Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism. Right here, right now at the NYSE and at ICE's 12 exchanges in six clearing houses around the world. And now welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
It's been a bad season, historically speaking from my Boston Red Sox, the biggest payroll in the league and the defending world champions are well over spitting distance from a wild card spot. A recent headline from Dan Shaughnessy, The Boston Globe columnist read, "Dave Dumbrowski May Have to Take the Fall for the Red Sox Fall Off." If the human talent doesn't perform the general manager, the HR guy really, may be out at seasons end. I mean, if you were a shareholder of a public company and you had America's highest paid CEO on your payroll, wouldn't you want to playoff sport in your industry? Sure, you would.
Josh King:
Down in Foxborough, where the Patriots are readying their defense of the Super Bowl trophy, the quarterback, Tom Brady, has signed for another year. He's 42 and wants to play until he is 45, ancient by any actuarial measure of football performance, and all sides, player and team, are hedging their bets, able to walk away from the table if this year doesn't play out as planned or one side or the other isn't generous enough when they come back to the negotiating table.
Josh King:
So much is at stake for the franchise if it's key man is absent from the huddle in 2020. Look, these are the human resources issues that we see play out in the sports pages every day of the week. If you look closely enough, you can see HR issues displayed across the rest of the newspaper as well, but they come in more camouflage disguises. Is the CEO's comp aligned with shareholder interests? Is the plant and the Midwest being closed and a new one being opened in Guadalajara? Has the spiraling cost of health insurance caused companies to cut back on benefits? Do millennials need beanbag chairs and ping pong tables to be productive in the workplace?
Josh King:
And can I please, please work from home? If you total up all of the employees that work for all of the 2,300 companies listed on the New York Stock Change, to say nothing of contractors or other outsourced labor, you're talking in the neighborhood of 45 million people across all sectors across the globe. Think of that. Walmart alone, that's NYSE ticker symbol, WMT, 2.3 million people. Kroger, that's NYSE ticker symbol, KR, 443,000 people. Home Depot, NYSE ticker symbol, HD, 406,000.
Josh King:
You get the idea. You dive into the S-1 of a company getting ready for an IPO in the New York Stock Exchange, there's a lot of similar language about how much depends on the talent around the table, not just the product on the shelves. From the men and women in the C-suite to those earning minimum wage, the responsibility for creating and maintaining a healthy, productive champion workforce orbits around the CHRO, the chief human resources officer, of any of those firms. It's a topic that's always fascinated me, and one that we're going to explore in depth with my friend, Doug Foley, an expert in the field and head of human resources for Intercontinental Exchange right after this.
Speaker 3:
It's more than an iconic building or a global financial marketplace. It's anywhere technology commerce and people intersect. The innovation that makes people's lives better, dreams that were once impossible are now realities. At the New York Stock Exchange, we help tech companies flourish and change the world. So go ahead, bring those ideas to life, we'll bring it to market. We are a living tech.
Josh King:
Our guest today, Doug Foley, is senior vice president of HR and administration at Intercontinental Exchange. Different companies put different pieces of the corporate structure puzzle in the HR function. And at ICE, Doug is responsible for both global human resources and the real estate functions, and other things that he'll tell us about. Prior to joining ICE in 2008, Doug worked in the performance and reward practice at Ernst & Young, and for Delta in a global compensation and reward role, both in Atlanta.
Josh King:
During his tenure, ICE has grown from less than 800 employees, and over 90% of those domestically based, to now nearly 6,000 employees that span the globe with over one-third based outside of the United States. Welcome, Doug, Inside the ICE House.
Doug Foley:
No, thank you, Josh. Great to be here.
Josh King:
Let me start with a metaphysical question. I mentioned Tom Brady is 42. The stats guys looking at his numbers or the insurance company analyzing that term life policy, they may write on Tom and Gisele, so much depends on the actuarial tables. You have the honor of being the first actuary we've had on this show, Doug. What do actuarial tables mean for all of us to understand? What should we know about them?
Doug Foley:
First, a point of clarification, I worked as an actuary. I didn't pass enough exams to be a credentialed actuary. So, I don't want to insult all those people that have.
Josh King:
It's a long road.
Doug Foley:
It's a long and dedicated road. Very early on I realized that, maybe that's not the road for me, but as it relates to underwriting a policy on Tom Brady's fitness, I would never take the short side of that. I would never assume he's going to be out, even before 45, maybe 46.
Josh King:
Our lifespans are getting longer. Our work expectancies, the time that we expect and hope work are getting longer because our retirement will otherwise get longer and we won't have enough money to pay for the rest of our lives. How close are you following these trends? And what do you see as the head of human resources about sort of how people are productive, whether they're into their 50s or 60s?
Doug Foley:
Yeah, it's interesting, I read a lot about that, largely because I have a personal interest in just retirement planning and retirement in general. And you do, you read all the time now that people are working until into their 70s, and some financial planners are telling people, work till your 70. Don't start drawing your social security until your 70, things like that. So, I focus on it, probably more out of a personal interest than a work interest.
Doug Foley:
But we see it as ICE has evolved. When I started with ICE, you mentioned we were under 800 employees. ICE is a very young company, but we've purchased and partnered with some very old companies, and our workforce and the average age and the average tenure and the expectancy around those ages and tenures has changed so dramatically over the past 10 years, that now we see people 65, 66 that aren't even close to retiring and are continuing to deliver results day in and day out beyond that of your average worker coming in.
Josh King:
And a person with 40 years experience under the belt is a very different kind of staffer, advisor, employee than a person with 10 years of experience under their belt.
Doug Foley:
Yes, absolutely. It's a great force to have around the office, as you pointed out, right? It's 40 years of life experience. They can help shape and mentor and coach and soothe sometimes, if you will. Your worker with 10 years experience who hasn't maybe seen as many cycles as somebody who's seen 40 years worth of cycles.
Josh King:
I know this maybe a radical digression at early point in the show, but we mentioned it at the beginning, you were studying or focused on being an actuary. You did actuarial work at the beginning of your career. What led to that?
