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North Star Leaders Podcast

Raj De Datta

Season 2 Episode 1 23 Apr 2024

Transcript

Raj De Datta:

To use that phrase of ultimate growth mindset, today's a new day, today's a new world. There's new technology, there's new customer needs, there's new market forces at work, there's new people. And so instead of being the person who, with experience in age, feels like something can't be done, some feels like something was tried and won't ever be successful in the future, feels like it has been learned, just bring that open-mindedness to every conversation, every effort, every problem.

Lindsay Pedersen:

The world needs what only your business can bring. And as a leader, it's your job to deliver. But where do you focus? Where do you direct your time, your team, your budget, and your emotional energy? We are learning this together on the North Star Leaders Podcast. I'll be talking to purpose-driven leaders about the choices they make to create audacious economic value while also realizing their distinctive purpose. I'm Lindsay Pedersen, brand strategist, author of Forging an Ironclad Brand, and host of the North Star Leaders Podcast. Let's get to it.

Today, I am thrilled to be joined by my guest, Raj De Datta. Raj is CEO and co-founder of Bloomreach, a leading software platform for digital commerce experiences. Raj is a multiple time entrepreneur, and he's also the bestselling author of The Digital Seeker: A Playbook for Digital Teams to Win Big. Raj, welcome to the show.

Raj De Datta:

It's great to be here with you, Lindsay.

Lindsay Pedersen:

I'm so delighted to see you. To start us off, Raj, what is your favorite thing about what you do?

Raj De Datta:

Oh, what I love is really challenging the status quo. That is the thing that makes us all entrepreneurs is believing there's a different way the world should work, whatever realm we're talking about. And certainly, that's why I started this business. That's why I've started any business is just a belief that there's a world as it is and a world as it should be. And I feel like every day is getting up and trying to create the world as it should be.

Lindsay Pedersen:

I love that. Are you like that in the rest of your life too? Is it something that shows up in your career and in your personal life? Or is it like, no, this is my entrepreneur world?

Raj De Datta:

Probably unfortunately so.

Lindsay Pedersen:

Yeah. Yeah, that's the focus now.

Raj De Datta:

One of the tests that I've done as part of all these personality tests that I like is called the Enneagram.

Lindsay Pedersen:

Oh, sure, yeah.

Raj De Datta:

And the Enneagram has you on a clock. And I am the number eight on an Enneagram. And specifically the number eight represents the challenger. You see, anytime anybody says something or you look at something, the first question that goes through your mind is how could I challenge this? What could make this better? One of the things I've learned is that that's great in certain contexts, certain professional contexts, but it's also infuriating to a lot of people, and it actually requires a lot of discipline to not use inappropriately.

Lindsay Pedersen:

Wow. You mean your teenage kids don't like it when you say, "The status quo isn't my ideal. Let's uplevel"?

Raj De Datta:

They don't love that. I have learned that there's a power to it, but there's also an appropriate use of it for sure. And especially with strong, personal relationships aren't always the best.

Lindsay Pedersen:

Yeah. It's about having awareness around when to shine the spotlight on it and when to let it recede.

Raj De Datta:

That's right.

Lindsay Pedersen:

I've heard you say that at Bloomreach, you went well beyond articulating company values, that you specified with a lot of precision how you would operationalize those values. For example, you said that with the value of truthfulness, it's not just a pretty word, you actually operationalize it with transparent biweekly performance reports. Tell me about the process of defining these values and how you went about operationalizing them.

Raj De Datta:

It's one of those things that is very easily talked about and very difficult to do. Everybody has understood that values and culture are the core ethos of every company and that every tribe needs a code. What we are is in the tribe building business. But it's just easy to put on a wall and become a plaque and even become a me over the course of time. One of the things that I believe is that, first of all, values and culture are never done. They are aspirations in and of themselves. The same way we would never say, "Hey, we released a product and we're not upgrading a product or we're not constantly iterating on it or we have a revenue goal, but we're good. Once we achieve the revenue goal, we never want more revenue." Of course not. You're always improving.

