#HRTechChat: Mike Ettling, Chief Executive Officer at Unit4

I’m going to date myself here. My first encounter with Mike Ettling, CEO of Unit4, was over 10 years ago. Technology editor for HRO Today at the time, I was relatively wet behind the ears, as the saying goes, when it comes to human capital management and the technology for it. I attended a briefing for analysts and the industry press with Mike, CEO at the time of what was then NorthgateArinso. The gathering was in real life, a.k.a. IRL (a term that had not even emerged yet).

“Well, Brent, that goes back some time,” Mike said when I brought it up to open the discussion on this episode of the #HRTechChat video podcast. Much has happened since 2011. NGA became NGA Human Resources and, eventually, a part of Alight, and Mike went on to even greater things. Possibly most notable among his past roles is that of CEO for SAP SuccessFactors, a post he held from 2014 to 2018.

To say Mike loves thinking about HCM is evident. He sees how it all blends, and he takes it a step further. “Unit4 focuses on ERP for people-centric businesses,” he says, and his philosophy there is, in fact, to treat HCM and Unit4’s software for enterprise resource planning and financial planning and analysis (FP&A) as being inextricably linked and having one holistic application for business.

Mike’s perspective here is refreshing. The idea to integrate these activities closely has been forming bit by bit for years, and, from a messaging standpoint and more, the approach has been just screaming for a go-to-market vehicle. The benefits afforded to an organization that treats these activities as linked are many and go beyond potentially sizable newfound efficiencies. The company that can give its financial people visibility into the organization’s people overall, its workforce, will cultivate a greater appreciation among the former for the upside of a positive employee experience.

Perhaps it is no accident, then, that one of Mike’s first executive decisions, when he took the role to lead Unit4, was to rename the human resources department as People Success, a term that captures the essence and spirit of recently gathering trends in HCM and business leadership overall: the tenet that organizations’ profitability and overall perpetuity hinges on their embrace of a new guiding ethos, one that asserts the success of the company’s people ultimately translates to success, period.

Not for naught, the concept is baked into Unit4’s tagline, too: “in business for people,” which is what initially drew Mike to Unit4, he says. The saying implicitly intersects with diversity, equity and inclusion, another topic we explored during the podcast. Mike says that he is grateful for his upbringing in South Africa, as it instilled in him what he sees as a second nature for DE&I. “You cannot solve DE&I with a process,” he says. “You can solve it with empathy and the right leaders in an organization.”

It was a wide-ranging conversation. Just before recording began, Mike and I joked that our discussion would probably dip into speculation over artificial intelligence at some point (as does most coffee talk in HCM these days, it seems). Amazingly, it did not, but he says he’s interested in returning to #HRTechChat someday to discuss AI specifically. That would be yet another fantastic discussion.

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Transcript:

Brent Skinner 00:03
Well, hello everybody, and welcome to this the latest episode of the #HRTechChat video podcast. I have a very, very special guest with me today, it’s Mike Ettling, who is the CEO at Unit4.Welcome, Mike.

Mike Ettling 00:16
Hey, Brent, good to see you.

Brent Skinner 00:20
Yeah, good to see you, too. I remember the first time I met you, I don’t know if I actually met you. I don’t recall. But I was in the, at the event it was for journalists and analysts way back in the day, I think it was maybe 2011 or so lucky to win. So yeah, and I’ve followed your career, and then not in a stalking way, just in the back. followed your career ever since just Oh, Mike’s there now and are here in there. And now you’re at Unit4. And it’s just been fascinating to watch. And we were we were at Unit4 analyst summit back in late ish 2021 in Boston. And I remember being very impressed with what you’re doing there and what the team’s doing. And then we spoke with you spoke with us a 360 insights team at HR Technology Conference and Expo back in September. And we had an interesting conversation there. But and there’s some there’s some of that we wanted to sort of resurrect today. But first of all, maybe you could share with the share with the audience. You know, what brought you to Unit4? What have you been doing? What how do you view the HCM, market space, these sorts of things. Not too much pressure here, thankfully,

