Speakers: Aron Ain, CEO, Kronos Incorporated
Kronos CEO, Aron Ain explains how trust between companies and their employees is the at the heart of what creates a great place to work for all. Aron's keen insights will reveal what Kronos’s clients have learned about building trust with employees, as well as the impact that successful business leaders have when they prioritize workplace culture and maximize the full potential of their people.
This interview took place during our March 2020 For All Summit. UKG acquired Great Place To Work on September 1, 2021.
Show Transcript
Julian Lute:
We talked a lot about leadership. We had some great folks from very, very powerful brands sharing their journey and sharing what it means to create great workplaces for all and now we're going to have another one of those conversations with an organization that has grown tremendously over the last 30 some years. This is a very special conversation and I hope that you all feel the same way.
Julian Lute:
Our next guest is important partially because we always preach that employee engagement is a strategic weapon for our businesses and this guest really believes it. Aron Ain is the CEO of Kronos Incorporated and he fiercely contends that great businesses are powered by great people and that there is a direct link between employee engagement, customer satisfaction and business success. I love it when you hear leaders make the correlation between business success and how they treat their people. You don't know how many rooms I've been in and I've had to try to force that down people's... Into their thought process. Aron really gets it. Kronos is a $1.5 billion enterprise software powerhouse so he knows how to make money and he knows how to deliver tremendous value to his clients. He's here to share his surprisingly simple ways for creating a great workplace experience that translates into superior business success. So join me in welcoming CEO of Kronos Incorporated Aron Ain to the stage.
Julian Lute:
Have a seat on the far [inaudible 00:01:38]. All right. So Aron's going to be in conversation with our own chief content officer for Great Place To Work. Chris [Decochik 00:01:50] is a tireless journalist whose work has appeared in Fortune, Travel and Leisure, Time, InStyle, Food & Wine, amongst others. As a chief content officer for us, he oversees our thought leadership, he oversees our research reports, our company profiles, articles for the website, anything that's outward facing, Chris generally has his hands in that. And he's also the host of Better, which is our podcast series around workplace culture. So we're going to let them get into conversation, but join me in welcoming Chris Decochik to the stage.
Chris Tkaczyk:
Welcome back, everyone. Hi Aron.
Aron Ain:
Hi Chris.
Chris Tkaczyk:
Have a seat, please. I hope you guys had a good a refreshment break. But now we get to talk about one of my favorite topics, human capital management software.
Aron Ain:
One of my favorite too.
Chris Tkaczyk:
We can argue about who likes it more. But first, I think the perfect way to talk about human capital management software is about your book, WorkInspired. So the book came out last year and it's WorkInspired: How to Build an Organization Where Everyone Loves to Work. And so I just finished reading it on the plane ride here and I'll set it here as a nice little prop on the table. But I think it's not only one of the best books about workplace culture, it's not only a how-to manual, but it's also one of the best leadership books that I've read in a long time. So congratulations on that.
Aron Ain:
Thank you.
Chris Tkaczyk:
And if anyone's read it applaud, anyone here...
Chris Tkaczyk:
All right, we're going to get more applause next year when we find out who's read it and I just wanted to mention also the book is in the partner hall. There's 300 copies, you'll be doing a signing I understand?
Aron Ain:
I will.
Chris Tkaczyk:
So after you leave here, run down the hall and get your copy so you can make sure you get one. One of the things I wanted to talk about that I read about in the book is about the way that you look at trust, which is sort of the foundation of what you do to make your employees happy. It's also the foundation of Great Place To Work's mission since the beginning when we were first founded years ago. Talk to me a bit more about trust. How do you establish trust with your employees?
Aron Ain:
It's a great question. So I believe trust is the magic glue that holds together personal relationships. I believe it's the magic glue that holds together professional relationships. I don't think we do it enough in our personal lives and our professional lives and we tell our staff, our team members all the time that we trust them and we want them to go make decisions. And it's interesting for me when someone comes and asks me about something and they're asking me to make a decision, I tell them, "No, I trust you to make the decision." And I watch them get uncomfortable. And the next thing I do is I actually take a physical step closer to them, not right in their personal space, but pretty close. And I say, "No. I really trust you to make the decision." And they really get uncomfortable.
Aron Ain:
And so I've learned that this idea of trust is not something that people are used to because we all have experienced situations where we work in professional situations, we have relationships in personal situations, and we can tell when people don't trust us and how do we feel. So I try to make sure that we tell people that we trust them. It liberates them. It liberates us as leaders to do other things. It just is a magnificent tool to use and the right way to do it.
Chris Tkaczyk:
And if there's a situation where you get a sense that you have not established that trust with one of your workers, how do you handle it? Do you sit them down and have a conversation and say, "I feel like you don't trust me"?
Aron Ain:
Yeah. And so I'll answer the question a different way, Chris, to get to the same thing. So I'll sit in a group meeting and I can tell that someone who's a manager doesn't trust someone on their team by the way they're interacting with them. So at the end of the meeting I'll grab them and I'll say, "Hey, can I talk to you for a minute?" They go, "Yeah." And I go, "What's the deal with you and so-and-so? You don't appear to trust them." And they say, "Well, they're new. They have to earn my trust." And I always say to them, "Well, I don't understand that. When you hired them and you were interviewing them, did you say, "Oh, they're really great. They can do their job. They have the clinical skills, but I don't really trust them, but I think I'll hire them anyway"? Of course people don't do that. So why can't you assume that you can trust them to start with and let them un-earn your trust?" And so I encourage people to start all relationships by trusting in those type of ways.
