Ali Nawab: That's a great question. So our platform is indeed part of a paradigm shift. What we see here is that there's a combination of several things that have happened relatively quickly. So firstly, COVID changed the way we thought about workforces, offices, hybrid, in person, remote. And it basically made remote Okay. In addition to being in-office, which was previously kind of not the case.
We've also seen a rapid focus on the HR person, the leader in HR, becoming more and more of a strategic leader, because when that sort of unprecedented event occurred, everyone looked at HR to figure out what to do and to have all the answers and they were figuring it out in real time. And I think the third paradigm is that we are now in the age of AI, where it's very possible for most executives and business leaders to imagine what their business looks like once this AI wave has fully crested.
Could you elaborate on how the platform bridges the gap between the people function and finance?
Ali Nawab: So what I say often is that there's two ways we have to think about this. The first one is we have to look at the evolution of the HR leader's role over the last 50 years, where it is going increasingly, I think, on almost like a month by month basis, it's going from, what 50 years ago used to be a highly administrative, non strategic role to a highly strategic and administrative role. That's one thing.
The other thing is that if you look at the nexus of the CEO, the finance person and the HR person, if they're all doing their jobs, phenomenally well, they are being pushed away from each other, because today, they operate in their own departmental silos.
Now, the reality is to make a business successful, you need the HR function to be performing at the highest levels, you need finance to be making sure all the dollars are being counted. And then you need the CEO to be writing strategy to make sure that all those dollars are being applied in the right places. Today, they all happen in a very disconnected way. So if we leave the CEO out for a second, and we just look at HR and finance, the thing that I've observed is they are very different roles. So therefore, the language that they speak is also very different the way that they think is very different.
For example, an HR person who will typically get into consistency and compliance in a business in addition to all their other functions. A finance person will focus on repeatability predictability, and things like that. So the one thinks in org charts, hiring plans, headcount positions, the other one thinks in cash flows, and cash outlays and payments on their end.
So the summary there is that HR speaks French, and finance speaks German, right?
Now finance is relatively sheltered from the rest of the employee's organization, but HR is at the forefront, right HR is the first protocol for every employee in the business. So naturally, HR leaders have to be incredibly empathetic, they have to be incredibly aware of the situation in the business, the situation with the workforce, the situation with the overall economy, and therefore they have to take a very empathetic tone to a lot of the things that they're talking about. Finance is usually very quantitative; they're looking at everything from a dollars and time perspective.
What our product does is that without getting these people, whether it's finance, or HR, to change their ways, it basically create an instant translation layer between the two departments.
So when a finance person sees some request for new hires, or requests for some changes in roles or compensation or whatnot, they understand spreadsheets, they understand their financial model, that is how they make sense of the world. Our product takes all the org chart hiring plan visual and instantly translates it into finance speak. The the finance person can then within a minute, say, Yeah, I understand what you're trying to do, it makes sense to me, or I would change this or I would change that. So they don't spend a ton of time trying to guess what is being asked for.
From an HR perspective, it's actually a multi stakeholder problem, because HR is working with multiple stakeholders where you have a base layer of good data, a very clean, simple, intuitive visual, where the person can say, I want to make these changes to my team, I want to reorganize my team in this way, I want more leaders, I want more entry level people, I need to build up my middle management.
And, instead of HR trying to figure out whatever squiggly drawing they've made to try to communicate what they want to do, they can basically have the equivalent of like a digital whiteboard where they can say, okay, so what you're saying is you want to take all your high potential high performer people, and you want to try to elevate them in the next six months. And what you want to do is you want to hire more junior people to get them, and this is that what that would look like.
But wait a second. Now this person on your team has way too many direct reports. So maybe we need to kind of create some more leering here, we need to help them and give them some more support. Those conversations as a trusted adviser become a lot easier because again, everybody speaks the same language
Felicia Shakiba: That makes a lot of sense and I think it arms an HR professional to relate the things that they're wanting to design and develop for the organization translates that into what you can convince your Chief Financial Officer to do for the business and actually articulate the value.
