The Secret Sauce of Hiring and Retention in the Digital Era

Jim Marous (00:11):

Welcome to another episode of Banking Transformed, the podcast that dives deep into the trends, innovations, and strategies shaping the future of banking. I'm your host, Jim Marous, owner, CEO of the Digital Banking Report, and co-publisher of The Financial Brand.

Jim Marous (00:25):

As banks and credit unions continue to navigate the rapidly evolving landscape of digital transformation, developing a skill and adaptable workforce have become more critical than ever.

Jim Marous (00:38):

We are thrilled to have Pierre Naude, CEO of nCino join us on the Banking Transformed Podcast, where he'll discuss the opportunities and challenges of hiring and upskilling key employees for the digital future.

Jim Marous (00:51):

Pierre shares nCino's approach to talent acquisition, training and development, highlighting the importance of continuous learning and adaptability. He also, discussed the challenges banks face in attracting and retaining top talent in a competitive marketplace and offers strategies for overcoming these obstacles.

Jim Marous (01:11):

The future of work calls for a proactive approach to talent management from the top down, fostering a culture of continuous learning and adapting hiring practices to identify candidates who can thrive in an AI driven environment.

Jim Marous (01:26):

By investing the right talent and providing ongoing training, banks and credit unions can harness the power of generative AI to drive innovation, improve customer experiences, and gain a competitive edge in a very evolving financial services industry.

Jim Marous (01:43):

So, Pierre, before we start, could you provide a brief summary of your career path and an overview of how your role at nCino has changed over the last 12 and a half years?

Pierre Naude (01:54):

Jim, thanks for having me.

Pierre Naude (01:55):

We started as a startup with five people in a room as big as my office today. And so, obviously that beginning phase, you put desks together, you decide the strategy, you build product, you call customers, and the job is everything just to make it through the first few years.

Pierre Naude (02:11):

Over time, that job has evolved from a lot more away from the tactical, to a lot more strategic, as well as setting the right direction for the company and understanding the marketplaces we are pursuing and the specific needs by marketplace so that we hit the nail as we enter those markets.

Pierre Naude (02:29):

So, I would say in the beginning days, you're literally with a team every day tactically involved in making sure you get the foundation in place.

Pierre Naude (02:41):

Later stages like now, you're a lot more focused on strategy, the right skilled people around you, the right attitude, the company's culture. So, it's more big picture things. But I enjoy every day of it.

Jim Marous (02:54):

It shows. I was at your event about a month ago, and it showed your love for the business, your love for the company you work with, and for, and the people you work around. And it was interesting because the reason this podcast actually came about was during a breakout session I did on behalf of your top customers.

Jim Marous (03:14):

You and I met each other in the hall, and I said, "It's amazing how the company seems to have what I see as your personality to a degree, a good fun living culture, a good attitude, some real good intelligence, but also, a finger on the pulse of what's going to happen in the future."

Jim Marous (03:31):

And you immediately said, "Well, have me on your podcast. I'd love to share how I think the hiring of people is probably the most important thing I do and how I'm still involved in doing it." And you said not to braggadocious, but in a really calm way, "And I think I'm pretty good at it."

Jim Marous (03:46):

So, what are the most important factors that nCino considers when hiring new employees? And are there any specific values that you want your candidates to be aligned with?

Pierre Naude (03:57):

Yes. So, it's a very interesting development is how we came about this. After about six months, we had 15 to 20 people. We started making hiring mistakes. In your early days, you’re VC funded or we actually ran on a loan.

Pierre Naude (04:10):

You realize I cannot continue doing this because I can't afford it, number one. And number two, I need to get my people aligned what we're looking for. That's one cornerstone.

Pierre Naude (04:18):

The second one is I've worked for some pretty poor managers in my life and where politics was paramount, they tried to keep you down, initiatives were squashed.

Pierre Naude (04:32):

And I literally sat back before I was asked to start this company and said, "What if we just treat people with respect, dignity, and nice, and actually make sure that they decide that they are respected, their ideas do matter, and that they can share their ideas without fear of retribution or belittling."

Pierre Naude (04:54):

Alright, so, literally I decided this is going to be like warfare. You have to decide how do you win them over. So, at nCino, we will never tell somebody, "You're lucky to have a job here." I repeatedly say, "We are lucky to have you because you're doing a fantastic job here." So, that's number one.

Pierre Naude (05:11):

The second thing is we actually do have a little diagram, which is pretty awesome. I saw it on a Harvard Business Review a while back. And the one access is competency, and the other access is likability.

Pierre Naude (05:21):

And every onboarding class that we bring in, it's about 30 to 40 a month. I present to them for 30 to 45 minutes because firstly I tell them, "You are hand selected, you're not lucky to get in gear. We went through this whole process."

Pierre Naude (05:36):

The second thing is, if you look at that diagram I just talked about in the bottom left corner, you're incompetent and you're not likable. We call that the vortex of death. We don't want those people, and we're very honest and open about it.

Pierre Naude (05:49):

Then if you go one block over, you're somewhat incompetent but man, you're the fun of the party. You always have the pool for the football ready, you've got the baseball beds going and you know everything. But eventually your team suffers because they have to carry the weight.

Pierre Naude (06:08):

And we identify this, and we say, "Look, the lovable fools we can't afford to have, but we can train them and we can help them to get over the line to actually be competent and likable people."

Pierre Naude (06:18):

Then in tech, you've got a third element and that is your competent jerks. Those are people that's highly competent, very good technically, et cetera.

