The Performance Review is Dead – A Podcast with the Founders of Fizz


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Adam is talking to the founders of Fizz, Jennifer Shoop, COO, and Landon Shoop, CEO, about performance reviews, millennials, and how they split duties as a husband and wife team.

Adam Robinson: Welcome to The Best Team Wins podcast where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson and for the next 25 minutes I’ll be your host as we explore how to build your business through better hiring. Jennifer and Landon Shoop are with us on the show today. Jennifer is the co-founder and COO and Landon is the co-founder and CEO of Fizz. They are a husband and wife team. They founded the business in 2015. They have three employees and have raised seed funding to scale the business. Guys, we are pumped to have you both on The Best Team Wins. Welcome to the show.

 

Landon Shoop: Thanks, Adam. We’re really happy and excited to be here.

 

Jennifer Shoop: Yeah, thank you.

 

Adam Robinson: What we know is that the best learning happens through the sharing of real-life experiences from fellow entrepreneurs and leaders, and so I’m excited to tap into the body of knowledge we have here on the show. We’re going to learn a lot today, but first we always start off on the right foot. That’s the tradition here on the best team wins podcast. We talk about the best news, business or personal that’s happened to you in the last seven days, and so, jump ball, whoever wants to start. What’s your right foot?

 

Jennifer Shoop: Gosh, I’d have to say we had some new customers come onboard in the last week. We are an early-stage startup, so any new customers that are really understanding the value that we can provide is awesome news for us.

 

Adam Robinson: That’s great. Let’s talk about Fizz. What is Fizz?

 

Jennifer Shoop: Fizz is a tool that facilitates real-time employee feedback. The idea that so many of us still slog through an end-of-year annual performance review is mind-boggling to us because it’s expensive, it’s ineffective and pretty much everyone we’ve spoken to hates them. So, we’re trying to help companies move away from an outmoded approach to employee feedback to get folks into more of an ongoing, on-demand model.

 

Adam Robinson: Okay. Talk about why this problem is important to you. What was the catalyst for starting the company and why do you care so much about employee reviews?

 

Landon Shoop: Yeah. This is something that we felt the pain of first-hand as employees, managers, defacto HR folks, executives in our respective organizations. Really, the straw that broke the camel’s back, the moment where we said, “We can’t take this anymore,” was I came home literally the night before my self-assessment was due for my annual performance review and it was very traditional that the process that so many organizations follow across corporate America where you’re filling out a form asking you very stilted questions about how you demonstrate the value of curiosity. There’s a lot riding on the line and I have to capture a year’s worth of work in this moment and my merit increase is going to be affected, my promotion eligibility is going to be affected, and it got the better of me. To be quite honest I threw a temper tantrum.

 

Jennifer Shoop: He did.

 

Landon Shoop: Jen can attest to this. Just because it was, like I said, a lot was riding on the line. Then, really, I went into work the next day and saw the head of our sales department send home 600 sales people just to complete their performance review. You know right when he said that, once he said, “You can go home once you’ve done this,” that every sales person put down their phone and hurried through this form as quick as possible and got out of there.

 

That really was scary to us for two reasons. One, it’s an incredible cost to the organization. You can actually quantify how much that decision cost my company. Second, and I think most importantly, what kind of message is that saying to these employees about how my organization was investing in their performance and their development and growth as employees? Not much, not much.

 

Adam Robinson: Looking at the marketing materials you guys have on your website and some materials I’ve seen in advance here on the show, you state that the annual performance review is dead. How did it die? Why is it dead?

 

Jennifer Shoop: Yeah, this end-end-of-year summative assessment that so many of us still use was built in the 50s and 60s and hasn’t been updated since. And where else in the pace of modern business do we wait till the end of a full year to make a decision? I can’t think of a single other area, marketing, customer acquisition, sales. You’re doing things in real time. Why do we wait till the end of the year with reviewing our talent? It’s mind-boggling.

 

I think that the way that we tend to approach reviews has been anchored in this sort of vestiges of the past. It’s not keeping pace with the pace of modern business, and also not keeping pace with how the majority of the workforce prefer to be engaged in the workplace, meaning, there’s a lot of younger millennials and even younger employees entering the workforce and this is just not how they anticipate to interact with their managers.

