The funds will be used to advance the 15Five’s mission to help corporations move away from the “competitive evaluation” model of performance management, which has been standard practice since 1940 – and, towards a “coaching and development” model. This focus on “growing” people is what’s driven the world’s most progressive companies – HubSpot, WP Engine, Spotify, Citrix – to start using 15Five to help employees become their “best-selves” at work.
To discover more about this alternative human resources initiative for businesses, Digital Journal spoke with 15Five’s CEO David Hassel.
Digital Journal: Is the annual performance review outdated?
David Hassell: Annual reviews are an ineffective holdover of a bygone age, because the world of work looks very different now than it did when these performance appraisals first rose to prominence in the 1940s. Back then leadership handled strategy and operations, and what organizations needed was hard working, cheap labor who were more or less replaceable. Today, what sets a business apart is a psychological and physically safe environment that allows every employee to naturally become their most creative, best self.
DJ: Does the concept of the performance review adversely affect employees?
Hassell: In many situations, reviews are detrimental to the teams, individuals, and company cultures that utilize them. The research here is overwhelming; reviews are inherently biased and inaccurate which erodes trust and in many cases has been shown to harm performance. Additionally, most companies perform these reviews in large part to determine pay increases and advancement decisions, which employees perceive as a threat.
DJ: Why is a ‘competitive evaluation’ model a better alternative to the annual appraisal?
Hassell: The competitive evaluation model is the problem, as it responds to the outdated industrial model of work I mentioned. Managers and employees despise being forced to rate and rank employee performance, which is why giants like Adobe, GE, and Microsoft abandoned this practice. The model we have seen work and which is now coming into vogue, is the continuous feedback model, which augments or outright replaces the annual review process and allows ample opportunity for coaching employees in real-time.
DJ: Why did you set up 15Five?
Hassell: We had a vision from the start of creating a company that had the potential to dramatically change the world of work for the better. We envisioned a world where companies succeed because they radically support their people in thriving, rather than succeeding at their expense. And we envisioned world that recognizes the potential brilliance and genius in every human being, and the possibility created when we unlock the potential of every person who works for and with us.
DJ: What does your technology do?
Hassell: 15Five is continuous performance management software that meets the demands of this new model we’ve been discussing. According to analyst, Josh Bersin, in this article, performance management software includes Objectives and Key Results (OKRs), Check-ins between managers and employees, regular feedback, coaching, a performance review (based on data), and an employee development plan. 15Five provides all of that in one beautifully designed, simple platform.
DJ: How did you secure the Series A funding?
Hassell: I was introduced to Brent Hill of Origin Ventures (who led our Series A) in February of this year by 15Five’s Chief Revenue Officer Brad McGinity. Brent had invested in Brad’s prior company, so there was already a strong relationship there. There was immediate mutual interest from the start. We felt Origin had great alignment with our mission, and we liked their ethos and their very positive reputation amongst other founders.
We decided to run a process regardless as an exercise in understanding the market and ensuring we were indeed picking the best partner, knowing full well that a likely scenario would be that we would end up with Origin in the end. That’s exactly what happened. After securing Origin’s lead, we spoke with a number of other firms to find the best fit to fill out the round, and I’m very excited by the investor group we assembled.
DJ: Which types of companies do you plan to work with?
Hassell: We believe that nearly any company can benefit from 15Five, which is why we have more than 1,700 customers worldwide. Some of the industries that use us are software/technology, medicine, education, finance, marketing, PR, media… and the list goes on. All it takes is a willingness to have every leader and manager conspire for the success of every employee.