The same mindset has to apply to values and culture, which is you set up the North Star, which in our case is that this be the single most impactful professional experience of people's lives. You set up the values, which are a set of core values, and then you ask yourself, "On an ongoing basis, how are we doing against that North Star?" And you're never there. You've never arrived. You always have something to work on. And so when you're prioritizing working on the things that are identified. Typically, we will do these barometer surveys every few weeks where we will ask a deep set of questions, and then we will work on the things that aren't working from an employee perspective. But there might also be a perspective from shareholders or from the board or from me or from others about what's not working in the environment. And you just constantly cycle through an improvement process.

And then the last thing is there's really a set of behaviors that have been mapped to the value. If there's truth, it's what are the five things we're doing to instill this? What are the behaviors we expect from our people? What are the practical things we expect them to be doing? If something goes wrong, how do we expect them to communicate that? If we have a value around we, how is our compensation model reinforcing that? It has to be translated, we think, into very practical behaviors and operational items, and so we've done that mapping. Because ultimately, I think whether somebody's living up to a truth value or a we value or own value, you've got to look at the behaviors that map to the values to then say, "How are we doing?" All of that is very intentional.

Lindsay Pedersen:

I love the idea of bringing down closer to the ground a lofty, maybe even amorphous at times value to specific behaviors because maybe you can see a value, but you definitely can see a behavior. You can see and hear and feel viscerally a behavior, whereas a value can be harder to put your finger on, and therefore you can hide behind it. Because if you specify the behaviors, it's so anchored and concrete that you hold your own feet to the fire and everyone else's feet to the fire.

Raj De Datta:

Exactly. That's right. Operationalizing it I think with that specificity, it helps a lot. What also helps is for it to be really bottom up. Today, when I think about our values and culture, I wrote the original culture document of the company before I started the company. It's been a long time. But now it has taken on a life of its own where I am no longer the primary ambassador of it. It means something. And when people exit, they talk about it. When they arrive, they talk about it. We have built it into the mechanisms of the journeys of people through the company, and therefore there's a sense of ground level ownership for it and ability to contribute to it that wouldn't be there if it were purely top down.

The last thing I'll say on this topic is I think that the root of our valued system, the root of our cultural fabric is what I would call a commitment culture. There's a concept even above the values, which is the notion of commitment. And it is rooted in this idea that if the great outcomes are built on the degree of commitment of the teams to each other, to the shareholders, to the customer, to the partners, to the metrics, to the customer outcomes, to the product excellence. So if the commitment level is really high, then the output will be assured, provided that they're the right people in the boat. If the commitment level is low, it doesn't matter who you put in the boat. And so the threshold question is if we're doing something as a leadership team, we're rolling out a new policy, we're doing something with work from anywhere, we're changing our bonus scheme, the question is does it increase the level of commitment of the teams to all these outcomes or decrease the level of commitment? And if it increases it, it's probably going to work.

Lindsay Pedersen:

It makes me think of performance or the outcome. It's like a happy byproduct as opposed to it isn't the North Star, it's something that happens as a result of having fidelity to a North Star.

Raj De Datta:

100%.

Lindsay Pedersen:

Yeah. Are there ever times you wish you didn't have these values? Are there disadvantages to having such explicit and tightly operationalized values like this?

Raj De Datta:

There are disadvantages. The disadvantages are, one, it takes a lot of time. Sometimes people are like, "Why are we talking about this stuff?" They're like, "Why are we spending time on these kinds of topics if they're not needle moving for the current value of the business?"

The second is that any kind of tribe, any kind of code, as much as I hate to say it, is by definition exclusionary. I don't mean exclusionary in a non-inclusive exclusionary, but exclusionary in that anything that has a tight definition, you're going to have people that fall outside of the definition that you'd like, that are capable, that are impactful, that are super smart. And then you have to ask the question, "Well, do we value that individual more or do we value the code more?" And there are times when that's incredibly tough because somebody's really effective, somebody's making a big impact, and then you look back on it and you say, "But no, we're here for the long term." Those are the hardest cases.

