speaker-0 (00:00.12)
I've had most of my CEOs tell me, you know, if we pay them less, equity speaks for itself. It has been a lot of startups, and that's absolutely phenomenal. Sometimes startups blow up, everybody gets rich. Look at NVIDIA. But we're at a lot of smaller startups where people are taking a chance on you. We can't lower their pay to the point where sometimes they want to and just pay them a million dollars in equity. That equity right now is not paying the groceries. It's not paying the electricity, especially when we're not talking about

An IPO exit plan, we're not giving them an end goal. We need to pay them cash.

speaker-1 (00:32.938)
Stephanie Bonnet inherited a company where retention sat at 30% in the middle of 22 acquisitions. Three years later, that number was 80%. That kind of swing usually gets a culture story. But Stephanie's isn't one. It's a specific decision that most companies don't make until it's too late, if they make it at all. She's built people functions from zero across four continents, run comp and equity design ahead of IPO, and sat inside 20 plus acquisitions with a different.

Difference between capturing a deal's value and losing it came down to a structural call in the first 90 days. In this episode, we talk about the decision behind the retention swing, what she chose not to build when the pressure was to move faster, and the trade she makes every time equity has to compete with headcount for the same dollar. Welcome to People Multiple. My name is Jia Kanesh. Here we unpack how talent decisions act as leading indicators of enterprise value, shaping whether companies scale with strength or stall under pressure. Drop me a line on LinkedIn.

to say hello. Meanwhile, let's dive in.

speaker-1 (01:41.678)
Stephanie, I'm so excited to chat with you, especially about this little tidbit I learned. Your love for vintage pieces. Tell us a little bit more about what this is all about, what attracts you to vintage pieces, and how did you start on this journey?

speaker-0 (01:57.384)
Yeah, vintage pieces really started for me. I think in middle school, when I had friends that introduced me into thrifting and they would go and find unique pieces. And that's when I started really discovering what a designers really look like versus what is already out there and how do we mix and match. The other portion that really got me into really the thrifting side is whenever I lived in Spain or I lived in Mexico or I travel, I really love to go into vintage and charity shops as some places call it.

to find something unique, maybe something that an artisan made or something that was in style maybe even twenty years ago that I think is still absolutely beautiful, well made, and could be mixed in with so many different pieces. And as you could tell, I love color. I love to dress a little bit more uniquely. So it's an absolute passion of mine.

speaker-1 (02:45.932)
What are some of the unique pieces that you found? Can you share?

speaker-0 (02:50.156)
Yeah, I have some hats from the nineteen thirties, all the way to the nineteen sixties that I I do wear them around Denver. And yes, I do get some fun looks with them. but I think if you don't take a risk, what's the point of living life? I also have very old vintage jewelry pieces from when I lived in Spain that I still put on. They're chunkier necklaces. But if you just watched some of the Chanel guitor shows that came out, that's exactly what they're showing yet again. So why get rid of these older pieces that I found maybe

14 ish years ago. And then I'd say some of the best vintage pieces that I do have too are really unique shoes that I have found all over the world that I don't I don't throw them away. I will get them redone with a peddler and continue wearing them on. And as they say, fashion comes around and goes around.

speaker-1 (03:38.03)
That's exactly it. Fashion does come around and go around. And these unique pieces make great conversation starters, right?

speaker-0 (03:45.346)
They do. whether I'm going to a ladies night playing bunko or I'm going to do a happy hour, someone's already asking, like, where did you get that? Where did you find that? Or how did you mix that in? So it makes it really easy for me to pop out and stand out and gives me something to talk about, especially maybe in a more awkward or lonelier situation. I get to connect with folks.

speaker-1 (04:05.61)
Absolutely. And with that around the world journey that you've had, I wanna move us into TrueNAS where you build the Philippines operations from zero. I'm curious about that buy birth versus build decision on that capability. What convinced you to build in the Philippines and what would have been the earliest signals that you've made the wrong call?

speaker-0 (04:30.402)
What really convinced us to go into the Philippines was our CFO had had previous discussions with her other companies about going into the Philippines. She knew the people and the culture a bit more. So when it was brought over to my table, I have always had an interest in putting PEOs into entities and really bringing people from around the world and putting their culture together with us and allowing us see what services we can do over there. Not just because it's a cheaper aspect, but maybe it's more of a passion for them.

In the Philippines, very similar to India, they have a large passion for data and customer-centric positions, such as customer service or even back office items. So when we decided, hey, we need a lot more of those positions, the Philippines was a natural fit, especially with her own desire to come in and replicate something and a lot of those discussions that she had had previously. Once I started really speaking to folks in the Philippines, you could feel their warmth and their excitement about really wanting to join something and help you build something.

It's very different from going into Europe where there's a lot of standardized items that are very easy. You could fill out, it's a form. Here, when you come into the Philippines, the culture is about happiness, friendliness, and lending hand with their government that has a lot of flexibility and comes up with new holidays and new celebrations, and people are very family oriented. So that right there caught our eye of a culture that we really wanted to tap into.

speaker-1 (05:55.842)
How how would you have known if that was a wrong decision, Stephanie?

speaker-0 (06:02.006)
I think when we were really taking a look at what culture will mesh really well with not only with our company and our employees, but with our customers, if we started to feel that drag, that resistance from both sides. I've actually been in MAs before where you could feel where it's not going to be a very smooth MA, but we're already too far down the pipeline when both sides of employees, they don't want to work together, they're feeling some resistance. And then the customers really start to feel it as well.