Mike Ettling 01:40
well, well Brent, that goes back some time. 2011. But it’s interesting, because that was my first sort of segue from having spent most of my career in IT services in IT outsourcing. And a little bit of BPO, with companies like EDS, that was kind of my first transition at NGA into HR, and the world of HR. And, you know, and then I went on to spend time at SuccessFactors. And what got me interested in in Unit4 was the kind of the convergence of the people aspect with ERP, because Unifor focuses on ERP for people centric businesses. So, you know, we’re not interested in widgets and manufacturing, we’re interested in companies where the are the resources a person? And, you know, how does that hang together in terms of what we call the triple play value, which is around finance, HR, and project accounting and project management. So, you know, I say that I, it’s constantly been about people plays in the sense that nga was all about paying people SuccessFactors was all about engaging people. And Unifor is all about enabling people. So that’s been a little bit of my sort of career and thinking around it. You know, I think, I think the world we live in now around HR tech is, is an interesting world. Because certainly, in my area of focus, people centric businesses, consultants, cantons, lawyers, engineering firms, I don’t think you can afford the luxury of thinking of finance, HR, and project accounting in three distinct buckets, cause an effective professional services firm, it’s all about the integration of those three, and how things happen in between those three entities, you know, whether you recording time, billing time, learning people’s skill sets, assigning people to a next project, it’s all in a very, it’s all got to be highly integrated. And it’s all got to be really in sort of one type environment. So who would have thought after my SuccessFactors? Career? Yeah, I’d be advocating the power of one solution and how it should be up.

Brent Skinner 04:15
You know, it’s, it’s super interesting. And I have so many thoughts. One is, you know, that was envisioning sort of a Venn diagram of those three domains of the enterprise. Right, you know, there are a few things that happen, you know, that are really sort of, you know, unique to those areas, but there’s so much overlap, and, and to be able to approach an organization you know, as a vendor and say, hey, you know, we, we, you know, we’re able to solve not just for your, you know, F PNL, but also your, your HCM and we can make those things work together. That, to me is really interesting. Many years ago, I was speaking With someone whose name escapes me, but we were talking about the, the hockey stick graph in terms of the, the benefits that you can sort of really experience when you’re when you’re really able to make, you know, ERP or and each HCM can really sort of get them tight and working together. There’s a lot of upside there. And, you know, you talk about the Go ahead, go ahead.

Mike Ettling 05:29
I think my definition of in that in that world of preserving for services businesses, I was interesting, you said ERP and HCM, my definition of ERP, includes finance, HCM and project, right, we’ll see ERP as a component, but it’s the overarching piece. And if you think about that sort of triangle, those three things, what really makes those businesses succeed is what happens inside the triangle around data movement, and workflow, and heart and insights, which you can get. So the days of kind of thinking about what I can buy three triangle points, and then try integrate it and put it together, you know, for professional services firms, I think has gone. Yeah,

Brent Skinner 06:23
you know, it’s, there’s a great point and, and it’s really fascinating to me, and really encouraging how, how it seems to be a very organic or almost background thing that’s enabling us to kind of think, to expand our, our thinking in this space, where we’re looking at, we’re looking at activity in the enterprise more holistically, right? It’s very moving away from those discrete silos. And, you know, a great analogy isn’t is in a talent acquisition and Talent Management. The latter, I think, is a term that’s going to go away eventually, not right away. But it’s really, that stuff blends together, you know, I’m old enough to remember when internal hiring was called promoting people, right now, it’s called internal hiring, you have a re onboarding, you have internal onboarding, all this kind of stuff, and you have learning that threads through the entire thing, you know, this, you know, with the exception of, you know, actually sourcing the potential new external person, right, external, higher, there really is no discernible, beginning an endpoint between those two domains anymore.

Mike Ettling 07:42
Yeah, I think you’re right, I think we seeing that whole value chain, from, you know, finding talent, engaging the talent, and then how talent gets developed, really melding now into one continuous type of process. And, but I also think it’s drive, there’s a cultural shift driving around this as well, because, you know, hrs, traditionally come at this, from the perspective of HR has to manage this. You know, I wonder To wit, to what extent, one, somebody’s engaged in an organization, you know, the management and responsibility for development and talent should actually be more squarely in in that person’s realm of responsibility. You know,

Brent Skinner 08:37
I agree with you and that, you know, that parlays with this idea that a lot of HCM you know, to me, it’s interesting to think about how much of the employee experience for example, HR is going to know, what is HR is natural place in the employee experience versus line managers, the people who interact with the employees having the experience and those line matters or experience for the for that matter, because their employees to it’s all really, really interesting. And, you know, honestly, this, this is, uh, this is this is a nice segue because I know, we wanted to talk about, you know, engagement of employees and, and, and I know that you have some philosophies around that. visa vie diversity, equity and inclusion as well at Unit4.

