Putting digital at the heart of the organization

In this podcast, Heidrick & Struggles’ Shaloo Kulkarni speaks to Raj De Datta, chief executive officer and cofounder of Bloomreach, a digital commerce platform headquartered in Silicon Valley. De Datta shares what he believes are the most critical issues for organizations that are focused on building on their digital transformation program and discusses the difference between a customer-centric approach to the digital experience and the more successful seeker-centric approach. He also offers some advice for those seeking to become entrepreneurs.

Some questions answered in this episode include the following:

• (2:26) How did you think about forming your leadership team as you scaled the organization?
• (3:51) What would you say is most critical to organizations that are now seriously focusing on building on their digital transformation programs?
• (7:39) What would your advice be for young entrepreneurs who would like to embark on a path similar to yours?
• (11:03) Culture as we know it is at the heart of what makes an organization successful. How would you define Bloomreach’s culture and what efforts have you made over the years to shape and build it?
• (13:22) What did you do to ensure that you have diverse perspectives across your organization and particularly in your leadership team?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Shaloo Kulkarni: Hello, I'm Shaloo Kulkarni, a partner with Heidrick & Struggles and a member of Heidrick Consulting, based in London. In today’s podcast, I'm speaking to Raj De Datta, chief executive officer and cofounder of Bloomreach, a digital commerce platform headquartered in Silicon Valley. Before launching Bloomreach in 2009, Raj was an entrepreneur in residence with a venture firm and, prior to that, served as Cisco’s director of product marketing. He was also on the founding team of the telecom company FirstMark LambdaNet. Raj, welcome, and thank you for taking the time to speak to us.

Raj De Datta: Shaloo, it’s great to be here with you.

Shaloo Kulkarni: So, Raj, Bloomreach has grown exponentially since its creation in 2009, and we now hear it’s reached a funding valuation close to a billion dollars. Can you take us back in time and tell us a little bit about why and how you decided to embark on this exciting venture?

Raj De Datta: Absolutely, it’s a pleasure to tell the Bloomreach story. Thinking back to 2009, those were the days when Google and Facebook were really taking off as internet marketing channels, and I felt that the class of AI and machine learning technology used by Google and Facebook was, at that time, primarily being used for advertising; yet I felt like everybody that went online was really interested in experiences, not ads. And, in particular, they were interested in shopping, in meeting people, and in reading and so on and so forth. So, I think the core insight that led to Bloomreach was, “Why not harness that class of AI and machine learning technology to power every website, every app, every interaction in the world, and ultimately deliver profoundly incredible experiences?” And, in so doing, also enable the brands that are trying to recruit people to become long-term customers. Brands can do that in a much more effective fashion by delivering on-point experiences. And, with that, we started Bloomreach.

Shaloo Kulkarni: How did you think about forming your leadership team as you scaled the organization?

Raj De Datta: It’s been an interesting journey, perhaps not that different than many other growth-stage companies, because in the early days it was myself and my cofounder and a small team of engineers. There were five of us who got started at Bloomreach, and so at that time the leadership team was obviously incredibly flat. We went through a second evolution of that team, where it went from sort of a founder-led team, where it was myself and my cofounder, to the first version of an executive team. It was three years or so into the venture when we had our first head of marketing and sales and engineering and product and so on, and assembled the initial executive team. That was a profound shift, because now the company was being led by a team, not by the founders. And as time went on—I would say as Bloomreach has scaled up and in the last two or three years as it started to approach that billion-dollar valuation—we began to feel that that initial team, which was well set up for the start-up phase, was not necessarily the right team for the scale-up phase. And so we started to bring in people with a lot more experience of scaling software businesses and we assembled the team that we have today, which we think of as a leadership team that can take the company through an IPO and beyond.

Shaloo Kulkarni: In your book, The Digital Seeker, you wrote a lot about your experiences. It becomes particularly relevant as we talk about the world coming out of the pandemic with a digitalization perspective. Based on your experience and what you’ve learned, what would you say is most critical to organizations that are now seriously focusing on building on their digital transformation programs?