And you have to find new unique situations and solutions to really be brought forth. So we didn't feel any of that. So it felt like it was going to be a more natural fit for us. But absolutely that that pause that it gives you is when both sides just they don't want to meld.

speaker-1 (06:46.548)
Absolutely. Many an acquisition has failed just because people cannot meld with each other.

speaker-0 (06:51.352)
Exactly.

speaker-1 (06:53.198)
Staying on the scaling headcount line of questioning here, at Measurable, you grew the international headcount 175% in twelve months while holding engagement at ninety-three percent. How did you do that? You know, what did you have to say yes to and what did you have to say no to consciously to achieve those kind of numbers?

speaker-0 (07:15.902)
that was actually one of my funnest experiences because of the amount that was really being put on my own plate and the speed that everybody required me to go to. Honestly, I did a lot of pushing more than anything with the executive team and the CEO, letting them know I need a budget right away. I need to bring in some really great professional talent recruitment, especially from agencies that really understand their urgency and that could quickly give us a read on not only that person, but can really sell us as a brand.

at the same exact time, I also needed to get the software that could help me bridge that information when it came to compensation philosophies and what are other companies doing, taking a look at our benefits at the same exact time, letting vendors know we're moving at the speed of light. Can you move with us? Are you willing to move with us? And at the same time, having great communication and transparency with the 50 employees that were already there to really let them know, hey, I'm gonna be diving into this organization organizational structure.

And we're going to be hitting the ground running. So please allow me to make changes while still voicing your own opinions, but trust me within this process. So with quickly setting up the recruitment team, putting on the onboarding, really taking on IT as well, because the IT department was not fully flushed out to, and really deciding what kind of employee branding we were going to put. That was one of the very first steps that I had to go ahead and push on and really start getting an applicant tracking system that we could start advertising on.

and of course working with LinkedIn and not only finding those passive folks, but all the smaller positions that we needed to fill with those people that were actively looking. Then pushing on with the compensation factor of quickly understanding what are we paying now, what are we going to pay, and what does that long-term feel really look like? And putting this all together really in a playbook to present not only to the executive team, but also go to the board and say, if you're expecting these numbers from my side from the recruitment side, here's what I think I could do to really deliver that.

Can we move forward again at the speed of light? With all of the yeses and the playbooks and the strategies really in line, it allowed my team to quickly hit the ground running and understand where are we going to be hiring? My number one partner, though, I will say was finance. Finance immediately understood when I said, what is the hiring plan to really start raising their hand with every single department to say, what do we actually need? What can we afford? And to help me prioritize what hires we're going to do first.

speaker-0 (09:39.648)
As much as we want to hire 50 people at once, our top was only 25 a month until we got to a certain point where we had the process nailed down so quickly that we were able to, again, make that bandwidth just a lot bigger or involve bigger referral bonuses. And we got to the point where we were so smooth that hiring managers and then had to start planning very quickly for their own training, their own introductions, their own agendas. And our employee branding and our process was wonderful.

We had people that were being rejected for positions sending us their own referrals because they knew this company was phenomenal by the culture that we were selling them. So it was a great success. It was a lot of work, many hours, many nights, but to just see the turnaround and the people that we brought in, it was such a wonderful and positive experience.

speaker-1 (10:29.106)
it sounds wonderful to me listening to you talk about it. I'm sure it must have been a ton of work, like you said, but you know, sitting on the outside, hearing you talk about it so passionately, it's like, wow, everything fell in line for her to achieve this. But I'm sure it was not that. I'm sure you had a lot of roadblocks and it sounds like the partnership with finance was very critical for you to achieve such a wonderful outcome.

speaker-0 (10:51.862)
It has to be if HR and finance are not partnered together, they become each other's red blocks.

speaker-1 (10:58.292)
Absolutely. going off topic here for a second, what are your thoughts on HR reporting into finance? I've heard multiple stories. I I have the good fortune of reporting into the CEO while having a amazing partnership with my CFO as well. But any thoughts on based on your experience where you've reported into the CFO or seen stories where that has worked or not worked?

speaker-0 (11:20.886)
Yes, actually, same CFO that I was just speaking about. I consulted for Vegetable for three months before I was brought on as a CHRO. Her and I had such a great transparency that we were both able to say, you know, I outgrew the position I was originally there to consult. And it's not healthy, in my own opinion, and it was in hers as well, that HR should really report into finance. Finance is there to give us wonderful guard guard lines and roadways to really understand where we're going to be heading. Whereas

HR is seen a lot as a function of spending and how are we going to get there? So both need to run congruently, not as a T into each other. I've seen it also at other locations where I've been asked to interview for you know, the finance person wants to know every single little thing that's happening with HR. That's fine. Partner with me, but don't stop me from making my own mistakes, from making my own adventures and understandings and giving me the data analytics.