Doug Foley:
I wasn't the greatest math student growing up, and then somewhere during college, the switch flipped and I just developed an interest in math.
Josh King:
Where was college.
Doug Foley:
I graduated from Georgia State right in Atlanta.
Josh King:
And how did that switch flip? What were you doing beforehand? And aha, math.
Doug Foley:
I was interested in transferring over to Georgia tech. Worked as a civil engineering assistant apprentice, if you will. And I thought, okay, well, if I'm going to be an engineer, I'm going to need to take more math obviously, and so I started taking math classes, and all of a sudden, I just thought, you know what? I really like math. And while I'm interested in engineering, I really like math. So, I just decided to get a bachelor's degree, a bachelor's science in mathematics. Then coming out of that, at that point in time, I thought I had two pretty distinct choices.
Doug Foley:
One is I could be a math teacher, and I thought about that. And one is I could be an actuary, and I thought about that. I did my student teaching. I actually got a job offer to be a teacher. The number was shockingly low, and I'd been dating somebody, my now wife, for quite some time. And she said, "You should pursue that actuarial path." As fate would have it, I got a phone call, a friend of a friend was leaving an actuarial position and was looking for somebody to backfill them. I got that interview and I ended up getting that job at Ernst & Young, and I was on that path.
Josh King:
Were you already doing your prodigious saving at this point?
Doug Foley:
Well, that's when I started earning money, so that was not the point at which I started saving.
Josh King:
And so the path through Ernst & Young, you also had a stop at Delta, where did that fall in your trajectory?
Doug Foley:
I worked at Ernst & Young and then Arthur Anderson for a couple years, and then back to Ernst & Young. And then I realized, hey, this is my career path here, that I'm going to be in and around HR, so I branched out from being a traditional, working as a traditional pension actuary into executive benefits executive compensation consulting. I realized that if I ever want to have the choice to work for a corporation in a more traditional HR role, I needed to go have that corporate experience.
Doug Foley:
I was fortunate enough to get a role at Delta. That was about gosh, about eight-years into my career, get a role at Delta in executive compensation, and then I expanded out into some global and benefits, but that was my chance to get experience, not on the consulting path and the advisory path, but instead, real world in the company HR experience. Went back to Ernst & Young and started working in an M&A setting, doing HR advisory work in an M&A setting, due diligence primarily.
Doug Foley:
My very first client was ICE, and the real role that I have now was held by a good friend of mine, Dan Kennedy. I got reconnected with Dan and connected to ICE, and for a couple years, Dan would call when ICE was doing a deal. The very first deal that I got the call on was New York Border Trade. We stayed connected for a couple of years, and I continued doing that work at Ernst & Young. And then after early 2008, Dan gave me a call and said he was thinking about leaving ICE. And if he did, was I interested in interviewing to backfill him?
Doug Foley:
And I was. First, I berated him on why he would ever leave ICE, and then I realized he was retiring. I was fortunate enough to interview, and even more fortunate to get the job, and here I am 11 years and about a month later.
Josh King:
We're going to spend a lot more time talking about ICE, but before we do, another radical digression in our conversation, because I think you bring some certain expertise that a lot of people will be interested in. I mentioned at the introduction, the pathetic Boston Red Sox. Here is a clip of Aaron Judge of the Yankees batting against Sox ace, Chris Sale.
Speaker 5:
But you had never had a hit against Sale before tonight that's picked up two singles. Deep drive center field, turning and looking is Bradley. See ya. Deep into the center field bleachers. The Yankees are on the board at 5-1.
Speaker 3:
He knew right off the back where this was going. That's a deep part of this park. Judge, I'll tell you what, he's got things going, which he does tonight.
Speaker 5:
All rise, here comes the Judge.
Josh King:
Doug Foley, the Elias Sports Bureau said Monday that batters hit 1,142 home runs in June, seven more than in May, five of the top six home run months have been in the last three years. In addition to being an expert on the actuarial tables, you're also somewhat of an accidental expert on the manufacturer of major league baseballs.
Doug Foley:
My dad ran the Rawlings baseball manufacturing plant in Haiti, just outside of Port-au-Prince, Haiti. So, I grew up around baseballs, around people spinning baseballs, making baseballs. I didn't know a lick about baseball, had never seen a baseball game. We used to get them and uncover them. We would get all the misprints and misstitch or ... If I had to scuff things, all the rejects, we would, my brother and I, would actually take them apart and get down to the rubber core and just do all sorts of things with the ball by decomposing it.
Doug Foley:
We didn't actually know what to do with it as a baseball. I was skeptical of it. Honestly, we had spoken about that. I was a little skeptical of it and then I saw the stats when they introduced baseball into the minor leagues. I thought, wow, that's ... I mean, it's one thing to see it happening in the majors, and you can make all sorts of explanations saying, I read that article about it. Happening in the minor leagues, and I thought, wow, maybe it is the baseball.
Josh King:
But a kid whose household was full of rejected baseballs, and dad was running the plant, I mean, I've been to Port-au-Prince, Haiti, all of, maybe once in my life, maybe twice, not the place that I go to regularly. How did the Foleys find themselves in Port-au-Prince?
Doug Foley:
My dad was ... He was a wild hair and he was very interested in living and working overseas. So, I was born in Pennsylvania, in Harrisburg, Pennsylvania, and immediately, within the first year of my life, he moved the family to Jamaica, Mandeville, Jamaica. He just loved working in living in overseas. He liked kind of the free spiritedness of it, if you will. I think he, I suspect, he really liked the independence of it from whatever home office he was working for. Yeah, we lived in Jamaica in Mandeville for a little while, moved to Miami for a little while, then to Haiti.
Doug Foley:
Again, when he told the stories, it was all about, he just wanted to be back overseas. So, he was constantly looking for that next bit. Ironically enough, he ended up in Costa Rica, not with Rawlings, but ... The baseball plant ended up in Costa Rica, not far from where he lived.
