Substance: How Data and People Will Transform an Industry w/ Lisa Hook, CEO of @Neustar

I'm pleased to have today on Substance a very special guest, Lisa Hook, CEO and President of New Star. So Lisa, it's so exciting to be here with you and talk to you about what's going on over at New Star and with yourself and all the fun, exciting things that are happening. So thank you for joining me here today.

Thanks for having me. I'm really excited to be here.

Thank you. Thank you. Me too. So why don't we go ahead and get started?

Sounds good.

How did you take a traditional telecommunications company and turn it into an information services business?

So the DNA around performing services flawlessly comes out of the telecommunications industry. Our background in being the brains of the telecom network means that we have to be neutral. We have to be extremely fastidious with data. We've never had a breach. We are hyper-concerned with privacy. People take privacy tests once a quarter. So all of that DNA around hyper-scalable, hyper-reliable, hyper-private systems is phenomenally useful and actually quite differentiated from any other company in information services. What's held us back, and it holds every company back in a transformation, is change is really scary. Even good change is scary. And so you have to overcommunicate why change is good, why this is— why we're all going to move into the future together. But, you know, that's really, I think, where we need to— where we have focused a lot of time, but we need to focus more time, is on pulling people along, getting more velocity against the—

I want to talk to you a little bit about that, about the employee infrastructure and how do you move, motivate, and create an environment that does that. But let's get to that in just a second because before we do that, let's stay with the data privacy aspect. Yeah. The privacy aspect especially that you have over personalization right now. And I know you guys are heavily involved in personalization. How do you take data and actually personalize it without being creepy, and especially without, you know, data mining to the point where you're gonna especially creep someone out. But where does that live on a security level? How do you protect people?

So the first thing we do is we atomize the data and we store it in silos. So if you miraculously were able to break into the company and steal one of our datasets, All you would be stealing would be, for instance, a dataset of women's first names.

Mm.

Or a dataset of men's first names or men's last names. So the data are atomized into the lowest common unit. Names, addresses are fragmented, numbers are fragmented, etc. Behavioral propensities are fragmented. And then the only thing that would exist with respect to you would be a small container of pointers that if the container of pointers were stolen would point to nothing.

Mm-hmm.

So we've created a structure for the data that makes it uninteresting to break into. So that's the lowest. And then of course, like every other company, we've got a variety of protections and scanners and all sorts of, you know, Mission: Impossible stuff going on that both looks great and works well. We continually worry about security, as every company should. And then, as I said, on top of that, we're really, really focused on what's called the human firewall. Mm-hmm. So every one of our 1,500 employees at the beginning of the day, and then, as I said, every quarter, is retrained on the use of data, using your business judgment. If you're creating a product and it's a product that would creep you out?

Yeah.

Don't create that product. So it's both training on protection and training on using business judgment. And to date, in the product design, that's worked extremely well for us. The way we use the authoritative identity framework when it is composed is very different depending on the use case. So in a marketing environment, for the most part, Our clients don't really care that it's Lisa Hook. We don't sell them that information.

Mm-hmm.

What our clients want to know is, I have this person navigating to my website, I have this person calling my call center, what should I be talking to them about?

Mm-hmm.

You know, what should I be selling them? Which line should I be putting them into? How should I care for them? So instead of providing the identity data itself, we anonymize that, we map it to certain needs of the client, and then what we provide to the client is the interaction or the actionable insight. Here's what you should be saying to this person when she calls. Here's what you should be presenting to this person when she navigates, right? Not, oh my goodness, it's Lisa Hook. We do that from gathering from a variety of authoritative sources, core identity data, and then we take a lot of information that's been developed over the last 40 years for direct mail, which has always been used in offline environment and is equally useful in an online environment. So am I more likely than the average American to shop at Bergdorf Goodman? Am I more likely than the average American to shop at Walmart?

Mm-hmm.

To buy branded orange juice? that kind of thing. We don't track people's behavior online.

And

I know many people think that that's valuable, but I can tell you that all recommendation engines for me are wrong because the only thing I do online is buy gifts for my sons. So I am continually getting recommended fishing trips in the Amazon.

Right.

Which I would never in a million years wanna take. So we basically marry offline and online. to get to what we hope will be a delightful transaction for our customers and their end users.

Mm-hmm.

In the risk and fraud environment, it's different. So there's a law that prohibits companies from calling you unless you've given them permission. You give your credit card company permission when you sign up for the credit card. You give them that phone number. 5 or 6 years later, that phone number may belong to somebody else. If they call that phone number and it's someone else, they pay a statutory fine. So in that case, they need to know that that phone number no longer belongs to you, Bryan, right? So there, your identity is more important. You want to be protected from risk and fraud, and therefore who you are is quite relevant.

Yeah.

