surrounded by images of ping pong tables, beer taps and nap pods in the workplace, that we are being paid to show up and do a job. Losing that perspective, along with work playing such an important role in defining our identity, can lead to the lack of happiness we see in the workplace today.

Based on your experience or research, how do you think an unhappy workforce will impact a) company productivity b) company profitability c) and employee health and wellbeing?

I would argue that the challenge is not happiness but engagement at work. Again, I think too many young people today lose sight of the fact that a job is work, often hard work. Being happy isn’t the goal, being engaged and productive is. That said, I agree we have an engagement problem and it negatively impacts productivity, profitability and ultimately employee health. A recent Gallup survey found that teams with high employee engagement rates are 21% more productive and have 28% less internal theft than those with low engagement. Another survey found that organizations with highly engaged employees had an average 3-year revenue growth 2.3 times greater than companies whose employees were only engaged at an average level. That’s a huge level of productivity and profitability that is lost due to a lack of engagement. Over the past 15 years I have had the opportunity to consult with hundreds of organizations as they worked to improve their talent management programs in large part to improve this engagement problem. Organizations that have tackled this issue with innovative programs to drive objective alignment, performance management and lifelong learning saw a marked increase in employee engagement which drove measurable increases in productivity, employee retention, profitability and stock performance.

Can you share 5 things that managers and executives should be doing to improve their company work culture? Can you give a personal story or example for each?

A lot of great material has been written on the topic of improving company culture. These are a few of the ideas that I think are important but maybe less obvious.

Points not yardage. While it may be easier to reward effort, “you tried really hard” leaders should focus on rewarding real results and not just the effort. On my team at Degreed we have a saying, “points not yardage”, that I borrowed from my time working with Lars Dalgaard, former CEO of SuccessFactors. Our team at Degreed challenges one another and offers encouragement and support on the journey, but the team has come to appreciate that we celebrate points on the board, for example customers that work with us to create case studies based on their success or marquee clients that renew and expand their business. Ultimately, I think that makes the recognition we give more meaningful because the team realizes it was truly earned.

Leaders set the tone. The next thing leaders can do to improve work culture is set the standard, holding themselves accountable to the same standards they expect of their people. This sounds obvious but in my experience, it is often a gap. Simple things like showing up to meetings on time, eliminating the constant multitasking, and practicing active listening are behaviors that just aren’t that common in many of today’s work environments. When managers and executives hold themselves accountable, even on the small things, it sets the tone for the organization and helps to create a culture of integrity and accountability. At a prior company, I worked with one executive who would sit in the back of the room, head down, texting (or who knows what else) while the team who had spent hours preparing, presented specifically for his benefit. It was incredibly disrespectful and set an awful tone for the organization as to how we treat one another. While it’s not always easy, I believe that leaders need to set the example for their teams.

Honest but kind feedback. I think that employees today are desperate for authentic feedback. There are, of course, those who honestly believe they have nothing to learn and won’t be convinced otherwise, but I have found that sharing candid feedback builds a stronger culture over time than taking the easy road and telling people what they want to hear. On my team at Degreed we have an operating principle of “honest but kind feedback”. This is not always easy and I have not always been great at giving feedback that is kind. One of the hardest lessons I have learned as a leader, and that I am still learning, is the need to take the edge off of constructive feedback for it to have the intended positive impact. Over the years I have given well intentioned feedback that was simply too harsh. While the employee learned from the feedback, our relationship and my ability to coach them further was never the same. Employees are desperate for authentic and candid feedback but it has to be delivered in a respectful and kind way to have the positive effect that we intend.

Less but better. Company culture isn’t defined by how many benefits you stack up but by how employees are treated in their day to day work lives and by how they leverage the benefits you do offer in their lives outside of work. For example, I recently read about companies offering pawternity leave (a week off when you adopt a pet). Do we really need benefits like this when, by recent reports, 52% of employees end the year with unused vacation time? Maybe less but better. Like many technology companies today, Degreed offers unlimited paid time off. Importantly, we combine this great benefit with operating principles of personal accountability, that you are responsible for creating your own life/work balance, and, just as importantly, trust in one another. When you exercise your personal accountability and take time we trust our peers to have our back so we fully unplug.

Translate the shared mission. I would guess that every company has a vision statement of some kind combined with a mission statement. While it is important to align the organization behind a singular purpose, I think building a great company culture requires taking this a step further. At Degreed my team took the company’s big audacious mission, “Jailbreak the Degree”, down into our team’s mission and then further into how statements which we then aligned to our quarterly objectives. It is important to understand the how; how are the things we’re doing today, this week and this quarter, going to help us achieve this lofty mission of the organization? Like the famous story about the NASA janitor who told JFK he was helping put a man on the moon by sweeping the floors, a great company culture is created when people not only see and believe in the mission but understand clearly how their day to day work contributes.