Raj De Datta: That’s a great question, Shaloo. The genesis of me writing the book was that as we at Bloomreach powered almost a quarter of ecommerce in the United States, the United Kingdom, and many other geographies, I would be asked by boards and leaders, “What makes the winners win and the losers lose in digital?” I conducted about a hundred interviews, spoke to many of our several hundred customers, and through my seed investing did some research to try to answer that question. The book, The Digital Seeker, is really the answer to that question. And the conclusion, if I were to summarize it, is that after hearing about customer centricity for 20 years, the great digital experiences, the winning ones, are actually built for the seeker, not the customer. We might ask ourselves, “Who exactly is the seeker?” The seeker is the motivation behind the customer. So, I may be interested in buying some plywood to build a deck, and therefore I'm a customer of plywood or a prospective customer of plywood. But really what I'm seeking is a beautiful deck where I can entertain friends and families and have barbecues and the like. And if you look at the research and the winners in category after category, what you find is that the winners build for the seeker; they build experiences for the underlying motivation behind the purchase. And the pandemic in many ways has accelerated all of that, has made us ask what should be digital and what should be physical, and increasingly the answer has become that most of it has been digital. We've seen five years of acceleration in ecommerce and digital adoption through our data over the last 12 months or so. And so that's put everything on hyper-speed and changed the game in so many ways.

Shaloo Kulkarni: And what shifts do you expect to see in the leaders of the future as a result of this changing dynamic?

Raj De Datta: Well it’s really interesting: I think what we saw in digital pre-pandemic was that most organizations had a functional leadership team, all the different functions you'd expect, but also have a digital team and that digital team was off to the side. And, of course, now digital is at the heart of every business. So digital has to be put at the heart of the organization. I think a good analogy for what organizations of the future are going to look like is to look at the companies that are digital natives, you know, software businesses, internet businesses. If you look at them, their digital team is a cross-functional representation of every major function in the company. So you have digital marketing, developers, security experts, digital merchandisers in the case of product managers, and they're all organized around the digital experience, often with a chief digital officer or a chief technology officer or a senior vice president of ecommerce. And so, instead of thinking of digital as the tech team, we start to think of digital as a business team that encompasses multiple cross-functional functions, all of whom are chartered to go win in digital and treat digital like the product that it is. And in doing that, they think about digital through the entire lifecycle of the journey of the company.

Shaloo Kulkarni: As a leader, you've had a long career that has spanned the tech space and you’ve been rather agile moving from a traditional tech environment to becoming a unicorn founder. What would your advice be for young entrepreneurs who would like to embark on a path similar to yours?

Raj De Datta: This question of being an entrepreneur—in many ways, we've celebrated entrepreneurs in the last several decades and that's a great thing. But I think, in some ways, we haven't stopped to ask the question, “Why do you want to be an entrepreneur?” That's the question that I usually ask first when somebody calls me from a larger company and says, “Hey, I'm thinking about leaving and starting my own business.” I start by asking why, and then my second question is going to be, “Have you quit your job yet?” because so often people think about being entrepreneurs but don't actually do it. It’s a super hard thing to pursue; it’s not one that, risk-adjusted, makes any sense as a career; the odds are stacked against you when you start a business and try to make it successful. So, the motivation has to be pure and usually that means it can't be money. The motivation has to be a genuine passion to build something, or perhaps to solve a problem. That passion will carry you a long distance, through the ups and downs. So, my best advice to a young entrepreneur is to, first, quit your job. Let go of all of the things that bind you to something that is safer. And then, having let that go, really make sure your motivations are pure. Don't do it because it’s cool to do, don't do it because you can get rich doing it; do it because you're genuinely passionate about solving a problem for the world and you can't imagine your life any other way. It that’s the case, you're off to a good start.

Shaloo Kulkarni: How did you grow and evolve your own leadership style through this journey?

Raj De Datta: I've always worn two hats: the founder hat and the CEO hat. In the early days, they were the same hat because my cofounder and I led the company. But I think of these two hats as being two different things. The job of the founder is to challenge, to vent, to push, and to envision a future that might not be able to be envisioned by other people. The job of the CEO is to lead, to scale, to enable—all the things that ultimately make businesses succeed. It was very natural to me to be a founder because I always had way too many crazy ideas and a lot of passion to pursue them, but I really had to learn how to be a good CEO: when to let go, how to recruit the best people, how to create the operational processes that can scale. And I've been helped along the way by mentors, by my own mistakes, by my board, by advisors who have given me great advice over the years, and by forums like YPO and others that bring together software CEOs or technology CEOs to commiserate on all the challenges involved in building a business. But, ultimately, you know, I've had to trust my own instincts and judgment. They haven't always been right, but I feel that, as an entrepreneur, your judgment is all you have and so you may as well count on it.