Lindsay Pedersen:

Yeah, the axiom, you can't be all things to all people comes to mind. Usually that's used in a marketing sense, but it's the same with a building, a group of people where if you're creating something that has soul, then it actually does have some teeth to it. And if you try to serve everybody, you'll end up serving nobody, let alone the shareholders. You're not going to serve the rest of your employees either. That takes some guts and some belief in its power.

Raj De Datta:

100%. It takes that kind of definition and strength to stick to it. It's also, as the company has grown, as we've reached a size and geographic scale that is much more disparate, people can tend to project their own mindset on it, and understanding what parts of it are malleable and which parts of it are hard-nosed requires some judgment.

Lindsay Pedersen:

I love that. And it makes me think of something you said earlier. "This is a constantly evolving dynamic being." It's like an organism, so it can't not evolve; it has to in order to be alive. And at the same time, if you're too willy-nilly about making modifications to what matters, you erode trust and maybe even belief yourself as a company. That's a dance, right?

Raj De Datta:

That's a dance. And one of the things we've said is, "We're not going to change the North Star. That's never going to change. We're not going to change the core values. That's never going to change. What we will change is what we work on, how we operationalize it, how we adapt it to a particular set of circumstances." We try to separate what should be very flexible from what should be very rigid.

Lindsay Pedersen:

Yes. To be really clear on what's allowed to be malleable and what's not, because where do people have freedom to shape it and where is it, nope, this is what it is? Something else you said is... I think you used the word the current value of the company or the current economic value of the company. One, a, quote, unquote, "disadvantage" of a value is that it benefits your long term more than your short term in a way. It's like there's faith in this is going to be a good thing at some point, but we might be costing ourselves something now, even if it's only the time it's taking to talk about it. And I think that's a really juicy... another dance, in a way, as a leader that you're navigating this short term, long term, you got to address the short term or you won't be around for the long term. But if you're trying to build something enduring, then sometimes you're going to do things that suck in the short term or might be less than comfortable. Do you find that?

Raj De Datta:

For sure. There's the example after example of that. I can go through a few of them. The most obvious cases are the cases where you have an employee that you feel like has breached a certain level of trust but is incredibly competent. And you'll have operational trade-offs in the short term by letting that person go, but on the other hand, you're setting an example for others if you tolerate a certain set of behavior. Those are the table stakes cases, I would say, that we've gotten at the muscle memory of, look, we don't tolerate behaviors that cross certain boundaries. That's the threshold case.

The more complex cases that have come up in recent years, to use a more controversial one, is all the political stuff that's happening around the world. Russia, Ukraine; we have business in Russia, we have business in Ukraine. We have team members that are both. We have an office in Slovakia that is on the border of Ukraine, so that becomes complicated. But then what do you do about Israel and Gaza? And there are strongly held views within the company about that and whether the company should or should not take a stand on that. And those are much more nuanced.

We've had to develop some principles that adhere to our values that many of which are not popular because they never will be. You'll have half of your employee base that will hate you and half that will... But what I've told myself is, "It must come from a place of principle." And then we need to be able to stand on that principle and have consistency to it because if we're going to take a position on something and just live with the fact that people may not agree with our decisions, but at least we're open and straightforward and clear about why we make them.

Lindsay Pedersen:

Yes. That's like a crucible moment of the idea of being really clear about what falls inside and what falls outside the code. That is not for the meek. That is a big one.

Raj De Datta:

And the one we developed on that was, look, if something is going to materially affect our customers, our employees, we will take a position on it. If it is not, we won't. We're not going to be chasing PR bonafides about being on the right side of every issue on LinkedIn. What we are going to do is take a clear position that impacts our people on those sets of topics, but not on others because we're not political organization on the other side so at least then people know, "Okay, I can expect to hear from Raj on these topics, but not on those."

Lindsay Pedersen:

I also hear you saying that in codifying the decision-making process, you also make it replicable for other leaders in the organization. You don't have to be the one to adjudicate every time something like this comes up, others can use the same process that you would have, and then you're democratizing leadership across the organization.

Raj De Datta:

That's the power of principle for sure.

