Stuart Frankel, CEO and Co-Founder of Narrative Science, has been a lawyer, a CPA, a CIO, a CFO, a COO and now a CEO for many companies in many different industries throughout his career. Stuart has a wealth of knowledge around the growing pains of high-growth companies and how to scale teams, and in this episode of The Best Team Wins Podcast, we dig into his experience.

            

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Transcripts:

Adam:	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. Today on the program, we have Stuart Frankel, CEO of Narrative Science, a company based here Chicago, founded in 2010. He has 95 employees and all sorts of great experience to share with us today. Stuart welcome to the program.
Stuart:	Hi Adam. Thanks for having me.
Adam:	You have had all sorts of different roles over the years. You’ve been a part of some huge acquisitions, lots of organizational change and experience, and really excited to talk to you today on the people side of your business. First, let’s start off on the right foot, as is the tradition here on The Best Team Wins podcast. We always start off on the right foot, that’s the best news, business or personal, that has happened to you in the last seven days. Start us off Stuart. What’s your right foot for last week?
Stuart:	Well I guess my right foot would be closing a big deal. We actually closed one of our biggest deals of the year.
Adam:	Congratulations.
Stuart:	Thank you.
	Which is always nice, particularly in the last couple weeks of the year. It ends the year well, and it helps us kick off next year in a very strong way.
Adam:	That’s huge, congratulations.
Stuart:	Thank you.
Adam:	Well let’s talk for a second then about Narrative Science. Tell us what you do.
Stuart:	Narrative Science is a technology company. We’re Chicago based. We have built an advanced natural language generation platform that we call Quill. Quill’s an intelligent system. It takes data, it analyzes data, and based on a user’s intent, it renders that analysis not in a graph or a chart, which is typically the case, but in a natural language document, a document that sounds like somebody wrote it. Our natural language documents could be anything from a snipp it of text that’s driven from censored data, for example, so creating an alert from some industrial sensor, all the way to a 20 page investment research report that looks and sounds like a Wall Street equity analyst took a look at a stock, did research, and wrote up a report. It’s highly flexible. It’s highly scalable, and it’s being used now by some of the largest companies in the world.
Adam:	You’re making a bet on the future of reporting out these kind of things of big data sets is automated, not manual clearly.
Stuart:	We think certainly there’ll be some augmentation, and we think technologies like ours will play a big part in that. You’ve no doubt heard a lot about conversational interfaces, and just natural language communication in general. It’s gotten very hot. We’ve been doing this for a while, and we fundamentally believe that people do better when they receive information in a way that they’re used to receiving information. As people frankly looking at graphs and charts, and walls of numbers, that’s pretty difficult for most people, even people with those skills. When we started the company we thought what if we could do it differently. What if rather than teaching people to always speak the language of the machine, we could actually teach the machines to communicate to us in our language, and the impact that, that could have we thought could be pretty significant.
Adam:	Yeah, so you started the business with that premise. Has there been any big pivots? Has this been, as we move to talking about the people side of this business, has the model changed fundamentally over the years, or have you always done it this way?
Stuart:	Yeah, the business started in 2010. It’s always been a technology business. It’s always been an enterprise software business. I think in terms of the industries that we’ve focused on, that’s changed a bit. When we first started we were actually focused on automating aspects of journalism, generating sports stories from sports data, financial news stories from financial data. That was a great way to get the business started.
	Over time we’ve actually moved more to the heart of the enterprise working with large financial services companies, members of the US intelligence community, large retailers and manufacturers. Our customer base has changed, but fundamentally we’re doing exactly the same thing today as we were doing when we started the company.
Adam:	You’re a funded company. You’ve got VC money behind the business. You’ve got 95 employees. Let’s start at the top. Walk us through the leadership team. When you’re sitting at your leadership table having discussions, what seats do you have?
Stuart:	I’m the CEO and one of our founders. We’ve got two other founders. I’ve got two co-founders who are part-time with us so they primarily advise me and the rest of our management team, and they’re domain experts. Their background is in artificial intelligence, and they really help with our core technology. We’ve got a CTO. We’ve got a COO, who runs a significant part of our day-to-day operations, obviously. We’ve got a controller. We’ve got a woman who runs talent for us. We have a VP of marketing, a VP of professional services, and then we’ve got a separate business line that integrates our technology with third party technology platforms, and the GM of that business sits on our management team as well.
Adam:	Okay, let’s talk about the COO role for a second. I get lots of questions from listeners about the COO-CEO split. Have you always had a COO, and how do you make that work?
