David Blake, CEO and Co-Founder of Degreed, discusses his unique interview style, their mission-driven organization, their amazing retention rates, and more on this episode of The Best Team Wins Podcast.

 

 

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Connect with David on Degreed, Linkedin, and Twitter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transcripts: 

 

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. Today on the program, David Blake is the CEO of Degreed, based in San Francisco. Degreed is a venture-backed firm founded in 2012 with 150 employees and doing some pretty amazing things. David, welcome to the program.
David Blake:	Thank you.
Adam Robinson:	We are here today to focus on the people side of Degreed, but before we dive in, let’s set the stage. Give us 30 seconds on Degreed and what you do.
David Blake:	Yeah. The company was born out of the question, “Tell me about your education,” and when you ask that of people, they inevitably tell you where they went to university and what degree they have. It’s just this reflection of the fact that we have no universal way to speak to our lifelong learning, and so that was really the ambition and mission of the company was to make all lifelong learning count and matter and be transparent in our lives and in the market so we can connect, and grow, and develop, and transact on that learning.
Adam Robinson:	Yeah. I read a piece written about you in Fast Company where you talk about that fact and equate it to asking an exercise question and someone telling you about the time they ran a marathon 23 years ago.
David Blake:	That’s akin to if I said, “Tell me about your health,” and you said, “I ran a marathon in 1999.” That really is an absurd answer to that question, but we answer our education in the exact same way. “Tell me about your education,” and you say, “Well, I went to SMU in 1999. I graduated in economics.” It’s not because marathons are bad, and it’s not because college is bad. It’s just a reflection of it really is an absurdity. We’re conditioned to it, but it’s an absurdity that when I say, “Tell me about your education,” you tell me what you did 25 years ago.
Adam Robinson:	If listeners want to learn more or check out the courses, what’s the best way for them to do that?
David Blake:	Yeah. Degreed.com, it’s free for anyone to use. While we, ourselves, aren’t a provider of education or content, really, our platform is about helping you find and discover the best resources online, offline, to learn anything. We’ve integrated with nearly the entirety of the world of training and learning providers and so that you can have the best resources discoverable to you, and you can structure that and create a pathway for yourself to learn whatever you need from the best content out there.
Adam Robinson:	All right. Let’s talk about the people side of the business, and start going back to 2012 when things got started. Talk about how that first team came together and that moment you knew it was time to go beyond founders and put that first person on the payroll.
David Blake:	For me, it was a fairly, I don’t know what the right word is, audacious, scary start. We live in San Francisco. We had been a part of startups previously. By their very nature, startups don’t always pay the best, sort of the risk-reward. We had been able to save a little bit, but not a lot, and it was an expensive city, and I was a father of two, and at the time, my wife didn’t work. When we started the company, we were spending … We had very little personal runway, and so hiring people was a big step for us, but also knew that this was something I wouldn’t be able to do alone and so had to balance that and set out to find a co-founder.
	Eric Sharp, my co-founder, was the first person to join. It would be a few months before I was able to be connected with and recruit him and pull him into the company, and just a phenomenal talent. We’ve been at it ever since together, but it was a big step. For the first couple of months, I was paying his salary on my credit cards, and so it was important that it was a good match and a strong fit because there was a lot of risk involved.
Adam Robinson:	What about him did you believe, at the time, made him the right person to make this investment with?
David Blake:	Yeah. The decision criteria and process is a lot different in the early days than it is later on where it becomes much more structured, and you’re talking to a lot of people, and there’s some recognition to the company in the space and in the industry. It changes a lot. I mean, in those early days, some of it’s who out there is hair-brained enough to go on this crazy ride with you? People who are in a position to go on a crazy adventure like that, it filters a lot of people out, I mean just for the risk profile, for the financial ability, and luckily … and then you have the talents and the fit.