Pierre Naude (06:29):

But man, they're difficult to work with, they always second guess the strategy. And by the way, they hoard information. And then they would influence a pool of 10 to 20 people around them and make them dependent on them because that's their power.

Pierre Naude (06:42):

And I would tell you in tech companies, that is the most difficult thing to root out. So, we just don't tolerate that, and we absolutely will get rid of people who behaves like that.

Pierre Naude (06:52):

And then finally on this axis, highly competent, very likable people, that's where nCino hires. And we make that clear in the interview process, we make it clear as they come on board, and we reiterate and reinforce us on an ongoing basis.

Pierre Naude (07:07):

Because if you take those four factors and then you look at attitude and you pair it with our six values, once people made it through this and they come in with a positive attitude, you put an amazing culture together that understands our job is to make the customer successful. And that's what we did.

Pierre Naude (07:26):

And I will tell you at times during COVID, et cetera, this thing slipped a little bit. It was not in-person, it was more remote, et cetera. And then over time those people leave because they feel uncomfortable.

Jim Marous (07:38):

It's interesting, I can understand how you can determine, or grade, or evaluate competency. Before you hire a person, how do you determine likability?

Pierre Naude (07:50):

So, by the way, I want to make sure, this does not mean you have to be a type A or a type D person or a type B, et cetera. This is not the factor because I need some quiet analytical people that's deep thinkers. I need some outgoing people who's in marketing and sales who can entertain customers, et cetera.

Pierre Naude (08:06):

So, it is a broad set of cultures. It's also, a broad set of diverse backgrounds in all measurements that you can get today.

Pierre Naude (08:17):

But in the interview processes, we've got specific questions, and we figure out, are you a glass half full person or a glass half empty person? And you can't determine that through questioning. How do you approach problems? Do you say we cannot because versus we can if?

Pierre Naude (08:34):

Because look, we like to approach every problem with a we can if. And then we can if could be, “Pierre, we give you $3 million to invest.” I can of course go do that. Or, “Pierre, we can if you deprioritize this and go do that.”

Pierre Naude (08:45):

What that does is it feeds a positive narrative that anything is possible and that forces us to prioritize. Versus everyone in legal, HR, and finances, we cannot because.

Pierre Naude (08:58):

So, that will snuff out all initiatives. You do it five, six times to somebody, they go, "Well, my ideas doesn't matter." And so, we are reinforcing these ways of working continuously throughout the organization.

Jim Marous (09:13):

So, do you then measure those skill sets and determine how well are they doing on that four-quadrant grid?

Pierre Naude (09:21):

Oh, absolutely.

Jim Marous (09:22):

So, that's where you value? That’s great.

Pierre Naude (09:23):

Yes. And I would say, "Jim, you work for us, buddy. You're fantastic. You're a great programmer, you're a great system analyst, whatever you do."

Pierre Naude (09:29):

"But I'm noticing behavior. You're slightly over the line here on the competent jerk stuff. And let me show you the behavior. Here's what you've done and here how people reacted to it. So, I need you to move slightly over."

Pierre Naude (09:40):

And you'll be amazed, people see that little diagram and they go, "Wow, I didn't realize I impacted them that way. I got it, thank you very much."

Pierre Naude (09:48):

And over time, if you do this consistently it just becomes part of the DNA of the company.

Jim Marous (09:54):

Boy, that is so key. And it's something that we continually get caught up in how smart a person is, how many skill sets they have. And you said it, it hurts the company if the person doesn't have those likability skills.

Jim Marous (10:08):

And as you said, it doesn't matter if they're loud or quiet, that doesn't determine likability in many cases. In fact, it can impact life maybe in a negative way in some cases.

Jim Marous (10:18):

But when you're hiring and to see that you do that, but then also measure along the curve, then the people that are hiring want more people like that. I mean, it becomes a never ending thing.

Jim Marous (10:29):

And you said you get at least at the end part of every single hire, you're part of the indoctrination onboarding process?

Pierre Naude (10:37):

No. So, they get hired by their departments, but then every month people who got hired over the past 20 working days or 30 days go through a fully onboarding process. And there is presentations by all my senior leaders.

Pierre Naude (10:55):

I go down there, and I spent 30 to 45 minutes with them making this exact presentation. Show them how they got selected, tell them why they're here. Take them through our core values, take them through to the origination. Why do we have six values? What do they stand for? Why did we pick them?

Pierre Naude (11:13):

And it's actually great fun because remember, English is my second language, so I don't do corporate speak. So, if I could just read to you our core values.

Pierre Naude (11:21):

The first one is make someone else's day. The second one is do the right thing. Third one is respect each other. Have fun is number four. Bring your A game, and finally be a winner.

Pierre Naude (11:34):

We are not a family and it's very important to understand that. Families tolerate Uncle Bull behaving badly at Thanksgiving. Teams who wants to win Super Bowls, they are focused on winning and how you work together to actually score touchdowns and get over the line.

Pierre Naude (11:52):

And so, this is a highly professional team that wants to win the Super Bowl or the Euro Cup or the World Cup, whatever sport you like. And that's how we approach the business.

Jim Marous (12:02):

It is interesting because again, getting back to our first one-on-one conversation besides the time when you correct me on something I said wrong (which was great) during my presentation, but around when we came outside and you mentioned that you'd like to talk to my listeners about hiring and how you build teams.

Jim Marous (12:22):

That would not have resonated except for the fact that I already saw all that in action. I saw it in the people I worked with myself. I saw in your halls, I saw it in your post learning session activities at night. You live what you say and that's important.

