Why Lattice Is Going All-In on AI for More Effective Managers
Understanding Lattice’s AI roadmap and its impact to the competitive landscape.
Welcome back to the Product Beat’s Unboxing series!
In this edition: We see how AI is unfolding at Lattice and how it’s changing the competitive landscape.
TL;DR
Lattice, a leading people management platform, has an ambitious generative AI roadmap focused on improving manager effectiveness and efficiency through features like performance summaries, review writing assistance, and individual development plan creation.
Key drivers for AI adoption in the HR tech space include the need for efficiency amid flat/decreasing budgets and overwhelmed managers juggling too many responsibilities.
Lattice's main competitors like 15Five, Leapsome, and CultureAmp have already invested in AI capabilities, with common moves like AI-generated engagement insights and AI-assisted reviews across the competitive landscape.
Lattice's AI vision is a strategic move to potentially compete with 15Five's competitive advantage in manager effectiveness tools.
Company Overview
Lattice is a leading people management platform that empowers companies to build engaged, high-performing teams. They provide tools to support employee performance, compensation, development, engagement, analytics, and OKRs. Lattice helps companies reduce turnover and foster a culture of growth and fulfillment. They are trusted by over 5,000 customers serving startups and enterprises such as Slack, Monzo, Webflow, and Klarna.
Lattice’s Robust AI Roadmap
Now, let’s jump into Lattice’s ambitious generative AI roadmap which is focused on addressing the increasing pressures managers face, catching up to the competition, and the strategic move into manager effectiveness.
The Conditions Driving AI Adoption
Today, HR teams face increasing pressures to do more with less and managers are grappling with information overload. As a result, the need for AI-driven automation and efficiency has become pressing in the HR technology space.
Seeking efficiency: In Lattice's 2024 State of People Strategy Report, 62% of HR teams reported flat or decreasing budgets, even with increased pressure to perform. Unsurprisingly, two-thirds of respondents also said they were considering ways to leverage AI"1.
Overwhelmed managers: Data from Gartner shows that managers today “juggle 51% more responsibilities than they can effectively handle”2. Managers are being inundated with large amounts of employee information such as feedback, calibrations, and compensation benchmarking that they need to review, understand, and make decisions upon, while also managing their other responsibilities to drive key business objectives.
Why this matters: Sarah Franklin, CEO of Lattice, wrote it best, ”[w]hen managers are overwhelmed, everyone suffers — employees miss out on the support they need to perform, and businesses lose out on profitability that would have resulted from high performance”3.
The Vision
Earlier this year, Sarah Franklin shared an ambitious vision to leverage AI technology centered on improving manager effectiveness. She talked about how the company aims to solve the problem through augmenting teams and managers with AI.
The roadmap promises to transform various aspects of the platform with AI technology to empower managers with data-driven insights, information summaries, and recommendations. The company has strategic partnerships with OpenAI and HeyGen to power their tools.
Assessing the Plan
Strategic Rationale for Near Term Priorities
Some potential reasons behind prioritizing engagement insights, performance summaries, review writing assistance, and development plans are:
Vision aligned: These features directly help managers be more efficient by making it faster to understand key themes in engagement surveys and employee feedback, as well as write performance reviews and create development plans.
Core product impact: Focusing on employee performance, development, and engagement strengthens Lattice’s core offering and value to customers. It also increases the potential for adoption and delivering immediate value compared to non-core areas which may not be as widely adopted.
Optimizing for key moments: Aiming to rollout by late 2024 strategically positions these AI features to impact major performance management cycle events such as year-end employee reviews. Year-end events are time-sensitive, high-volume periods that represent peak opportunities to demonstrate efficiency gains and relief to managers.
The AI Competitive Landscape
Lattice’s main competitors in the people management space are CultureAmp, Leapsome, and 15Five. It is a very competitive space where there is a lot of overlap in product offerings and capabilities, and few differentiators that are being quickly chipped away. Although Lattice was late to developing AI-powered features compared to the competition, it is quickly closing the gap after making progress on its roadmap.
Common Moves
As each company develops their AI features, insights on engagement surveys and AI-assisted reviews are two common features across the competitive landscape. They represent two important use cases that are time-consuming and where AI can have a big impact on reducing the time to act on engagement feedback and to write performance reviews.
Engagement insights: The ability to analyze open-text feedback, identify themes, and create summaries is a tablestake feature for all the competitors.
AI-assisted reviews: Lattice, Leapsome, and 15Five choose to help managers draft performance reviews quicker and remove bias; performance review is a key area for any company in the space.
Differentiated Moves
While each platform strives to deliver a comprehensive solution, they each have their own specialized focus.
15Five | Manager support and development: Reinforced its focus on manager support by introducing an AI Manager Copilot feature, a conversational assistant for managers, and AI-recommended manager development content.
Leapsome | Employee development and OKRs: Focused on employee development and OKRs by speeding up the process of generating competency matrices, development goals, and business key results.
Lattice | Team engagement and HRIS: Differentiates itself from the competition with team engagement recommendations which none of the competitors have and onboarding videos for their HRIS (human resources information system) product.
A Missed Opportunity: AI-Manager Copilot
One opportunity that I would have expected on Lattice’s AI roadmap is an AI-manager copilot feature like 15Five’s conversational assistant for managers instead of their AI-generated onboarding videos. Here are a couple of reasons:
Vision aligned: A manager copilot feature would be more aligned to Lattice’s AI vision of improving manager effectiveness and efficiency compared to creating customized onboarding videos.
Core product value: A manager copilot feature could help managers make better decisions and create efficiencies in their weekly tasks, while onboarding videos deepens Lattice’s exposure to HRIS which is still in beta.
Recurring use: A manager copilot feature could also be used over and over to deliver value multiple times, while a customized onboarding video might only be used once.
Big Moves in the Competitive Landscape
Lattice’s AI vision of helping managers become more effective and efficient is a big strategic move. Up until now, 15Five’s clear competitive advantage was its depth of features to improve manager effectiveness; however, Lattice’s vision creates an opening for the company to compete in the space with its first few features as a beachhead to launch into manager effectiveness.
Competitive Positioning
While there is a lot of overlap amongst these companies, each one of them has a distinct differentiator. However, Lattice’s roadmap is a step towards chipping away at 15Five’s differentiation in manager effectiveness.
Lattice | HRIS: Today, it leads the competition in HRIS by being the only company to vertically expand into the space. However, it recently lost its first-mover advantage in compensation as 15Five now plays in the space. It is a little curious that Lattice’s big bet in AI was centered on manager effectiveness, 15Five’s competitive advantage.
15Five | Manager effectiveness: The company has the deepest feature set in improving manager effectiveness from offering in-depth training content and live coaching to tools measuring manager effectiveness and providing assistance.
Wrapping Up
Although Lattice was late to developing AI-powered features, it makes a clear statement about its commitment to AI and ability to leverage its machine learning capabilities with a robust roadmap. Its strategic investments into AI are an opportunity to innovate and regain its edge. But, as with all roadmaps, it will likely evolve based on customer needs, changes in the market, and customer adoption of AI tools.