In the security environment, again, nobody cares that it's Lisa Hook. What they care about is, is it Lisa Hook or Lisa Hook's computer who are attacking us right now with a denial of service or other type of attack? So there, the identity is more, is this a bad actor? Is this bad behavior that we should stop or control? Not who am I as a person. Yeah. So again, while we have an identity framework, we're actually quite controlled about the use of it for different use cases, and then it's just an input to what our clients really want, which is not, it's Lisa and she's 5'7. It's, what am I selling this person?

How do you manage a company through change and do that at scale and still solve all these different problems? Looking at all these, all the employees and saying, hey, here's— this is good for us. We need to go do this.

It's been a combination of having people who are extraordinarily skilled and mission-driven with respect to the services and being incredibly fortunate to be able to attract new talent into the business who are natives to the information services industry. So today on my senior team, I have about 70% of the folks have come since we've started this transition. 30% of the folks have been here prior to and carrying on the institutional knowledge, but it's the great fortune of the mix of voices and the mix of talents, and then frankly having a senior team that is dramatically better at communicating than I am. So it's not me, it's really unbelievable luck at attracting an extraordinary group of people.

That's always good when you have a good team behind you to be able to To do what you, what you need to.

Every smart CEO should realize that they're a C student and should go out and hire A students.

And

we've got A+ students from the best companies on the planet.

What is an A student?

An A student is somebody who is creative, takes ownership and accountability, can drive the business forward in ways that I could never imagine. That's the most exciting part is, you know, having come up with this crazy escapade of an idea to move from Detroit to the Hamptons, to move from telecom services to information services, to move from a slow-growing industry to an industry that's growing double digits.

Mm-hmm.

That was just an idea. But being able to bring on these people who can flesh out the idea and tell the story and tell the story and create the reality in ways that I could never dream. It's like breathing pure oxygen.

Wow. How— so how— you were a part of the Carter administration?

Yes, I interned in the Carter White House.

So, wow.

Back when interns were really interns.

So how are you using today the skill sets that you gained and how do you— what did you learn from that that you're using today?

So I was there as a junior in college for the summer and then a semester. I was managing student press and out-of-town press under Carter. And really, I only began there to start to have any sort of executive function. I think women are better than guys in college with executive function, but they're still not particularly organized. So honestly, it was learning how to be organized, learning how to show up, learning how to be accountable, learning how to creatively problem solve, because I was left on my own with a lot of these programs.

Even as an intern?

Even as an intern. Really? You know, they weren't— they didn't have enough hands to go around for everything that they were doing. I was there at the beginning of the hostage crisis, for the Pope's visit. So there were just an incredible number of really interesting once-in-a-lifetime experiences. I actually went because I was interested in the First Amendment and continue to be. I really think that we, sort of through an authoritative identity framework and providing proper conversations with people, can push that free speech forward and push correct and appropriate speech forward. So it's— what I'm doing today is really quite related to my core interests at the beginning of the day.

When you piece all these things together and you look at all that, what do you think is the one thing that contributes to now changing this? What helped you do that?

Well, when you listen to that crazy background, it means that I have no skills for what I'm doing, which is why I need to have people around me who actually know what they're doing. And I think That's the most important thing is just realizing that I've landed in this incredibly fortunate position and I better damn well have people who are smarter and information services natives come and keep me from stepping in it.

Well, let's— so that's an interesting thing because one of the roles that I wanted to talk to you about was the CIO and CMO role and how people are Seeing those roles and how that role is changing, the technology role is becoming more and more important to the CMO and vice versa. How do you see the lines being blurred and how do you see those 2 roles working moving forward?

The reason we're focused on the CMO and the marketing department is that we think there's an extraordinary opportunity to help them organize technology and to push it back down. And by that I mean, CMOs today are getting inundated by companies saying, I have a dataset of every single person who lives within 100 feet of a fire hydrant. I'm not making this up. I have a dataset of every person with a dog. I have, you know, so there are thousands of companies selling these micro datasets. And then on top of that, you have thousands of companies selling very tiny, particularized analytics packages. Those are all interesting, but as a CMO, having to sit and sort through and compare datasets and then tools and then put them all together makes absolutely no sense. As a CMO, you want to get more customers, delight your existing customers, Right. think creatively, come up with new offers, not be sitting in the back office with a Lego set trying to put it all together. Mm-hmm. And so it's probably inappropriate to refer back to my 4 years at AOL, but I think the one thing AOL did brilliantly was to make technology invisible. So easy to use, no wonder it's number one. You know, nobody knew they were on the internet. And the adoption rates were extreme. So we're really focused on putting together a suite of marketing services in a simple, easy-to-use environment that will allow the marketing department to look across all channels, to manage their spend across all channels for one simple, easy interface. And again, push technology down so they actually don't have to think about IT because to your point, Nobody really likes to think about IT.