When there is a stronger relationship between the CFO and the CPO there naturally is a greater collaboration and understanding between the Chief People Officer and the Chief Executive Officer and navigating the critical workforce planning decisions. Does that make sense?
Ali Nawab (09:43): That makes a lot of sense. I have a great story here. In the last two years in doing research for my product and working with early customers, I've had the privilege of talking to hundreds of CEOs, hundreds of HR leaders and hundreds of finance people. The one common question that I get from CEOs, once they kind of feel comfortable talking to me is they're like, You know, all this is great, but I'm not sure if we have the right person in the HR seat. And I don't know if it's a system problem, or if it's a personnel problem, and how do I figure that out?
And oftentimes, and I mean, because I've done this so many times now, I will often go back to them with a very curt, do you even know what the HR person does?
And they're like, of course, I know what they do. They hire people. And they, they, you know, they build our culture, and they do this. And they do that. And I'm like, no, no, I mean, what do they do? If you had to kind of look over their shoulder for two weeks, what do you think they do? And they're like, well, I don't know, actually. But my complaint is that when I ask them for some data, they never seem to have it.
And I'm like, okay, yeah, it's a valid complaint, that you ask them for analytics, or some kind of data, they bring it to you. And when you ask sort of deeper dive questions on that data, they often will say to you, I'll come back to you give me a little bit more time, and then we'll come back and in some time, so I understand your frustration. But you haven't asked my question.
My question is, what is your HR leader, what does a day in their life look like? And they're like, well, they're hiring people... and then I'm like, Okay, let me tell you. I've had the privilege of looking over the shoulder of several HR leaders, and it involves putting out a lot of fires, it involves answering a lot of queries very quickly, that could potentially become a disaster if they don't answer it well. It involves having a bunch of Walkins with all kinds of challenges that they have to deal with.
On top of that, they have to make sure that their responses are consistent to everybody, no matter how the question is being asked, they're compliant with the company's policies, as well as all the other sort of legal requirements that the company has to adhere to. On top of that, they have to like go through 20 different spreadsheets, that everyone's emailed to them, and a bunch of different systems that all pretend like they are the only system in the company, and they have to give you like instant analytics, like they are a data scientist, which they are not.
They are great at people, they are great at being empathetic, they are great at understanding and meeting people where they are. So you know, they're putting up with a lot of, you know, BS to be able to keep the ship running.
So the performance is not whether they can get you reports on time, or reports with a 99.9% accuracy. That is one area of their business. And frankly, that is the least of their worries, if you were to spend a week in their seat. And they're like, oh, okay, I, I thought we had like a BI system or some data thing that we did. And like, if you had a data thing, then you would have all your answers instantly, wouldn't you? You don't. So clearly something is missing. And this is where I tell them a story.
And I say look, I was just like you. I had never worked HR. My only interaction with HR was when I wanted something like, you know, when I was a young employee, it was like time off or something like that. And when, sort of as I grew in the organization it was hiring people or performance questions or whatever it may be. Only when I started building this company, did I start to realize the magnitude of work that an HR person does, and I can consistently say that 99% of all leadership teams are completely oblivious to it.
They only get to see the interaction in the Management Committee, they only get to see when they Slack somebody or ask them a quick-fire question to be like, What is your turnover in this month? What is it versus year over year versus last month, and the HR person's like, I'm gonna have to get back to you. They think they're not on top of their things, right? Because the comparison is to somebody in a more technical discipline, like a product person, and they have phenomenal tools to be able to help them do that, right?
So I remind them, and I think they come to the agreement then that it's definitely not a personnel problem, at least not yet. There's a lot of variables we need to isolate before it can get to that.
Felicia Shakiba: It's incredible that you share that because actually in my first episode with former CPO at Credit Karma, Colleen McCreary, she actually talks about this evolution between the administrative historical role of the CPO to now the strategic role of the CPO.