 

Adam Robinson: I want to talk about the impact on millennials, Gen-Y, that incoming demographic in a second, and so let’s hold that thought there. My sense of it is the performance review started as a way to check a legal box and manage pay increases. Would you guys agree with that, first of all?

 

Jennifer Shoop: Yes, I think that’s by and large true, and just to make sure that people are getting at least some sort of feedback at some point in the year.

 

Adam Robinson: Okay, so this was a check-the-box process that HR or the operating function of the business created to make sure you’re providing some feedback, and to have some kind of logic to pay increases. What do you do to reward performance on merit if you’re taking traditional reviews off the table? How do companies make that transition? What do you see as best practices for doing that and for even thinking through whether or not a move to a less formal or less structured performance review process would even work or make sense?

 

Landon Shoop: I think, Adam, this is an area that’s super, super interesting. It’s a question that we get quite often. I would say what we see runs the gamut in terms of how migrating from this annual performance review to a more on-going model. I would say the more provocative approach is that some companies are completely disassociating the two in that they have a feedback process and it’s only meant to drive employee growth and development. It has no bearing whatsoever on their merit increase.

 

Now, the question then is, “What do they do about pay increases?” They offer, if you’re at the end of the year, still an employee they give you a cost-of-living increase and get on with their day, which, obviously has its own perks in the sense it’s a dramatically streamlined merit increase process all of the sudden. There’s benefits just to that model in and of itself. Now, a lot of companies are using this blended model and the beauty of this on-going feedback is that you’re getting a lot more, I think, accurate, data-driven information that can influence this process more, I think, more accurately.

 

Jennifer Shoop: Yeah. A more specific example would be if you still want to award merit increases but you’ve gone to this more ongoing feedback model you could mine the data that you collect through Fizz to say, “Okay, if you are in the top 10% of performers based on the accomplishments reviewed in Fizz, then you’ll get this percent increase. If you’re in the middle 80% you’ll get this percent increase.” Again, just make that merit increase process a little more fair, to be honest, a little more based in something that goes beyond just what I remember as a manager over the last months.

 

Adam Robinson: Yeah, so what you’re saying is that, Landon, your point was you can divorce the ongoing performance and coaching process through regular feedback from merit increases. But, Jennifer, what you’re saying is you can also leverage the data you create through that ongoing process to drive merit increases. You have to look at the data a little differently.

 

Jennifer Shoop: Right.

 

Landon Shoop: Exactly. Just from what we’ve seen, we’ve seen customers employ both models, and I would say with equal success. Those in the camp of divorcing the two feel that it’s the right path forward, that that’s the right approach because you kind of start to muddy the water when you know your performance, when your feedback is going to affect your compensation. So, they think that that should not be the case.

 

Adam Robinson: Let’s talk about millennials. You look at the research and we’ve certainly had guest after guest on this show that talk about millennials and the fact that they want real-time feedback. I can imagine that traditional performance appraisals are excruciating to people that want real-time feedback in this generation. This has to be a great way to retain employees. What do you see as the potential impact on the workforce of the future of moving to this? Do you think that this is in response to what this incoming demographic needs, or do you think that companies can better leverage this incoming demographic by moving to this? Who’s driving who here?

 

Jennifer Shoop: I think in general when we talk about this we talk about using this ongoing feedback model to meet folks in the middle. The more tenured, older generations are often saying, “I can’t engage my talent or they’re leaving. They’re job-hopping too quickly,” so they can use this as a way to, yeah, exactly, engage and retain their talent for longer. Then on the flip side, the younger employees with a tool like Fizz it’s a way to say, “Okay, we’ve heard you, now use this to drive your own career progression.” It can really help meet the needs of both sides of the table, both employees and managers.

 

More generally, I think the millennial in the workplace is a really interesting topic. I’m a millennial, so I obviously relate strongly to this. I think that one of the really interesting pieces is agnostic to whatever technology you are using. I think what millennials really are craving is sort of a coaching model in the workplace. They want to know that their managers are investing in them, taking the time to help them individually grow and develop, and that’s just very different from how people perceived their workplace relations in generations past.

 

Adam Robinson: Sure. I absolutely agree. As a GenX-er, let’s say. I came through the traditional model, certainly. Now as a CEO of a company whose average age is 26 I can tell you that annual reviews are really only good for checking the box. It doesn’t have the intended effect. It is not the right way to do it. I think it’s super exciting you guys are attacking this issue, and I know there’s a lot of buzz in the market about what you’re doing and about this category, in general, so congratulations on your success so far.