Josh King:
How many signalings do you have?
Doug Foley:
Just one, older brother, four years older.
Josh King:
How are the Foley boys feeling about moving from Pennsylvania to Mandeville, Jamaica, to Costa Rica and the globe trotting that your father really wanted to have as a part of his life?
Doug Foley:
I was pretty young for the most of the moves, so I probably didn't have many feelings at all about it. I probably just went along. I know my brother, looking back on it, myself and my brother, I'll speak for him on this, loved the experience. It's unbelievable, the things that he exposed us to, the experiences that we got parts of the world that we saw because of his free spiritedness, which is ... We're very grateful for that now. I know that.
Josh King:
I mean, do you think your dad's story of sort of moving around the globe, living internationally shaped, in some way, your conservative approach to life and savings in a career that helps design the financial lives of others?
Doug Foley:
Very early, he pointed to things, and he said, "Look, if you want that thing, whatever it is," we would go on a trip, "Well, if you want to go on these trips, you want to take your children on these trips, you have to think about now, how are you going to make that happen? How are you save for that? And how are you going to ..." You want that car? I would comment, oh, I like that car, I like that boat. He's like, "Well, print a picture out, put it over your desk. That's your motivation. Study for that."
Doug Foley:
He was constantly, constantly hammering on, "Look, if you want something, you know what you want, put in the effort, go get it. But it's not just going to come to you. You've gotta be motivated to go get it."
Josh King:
Doug a new survey from bankrate.com asked a thousand working American adults how much of their annual income they set aside for retirement, emergencies and other financial goals, like that picture your dad had you put over your desk. The answer, more than one in five 21%, don't save any of their annual income. Why is that? What kind of a problem is it?
Doug Foley:
I think it's a huge problem. Many people are experts on this and many people write on this, and it's clearly a huge problem. I think the painful reality for so many people is that they're living paycheck to paycheck. It's, how can I put a dollar away for the future when I need that dollar today to get by? It's a very difficult choice. I know that. And everybody goes through that. I can tell you my personal journey, as I started, I couldn't save that dollar for the first paycheck, but I could save 5 cents, and then the next one, it was maybe 6 cents. Just tried to work up that ladder.
Josh King:
Did you have automatic methods to do it, or all sort of like, here's how much I've saved this week and stash it somewhere else?
Doug Foley:
Yeah. I definitely hid the money from myself. Honestly, I worked in college and I had an income college, but all that was going to just living and things you do in college. Then, right away, when I got my first paycheck, I said, okay, I got to hide some of this money. This is more money than I've ever seen. So, I just need to hide it. Yeah, I would push it off. 401K was a great savings vehicle, but then I would also push some different money and accounts that I couldn't access easily.
Josh King:
Researchers, Doug, at the Stanford Center on Longevity project, if you want to retire at age 65 and maintain your standard living, you need to put 10% to 17% of current income into a retirement account, and that's if you start saving, as early as you were, stashing it away at age 25. Does that sound about right to you?
Doug Foley:
It does sound about right. It's the number that I aspired to when I was in my early 20s, and eventually I got to that number. It's not easy to do. That 10% number, I'm not even sure when people do the math and they grow and they progress. You mentioned life expectancies, and I'm not even sure that number produces enough money when you actually get to retirement. So, it's a concern.
Josh King:
From this company, Intercontinental Exchange, which had 800 people when you joined, it now has close to 6,000, what did you have to do to scale your function from that time that you joined from Ernst & Young, you took over from your predecessor, in terms of people on the team, the expertise they had, the technology you used, the processes you put in place to serve that many people in all the countries in which ICE operates now?
Doug Foley:
Yeah. You used the word, the thing that we focused on very, very early in my time at ICE was building the ability to scale. When I first went in, the company was very small, a lot of things were still very manual. It all made sense for the size of company and type of company that ICE was right then and there. No question, it was perfectly fit for purpose, but to the extent that the company was going to grow twofold, threefold, fourfold, whatever it was, we knew that we had to change our methodology. It could no longer be arms and legs trying to process things and arms and legs trying to fight fires, but we needed to automate.
Doug Foley:
The very first thing that we did is we put in an HRS system. That got everybody, on a global basis, on the same page. For example, when I started, if Scott Hill would come down and say, "Hey, what's our head count today?" I actually had to pick up the phone and call people, and ask, "Hey, well, exactly how many people we have in London today? So, my answer usually to him was, "Well, do you want the head count as of the end of last month? Because I have that spreadsheet. If you want it today, I have to go ask."
Doug Foley:
We really focused on, "Hey, how do we scale? How can we get, do more with the exact same number of people? What if our headcount were going to be two times, three times? What would we need to be building and have in place today to be able to withstand that growth?"
Josh King:
What would you say are the other big things that keep a global HR leader up at night?
Doug Foley:
If you read around this space, you read it all the time. It's, how do you ensure that your team members, the team members that really make the company produce results are engaged, stay engaged, are interested, involved team members? Every day I think ... Everybody can acknowledge that, even throughout the day, you probably zone in and out of engagement. You have great periods where you just think, gosh, I'm on fire, I'm getting so much done. Then you have other periods you look back, you're like, what do I do the past 30 minutes?
Doug Foley:
It's, how do we make sure that the team members, on a global basis, feel connected to the company, feel connected to our mission, feel connected to our clients? That's our mission, right? Serve our clients. And they're engaged in that as much as possible as long as possible each and every day.
Josh King:
The CEO of Vonage Alan Masarek, was a recent guest in this podcast and spoke about his policy, Doug, of personally reviewing the job description and resume of every single new hire as one way to maintain the right caliber of employee. Do you have a similar strategy?
Doug Foley:
We're not that heavy handed. I will say that Jeff approves, reviews and approves every single position that we open so that he definitely has his finger on the pulse of the company's growth and where we are growing. He's keenly focused on what types of positions are we adding? What types of positions are we losing people from and replacing people into? As it relates to reviewing the job description, just to make sure the caliber of people, we're not quite that heavy handed. I like to think that our talent acquisition team, and more importantly, our managers, the people that are making the hiring decisions are keenly focused on finding the right level of talent, the right level of background, or the right level of cultural fit to keep us moving forward.