But aside from that, I think it's worth asking in this remote work arrangement and dynamic market that demands and presents unique challenges, how does agent noon software leverage data analytics to provide these insights for strategic workforce alignment?
Ali Nawab:
I think, because of how rapidly the world is changing, being strategic for HR leaders is no longer optional. No longer nice to have.
They have to be strategic, and because the world is changing very, very quickly, right? It's not like things change every two years and we readjust some stuff. Things are changing on a monthly, sometimes weekly basis, if you look at kind of advancements in AI and things like that.
So it's I think the HR leader is the least tooled leader in the organization.
What I mean by that is, the product function has amazing analytics on what users are doing, why they're churning, what's going on engineering has fantastic analytics, on what code are we shipping? How fast are we shipping it, et cetera, et cetera.
Meanwhile, most HR teams are running on spreadsheets. And the spreadsheets are being fed, sometimes manually, sometimes by way of some API, data from a whole bunch of systems because guess what, we don't just hire people in Indiana anymore, we hire them all over the world. And what that means is they have different rules on how we pay them different rules on how they're treated as employees.
All of these systems are the HR tech players, all the HRIS systems, they're all trying to position themselves to be the one HR system that you will use globally. But the reality is, even a 2-300 person company is using three, four or five different vendors, to pay everybody hire everybody, manage everybody. And therefore, it becomes the HR leader or their team's Friday afternoon where they have to go through all of the systems that pretend like they're the only system in the company, pull it out of them, put them into some spreadsheet, massage the data enough so that it can make sense of it.
Ali Nawab (16:17): And then when they go to the Management Committee and say, Hey, I got the report that we need. And they're like, but what if we just isolated this to our India and Poland, and we only did it for engineers, that's like a whole, another Friday afternoon, or probably a weekend of work that, frankly, the HR person don't have time for. So, what our product does is it embraces the fact that there isn't a single HR leader that likes to do data entry.
They don't like to do data entry; they don't like to do basic sort of things that a computer is well suited to do. So we plug into all the HR systems, we plug into all the spreadsheets, and we give them a really simple visual area where most of the answers that a stakeholder would ask for are already there.
So what happens is that because we've collected all the data, cleaned it out, we built proprietary technology to do that. The first order of questions, the level one questions that somebody would ask of an HR leader are already answered, they're available.
So now we get to elevate the conversation to be like, Okay, this is what our hiring pipeline looks like. This is what our cost of our payroll looks like, next quarter, I want to figure out for this one leadership role where you're not sure if you want to hire a senior person, or you want to hire two directors, what do you want to do, because until you decide that we can't really move forward on recruiting.
So instead of kind of playing catch up with all these data requests, the data requests are already handled, oftentimes, the HR leaders and our customers will send out the data in advance of the meeting so that the meeting can be all about now that we know our turnover is a problem, here are some ways we're going to solve for them, these ways are going to cost more money, these events are going to cost less money. This is what the change on the organization is going to be.
Ali Nawab: We don't profess to do any of that in our product. We just give all the right data so that people can make decisions about what changes you want to make to your organization aligned to your strategic goals, aligned to your cost goals, and how do you want to implement them, and then all the tracking happens automatically. So you can create 10 different scenarios of this is what I want to do like I mean, I'll give you a very practical example, something that happened this morning.
A finance leader at a company quits the CEOs trying to figure out if they should hire a senior finance person or two directors. And on their sales side, they've had a person that's not performing. So they want to figure out if they want to bring on a CRO type person or do they want to bring on a B2B sales and a B2C Sales Director, all of those things are various options that they're communicating to the management team to the board.
And without Agentnoon, they're having to draw like weird boxes on a Google slide that nobody understands. So a lot of the meeting time is taken up with people trying to figure out what do you mean here? Like, are you do you mean, you're letting somebody go here? Or do you mean you're promoting this person? Oh, it means I'm promoting them. Oh, cool, because I thought you were gonna let them go.