Chris Tkaczyk:
There's a really great example that you use in the book about an employee who came to you and was very honest about the fact that he had been contacted by a recruiter for a competing company and for a very attractive job. And you said to him, you encouraged him, saying, "Hey, go have the conversation, do the interview." And you use that as one way that you can establish trust with people is that if you trust them enough, they might come back to you as a boomerang employee, which you also have a big part of... One of the chapters of the book is about that.
Aron Ain:
Yeah. So that covers a group of areas. So when you have a trusting relationship with people on your team, everything becomes possible. So one of my top executives came and said to me, "Can I talk to you?" And I said, "Yeah." And he said, "I've gotten an offer to possibly be the CEO at another company." And I said, "Tell me about it." And he told me about. I said, "That seems like an unbelievable opportunity. If I were you, I would go take that interview and consider that."
Aron Ain:
Now what I didn't tell him was that if he got the offer and if stuff went well, I was going to go fight like crazy to get him to stay. I wasn't just going to walk away and he did get the offer and I actually did a reference call for where he was going to go be and I gave him a great reference. But then I fought like crazy to get him to stay. You want to talk about building trust with people on your team? Do that a couple of times.
Aron Ain:
We have an open vacation policy for all of our employees can take as much time off as they want. You can't do that unless you have a trusting relationship. I tell the people all the time, "I care more about what you do than where you do it and when you do it and I trust you to get your work done." So go on and on about it.
Chris Tkaczyk:
Yeah. Do you ever find that people have abused this policy?
Aron Ain:
Yeah, sometimes. Yeah, sometimes, but rarely. In the great scope of all the times, I find people that take the trust that we extend to them and they do more than we ever imagined and their loyalty is tremendous and their engagement is high and how they feel about their relationship with us goes way up. So we get way more out of it.
Chris Tkaczyk:
Okay. So one of the other important parts of where your company values are is around being compassionate and caring. And you share a lot of really amazing stories about the way that not only that you take care of Kronites, but how they take care of each other. And there's a very nice moment in the book where you talk about how the nephew of one of your Kronites had come down with leukemia and had sent out a request for a bunch of his colleagues to send postcards from as many places around the world as they could and got like 9000 postcards.
Aron Ain:
Yeah. So I believe that work is really important and I enjoy it every day and I'm in my 41st year at Kronos, so it's the only place I've ever worked, but it's not the most important thing in my life and I don't think it's the most important thing in the lives of the people who work at our organization. So what's really important is making sure you have balance in your life and that includes making sure that we, as an organization, it's just not about profit and loss. It's also about caring and kindness and looking out for each other's interests and looking out for our family's interests and doing everything we can on a regular basis.
Aron Ain:
So people know that it's there. And so they ask us for things that I don't know if they would ask for it all the places they might have an opportunity to work at. But because we're safe and because we care and we want to look after each other's needs, we do that and we don't publicize it. Some organizations spend a lot of time publicizing when they do things unusual on behalf of people. I don't want to do that because I don't want us to get credit for doing the right thing when someone or some group of people are in a bad situation. So people say, "Oh, you should tell people all about that." I say, "I don't want to tell people about that. I want us just to do what is right and then just do it that way." And so if people know, people know, if they don't, they don't. But we know that we do the right thing and care for each other deeply.
Chris Tkaczyk:
Kronos is a family business. It was founded by your brother.
Aron Ain:
Yeah, he's one of the founders.
Chris Tkaczyk:
One of the founders. And so in your time now as CEO, at what point were you really aware that you had to have a people first caring culture?
Aron Ain:
Well, it's not the kind of thing that I was taught. It's the kind of thing that I've just learned as time has gone on. I've always believed that great organizations are powered by great people, that great people produce better products, deliver better service, better products, better service, you have better outcomes. And so once I realized that, I also then realized that there's a problem with that, that if you're going to go recruit great people to produce great products and great services, you better have a great environment for them to work in because if you don't, great people will do what great people can do, they'll go get another job.
Aron Ain:
And so what we have to do is make sure that we create this engaged environment where those great people want to stay at our company. I also tell people, by the way, if you don't want to have that problem, then go hire average people. You won't have that problem. But we choose not to hire average people, great people, but you better make sure that we do that. And going along with that, Chris, I believe that people join organizations because of the organization and they leave because of who they work for. Think about times in your career when you had someone who you didn't really like working for and how did that make you feel? So we make sure our 1000 people managers are clearly trained carefully about what a privilege and honor it is to lead people and most importantly the impact they have on those great people.
Chris Tkaczyk:
And your manager effectiveness index, which is part of the review process, right? That you do every six months where employees are given the opportunity to rate their managers and the management performance. What is typically the score in terms of how happy they are? When you look at the broad picture across the entire organization.
