In his HCM World keynote address that was perfectly pitched to wake up an 8am audience, Mark Hurd, co-CEO Oracle peppered the crowd with a dazzling array of statistics designed to hammer home the message that change is accelerating and that the need for talent is more pressing than ever. Nothing much surprising there.
But it was when Hurd turned his attention to the job of the CEO that things got interesting. In the lead up, Hurd apologized if he didn’t sound as crisp as he’d like but he’d been rudely awoken at 2am by a false fire alarm at his hotel that kept him from his slumbers for a good hour.
This is what CEO’s care about. Most of the time you’re thinking about survival. You have zero friends and investors? Well, nobody cares about you. They only want your performance. Make me money and if you don’t do it fast we’ll get the next person in line to do it. It’s about execution. It’s in the head of everyone who’s in the corner office. Its the reality.
Stark? Brutal? For sure. How does this relate to talent and what Oracle is doing?
Those of you in HR, you’re maybe not the highest priority in corporate IT spend. This is not a shocking survey. Priorities go to the places where survival matters – revenue growth etc.
So in the next five years it looks like we’ll have a healthy economy, a healthy pool of people but not enough skills. Why is this? Because 60 percent of millennials leave a job in under three years, This is really bad news for us at Oracle as we take a lot of college recruits. This is the first generation in the history of America that hasn’t said it wants a better life than its parents. It wants more flexibility. It’s going to be a different sets of things and fundamentally people who are less loyal. This is really bad news.
And to hammer the message home, Hurd drew on his own experience of only having worked at three companies during his life.
What kinda guy gets a plate these days? I got one after 25 years at my first company.
Investing for the future
By this stage the audience was in the mood to giggle along with Hurd. Then he delivered the punchline about building the next generation of leaders at Oracle and his belief that you have to train by the modern equivalent of an apprenticeship – a concept that has all but died out in many industries:
We’re hiring from the college because we think this will be materially more successful. We bring people in, we train them, we bring them in as a training person for three years. We’re making an investment back. We won’t know for five to six years whether this is right. We’re in the fourth year. Management is telling me ‘hire more.’ We are different. We are going against the grain and against the data that tells me we’re going to fail. But get this: you’ll hear companies say: “We’re going to hire the best people.” This is such nonsense. We have to get the best people for our business. That’s a different problem that you have to solve through investment in the people.
In the post keynote conversation with analysts, Hurd was at pains to explain that Oracle’s investments across the broad spectrum of HCM and learning in particular are vital to the company going forward. His answer to the question of well known rivalries?
We think that winning in HCM is strategic to us. This is not a sprint. We’re in it for the long run. It’s a decade long game.
What did he mean by this?
HCM has been the emerging darling of cloud based solutions, starting with SuccessFactors that was subsequently acquired by SAP. But SuccessFactors only covers a sliver of the overall HCM landscape. Subsequent to acquisition, SAP started to fold that solution into a much broader, cloud based HR system of record, bolting in social features from Jam. Oracle has been doing much the same but the difference is that Oracle’s belief in the technology shift to cloud is rather different to that which we see from SAP.
Oracle has arguably progressed much further than SAP in terms of broad footprint functionality and is therefore in a position to talk about HR/HCM as a strategic imperative while also picking off piece parts where it makes sense. If Oracle succeeds in making that play stick – and the net new greenfield wins suggest they’re on that path albeit at sweet spot organizations with 3-4,000 employees today – then it is a short hop to scaling for larger organizations.
This won’t be easy – hence the ‘decade’ reference – but the intent is clear. Win in HR and you’re in with a very good chance of winning in financials. When that happens its game over and the account is yours for the next 10-15 years. That is the as yet unsaid agenda and one that exercises the minds of all ERP vendors.
- Everything Hurd said fits with my overall picture of Oracle in 2015.
- This is a vendor with fresh purpose buoyed along by relative success after many years of being the whipping boy for tardy delivery in cloud solutions.
- Its internal people strategy is bold and I give Hurd a great deal of credit for investing for the future. It’s either that or pick up other people’s scraps.
- There are still many unknowns but I will address those later.
Disclosure: SAP and Oracle are premier partners at time of writing.