Stuart:	We added our COO in early 2012, so we had been in business for about a year and a half. Our COO is somebody that I’ve worked with at two prior companies, so this is the third company that we’ve worked together.
Adam:	So it’s working.
Stuart:	It’s working well. We’ve worked together for the last 14 years. He’s more of a partner than a typical direct report, and he runs a big part of our business. I think unusually his background is really in sales and marketing. He’s very broad in his skills. When he was earlier in his career he came up through sales and sales management. He’s responsible for revenue in our company. He has sales reporting to him, he has marketing reporting to him, and he has our professional services team, which really is delivery. He has that reporting directly to him. Then I’ve got really the technology and product, and you know finance, and HR reporting to me. Then there’s some other kind of smaller responsibilities that we divvy up. We really work together on most things and it’s just been a fantastic partnership.
Adam:	That’s great. Let’s talk about your company’s core values or the core tenants of the culture. Describe your approach to culture building at your company and take us through the things that you think are most important from a value standpoint.
Stuart:	You know culture obviously, particularly in emerging technology companies, it’s just absolutely critical. The longer I do this, the more I realize that the technology is really secondary to the people, and I know you’ve experienced that as well. We have four core values. I’ll go through those in a second, but when we started, I think we had 15 core values, and nobody could remember them, including me.
Adam:	That’s a lot.
Stuart:	It was too many, so we really got together after a couple of years and really boiled it down to four values. Essentially it’s about team, you know, we’re a team. It’s a mission, not a job. Create exceptional customer experiences, and then speed to market through simplicity. Those four values I think really embody all of these other values and characteristics of employees that we were really looking to codify, if you will. We’ve really stuck to them, really cradle to grave in terms of employees. When we interview, for example, we’re interviewing directly against those core values. We engage in behavioral interviewing. There’ll be four people, each person will be assigned one of those core values, and they’ll have a set of questions that they ask to really get to whether this prospective employee would live our values and live those values every day.
	Then when we conduct performance reviews and we evaluate the performance of existing employees, they’re also measured against those four core values. We also have quarterly awards. We’ve got a customer hero award, and an unsung hero award. We give those out each quarter at out all company meetings. Those awards are given in large part to employees who most embody our values during the prior quarter, so it’s a pretty important part of what we do.
Adam:	Yeah, full spectrum reinforcement of those values, that’s very cool, very cool. Daily in the operations of the business, other than over-reward and recognition, what are the things that you’re doing if anything to promote those, or mention those in the normal course of business?
Stuart:	Well I think we probably could be doing more to be perfectly candid with you. It’s really about trying to keep the values in front of people. Again, create these rewards. Have very little tolerance, honestly for people who don’t live our values. You know one of the things that I’ve learned over time is that hiring for cultural fit is just absolutely so critical. I think I’ve lived a lifetime of hiring people for talent only, and skills, and experience. That has come back to bite me so many times, because I knew it, even when I was talking to people. I thought well there’s something off about this person, but they seem so smart, or they went to a great school, or they worked at a great company so they have a really good pedigree. I always would regret not listening to that voice that was telling me, you know there’s something really not right about this person.
Adam:	Yeah, what I’ve found is that the interview is as good as it gets. You know people are on their best behavior. If you think something’s a little screwy, it is.
Stuart:	That’s right.
Adam:	It is.
Stuart:	Yep. It only goes downhill from there.
Adam:	You mentioned performance reviews. Our guest in a previous episode were co-founders of a company trying to reinvent performance reviews. What does a performance review mean at Narrative Science. How often are you doing them, and what are you covering?
Stuart:	We have a formal performance review, really twice a year. One is an annual, very in depth review, and then at mid-year, it’s really a check-in. I would say that mid-year review is probably given to about 80% of our employees. It’s another area that if you asked me, hey what are the things that you need to kind of spend some more time on and work on, it would be performance reviews. We call it a performance review, it’s really a couple of things. It’s certainly to review performance “How did you do this year?” but I think equally as important is what are you going to do next year? Not what are you going to just do for the company, but what are you going to do for you? What are your career aspirations? What are the things that you want to work on?
	We try to really match those interests with the needs of the company and develop an individual plan for each employee for the upcoming year. Again, I think we do that very well with some employees. We probably don’t do it as well with other employees. It’s something we’re very focused on.
Adam:	Okay, let’s talk about the people model at Narrative Science. You know we refer to people model, as you know are you hiring less experienced early career people, investing heavily and development? Are you hiring specialists and retaining those specialized skills, some combination of both? What is your go to market strategy for the people side of your business?