Josh King:
Talk about the right level of talent, the right type of talent. Press around the HR industry has been steadily banging the drums with headlines about the impending talent gaps for high-demand jobs, particularly, Doug, in technology. Are you already seeing an impact from this problem, either directly at ICE or across the economy?
Doug Foley:
Yeah, no question. I feel like I've been reading that article for the past 20 years. I bet you could take that article and print it again in 20 years. Everybody will still look at that and say, "Yes, I'm feeling that." We feel that day in and day out. I know we feel it. I know our peers in the industry feel it. I know our peers, just here in New York or in Atlanta, or the other centers that we operate in, they feel it. Technology talent is scarce, and the more you want to narrow that statement down to, okay, well, technology talent, I need a job, a developer, a C++ developer, as you start to narrow that, I tell you, it feels even more scarce as you narrow exactly what you're looking for.
Doug Foley:
Talking to a 25-year-old today, if you don't know what you want to do, I don't know, become a developer and you will have a job for life.
Josh King:
Well, then what's the problem if people are worried about how their five-yeah-old is going to eventually get a job? You've spent much of your career in Georgia with a great feeder system from Georgia tech and the other local colleges and universities. The local FinTech industry has grown up around it and the cost of living has historically been affordable, but why aren't we creating enough technology students and experts coming out of US high schools and then colleges to be able to meet this demand?
Doug Foley:
I wish I knew the answer to that. I really do. I don't read enough to maybe even have a wildly informed view on that, but I tell you, just, I have three kids ranging in ages from 18 down to eight. I definitely don't see in that elementary school, middle school, high school, I definitely do not see, at least in our little bubble, a heavy emphasis on stem. It's there. If the kids are inclined toward it, that's great, then they can excel in it, but there's not a real push into those areas, which I find curious.
Doug Foley:
Look, I honestly think the best developer probably has a liberal arts undergrad and then goes back and gets a graduate degree in MIS or CIS or something like that, that they have the art and the science.
Josh King:
But there is one geographic advantage that ICE and other companies in Atlanta have always had, and that is that it is a magnet for FinTech and the financial technology sector, certainly Georgia Tech and the surrounding universities. Talk for a minute about maybe the advantages that ICE and its neighbor company companies have had growing up, and looking at talent, whether it's coming outta the schools or drawing them from other companies in the Southeast.
Doug Foley:
Yeah. I always say we were FinTech before FinTech was cool. I think that's a true statement. We've been FinTech all along, and to hear Jeff talk, I mean, you can hear it in everything that he was thinking when he just even thought about forming the company. We are very fortunate, in Atlanta here in New York, we have an office in Bedford, Massachusetts, so we are very close to some of these tech centers and tech universities, as you're pointing out, that, that crank out incredible, incredibly talented students and graduates that we're able to work with and deploy.
Doug Foley:
We have some great people on our team that came out of some of these universities. We also, honestly, we recruit, I would say it on a global basis. There's a lot of great talent that moves into this country that has a technical background or a STEM background. We found great immigrant labor from that perspective coming in from overseas.
Josh King:
I mean, anything about where you see the country headed now and its views toward immigration that gives you concern or pause?
Doug Foley:
We've certainly noticed it and felt it. We're very immigration friendly. We will sponsor visas for four individuals, and that's become much, much harder. The process of getting a visa is much harder. The process of onboarding somebody who needs a visa transferred from a prior employer is much, much harder. I'm not talking about, we don't import hundreds, thousands of people to come in and do technology. I'm talking about day-to-day, we're trying to hire developer A from company X coming over to us. That process can take six to eight months now to just transfer the visa from one employer to another.
Doug Foley:
That wouldn't be a problem if we had this robust talent pool of technology talent out there, but it's ... I mean, there's negative unemployment, so it's just, as that immigration process gets harder, process gets longer, that we feel that pain every day.
Josh King:
If you think about your own experience at ICE, or talk to your peers, leading HR functions at other companies, what can companies do, and what do you see them doing, the best ones, to keep the talent gap from becoming a critical impact on their ability to meet the needs of their customers?
Doug Foley:
Yeah, most people that I've talked to, what they try to do is honestly, they try to over-hire. If I need three, higher six. Because the three extra, something's going to happen. Life is going to happen, they're going to go to another company, whatever it is. A lot of people I talk to are just trying to over-hire, and that sort of exacerbates the problem there. It's a never ending cycle, but a lot of people try to over-hire, the thing that I found, and I think my peers have found, and people write about is, largely the technology talent want to work on exciting and new technology.
Doug Foley:
When I got my math, I learned a program in Fortran. I can tell you there aren't many Fortran developers out there. Nobody wants to program in the old language or the old system, those sorts of things. It's, hey, what can I do to further my skills and just be, I, as a developer, stay very interested in what I'm doing? That's something that ICE brings to the table, and being in that FinTech space is ... Some of the things we're doing recently in the press is the Pillar launch here at NYSE and the matching engine.
Doug Foley:
It's amazing, the technology that we deploy, it might seem invisible, or even innocuous to some people like, well, of course, you match buyers and sellers, of course that's easier, right? But when you really get in there, and you think about the volume of transactions that we do, the types of transactions, all these different orders that run through there, it's really, really interesting stuff for developers to sink their teeth into. When they see the volume, the numbers, the type of technology, the cycle that we go through on that, it's exciting stuff and it keeps them very interested, and we're always looking for that next thing. What's the next great thing?
Josh King:
I mean, that's exactly what [Majorca Pani 00:27:49] and [Swit Amasam 00:27:49] were saying when they were on this podcast, talking about sort of the opportunity working at these exchanges to work on some of the most sophisticated trading technology in the world, certainly the most sophisticated trading technology in the world has got to be a draw for people to come to ICE.