Aron Ain:
Yeah. It's a good question. So we do something I think that other companies do maybe a little more formally. People managers are not just reviewed by their managers. Managers at Kronos are reviewed by everyone on their team twice a year, so twice a year every manager is reviewed by their team members. 18 questions are asked about how their team members feel their manager is doing, and then every manager gets an MEI from that, a Manager Effectiveness Index. Of course, it goes across the spectrum. People who are exceptional and people who need to improve and really great people, believe it or not, get a 100. It's everyone on their team rated them strongly agree on all 18 questions about how they have a relationship but people in the fourth quartile get 60, 70% and they have to work to get better or else they can't be managers at our company anymore. Doesn't mean that they might not stay in the organization but not as a leader.
Chris Tkaczyk:
Okay. We only have a few more minutes left, but we have to talk about Ultimate Software. Ultimate Software is a company that I have gotten to know very well because I wrote the profile of it that you should all have gotten in your tote bag. And I expect everybody to read it. But it's actually, for me, it's interesting when I get to go down and interview people about their work experience, especially when they are so thrilled that they put their company at number two on the list of the 100 best companies to work for, you sort of really begin to understand them and appreciate what it is to work for a company that is a great place to work. And so just before we had our chat last week to prepare for this, there was announced that Kronos and Ultimate Software are going to be merging. And so we're taking two companies that are both roughly valued at what, $11 billion each?
Aron Ain:
That's right. Valued at $11 billion each, yeah.
Chris Tkaczyk:
Valued at. They're both privately held companies and this new company will be valued at $22 billion or so. And you're roughly the same size in terms of the number of employees you have. And so I wanted to ask you about how are you going to manage this whole transformation of merging these two companies that are both on the list of the 100 best companies to work for? I think in the history of the 23 years that we put out the list, we've never had two companies on the same list ever merge with each other.
Aron Ain:
How am I going to do that? Very carefully. Very carefully. What an honor for me to have that opportunity to be the CEO of this combined company. I believe it's going to be a merger like no other ever before. We have two organizations with remarkable cultures. Funny thing, one of the things I'm nervous about is we moved up 26 spots on the Fortune 100 list to number 52 and Ultimate's number two so when I addressed all the [Ulty-peops 00:15:25] a week ago, when I introduced myself to all 6000 of them, I said, "Congratulations, thank you, way to go." I said, "I'm really nervous though. I'm doing the math. 52 and 2 averages to 27. I just screwed the whole system up."
Aron Ain:
And so we're going to do it very carefully. We're going to take the best of what is at Ultimate today and the best of what is at Kronos today and create a culture that I hope we can say a year from now, two years from now that has never been seen before and we're going to do it thoughtfully and I'm really excited to try to figure it out. By the way, people say, "What's the first thing you're going to do? What are you going to work on most actively through this?" The first thing we're going to do is work hard to merge these companies and I'm going to be focused, job number one, on the culture and spend my job with as many people in the new organization as I can to understand what the dynamics are.
Chris Tkaczyk:
If you follow Aron on LinkedIn, you can see this for yourself, but I think it's so powerful that I wanted to share it with the room today. You posted numerous things. You're very active in social media. He posted this announcement that the two companies would be merging and there was a lot of feedback and comments from employees from both companies, all of which seemed to be unanimously supportive of the idea and seemed to be excited by it. But one of your Ulty-peops wrote as a comment on your post, "No denying the unbelievable power and synergy of this merger. I'm all in support. It's wild success. That said, speaking from the heart, I'm feeling bereft about the loss of two of the smartest leaders I've ever worked for so not ready to just abandon that loyalty. But after seeing Aron respond to hundreds of these posts, I'll admit to being a little bit amazed/impressed."
Chris Tkaczyk:
And you of course responded to her and says, "We are all in this together, one team. Let's never forget the foundation and legacy the leaders that Ultimate created. We should always be loyal to them, always. I will be for sure. Grateful too. Looking forward to a bright future ahead. Thank you for your support."
And the fact that you took that opportunity to respond to every single post shows the caring and establishing that trust already.
Chris Tkaczyk:
But one thing I do to point out is that it'll make one other company very happy as well, the company that would have scored the 101st spot on the list this year.
Aron Ain:
That's a good point. I didn't think about that. Can we have two slots next year? I don't want to be selfish. No, what's interesting-
Chris Tkaczyk:
Don't be selfish.
Aron Ain:
What's interesting about that was I told people when I went to the Ultimate town hall, the day we announced, and again introduced myself, said, "I read my own emails, I respond to my own texts, I return all my own phone calls." Wow. Holy macaroni. Over the next week, I got 1800 inbounds and it took me about 20 hours, but I responded to every single one of them one by one like that. Yeah. So that's part of trust. It's part of just being kind. If people took the time to reach out to me, the least I can do is respond to them.
Chris Tkaczyk:
Yeah. So one of the things that I remember reading when the announcement came out was that you took the company mantras, "Work Inspired" for Kronos and Ultimate's logo has the words "People First" on it. When I was down there, one of the things that really struck me was that you walk in the door of any Ultimate office and it says "People First". And as you see in the profile, I say, "The moment you walk in the door, you know what the company is all about." So you created this phrase, "People Inspired", if that's it?