I think the most important thing that an HR leader can do is really understanding the financial side of the business, how it actually works, what does Ibara mean? What does revenue mean? And how you really impact the ROI of not only the people, but the products, the HRIS and the applicant tracking system that you're bringing in. So if you don't understand that, you become the immediate roadway for finance and finance loses the trust. So when they're both separate and they both understand each other, it becomes a wonderful partnership.

speaker-1 (12:47.532)
Very well said. I absolutely agree with you on that, Stephanie. I'll bring us back to measurable. Measurable again, you moved the recruiting from agency dependent to mostly internal, again cutting spend by hundred and twenty thousand per quarter. Yes. What signal told you it was time to stop buying that capability externally?

speaker-0 (13:09.132)
Done it multiple times. A great example was Vistar, where it was hundreds of thousands of dollars of having agency recruiters all over the place. Nobody owned these vendors, nobody owned the relationship. They constantly were coming to HR to ask, you know, who do we talk to about maybe offboarding these people or the next open position? Understanding how to organize your vendors, I think, is going to be absolutely crucial to know who's coming, who's going, how much are we spending.

What rates are we getting on these folks? What are the ROI? So when I first put that together and organized that at Vistar, I decided moving forward, there's going to be positions that always need to have external recruiters, such as our own positions, a CHRO, a CTO, a CIO. They need to be external because I think there's a level of recruitment that just an internal recruiter cannot have or does not have the bandwidth to have. There's a different type of professionalism. So those, let's go ahead and kick them outside of the house.

have them run their usual process and bring us fantastic C suite leaders or sometimes VPs and such. But when we bring in our own inside process, we can not only save money, but we're saving the time. We run the process. We run the employer branding. We're also selling the culture. That's going to be the number one hook. No matter how much we're paying people, people always want more.

speaker-1 (14:26.37)
Right? Mm. Yes.

speaker-0 (14:28.216)
But nowadays we have a lot of millennials and Gen X's and younger folks that are saying, I want to be at a place that I love. It's not just about money, but I spend most of my day at work. But who's going to control that narrative? An external recruiter could only tell you so much versus an internal recruiter is living it. They're putting it out there every single day. So that's really when I see the switch. When I go into a company and I see all this money that's going out the door, it's really how do we organize and narrate that to our own.

Let's say passion and our own advantage. And where do we also keep that external line at the same time?

speaker-1 (15:03.059)
Do you believe outside of cost savings there was any other gains you had, maybe in terms of speed, quality, or control of the hiring process itself? What other gains did you see?

speaker-0 (15:15.758)
I saw gains of just knowing who was in the company. We had external recruiters bringing in some consultants and then some folks that were more of a permanent hire that nobody really knew who they were and they weren't added to payroll, they didn't have the right security measures, they didn't have the right titles, and it became a mess. Honestly, nobody knew who was what. And I also didn't have signed job descriptions for them, too. With me controlling the vendor and when they're brought in by an external versus internal.

I could give more accountability, managers know what's happening, security and IT know what to assign them to, who has external laptops versus internal. And we just have much more organization and much better planning when it comes to in general.

speaker-1 (15:58.786)
And that definitely impacts the execution, right? From team collaboration perspective as well. You you brought up Vistar. At Vistar, again, you had amazing metrics here. Retention moved from 30% to 80%, and engagement went from 42% to 85%, while you were leading people integration across twenty-two plus acquisitions. I can't even imagine what that feels like. Stephanie, of all the decisions you had to make, what is the greatest impact?

on retention and how did that dis decision maybe show up in business outcomes?

speaker-0 (16:34.926)
Honestly, the number one thing that I did was within my own first month of really listening, HR previous to me, was constantly turning and burning. They were reactive or they were very passive. So nobody was getting that kind of service level that they were really looking for. They weren't getting any partnerships whatsoever. There was no communication, there was no clarity. So the first thing I really had to understand was where are these communication gaps happening from? And where can I go ahead and grow my team?

So that the short-term strategy could immediately start making an impact to the long-term strategy. One of the first things that I did was not only bring in recruiters so that hiring managers could actually start discussing more of their hiring plans, how they were going to hire, what was the priority, and we understood where the finances were going through the windows and the doors. And we could narrate that a lot more and really control that. But the second piece that I really put around was in the benefits department and communication.

so that people could come to our HRVPs and our generalists, actually get things answered and allow my team to actually sit within other larger teams. So that way we knew sales was actually going to need a new head of sales before they sometimes even thought about it. Or when they were already having some issues with folks, I had my team so embedded that they could immediately start with the communication with the head of sales to really understand, hey, you're probably going to have to replace the director of pricing because we're having X, Y, and Z problem.

Which saved us money. We understood the severance issues or any legalities, and we really nipped that in the butt a lot more. And then the third thing that I immediately noticed was they were hiring the same exact person over and over. There was no D E I, there was very few female leadership. There was very few people my own age or even younger too. So after having a long discussion with the CEO, he also agreed we need to start breaking that mold.

