Founder and Chief Achiever Razor Suleman tells ESM how his firm has evolved in the engagement space by downplaying features and functions and selling solutions
Perhaps no other company in the incentive, recognition, or loyalty business warrants closer attention these days than Achievers. After all, it’s the only company in this space that has received Silicon Valley funding since the 1990s dot-com boom.
Launched as I Love Rewards in Toronto back in 2002, the company successfully won the backing of Sequoia Capital, whose investments include Apple, Electronic Arts, Cisco and other high-profile firms – and more recently, Airbnb and Tumblr.
With total financing now at nearly $40 million, the company faces the challenge of accomplishing what no one in this field has since the golden era of the trading stamp: scaling a business to the extent necessary to justify a public offering. Globoforce, the other well-financed company in the engagement and recognition space, recently withdrew its public offering.
Achievers is known for two key innovations – its early embrace of the concept of employee engagement and its leadership in social recognition technology (i.e., the ability for managers and employees to share recognition on social-media-like news feeds open to everyone in the organization.
“No company ever woke up and said ‘I need more rewards today,’” says Razor Suleman, Achievers Founder and Chief Achiever, in a recent interview with ESM. “When your business model is based on that, it’s hard to change. Often, it takes an outsider to look at an industry differently to bring a fresh perspective. Our approach from the beginning was to be focused on employees and employee success. We only learned later that rewards are only one element of that. If you continue up the Maslow hierarchy of needs and look at Self-Actualization, it’s really about success. What was I put on this planet to do? If we can align employee success to company success, we provide an invaluable service – performance.”
In short, explains Suleman, “We’ve evolved from a focus on rewards to a focus on success. That’s what differentiates us from the competition. We believe we can do what others can’t do, for the same reason Blockbuster didn’t become the next Netflix. We were fortunate that we came in when a lot of things were changing in the marketplace that would get the attention of the C-Suite.”
Suleman is optimistic about the emergence of engagement “…because the trend is our friend for I think about the last 10 years. There are a lot more people that are thoughtful about the entire issue of engagement. But there’s a big difference between getting it intellectually and getting it done. There are a lot of companies that ‘get it’ but haven’t yet developed a formal plan. I do think that most executives believe having highly engaged employees is the key to success, but when you ask them about how well their organization is doing at making this connection, their views don’t always match those of their employees. In one of our surveys, we found that more than half of CEOs thought employees were getting immediate recognition, but only 24% of employees had the same response. Yet everyone agrees that they don’t like annual performance reports. When we think about our mission, it’s to change the way the business world works.”
Suleman sees a generational shift. “If you think about it, most CEOs grew up in the era when the mentality was ‘You’re lucky to have a job.’ It was a ‘You have to pay your dues’ type of world. That’s what they personally experienced in their rise to the corner office. As a result, some CEOs may be disconnected from the world today. Look at Millennials. They’re a bigger demographic then even the Baby Boomers (in terms of total size), and they don’t think the same way. Lifestyle and experiences are much more important to them. I do think CEOs understand that there’s a new generation of customers and employees who have more information and choices than ever before. CEOs know their customer experiences are important, and more and more know that the only way to have a great customer experience is to first have a great employee experience. The way that management treats employees is the way employees treat customers.”
So what’s standing in the way of change? “Many businesses don’t have the solution yet. There’s no general agreement on how to effectively engage people the way there are formal frameworks in other fields. Engagement is now a ‘painkiller.’ The opportunity is for it to become a profit center. That’s when it will scale.”
While the rest of the recognition field goes after social recognition, Achievers tends to downplay that emphasis. Two years ago, the company developed a vision around Employee Success. The idea, says Suleman, is to tie engagement with performance. “If you look at our journey as a company – from our original name as I Love Rewards to our leadership in engagement and social recognition – we know that recognition is just one component of a broader engagement strategy. If the only tool you have is a hammer, every problem looks like a nail. We want to provide a complete tool box. What problem do you want to solve? Is it to have happy customers? Healthy or safe employees? High quality or productivity? Sometimes incentives or rewards & recognition are the right tools; sometimes building a person’s status or reputation in the organization will work. Often, the problem is front-line management. There are so many ways you can solve bigger business problems when you have a broader definition of employee engagement.”
With the backing of Silicon Valley comes the need to grow. Suleman says the company is growing at nearly 60% a year, focusing primarily on employee engagement. He recognizes the opportunity to expand into customer, distributor, sales force, vendor and community engagement, but says what’s most important is focus. “We want to perfect our methodologies in our key marketplaces so that we can expand with confidence beyond them,” he explains.
One key to scale is the sales force. “I think 90% of salespeople sell features and functions,” says Suleman. “The problem with that approach is that it’s not inspiring and it doesn’t serve the customer well. We try to find people who are solutions-oriented – people who can ask good questions. What does the company want more of in their business? What are they trying to get people focused on? What are their fundamental challenges or problems? Understanding the customer’s area of pain and being able to process and understand their business and then translate that into a solution is essential.”
As a result, Achievers has focused specifically on certain industry verticals so it can apply in-depth industry knowledge. “At first we thought that might be a problem, but we now realize clients appreciate our deep understanding of their business fields,” Suleman notes.
Once the sales team identifies an opportunity, the company brings in separate consultants who have the training and knowledge to provide high-level solutions. “It’s definitely resource heavy. Conducting a proper ‘discovery’ is critical, and we’ll push back if we feel our customers are heading down the wrong path. And we’ll even walk away from business if we think what we’re being asked to do will fail.”
Suleman sees the sales process as akin to a three-story building. “In the discovery process, we often learn that the customer has a rewards problem,” he says. “This is like the first floor. Further questioning may reveal that they have a recognition or incentive problem, and there are a lot more questions around that. And then, through that process, we may discover a client has an employee success problem – the third floor. We’re ready to work with our clients to address every level of need.”
So what does Suleman tell people he meets casually when they ask what his company does? “I generally say we’re in the business of employee engagement,” he says. Above all else, he’s extremely optimistic about the emergence of the engagement field.
“I can’t say if it will be as big as advertising, but I do think that engagement is one of the top three opportunities in business today. I can’t see how anyone could argue that engagement isn’t one of the top priorities of business executives, and we’re just at the beginning. A recent Gartner research study put the category of employee engagement systems at 3%-5% market penetration.”
Suleman says he welcomes more competitors embracing the Achievers approach. “You need healthy competition to create a marketplace,” he notes. For Achievers, the focus is to provide a complete toolbox of solutions focusing on employee success rather than a more traditional focus on rewards. “This is the second inning of Game 1 of the World Series,” he says. “We’re just getting started.”