Doug Foley:
We hear it a lot from people that join. I don't think we do it good enough ... I'm glad that [Trudor 00:28:10] and [Mayor 00:28:11] did the podcast, because I don't think we do a great job of really staying out there in the marketplace and preaching, look at all this cool stuff that we're doing. But it is, when you sit down and you talk to the teams that put these technologies in place and see their eyes a light up on what they get to do and how quickly the tools will move, the orders from point A to point D, point B to point C.
Doug Foley:
And even we, as just consumers, we see it, right? I can remember one day trading a stock on my phone, sitting in an airport in a different country. The order came back confirmed so ... I was on the local wifi. It was amazing. It was confirmed back before I could even blink my eye.
Josh King:
HR leaders are often on the receiving end of a lot of feedback related to workplace culture. We've all seen The Office and the sparring between Michael Scott, played by Steve Carell and Dunder Mifflin, local HR chief, Toby Flenderson, played so well for so many years by Paul Lieberstein. Let's take a quick listen.
Speaker 6:
Oh, and another fun thing, we, at the end of the night, are going to give the check to an actual group of boy scouts. Right, Toby? We're going to ...
Toby Flenderson:
Actually, I didn't think it was appropriate to invite children since it's ... There's gambling and alcohol and it's in our dangerous warehouse, and it's a school night, and who it is, is catering. Is that enough? Should I keep going?
Speaker 6:
Why are you the way that you are? Honestly, every time I try to do something fun or exciting, you make it not that way.
Josh King:
Doug, how do professionals in your function overcome the stigma of being the killjoy?
Doug Foley:
I just turn into it. Don't turn away to ... I turn into it. My wife gets furious. We'll meet people and oh, what do you do? I'm like, "Oh, I'm Toby from The Office. I'm in HR." She's like, "You're not Toby." I'm like, "Why hide from it?" Look, we don't ... Fortunately, at ICE, fortunately or not fortunately, I don't know which, our role, my role, the role my team plays is in support of the business. Providing Jeff, providing Scott, Chuck, [inaudible 00:30:24], all these folks, providing insight, opinions, guidance, hey, have you thought about this or have you thought about that? That's what we do.
Doug Foley:
Sometimes yeah, we point out the, hey, look, here's where things can go wrong. I can remember a long time ago, Mark Wassersug wanted to put one of those machines where you hit it. That you either hit the character or you hit the punching bag and measure the voracity with ... I said, that's fantastic, the team is going to love that. They're actually going to love it. I'm telling you that somebody is going to break something. The best that we can hope for is that they break the machine that mark was going to by himself, so that was his problem.
Doug Foley:
But inevitably, somebody is going to break their hand, or worse, their foot or they're going to-
Josh King:
Sledge hammer coming down on foot.
Doug Foley:
Yeah. Something that is going to happen here. You want to do it, let's do it. Let's just know that this is what we might encounter along the way. He ultimately ended up not buying it. I think we really started to think through what could happen. But no, look, we just provide tools, guidance, knowledge. We try not to be the killjoy. Occasionally sometimes, maybe that is the case, but somebody has got to do it.
Josh King:
Beyond the Toby Flenderson stereotype though, Doug, what are some of the functions that HR is responsible for that really go beyond what most employees are aware of that you do?
Doug Foley:
I don't know that people know how often we are simply playing connector. Everybody knows we run payroll and benefits and compensate, the little ... The tactical things, but one of the roles that I think that we play well, and I think HR in general can play very, very well is just connecting people on topics, whether it's because you're trying to solve a problem. We talk to a lot of people were in a lot of different conversations and we get a lot of different pieces of information. A role that we play is, is bringing people together. Whoa, hey, wait, Josh said something. Steve said something. I got to bring these two people together because they're not talking.
Doug Foley:
I don't think people see that, and honestly, they don't need to see that. It's different from the just conflict resolution where HR is trying to bring people together, but it's really just trying to tie together business topics, business initiatives, pieces of information that we're gleaning from different parts of the business to say, oh, wait, you guys get in a room, and you're talking about very, very similar things, similar resource needs, similar approach, is there something here?
Josh King:
Bringing people together, the role of the connector. After the break, Doug and I delve into how companies are preparing to staff the workforce of the future and the importance of validating that a company practices what it preaches. That's right after this.
Speaker 1:
And now a word from Chip Bergh, CEO of Levi Strauss & company NYSE ticker, LEVI.
Chip Bergh:
There's no other brand in the world like Levi's. We're here today because of the dedication of the 15,000 employees that we have around the world. Growth is being driven across the company, men's, women's tops, bottoms, outerwear, virtually every country in the world grew last year. Being associated with an institution that goes back for Levi's is special. This is where this company deserves to be.
Josh King:
Welcome back Inside the ICE House. Before the break, Doug Foley, senior vice president of human resources and administration at Intercontinental Exchange, and I, were discussing how a company develops its workforce and the seeds of its company culture. Doug, let's go back to November 19th, 2013, on the floor of the New York Stock Exchange, where we are today, or a couple floors above it, CNBC's Bob Pisani asked ICE CEO & founder, Jeff Sprecher, about integrating his newest acquisition NYSE Euronext into ICE. Let's take a listen.
Bob Pisani:
Before we let you go, I want to put up the revenues indicating where you get your money from, because you got your questions about the floor of the New York Stock Exchange, and yet only 5% of the revenues of this combined company come from the cash equities business, that's the US stocks. You're basically a futures companies, oil futures, agricultural futures. Where is the growth going to come from for you? You're going to spin off the European cash equities business, Euronext, you've said you want to IPO, but where is the growth for you?
Jeff Sprecher:
Well, what you're seeing there is that we are a multi-asset class network, where we can sit on people's desktops and allow them to trade everything around the world. That's the goal. And it all feeds on each other because capital is quick to move around. It is global, and that's what we want to do. The New York Stock Exchange, while it's small, it's an important part of what we do. And I think it is a growth engine for us.