Because that mold that we have right now is not making the sales, the customers are getting bored. There's new innovative products that we're starting to distribute, but we don't have the people that are thinking outside of the box. So immediately we started looking at who are we hiring? What kind of employee branding are we putting out there? And what is our messaging and how are we trying to capture folks? We want people from all kinds of ages, faces, and locations to really start noticing us so that we could get the best of the best talent walking through the door.

speaker-0 (18:51.756)
I was really proud because by my first year, I had so many people coming to my office saying they had never seen so many females in the office. They had never seen people their own age working there. And within the different levels of the organization, it felt like there was new blood, new execution, new ideas, and there was a buzz of energy. And I think that really put together a stronger attrition of just people wanting to stay there and get reinvolved.

speaker-1 (19:19.406)
Do you think that showed up in the business outcome in terms of growth or margin or execution? How would you categorize how it showed up?

speaker-0 (19:29.452)
Yeah, yeah. I think it really came down to the bottom number of our customers were starting to sell to us more because we had more salespeople that were more excited. We had more product people that wanted to try new things. It wasn't the same people buying the same exact thing. It wasn't the same or distributing the same exact thing. It was more ideas coming through the the doors that people wanted to say, yes, Coca-Cola, when you bring in this new product, not only do we want to test it, try it, but we're gonna also give you our opinion and we're gonna tell you what markets it's working with.

Well, lot more. Instead of giving you the same spreadsheet with the same exact stuff we've been selling for the last 20 years. So customers feel when you make a high performing team, you have a great culture, attrition is staying there. Not only do they know the same names and faces a lot more, but people feel the impact. Even when they make the slightest call, the energy and the buzz behind it, they want to buy more from you. They want to work with you a lot more.

speaker-1 (20:25.934)
I love that you point out the continuity in having the same person responsible for an account or a customer is so important. It makes a big difference because they build that relation. At the end of the day, business is done between two people, right? So that relationship definitely matters and constant attrition and having the person that is interfacing with a client churn is not is not a good way to continue that business.

speaker-0 (20:48.5)
No, no, it's not. They they immediately have a lack of trust within. But when you see a person that knows the the product that maybe they're selling or and the customer at the same exact time too, not only will they nurture that relationship, but they'll add on more to the sale. And then there's more confidence that grows with that customer that then becomes an outside referral as well. And they continue to just bring you that business. I've sat and witnessed it firsthand.

when there is a customer success group where they're they can't keep the pay bull because there's a manager that we just unfortunately can't exit because they have personal ties to the CEO. It's an unfortunate time when that happens. But what you need to do honestly is really reassure your customers that yes, we will have the people walking through that door, but we are always going to have the same executives that you could come to that will have the same knowledge and you could trust us with that. And we're going to handle the situations day one.

speaker-1 (21:46.566)
Stephanie, let's talk about the twenty plus acquisitions you've been involved in. Maybe pick one deal where the integration structure determined whether the company actually captured the value it paid for and what was the key decision in that structure that impacted the value of the deal.

speaker-0 (22:02.594)
Yes, absolutely. I actually was involved in an MA where we were looking at a distribution center that was really close to Hershey, Pennsylvania, and that was really close to other really big vendors that we worked with constantly. They had already been basically a mini Vistar. And what we wanted to do was integrate them with us because they had these talented managers that had phenomenal relationships.

And in a time zone and in an area in the US where we didn't have a distribution center, we didn't have anybody sitting there. So when we were going to sell to those markets, we had people that were already fully integrated. What we ended up doing was when we integrated these people, we put them strongly within their own organization, but we wanted to make sure that they felt like they were part of the corporate office. They were part of the full team. So a lot of us actually ended up flying out there and really focusing more on the relationship side instead of

Let's just fill out your paperwork. What else can you get from us? And let's fly home, which a lot of MAs, let's be honest, end up turning into that. I really make sure that I really understand the relationship, the cultural impact, so that they have that trust and that execution with me. But one thing that I really push forward there is if you're really hiring mostly this talent for that location and that embedded information and trust, make sure that we focus more on the relationships. Do we know that?

Bob and Sally love to go to certain locations and they'd love to hang out more over there. Let's go with them. Let's have them build that trust with us as well. So whenever we go out there, we know they love to go ahead and go to locations, baseball games, whatever really smokes their fancy. So they feel like they're part of the team. And let's continue bringing them over to the corporate office too, so that they they get to meet more people. They feel more integrated too.

the result of this MA really was just a phenomenal shift for our East Coast office because we were able to hit new markets that we had never touched before in the Pennsylvania area. And some of those people that we actually brought on from that distribution center that had that great relationship with Hershey's, let's just say, ended up growing within their own corporate office. And I did see some of them get promoted to some higher positions pretty recently too. So they were fantastic hires.

speaker-0 (24:17.016)
Great ROI on them. And then they brought in their own team members too to grow that whole area too. So great financial impact.

speaker-1 (24:24.27)
I love that. when you walk into an integration or an acquisition, what is the one signal that you are able to use to tell that this is not going to be a good acquisition and it's not going to work?

speaker-0 (24:38.462)
One of the worst MAs that I've done, and I made it work, but it it was I knew it wasn't gonna be an an easy game to really play with them what play ball. The CEO immediately told me, Hey, our folks haven't gotten a raise in two years. I want you to go with fifty percent bump. If not, we're not moving. Fifty percent bump would not only put over our market, it would put over our own people as well. And there was really no justification except for that. He was incredibly

insisted on just having this huge, huge increase for his folks. And then he had three or four people too that were clearly his favorites. And he wanted more money for them, bigger bonus packages. And I had to let him know hey, that's actually more than the executive team over here is getting. That's more than you're going to be getting. How exactly do you want me to make that work? Please give me more rationale so that I could see it from my side. The CEO could see it from their side too.

