The Wall Street Journal - 07.03.2020 - 08.03.2020

B6| Saturday/Sunday, March 7 - 8, 2020 **** THE WALL STREET JOURNAL.

has 420,000 employees, says the

company has considered using tools

that claim to analyze employees’ so-

cial-media use to pick up on signals

outside of work that they may be un-

well. But Mr. Schuyler says such soft-

ware raises clear privacy concerns

and may go too far for the company’s

comfort. Instead of technology, Hilton

is training hotel general managers to

look for signs that workers might

need help, coaching them to pick up

on unusual statements or increased

absenteeism, for example.

“We want them to be the wellness

watchdogs,” Mr. Schuyler says.

Automotive giant Ford Motor Co.

adapted a novel approach to surface

employee feedback: HappyOrNot ter-

minals, similar to the ones used in

airport restrooms, with smiling and

frowning icons on a tablet that em-

ployees can press in response to

questions like “How optimistic are

you feeling about your day today?”

The machines also allow people to

provide more detailed comments.

The company started using the

machines in 2018, placing them inside

some manufacturing plants, at the

entrances of its corporate headquar-

ters in Michigan and outside meeting

rooms, says Julie Lodge-Jarrett, chief

talent officer at Ford.

“When you’ve got a company of

200,000 employees,” Ms. Lodge-Jar-

rett says, “it’s hard to sometimes get

your arms around how employees are

feeling on any given day.”

Ford has also started analyzing the

sentiment of comments that employ-

ees post below articles and videos on

the company’s corporate intranet us-

ing natural language processing tools.

It can parse them by region or demo-

graphics like age to show, for in-

stance, whether worker sentiment of

early career professionals is different

than people who have been with Ford

for years, Ms. Lodge-Jarrett says. The

company’s HR team can take the

trends it spots to an internal commit-

tee made up of Ford employees and

ask them to elaborate on issues.

“People aren’t going to be willing

to tolerate an employer, regardless of

how good the pay is, or how stable

the job is, if they’re not happy,” Ms.

Lodge-Jarrett says. “They’re going to

vote with their feet.”

“The little things make a big dif-

ference,” she says.

Gleaning insights from informa-

tion already generated by employ-

ees, or what some call “data ex-

haust,” has become an increasing

focus for many companies, al-

though some HR experts say they

have some apprehension.

“The obvious concern,” says Peter

Cappelli, a management professor at

the University of Pennsylvania’s

Wharton School, “is that scooping up

this info means listening in on indi-

vidual employees.”

Though sophisticated methods ex-

ist to anonymize information, Mr.

Cappelli says, “all it takes is one exec-

utive to ask the IT people to dive in

and look at individual employees, and

privacy is gone.”

Putting on a Happy Face

A number of employers insist,

though, that more advanced technol-

ogy could help employees, and in

turn, businesses. Grant Thornton ex-

ecutive Nichole Jordan says she is a

proponent of laptop cameras that

could regularly scan the faces of her

workers to detect even subtle

changes in their moods.

Should an employee at the ac-

counting and consulting company ap-

pear stressed, distracted or even

bored, facial-recognition and emo-

tion-sensing software could inter-

vene, suggesting someone take a brief

walk or get a cup of coffee.

Employees would need to opt-in to

such a system to allay privacy con-

cerns, she said, but in a tight job

market where companies want to

keep workers satisfied and produc-

tive, she sees the potential benefits of

making workers aware of their emo-

tions. The firm isn’t currently using

such technology, she said, but has

discussed it with clients.

“Companies are going to have to

figure out ways to better engage and

drive up the performance of the em-

ployees that they have,” says Ms. Jor-

dan, who is a managing partner for

the central region at Grant Thornton.

“If it were up to me, we would be

moving down this path.”

Matthew Schuyler, chief human re-

sources officer at the hotel giant Hil-

ton Worldwide Holdings Inc., which

“The words we use in everyday life

reflect our psychological state,” Dr.