Josh King:
Putting two companies together, integrating two cultures after a merger, two teams, one future, it's happened a lot at Intercontinental Exchange. What's the secret sauce, looking back in some of these experiences in your view and making it work?
Doug Foley:
Yeah. That's a great clip. That was a great day. Look, for us, every deal is different. The secret sauce for ICE is not the same as the secret sauce for another company. What we have learned is that to stay true to ourselves. We are incredibly good integrators, incredibly good operators. We make decisions very, very quickly, very transparent about the decision-making process. We're very transparent. Once we've made decisions, we understand that you're not going to make everybody happy with every decision, and we don't try. That's not the goal. The goal is to achieve the business outcomes that we're after, whether it's integrating companies, realizing synergies, whatever it is. We have put together a playbook and a team that is very good at staying on task and getting the objective accomplished as fast as possible.
Doug Foley:
And we just don't stray from the mission. Again, it's not secret and the way we approach things might not work at different companies, but yeah, no, we've become very, very good at that. I think it's largely, we stay very outcomes focused, and we understand we're going to break a few legs along the way. It's not personal. It's never personal. It's not that we're out to break that egg. It's just going to happen. We've honed that over the years and have become very good at it, I think.
Josh King:
We recently had the chairman of Nokia on this show, Doug. When looking back at their merger with Alcatel-Lucent, he said that the integration process was purposefully blind to whether a manager was originally with Nokia or Alcatel when creating a new reporting line. How does ICE begin the process of integrating a new team into the overall ICE structure?
Doug Foley:
We typically know the end state that we're trying to get to. I think everybody does that, is trying to define that, what's that end state going to look like? But honestly, sometimes you can't do that. Sometimes you don't know, and that doesn't stop us. We're not afraid to just start down the path and figure it out as we go. We know some things going in. The culture that we bring to the table, if we're buying somebody, is the culture we're going to end up with.
Doug Foley:
Part of that culture is being very aggressive around decision-making, very, very focused on speed to execution, very transparent. And sometimes we just start down the path and find our way versus having the end in mind. A lot of times we know we're going to try to end up in that makes it a little bit easier, but sometimes we don't know. For example, you made that clip from when we closed on NYSE. We didn't always know that ... NYSE, NYX was a much, much bigger company than us. We didn't always know what we were going to find. We didn't know exactly where we needed to be, but we knew the first step we needed to take.
Doug Foley:
And then we took that, we knew the next step, and so on and so forth. For us, it's staying true to our culture, staying true to that mission, being as transparent as possible. That's always worked out very, very well for us. You referenced some companies will be blind to where the individual, where the decision-maker came from. More often than not, we are blind to that. It's not that there's no loyalty, but it's, hey, look, it's, who can help us best achieve the business outcomes. And sometimes that comes from ICE, and sometimes that comes from the company that we're partnering with. It's not a factor that drives the decision.
Josh King:
I mean, sometimes you don't have all the talent you need in-house or certainly acquired through a merger. Is there a science to balancing internal promotion and advancement through external talent acquisition?
Doug Foley:
So many great people have come to ICE from [DS 00:38:48]. I mean, think about this building we're in here at 11 Wall, ICE wasn't in this business. There's so much great talent came to Intercontinental Exchange through this deal, so much great talent came through the more recent acquisition of Interactive Data Corporation. Look back at all the deals ICE has done, you get great, great talent in these deals. Honestly, I think Jeff has done some deals because of the great talent that it brings. Opportunity begets opportunity.
Doug Foley:
Deals, particularly, beget opportunities. You get great influx of new talent. You also have an opportunity to promote. We always drive to promote from within, but honestly, when you're partnering with a company, you're merging with a company, buying a company, that's within also. So, the promotion set grows through deals. We're always looking to promote from within, but when I say that, that means also we're promoting the people that came via acquisition, but that creates so much opportunity for people to stretch their legs, stretch into a new role, stretch into a new project. Sometimes, after a few years, they kind of settle back to the role they ran, but they had three years, two years of working on a new initiative, a new project, a new technology that they wouldn't have otherwise had a look at.
Josh King:
So Jeff Sprecher, Scott Hill, Ben Jackson, and other members of ICE's leadership have talked about ICE's culture on this show, but for the person responsible for filling out the ranks of ICE, top to bottom, with people who will work well within this culture, how would you describe what it is?
Doug Foley:
Yeah. I have a lot of little elevator speeches on this, and I figured this one would come up, and I struggled with, which elevator speech? So, I was going to do two. One, I try to emphasize with people, when I speak to them, is it's deceptively intense. You guys have sat down with Jeff, incredibly humble, incredibly, almost soft-spoken, if you will, but never mistake that for a lack of intensity. I try to describe that to people. When I talk to them, I say, "You're going to meet with people, can be very casual, very informal, very approachable, but don't misunderstand that. You can be all those things and incredibly intense about achieving success for our customers and our clients and our teammates."
Doug Foley:
It's deceptively intense. Then I meant to go cite this, this is from a book, "It's humble, it's hungry, and it's smart." If you can be humble, hungry, and smart, you're going to fit very, very well at ICE. Also, back to, don't ever get fooled by that humility.
Josh King:
Maybe I'll focus a little bit on that middle thing, hungry and the literal sense of being hungry. You're responsible for corporate real estate, Doug, along with human resources, but the two are often intertwined. The setting here at the NYSE, it's a historic building in itself is very different from ICE's headquarters in Atlanta. Cool, clean futuristic, with farm to table food in the cafeteria. I haven't seen any ping-pong tables at ICE, but what have you learned in your career about real estate and how it serves as a motivator or de-motivator?
Doug Foley:
Yeah. Please let me know if you find a ping pong table at ICE. From a real estate and office perspective, well, one, I'm very fortunate in that Jeff is keenly interested in the topic as well. He's got an eye toward design and he has a very strong opinion about how workspaces should lay out, how they should function. He understands and invest, helps us invest in design decisions that will help from a human interaction perspective. All the way back to our early days, we were putting, connecting staircases between floors. So, we would rent two floors in a building. Of course, they have fire stairwells that you could use.