And then I also have to explain that to the board if you think that's really going to be the outcome that you're looking for. They didn't budge. It was a lot of I wouldn't say fighting, but a lot of back and forths where I had to show the market data. I had to show where we were going. And I had to give them really the negotiation of a one time bonus payout and a little bit more of a bump in pay than what we had. But the negotiation at the end of the day was also you're not going to go ahead and get a bump at pay at the end of the year.

If not, you're going to be so far over everyone else that you're just going to do a culture of class immediately. There's going to be people that constantly talk about what they make. They always want to see to the person to the left and to the right what they're making. And the moment they discover that, the trust is going to be gone. We're going to have to fill that seat with someone more expensive or your own people are going to start leaving because people are going to start giving them the side eye quite a bit.

speaker-1 (26:25.058)
Yeah, that is a tough one. It kind of reminds me of a similar situation I've been in. maybe our comp the comp that they asked didn't go over the comp that our people had. But it was the same thing. It came, they came in with a lot of demands, a lot of golden handcuff kind of situations. And it is a tough one to navigate, and that was not a successful acquisition after a year. Talking about compensation.

You designed equity and compensation architecture ahead of IPO exit readiness at TrueNAS. Talk to me about a decision where there was no clear answer in terms of what were you willing to trade off in terms of future valuation or exit options and how were you thinking about it?

speaker-0 (27:08.92)
I've had to design so many compensation philosophies within the past 10 years because of all the consultative work that I've had to do. So I've seen it all. But I think one of the worst, and I won't name their name, I walked into a position where they had females making far less than males. Same exact positions, same cities. they gave the females more equity, but they gave the males far more base compensation. Also, some had bonuses, some did not. And

I had to come immediately with the explanation to the executive team with the data analytics showing how unfair this was gonna be. The worst part was they were sitting in California. And even worse

speaker-1 (27:50.006)
yes. Yes.

speaker-0 (27:51.736)
So having to explain the hows and the whys, they were very affronted of we we can't afford to fix everybody right away. What what do you expect us to do? And I asked, can I have a conversation with the board? Because we do need to have that money to go ahead and fix this, these in individuals that aren't being treated fairly. The third piece was once people understood that I was a new head of HR, a lot of those females that weren't getting paid well came to me. They were very vocal.

It they came to me as a group and they said they love the company, they love all the pet benefits and the healthcare benefits, but everybody knew they were far paid less than the other data scientists, let's just say. Those two factors really allowed my financial partner to really say, Hey, CEO, you you really got to let her go talk to the board. I talked to the board. Luckily, there was

Quite a few females on the board. And one was a huge HR fan, as is. So she was already really excited that I was joining the the company. And she immediately voiced it. She's like, This is unfair. We can't do this. We're gonna get audited. We're gonna get sued. And I I threw in the little tidbit of you're actually already going through litigation for harassment. Let's add this to it. It's gonna be far more expensive if we continue down this path because the litigation opens the door to bigger negotiations and severance severance packages.

So they gave me a nice round figure where I was able to bump up a lot of the females. I used a lot more equity packages too to really round it out on both sides. And I immediately fixed the bonus packages. Some of the males were pretty upset because their bonuses did go down, but I had to explain why we were doing it. And I was very strategic to the point where it wasn't like, hey, you five are going to be going down. It was more of I talked to the executive team of saying, let's make a company bonus structure so it doesn't look like we're just going after them.

But it also clears up all this compensation bonus randomness that we have going around here where some people are making so much more and some people aren't making anything and they have no idea why. Let's just use transparency and communication as our key and it will save us money in the long run.

speaker-1 (29:58.67)
And it sounds like the trade off that you painted a picture for them really helped in moving the conversation forward.

speaker-0 (30:07.82)
It did. And none of those males quit.

speaker-1 (30:10.506)
You s you did something similar at measurable. You closed the pay gap within three months, which is fast for any compensation remediation plan. I definitely haven't seen that happen in three months. So I'm curious about how did you explain the business benefit of closing these gaps immediately versus waiting? Was it similar to what you just shared about the other story, or was there a different different business outcome that you were able to point to?

speaker-0 (30:37.772)
It was rather similar. Again, California. Females also, some were getting a lot more than others. and we also had some really young folks that were in the same exact title that were making a lot less too. And no one could really explain to me why. I knew why. It was because no one had recruitment, no one had any guidelines. So again, we had external recruiters that were working with all types of different hiring managers, even if they were in the same department, telling them, let's go get ahead, give Bill 60K.