	Eric and I were really aligned. His own education, he came from, really, the back woods of Wyoming and grew up … Education was really the point of leverage that enabled him to elevate his position in life, and to be able to unlock opportunities, and to meet and reach his ambitions. He had a deep passion for education and the power that it could have in others’ lives, and so we were deeply aligned with that. His spouse, Sarah, was also really interested and deeply committed. I think, in those early days, it’s especially important that the couple and the family are also committed to it because it takes so much from in those early days, and a lot is demanded, and a lot, ultimately, is sacrificed by spouses and families. Then, his life, luckily, was enabled to make that jump, where he was part of a company that had just recently been acquired, and it gave him a, well, sort of the financial opportunity as well as the window in his career to be able to take something like this on.
Adam Robinson:	You alluded to the fact that hiring later in the stage of the business, perhaps where you guys are now with 150 people, much different, a little more systematic than, perhaps, looking for utility players early on. How did you, organizationally, learn how to go through that journey? Take us through the maturation of the selection process, and when was, “We like this person. We think they could do lots of things,” not good enough anymore?
David Blake:	Yeah. I mean we have two principles as a company when it comes to who we let on the bus. One is we aspire to hire well, and the second is we aspire to fire well. I think all companies probably aspire to hire well. Not all will openly talk about or explicitly make it a goal to fire well. We believe both are important. The principle that guides who we hire is really the discipline of it has to be an easy yes. When the candidate isn’t right, it’s actually pretty easy. Once there’s, “We like this person, but,” that one’s usually fairly easy to dismiss that candidate and keep looking.
	Often, that principle has been tested most when we love the candidate but timing isn’t right, or but the price isn’t right, or but the role isn’t right, or but the … It’s a principle that extends beyond just the individual themselves. We use it to encompass a discipline, holistically, on dimensions of budget, and timing, and role, and phase, and all of those things. We’ve lived by that principle.
	Then, as I have had to recruit and then interview, and vet, and hire, and sell, and close, and onboard a lot of people over the course of this journey, there was a … It’s a process I developed early in my career that I use for interviewing people, and it’s served me really well. I’m happy to talk a little bit more about that should it prove interesting.
Adam Robinson:	Yeah, let’s go there. This is a system that you developed through experience and earlier on. Take us through that. What does that look like?
David Blake:	Yeah, so this came, really, as I became an early manager in my career. There’s nothing about the process in the book, but really, what I look back to and what catalyzed the thinking that would go into this process I developed, I was reading Tony Hsieh’s Delivering Happiness at the time. He does talk a little bit about how and who they hire and what questions are asked, but this process isn’t immediately a reflection of that. It really just sort of stirred the pot for me.
	One of the challenges of being an entrepreneur, and a founder, and CEO, and growing a team of diverse talents and job functions and roles is that you’re often having to recruit people in a area of expertise where you’re not a subject matter expert or, in many cases, where you have no subject matter domain. This process is one that I found serves, adapts to that very well, is able to get a lot of information out of people, and even puts people in a position where it puts a little bit of pressure into the interview itself to where you’re able to get a reflection of how people are able to deal with a challenge.
	What the process is, it’s really quite simple. I bring a pad of sticky notes into every interview I do, and I do two things with those sticky notes. It’s a similar exercise. I do it twice. The first is I give the sticky notes to the candidate and ask them, “What are all the skills and attributes and traits that are going to be required for you to be successful in this role?” Then the candidate is then required to, one trait or attribute or skill per sticky note, and it usually ends up being 12, 14, maybe 15, 16 things, and one per sticky note, and just ask that they put them down in front of them as they come up with these.
	That first step is really a reflection of does this person know what is required to be successful, and how well is this person acclimated and self-aware of the requirements of the job and the role and what it requires to be successful? I will sometimes fill in a couple of holes if I see something that I believe is important to the job or the role that they missed.