Jim Marous (12:40):

Because a lot of people can say this and then you get in the company's going, “Eh, it sounds very normal to me.” It may not be negative, it may just be business as usual compared to everybody else out there.

Jim Marous (12:52):

And I get to see a lot of companies and that was the reason why this very quickly resonated with me because I said, "I'm seeing the impact of that. There's something going on here. There's a secret sauce." So-

Pierre Naude (13:01):

All CEOs love to say it's all about the people. And then I'll just give you a little data point here. And then they go to a five point annual evaluation scale and the HR dogma is that you have 5% on each of 1 and a 5. You have 10% in each of the 2 and the 4s. And then 70% sits on the 3.

Pierre Naude (13:26):

Now, if I say to you 1 through 5, what word comes to mind if you're a 3? The word is always average. So, wait, what signal are you sending to all your people at 70% of your average, 10% needs improvement and 5%. You just cover 85% of your people.

Pierre Naude (13:46):

So, we went to a 4-point scale, and a 3 is you're a rockstar. You are the solid and senior person who made it through the gate. You're here buddy. We win business because of you.

Pierre Naude (13:58):

And then we've got 20 to 30% who's a 4, who's absolutely knocking it out the park. And they get differentiated through pay and stock options.

Pierre Naude (14:06):

If you're a 2 and that cuts it through, you can't be this wishy washy, “I'm a 3,” when you're a 2, we need improvement. There's a problem here and let's talk about it.

Pierre Naude (14:14):

And so, these psychological elements is very important on the signals you send to people on a day-to-day basis. If I'm telling you every day you’re average (and this is not about skills, this is about effort) then your effort is going to be average because I just confirmed it for you.

Jim Marous (14:34):

Well, it's interesting because again, you just told me without making it a key point of the discussion, it's how you measure people. That you got rid of the average barrier, the easy fallback to a number. A three, maybe it's a four.

Jim Marous (14:51):

But now, you have a four-point scale completely changes the way you view how you measure people and the impact that measurement has on future engagement and in future activity.

Jim Marous (15:03):

You've been at nCino 12 and a half years, and obviously we've seen a lot of change happen recently, certainly since COVID. But more than just the hybrid work environments, more importantly is the skill sets needed.

Jim Marous (15:19):

The need for continuous learning becomes more important than ever, I believe, because what we knew yesterday is great as a foundation, but it doesn't put me to the future.

Jim Marous (15:29):

How do you build that mentality in a company as large as yours to keep your eye on what's beyond what you know is going to happen into what you're not so sure about happening?

Pierre Naude (15:39):

So, the cultural foundation, as I described, is very important because it means people can innovate and bring ideas without fear.

Pierre Naude (15:45):

But about nine months ago, we had a hackathon, and we've had hackathons for years where the developers can actually come with ideas and multiple prototypes, and we'll see what goes to product, and what is cute and so on.

Pierre Naude (16:00):

And so, last year we said, “Look, the world is moving to data analytics and AI, machine learning.” In other words, it's moving to a world of intelligence as opposed to a world of workflow and process. And we have to be willing to reduce our workflow elements and the time and roles it take to complete processes by automating it.

Pierre Naude (16:23):

And so, what we did is, (and this is a fun story) we said, we'll pay $50,000, five teams can win a price 10,000 each.

Pierre Naude (16:34):

And the first thing I loved was, so the 47 teams came in and pitched their ideas and we said, "Fine, go ahead. And you build, you get six weeks." And we told them the focus should be on analytics, and AI, and machine learning. All these automation technologies we can use.

Pierre Naude (16:48):

By the way, remember, I'm not sitting right next to Georgia Tech or MIT. I'm sitting in Wilmington, North Carolina, where a lot of the people we hire comes from the schools in Carolina, I get some schools from states next door.

Pierre Naude (17:05):

And the one team had four people. And the moment they had this 10,000 on the line, the team split into two groups because the one team said, "I can do this myself. I don't need to share the 10,000 with four people." And so, both of those teams went their own ways.

Pierre Naude (17:20):

They came back with insights, frameworks, and actually products that we are launching right now. The stuff you saw at Insight is being launched and it comes from these kids. And I call them kids because they're so much younger than me.

Pierre Naude (17:36):

But I used to code till I was 36 years old. So, I fully understand their culture, their curiosity, and how they feel rewarded. And it was amazing. It blew us away.

Pierre Naude (17:45):

My board, as you can imagine, keeps on pushing me. "Pierre, who's your big name you're hiring for AI? Who's your ..." I said, "Guys, they don't exist. The people who tell you that, they made it up because ... and I've had some of those and they never deliver. They just want to be on stage all the time."

Pierre Naude (18:01):

So, at the last board meeting, I said, “Well, for one hour go through the business and then for two hours, I'm literally unscripted without any presentation material, going to bring these young people in to talk to the board about AI, data analytics, and actually making the banking processes efficient and intelligent and change the way you work in the bank.”

Pierre Naude (18:22):

And that night I had them all over at dinner at my house, and the board members, and the ones is very technical, some are VCs, et cetera, literally said, "We've never seen anything like this." They were blown away by the intelligence, the innovation mindset of these people.

Pierre Naude (18:37):

And they left and said, "Pierre, just carry on what you're doing. If we ever ask for product again, I know what you've done. You drowned us." And I said, "Well, I wanted you to get as excited as I am because of the skills and the brilliance we have in the company."

Jim Marous (18:53):

Yeah, that's amazing. And when you look at that, when you look at what's going on today in AI and everything else, and in the future of work, we're dealing with hybrid work situations, talking about work-life balance, but also, we're talking about internal versus external talents to move us forward.