Josh King:
Go out a staircase.
Doug Foley:
We'd blow out a staircase. We did it in Midtown. We do it in Atlanta. We actually built a staircase on the side of our building in Atlanta to connect to people. We genuinely believe, look, I've learned over the years, you can't make all people happy with real estate decisions. I always say my goal is to make everybody equally unhappy. Whether it's all open plan or all offices or huddle rooms or not huddle rooms, furniture, this furniture, that furniture, we firmly believe that office design office environment absolutely plays into employee engagement, it plays into employee interaction, it plays into our success.
Doug Foley:
You see that we invest a reasonably big number of dollars in making sure that people have a great place to work.
Josh King:
Sometimes you have to check in periodically to see if it's as great a place as you think it is, and whether the company is actually living up to its values and its ideals, you can listen in to conversations in the cafeteria, hold focus groups with employees, or survey them. How important is it to tap into the pulse and how do you do it?
Doug Foley:
I think it's very important in that how we do it, how I do it, how we do it has evolved over the years. We used to be small enough that you could just go talk to people. It was that easy. You could talk to people in different offices. You knew who those connectors were in those offices, that if you've talked to the right people, you could get the pulse after a few conversations. We've grown, the process has evolved. And more recently, we did our first employee survey. That survey was specifically designed to say, look, we espouse this culture. We actually write the culture down. We call them our competencies.
Doug Foley:
What we did is we designed a survey that says, are we living these competencies? We tell you, this is the roadmap to success at ICE and the competencies, and so we actually deserve it. I said, "Okay, are we actually living that? Do you see that every day?" As we've gotten bigger and more dispersed, that's how we're doing it now, is through that survey.
Josh King:
When did you know that the time right to do it, and what did the survey find out, and were there any surprises to it?
Doug Foley:
We knew it was right because we knew that a collection of senior people getting together in a room couldn't necessarily represent, here's everything that my people, my team members are thinking. So, we knew that we were geographically dispersed. It was hard to get firsthand accounts, firsthand opinions on the pulse, if you will. So, it was time to go out there and get just objective and anonymous feedback. We did that. I don't know that we were surprised by the results. I think we were ... Everybody reads statistics slightly differently. I was surprised at the consistency of results, and I think maybe that's where our surprise came from.
Doug Foley:
I would have speculated that different offices would have had different hot buttons. Different countries would have had different hot buttons. But what we found was incredibly consistent throughout the geography and throughout the offices, incredibly consistent. That surprised me. Then looking back, I think that, that's a testament to the culture, the way Jeff runs the company, the way he really talks about ICE. It's just one ICE. It's one Intercontinental Exchange, so it's one culture. I think that was a surprise on the good side that, hey, we really do have a consistent culture and we're having the same growing pains throughout the company instead of, oh, this building feels a different way from that building.
Josh King:
What does it take to maintain between surveys, the environment that encourages feedback up and down the chain of command?
Doug Foley:
It's a daily challenge. I don't know that we've figured out the exact way to do that, or the most efficient way to do that. We try to tackle it from a number of different perspectives, as you'll know. We push out a lot of communication saying, if you have feedback, provide it, email this person or that person. For example, when Scott does his quarterly videos after earnings, talking about results, talking about what's ahead, he's very consistent in his videos and/or his written message of, if you have feedback, please provide it. We really, really, really tried to push out through the manager ranks, ask for, seek out, solicit that feedback.
Doug Foley:
Don't just assume because you're not hearing anything, people don't have anything to say. Ask for that. We try to drive it through the management chain. We try to drive it through corporate communications. We try to drive it just in direct messaging when Jeff does a video, he'll say in there, if you have feedback, please provide it. We come at it from all sides. I still think we can do more and better, because I know people are reticent to provide that feedback. It is valuable when you get it.
Josh King:
Share. I made brief light of it at the top of the show, flexible work arrangements. It's a question that comes up at most companies, certainly all the companies that I've ever worked at, especially with multiple generations represented among the workforce. How do you strike the right balance, Doug, between flexibility and the collaboration that comes when you get around a table like this in the office and look a colleague right in the eye?
Doug Foley:
I wish I knew the exact answer. That is something that we spent a lot of time talking about, and up until this year, we didn't have any work from home. We genuinely believe there is so much value in the human interaction. We talked about real estate just a second ago, bringing people together in an office, having them collaborate, whether it's while they get coffee, while they run into each other on the staircase, while they're sitting next to each other. Can they get into Scrum, a Whiteboard together?
Doug Foley:
We really believe that there's a lot of value in those human interactions. It's a core principle. We think that's true. Other companies may think it's not true or it's different for them. And then that's great. Different answers for different folks. For the longest of times, ever since ICE was formed, we did not have a work from home policy. We heard it, you mentioned it right, we heard it loud and clear in that employee survey, that work from home was important to people, and so we took a first step into it this year, and we did it. We started with one day a week for certain roles. Work from home one day a week. We'll see how that goes.
Josh King:
Early signs.
Doug Foley:
Early signs are very, very positive. It's been in place now for six months, everything is positive. I don't mean that people are happy they can work from home one day a week. I would have expected that, so I wouldn't be surprised that I'm hearing that, and I am hearing that. What I'm hearing is manager feedback has been very, very positive. I talked to a lot of people about this. Are you having difficulty connecting with team members? Do you feel like that human connection is lost? Do you feel like the fewer interactions are causing less innovation? Etc.
Doug Foley:
I'm hearing nothing but very positive things from managers because they're hearing very positive things from their team members of, hey, that affords me, you know what? I don't have to sit in traffic and I actually work longer, and I'm happy, or whatever it is. So, early sign is very positive.
Josh King:
We've been talking mostly about the main bulk of a workforce. But of course, so much attention is paid to the leadership of companies and aligning that leadership with shareholder interests. Tesla's CEO, Elon Musk always gets a lot of headlines, but he got them earlier this year for a pay package worth $2.3 billion, not just the highest of the year, but the highest ever according to compensation experts. Going back to your time at Ernst & Young up to the present moment, what's Foley's view of how to get the most out of senior management?