	Then, the next step of it all is that I then ask the candidate to rank order all of those things. On the table now are only positive attributes and skills, by the very definition of the task, are required and necessary to be successful. You have only good, positive things in front of you. Then I ask the candidate to rank order those things in the order in which a reflection of themselves, which are they strongest at to what is, ultimately, their weakest of those attributes. This is, by the very nature of the task, a bit of a difficult challenge because it is forcing people to force rank what is entirely positive things.
	There’s no right or wrong answer here, necessarily. People are ultimately, I believe, under that pressure. It’s hard to think about what might be the right answer or how to game it. Really, you get a pretty good reflection of people’s truth and people’s reality, which is just which of these things are they best and strongest at? Good things are at the top of the list, and good things fall to the bottom of the list, and how the candidate can react to that pressure of that task of having to self-identify things that fall to the bottom of that list.
	Then, the last step of it all is I ask … Then I come back over it, and I ask people about it, “Why did this end up at the top? What about this one in the middle? Why are these at the bottom?” Seeing people be able to articulate their strengths and … Ultimately, it doesn’t even mean anything at the bottom of the list is necessarily a weakness. It’s just the weakest. Seeing how confidently they are able to stand behind their attributes and their skills and their abilities, even those things that fell to the bottom, and it actually does end up revealing quite a bit, both how people handle that moment and that articulation, as well as what things are at the top of the list and the bottom, as well as that full spectrum.
	You come away with a lot of information in a short amount of time. You see the shape of people’s skills. You see how they react in that moment, and you’re able to get, really, pretty good exposure of who they are, what they’re going to bring to the table, where you might have to complement and/or augment their attributes or skills as you bring them onto the team. That’s the first.
	The second, just quickly, what I do is the same thing, but then it’s, “What are you optimizing for as you think about the next role that you’re gonna to take?” Similarly, on each sticky note, it’s things like geography, and industry, and company size, and culture, and mission, and team, and growth opportunities, and challenge, and comp, and title, all of those things that affect our roles and that people value and are important in how we shape our careers. We get all those things out on the table, and then they are asked to force rank which of these things are most important to you and are you optimizing for, and which of these things, ultimately, are the least important to you?
	Then you come away with a really good sense of what people value and what’s important to them. That helps, one, in seeing a reflection of who they are, but also, ultimately, where you have a candidate who you do want to bring onto the team and hire and close, it helps bring that alignment of what’s important to them so that you know how you can meet those things that are important to them.
	We’ve often found, over the course of Degreed as we’ve recruited and hired people, companies often think fairly narrowly in a job offer: cash, maybe equity. We have two levers to play with and, otherwise, every offer is a template, and those are the two knobs that we’ll turn up or turn down. Really, people often care about a lot of really very different things. If you know what they care about, you can often meet those things, ultimately, to both parties, ultimate satisfaction much easier than you can just paying people a lot. It’s served us really well. It’s been a bit of a real secret weapon in my career. It’s served me and, I think, Degreed exceptionally well.
Adam Robinson:	Yeah, I can see why. That’s pretty incredible. This is for all roles in the organization.
David Blake:	Yeah. Anymore, I don’t interview every candidate who joins, but especially early on where I did, I mean I would have to interview engineers, QA engineers, designers, I mean just people whose … I’m not a domain expert, and I found it was an especially helpful way to bring a meaningful conversation to the table even where there is an assymetry of expertise between me and them. I’m able to tease out of them what’s important and still engage with them around those points not necessarily being an expert. I used it for all types of roles.
Adam Robinson:	Is there a common set of core values that have been developed in the business that help guide your decisions in addition to the individual interests, likes, hot buttons, or other ways they’ve self-ranked things, as you discussed?
David Blake:	Sure. Absolutely. I’m a first-time CEO and founder. I’ve now been in the role for six years, so I’ve earned one or two stripes along the way. Really, as I started the company, it was the first time being CEO, the first time being a founder, and so it was the first time that it fell to me to give that articulation of the mission and the vision, the culture, and the brand, and the strategy. I sat down to that task, really, very early on. I mean I think it was, likely, still probably only Eric and I as I sat down to it. We did come up with, very early on, an articulation of all those things.
