December 24, 2012 Issue
The Most Powerful Name In Corporate News and Information
Offering Solutions and Software that helps their Customers with the Recruiting Process, Performance Management and the Learning and Development Process, Halogen Software is helping their customers Build a World-Class Workforce
About Halogen Software:
Halogen Software was honored in November with the prestigious Company of
the Year Award at the 2012 Ottawa Business Achievement Awards (OBAA).
Halogen was selected by the awards committee based on the OBAA’s mandate to
highlight growing, innovative companies that demonstrate great customer
service and corporate social responsibility standards in the Ottawa area.
Paul holds a Bachelor of Computer Science, with Distinction, from the Technical University of Nova Scotia.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – December 24, 2012
Mr. Loucks: The grand vision here is about helping our customers build their world-class workforce, helping them get better results through a high performing aligned and engaged workforce and helping them establish talent with a lasting competitive advantage. We have just under 2000 customers right now, so you can think of that vision as pretty aspirational to get all of our nearly 2,000 customers to have a world-class workforce.
CEOCFO: What are the main features of your system and what is it that you are trying to accomplish with the features?
Mr. Loucks: I think you can think of the features as those components of either human capital management or talent management that helps companies build a performance based culture. Our solutions are designed to help organizations build their world-class workforces and establish talent as a lasting competitive advantage. We have software that helps them with the recruiting process and makes sure these organizations can source a large number of candidates in order to get the very best talent. We have software that helps them with the performance management process, the appraisal process or the goal management process. We have software that helps them with the learning and development process, with succession planning and with developing job descriptions that accurately reflect the role and competencies needed to help organizations succeed. All of these solutions integrate so that organizations have the information they need to make effective talent decisions. Think of an employee with whom you have been going through the appraisal process with. Perhaps you are evaluating this employee for her negotiation skill. Based on her performance, she ends up being a weak negotiator and you need to put into place a development plan to help her improve on this skill. From our performance management solution, you can automatically jump out to our learning and development solution and assign a learning path to this employee without exiting the appraisal process. This means you can discuss and identify development activities as part of your employee performance appraisal review. You can then monitor progress throughout the next year to make sure that the employee improves on the negotiation skill and closes that competency gap. We also have a compensation module, which makes it easy for organizations to establish a pay-for-performance culture. It lets you introduce real accountability to compensation plans and reward your workforce accurately and fairly based on real, measurable performance. We have a succession-planning tool to help ensure organizations have a large pool of employees ready to step into new roles. Think about establishing a talent pool in your organization for people. You may have a bunch of individual contributors in your company and they want to become entry-level managers. They are currently evaluated against individual contributor competencies, which would not include something like inspirational leadership, but you want to move them up into that entry-level manager role. To do that you want to make sure they are inspirational leaders, so you will need to help them develop those leadership competencies by placing them in a talent pool. Then you will put development plans in place in to make sure that they have those leadership skills and are ready when entry-level manager jobs come available.
How do you help companies with the personal assessment side and where does
gut feeling come into the mix?
CEOCFO: What types of organizations are using your services?
Mr. Loucks: We target companies with between 200 and 10,000 employees. There are 48,000 of those types of companies in North America. We have just under 2000 of them using our software and they range in all different industries. There are many brand-name customers that you would recognize like San Diego Zoo, Jelly Belly, Major League Baseball, etcetera. When you have a mid market target customer, the vast majority of those companies most people do not know. We are proud to have the brand names and we are equally proud to have those companies with 500 employees out there that no one really knows about.
CEOCFO: Halogen has been around for a long time; what are some of the major changes in the last few years?
Mr. Loucks: The largest change over the last couple of years is something we call Internationalization. From 2002 to 2009, we were really focused on North America and companies between 200 and 10,000 employees. As we went through 2010, 2011 and 2012, we decided we would expand our reach to be international as well. In 2010, we needed to make some changes to the organization to help us get ready for going global, think about changing software, adding language packs, extending support hours, marketing reach, and sales coverage. All those things went in place in 2010. In 2011, we opened an office in the UK in London and in 2012, we opened an office in Sydney Australia. I think that is a major shift for us as a company to expand our total addressable market and to start thinking global and acting global.
CEOCFO: What is the competitive landscape and why should people use Halogen?