Jim Marous (19:12):

How do you balance that? How do you support the balance of not only (and these are two very different things) work life balance and hybrid work environment, but also, build yourself versus use outside talent or hackathons in this case?

Pierre Naude (19:27):

Yes. So, that's a very interesting question and there is a number of answers to it to balance that the right way. Firstly, all jobs we post, we post for internal and external. So, you can apply and you can come make your case where you think you qualify for it. And we do a lot of internal promotion.

Pierre Naude (19:42):

Secondly, we do have a nice little blend of external people we bring in. So, you always keep fresh and people with different perspectives coming from other companies. So, that's a healthy balance that's happening naturally in the recruitment processes.

Pierre Naude (19:56):

Secondly, you have to realize nCino was always a very flexible workplace. We were a hundred percent in office. But if you want to do something from home today, because you just need the quiet time, you never had to ask. You can just do that.

Pierre Naude (20:12):

If the air conditioner break and the repair man is coming, you just work from home, you talk to your manager. So, that was already baked into the culture. And I would say that flexibility helped us when COVID came, all these people was just ready to go and did tremendous stuff.

Pierre Naude (20:27):

And so, then when the pandemic was done, we tried the three days in the office, four days in the office and it was just a mess because now every meeting is half of the people is at home and half is in the office and it doesn't work.

Pierre Naude (20:40):

So, in 2022, October, we started with Wilmington. So, realize this is heavily dependent on the city or the region you're in. The commute time is different, et cetera. Wilmington has relatively no traffic compared to New York City, Atlanta, LA, et cetera.

Pierre Naude (20:58):

So, what we said is, in Wilmington as the headquarters, we're going to lead the way and we gave them three months to get their life in order and be coming back five days a week.

Pierre Naude (21:08):

Same as before I described it, if you have a personal situation, you work from home. But nobody can say, "I don't come in Fridays, or I don't come in Mondays." So, we are back in the office. Everybody said, "What's going to happen? How many are you going to lose?"

Pierre Naude (21:21):

My retention or my people that left went up a little bit and boom, it settled down. I showed a stat to all them, especially the young people.

Pierre Naude (21:31):

Firstly, you have to be mentored, you have to be around people to learn how the business works. And I want that personal interaction. That's a core value of ours.

Pierre Naude (21:39):

The second thing I made clear to them is that the people who want to stay home is between 30 and 50. They've got kids and they've got complex life. The kid coming out of college (and we did surveys) they want to be in the office, they have to learn, they want to be mentored. And that was too important to me to sacrifice them for the sake of flexibility.

Pierre Naude (21:57):

So, in Wilmington, we did the first test case. We all came in, we're in here five days a week and it's a fantastic thing. The second data point, mental health issues in America went from 11% of adults to 44% of adults because of loneliness, sitting at home, no interaction, et cetera. So, we took that step.

Pierre Naude (22:17):

Now, realize along with that we have many remote employees because there's people in Texas selling software, there's people in California selling software, et cetera.

Pierre Naude (22:25):

So, then we went to London. London is a very different commute. So, I told my GM there, Charlie, "What do you think is the right thing for London?"

Pierre Naude (22:33):

And he said, "Pierre, I'm going to ask people to come in Tuesday, Wednesday, Thursday. All three that you always come in. And then Monday, Friday is flexible because I want my salespeople and customers, in any case." Implemented that, worked fantastic.

Pierre Naude (22:48):

Salt Lake City, slightly different. Salt Lake City is Monday through Thursday in the office. Friday's a horrible commute day so you can work from home. So, we have a happy hour on Thursday at the end of day, and then Friday you work from home. And if you want to come in, you can.

Pierre Naude (23:02):

So, we took it very much by office. But the culture is, we're heavy on collaboration and we like to be together in the office in person. And that's how you learn. And I was very frank about it. If that doesn't work for you, I'm okay. Go work somewhere else. I understand it, I respect you, I want you to be happy and successful.

Pierre Naude (23:24):

But then as a public announcement, as an immigrant to this country, I reminded all of them, if you work remote fully, who are you competing with? You're competing with little Pierre, me, when I was 24 years old, I would work through the night for you to be successful and I'm willing to work remote in South Africa and have the price.

Pierre Naude (23:43):

So, now, you have to realize what is your value add as an American kid who wants to work from home without interacting with people. Because now, you're competing with offshoring.

Pierre Naude (23:56):

And you can imagine the slack messages and the, "Whoa, I can't believe Pierre said." I said, "I'm telling you the truth. It's a capitalistic society. That's what's going to happen to you."

Pierre Naude (24:07):

And today, it all settled down. We've got a fantastic culture and we carry on.

Jim Marous (24:12):

It's interesting, Pierre, maybe I'm reading too much into this, but when you went through all those stories, something you mentioned twice during the beginning was, if somebody has an issue where they need to be at home, we let them be at home. It's a trust issue.

Jim Marous (24:24):

What is interesting is that's trust and trust on both sides. Trust that the employee can say something that's not going to hurt their career, trust in the employer that a person's not going to overuse that situation. And that you were flexible because I've been in London many times and I don't think there's a soul in the city that works on Fridays.

Jim Marous (24:46):

But the reality is, it is an issue of transport, the commute, the dynamics of everything. But some of these same employees put in weekend time, they don't even get on the time charts, so to speak, but they get the job done.

Jim Marous (25:00):

And I think rather than put the law down, I'll use Chase Bank as an example where the leaders of Chase Bank said, "You're either in here or you're not going to be working for us." That's a little shortsighted on its own.