And then the next person works with someone else and they're like, let's give Abigail 105. So these numbers were just all over the place. And it was again me pulling the data, the analytics, the legalities of having to show the executive team, hey, we're actually right about to go to a series C. Let's take some of that money so that we don't get sued and fix a lot of these inequalities that are happening. We could document everything of why and how and

I think it's gonna pass us over when we go through our due diligence. And again, I did ask for a compensation committee with some of those board members to really explain why we were gonna go ahead and spend that money. at the time, part of my explanation too was we only have 50 people. We're about to hit the go button to get about 500 people within 12 months. If we don't fix it now, we're gonna have much more back pay. We're gonna have a lot more people to fix. This is a really small number that we just have to fix right now, and it's gonna make a massive impact.

speaker-1 (32:02.91)
Absolutely. Those become the cornerstones for building you know, career frameworks and leveling and compensation bands, et cetera, right? You wanna have a structured process, not random numbers that you decide on the spot for every hire.

speaker-0 (32:17.217)
Absolutely.

speaker-1 (32:18.614)
In your extensive work on compensation planning and design, what is one rule that you've begin now trust, especially in high growth or pre exit environments? Maybe it's an unpopular opinion in the room, but it's something that you truly trust and live by. Tell us a little bit more about that and why.

speaker-0 (32:38.414)
I think in the past 10 years, I've had most of my CEOs, sometimes my financial partners tell me, you know, if we pay them less, equity speaks for itself. It has been a lot of startups, and that's absolutely phenomenal. Sometimes startups blow up, everybody gets rich. Look at Nvidia. But we're at a lot of smaller startups where people are taking a chance on you. We can't lower their pay to the point where sometimes they want to and just pay them a million dollars in equity.

That equity right now is not paying the groceries. It's not paying the electricity. And especially when we're going through inflation, it's much harder for us to say, hey, we're going to give you less at the end of the year because we're going to give you more equity. It doesn't mean a lot to people right now. Especially when we're not talking about an IPO, exit plan, MA, whatever it is, some actionable event that's going to be happening in the next three years, six months, whatever it is. We're not giving them an end goal. We need to pay them cash. Cash is always

speaking until we have that end goal.

speaker-1 (33:40.728)
So true. Equity is just paper money until it truly becomes money, right? you don't know if it's going to convert to real cash. yes, like you said, if you get lucky to get hitched on a unicorn like Nvidia, yes, you're gonna be paid out well, but most startups are not that lucky.

So you definitely want to treat people the right way with the base compensation. let's talk about your stint at sports authority. You lower the cost per hire while improving candidate quality across a 13,000-person retail workforce. I feel like those are two metrics that usually move in opposite directions. What did you understand about the hiring system that made that usual assumption that if you

Higher for cheaper, that means you get the worst quality of candidates. How did you prove that wrong? And how did you end up sh showing that it's top performance or turnover?

speaker-0 (34:40.055)
Actually, I did something a little bit different. What I noticed when I was joining the recruitment team there and really understanding what our recruitment process looks like, what's going on, the team was so inflated and overgloated. We had so many recruiters doing a million Starbucks runs, hanging out on the phone, looking at their Facebook at the time or Instagram when it had started. And I noticed that a lot of phones were getting picked up. Our applicant tracking system really wasn't getting moved.

The only time it was getting moved is when there was leadership behind them or when someone was calling with more of an urgency. A lot of the store managers were actually doing their own recruitment instead of leading onto the corporate office because they knew it was slow moving. as much as I love having people around me, having the extra hands, it was my suggestion to really understand who who was in the recruiting department. Were there other interests and passions that they had? And there were some.

And were there some people that we honestly just didn't need and maybe they could go to other departments. I had a couple of people that actually ended up going to the e-commerce department because they had told me, you know, they they just took a recruitment position with sports authority because that was their way in. They were bored to death. They didn't want to do it. I had a couple other folks that wanted to become journalists and I had suggested that they move on to the journalist department to really start to understand the core of sports authority, how it works for the underlying. And then a couple other recruiters, I ended up retraining to them.

For them to really understand how quickly we have to pick up the phone, how we follow up on candidates, and how we work with stores and have more communication too. Because we had some stores that had a lot of recruiting issues. They don't have people that walk into the door and just give applications every day. So, how do we find people or how do we politely steal from other similar companies too? One thing that I really pushed for was the employee branding. Everybody knew Sports Authority, but no one really thought, like, is that the place for me? Do I want to work there?

Let's go ahead and put a campaign together so that we could start handing them out as flyers back in the day because it wasn't as digitized as it is today. So when people walk through the door, a lot of those teenagers could really start getting that discount that everybody wanted, which by the way, was 50% off of everything in the store. So one way to really entice that people didn't know that. And also office, we had some departments such as logistics where it wasn't a glamorous and sexy job, but there's some great.

speaker-0 (36:58.658)
Data analytics folks that would fit in really well as well. And again, use that discount to get some of those great analytical moms that were coming through the door to get them excited about the company. So really where I saved a lot of that money was taking an overbloated department and shrinking it down, simplifying the processes and really putting a campaign out there so that people aren't spending so many hours of just praying and hoping that someone comes into the door so that we could hire them.

speaker-1 (37:24.65)
It sounds like you had to build a whole recruiting infrastructure from the ground up in terms of helping them understand how to partner with the business, in terms of understanding how to you know, impact the candidate experience in terms of, you know, having the right EVP, and then being able to build that brand for sports authority, sharing the value proposition, et cetera. That sounds like you had a lot of ground up work to do there.

speaker-0 (37:52.332)
And a lot of resistance because the the lack of urgency, the it the height of fun that sports authority was, they weren't gonna give up their cushy seat. Sometimes they didn't want to move, they didn't want to learn, they didn't want to make those phone calls a lot more than they really needed to. I mean, it was the funnest place I've ever worked because of the huge barbecues and parties they constantly had, us going to Bronco games and such. But I think that also made the atmosphere at the corporate office.