Mike Ettling 09:30
Yeah, I think you know, it’s interesting what the thing which at Unit4 which attracted me, firstly, to the company, you know, when the P firm asked me to have a look at Unit4 was the strap line. So we have we have a strap line on our brand, which says Unit4 in business for people. And that was what got me interested. You know, in terms of, well, what could that mean? What does that actually mean in the business? I don’t think we it was then very well crystallized and define. But the thing I like about it is that it, it resonates for customers. So we in business for people, based businesses, business for people ourselves. And I think it creates a very kindness, symbiotic, outward looking and inward looking kind of statement of what we are, which is really important. And then, you know, I think when you think about any business, I do find somewhat the, the sort of constant focus and talking about the AI, almost like, Well, why are we talking so much about it? Shouldn’t it be second nature? In organizations, you know, and having had the, you know, I think that I’ve been very fortunate enough to grow up in one of the biggest diversity petri dish experiments, I, you know, the whole transition of South Africa, I’ll take days to, to the change and what it is, you know, it’s always been kind of second nature, thing for me. So, you know, I think we, to me, that’s the biggest thing about an organization is, this is something which is driven in my experience by a lot of empathy. And, and bad leaders, you cannot solve DNI, with a process, you can solve it with empathy, and the right leaders in an organization.

Brent Skinner 11:43
That’s a huge point. And, you know, for getting down to brass tacks here, so to speak. As an analyst in the space, I see a lot of solutions out there. And in the, in the marketing that kind of wraps around it, there’s a lot of discussion about dei and how it helps with dei and all that and not saying that it doesn’t because you know, a lot of these solutions, and this might be a segue into AI at some point during our discussion today. But you know, you can have AI or machine learning or whatever you want to call it. That’s, that’s understanding. Who’s out with a talent acquisition, and it’s helping to bring in more, a greater volume of potential new hires, who were, you know, categorizable as diverse hires. So that does help but then there’s sort of mechanics doesn’t mechanics of Dei, and then there’s, and then there’s the whole abstraction around dei and, and you know, you’re not going to you can I like automobile analogies, right, you can have a, you know, a really fast Porsche or Corvette or whatever. Really great car. But if the driver doesn’t know how to drive it, you know, that’s the only going to get so much out of that. So that, to me, is where the empathy comes in. So you bring up a super important point.

Mike Ettling 13:07
Yeah, and I think the whole thing about beliefs, and empathy, and leaders, I think, in this topic, Trump’s process, and the reason I say that is you have people’s views on di are kind of shaped and grounded by the upbringing. You know, mine was shaped very significantly by my upbringing, and the experiences I had growing up in South Africa. Now, whether somebody has grown up in Norway or England or us, it’s very much shaped by that. And there’s no one size fits all answer. So coming up with a process in North America may feel totally alien to a leader employee in Norway, or in, you know, somewhere else in the world. Most of the sort of code. The belief system can be common, you know, the fundamental beliefs. You know, I always say to leaders, if you don’t fundamentally believe that having the most diverse team is going to be add more value, be more exciting, create more innovation, be more develop you more as a leader by having more diverse reports, you don’t fundamentally believe that? You know, that’s, that’s an issue, you know, whatever. QUESTION And so, I think this is an area where recruiting for beliefs is really important when you bring in leaders on around the topic. And I’m a little bit more than I’m a little bit I’m quite skeptical and cynical about is this a category of HR tech tools? Yeah, because think HR tech tools are going to be built. You know, if the tool originates in the USA, it’s going to have a kind of the history of the USA embedded In the tool, if it’s built in Germany, it’s going to have the history of Germany, if it’s built in South Africa, it’s going to have that history embedded in other tool operates. And I don’t believe there’s a single process, universal process, which companies can adopt, which is going to magically change, you know, the whole di landscape, strong views on this set, it’s all about beliefs, it’s all about empathy. You know, it’s all about the leaders. And if you can get that right, then a lot of good stuff can happen in the organization.