Jim Marous (25:13):

And you already showed that the whole process was interactive, it was collaborative. You're looking at your different units differently, different people's roles differently.

Jim Marous (25:23):

And that's really an issue of trust where that's not something that's created just by how you let people work, but it's overarching again, around you rated really high on that likability. I don't really want that likability at home. I want it to be in my organization doing what you do best. Your likability and your skillset.

Jim Marous (25:47):

As far as training, how do you bring people up who've been with the company for as long as you have and help them learn more about what's coming up? Let's say generative AI is a great example.

Pierre Naude (26:00):

Yes. So, firstly, we have formal training programs. We've got LinkedIn Learning, we have in-person training. And of course, there's technical training by discipline or what you play in.

Pierre Naude (26:10):

Are you into more of the banking processes business? Many of our employees come from banks. Are you more into the intelligence data, et cetera? And many of those people have degrees or backgrounds in those more scientific areas.

Pierre Naude (26:24):

And then as a company, we've got ongoing training programs. That's mostly external if it's highly technical and attached to new technologies. And if it's more about our current business that we've got, it's all about internal training.

Pierre Naude (26:38):

Because remember, we have to train the customers, in any case, how to use the software. If I can train a customer, I can train my internal people the same way.

Pierre Naude (26:46):

So, we have a wonderful group of people who does the onboarding. We understand exactly what discipline you came in for, and then you go through a training as well as a familiarization program to get you productive as soon as possible. And every department varies slightly depending on the skillset as well as our complexities.

Pierre Naude (27:06):

We hire a lot of people out of college and we get them up and productive in a few months. And we have specific departments where we feed in like customer success managers, like customer support. People coming in there, they learn the business, then they come out, they get promoted in the rest of the organization.

Pierre Naude (27:25):

I would say, to me, the most critical one of all of this is because technical skills, you can go find, you can go to a local college and so on. First and second line management. This is where companies fall flat.

Pierre Naude (27:36):

If you don't pay attention and train your first line and second line management, you've got a management vacuum and a gap of leadership downstream.

Pierre Naude (27:47):

If you train those people, let them sit with a CEO, get them in group meetings, understand the background of the values and why do we make certain decisions? They will defend you all day long.

Pierre Naude (28:00):

If they get it through HR, their answer is, “HR said we have to do this.” And that is a horrible message to send to a group of people that is highly intelligent and just want to understand the reason behind it.

Pierre Naude (28:12):

So, my view is spend more money and training on first and second line management. Your typical person who manage seven people, and the next level, which is typically senior manager or director who manages 50 people, 7 managers with 7 each. If you get those 2 groups on your side, you can take on any competitor.

Jim Marous (28:34):

It's interesting because you mentioned that and I kid the fact that a lot of banks still use old traditional ways of bringing in new employees, where if they're a management trainee, they go through different parts of the organization to see how we do things.

Jim Marous (28:49):

There can be no more dis motivating thing then to be told, "Oh, by the way, you learned all this in school, but here's how we do things."

Jim Marous (28:55):

Some very progressive organizations are putting some of these employees directly into the areas that need help and saying, "Bring us solutions." Almost like your development program, your innovation program.

Jim Marous (29:10):

And when you do that, you're actually given the employees the ability to say, "You know what, based on what I've learned, and I may be wrong, here's what I see as a problem. At least that's the discussion going.

Jim Marous (29:20):

So, let's take a short break here and recognize our partners.

[Music Playing]

Jim Marous (29:27):

Welcome back to Banking Transformed. So, I'm joined today by Pierre Naude, chairman and chief executive officer at nCino. We've been discussing the importance of hiring and training the right employees for an AI impacted future. Pierre also shared strategy and tactic that have proven successful at nCino.

Jim Marous (29:46):

So, at the beginning of our discussion, Pierre, you mentioned that you came on, you were hiring the first employees. And a lot of your talents, a lot of the things you're doing with employees have changed over the years, maybe because of the size of organizations.

Jim Marous (30:02):

What did you find worked really well when you were a small organization that maybe didn't work as well as a large one? And what have you found since as you've grown, has worked really well with large organizations that maybe wouldn't have worked very well with a small company?

Pierre Naude (30:17):

Jim, the first word that comes to mind for me is process. Nobody likes process. It ties them down, it forces them to do things a certain way.

Pierre Naude (30:26):

But the fact is, when you're a small company, we were 10, 15 people every Friday morning, either round table conversation, all employees were there. We shared what happened the last week, we shared experiences, we made decisions and communicated.

Pierre Naude (30:40):

There is this concept of overcommunication because people miss what you're saying. They misinterpret because of a lack of education or background in that topic you're talking about, et cetera.

Pierre Naude (30:52):

But you could do it very informally and keep on driving it. And you almost could build a personality cult around you up to about 50 people.

Pierre Naude (30:59):

The problem is when you start crossing a hundred people, now it gets big. There's managers, there's directors in between, there's vice presidents, and each of them brings a little different color to it and they do things their way.

Pierre Naude (31:14):

That's when process start coming in and discipline. And what is the purpose of a meeting? Is it communication? Is it informative? Is it training? Is it solving a problem? In other words, you become a lot more structured in when you do things to make it purposeful. That's number one.

Pierre Naude (31:30):

The second thing that happens is you start building systems. And if you build systems the wrong way, it could be extremely demotivating. And if you build systems that we need, like HR systems, expense reporting systems, et cetera, people understand the need for it, but don't overcomplicate it.

Pierre Naude (31:48):

So, the first rule of thumb I always said is we cannot let the functions run the company. And by that I mean legal, HR, and finance. I love them, they keep us clean, they help us what to do, tremendous value add. But the company is run by line management with the support of those three functions.