Pennebaker says.

The software is used by three

companies in Canada and the U.S. to

delve into the emotional health of

their workers. Customers pay Recep-

tiviti a fee that ranges from about

$250,000 to $1 million a year to mon-

itor their employees’ messages. “We

worry about the perception of Big

Brother,” Mr. Kreindler says of his

software. He says he prefers to think

of the service as “corporate mindful-

ness,” adding that it is good for man-

agers to know how their people feel.

Another happiness monitoring de-

vice is being developed by Corner-

stone OnDemand Inc., a 2,000-em-

ployee company that provides

software for recruiting and talent

management to companies like Visa

Inc. and T-Mobile US Inc. It is in the

early stages of experimenting with

heart-rate data gleaned from wear-

able devices such as watches. It hopes

to tie that information, with an em-

ployee’s permission, to entries from a

person’s calendar or project-manage-

ment software.

Doing so could shed light on

whether certain meetings, projects or

even people in an office cause ele-

vated stress levels, says Greg Haga,

director of architecture at Corner-

stone, who cautions that the com-

pany is still evaluating such a tool.

“Your stress data really does

change from moment to moment,”

he says.

Scoring Happiness

Some companies are making a promi-

nent display of their attention to hap-

piness. A door inside the Manhattan

office of software company Sprinklr

is emblazoned with the words,

“happy Sprinklrite, happy client.”

The company, which makes soft-

ware for social media and customer

management, in 2018 rolled out

something it calls the Employee De-

light Assurance Program. Every two

months, all 1,900 workers meet with

their bosses and report how happy

they are, on a scale from 1 to 10, 10

being the happiest, and they list three

improvements they or the company

can do to make them more satisfied.

“I want everyone to be happier ev-

EXCHANGE

cheap, for instance, the company’s

leaders said creating better the-

aters is the priority.

“Investing in long-term growth

and stability through...[return-on-

investment] generating initiatives

that enrich our guest experience,

drive consumer engagement and

improved productivity is a prudent

use of capital,” said Sean Gamble,

Cinemark’s chief operating and

chief financial officer. Investors

can be even more fickle than mov-

iegoers. Cinemark’s stock nose-

dived following fourth-quarter

earnings late last month after it

missed analysts’ profit and reve-

nue targets. (It continued its free

fall in recent days amid the broad

stock-market selloff, as investors

fretted that the cornoavirus out-

break could cause moviegoers to

stay away.)

The anxiety felt by movie-theater

executives in the face of disruption

is similar to the pressure felt by

grocers and retailers, taxi compa-

nies and hotel operators, sports-

franchise owners and newspaper

publishers. Technology allows gro-

ceries to be delivered to your door,

sneakers to be bought online and

advertisements to be skipped.

Some of these industries can re-

spond by adopting a so-called om-

nichannel approach. This is what’s

behind Walmart Inc.’s buying spree

of internet fashion companies,

AT&T Inc.’s acquisition of Time

Warner, and McDonald’s Corp.’s

budding relationship with food-de-

livery app DoorDash.

This strategy doesn’t work for

guys like Mr. Glantz. The core busi-

ness model is the only business

model. Without a stream-crazed

population visiting physical loca-

tions, the movie business is dead

on arrival.

Gary Pisano, a Harvard Business

School professor, says that because

we fixate on headline-grabbing in-

novations, such as autonomous cars

or the iPhone, we risk overlooking

the value of continuous upgrades

that are necessary for keeping in-

dustries relevant.

“People sometimes dismiss im-

provements to packaging, manufac-

turing processes or product fea-

tures as ‘merely incremental,’ but

that misses the point,” Mr. Pisano

recently said in the University of

Toronto’s Rotman Management

magazine. “The way to judge inno-

vation is not whether or not it

grabs headlines, but by whether it

generates value. The fact is, compa-

nies make most of their profits on

routine innovation.”