Lindsay Pedersen:

Yes. In your awesome book, The Digital Seeker, you talk about the difference between customer centricity and seeker centricity. Here's a passage that really struck me as you were describing the brand, Uncommon Goods. Quote, "While the customer may be looking to buy a gift, the seeker is looking to delight a friend or a loved one." Could you talk about what makes that contrast so valuable for digital commerce companies, discerning the seeker mentality and separating it from the customer mentality?

Raj De Datta:

No doubt. I think this is the core essence of the book is that we've lived in a world, and Amazon perhaps being the best example of it, of being taught about relentless customer obsession. And when Amazon talks about relentless customer obsession, what they're mostly saying is, "When a customer is coming to my website, when my customer is looking to shop, I want to create an incredibly frictionless experience for them to accomplish what they're doing."

The research suggests that that is an incomplete view of what it really means to get to the heart of the customer because by the time the customer got to the Amazon website, the customer actually did most of the work. They already decided they were looking for a set of speakers for a Christmas gift, and now they're just deciding which speaker to get and what price they can get it at, and so on and so forth. And so when you deliver that frictionless experience, most of the work's been done by the customer, and you're fulfilling on that demand in an incredibly narrow way, and maybe doing that in a really effective fashion.

But the larger shopping problem is the why we shop. And most of the work is in thinking about, well, that particular friend of mine loves music; he or she might really love the idea of a speaker. And maybe they listen to music all the time, and so I want a thoughtful gift that gives them the joy of listening to music. What I've done is understood music means something to this friend of mine. It would be incredibly thoughtful to provide a gift around music, then do the mapping. I could have gotten him or her a guitar. I could have gotten him or her an album or a gift certificate to iTunes, but I decided I wanted to get a speaker.

And that's what I mean by the seeker. The seeker is really trying to solve a problem. And in this case, what he or she has tried to do is find an incredible gift for a music lover or delight a friend who knows that I know that he or she loves music. And that's really what the representation of the speaker is. Imagine if we could build commerce experiences that allowed me to articulate that need, and then you would lead me to buying a speaker instead of me showing up and looking for a speaker.

Lindsay Pedersen:

As the customer, you feel so seen when a business does that for you. You feel so seen when a customer or a company or whoever is having this relationship with me is actually doing the work to get inside my heart as opposed to looking at me as a wallet from which they can extract money.

Raj De Datta:

Exactly. And not for everything. Maybe there's a set of replicable purchases that I do all the time. But increasingly, I believe this is the blocker for why we look at digital commerce and we say, "What an amazing industry it's been in this last 20 years." But the truth is it's about 20% of what people buy is that they buy digitally. The other 80% they don't. Now, why is that? Because there's so much consideration to so many purchases that a lot of it still happens in conversation through discussions with my friends with a lot of back and forth. And if we could build these seeker style experiences, I believe we can capture more of that commerce much more holistically. And it's also much more defensible. It's really hard to stand out with on the dimension purely of fulfilling demand. If you build these seeker-centric experiences, you have a much better shot of a lasting moment.

Lindsay Pedersen:

I was feeling that too as you were describing, I think, the contrast between shopping on Amazon versus shopping at Uncommon Goods, for example, since I'm a customer of Uncommon Goods. That my willingness to pay is higher for Uncommon Goods than Amazon. It's almost like the adage, nobody else can out Amazon Amazon. They will always have the lowest cost structure, so therefore you have to play a game that they don't have any interest in playing, which is not about taking advantage of cost structure, so the rest of us have to find something that does have a moat that is outside of Amazon's wheelhouse.

Raj De Datta:

Yeah, exactly. It manifests in different ways. I think a very prominent example, also a great brand example, which I'm sure a lot about, is Patagonia.

Lindsay Pedersen:

Oh, sure.