Pierre Naude (32:08):

And here's the reason, if you're an HR, legal, or finance, it's a lot easier to make a rule and police the masses than it is to say, “Somebody just overspend on something. What are we going to do about this?”

Pierre Naude (32:22):

And my reaction's always, "Guys, wait, our culture, you spend it like it's your own. Pull Jim in.” Next to all hands, pull Jimmy on stage, he's going to talk to Pierre. What happened here?

Pierre Naude (32:31):

You're going to find out typically it's a customer that would bring them into bringing four people along to the lunch. It costed way too much. And then we discuss as a learning experience with some more senior people who's had these experiences, learning stuff, how to avoid this, be more explicit than who you invite, et cetera.

Pierre Naude (32:47):

And if you keep that dynamic environment going, it's a fun place to work with a fun culture and no fear of retribution.

Pierre Naude (32:56):

So, I've got this little methodology. When anything goes wrong in the company, the first thing we ask is, how did we get here? What happened? Now, I would tell you, most companies says who did it? So, how did we get here?

Pierre Naude (33:12):

The second question is, how quickly can we get this thing corrected? In other words, what are the steps to be taken? Get the customer back up and running, et cetera. By now, the emotions is done. All the focus was getting the customer back up and running, remove the mistake.

Pierre Naude (33:28):

Now, finally we come to, who did we get here? This is when you find out, actually it's not the person's fault. The manager puts somebody totally untrained, unprepared into a situation they should never have been in. And by that time, you've removed the emotions and the blame game.

Pierre Naude (33:43):

And if you can put these kind of structures in place and ways of doing things, you will build a tremendously empowered workforce.

Jim Marous (33:54):

That's interesting because what you're really saying is you're asking questions about why before putting the hammer down and going, "Here's the penalty for what you did wrong."

Jim Marous (34:03):

In most organizations, no matter what size the questions aren't asked. And again, it says it's a matter of trust. You're trusting the employee to make good decisions. But if they didn't, you want to find out, okay, where did we go wrong? But help have the employee help in that process.

Jim Marous (34:20):

I mean, they're going to learn it won't happen again. Or maybe it'll happen more frequently if you find that there was a good strategy here that we put into a back office and realize that we could fix it.

Jim Marous (34:31):

So, one thing I noticed at your company, it was evident, very clear. And mind you, a very large user meeting, there's a lot of passion and enthusiasm anyway, but there seemed to be an overwhelming amount of employee camaraderie, team spirit, things of that nature.

Jim Marous (34:50):

How do you foster that after your events? How do you foster comradery, community support, and team spirit across multiple regions? I mean, dozens if not hundreds of regions.

Pierre Naude (35:04):

It's interesting, if you travel to London and you go to the office there, you're going to feel exactly the same culture and the same energy as in Wilmington, as in Salt Lake City, Utah, or Lehi. You go to Sydney, Australia, they're the same. Which tells you we have a hiring pattern of the kind of people we like to have around us.

Pierre Naude (35:26):

The second thing is that element of trust you always talk about and that people truly believe in living the six, which is our six values.

Pierre Naude (35:33):

I will turn another element is the informality. As you see our values, it's not corporate speak. It doesn't say, “Oh, you should have integrity.” No, if you don't have integrity, Jim, you're not going to work here. Let's get it right.

Pierre Naude (35:44):

So, what this is about is also, recognizing that since we all have smartphones, life has changed. That kid tomorrow morning, Saturday morning will answer an email, or do something quickly, will have an idea and do it.

Pierre Naude (36:01):

So, when they come to the office, we've got a game room, we've got a fantastic coffee room, they can go play pool. Nobody questions if they walk by, “Why are the two of you playing and not working.” Because I know they just took a break, they want to hang out a little bit.

Pierre Naude (36:14):

By the way, when the PSO person hangs out with the engineer and they talk about, why did you build it this way? It's a learning experience. That's why we're together in the office.

Pierre Naude (36:22):

So, we've created an environment where we continuously cross breed and crosspollinate different organizations. We move people, they come from the field. After five years or so, they come into product and bring all that field experience and cross pollinate.

Pierre Naude (36:37):

So, now, it's not a bunch of strangers, it's people who want to work together and see each other. We also, have annually the top 150 managers of the company come together for two days. And we talk about all these elements, what the business is about, and where we're taking it.

Pierre Naude (36:54):

And then we have frequent all hands picnics. Like today, outside, we've got about 900 people here in Wilmington. Today's Employee Appreciation Day, they're out there. There's a DJ, there's a fantastic rounds of activities, there's food and fun. And I was down there before I came here and I can tell you the energy, you could feel it from a mile.

Jim Marous (37:19):

Yeah. And it's real. Everything you've said, I mean, it makes me even more inspired and more excited about having worked with you this year. And everything feels really good.

Jim Marous (37:30):

However, I know every situation there are challenges. There's something that catches you off guard. What is a challenge that you've had over the last 12 and a half years at nCino with regard to employees and culture and organization? What have been the challenge or what had been really difficult to solve for?

Pierre Naude (37:50):

So, we went public in June of 2020, and it was fantastic. I mean, we were one of the first companies to go public over Zoom. And-

Jim Marous (38:00):

I don't know if that's a claim to fame, but it's really interesting.

Pierre Naude (38:04):

It is one of that stuff that happens. And so, you have no clue how long this pandemic is going to last, what you hire. By the way, we acquired a company, we added 700 people in the two years of the pandemic.