Mm-hmm.

And then on the CIO side, those poor guys are just inundated with problems. Data breaches, physical breaches, bring your own device, you name it. The move from owning your own servers, which makes every CIO feel safe, to cloud services— you can't see them, you can't touch them— that's a huge change for a CIO. And the e-commerce component of it really doesn't yet hit the number one spot for most CIOs. So our goal there is to help them understand in their language what does the marketing department need from them. How can they perform to be the best customer experience partner for the marketing department in language that the CIO speaks?

No small feat. to get a technology person and a marketing person together. I've actually heard different titles around certain CMOs that actually come with an engineering background and certain engineering backgrounds that come, you know, in the opposite. Do you think that that's viable or do you think that the two really are two completely different positions in what they're doing?

I think we're only beginning to see the start of those conversations. There are some companies that are talking about moving a CIO into the marketing department that would report directly to the CMO for e-commerce purposes. Other CIOs are looking at bringing more e-commerce technology skills onto their team. Honestly, I think it's really too early to call how organizationally this will work out, but it's not too early to know that the two have to be speaking to each other, have to work with each other against the goal of a delightful consumer experience.

Yeah. So let's talk a little bit about your excitement around STEM and the future of STEM and where you see it going, especially with women playing a role in STEM and Where's your passion? Where's your excitement around STEM?

Well, you know, within the next couple of years, we're going to have 1.6 million STEM jobs empty in this country. And we could quite easily fill those jobs if we could figure out how to get more women interested in STEM. When I graduated from college, you know, back at the start of the world, 29% of STEM STEM graduates were female. Today, 19% of STEM graduates are female. So instead of increasing the number of women who are graduating with STEM degrees, it's been collapsing for reasons, frankly, that I don't think we quite understand. So, you know, I'm not sure that I can have a huge effect, but my view is that I should be very visible, and the women in our company are very visible in terms of promoting STEM careers both in our company, going into middle schools, going into high schools, going into colleges, and just talking about how exciting the world of technology is. And frankly, it doesn't really matter what career you want to go into, it will be technology affected. And I think it's a real disservice to women to let them graduate without a facility around technology and programming.

So what excites you about technology?

Oh my God, technology is everything. You can talk to an engineer and say, is this possible? And you know the answer is always yes. I mean, anything you can imagine is always possible, and it's just that ability to think creatively is so exciting, not just in what we're doing, but the breakthroughs in science of the brain, the breakthroughs in robotics, the breakthroughs in artificial intelligence. There's really not enough time in the day to get excited about all of these areas, but it's extraordinary. We're just at the beginning of, you know, really moving from the information age to the intelligence age. And I think it's wild.

Man, I could not agree with you more. And I love that answer.

Isn't it?

Yeah.

It's just insane.

It's mind-boggling what's coming. So you're going— you want to go trash-free. So how do you do that? How do you completely go trash-free?

In stages. So we've started with our San Francisco office. When we moved in, we made the decision to go— to start going trash-free and to get there by 2020. And it's not completely trash-free because we have food waste. So basically, we're focused on reducing simply to compost. We recycle our computers. Mm-hmm. We don't have any bottles, cans, plastic, paper plates, uh, uh, plastic forks. We've given everybody Nalgene bottles. We have an old-fashioned soda machine, which the engineers have already hacked. Because they could.

How do you hack a soda machine? Did they, like, transfer—

Oh my goodness, soda machines are some of the first machines on the Internet of Things. So our soda machine talks to its overlord regularly and tells it whether it needs more of this kind of syrup or that kind of syrup.

Really?

And you can make custom sodas on your computer and then download a barcode to your cell phone and put the barcode against the machine, it will make your custom soda. So it was— it's a computer. So what does one do with a computer? Hack it. So they've made now— I shouldn't be admitting this, I'm sure I'm gonna get in some sort of licensing trouble, but they've made all sorts of unauthorized custom sodas, and the machine says unauthorized things to certain users.

Wow.

God only knows what it's going to be doing when I get back to the office, but yes, so we've got a talking, living soda machine and real food. And with respect to our printer, we have one for 180 people, and it mostly doesn't have any paper, purely by accident. But we're trying to habituate people to read and edit, etc., online rather than, rather than using trees.

Why the resistance? Why would people push back on that?

It's inconvenient. We have learned a lot about the way people were brought up, whether they clean their own dishes, load the dishwasher, unload the dishwasher. So we're all helping each other to develop new habits inside the company.

Well, good luck with that.

Thanks. See my dishpan hands?

That'll be fun when, when you get there. I would love to come see the soda machines.

We'd love to have you up there, and we promise it will only say nice things to you.

Oh, good, good. And the soda machine will say nice things to me as well, right?

Absolutely, absolutely.