Aron Ain:
Right.
Chris Tkaczyk:
But that's not going to be the name of the combined company. You're still figuring out what the new brand is going to be.
Aron Ain:
We are. So I wanted to take a little bit of time after we announced the merger before we close it, which will happen later this month and have more people participate in the decision of what the company should be named because there's a lot of emotion on both the Kronos side and the Ultimate side on what the name should be. So I want to have more people do that. Plus I want to be able to hide behind "It was somebody else's decision." That's not true.
Aron Ain:
And there were other things. Some people said to me, "I know you took "Work Inspired" and "People First" and put it together, "People Inspired". Did you ever think about putting together and calling it "Work First"?" I said, "I didn't do that." And then we call ourselves Kronites and the people from Ultimate call themselves Ulty-peops and someone said, "Are we going to call ourselves Kreeps? K-R-E-E-P-S?" I said, "No, we're definitely not going to do that. I don't need an outside branding company to help with that."
Chris Tkaczyk:
So when you eventually do merge these two companies, where's the headquarters is going to be?
Aron Ain:
We're going to have two headquarters. So we're in Lowell, Massachusetts, one of the birthplaces of the industrial revolution in America and Ultimate's in Western Florida just a little bit west of Fort Lauderdale and we're going to keep both of those corporate headquarters at a respect for the legacy and who we are and what we represent to our communities and no plans to put them together and I'm confident we can make that work. I'm going to be going back and forth a lot. Ay-ay-ay.
Chris Tkaczyk:
Yeah. And one of the first things that I did when I heard the news is I messaged one of the folk, one of the Ulty-peops, saying, "Are you okay? Is your job secure?" I just wanted to share my concern. And she's like, "Oh, it's going to be great." She's like, "I already read Aron's book over the past weekend and he's already inspiring people on the other side who are going to be a part of the family." One of the things that I found to be very interesting is that you have two companies that are in the same industry and yet when you were doing the review and due diligence for this merger, you discovered that you only shared, what, 3% of the same clients?
Aron Ain:
Yeah, In the same markets where we offer our products, we have 22000 combined customers and when we matched up the list of our customers, there's only 400 customers in common. Now when I first got that back from a high cost consulting company, I said, "You must have made a mistake. That's impossible." And once I realized it was true, I got even more excited about the possibilities of what's out there for the customers who we both serve.
Chris Tkaczyk:
Okay. I want to talk more about the bigger picture. You mentioned, we were speaking yesterday about the number of places around the world where you have employees and Ultimate has employees, I think from what I remember, six or seven countries and many of those are remote people. How are you going to ensure that your remote employees who may not have an opportunity to come to either headquarters often are going to have a consistently positive and great workplace experience?
Aron Ain:
Well, we're going to do it the way we do it now. First of all, 40% of Kronos and 40% of Ultimate employees today work remotely. Again, gosh, back to trust. Trust them, trust them. It's okay. So I'm going to do it the way I always do it. I over-communicate. I do vlogs, a video blog. I tried to write blogs, I never did it really well. So I set up an iPad and once every couple of weeks, once a month I just sit there, unrehearsed, one take. If I fall over in the middle of it, I don't do another take. I get up and go, "Sorry about that," and I just keep going because I want it to be authentic, which is what it is and I talk about what's on my mind. And so people tell me all the time that they always know what's going on because I over-communicate.
Aron Ain:
And so I'm also going to visit places and continue my relationships with people. And it's really not that hard to make a connection to people who work for you around the world if you just put your mind to it, if you just put your mind to it. Sometimes you don't even have to be with them physically and they can feel your spirit and they can feel what you're all about and they can understand the mission and perform really well.
Chris Tkaczyk:
Yeah. Michael Bush, my boss, does a really great job at communicating through video to the entire team and I always look forward to when I see that in either Microsoft Teams or in our email or whatever, and it's always about something that he's incredibly passionate about and sometimes it's sensitive stuff too. But I have found that it's a really fun way to actually communicate with your owners, CEO, boss, whoever.
Chris Tkaczyk:
So the other thing I wanted to mention, which we're almost out of time, but one of the great things to learn about in the book, and this is why I think it's such a great leadership book, is that you talk about becoming an un-leader. What is that?
Aron Ain:
So I don't really take my job seriously in terms of my title. I think it's unimportant what my title is. When people ask me what I do, it takes about 20 or more questions to get out of me my job. "Well what do you do?" "I work in the enterprise software business." "Oh, what company?" "Kronos." "What does Kronos do?" "All application software." It gets very circular after awhile because being who I am does not define who I am.
Aron Ain:
And so when I go work with the people I work with, I want them to know that they're as important as I am. We have now 12700 people because we need 12700 people in our combined company. And so every one is as important as I am. So for me, an un-leader either as a CEO or whatever your job is, is just really understanding the foundational obligation. You have to show respect to people who you work with. And it's not about you. And CEOs get too much credit, too much credit. They just do. I guess they get too much credit if things go really well and probably get too much credit when things go badly. So I'd rather get too much credit, I suppose. But that's not what it's about. And so the un-leader is meant to be focused on that and send a message to all leaders that it's not about us individually. It's about us collectively.