Pierre Naude (38:17):

So, now, you've got this disparate group, you've got a new company coming in. You've got all these people you hired organically, everybody works remote, they've got different expectations.

Pierre Naude (38:28):

And then the moment that ended, and I'm trying to get a handle on my people and the culture and kind of bring it back, we've had rate increases at an unprecedented level. And the mortgage business started struggling and the whole banking liquidity crisis happened, and all of a sudden, the banking market clamps down.

Pierre Naude (38:48):

So, if you take from 2020 March all the way to '24 or '23 fourth quarter, we were in a very depressed, struggling banking market to focus on strategy and do transformations.

Pierre Naude (39:04):

And so, as I look at that period, and I reflected on it and told this to the investors, I said, "Look, guys, last year, fourth quarter, we had fantastic bookings." And I told them, "I think it's going to carry into first quarter." And when it happened, we had fantastic bookings again, or record bookings.

Pierre Naude (39:20):

Is that when I look back, we came out of a four-year period of depressed demand. And if we could survive as a company that then I'm telling you the best is yet to come. Because now, the banks are open for business, they're more strategic, they want to change how they work. AI came into the picture and they all need to understand how to do that.

Pierre Naude (39:38):

But that period of 4 years between adding 700 people all remote and then bringing it back together, put the empty dumpty back together and actually get my culture back, get the people to be motivated and understand what we're doing. And in that same time, expanded into Japan, Australia, New Zealand, and South Africa.

Pierre Naude (39:58):

If I look back now, I think to myself, "What were you thinking, Pierre?" But-

Jim Marous (40:08):

Oh yeah, I mean, you said June of 2020, I'm going, “We weren't even sure what the pandemic was going to be back in June of 2020 because it started March.” And we all thought, "Oh, we're going to wipe off our trade tables on the airplane a little bit and we'll be through this in no time." Didn't end up that way.

Pierre Naude (40:23):

No. but we just believed.

Jim Marous (40:26):

And yet COVID really was a cakewalk compared to the economic uncertainty. This happened more recently.

Jim Marous (40:33):

And I think one thing that's played to your organization's skill sets is there's a whole lot more organizations wanting to outsource composable solutions. In other words, get me this solution now. And your organization obviously provides that, but then the organizations have to pick who to partner with.

Jim Marous (40:51):

And I think this is where the employee part becomes so important, because it wasn't all that long ago that I was hiring people to work with, to make my job better. And you pick companies who wanted to work with.

Jim Marous (41:03):

Yes, they had to have skill sets. That's like having good food at the restaurant. You have to have that. You can't have rats walking along the floor.

Jim Marous (41:11):

But at the end of the day, it's where do I like going to, who do I like working for? And I think this is the thing that a lot of organizations forget is that the talent, and the culture, the employee enthusiasm, the passion, while those are soft skills in a way, they're really the hardest things to replicate if you don't get it right.

Jim Marous (41:32):

And it's how people sometimes select their partners. I mean, yes, your organization is better in certain categories than your competition, but you sometimes can make up for that through the spirit and the enthusiasm and passion of your employees and your ongoing change management skills. So, go ahead.

Pierre Naude (41:53):

No, I would say to you that that is the holy grail that people miss. If you get that right and then you draw into the employees, we are only successful if we make the bank successful.

Pierre Naude (42:03):

In other words, what we market and what we sell must be real. If somebody looked back and go, "Man, that was a tough project, and I didn't gain anything." Then the thing will run out so fast, you wouldn't know it.

Pierre Naude (42:14):

But when banks start telling you, "Pierre, your people were tremendous. They came in here, they creative, they were positive, they keep on driving us forward. We didn't want to change. We struggled with the change, and you pushed us. You have your gold standards and you tell us, stick with me, I'm going to make you better."

Pierre Naude (42:28):

And when it's done and they look back and go, “Wow, I made it through this, and I want to buy more from this company.” That's how it works.

Pierre Naude (42:34):

So, that culture linked to that customer centricity, every bank that visits here, if they come here, they buy from us, number one.

Pierre Naude (42:45):

Number two, when they come to visit again, they buy more. They understand we're an innovation driven company. The product is not getting stale. The product has been enhanced at a pace that they struggle to adopt the new features, can adopt the new technologies we do.

Pierre Naude (43:00):

And we are here to lead them down this path of AI in a responsible and a compliant way. And that's going to be the biggest challenge here.

Pierre Naude (43:09):

I'm going to take you back through Bitcoin. So, Bitcoin and crypto came up. And there's two things there. There's a platform that Bitcoin sits on top. The platform is a great technology, it struggles to scale a little bit. And then there's cryptocurrencies.

Pierre Naude (43:27):

And people ask me, “Can you handle crypto?” I go, "Yeah, I can handle Euro, dollars, crypto, Bitcoin. You tell me what it is, I just change the signal in front of the thing. Little translation table, it can work." That's not the problem here.

Pierre Naude (43:38):

What's going to happen to banks that embrace this? And you and I both know Signature Bank embraced it too fast and got shut down. Now, they will tell you it's liquidity. I'm telling you a heavy element of that was they were too deep into crypto, and the Feds didn't like it.

Pierre Naude (43:53):

So, here we go with AI. Now with Ai, the Europeans love to regulate and then figure out what to do next. In America, we love to say, let the market decide, let's see where this goes, but we have to be responsible. And then we'll figure it out and regulation will follow and it'll come at the right time at the right pace.

Pierre Naude (44:14):

And what I'm seeing is that we can now, innovate and try and people like us who's been working with banks for a long time, that fully understand the transparency, the order trails you need, and the glass box you have to put this in so people can see exactly why you did it and what the applications you used it for.

