Every year in early June I get an opportunity to catch up with Cornerstone at their annual user conference – Convergence - held this year in San Diego. Once again the event was well attended by enthusiastic Cornerstone users wanting to learn more about how they can use this Talent suite to enhance their employees’ experiences.

This year’s theme was all around how the actual skills needed by a worker today are so vastly different to what was required in the past. Jobs and requirements are rapidly changing and as Adam Miller said in his keynote,“65% of kids today will work in jobs that are yet to exist.”

Skills have become the new digital currency.  The pace of change is dramatic and what is needed to be successful today is very different than in the past 10 years – and will change dramatically in the next five years. How we manage talent and develop skills over the next five years will be completely different from the last 20 years.

Cornerstone is focussed squarely on this issue with a strong emphasis on Recruiting, Learning and Performance enhancements to its product suite. I particularly liked Adam Miller’s slide during his keynote where he said that, “the term Human Capital Management in Cornerstone words is Human Potential Management.”

I will cover the updates, which are excellent, but first I want to highlight the market growth and performance of the company as this should be an important consideration when you evaluate solution providers. Not only is growth important but also profitability as well, especially if you want to feel secure that your supplier will be able to continue to innovate and support you.

Market Growth and Financial Strength

Cornerstone has been continuing to grow at a steady clip. At the end of April 2017 the numbers were as follows: 

• Over 31 Million active users across all talent management areas
• 3,000 + Clients
• 43 Product Languages
• 191 Countries (products in use)
• 1,855 + CSOD Employees

Here are the updated numbers as of the end of April 2018:

• Over 36 Million active users across all talent management areas  ↑
• 3,280 + Clients show last reported numbers. Note: these numbers are only for mid-market to enterprise as SMB is not reported so 3,280 clients actually equals ~4,000 ↑
• 43 Product Languages
• 191 Countries (products in use)
• 1,900 + CSOD Employees

Recent Results
Cornerstone reported that the first quarter outperformed expectations in all areas, from top line growth to unlevered free cash flow. Revenue came in at an 18.9% YOY increase.  This is doubly impressive as they were also working on a strategic transformation between Q4 2017 and Q1 2018. That transformation is now complete and Cornerstone is in a healthy place in both revenue and profitability.

Key Highlights from the Strategic Transformation

1. Cornerstone is exiting the services side of the business to focus on new Cornerstone implementations. As such, they are now working in close harmony with their implementation partners who include Alight, Accenture, Bluewater, Deloitte, DXC Technology, Educe, IBM and Wipro. Together they are working to strengthen Cornerstone’s presence in the marketplace. Further, Cornerstone has successfully placed several of their senior services executives into leadership roles of partner organizations, such as Deloitte and IBM, to develop their internal Cornerstone practices.
2. They have added new recurring revenue streams including E-Learning Content (Content Anywhere) subscriptions. In Q1, their content team saw continued momentum following a strong Q4 by more than doubling the volume of wins from the prior year as well as delivering more than 140% growth in annual recurring revenue from the prior year. They believe content has the potential over time to become as large as their entire learning business. At the event they announced further enhancements to the Content Anywhere program.
3. Cornerstone has enhanced its Leadership Team led by Adam Miller (founder and 18-year CEO) with the addition of Jeff Lautenbach (formerly IBM, SAP, Salesforce and Jive)  to oversee Cornerstone’s worldwide sales/content/client success functions and Adrianna Burrows (formerly Stack Overflow and Microsoft) who is their new Chief Marketing Officer.
4. The Board has also seen additions of new board members. Three accomplished Software Industry CEOs have been nominated to the Board of Directors. This group includes Elisa Steele (Jive Software), Richard Haddrill (Scientific Games) and Marcus Ryu (Guideware Software), following an extensive search conducted by its independent nominating and corporate governance committee.

Market Positioning

As far as who uses Cornerstone solutions, they are very diversified across all industries. They report to have one of the top three companies in each industry. They have also made major gains in all levels of Government including a number of prominent Federal agencies.