Chris Tkaczyk:
Great. Well, thank you Aron, and everyone, please get your copy of WorkInspired in the partner hall.
Aron Ain:
Okay, thank you, Chris. Thank you.
We talked a lot about leadership. We had some great folks from very, very powerful brands sharing their journey and sharing what it means to create great workplaces for all and now we're going to have another one of those conversations with an organization that has grown tremendously over the last 30 some years. This is a very special conversation and I hope that you all feel the same way.
Julian Lute:
Our next guest is important partially because we always preach that employee engagement is a strategic weapon for our businesses and this guest really believes it. Aron Ain is the CEO of Kronos Incorporated and he fiercely contends that great businesses are powered by great people and that there is a direct link between employee engagement, customer satisfaction and business success. I love it when you hear leaders make the correlation between business success and how they treat their people. You don't know how many rooms I've been in and I've had to try to force that down people's... Into their thought process. Aron really gets it. Kronos is a $1.5 billion enterprise software powerhouse so he knows how to make money and he knows how to deliver tremendous value to his clients. He's here to share his surprisingly simple ways for creating a great workplace experience that translates into superior business success. So join me in welcoming CEO of Kronos Incorporated Aron Ain to the stage.
Julian Lute:
Have a seat on the far [inaudible 00:01:38]. All right. So Aron's going to be in conversation with our own chief content officer for Great Place To Work. Chris [Decochik 00:01:50] is a tireless journalist whose work has appeared in Fortune, Travel and Leisure, Time, InStyle, Food & Wine, amongst others. As a chief content officer for us, he oversees our thought leadership, he oversees our research reports, our company profiles, articles for the website, anything that's outward facing, Chris generally has his hands in that. And he's also the host of Better, which is our podcast series around workplace culture. So we're going to let them get into conversation, but join me in welcoming Chris Decochik to the stage.
Chris Tkaczyk:
Welcome back, everyone. Hi Aron.
Aron Ain:
Hi Chris.
Chris Tkaczyk:
Have a seat, please. I hope you guys had a good a refreshment break. But now we get to talk about one of my favorite topics, human capital management software.
Aron Ain:
One of my favorite too.
Chris Tkaczyk:
We can argue about who likes it more. But first, I think the perfect way to talk about human capital management software is about your book, WorkInspired. So the book came out last year and it's WorkInspired: How to Build an Organization Where Everyone Loves to Work. And so I just finished reading it on the plane ride here and I'll set it here as a nice little prop on the table. But I think it's not only one of the best books about workplace culture, it's not only a how-to manual, but it's also one of the best leadership books that I've read in a long time. So congratulations on that.
Aron Ain:
Thank you.
Chris Tkaczyk:
And if anyone's read it applaud, anyone here...
Chris Tkaczyk:
All right, we're going to get more applause next year when we find out who's read it and I just wanted to mention also the book is in the partner hall. There's 300 copies, you'll be doing a signing I understand?
Aron Ain:
I will.
Chris Tkaczyk:
So after you leave here, run down the hall and get your copy so you can make sure you get one. One of the things I wanted to talk about that I read about in the book is about the way that you look at trust, which is sort of the foundation of what you do to make your employees happy. It's also the foundation of Great Place To Work's mission since the beginning when we were first founded years ago. Talk to me a bit more about trust. How do you establish trust with your employees?
Aron Ain:
It's a great question. So I believe trust is the magic glue that holds together personal relationships. I believe it's the magic glue that holds together professional relationships. I don't think we do it enough in our personal lives and our professional lives and we tell our staff, our team members all the time that we trust them and we want them to go make decisions. And it's interesting for me when someone comes and asks me about something and they're asking me to make a decision, I tell them, "No, I trust you to make the decision." And I watch them get uncomfortable. And the next thing I do is I actually take a physical step closer to them, not right in their personal space, but pretty close. And I say, "No. I really trust you to make the decision." And they really get uncomfortable.
Aron Ain:
And so I've learned that this idea of trust is not something that people are used to because we all have experienced situations where we work in professional situations, we have relationships in personal situations, and we can tell when people don't trust us and how do we feel. So I try to make sure that we tell people that we trust them. It liberates them. It liberates us as leaders to do other things. It just is a magnificent tool to use and the right way to do it.
Chris Tkaczyk:
And if there's a situation where you get a sense that you have not established that trust with one of your workers, how do you handle it? Do you sit them down and have a conversation and say, "I feel like you don't trust me"?
Aron Ain:
Yeah. And so I'll answer the question a different way, Chris, to get to the same thing. So I'll sit in a group meeting and I can tell that someone who's a manager doesn't trust someone on their team by the way they're interacting with them. So at the end of the meeting I'll grab them and I'll say, "Hey, can I talk to you for a minute?" They go, "Yeah." And I go, "What's the deal with you and so-and-so? You don't appear to trust them." And they say, "Well, they're new. They have to earn my trust." And I always say to them, "Well, I don't understand that. When you hired them and you were interviewing them, did you say, "Oh, they're really great. They can do their job. They have the clinical skills, but I don't really trust them, but I think I'll hire them anyway"? Of course people don't do that. So why can't you assume that you can trust them to start with and let them un-earn your trust?" And so I encourage people to start all relationships by trusting in those type of ways.