Brent Skinner 15:33
Absolutely. So and that’s where the, you know, the tools and functionality that, that just so happen to help. With Dei, you can get the most yield, or you can get your real money’s worth out of them. I agree with you. And I’m skeptical as well, that there’s a really a true category of HR, HCM technology that will, you know, be dei solely focused, you’re absolutely right on that, you know, and for some of the, the, the skeptics out there, and, and we don’t judge them, but at the same time, there is actually I’ve been learning a lot about this over the past few years. And there is some evidence, strong evidence out there that that diversity, equity and specific diversity and inclusion, equity is, you know, that’s important to us talking about diversity and inclusion here. Google did some, some, longitudinal, some massive longitudinal research within its organization around diversity and inclusion and all that. And they, they found that, you know, if, on teams where everybody feels like they are, they are that their opinion is welcome, for instance. Right. So it’s talking about inclusion, that those teams perform better. And because there’s more innovative thought, you could call it bright brainstorming or ideation when, you know, innovation, true innovation versus, you know, attempts at it, you know, to achieve it are two different things, but you can’t get there without brainstorming and ideation probably, that, yeah, so those teams perform better. And that’s something I actually learned recently, but you know, this, there’s, this is not, you know, there’s, there’s sort of, you know, I think, you know, if you look at the general population, you know, in the HCM, technology, space, especially, we’re, we’re very much sort of attuned to this, and we’re very much aware of it, and we understand it, but, you know, the great blue, yonder, wide blue yonder, well, the blue yonder, whichever it is, you know, there’s there is some skepticism there. And so it’s important to kind of bring this, this understanding to, you know, the thinking, you know, that’s, this is just kind of a wishy washy, soft topic, but there is some very, very defensible research behind it.

Mike Ettling 17:59
I think there’s a lot of these, there’s good research at a sort of company level, particularly around innovation, you know, diverse teams are way more innovative. But I think when you stand back a bit, and just look at a macro picture, you know, I always say, I think the biggest living proof of diversity being successful in Silicon Valley. Just look at, you know, the diversity of nationalities and cultures and founders and CEOs, which make up, you know, that whole innovation hotspot of Silicon Valley, and all the companies which have been spurned out of that, you know, that is not pure, you know, American only what type of environment, it’s incredibly diverse, attracts people from all over the world, from all walks of life, to create that outcome. So when you stand back and look at the big picture, you know, there’s the biggest living proof.

Brent Skinner 18:55
Any No, that’s a really great point. And it developed organically. There was no sort of sort of authoritative force that said, You guys have to do this. It just it just developed that way organically. And, you know, not for not this is kind of interesting. I learned just the other day scrolling through LinkedIn, actually, about the end it was called the traitorous nine or traitorous eight or whatever, they way back in the day that the late 1950s I think it was they all left a certain company and founded the first sort of real, bonafide, successful tech company in the Silicon Valley area, and they all happen to be white guys. So it’s interesting, you know, it started that way. And but it didn’t stay that way. You know, so it’s just really interesting. Yeah, this is just absolutely fascinating. Let’s talk a little bit about it. This is a nice segue to HR at Unit4. I know that this was something that really struck me and I it really resonated with me Back when I was at the analyst Summit, he called people, the people success department, you’ve dispensed with the term HR, so to speak, I don’t want to take words out of it. I’ve put words in your mouth. But can you talk a little bit about that?

Mike Ettling 20:16
Yeah, so we, we call it people’s success. Because ultimately, I think, you know, having been in NGA, a payroll company, you kind of you deeply understand the roots of HR as being the payroll department. And now you go back, that’s a lot of HR. You know, that’s kind of the origins of HR. But actually, what is HR hrs, in my view is about enabling leaders enabling people to be successful. And that can take place through a multitude of different tools, technologies, engagement. So let’s call it that it is about people success. And, you know, I liked the name because it doesn’t have the same control dimension, which human resource management, as you know, and then some people started calling it human capital management, then just starts getting into like, finance resource allocation connotations, you know, like a capital allocation. And the end of the day, it’s people, you know, it’s people and people success. And so, you know, I think that resonates well, certainly, for me and in our organization. And, you know, my, my people success leader truly sees it in that light. That’s her role. And that’s what she wants to enable. In the organization.

Brent Skinner 21:49
Yeah, it’s, it’s, it’s a brilliant move, honestly, you know, because there’s people success, that term, it could have been any number of terms to connote what you’re emphasizing here, but I think people success really is because it’s the word people, right? That’s, you know, I think we’re all kind of in the background in this industry, you know, on the sideline, you know, on the side, having little conversations here and there and trying to think what’s, how can we get away from the term human capital management? Or, you know, let’s think of something new. And, you know, I just that, that, that was what, however, that came about, that was a great conversation. You know, the other thing is the thinking about human as, as humans as capital, right? You make a really good point there. Even there, though, you know, there’s, we’re talking about a shift in thinking, right, you know, it’s okay. All right, let’s call them capital, but let’s, let’s, let’s measure them differently in the, in the GL, or the spreadsheet, right? They’re not a, you know, they’re not an expense. They’re, you know, this is where I reached the outer limits of my accounting knowledge. You know, what would be, you know, like their, you know, like, an asset or something like that, right.

