The Wall Street Journal 12.13.11, By Don Clark// A new generation of companies is learning to manage a new generation of workers, and many time-tested techniques are not a good fit. Rypple, a Toronto startup, is tackling the problem with the aid of customers like Spotify.
The London-based online music company could have just adopted Rypple’s existing Web services, which help coach employees and give them real-time feedback about their performance. Instead, Spotify asked Rypple to incorporate a more formalized management methodology called OKR, for Objectives and Key Results, which is often attributed to Intel and has been used by companies such as Google.
“It turned out they thought it was a great idea,” says Johan Persson, Spotify’s organizational manager. “Now they like it so much, they want to release it as a product.”
It’s not a first for Rypple. The startup also developed an addition to its service called Loops with help from Facebook, another major customer.
In another era, companies might have sought to keep such modifications to themselves, on the theory they could gain an edge over competitors. But many young companies have developed a philosophy that sharing some kinds of innovations brings broader benefits.
“People’s view of competition is changing,” says Daniel Debow, Rypple’s co-CEO. “Yes, some things should remain proprietary. But there’s a lot to share with each other.”
Facebook, for example, opted to publicly post specifications about its data centers, Debow notes. It’s a bit like the philosophy behind open-source software; though contributors to such programs may be giving away some of their labor, they stand to benefit as many more companies suggest improvements.
A Facebook or Spotify that suggested improvements to Rypple, for example, may subsequently benefit as others suggest new features for the service. After Rypple started working with Spotify, “we went to ten or 15 other companies to learn how to make it better, and that made it better for Spotify itself,” Debow says.
The service that was developed, called Social Goals 2.0, is being announced for use by other customers on Tuesday.
Rypple, founded in 2008, has raised $13 million from venture capitalists and angel investors that include Peter Thiel, the co-founder of PayPal, and Maynard Webb, the former chief operating officer of eBay and current chairman of LiveOps. Companies or individual departments may start with a free version of the service or can graduate to more full-featured offerings that cost $5 to $9 per user per month.
Debow and co-CEO David Stein were previously co-founders of Workbrain, an enterprise software company sold in 2007 to Infor Global Solutions for $227 million.
“We realized that the world of work was changing and the way people were being managed was fifty years old,” Debow says. “The world of software was becoming social and mobile and going to the cloud, and you had a whole new generation of people who had grown up using these tools.”
A defining trait of this new generation, Debow says, is that the tradition of employees receiving performance evaluations once a year is no longer appropriate. They want regular feedback on how they are doing, and more chances to learn and improve their skills, he says.
Rypple, among other things, allows people at companies to thank and praise other employees by posting colorful badges that are akin to those won by scouts. Managers can ask workers in a group to anonymously provide observations about how an employee is doing, and peers can also seek anomyous feedback about their own performance.
“For many people, this is the start of their careers,” says Persson, who works in the Stockholm offices of Spotify. “They want to learn as much as possible and share ideas…I have to meet that demand.”
Original article can be found here.