Chris Tkaczyk:
There's a really great example that you use in the book about an employee who came to you and was very honest about the fact that he had been contacted by a recruiter for a competing company and for a very attractive job. And you said to him, you encouraged him, saying, "Hey, go have the conversation, do the interview." And you use that as one way that you can establish trust with people is that if you trust them enough, they might come back to you as a boomerang employee, which you also have a big part of... One of the chapters of the book is about that.
Aron Ain:
Yeah. So that covers a group of areas. So when you have a trusting relationship with people on your team, everything becomes possible. So one of my top executives came and said to me, "Can I talk to you?" And I said, "Yeah." And he said, "I've gotten an offer to possibly be the CEO at another company." And I said, "Tell me about it." And he told me about. I said, "That seems like an unbelievable opportunity. If I were you, I would go take that interview and consider that."
Aron Ain:
Now what I didn't tell him was that if he got the offer and if stuff went well, I was going to go fight like crazy to get him to stay. I wasn't just going to walk away and he did get the offer and I actually did a reference call for where he was going to go be and I gave him a great reference. But then I fought like crazy to get him to stay. You want to talk about building trust with people on your team? Do that a couple of times.
Aron Ain:
We have an open vacation policy for all of our employees can take as much time off as they want. You can't do that unless you have a trusting relationship. I tell the people all the time, "I care more about what you do than where you do it and when you do it and I trust you to get your work done." So go on and on about it.
Chris Tkaczyk:
Yeah. Do you ever find that people have abused this policy?
Aron Ain:
Yeah, sometimes. Yeah, sometimes, but rarely. In the great scope of all the times, I find people that take the trust that we extend to them and they do more than we ever imagined and their loyalty is tremendous and their engagement is high and how they feel about their relationship with us goes way up. So we get way more out of it.
Chris Tkaczyk:
Okay. So one of the other important parts of where your company values are is around being compassionate and caring. And you share a lot of really amazing stories about the way that not only that you take care of Kronites, but how they take care of each other. And there's a very nice moment in the book where you talk about how the nephew of one of your Kronites had come down with leukemia and had sent out a request for a bunch of his colleagues to send postcards from as many places around the world as they could and got like 9000 postcards.
Aron Ain:
Yeah. So I believe that work is really important and I enjoy it every day and I'm in my 41st year at Kronos, so it's the only place I've ever worked, but it's not the most important thing in my life and I don't think it's the most important thing in the lives of the people who work at our organization. So what's really important is making sure you have balance in your life and that includes making sure that we, as an organization, it's just not about profit and loss. It's also about caring and kindness and looking out for each other's interests and looking out for our family's interests and doing everything we can on a regular basis.
Aron Ain:
So people know that it's there. And so they ask us for things that I don't know if they would ask for it all the places they might have an opportunity to work at. But because we're safe and because we care and we want to look after each other's needs, we do that and we don't publicize it. Some organizations spend a lot of time publicizing when they do things unusual on behalf of people. I don't want to do that because I don't want us to get credit for doing the right thing when someone or some group of people are in a bad situation. So people say, "Oh, you should tell people all about that." I say, "I don't want to tell people about that. I want us just to do what is right and then just do it that way." And so if people know, people know, if they don't, they don't. But we know that we do the right thing and care for each other deeply.
Chris Tkaczyk:
Kronos is a family business. It was founded by your brother.
Aron Ain:
Yeah, he's one of the founders.
Chris Tkaczyk:
One of the founders. And so in your time now as CEO, at what point were you really aware that you had to have a people first caring culture?
Aron Ain:
Well, it's not the kind of thing that I was taught. It's the kind of thing that I've just learned as time has gone on. I've always believed that great organizations are powered by great people, that great people produce better products, deliver better service, better products, better service, you have better outcomes. And so once I realized that, I also then realized that there's a problem with that, that if you're going to go recruit great people to produce great products and great services, you better have a great environment for them to work in because if you don't, great people will do what great people can do, they'll go get another job.
Aron Ain:
And so what we have to do is make sure that we create this engaged environment where those great people want to stay at our company. I also tell people, by the way, if you don't want to have that problem, then go hire average people. You won't have that problem. But we choose not to hire average people, great people, but you better make sure that we do that. And going along with that, Chris, I believe that people join organizations because of the organization and they leave because of who they work for. Think about times in your career when you had someone who you didn't really like working for and how did that make you feel? So we make sure our 1000 people managers are clearly trained carefully about what a privilege and honor it is to lead people and most importantly the impact they have on those great people.
Chris Tkaczyk:
And your manager effectiveness index, which is part of the review process, right? That you do every six months where employees are given the opportunity to rate their managers and the management performance. What is typically the score in terms of how happy they are? When you look at the broad picture across the entire organization.
