How a battered Zoosk kept employees engaged

After an abrupt leadership change and a cancelled IPO in January, Zoosk vice president of people Carol Mahoney had to start from scratch to bring the online dating company back from the brink.

How Zoosk Improved employee engagement

When Carol Mahoney met with Zoosk's founders Shayan Zadeh and Alex Mehr in late 2014, she believed it was to finalize a post-IPO talent strategy and make plans for the company's public future.

Zoosk, founded in 2007 by Zadeh and Mehr, is the number-one dating app in the world, with 33 million users via a subscription service and is consistently in the Top 30 most-downloaded apps in Apple's App Store. Zoosk uses Behavioral Matchmaking technology and real-time adaptive learning to deliver better matches for platform users. The company was set for an IPO in early 2015, says Mahoney.

As it turned out, Zadeh and Mehr had other plans. The online dating platform's founders handed over executive control to former CFO Kelly Steckelberg, and scuttled plans for the IPO. That left Mahoney in a bit of a pickle, she says in a presentation at TLNT and ERE Media's High Performance Workforce Summit, last week in Atlanta, Georgia.

Making big changes

"What happens at a founder-led company when the founders leave? Well, in this case, everything had been focused on this IPO. All of the product development, all the strategy had come from the top down. After seven years in business, there wasn't an established culture. We had to make some big changes," Mahoney says. And there wasn't much time to make it happen.

The management change was announced in the press in December 2014. By January 2015, the founders were gone, Steckelberg took over as CEO, and a new strategy had to be implemented to focus on Zoosk's customer base and on attracting and retaining new talent, says Mahoney.

"We looked at revenue and realized we needed to cut back; we were so focused on revenue growth in anticipation of this IPO that no one ever thought about the customers -- it was all about data. 'How are they interacting with the site? How long do they stay? What influences them to use certain features?' No one could answer these questions because the customer was missing from the equation," Mahoney says.

By January 8, Zoosk had reduced its workforce by approximately 15 percent to better align these costs with potential revenues. While it was Zoosk's only reduction in workforce, it still hit the company like an atom bomb. "By January 8, we'd done the workforce reduction. Morale wasn't great, people were nervous and anxious. As for creating a new strategy to move forward -- well, there wasn't a strategy. So, we had to develop a brand-new call-to-action," says Mahoney.

Call to action

Mahoney worked with a lean team of three other human resources professionals to focus on four areas. "We knew we needed four things: first, to serve customers better. But what does that mean? We didn't even know who our customers were and what they wanted. Second, we knew we needed to boost engagement of the employees we'd kept on. Third, we had to find our 'true north;' set out exactly what our vision and mission were. When we'd ask our employees why they worked for us, so many of them said, 'For the IPO.' Now, we needed to give them another reason. And finally, we had to achieve sustainable growth. Without the IPO, we had to start to look closely at how we balanced marketing dollars, our talent costs and everything else with the income from subscribers," says Mahoney.

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