Recliners in movie theaters and

ordering your tickets or cherry

slushie in advance may not seem

sexy, but when streaming services

are spending more annually on new

programming than some theater

chains earn in a lifetime, it’s the

cost of admission.

Movie Theaters

Are in Recline

Theater owners aren’t taking your Netflix

addiction lying down. ‘This is about survival.’

ON BUSINESS|JOHN D. STOLL

year, buoyed by steadily rising

ticket prices. Americans say they

are willing to pay $44 per month

on a growing list of available

streaming services.

One of the tricks for a business

disrupted by the streaming trend is

to think less like Wall Street and

more like a viewer. Theaters with

recliners, for instance, lose at least

50% of their seating capacity. That’s

a problem if you’re operating only

during Christmas, New Year’s,

Thanksgiving or Memorial Day, the

peak moviegoing dates. But if

you’re thinking about the rest of

the year, when a cinema’s capacity

utilization goes as low as 5% to 15%,

you’re seeing the bigger picture.

Mr. Glantz’s philosophy dictates

that if fewer, better seats encour-

age people to pay more and come

back more often, installing them

and replacing them every few

years is the only option. “Bigger

theater chains are racing to install

such seats in upwards of three-

quarters of their auditoriums.

On earnings calls in recent

weeks, theater executives defended

spending money on upgrades in an

industry plagued by sluggish

growth and heavily influenced by

factors out of their control, such

as the quality of new releases or

the economy. When asked why

Cinemark wasn’t using excess cash

to buy back shares at a time when

its stock could be considered

When some fresh
gadget or smartphone
app comes along and
wreaks havoc on an
industry, the old guard
wrings its hands and
blames technology.
Thales Teixeira, a former Har-
vard Business School professor
turned consultant, has a better re-
sponse than blaming the big, bad
tech monster. Blame the customer.
If your customer was happy with
your service or product, they
wouldn’t be so quick to embrace
the new technology.
This unhappy-customer principle
was behind my decision to stop go-
ing to the movies about a decade
ago. For this busy and budgeting
father of a growing family, heading
to a theater was increasingly like
going to the airport. Finding a
parking spot was a battle; food was
overpriced; shimmying into narrow
rows of folding seats felt like pack-
ing into a sardine can.
I met Netflix Inc. founder Reed
Hastings in Europe in 2012 and
took him up on the suggestion I
give streaming-video services a try.
It only took a taste of Netflix and
Amazon Prime to convert our Fri-
day movie-watching tradition from
being a night out to a pajama party.
We kissed the cinema goodbye.
That all changed this past holi-
day season when my wife and I
took our five kids to see “Frozen 2.”
We walked into an Emagine theater
10 miles from our house after drop-
ping $10 a ticket ($9 for the kids)
to reserve big cushy recliners with
built-in heaters and ordering our
pizzas and popcorn on an iPhone. It
took that one visit to rekindle a
love for the big screen.
Recently, I’ve spent time study-
ing at upper-crust business
schools, met with billionaire
founders in Silicon Valley, moder-
ated panels at major corporate
conferences. It only took a trip to
the movies to teach me this about
business: Keep investing or start
shopping for a gravesite.
“This is about survival,” Paul
Glantz, the accountant-turned-en-
trepreneur who started Emagine in
the 1990s, told me while sitting at
his kitchen table last month. He’s

for Blue Cross Blue Shield of Michi-
gan. “I want you to have an im-
proved mental state.”