 

Jennifer Shoop: Thank you.

 

Adam Robinson: Let’s talk about how you’re running the company. I know our listeners are interested in hearing about how you’re managing the people side of your own business in addition to helping deliver value to customers. You guys are a husband and wife team, and I’d love to hear about how you handle people decisions in your company. You’ve got three employees. You have open positions now. Who’s responsible for hiring and firing and how are you splitting duties there?

 

Jennifer Shoop: It’s definitely a joint effort, but I think that we’ll probably talk a lot about this. We’ve taken the approach of being very anchored in organizational values. Even when it was just the two of us, just Landon and I, before we had a third employee and before we had interns we sat down and took about a day to go through the human-centered design process to actually articulate what are the values that matter most to us as an organization. We use those as the cornerstone for every people-related decision we have. When it comes to hiring people we evaluate people against those values before we even get into the functionality of the job opportunity. The same goes for firing. If someone’s not a good fit it’s because they’re not mapping to our core values and we take them very seriously. We really believe in them and we see them work.

 

Adam Robinson: So Fizz is a core values-first organization. That’s what I’m hearing.

 

Jennifer Shoop: Yes.

 

Adam Robinson: Okay fantastic. How did you decide the leadership structure and the split? CEO, COO, very different roles, talk about that for our audience. Did you flip a coin? Are you leveraging strengths? How did you do this?

 

Landon Shoop: The latter, leveraging strengths for sure. We reflected back on our professional and academic experiences. I have a background, studied electrical engineering, an undergrad, went on get my MBA, worked in consulting. This is not my first startup, and then was most recently in sales operations. Jen has spent, I won’t speak to her experience as eloquently as she can, but has spent a lot of time in product and managing engineering teams. Really the big functional differences in our roles is I’m the sales guy, Jen’s the product girl and, really, that’s how it’s shaken-out.

 

Adam Robinson: Okay. Got it. So far how would you rate yourself on performance?

 

Landon Shoop: We nailed it.

 

Adam Robinson: That’s good. Are you guys using your own product?

 

Landon Shoop: We absolutely are.

 

Adam Robinson: I know you’ve recently added a new employee to the business, you mentioned here. Talk about that first hire. For so many entrepreneurs making their first hire is one of the toughest decisions that they you make. Nobody’s really good at this stuff is the whole reason why I wrote the book in the first place. Talk through that process. Your first hire, what was that like, what was the process you followed and what did you learn?

 

Landon Shoop: Yeah, just starting with the process, we spent a lot of time thinking about that before we even started talking to anyone. As Jen mentioned, we established our values before we even had a product, almost, I would say. Starting there, our processes looked as such, the first conversation is really just a brief, 30 minute chat with the individual, with the prospective job candidate. What that conversation is centered around is really is there mutual interest in solving this problem together that we’re trying to solve that fits? Are we mission-aligned? If it makes sense to continue the conversation then we carry on another 60 minute interview with questions that are entirely built around our organizational values. Like Jen said, we haven’t even talked about their functional expertise at this point. It’s because if they’re not a fit for our organization we’re doing both respective parties a disservice.

 

Adam Robinson: What’s your favorite interview question, Landon?

 

Landon Shoop: My favorite in 60 seconds how many different uses can you come up with for a pencil outside of just writing. It’s a really interesting question in that people’s reactions can vary. It shows their willingness or their ability to think outside of the box. It shows their capability for putting on, I guess, different hats. It’s garnered some really interesting responses.

 

Adam Robinson: What’s the most outrageous thing that someone has said to you in response to that question?

 

Jennifer Shoop: Someone said a back scratcher, which I thought was kind of odd, outside the box.

 

Adam Robinson: Isn’t that what you use pencils for? That’s what I use pencils for. Yeah, that’s answer number one coming out of my mouth. I guess maybe would be a poor choice for your company. You mentioned core values a number of times. Why don’t you take us through the Fizz core values? What are they and what do they mean?