	When we talk about our company’s culture, we define it as the principles by which we will make decisions and how we treat each other. We have 12 company principles. They’ve really held very true over the six years. They’ve evolved ever so slightly, but have served us very well. They range from some being about who we hire, how we structure the organization, our strategy around financing, to diversity and inclusion, to flexibility and family, to what we aim to achieve in the organization and the outcome we hope to achieve. It’s a diverse set principles.
Adam Robinson:	As you look at the people side of your business, David, is there a single philosophy that sums up your approach to that if we were to define it as find and keep the right people in the right seats? How would you describe your approach to that at a macro level?
David Blake:	Yeah. I mean I think, definitely, our mission is our guiding star. We want people who are behind that and who self-select in to that. That’s sort of the apex. If they’re behind the mission, then we want people. We use our cultural principles to create alignment inside the organization. As far as people, I think, it has to be an easy yes. That really has been the guiding principle. There really is not other philosophy. We don’t talk about A players. We don’t talk about anything else. It’s the guiding principle has always been that it has to be an easy yes.
	I don’t believe in hiring for fit. I believe in the power of diversity, and I think those things are contrary to each other. I think hiring for fit is code speak for hiring people that look, think, act like yourselves. There’s no consideration given for that “fit” as we both recruit and interview and hire people. We like bringing in people that really are different from ourselves. When we talk about our company culture, it’s not how we act. It’s not the office culture. It’s not what it feels like to live a day in the life at Degreed. Our principles are how we make decisions and how we treat each other, not what vibe you get when you walk through our office.
Adam Robinson:	That’s been consistent, then, over the life cycle of building the employee base, then.
David Blake:	It has, yeah. Yeah.
Adam Robinson:	Translating that, then, to rewards and recognition, how is that philosophy reinforced in the way you pay, reward, and promote the people that are on your team?
David Blake:	Yeah. The most, on the nose, is really actual compensation. How does it translate into compensation? Then I think there are other ways that rewards extend beyond just compensation or equity, as I mentioned. One of our principles is equality, and to that principle, we really … Compensation is one of the things that we speak to in that principle. There’s a whole range of philosophies, and there’s a whole science and industry of practice behind compensation, and there’s a lot of ways, yet, you can come out on this question.
	For us, we saw it as a spectrum where, at one end of the extreme is that flexible approach of you get who you want, the best people. You pay what you have to. Don’t ever let compensation keep you from hiring the best person. The other end of the spectrum is, for a given role, pay everyone the exact same. There’s pros and cons to both. That flexible approach means you’re more advantaged and have more flexibility and degrees of latitude in who you hire and what it takes to get them through your door, but one of the downsides of that approach is, over time, ultimately, people are going to be joining your organization from a diversity of contexts and companies. They’re going to be being paid different things as they enter the door. Some people are better at negotiating than others, which doesn’t necessarily always immediately translate into any reflection of how competent they are in achieving their role inside the organization.
	You can draw people into the company and through the door, but often are paying very … have a high variance in what you’re paying people for the same role, or for the same job, or for the same work. Over time, that can lead to a inequality in pay, and that is something that we were sensitive to as we seek to be an inclusive and diverse and aspire to have a quality is one of the principles that guide our organization.
	The other end of the extreme is pay everyone the exact same. It’s a rigid approach. It’s one where it often is hard if you’re looking for the best people. They’re in companies where they’re well paid or situations where they’re … and it can be a challenge. That was a question that we confronted very early on and had to decide how we were going to come out. We sort of split. We take two approaches inside the organization, and both are a bit of down the middle. There’s a bit of a compromise in this.
	For some roles inside the organization, everyone has the exact same compensation structure. Those are often the roles where there is a variable compensation piece to it, so everyone has the same base, and they have the same rates on the variable comp. That’s our sales organization, our sales development organization, a couple of other roles, and they all have the exact same structure. Now, at the end of the year, they’re going to make varying amounts because of that variable compensation, but they have the same structure on it. Just because one sales rep was being paid more as we brought them through the door, we don’t give them a sweeter deal on the rates on their variable compensation. Everyone has the exact same structure.