Mr. Loucks: If you look at the history of talent management, it was the convergence of three independent spaces. There was the performance management space, the recruiting space and the learning space. They all merged into a single space called Talent Management Space and each of those companies either bought or built the products that the other companies had in order to complete their talent management offering. The reason prospects should choose Halogen is because I believe in the talent management space, the companies that came from a performance management background like ours provide better solutions, drive better employee performance and get better business results for their customers. Halogen is very customer focused, so world-class customer experience is incredibly important to Halogen. We offer the only solution built from the ground-up to drive higher performance, and we believe that it is not about the here and now; it is about making sure we establish great relationships for our customers that last twenty years out. We think that focus on the customer really separates us from our competitors.
CEOCFO: Do you find your customers take advantage of the wide variety of your services?
Mr. Loucks: Yes, we have astronomical customer satisfaction scores and that is not only the products but also the services that we offer. One of the more innovative services that we just launched in the last few years is something called Continuous Advancement. Continuous Advancement enables us to make sure that each and every year we have a set amount of services with our customer which allows us to do an audit of where they are on the talent management maturity model and make sure they are always progressing to get better results, so they can build that world-class workforce.
CEOCFO: Last quarter you had 30% revenue growth; how do you sustain this?
Mr. Loucks: I think we are very fortunate; we are in the talent management space that is a very active and good space where there is a great deal of interest. It is still in the early stage. People are recognizing the value and CEOs are starting to pay attention.
CEOCFO: Have you seen any effect from the economic situation over the past few years?
Mr. Loucks: I think 2009 did show up as a year that was quite challenging for the industry. Prior to 2009, you would have seen companies in the talent management space with 50% to 80% growth rates and I would say 2009 slowed most of those down to anywhere between 25% and 50%. Since then we have continued to see the market mature nicely, and have seen 25% to 35% growth rate year over year for an extended period.
CEOCFO: As you grow and expand into different geographies, how do you maintain the corporate culture and the focus on customer service?
Mr. Loucks: Customer intimacy is incorporated into the DNA of our company. If you look at customer focus as a core competency, it is something that we assess every employee against. It is something that in every interview and process we go through, we are making sure that the person is consistent with that as part of our core culture and our values. It is the opening sentence of our mission statement. When our customer calls us for support 95% of calls are answered by live operators within sixty seconds. We think they deserve that level of service combined with a great product. We make sure we satisfy them and that they get great results and we know over the long-term if they get great results we will build a great company.
CEOCFO: Would you tell us about the Company of the Year Award?
Mr. Loucks: We won Company of the Year Award about two weeks ago and we are very proud of that. I think when you reflect on it, it was quite interesting and we felt there were many reasons we deserved to win. When you look at the criteria they were putting forward, a key criterion was customer experience. Given that customer intimacy is our path to leadership and ingrained into our DNA, we did very well in that category. When you look at the category of innovation, we worked very hard in that area. We have an innovation committee within our company and we do something called Leonardo Friday’s, which is kind of your UPS half-days where people go off and create solutions that are off the beaten path but provide that innovation to your product. Corporate social responsibility was another area that was a highly valued criterion in the Company of the Year Award category. We identify three identified charities each year through an employee voting process. We run programs throughout the years to raise money for those charities, with the corporations doing a matching of the funds raised.
CEOCFO: Would you give us an example of an idea that came out of one of those innovation sessions?
Mr. Loucks: One of the features that we released in our product six months ago is called Feedback Central. What Feedback Central does is allow managers and employees to provide feedback on either other employees, peers, direct reports or managers for things they have observed that the employees have done that they think are particularly good. If you are walking down the hall one day and you see an employee servicing a customer in a fantastic way, you will go into our system and make a Feedback Central note. It will be put into that employees file and when it comes time for review, that employee can look up all of these feedback items that people gave to them throughout the year and make sure it is incorporated into their annual performance. Employees will be recognized for the great job they do in that area. It is one way we help organization establish a feedback-rich culture that drives performance.
CEOCFO: Why should the business and investment community pay attention to Halogen Software?
From an investment perspective, we are clearly still a privately held
company, so they cannot run to the stock exchange and buy shares at this
point in time. I think that we look at the company as a long-term
opportunity and it will be a long-term success story. They may want to watch
a company now that maybe some time in the future they will get an
opportunity to invest in.
“We offer the only solution built from the ground-up to drive higher performance, and we believe that it is not about the here and now, it is about making sure we establish great relationships for our customers that last twenty years out. We think that focus on the customer really separates us from our competitors.” - Paul Loucks
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