Stuart:	I guess our people model has evolved over time, certainly. We’ve got multiple models depending on what are of the company that you’re talking about. When we started, we were poor. We couldn’t afford to pay people real salaries so we took the best people that we could find, and these were people who were generally very attracted to start-ups. We’re an AI company. We were a little early in AI, so we found some people who were really interested in what we were doing just intellectually, and we were able to hire them at salaries that were certainly either below market or on the low end of the market. That also really caused us to hire people with less experience than I think we would have liked, but it was what we could afford at the time.
	Over time as we’ve gotten bigger and more successful, we’ve started to both attract higher caliber and more experienced talent, particularly in those fields where we really need it, analytics, artificial intelligence, some of our technical areas where we still hire less experienced people. People with that deep experience are incredibly valuable, not only to us, to almost everybody in the marketplace today, so it’s harder to find those folks, but they can make a real big impact on the company. There are other areas of our business today, our professional services team for example, where because we have some scale there, it’s about a 20 person group, we’ve developed some onboarding and some training, and some mentoring, and we can bring in people at lower levels either recent grads or maybe folks with one or two years of experience. I think it just depends on which department and which function of the company.
	From a management standpoint and a leadership team standpoint, I like to hire people who are on their way up, who are hungry, who haven’t necessarily hit a home run yet. Maybe they’ve hit a single or a double. They’ve been associated with good, successful companies but they haven’t been the person who has run a function. Maybe they’ve been number two. I love to hire those kinds of people, because they have something to prove.
Adam:	What are you doing to keep top talent? Once you identify somebody as high potential in that mold, what are you doing to ensure that in a pretty competitive marketplace that you keep them?
Stuart:	Well first of all we have a formal talent planning process that we put in place about a year and a half ago, which we hadn’t before, where we’re very explicitly identifying those top performers, right. Number one, is there consensus and do you understand who your top performers really are?
Adam:	Do they know they’re on a list?
Stuart:	They don’t necessarily know that they’re on a list, but they certainly get time and attention from our leadership team. We certainly let them know how valuable they are to the company. It’s really guidance as opposed to some kind of hard and fast, you know, you’re slotted in somewhere. We certainly look at compensation, not only cash compensation but also equity. We’re a private company. We’re venture backed. You know stock options are a part of our compensation, and so we’ll look at those different aspects of compensation, but we also really spend a lot of time with these individuals again figuring out what do they want to do? What are their aspirations? Do they want to lead a team? Do they want to just continue to be and individual contributor but have the freedom maybe to just explore areas that they haven’t had the time or the support to do?
	It’s really having pretty frequent dialogs and being in communication with these folks, and really talking about the things that we need to do as a company to make sure that they feel like they can continue their career at Narrative Science.
Adam:	I’m a perspective employee. What’s your 30 seconds on why I should come to work for you?
Stuart:	Narrative Science is a technology company that’s doing some cutting edge things in the fields of artificial intelligence, natural language generation. We’re well funded. We’ve got a very experienced team at really all levels of company, but the most important thing that I’d ask you to think about if you were looking coming to Narrative Science as an employee is that we’re doing something that one, has never been done before. We’re really in an emerging field, and we’re hitting it at the exact right time. It’s rare to have opportunities in your career where you get to go to a great company with all the things that I just talked about, just as the market is opening up for what you do. I had this experience earlier in my career where I worked at a company, and the market for search advertising opened up.
Adam:	I’ve heard of that.
Stuart:	You’ve heard of that, right? You’ve of Google and companies like that. When that happens, magic really can take place. A lot of it is luck. A lot of it is being in the right place at the right time, but then also being prepared to exploit that lock and to take advantage of that. We are, and I think it’s a great place for people to work for lots of reasons but that would be a big one.
Adam:	As compelling a pitch as I’ve ever heard, that’s good. Let’s talk about your past experience for a second. You worked for Rolling Stone, professional services firms, you worked for publicly traded home builders, is that correct?
Stuart:	Yeah.
Adam:	Marketing companies. Now you’re in data and AI. You’ve been a lawyer, a CPA, a CIO, a CFO, a COO, and now a CEO. How have you–
Stuart:	That sounds like I’m on the run from something, right?
Adam:	Navigated all of that stuff. That’s just an incredible wealth of experience and background. I guess to focus the question, across all those experiences, what’s different now that you’re in the CEO seat as it relates to talent? What do you find is the lesson you’re learned since being in this role?