That same motion of we'll get work done when we get work done because we've got a new event to go to. And really help them understand if we get these numbers done and we get our stuff done, then we have the time to do that. And we could also be a phenomenal department where we win the big prices where people get to know us a lot more. And when the store was really closing, everybody thought, hey, I'm gonna relax. I'm not gonna do a whole lot. I still had to staff these stores. So this recruitment team was not allowed to really let up.

and the reason how I sold it to them and I was going, you know, you're probably gonna wanna be a recruiter somewhere else. Brag about the numbers that you're able to bring in now into closing stores, put that on your resume. It's gonna take you somewhere. And it did. Quite a few people really use that. And I actually took one over with me to Vistar that did the same exact thing because she understood the urgency, she understood the communications that had to happen.

speaker-1 (39:11.446)
Your resume is a great example of a number driven resume, Stephanie. at least your LinkedIn profiles. I loved seeing how every bullet point had a number that showed the way it impacted the business. So I really loved that.

speaker-0 (39:24.418)
Thank you. I think there's a lot of HR that's really taught. Show what you did and just talk about it. But anybody could say that. I think numbers speak louder than words.

speaker-1 (39:36.31)
Absolutely. some HR professionals don't know how to get the numbers, some don't have access to numbers because their systems don't support it. So it's a long journey, but at least you are a shining example of what we should be doing.

speaker-0 (39:48.642)
Well, I had enough financial partners going, What are you doing? Very, very young. I mean, I started an HR by accident by working at the fossil retail store and having HR calling me and going, What are you guys doing? How are your sales? What's what are the analytics there? And I really had to write everything down so that when they called, I could actually give some information back. And then heading into such a large organization, such as Sports Authority at Vistar, I had to keep tracking information because

There are times where politics I think does affect HR. They don't trust us as much. They don't want us there as much. So I have to continually sell what do we do and how do we impact every single department, not just our small bubble.

speaker-1 (40:30.512)
yes, absolutely. I want to take a step back, Stephanie. In looking back in your at your professional journey, was there ever a time where you made a people decision that you were confident in at that time, but that did not produce the outcome you expected? And if you have an example, can you tell us what you misread about that system and how that experience changed the decision making process for you afterwards?

speaker-0 (40:56.588)
Yes, we've all made our fun mistakes. I made the mistake younger in my career when I was trying to implement two different performance systems. I thought it would be so easy just to turn one off and turn the other one on and just send out basically an email flyer telling people, hey, we're now on this system. here's some really simple bullet points. This is how you do it. We're good. We're golden. I talked to the head of IT. He also gave me the thumbs up and said, I'll have someone help you out with that. We'll get this all done.

Talked to my boss at the time because I wasn't head of HR quite yet. Everybody was on board with it. So we did the switchover. The problem was is that some of our information didn't get switched over correctly because we we went so incredibly fast with it. The second mistake that was really made was that flyer that was sent out. It didn't really bring people along with me in the journey that I needed them to to explain why are we moving to the system? What is it going to do for you? How is it going to make your life simpler? And then the third, which I've always

Now implemented is here's some training from day one on what to do with this system. Let me show you live and then you could also watch the recordings while we also have the FAQ as and we do have the PDFs. I only did one of those and that wasn't enough for everybody. So there was a lot of criticism on my part. I remember the COO sitting a lot of us down in HR going, you guys should have slow rolled this a lot more. More communication was needed. I mean, you guys ended up fixing it, but not the way we wanted it to really go.

And that was such an embarrassment for me because at that point I thought I should know better by now. But because of that one mistake that I made, it's been a constant journey, which I think has also helped me really level myself up of bringing people along with me in the journey, whether it's having to push something because it's a legality, the hows, the whys, to the why the company is moving towards a certain acquisition. And maybe the employees aren't too thrilled about it, but I have to explain it with clarity.

speaker-1 (42:51.479)
that's a great example, especially because it now has helped you frame the way you make decisions by bringing people along and communicating, it sounds like as well, in terms of why you're making that decision.

speaker-0 (43:04.044)
Yes, I do it every day now.

speaker-1 (43:06.158)
Yes. we're kind of coming to the end of our session here, Stephanie. Moving us to the rapid fire section here. when you build the people function from zero in Philippines, looking back, what's one thing you wish someone had told you on day one that would have changed how you approach that build?