Doug Foley:
This is another topic I read a lot. It's in the news a lot, so it's hard not to read a lot about. I feel like the pendulum here swings back and forth, back and forth, and you can talk about lots of different perspectives on this in terms of quantum, are executives paid too much? You can talk about executive pay in terms of ratios. Well, are executives paid too much relative to the average worker? You can talk about the relative alignment of pay, right? Are executives paid too much relative to their performance? You can take a lot of different perspectives on this.
Doug Foley:
My personal view is I feel like we've gotten to this stage where we're over-engineering it on some level. We're just overthinking this. I suspect that the vast majority of CEOs, the vast majority of senior management teams are intrinsically motivated to succeed, to have a performance scorecard for their company that is better than their ... They want to win. I suspect, if you could actually open up all these executives heads and see what makes them tick, it's not, am I going to make another dollar? It's going to be, am I going to beat my competition?
Doug Foley:
Aligning pay with performance, 100%, we should do that. I think we do. I think ICE does a great job at that, and I think a lot of companies do a great job of that, but the amount of energy that is spent on, should it be this performance measure or that performance measure? Should it be 60% on this performance measure or 50% on this performance? Just so much energy is spent on trying to precision-tune something that I'm not sure is the driver behind performance. I think it's more about just linking to performance. I think maybe it's over engineered.
Josh King:
It probably is over engineered, and you probably can spend too much time reading about it and putting it into force, but of those, whether or not it's used at ICE, what are some of the stats and measures that you think are particularly interesting about the way people are measuring performance these days?
Doug Foley:
I'm always interested, and I have been for a long time, that the economic value added, that EVA model, has been around for a long, long time and it's almost making a bit of a resurgence. I'm always intrigued that that model is so dialed in. Pay is talked about in relation to the EVA model. It's a great model. It shows you a lot of things, and I get that. I just think public companies have a marketplace that tells you, hey, what the company is worth. When the company valuation and EVA type number start to diverge, which one do you go with?
Josh King:
Companies certainly pay a lot in executive compensation. Sometimes they get what they pay for, sometimes they don't, but they also pay a lot for health insurance and healthcare for their employees. From the CEO on down, workers have traditionally looked to their employer to provide medical insurance. It's a debate that will continue through the next presidential election, many years beyond that. According to Mercer, Doug, the average per employee cost is now topping $13,000 among employers at companies with 500 or more employees. What are companies doing to contain the cost, shift some responsibility to individuals, but also remain competitive and maintain that culture that they want to have?
Doug Foley:
Companies are looking to shift that cost and risk across the table to employees and fix company cost and company exposure. You see that with these high deductible plans, for example. You're shifting a lot of the risk and the variability of healthcare spend from the company, which you would find in a more traditional model, the company would bear a lot of that risk and you're putting it over on the employee. So, the company's exposure to that risk into that volatility is fixed. It's just that fundamental shift from a variability risk and costs over to employees, that's how companies are addressing that.
Doug Foley:
Not everybody, not everybody is doing that. I'll tell you, at ICE, we still have a very traditional approach that you can choose if you individually don't want to bear that risk and don't find some of the benefits in these high deductible health savings account type plans, or we have that high deductible health savings account type option for you if you want it. So, you can pick between the two. I know plenty of employers that have stopped the former in favor of the latter. You nailed, that's exactly what people are doing.
Josh King:
We've covered a lot of the burning topics in the human resources landscape in our conversation here today, Doug. But as we wrap up, what do you think are the biggest challenges that companies will face in the human capital front, call it over the coming 10 years?
Doug Foley:
For the next 10 years and beyond, we're going to continue to struggle with the pool of talent around STEM, around technology. That's been in the news for 20 years, it's going to be in the news for 20 years. As you read about the labor force changes, not just around STEM, but just as baby boomers retire and those sorts of things, that is going to be a big, big problem. So, scarcity of talent, scarcity of the right talent is going to be a big, big problem for us. I also am intrigued at how, from an HR perspective, that AI technology is going to come in.
Doug Foley:
You mentioned it, the hiring recruiting perspective, I suspect it's not that far off, maybe it's within 10 years, that when we have a question around HR and we get a lot of questions that we're not always going to be talking to a person, that the machine on the other end is going to know enough and have enough experience to answer your question and to understand what you're trying to ask it. Whether it's, I think probably the pedestrian way to say it is a chatbot, or it's true AI on the other end of that IAM screen, I suspect within 10 years, we're going to see that readily available.
Josh King:
And if they aren't chatbots, Doug, but in the face of this pool of talent that companies like ICE are always looking for, if someone's listening to this podcast and says, I want to work at ICE, what do you do?
Doug Foley:
Well, one, let us know you want to work at ICE, right? We are very, very good about pushing out, all of our openings are out on our website at intercontinentalexchange.com. Even there, you can just click a link and send an email, send an unsolicited resume, and we look at absolutely every one of those. We catalog absolutely every one of those. We dip into those when we open new positions to see if we already have somebody on hand that might be a good fit for it.
Josh King:
Well, we've covered a lot of ground. Thanks so much for spending some time with us Inside the ICE House, and we'll keep our eyes on baseballs and see if they keep flying out of the park and see if we keep hiring people and keep acquiring companies and integrating them. Great conversation. Thanks a lot for joining us.
Doug Foley:
Josh, thank you.
Josh King:
That's our conversation for this week. Our guest was Doug Foley, senior vice president of human resources and administration at Intercontinental Exchange. If you liked what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or question, and like one of our experts to tackle on a future show, email us at [email protected], or tweet at us @ICEHousePodcast. As Doug said, if you want to work at ICE, go to intercontinentalexchange.com.
Josh King:
Our show is produced by Pete Asch and Theresa DeLuca with production assistance from Ken Abel and Stephen [Romanchuk 00:56:13]. I'm Josh King, your host signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.