It's a very different conversation, depending on what the answer is. So that's how our product helps because it takes care of the data drudgery. It creates simple visuals that everybody understands. And it presents the data in a format that can meet people where they are.
And it sounds like the workforce becomes more agile as you're increasing the efficiencies of this type of work between organizational design and actual impact on the organization.
Ali Nawab (19:24): Absolutely. So if you look at a CEOs mind for, for an instance, right? If they're having a conversation, they're probably thinking about, okay, I want to do this big thing. Do I have the right leadership to be able to lead this thing? Do I have the right people to work with that leader to work on that thing? And if the answer is no, then I've got to either move somebody internally, or I'm going to go recruit externally.
That's how they're thinking about it like they're using their strategy to back into what headcount looks like. And then oftentimes, it is changing at a very rapid pace, because CEOs are adjusting their company, more often than not to a strategy, but a lot of it is happening in their head, because they're not able to do the math, because there's a lot of math on what that means. But with our product, they can respond to changes a lot quicker.
And they can also make smaller changes, right? Like, if you ask the CEO, hey, do you wanna do a reorg? They're gonna be like, No, I don't want to do one we did one like a year ago, I'm probably not going to do one for another two years, because it's a lot of work.
With our product, you don't have to wait till these big moments, you can make small minor tweaks to keep shaping your organization to be best aligned to your strategic goals.
And so what is the data that you're pulling into your system to help make the best decisions?
Ali Nawab: Great question. So at the base level, an org chart that shows you who do you have? Where are they? Who they report to? What are their skills? And then you can connect to other systems like, what's their performance rating? What is their total cost to the company? What is your salary? Are they considered high potential? Are they considered somebody at risk?
Are they working with a specific skill set that we have? So a lot of this data towards the tail end of what I've described is often sitting in spreadsheets, right? We ingest all that data, we bring it in. And then we let people make plans on what they want the business to do in a very org design visual way while giving you benchmarks on what span looks like, what costs looks like, what distribution of people across various geographies looks like.
And finally, because we're able to translate into the finance side, as that plan goes through approvals, we can also track, Hey, you said you were going to spend $3 million a year on the marketing team - are you spending $3 million a year? Are you on track to spend that? Are you on track to spend less, more? If it's more, what do we do about it? If it's less, what do we do about it?
So this like manic, let's grow everyone and every department at all costs, and then like let's cut every team in every department because we overshot, it's quite unhealthy for businesses, it's unhealthy for our economy, it's for the employees.
It's particularly damaging to the HR leaders, because, you know, at one quarter, they were like, let's hire everybody, bring all your friends. And then two quarter's later, they're like, we're gonna let everybody go. Nobody saw this coming. So they got a lot of pushback from employees. And I think that's super important to address and do that in a more responsible way.
And when you think about organizational design, the structures can lead to inefficiencies. And so can you elucidate how Agentoon's system utilizes network science to deconstruct organizational hierarchies, and essentially uncover potential bottlenecks?
Ali Nawab: That's a great question. So, my previous company was an AI company. And when I started this business, a lot of people were like, Why are you building HR software, like what's going on with you? The secret there is that at the end of the day, an organization is a graph, that graph has nodes, nodes have distances to each other. So all of how you would optimize a network, the math can be applied to optimizing an organization.
But it's not as simple as nodes in a network, because these are actual people, and you have to be empathetic. And you have to be able to make sure that you are giving everybody the opportunity to do their best work to achieve their full potential. This is a very complicated problem, that you can't just leave the math alone, right.
However, for the experienced leader, to be able to make those decisions, to be able to better structure the organization, they have to use the data to their advantage. They have to be able to figure out, this is what my organization looks like. It may be too heavy at the top, it may be too light at the bottom, it may have too many people in the middle. For most companies that we come across, and the more companies that we work with, the things that I just said, are a real dream. But like they're even struggling to figure out like, how many people do we have? What do they do?