Shaloo Kulkarni: Culture as we know it is at the heart of what makes an organization successful. How would you define Bloomreach’s culture and what efforts have you made over the years to shape and build it?

Raj De Datta: Culture has been at the heart of Bloomreach since I started the business 12 years ago—in fact, I wrote the document that represents our culture before even coming up with the business plan for the business. That was because I felt that the only input you can ultimately control in the life of a venture is the quality of the people you bring in and the environment you produce for them; that's the input. The output, then, is great products, great customers, great business success, and so on. The culture document is grounded in a set of principles that I would describe as commitment culture, and by that I mean we ask ourselves, “Do the things that we do—the processes, the systems, the policies—do they create greater commitment of people to the mission, to each other, to the customers, and so on? Or do they create less commitment?” Very often, as organizations scale and in service of other goals, we create environments that create less commitment, and if you create less commitment, then you should expect less on the other side of it. So, I have really worked to center Bloomreach’s culture on this idea of commitment. And then we ask ourselves, “What would create a commitment culture?” And, to me, it has always been the several core cultural principles that we've stayed grounded on—things like truth and transparency, things avoiding star culture and staying true to our belief in the team. Things like ownership—owning every decision and every choice. We create an environment where we can rethink, on a first principles basis, every decision, and, finally, we avoid the drama and the politics that often seep into organizations.

These cultural forces come together but, more importantly, they enable us to make sure we incorporate them in the day-to-day lives of each of our employees. And that's the most important thing: it’s not what the culture is but how it’s integrated into the operational lives of the people around the company.

Shaloo Kulkarni: Diversity and inclusion, as we know, is currently a topic of discussion across the globe, and more than ever we understand it as key to any successful business. What did you do to ensure that you have diverse perspectives across your organization and particularly in your leadership team?

Raj De Datta: Like so many technology companies, we were woefully short on diversity early on in our lifecycle, but that’s changed. Thinking about the earliest days, I remember that the first 19 employees of Bloomreach were all men. And we stopped there and said, “If we keep going like this, it's going to be impossible for us to recruit women.” So we were happy to recruit the first woman at that point and that fed on itself. Now the company is over 600 people and the leadership team is approaching an even split between men and women. We've added a really strong board member into the mix as well. I think the leaders are key because they send a very clear message that diversity at the top and will cascade all the way through.

We're doing a pretty good job of diversity in terms of gender, but there's a lot more to be done in terms of racial diversity, for which we've started initiatives. But we have work to do in this area and I think the only way forward is to really make sure that it continues to be top of mind and at the center of recruiting, mentoring, and all of messaging as we try to build an increasingly diverse organization.

I will say that, for me, diversity is as much about diversity of thought and as it is about gender and race. In terms of diversity by nationality, we are now across three continents, and so we benefit from cultural diversity as well. I'm excited that we're building an increasingly global company, but the work is just beginning in this area.

Shaloo Kulkarni: As we come out of the first half of 2021 and look to the second half of this year and the year ahead, what do you see as most important for continuing to build upon your organization? Where are your key organizational priorities?

Raj De Datta: We’re thinking all about scale at this point, and the most important organizational priority is enabling the next generation of leaders. At Bloomreach, we're fortunate to have an incredible executive team, but the company is not run by that executive team, it’s run by the managers, the directors, the VPs that lead major initiatives, and teams across the world. And, increasingly, as we have operated in a work-from-anywhere orientated way, what we have found is that it’s really important to ensure that the next generation of leaders understands the context and that their motivations are centered on this mission of building incredible, magical experiences for people in business in a way that gets to the heart of the seeker.

Shaloo Kulkarni: Raj, thank you for making the time to speak to us today.

Raj De Datta: Thanks, Shaloo, this was fun.

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