Raj De Datta:

And them really getting to the heart of why I want to be outdoors and what that really means to me and engineering every aspect of the experience of how you interact with that brand in that way, that's an ultimate seeker-centric experience in that sense. Sometimes it's in the brand, sometimes it goes to the business model. We have a customer, Sur La Table, that does cooking classes. And why would a retailer of cooking essentials also offer cooking classes? Arguably, those are two different businesses. And it's because clearly they understand that the reason I'm buying all of these products is because I want to cook. And maybe there's a set of people that want to learn how to cook better or want to learn how to cook, and so if I'm fostering that, I'm actually cultivating ultimately downstream a set of shoppers for my products. But I'm going to be underlying motivations of why they may buy my products in the first place.

Lindsay Pedersen:

And cultivating a relationship with them, just a human to human relationship; somebody who isn't just after my money to buy a Dutch oven, but somebody who's going to teach me how to have the kind of experience when I have a dinner party that I would love to have. I'm going to be super loyal to somebody who does that for me.

This relates to another question I have because you also talk in your book about how mission itself is particularly magical in digital environments. Your word is magical. Particularly relevant and magical to have a mission that's beyond dollars and cents. Why is this? Why is it that the digital world presents this opportunity for mission to be such a significant unlock?

Raj De Datta:

I think mission has been one of those things that means so much to a small group of people historically. Sure, there are larger missions, but usually if you care a lot about your neighborhood, then you want clean streets, or you care a lot about your local schools, and you really want education in your school to be better. You used to be able to get with people in your neighborhood, get with the community, raise some money, have some fundraisers, work with the school administration and try and improve it. Well, now you get to do that at the scale of Khan Academy. You get to do that at the scale of digital healthcare that is ubiquitous, as we've seen, through the pandemic. It's not perfect, but it gives us the opportunity to take a quality of experience around mission that has historically been very local and very in-person and now enable us to deliver it to millions and millions of people.

And so when I think about talking to, for example, a friend of mine who was involved in Kaiser and their digital initiatives during the pandemic and the adoption of telehealth that happened during those early days and the democratization that then became possible of high quality healthcare to a group of people that might never have had access to it, or certainly not had access to it with the convenience that was then possible, it opens the whole world of possibility. We also saw the compromises that come along with that and didn't love some of it. But we can now ask the question, "What if we could? What if we could deliver that quality of experience in education, in healthcare, in environmental protections that had that kind of reach?" Now we're really getting to the heart of seeker centricity because mission is this turbocharger that end rolls.

Lindsay Pedersen:

I love that. It's a turbocharger. It reaches in and it stirs something in the person at the other end that makes them love you, that makes them more aligned with the kind of person that they want to be. And who wouldn't be loyal to a relationship that does that for you? Just wrapping up, tell me about being a leader and being an ever-growing growth mindset leader. What's your edge right now? What are you hoping to cultivate more of in yourself as a leader?

Raj De Datta:

I am committed above and beyond everything else of being a day zero leader. To use that phrase of ultimate growth mindset, today's a new day, today's a new world. There's new technology, there's new customer needs, there's new market forces at work, there's new people. And so instead of being the person who, with experience and age, feels like something can't be done, feels like something was tried and won't ever be successful in the future, feels like it has been learned, just bring that open-mindedness to every conversation, every effort, every problem.

Lindsay Pedersen:

I love it. It makes me think of the idea of the beginner's mindset, that just bringing the idea of, "I'm new at this. I've never lived today before, so I'm new at today. What are the possibilities for today?" And just to let that happen to you.

Raj De Datta:

It's super powerful. We have the benefit of some heuristics in our mind that allows us to shortcut certain things, but we have to be careful that in the shortcutting we don't skip over some of the things that open up possibilities.

Lindsay Pedersen:

That's a really neat observation about human nature, that we evolved to survive on the Savannah, which rewarded heuristics and confirmation bias and things that would keep us alive, but probably wouldn't set us up to thrive for decades and decades and decades, so we have to be watchful toward that instinct that we have evolved to have. And it's an important instinct. And heuristics are really useful until they're not.

Raj De Datta:

Exactly. I think that's a good analogy for sure. And that can happen with time for sure. I will also say I'm also very focused on energy. Energy is a scarce resource in our world. And when I say energy, I mean just human energy to go out and do something, to go out and solve problems, to go out and mobilize. There's all the things we should do, and then there's the energy to do it. I'm very focused on curating the day, curating the week, and ensuring that the well is still very full.