And basic things like if I were to move three people from China to Canada, it doesn't translate three to three, it translates three to like one and a half, because the cost profile in China is very different, right?
So on one hand, this is a combination of people, work, and the dollar is at play. It is hard enough to do just one of those things with the way the tech is today. If you can do the three variables together without over indexing on the finances, right? So if you were to take a spreadsheet and say, I'm going to let go of all the people that are over this benchmark, you're going to have a very hard to run organization.
We've seen that happen in some cases. And I don't think that's a suitable way to do that. But I think the reason the leaders end up resorting to it is because those three things are so out of sync, that the best way to do is to pull the plug and kind of try to start all over again. I think that'll change.
I think we'll see organizations that will make adjustments all the time. They'll make adjustments with a lot more precision and backed by a lot of data so that that your HR leader, or your finance leader isn't spending their evening, figuring out how to get to what the basic ground truth is. But they're like, Okay, I know what the truth is. Now I'm gonna have a brainstorm what the possible solutions are.
Felicia Shakiba: It's incredibly interesting and it's so exciting to hear someone that's not traditionally from the HR world to take their own perspective and actually create this product to make sense to an HR leader. So it's very exciting to hear.
Could you share a success story from an organization that switched from another workforce planning software to Agentnoon, and then what was the result and improvement in the CPO-CEO interactions and overall business outcomes?
Ali Nawab (25:45): One of the most sort of gratifying things for me from starting this company is that not only have I come to understand the HR leader's persona very well, but we've had the good fortune of many of them becoming evangelists, users and customers. So one of our customers, people leader at a fairly large size company was trying to put together some data, went on our website, and reached out over the chat bot.
And coincidentally, I was in the office. So I picked it up, we got on a quick zoom call, we understood what he was trying to do. We showed him what our product could do, we onboard, him in the next five minutes, and he had what he needed, he was so happy, right? And he was like, Okay, you guys just saved my weekend. So I really appreciate this.
That was, I want to say almost a year ago. So, what they were using before was a combination of spreadsheets and slides, because for the specific features that we have been talking about now for the last little bit, they're all a checklist item on most HR systems, right? Most HR systems are good at employees, attendance, you know, all the operational downstream things that are very important for an organization, nobody does a even a decent job at the upstream stuff.
I need to communicate this to the CEO, I need to communicate this to the board, I need to communicate this to the other counterparts in my organization. And there, a lot of them are like stuck to either trying to build something in a mural or slide deck or whatever. So we've helped save the HR function, particularly at the most senior levels, sometimes 10 plus hours of time a week. Because we create such phenomenal alignment where the finance person understands everything the HR person is saying.
It unlocks inefficiencies of about 7 -8% of total headcount spent.
That is a humongous number, because what happens is, it's like broken telephone, right? Like, the Head of Marketing says I want to hire so many people to throw some spreadsheet or something. HR tries their best to understand it, sends it off to finance, finance does their own things. Meanwhile, the marketing person has had two more conversations with the CEO and people are like, Why aren't we hiring these people?
If this is I mean, this is this makes sense. So why are we doing this? Like why are we tying this up in, you know, bureaucracy, or whatever? So people are like, okay, fine, whatever, we'll just do this, right? Now, you've ended up hiring a few people that just didn't need to be there, or they're the wrong fit for the type of work that eventually will become needed. But they're on your payroll. So what do you do, right, and by the time somebody figures out what to do about them, they're usually six months into the job.
Another example there, maybe from a customer is that one of our customers said, look, the economic conditions are not so great. So let's try to slow down on hiring more junior people for the next little bit, because we have to spend about six months training them and we need people to come in and get going from like the first kind of week or two. So a month or two later, they go to like a breakfast, welcome for new hires. And like six of them are like fresh out of college very junior.
So you don't see the Breakfast Welcome, comes back and talks to his team and says, Hey, I thought we said we were going to hire more senior people. Why are these people all like fresh out of college? And in that sort of translation, miscommunication, people have thought that we're trying to save costs, because economic conditions are not that great. So let's go hire junior people, because senior people are more expensive. This is just one of several examples of how inefficiencies occur. And they multiply, the more places you hire in.