Aron Ain:
Yeah. It's a good question. So we do something I think that other companies do maybe a little more formally. People managers are not just reviewed by their managers. Managers at Kronos are reviewed by everyone on their team twice a year, so twice a year every manager is reviewed by their team members. 18 questions are asked about how their team members feel their manager is doing, and then every manager gets an MEI from that, a Manager Effectiveness Index. Of course, it goes across the spectrum. People who are exceptional and people who need to improve and really great people, believe it or not, get a 100. It's everyone on their team rated them strongly agree on all 18 questions about how they have a relationship but people in the fourth quartile get 60, 70% and they have to work to get better or else they can't be managers at our company anymore. Doesn't mean that they might not stay in the organization but not as a leader.
Chris Tkaczyk:
Okay. We only have a few more minutes left, but we have to talk about Ultimate Software. Ultimate Software is a company that I have gotten to know very well because I wrote the profile of it that you should all have gotten in your tote bag. And I expect everybody to read it. But it's actually, for me, it's interesting when I get to go down and interview people about their work experience, especially when they are so thrilled that they put their company at number two on the list of the 100 best companies to work for, you sort of really begin to understand them and appreciate what it is to work for a company that is a great place to work. And so just before we had our chat last week to prepare for this, there was announced that Kronos and Ultimate Software are going to be merging. And so we're taking two companies that are both roughly valued at what, $11 billion each?
Aron Ain:
That's right. Valued at $11 billion each, yeah.
Chris Tkaczyk:
Valued at. They're both privately held companies and this new company will be valued at $22 billion or so. And you're roughly the same size in terms of the number of employees you have. And so I wanted to ask you about how are you going to manage this whole transformation of merging these two companies that are both on the list of the 100 best companies to work for? I think in the history of the 23 years that we put out the list, we've never had two companies on the same list ever merge with each other.
Aron Ain:
How am I going to do that? Very carefully. Very carefully. What an honor for me to have that opportunity to be the CEO of this combined company. I believe it's going to be a merger like no other ever before. We have two organizations with remarkable cultures. Funny thing, one of the things I'm nervous about is we moved up 26 spots on the Fortune 100 list to number 52 and Ultimate's number two so when I addressed all the [Ulty-peops 00:15:25] a week ago, when I introduced myself to all 6000 of them, I said, "Congratulations, thank you, way to go." I said, "I'm really nervous though. I'm doing the math. 52 and 2 averages to 27. I just screwed the whole system up."
Aron Ain:
And so we're going to do it very carefully. We're going to take the best of what is at Ultimate today and the best of what is at Kronos today and create a culture that I hope we can say a year from now, two years from now that has never been seen before and we're going to do it thoughtfully and I'm really excited to try to figure it out. By the way, people say, "What's the first thing you're going to do? What are you going to work on most actively through this?" The first thing we're going to do is work hard to merge these companies and I'm going to be focused, job number one, on the culture and spend my job with as many people in the new organization as I can to understand what the dynamics are.
Chris Tkaczyk:
If you follow Aron on LinkedIn, you can see this for yourself, but I think it's so powerful that I wanted to share it with the room today. You posted numerous things. You're very active in social media. He posted this announcement that the two companies would be merging and there was a lot of feedback and comments from employees from both companies, all of which seemed to be unanimously supportive of the idea and seemed to be excited by it. But one of your Ulty-peops wrote as a comment on your post, "No denying the unbelievable power and synergy of this merger. I'm all in support. It's wild success. That said, speaking from the heart, I'm feeling bereft about the loss of two of the smartest leaders I've ever worked for so not ready to just abandon that loyalty. But after seeing Aron respond to hundreds of these posts, I'll admit to being a little bit amazed/impressed."
Chris Tkaczyk:
And you of course responded to her and says, "We are all in this together, one team. Let's never forget the foundation and legacy the leaders that Ultimate created. We should always be loyal to them, always. I will be for sure. Grateful too. Looking forward to a bright future ahead. Thank you for your support."
And the fact that you took that opportunity to respond to every single post shows the caring and establishing that trust already.
Chris Tkaczyk:
But one thing I do to point out is that it'll make one other company very happy as well, the company that would have scored the 101st spot on the list this year.
Aron Ain:
That's a good point. I didn't think about that. Can we have two slots next year? I don't want to be selfish. No, what's interesting-
Chris Tkaczyk:
Don't be selfish.
Aron Ain:
What's interesting about that was I told people when I went to the Ultimate town hall, the day we announced, and again introduced myself, said, "I read my own emails, I respond to my own texts, I return all my own phone calls." Wow. Holy macaroni. Over the next week, I got 1800 inbounds and it took me about 20 hours, but I responded to every single one of them one by one like that. Yeah. So that's part of trust. It's part of just being kind. If people took the time to reach out to me, the least I can do is respond to them.
Chris Tkaczyk:
Yeah. So one of the things that I remember reading when the announcement came out was that you took the company mantras, "Work Inspired" for Kronos and Ultimate's logo has the words "People First" on it. When I was down there, one of the things that really struck me was that you walk in the door of any Ultimate office and it says "People First". And as you see in the profile, I say, "The moment you walk in the door, you know what the company is all about." So you created this phrase, "People Inspired", if that's it?
Aron Ain:
Right.
Chris Tkaczyk:
But that's not going to be the name of the combined company. You're still figuring out what the new brand is going to be.