Lindsay Pedersen:

Do you have rituals or rules for yourself or hacks that make that energy optimization really thrive?

Raj De Datta:

I'll tell you what works for me. And I think it comes down to each person getting energy from different things, but for me, it's very important to do a few things well. I sometimes tell people, "I'm the least scheduled CEO you're going to find," because I don't like to be overloaded with check the box meetings and check the box discussions and lots of physical gatherings that I feel like I should do as part of the job. I really keep asking the why behind why I'm doing what I'm doing, and that allows me to say no to a lot of things and do a smaller number of things. And I get a lot of joy not just from leading the company, let's just call it the CEO job, but I also get a lot of joy from the founder job, which I see as an individual contributor job. And so I try to make sure I have enough of that, which becomes an energy source and I think allows me to be a better CEO rather than saying, "This is all about running a larger and larger business and management practices." For me, that doesn't give me enough energy.

Lindsay Pedersen:

Oh, this has been so great. I have a few rapid fire questions for you. Are you ready for some one word answer questions?

Raj De Datta:

Let's do it.

Lindsay Pedersen:

Okay. What's your favorite dessert?

Raj De Datta:

Oh, pecan pie.

Lindsay Pedersen:

With ice cream?

Raj De Datta:

I'm not big on the ice.

Lindsay Pedersen:

Okay, naked pecan pie. What is your pet peeve?

Raj De Datta:

People who say they're going to do something and don't.

Lindsay Pedersen:

What was your last splurge purchase?

Raj De Datta:

I did buy a Tesla. It was after having the same car for about 15 years, and finally, my wife was like, "Look, if you keep telling yourself the company's going to be better and better and then you're going to buy the car, you're putting us through hell along the way. We need a functional car," so I did buy the Tesla.

Lindsay Pedersen:

She was right. What is the book that you have recommended the most?

Raj De Datta:

I like Zero to One. It's a book I recommend.

Lindsay Pedersen:

Yeah. Thiel.

Raj De Datta:

Thiel's book. I like zero to one. I like The Everything Store, which is an Amazon how the business strategy came about. I like Shoe Dog, which is the Nike story and just the scrappy entrepreneurial story. Those are some of the ones, the classics.

Lindsay Pedersen:

Love it. What is a favorite guilty pleasure TV show right now?

Raj De Datta:

Well, right now my wife and I are watching Berlin, which is I guess the sequel to Money Heist.

Lindsay Pedersen:

Oh yeah. Is it English subtitled or is it-

Raj De Datta:

English subtitle.

Lindsay Pedersen:

Okay.

Raj De Datta:

It's just about this completely over the top terms over the top in every way. And it's just entertaining.

Lindsay Pedersen:

Yeah. Love it. Raj, this has been so great. Thank you so much. Where can people find out more about you, about Bloomreach?

Raj De Datta:

Yeah. bloomreach.com is a pretty good place to start. My LinkedIn is another place, Raj De Datta. Both of those work well.

Lindsay Pedersen:

Awesome. Perfect. Thank you for joining me today.

Raj De Datta:

Thank you, Lindsay. Appreciate it.


Lindsay speaking

About Lindsay

Lindsay Pedersen is a bestselling author and brand strategist with a scientific, growth-oriented approach to brand building. She has advised companies from burgeoning startups to national corporations, including Zulily, Starbucks, T-Mobile, Coinstar, and IMDb.

Her background as a P&L owner at Clorox fostered in Lindsay a deep appreciation for the executive’s charge: increasing the company’s value. There, she led mature, billion-dollar businesses and newly-launched categories, from Clorox Bleach to Armor All to Brita. In each case, she was solely responsible for increasing the business’s value.

Thanks to this executive perspective, Lindsay demands that brands be hard-working, disciplined and rigorous in growing a business. Her brand strategies are tested in the crucible of her proprietary Ironclad Method. Lindsay arms leaders with an empowering understanding of brand, and an ironclad brand strategy to guide choices as they grow.