	Then, the other approach that we’ve taken is a matrix where, for roles like engineering, for our designers, there’s a matrix that corresponds with skill level. At each skill level, there is a small range that allows us some flexibility but also balances that need for consistency, and so there’s a small range at each step of the matrix. That’s how we’ve tackled it.
Adam Robinson:	If you think about the last six years in the CEO seat, what is the greatest lesson or learning that you’ve taken away from building the team that you’ve built?
David Blake:	That is a really tough one. I mean I think I’ll come back to I think Degreed has operated, really, quite gracefully, as we’ve grown. Our retention has been phenomenal. We have had, over the course of six years and 150 people, we’ve now had maybe six or seven people ever leave the organization.
Adam Robinson:	That’s amazing.
David Blake:	Our retention is exceptionally high. We’re an organization where people have complete autonomy and discretion as to whether they’re in the office or not and when and what hours they work. For me, it’s actually the principle I talked about how we aspire to hire well and aspire to fire well and the principle that guides who we fire. This is a principle we talk about openly, publicly. This one takes a little bit longer to explain.
	It’s, perhaps, less punchy, but is really just we’ve got this mission to make all lifelong learning matter. We say to jailbreak the degree, and it’s a big, audacious mission, and it’s taken a lot of work, and we believe deeply in it, and we believe 100% of our energies need to be focused on that mission. If, at any point, people are doing things that require us to turn our attention inwards and to be expending energy on ourselves, sorting through our own issues or challenges, that is energy that’s been stolen from pursuing the mission, and that is the day that we will move to terminate someone from the organization.
	What that principle has done is further reinforce this alignment towards the mission and just that really is what we are here to do, and we have very little tolerance for … People problems mean you’re stealing from the mission. We’ve hired well. We give people a lot of autonomy and trust. We really seek to reinforce people in their … keep them well leveraged in their personal missions, but then we also have this really high bar of what we expect and demand of our people, and it’s kept the organization operationally efficient and mission-driven and a great place to work, and I think it’s served us well.
	I suppose all of that is to say if you give your people a North Star and a pathway to pursue it and work hard to enable them, keep high expectations of them, I’ve really seen people rise to meet it again and again. It’s amazing how well the organization is able to operate even with this extreme and high amount of autonomy that we give every individual inside the organization.
Adam Robinson:	Final question here to wrap things up, David, if you were to come back a year from now and report to the community here whether or not you were able to successfully tackle the single-largest people-related challenge or opportunity that you have in front of you in the business today, what would you be telling us happened in 2018?
David Blake:	I mean I think people, even good people, the best people, we look for patterns and routines and processes. Those make us more efficient. That is, generally, a positive attribute. One of the things I’ve found, even of the best people, is when … Our strategy is one where we talk about our strategy in chapters. Our mission is sort of this guiding North Star and has been consistent, but our strategy, it’s, “All right. Step one, we’re gonna go do this, and then, step two, we’re gonna do this.” Shifting people in an organization through a strategy that evolves every 18 to 24 months … Our organization, right now, is sort of at another one of these fairly material inflection points in our strategy. I think, a year from now, what does success look like? It’s where we’ve been able to take our organization, and they have been able to efficiently and quickly adapt to the new strategy and not lost any time to it looking backwards.
Adam Robinson:	Ladies and gentlemen, that’s the final word. You’ve been learning from David Blake, CEO of Degreed. David, thank you for being with us on the program today.
David Blake:	It was fun. I appreciate it. Thanks so much.
Adam Robinson:	That’s a wrap for this week’s episode of The Best Team Wins Podcast, where we’re featuring entrepreneurs whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson, author of the book The Best Team Wins, which you could find online at www.thebestteamwins.com. Thanks for tuning in, and we’ll see you next week.