Mike Ettling 23:11
Yeah, I mean, it’s funny that because there was an era, about 10 years ago, where there was there’s massive kind of trend in the industry around how do we quantify the value of people in on the balance sheet? And, and how do we bring this kind of people starting to look at it through a lens of very kind of accounting type lens? You know, I think it’s fundamentally flawed. And then it’s like, trying to quantify the unquantifiable in the sense that, you know, we know that organizations with a better people dynamic across multiple dimensions are way more successful. So let’s put our energy into trying to create that dynamic and sustain it, versus putting a whole lot of energy into trying to quantify it and measure it. Because that’s important. You will know it when you see it. You’ll know when you feel it and experience it. You don’t need to measure it and sell it to you.

Brent Skinner 24:13
Yeah, I feel like you’re my spirit animal right now. I totally agree. Right? It’s, let’s just put that into place. For the best possible employer culture, there is endless wait and see what happens knowing that it will be good, right? Is your absolute right is fundamentally flawed to try to quantify that because it’s, it’s an unknown quantity, aside from the fact that we know it will be greater than zero. It’s an unknown quantity. It could be a million here, it could be 100,000. There could be $67 somewhere else, but it’s going to be in the upward trajectory. That’s why it doesn’t fit into the Yeah, the spreadsheet. And so, you know, to look at organizational success solely through the lens of the accounting spreadsheet, or organizational health, solely through the lens of the accounting spreadsheet is that’s a, that’s only a piece of the puzzle.

Mike Ettling 25:20
Yeah, I totally agree and not to, you know, I run a private equity based company, so not to undermine the importance of, you know, financial metrics. But I think people success and the people dynamic is a very powerful lead indicator towards where the financial dynamic is going to end up. You know, and it’s a little bit different now, with so much work from home. But, you know, I used to, say, five, six years ago that when you walk into a company, and you walk into the lobby, and you spend your first 10 minutes walking around, in 10 minutes, you can get a feel for the culture of the organization, many of us would make, you know, a lot of companies selling to HR leaders, you’d make up you’d formulate a view on the entire company based on that dynamic. And you, you know, walk into the company. And I would, I would say, being an accountant by profession, the views I formulate, walking into the lobby of a company and touching and seeing the culture, but are as equally important as the views I’d formulate looking at the balance sheet. And I’d probably get more predictive views out of the first one, then looking at the balance sheet.

Brent Skinner 26:41
That’s it, that’s it. That’s, that’s saying something that that is so profound. And I’m glad you brought this up around, you know, being able to really kind of sense the, the culture, walking around for 10 minutes. And you know, and again, this would be different now with work from home, and all that, but especially when you’re selling when you when you are I’ll use word selling, selling a product to people, leaders, especially that that to me is just essential, it’s indispensable, it’s inextricably linked to your ability to your success, in growing your market share is to have that, because every single one of your customers or prospective customers is going to look to you as it, they’re going to, you will resonate with them as an inspiration because they either they are in various stages of HR, maturity, or HCM maturity, whichever you want to call it, and they aspire to have a culture that that matches the energy of viewers. So you can see it’s not just about the functionality, obviously, its functionality needs to be good. But if you have two companies whose functionality are it that don’t suck, right? They’re both good enough. The one that has a better culture is it’s not it’s not going to be a perfect, you know, you know, you know, undefeated season, but they are going to, to win those deals more than the others.

Mike Ettling 28:19
Yeah, I totally agree with that. Because the culture, you know, how your people show up in front of a potential customer, you know, sends a strong signal to what that 567 Year 10 year experience is going to be. And remember, the more sweet type of solution like ERP, you know, the less the site, the longer the cycles, people don’t want to replace ERP every two years, they might replace compensation management, every but ERP, once you’re in, you want to be there for 10 years. So people are really looking at ERP when they think about it as a marriage. And all those non tangible factors really can’t.

Brent Skinner 29:06
Yeah, you need to choose your mate. Well. Yeah, yeah. Oh, this has been absolutely fascinating. Like, thank you so much for joining us today. Really, really interesting stuff you’re doing at Unifor.

Mike Ettling 29:23
Thank you. Brent has been great to talk to you. And, you know, just to remind you, this is live Mike, not a bot.

Brent Skinner 29:30
Yes, this is not a deep fake. This is real. And maybe we’ll talk about AI in our next podcast. I’d love to have you back

Mike Ettling 29:38
We had to say that with what’s going on in the industry.

Brent Skinner 29:41
Right. Thank you very much, Mike. Thank you.