Pierre Naude (44:31):

If you do it in that fashion, you will not get in trouble. And we will hold your hand throughout the process. Number one.

Pierre Naude (44:37):

Number two, make sure the data in is quality and the data in is the right input. Just like I can make you study a bad topic and a good topic. It's garbage in, garbage out.

Pierre Naude (44:48):

And so, what I would tell you is this links back to the culture. Our understanding that we are here to make banks successful and continuously push them to adopt new technologies.

Pierre Naude (45:00):

Because look, it's a risk averse business. It's a conservative business. And I love them and I respect them for what they do. Our job is to push them down this. We took them into the cloud, today the cloud is de facto.

Pierre Naude (45:13):

We're going to take them down this path of intelligence, AI, and analytics. And five years from now, you can double the bank size with the same number of people today. And it's going to be a tremendous place to work because it could be a totally different experience.

Jim Marous (45:29):

It's interesting in sitting down with some of your team and actually doing another podcast with a person in charge of some AI deployment, it becomes very interesting that you're very innovative company. You're very focused on innovation, but it's responsible innovation.

Jim Marous (45:47):

It's also, very collaborative innovation. When during our other podcast, it was very clear that you're going down this path of AI deployment in partnership with organizations that want to go down that path.

Jim Marous (45:58):

In other words, you're not leading, you're not following, you're doing it in a collaborative way which makes it so that you're getting the solution set on how you're going to be able to deploy through the partnership with financial institutions, which is pretty keen.

Jim Marous (46:12):

You also, have deployed innovations a lot further down the asset range recently. And you actually mentioned it in your keynote on opening day of your event around the fact that you are looking more and more towards composable solutions that can be, I'm not going to say plug and play, but can be deployed in marketplace beyond the very top banks. And that gives you some growth momentum.

Jim Marous (46:34):

So, a lot of things we talked about today, on a lot of subjects which are tremendous, you did not disappoint on what you said you'd like to talk about. What advice would you give other financial institution leaders if they're looking to attract and retain top digital talent?

Pierre Naude (46:50):

I would say the first thing is embrace new ideas and embrace a culture of innovation. In other words, you can't say, "Well, we do it this way because we've always done it this way."

Pierre Naude (47:02):

The only thing in the future that's going to make you survive is a flexibility to adopt and implement new technologies to drive efficiency. Over 70% of our customers in a survey said efficiency is the number one priority for all these banks.

Pierre Naude (47:19):

And so, my view is examine your culture and make sure the leadership you've got in place are innovative, people driven people that understand the only way you're going to get the organization to the promised land is by hiring the right talent and the right people.

Pierre Naude (47:39):

And that takes a hard look at what are the sacred cows that may be myths that's not valid anymore? Are there businesses we shouldn't be in? Because these edge cases is what break down efficiency, get out of some businesses and make sure you know exactly what your organization stand for.

Pierre Naude (48:01):

There are many recipes to be successful and the only one I know that's not successful is you dabble in a lot of small little stuff and you're not a leader in a single one.

Pierre Naude (48:11):

So, my view is become a leader in something. Know you the best and drive from there and go to ancillary markets and drive that innovation. Number one.

Pierre Naude (48:20):

Number two, pick the right partners. Can you imagine if you talk a great story in a bank that I come in there and I have to reenter the same piece of data seven times and I go, "Buddy, what are we talking about here?" I don't want to work for a place with a flip phone. I want the latest technology.

Pierre Naude (48:37):

You're going to attract people who's curious, who's smart, who's fast, and who's client focused with a value-add mentality, not client focused because of a administration data enter process mentality. And if you do that, it'll change the way you think.

Pierre Naude (48:54):

I firmly believe that consumer banking will move more to a self-service model. This is where you and I discussed the whole branch thing. That does not mean there's no branches. I'm telling you just that the consumers like self-service.

Pierre Naude (49:06):

Small business is a blend. It's going to be mostly self-service with a bit of advisory services attached to it. And then large commercial business will be more relationship oriented, but heavily automated behind the scenes.

Pierre Naude (49:21):

Account opening should be a simple process that's fully automated in self-service. The onboarding process as you've seen it, we are automating all that.

Pierre Naude (49:30):

If you embrace these technologies and pick the right platform, partners, and technologies, what you’re going to find is you'll attract the people who wants to be around that kind of a forward-looking organization.

Jim Marous (49:42):

Pierre, thank you so much. As I said, you certainly didn't just a point. It is interesting because I can say it from seeing it. You're not just talking the game, you're playing at daily. It is very clear with your employees, it's very clear in working with your employees in the way I have over the last couple months that it does transcend the organization and it's key.

Jim Marous (50:08):

It's also, interesting how you do not shy away from getting in the weeds. You probably almost like that. You have a very infectious personality that says, if you need something done, come to me. I'll see that it gets done if it makes sense.

Jim Marous (50:25):

And that's hard to keep going in an environment that's continually changing, but an organization that's very large as well.

Jim Marous (50:32):

Again, thank you very much, Pierre, for your time.

Pierre Naude (50:35):

Thanks, Jim. It was fantastic to be here.

[Music Playing]

Jim Marous (50:38):

Thanks for listening to Banking Transformed, the top podcast in retail banking and the winner of three international awards for podcast sections. We appreciate your support. If you enjoy what we're doing, please take some time to show us some love in the form of a review.

Jim Marous (50:51):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; audio engineer, Chris Fafalios; and video producer, Will Pritts.

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