And so when we bring our product on, it's kind of like turning the lights on a little bit where people know Oh, I didn't know we had that contracting firm with eight people doing some stuff that is more strategic maybe a year ago, but it's totally not anymore. Now we can tell that team that we're not going to work with them.
Even one bad hire will cost the company significant amount of money and I don't mean bad hire and the person is not a good hire, but more like somebody we didn't need to hire or we hired the wrong role for the job that was actually ahead.
So because of that we save a ton of money for our customers. But I think the real value is that because we save so much time for the HR teams, they become real evangelists. I'm really proud of customers like that, because it really validates all the hard work that we've put into creating a thoughtful product and a product that meets people where they are with their challenges.
And what does the future hold for more efficient workforce planning, particularly in the world of AI, and it's overwhelming adoption this year.
Ali Nawab (30:25): We are still in a world where arguably the best decision maker in the company, the CEO, has the worst possible tools, right? So you think about an individual contributor, like a software engineer, they have all kinds of tools to like debug their code, optimize their code, make things better, a marketer has all kinds of data on what the customer is doing and what they're doing on the website.
The poor CEO, meanwhile, is like looking at poorly constructed slide decks and spreadsheets that they have to kind of make sense of every time. And I think the reason for that is that the volume of data coming back at leadership teams has never been higher. And that's been true for the last five, maybe 10 years, the ability to process them has been catching up, but it's nowhere close to where it needs to be.
The one thing that AI does really, really well is make sense of tons of data. That is why the newer AI sort of implementations are all the rage, because the thing is read like 4 million articles and it's like helping you write what the perfect article looks like. So I think in the future, the data collection, analysis and parsing of it to give you level one information is going to become almost automated, where you could kind of like you talk to Siri, you would talk to something like an Agentnoon.
I don't know if Agentnoon is going to become that, but let's say and say look, I need to know this, and I'm trying to do these two things. And then it can parse all your data and say, Well, based on that this is what 1-2-3 options look like. This is the more expensive option, this is the more efficient option. This is the faster option. But you know, they say that you can get things like faster, cheaper, better, or something like that, and then you have to pick two. So, those calls are still going to need to be made by leadership teams.
So, I think the role of decision making is going to become even more important, the tools to enable that decision making with some sort of an AI copilot are going to become exponentially better. So net net, I think there will be organizations that will be a lot more efficient, there will be employees in that organization that will be a lot more aligned to the business.
And overall, I think it's going to create an environment where people are really going to be able to either do their best work, and really achieve their potential or go find a hobby or a pursuit or whatever their passion is, right. I think there's a lot of jobs in the world where you know, a computer, possibly at some point will do them better. And I think those have immense workforce implications.
And the reason why I'm building this company, is that we need better tools to be able to make more efficient organizations, putting the people first, we don't want to leave this to some algorithm to kind of crunch all the data and spit out, Hey, you don't need this anymore.
Right? I think that's where we're going to get to if companies like ours don't show up and start to kind of create a layer where the AI is the assistant that helps the leadership team get all the right information so that they can make adjustments to their organization, instead of doing one like big adjustment. That would be very hard for a business to recover from when it doesn't work well.
So predictive organizational design helps companies choose from different options.
Ali Nawab: Yeah.
Felicia Shakiba: Ali, thank you so much for being here.
Ali Nawab: Thank you for having me. I really enjoyed this conversation it was a lot of fun. Thank you.
Felicia Shakiba : That’s Ali Nawab, CEO & Co-Founder of Y Combinator backed company, Agentnoon.
Did you love this interview? As a special thank you for listening, we're offering an exclusive 20% off the first year of your subscription when you share the discount code 'CPO20'. That's C-P-O-2-0. Agentnoon, your organizational design and workforce planning engine for responsible growth.