Stuart:	Well I guess I’d split my career into really two phases. The first would be a professional services phase. You know I was a CPA. I practiced that, I practiced law for a while. There’s a certain caliber of people, particularly if you’re in a large law firm or a large CPA firm that those firms tend to hire. They’re typically A students from good schools. They’re very self-motivated. There’s a type there. When I moved into sort of outside of that world and I moved more into an operations role. My first operating role was with a home builder, I realized that where I was before was not necessarily the real world, that there was this whole other world out there, and with all kinds of people who had different motivations, and came from different backgrounds, you know had different experiences.
	I learned pretty early, fortunately, that everybody was different, and that you had to, based on the situation that you were in and the goals that you were trying to accomplish, mold yourself in the way that you looked at people and the way that you looked at talent. As I went through some of the roles that you described, you know it’s been a few years and I’ve seen the talent pool change. Clearly the thing that we all deal with today, that I think is very different from 20 years ago for example, is that when young employees now come to work for you, people who maybe either have no experience or who have come right out of college, there’s a desire there to be connected to a mission driven organization. There’s a desire to really understand where the organization is going. When I started my first job, I just was glad to have a job.
Adam:	How much vacation time?
Stuart:	That’s right, exactly. It’s very different today. I don’t think that’s a negative. I think you happen to get an enthusiasm and a passion at a very early point in your career that may not have even been possible 20 or 30 years ago. It does mean that you have to think about people differently. You’ve got to do things like career planning, and talent development earlier in people’s careers than again maybe when I came up and first started working. That’s changed my view pretty significantly about how I think about talent.
Adam:	Would you argue the skills to be successful as a CEO today are different from what it previously took to be successful in the sense that developing talent is more critical, defining mission is more critical than it was than just operating the business?
Stuart:	I think so. I mean certainly that’s been my experience. That’s where I spend a lot of my time now. I think about talent all of the time, both retaining the talent that we have, and going out and acquiring new talent. I think that’s always been the job of a CEO but I think that in a world of command and control, which was really sort of the old way of doing things, you approached talent in a very different way than you do today.
Adam:	Okay, so a couple of lightening round questions we like to ask everybody on the program. Do you think the US economy is getting better or worse over the next 12 months.
Stuart:	Worse.
Adam:	Worse, why?
Stuart:	I think there’s just an enormous amount of political uncertainty, not only in the US, but also in Europe as well, and there’s going to be a lot of volatility.
Adam:	Okay. Do you think it’s getting easier or harder, then, over the next 12 months to find the people you need to grow your business?
Stuart:	If I’m right about the first question, I think it’ll be easier. If I’m wrong, I think it’ll he harder, obviously.
Adam:	Okay, and what book are you reading right now or have most recently read, and would you recommend it to the audience?
Stuart:	I just finished actually Born to Run by Bruce Springsteen.
Adam:	Great.
Stuart:	Which I’d recommend, I loved it. Then I just actually started Creativity, Inc., which is the story about Pixar, which was recommended by one of my co-founders. It’s great so far, and anybody who is sort of thinking about being creative and trying to open up creativity in their organization, that’s probably a book they want to check out.
Adam:	Excellent, closing question here Stuart. If you were to come back on this show one year from today, and report on whether or not you accomplished the most important thing on your plate for the next year, what is that?
Stuart:	I think certainly for us as a company, we’re now making that shift from early stage startup to more mature growth stage company. There’s lots of thing that we have to put in place in order to make that transition, but I think clearly since we’re talking about people. People is a big one. We’ve got a few very key roles that we need to fill that we’re looking to do, and then we’ve got a couple organizational changes that we’re going to be going through. Then just in terms of our technology, we’ve got a game changing release of our technology coming up in the next couple of quarters.
Adam:	Exciting?
Stuart:	It’s exciting. We’ve got to ship that and deliver that. If we can do that, I’ll come back and declare success.
Adam:	Yeah, I would say so. If people want to find out more about Narrative Science as a potential customer or employee, where would they go?
Stuart:	Our website has tons of information, narrativescience.com. There’s lots of places for you to give us your information and we’ll get back to you. You can also follow us on Twitter, @narrativesci and you certainly can reach out to me, sfrankel@narrativescience.com. I’d be happy to talk to you.
Adam:	Okay, that’s the final word. You’ve been learning from Stuart Frankel, CEO of Narrative Science based in Chicago. Stuart, thanks for being with us on the program.
Stuart:	Thanks for having me.
Adam:	That’s a wrap for this episode of The Best Team Wins podcast where we feature 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 Teams Wins, which you can find online at www.thebestteamwins.com. Thanks for tuning in, and we’ll see you next week.