speaker-0 (43:26.158)
I think someone could have easily told me, work with legal a lot more. The legal folks that we were working with wanted to only meet maybe once a month. And then towards the end, we ended up having to find another legal team that allowed me to ask questions much more on a daily basis that wanted to meet with me a lot more instead of pushing me off to the side. I wish I would have been a lot more assertive. And I understand that sometimes that makes people angry and it did with this group towards the end because I needed

faster questions. I needed to get things done. Instead of me having to Google and try to find things on my own. I wish I would have quickly just relieved them of their own duties and found someone better, someone that allowed me to be more assertive.

speaker-1 (44:09.26)
What is one hiring mistake or organization mistake you now spot much earlier than you used to?

speaker-0 (44:15.624)
I once hired a CRO that I thought had fake references and I told the CEO about this. but he didn't care. And I wish I would have gone to the rest of the executive team and had them push with me not to hire this person. He didn't even last three months. He hired all his friends, gave everybody ridiculous salaries because he went over my head. and I I absolutely regret it. It's always gonna be a stamp on my own passport of going, you should have been much more assertive there as well.

I got my finance partner to be assertive with me, but I think we could have pushed a

speaker-1 (44:50.526)
Mm. One people metric you play you pay close attention to because it truly connects to business value.

speaker-0 (44:58.154)
I think it's the time to hire. If we're sitting on an empty seat for so long, it really devalues not only that seat, but the people that are trying to hire and the people that are taking on that work, it turns and burns them. But at the same time, I don't want to hire somebody so quickly that within 13 days we have somebody filling the seat, but it's to keep it warm. And they really didn't bring the great talent. So I think there's a great balance of anywhere between twenty-eight to thirty-five days where you get to actually speak with the candidates and find the right people.

speaker-1 (45:27.66)
And on the flip side, one people metric you'd kill because it looks smart but doesn't actually impact the business.

speaker-0 (45:35.052)
Ooh, that's a really great one. Never been asked that before. You know, I've had to do the nine box exercise several times, but I think it's so incredibly flawed. And it's been asked of me so many times. I've tried explaining why I don't want to do it and why it hasn't worked in the past, but because people know it, they insist on it. And every time we do it, it causes more confusion than answers.

And sometimes more frustration than anything else. So it's almost like I want to say, I told you so, but I still try to do it in a more professional manner and try to make as much clarity as possible. But I wish people would just stop using it.

speaker-1 (46:11.746)
Tell us why you want people to stop using it.

speaker-0 (46:14.752)
You could fit people in so many different boxes. And I think a couple of them are a little bit confusing. Like maybe they're a high performer when it comes to the business organization of selling, but they're terrible at their communication. So where exactly do you place them? Are they overall high performers or are they just middle of the pack? Because what ends up happening is you get almost everybody that just sits in the middle. And then managers have a couple low performers, but they're right below. They're not at the very, very bottom. And the lows mid to low performers, they don't want to move on them.

Because they could almost fit in the box above. So there's almost that wiggle room. There's too much gray to allow people to really make a higher impact. I think performance reviews speak louder than words, especially when you allow people to really give their own assessment of how they've done for the quarter or for the last six months. And then you compare them and have that open conversation with the manager. I think that is more documentation and more control over should we move this person or should we really keep this person or promote them? More than a nine box where the gray and the unclearity is there.

speaker-1 (47:13.11)
And then the potential piece causes so much more confusion because it's more abstract. You th you think that person has the potential, but there's no proof whether that can actually translate into results.

speaker-0 (47:23.628)
Yes, in the amount of hours that I have spent doing nine box with executives, I probably spent about a million dollars an hour's worth.

speaker-1 (47:30.062)
I know I've been there too. I completely can resonate with that. And moving us to the signature question here for our session. tell me if you have an example of what's a talent decision that probably changed a business outcome you were part of and no one recognized it as a talent decision at that time that it was being made, but it was a talent decision.

speaker-0 (47:55.02)
Than likely that would have to be at one of my consulting firms. It was a small engineering firm, but bringing on one of their first females that really had to work with Reddit, no one really cared that she was a female so much, except for when they brought her on board. The very few other females that were on a different teams were really excited to finally have a female voice within the Reddit team. because at engineering and architecture, there are as many females as there are males.

It's harder to find these wonderful females that get have these backgrounds and get as excited. So when it's a small team and other females are yearning for females, but they don't use their voice to say that. That one hire right there got so much more excitement and so many more thank yous. I don't need the thank yous. I just want to see people happy and thrilled. And it made it up all the way to the CEO principal of him saying they noticed the energy and people were talking about it a lot more. And he said, Let's let's do that again. Let's let's hire more.

D E and I and different types of folks in different types of ages in the other teams too.

speaker-1 (48:57.186)
Well, thank you so much, Stephanie, for being here on the show today. Thoroughly enjoyed your experiences and examples from your illustrious career. So thank you for being here.

speaker-0 (49:07.832)
Well, thank you so much for having me, Joe. You've been an absolute pleasure.

speaker-1 (49:12.792)
Thanks for listening to People Multiple. If you found today's conversation valuable, don't forget to give us a five-star review and share it with a colleague or fellow investor. And don't forget to follow the show on Apple, Spotify, or wherever you get your podcasts. Follow us on social media using the information on the screen and in the show notes below. This has been a production of the AGN Group. I am Jia Ganesh and I'll see you next week as we continue to explore how talent shapes multiples.