Aron Ain:
We are. So I wanted to take a little bit of time after we announced the merger before we close it, which will happen later this month and have more people participate in the decision of what the company should be named because there's a lot of emotion on both the Kronos side and the Ultimate side on what the name should be. So I want to have more people do that. Plus I want to be able to hide behind "It was somebody else's decision." That's not true.
Aron Ain:
And there were other things. Some people said to me, "I know you took "Work Inspired" and "People First" and put it together, "People Inspired". Did you ever think about putting together and calling it "Work First"?" I said, "I didn't do that." And then we call ourselves Kronites and the people from Ultimate call themselves Ulty-peops and someone said, "Are we going to call ourselves Kreeps? K-R-E-E-P-S?" I said, "No, we're definitely not going to do that. I don't need an outside branding company to help with that."
Chris Tkaczyk:
So when you eventually do merge these two companies, where's the headquarters is going to be?
Aron Ain:
We're going to have two headquarters. So we're in Lowell, Massachusetts, one of the birthplaces of the industrial revolution in America and Ultimate's in Western Florida just a little bit west of Fort Lauderdale and we're going to keep both of those corporate headquarters at a respect for the legacy and who we are and what we represent to our communities and no plans to put them together and I'm confident we can make that work. I'm going to be going back and forth a lot. Ay-ay-ay.
Chris Tkaczyk:
Yeah. And one of the first things that I did when I heard the news is I messaged one of the folk, one of the Ulty-peops, saying, "Are you okay? Is your job secure?" I just wanted to share my concern. And she's like, "Oh, it's going to be great." She's like, "I already read Aron's book over the past weekend and he's already inspiring people on the other side who are going to be a part of the family." One of the things that I found to be very interesting is that you have two companies that are in the same industry and yet when you were doing the review and due diligence for this merger, you discovered that you only shared, what, 3% of the same clients?
Aron Ain:
Yeah, In the same markets where we offer our products, we have 22000 combined customers and when we matched up the list of our customers, there's only 400 customers in common. Now when I first got that back from a high cost consulting company, I said, "You must have made a mistake. That's impossible." And once I realized it was true, I got even more excited about the possibilities of what's out there for the customers who we both serve.
Chris Tkaczyk:
Okay. I want to talk more about the bigger picture. You mentioned, we were speaking yesterday about the number of places around the world where you have employees and Ultimate has employees, I think from what I remember, six or seven countries and many of those are remote people. How are you going to ensure that your remote employees who may not have an opportunity to come to either headquarters often are going to have a consistently positive and great workplace experience?
Aron Ain:
Well, we're going to do it the way we do it now. First of all, 40% of Kronos and 40% of Ultimate employees today work remotely. Again, gosh, back to trust. Trust them, trust them. It's okay. So I'm going to do it the way I always do it. I over-communicate. I do vlogs, a video blog. I tried to write blogs, I never did it really well. So I set up an iPad and once every couple of weeks, once a month I just sit there, unrehearsed, one take. If I fall over in the middle of it, I don't do another take. I get up and go, "Sorry about that," and I just keep going because I want it to be authentic, which is what it is and I talk about what's on my mind. And so people tell me all the time that they always know what's going on because I over-communicate.
Aron Ain:
And so I'm also going to visit places and continue my relationships with people. And it's really not that hard to make a connection to people who work for you around the world if you just put your mind to it, if you just put your mind to it. Sometimes you don't even have to be with them physically and they can feel your spirit and they can feel what you're all about and they can understand the mission and perform really well.
Chris Tkaczyk:
Yeah. Michael Bush, my boss, does a really great job at communicating through video to the entire team and I always look forward to when I see that in either Microsoft Teams or in our email or whatever, and it's always about something that he's incredibly passionate about and sometimes it's sensitive stuff too. But I have found that it's a really fun way to actually communicate with your owners, CEO, boss, whoever.
Chris Tkaczyk:
So the other thing I wanted to mention, which we're almost out of time, but one of the great things to learn about in the book, and this is why I think it's such a great leadership book, is that you talk about becoming an un-leader. What is that?
Aron Ain:
So I don't really take my job seriously in terms of my title. I think it's unimportant what my title is. When people ask me what I do, it takes about 20 or more questions to get out of me my job. "Well what do you do?" "I work in the enterprise software business." "Oh, what company?" "Kronos." "What does Kronos do?" "All application software." It gets very circular after awhile because being who I am does not define who I am.
Aron Ain:
And so when I go work with the people I work with, I want them to know that they're as important as I am. We have now 12700 people because we need 12700 people in our combined company. And so every one is as important as I am. So for me, an un-leader either as a CEO or whatever your job is, is just really understanding the foundational obligation. You have to show respect to people who you work with. And it's not about you. And CEOs get too much credit, too much credit. They just do. I guess they get too much credit if things go really well and probably get too much credit when things go badly. So I'd rather get too much credit, I suppose. But that's not what it's about. And so the un-leader is meant to be focused on that and send a message to all leaders that it's not about us individually. It's about us collectively.
Chris Tkaczyk:
Great. Well, thank you Aron, and everyone, please get your copy of WorkInspired in the partner hall.
Aron Ain:
Okay, thank you, Chris. Thank you.
