Please welcome Andreas. Thank you. Thank you, Neil. So I am really excited about this opportunity
to talk to you about the technology space that we are disrupting. My name is Andreas.
I am the CEO and founder of Praise, and we help companies understand their applicants
from feedback from the applicant's network on their personality. And I founded Praise
four years after working four years at IBM with Big Data and Analytics because I felt
like we needed a better way to communicate our personality. And I think what I am going
to share today is because we are a room full of VCs and entrepreneurs. You always hear
that these groups are really good at pattern recognition, right? That is our strength.
So I want to share some of the patterns that we see within HR and particularly within recruitment
with you guys today. That is the introduction of the feedback loop. It is the introduction
of true cultural fit. It is the termination of self-assessments. And it is the bottom
up approach to testing. And so the last year we have talked with some of the biggest companies
and their HR and what we find is that their absence from the boardroom, unfortunately,
often times is justified. But I am going to start here. I am going to start here because
the last ten years, a vast amount of hopeful Don Draper wannabes have had their dreams
crushed. They have been met with the quantitative reality of what marketing has become. And
the same thing is happening within recruitment right now. As I said, the fact is that what
most HR professionals in recruitment call skill is actually, if you look closer, it
is sort of a cocktail of bad heuristics and psychological biases. The information that
is being prioritized when a hire is done is, well, it is interesting. Let's put it like
that. So the first problem and perhaps the biggest problem is that the performance of
the employee is not linked back to the signal, the initial signal. So the information that
causes the hire in the first place, right, is not being, when you make a bad hire as
a company six months down the road, right, you should actually not consider the story
of why that hire necessarily worked out or maybe you should do that as well. But what
is really important is was there a signal initially that you could have picked up upon
that would have enabled you to understand whether this person would be a failure or
not. So that is a really, really big thing if you can get that right. The second one
is the introduction of cultural fit. So if you don't actually know what kind of signals
create performance in the company, how you can screen applicants to figure that out,
what ends up happening is that cultural fit becomes this thing where everyone in a division
plays golf because that is what the hiring manager does. So that is cultural fit in most
companies. But actually what you should be doing again is going in and looking at what
actually creates performance in this company and how can we screen applicants on that.
And so this brings me to perhaps the most important point of today. Self-assessment
sucks and they suck because we often time have a very different understanding of who
we are than what everyone else thinks. And yet we have relied on self-assessment for
the last decades. When I apply for a job I send my CV, I send my cover letter, I maybe
do a personality test, but it is all me talking about how great I am in one way or another.
I am super creative, I am super organized, etc. And so this is a huge problem because
workplace performance does not depend on what I think about myself. The only thing that
matters is what do my colleagues think, what do my customers think, what do my managers
think. That is what is important. So at Praise as well what we do is we don't measure your
personality based on who you think you are yourself.
So the last pattern I want to talk about is who we test. So normally personality tests
are used at sort of the top 20 percent of the organization. We test senior managers,
executives and maybe graduates as well because we have this idea that these positions, they
cost a lot so we better get it right. We better have a good amount of information when we
do our hires here. But actually, at Praise we do this as well, but our focus is the bottom
80 percent of the organization. It is the sales, it is support and service positions.
The reason is, well of course it is a bigger market, there is a lot more people to test.
But actually more important, the complexity in these kind of jobs is lower. They are more
well defined and so it is easier to understand what kind of patterns create performance.
It is very difficult to see exactly what it is a CEO does right or what kind of personality
trait enables this CEO to perform well. But if you have hundreds of similar positions
in a company you can actually discern the kind of personality traits that predict performance.
And so the world is changing and in recruitment, in particular with this kind of introduction
of the feedback loop, the introduction of true cultural fit, it is the determination
of self-assessment test and it is the bottom-up approach to who we test. And of course at
Praise we are on the forefront of this change. And so we call this predictive recruitment.
It is just a fancy way of saying that we predict performance based on the applicant's personality
profile. The way it works is that we get a sample of employers tested in the company,
we get their praise data, we get their performance data, we merge those things together and do
AI, you know, we create a predictive model. And when we then get a new applicant and we
have those, the personality and the praise data from that applicant, we can predict their
performance, right, so whether that be sales or employee rating, et cetera. So the market
we are looking at is of course incredibly large. I mean when we look at the senior positions,
I was talking about the top of the organizations, there is a lot of competition but actually
not in these sort of more service kind of jobs lower down in the organizations. So there,
of course, a lot of competitors are starting to approach this market but they just have
to look at what is the quality of the data point they are using, right. And so we know
from academic research that peer-reviewed feedback on personality is the best predictor
of performance. And we are doing a study, hopefully, we will get funded by the end of
this month by Marcus Moenig's fund, it is called, with some really bright PhDs from
Copenhagen University and Copenhagen Business School. And our goal is to, through our data
sophistication and sort of knowledge of the individual company what creates performance
there, become, simply become the best company at helping our customers to hire successful
applicants. So thank you.