It’s very nice to suggest ideas, but it seems like we have to “change the culture regarding work culture”. What can we do as a society to make a broader change in the US workforce’s work culture?

I believe changing the US workforce culture starts with improving our educational system, specifically building into our early education more emphasis on learning as a process and not a product or test result. That’s a pretty big initiative, but a focus on learning as an ongoing lifelong process is absolutely critical. The half-life of a skill can be as little as 2.5 years. In careers that last 40 to now 60 years, the workforce simply doesn’t have the skills they need to be successful if they aren’t constantly building and developing new ones. We know that there is a serious skills gap in the workforce but society hasn’t yet fully adopted this idea that we need to be constantly learning, constantly developing and constantly building new skills if we want to remain competitive and evolve our workforce culture. I believe this change has to start early and the result will be a more engaged and ultimately more productive workforce.

I also think that reclaiming our work/life and online/offline balance will have a positive impact on the US workforce culture. There is a lot of great research that shows the value of taking time off, even short periods of time during the day, to refresh and recharge our minds. Not only will we do better work as a result but we will be able to better keep work in perspective and to keep the day to day challenges of work in context. As a society I also believe that we need to put more emphasis on offline time. I recently read that Americans spend more than 11 hours a day watching, reading, listening to or interacting with media. That’s an insane amount of our lives spent in front of a screen being bombarded with messaging. As a society I think we need to find a way to turn it off and to set better limits and expectations for ourselves. Doing so will not only positively impact our lives as a whole but make us that much more effective and engaged at work.

How would you describe your leadership or management style? Can you give us a few examples?

I have been fortunate to hire and work with strong and high potential managers and that has allowed me to take a mentor focused approach to leadership. As a mentor, I think it is my responsibility to look for and create opportunities to challenge individuals on my team both in areas where they can leverage their strengths but also in areas where they can develop against their weaknesses. Along with this, I think it is my role to provide candid feedback on what worked well and where there are opportunities to improve. I believe that people are hungry for feedback and, while they might not always like hearing it in the moment, they ultimately become leaders for it. A recent example happened at our all company kick off meeting. It’s natural for leaders to want to grab the microphone and highlight the accomplishments and upcoming plans of their teams. While it was hard to give up the personal opportunity, stepping back and empowering my leadership team to present gave them an important and highly visible opportunity to lead the organization.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

One of the most influential people in my professional life is Mark Bissell, currently Chief Operating Officer at Jibe. I worked with Mark for several years and across a variety of roles at SuccessFactors and he has been a fantastic coach and mentor ever since. Mark’s mentorship stands out for his ability to listen and ask the right question at the right time to cut through the noise, challenge my thinking, talk me off the ledge or just help me reach the right conclusions for myself. Mark and I worked together on dozens of complex consulting engagements over the years. In one instance, I was incredibly frustrated with our organization’s follow through on product commitments, and I told Mark that I was going to call the Chief Operating Officer and give him a piece of my mind. Mark, as he often did, calmly asked me, “Do you really want to use a bullet on this?” He wasn’t telling me not to make the call or disagreeing with the frustration but reminding me that there are a lot of problems to solve and you can only go to the top for solutions so many times. It was an important lesson that has stuck with me through the years and influences my own leadership.

How have you used your success to bring goodness to the world?

I have been fortunate in my career to have great mentors like Mark and great career defining opportunities like Degreed, HireVue and SuccessFactors. I think I owe it to my team to create similarly compelling career opportunities for them and to mentor and provide the same honest but kind feedback that helped me in my career. I also think the mission of Degreed, Jailbreaking the Degree, is incredibly impactful in bringing career opportunities to individuals regardless of educational background or pedigree and helping the world solve the growing skills crisis.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

My favorite life lesson quote was one that I came across only recently in the book Essentialism by Greg McKeown: “I can do anything but not everything”. I love the aspirational but pragmatic nature of that statement. Combined with the idea of “less but better” it has been relevant in helping me focus and prioritize my work. Instead of trying to tackle everything I have tried to narrow my focus to the points of highest leverage and what matters most to have the impact that I want to have, for example, coaching and mentoring my team versus being involved in every decision. It has also been relevant in my personal life as I have tried to focus more on being in the moment for anything that I am doing.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

If I could inspire a movement it would be one of personal accountability. All of our current challenges are ultimately solvable if we start by acknowledging our role in creating them and take responsibility for our role in solving them. It is not up to someone else. It’s up to me.

Thank you for these fantastic insights. We wish you continued success!