 

Jennifer Shoop: Yeah. Absolutely, so there’s three, civility, ingenuity and work ethic. Part of the exercise we went through to identify them was who do we want to be? Who is the best version of ourselves and who do we want to work with? Then it’s been really interesting because those three values also define various aspects of how we’ve built and designed Fizz, the tool itself. Every single product decision we try to map as best we can to those values as well. At a high level, it’s that we want to work with creative folks who work really hard and, importantly to us, are able to communicate with civility. I could go on a whole tangent here, but I think some of the politeness of the past has been gone in more recent years, and that’s really important to us, that people approach each other with respect.

 

Adam Robinson: Is that coming from a place where you’ve had negative work experiences that perhaps less than civil that drove that core value?

 

Landon Shoop: Negative and positive.

 

Adam Robinson: I love it. Okay. All right. We’re at the point in the podcast where we move into what we call the lightening round. We want to get your take on a couple of questions and then we’ll close with our final word question for you guys. You guys ready?

 

Landon Shoop: We’re ready.

 

Jennifer Shoop: Yes.

 

Adam Robinson: Number one, again, jump ball, either one of you can take this. Do you think the U.S. economy is going to get better or worse over the next 12 months based on what you’re seeing right now?

 

Landon Shoop: As an entrepreneur I have to say that I think it’s going to get better. The proxy I’m using for that is just based on the number of conversations that we’ve had with investors here in Chicago. We’ve spoken to seed-stage investors and much-later-stage investors and the interest and growth and investment in our space specifically has been really, really positive and promising, so I’m bullish.

 

Adam Robinson: Jennifer, where are you at?

 

Jennifer Shoop: I agree with Landon.

 

Adam Robinson: Okay. Do you think it’s going to get easier or harder to find the people you need for your company over the next 12 months?

 

Jennifer Shoop: I think easier. At least for our space, HR technology, I personally think there’s a lot of activity in this space and people are becoming increasingly interested in it. My prediction is it’s moving in the right direction for us.

 

Landon Shoop: And we’re trying to solve a problem that people can relate to. We’ve heard stories where people have literally quit their jobs because they didn’t want to have to go through another annual performance review. If you’re one of those people what have gone through that experience come help us fix it.

 

Adam Robinson: Fantastic. I love it. I love it, we’re marketing here. This is great. Okay. What’s on your bookshelf right now? Each of you, what book are you reading right now and would you recommend it and why?

 

Landon Shoop: I can’t say whether I’d recommend it or not because it just showed up on my doorstep yesterday, but I just picked up the Wayne Gretzky autobiography. I’ve found reading biographies and autobiographies, particularly through my entrepreneurial journey, has been interesting and just seeing what trials and tribulations they’ve gone through and relating it back to my own.

 

Adam Robinson: Okay. Jen?

 

Jennifer Shoop: I read a lot of fiction. Actually, I have an advanced degree in literature, of all things, so I’m reading a book that won the Booker prize called Hot Milk. I love reading fiction. It’s a total mental escape from what I do on my day job. I strongly recommend read widely and read variedly.

 

Adam Robinson: All right. There you go, folks. All right, closing question. If you were to come back on this show, both of you, a year from now and report on whether or not Fizz accomplished the most important thing on the table right now that you absolutely have to get done in the next 12 months, what would that thing be?

 

Jennifer Shoop: Absolutely it would be that we have happy customers. We are hell-bent on making sure that we’re solving a real need for our customers and that they feel supported and happy. If we have that in a year we will be successful.

 

Adam Robinson: All right. Where can listeners learn more about Fizz?

 

Landon Shoop: You can go find us at our website www.gofizzgo.com. We’re of course on Twitter and Facebook and all the other great social feeds. Don’t hesitate to email us at landon@gofizzgo.com or jennifer@gofizzgo.com.

 

Adam Robinson: That’s the final word. You’ve been learning from Landon and Jennifer Shoop, CEO and COO and founders of Fizz. Thank you both so much for being on the program today.

 

Jennifer Shoop: Thank you.

 

Landon Shoop: Yeah, thanks for having us Adam. This was great.

 

Adam Robinson: That’s a wrap, ladies and gentlemen, for this episode of The Best Team Wins podcast where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. I’m Adam Robinson, author of the book The Best Team Wins which you can find online at www.thebestteamwins.com. We will see you next week.

 

 

 

Interested in hearing more episodes? Check out this one on Millennials.

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