Slide Right for Frowning
A Blue Cross Blue Shield app for em-
ployers that subscribe to the com-
pany’s insurance programs lets em-
ployees drag a slider from a smiling
face on the left to a frowning face on
the right to record their mood. They
can graph their emotional fluctua-
tions over time, and employers don’t
see that individual data, said Angela
Jenkins, a Blue Cross Blue Shield co-
ordinator who helps companies set
up wellness programs.
“It just feels really good to put
that smiley face on there,” she said.
Even if you’ve had a bad day, record-
ing the emotion can be cathartic, she
added, or prompt you to analyze the
reason for your unhappiness.
One service offered by Toronto-
based software firm Receptiviti
plugs into email and messaging
systems like Slack to search for sig-
nals that employees are depressed
or burned out.
“These intangibles can be mea-
sured,” says Chief Executive Officer
Jonathan Kreindler. When workers
are down, they turn inward with
their language, he says, using “I”
and “me” more frequently than
“we” or “us.”
The approach is based on research
from James Pennebaker, a psychology
professor at the University of Texas
at Austin and a co-founder and mi-
nority owner of Receptiviti. He found
that poets who eventually died by
suicide used “I” more frequently in
their work than writers who were
presumably in better mental health.
In a separate experiment where par-
ticipants wrote stories detailing past
experiences, he discovered the happy
stories used “we” more often.

Continued from page B1

Happy? Your

Boss Wants

An Answer

Patrons watch a documentary in reclining chairs at an Emagine theatre in Novi, Mich. Emagine has spent

heavily on such seating for its more than 200 screens across four Midwest states.

BRITTANY GREESON FOR THE WALL STREET JOURNAL

spent millions on refurbishing the-

aters in recent years only to turn

around and spend millions more

updating those updates because in-

novations keep popping up.

Mr. Glantz’s closely held Emag-

ine has spent hundreds of millions

of dollars erecting and refurbishing

its more than 200 screens across

four Midwest states for the stream-

ing-video era. In addition to those

pricey recliners, new projector

technology and better audio equip-

ment have been installed. And the

menu has been upgraded as well:

You can still buy popcorn and Milk

Duds, but the theater now makes

big money selling quesadillas, craft

beers and cocktails. Audience num-

bers have remained healthy, and

the chain has increased revenue by

20% annually since 2016.

Heavy investment at Emagine re-

flects a trend among the big pub-

licly traded companies like AMC

Theaters and Cinemark Holdings

Inc., which together have spent bil-

lions on upgrades since 2014.

Why? Since the middle of last

decade, streaming memberships at

Netflix alone have increased 193%

to 168 million, while ticket sales at

U.S. box offices have stagnated

around 1.3 billion annually. Ticket

revenues have bounced between

$10.4 billion and $11.9 billion a

Tickets,Please

Salesofmovieticketshavebeen

stagnantforadecade.

Movieadmissions,U.S.andCanada

Source: National Association of Theatre Owners

1.5

0

0.5

1.0

billion

1990 2000 ’10

ery day, more than they were before,”

says CEO Ragy Thomas.

The initiative was meant to turn

around sinking morale during what

Mr. Thomas calls the “dark year.” In

2017, after a few years of fast head

count growth, worker retention

dropped. Employees became nega-

tive, work grew chaotic and infight-

ing blossomed.

The happiness scores get rolled up

and aggregated, culminating in a

companywide happiness index—7.87

now, compared with 7.2 when the ini-

tiative started. Artificial intelligence

combs the results, scanning for com-

mon complaints. As a result of em-

ployee requests, Sprinklr has added

more plants to the workplace, ad-

justed air conditioning in its confer-

ence rooms (some workers were

cold), and implemented a monthly

town hall so employees can give can-

did feedback to management.

Emily Sparks, a 25-year-old who

works in marketing and sales at the

company’s Austin office, requested

a footstool— she’s 5’ 3” and said

she felt less professional when her

feet didn’t touch the ground—and

more fresh fruits and vegetables in

the office. A few days later, she re-

ceived a black footstool with a

roller massage feature on the top;

the next week, produce like straw-

berries, carrots and snap peas

started showing up in the kitchen.

Ford’s HappyOrNot

terminals ask employees

questions like: ‘How

optimistic are you

feeling about your day?’