Market Share and Growth Opportunities

Cornerstone reports that 70% of their customers have 2+ products and 40% have 3+.

Recruiting

They see a very large opportunity to grow their Recruiting Suite sales as they have developed the solution to be on parity with the best solutions in the market.  It was interesting to hear about Cornerstone’s position in the recruiting space; Adam Miller stated that they no doubt hold the number five spot or higher in the order of sales of recruiting solutions, yet nobody talks about it. Clearly, they see improving penetration of their recruiting platform as a significant opportunity for growth. Investments have been made inside their platform to give them a leadership position. They have had great success in Europe with this and they believe the enterprise market in North America is hungry for a feature-rich solution that up until now hasn’t been available (except to small- or mid-sized companies).

It was interesting when they received applause from the analysts for their improvements on this module, specifically when it came to a couple of additions; LinkedIn partnership, New Candidate Experience improvements with fully optimized mobile capabilities and Manage Candidates Page to help recruiters be more effective. This last feature gives the recruiter the ability to view and action their candidates from a single location eliminating the need to navigate to other pages, which is a very welcome productivity enhancement. Please see the YouTube video below to see what is new in Recruiting.





Learning

As I mentioned at the beginning of this article, this year’s theme was all around how the actual skills needed by a worker today are so vastly different to what was required in the past. Jobs and expectations are rapidly changing and Adam Miller said in his keynote that 65% of kids today will work in jobs that are yet to exist. Skills have become the new digital currency.  The pace of change is dramatic and what is needed to be successful today is very different than in the past 10 years – and will change dramatically in the next five years.

Cornerstone is fully focussed on this issue and is delivering a complete learning platform that focuses on providing a modern learning management platform for required learning, a modern experience driven by machine learning to serve new content relevant to the end user’s career goals and a large catalog of content.

Cornerstone’s Holistic Learning Platform has been enhanced in many ways and this is an area that they believe will continue to grow as the need for new skills is enormous.  They believe the North Star of Learning & Development is that everyone wants a personalized experience that is relevant to them and has clear return on investment for them individually. People are looking for their learning to be:

• Personalized
• Skills-based
• Designed to Improve Performance
• Opportunity to Drive Promotions
• Easy
• Engaging
• Social
• Mobile

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They believe that there are currently 400M seats for learning. They currently provide learning to 36M people.

Content

Finally, a key differentiator for Cornerstone is their aggressive push into providing content that is modern and relevant. If you think about it, LMS providers don’t focus on providing content at all and this is a big problem for learning professionals as they are tasked with sourcing this on their own. To that end, they released Content Anytime late last year with content from TED, Cyber U, Biz Library and Grovo, just to name a few. It has been a smash hit as administrators have now been getting access to modern and engaging content that is continually curated – something that is difficult to stay on top of for most businesses. They are moving to add to this with Custom Subscriptions this fall that will no doubt be welcome. These will fall under the following categories:

• Industry Subscriptions - i.e. Manufacturing, Healthcare, Higher Education/K12, Business Services
• Functional Subscriptions - i.e. Sales, Technology
• Thematic Subscriptions - i.e. Compliance, Executive Leadership, Business Acumen, Innovation
• Regional Subscriptions - i.e. Country subscriptions

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May 2018 Release Features

Have a look at the following YouTube video to see some of the highlights of their latest release:


Conclusion
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We are in a completely different world than where we were even five years ago with what is needed to successfully move a company forward. Jobs are changing, skills that were relevant five years ago are in many cases outdated and new types of jobs are being invented every minute. Cornerstone has recognized the fact that in order for companies to be successful they need to be on a constant lookout for new talent to fill these new roles and need to be able to offer the most compelling reasons why this talent would want to come to an organization. I think they have done an excellent job executing by modernizing the recruiting platform and providing an exceptional learning experience for the end user.