Jay Goldman is a New York Times best-selling author of “The Decoded Company.” He is also the CEO and Co-founder of Sensei Labs - focused on technology, design, and the art of leadership. The conversation in this episode covers decision-making, connections, the six values of Sensei culture, and putting customers first. Jay urges leaders to have regular conversations with employees and use data to understand them better. Jay considers empathy to be the most important trait of a leader and he elaborates on its importance.   Key Takeaways [2:34 ] Jay has a 13-year-old daughter and a 12-year-old son. For Jay, parenting and leadership are very close; he uses some of the same principles with his children and in his one-on-one work discussions. [3:39 ] The book, The Decoded Company, was published in 2014. In the years since then, the world has changed a lot. Much of the book is still relevant, but in hindsight, Jay says they should have put more emphasis on culture. It should be a headline item. That has become more true as Jay continues to grow Sensei Labs, which was spun out of Klick to capitalize on the technology they talk about in the book. [5:34 ] Jay compares a company’s culture to a garden. The leader makes sure the garden gets enough sunlight, water, and nutrients, weeds the garden and protects it from pests. Leaders can’t directly make the garden grow. They can create all the right conditions for it to grow. If you want certain behaviors, create an environment that encourages those behaviors. It’s dangerous to try to fix people. [8:16 ] There are more small decisions than big decisions. Your physical space in an office has a big impact on culture. It’s hard to radically change your office space. Day-to-day moments can have just as big an impact. There are many times more of them than there are of the big decisions. Big decisions need to be followed up with lots of small decisions. [10:52 ] When COVID-19 hit, Sensei Labs was still within the offices of their parent company, Klick. Klick allowed them to stop paying rent, which was very helpful for a small business. In the summer of 2021, as COVID-19 was letting up, Sensei Labs discussed as a team if they needed to take an office. The Toronto group was missing the moments of connectivity, collaboration, and having lunch together. [12:13 ] After funding, Sensei Labs had almost doubled in size. International associates had never worked in an office together but they wanted the connection shared by the Toronto group. Sensei Group built an office with collaboration rooms but no private offices, desks for everyone there on a day, and multi-use spaces for large meetings and holiday parties. They are not mandating people back to the office. [15:04 ] Sensei Labs doesn’t say “remote” for people outside the office. Teams pick a day to come in together. They use Teams calls for those who cannot attend that day. They also use Teams calls on cross-team meetings or customer meetings. All meeting rooms are set up for Teams, with good microphones, audio, cameras, and video. Sensei Labs is all hybrid, rather than divided into tiers. [16:21 ] All “hoteling” desks have a proper monitor and Logitech webcam. There is an events space with a screen that rolls down from the ceiling, a webcam, a projector, and an audio system, so people not present can have the full experience of partaking in the event. There are multiple presenters, some in the building, and some participating by video. All these things help integrate the teams. [17:30 ] All of that said, you can’t replace the in-person experience, or going out for a coffee or lunch together. Jay loves to see a cross-functional group who have carried in lunch and are eating together. Those are collisions, as Steve Jobs called them, where you get an exchange of ideas and connections between different teams that wouldn’t otherwise form. Those are hard to recreate on Teams or Slack. [18:50 ] At Sensei Labs, there is a big emphasis on helping each other in a culture where that’s rewarded and recognized. The founders were intentional when they carved Sensei Labs out of Klick to build a culture that was unique to Sensei Labs, built around Enterprise SaaS, customers, and partners. [20:28 ] As they started, they came up with six values that represent Sensei culture: being Selfless, being Empathetic, being Nimble, being Skilled, being Entrepreneurial, and having Integrity. They built everything they do on the people side of the business around those Sensei values. They have a matrix of every role in the organization with the values, and observable behaviors expected from each role. [21:23 ] The matrix also shows how to get promoted in terms of what you should be thinking about in observable behaviors for each of the Sensei values for any role. When Sensei Labs does promotions, they evaluate on the Sensei values. The Sensei values are part of their open recognition channel in Teams. Everyone can post recognitions of others and tag them with Sensei values. It’s all intentional. [22:32 ] Over the last year, Sensei Labs has strongly emphasized CARE requests. Sensei President Benji Nadler came up with the acronym CARE, for Customers Are Really Everything, to reorient everyone’s thinking about customer requests to make them the highest priority. [24:08 ] An organization that does not give its people regular feedback about results is doing its people a disservice and will not get the results that it wants. In The Decoded Company, there is the Rule of Five Degrees. If you take a boat across a lake, and you’re five degrees off course at the start, it’s an easy correction then. But five degrees off course on the other side of the lake could be miles out of the way. [25:05 ] If an organization gives performance reviews annually, it’s already crossed the lake. Regular five-degree course corrections throughout the year could prevent an employee from being miles off course at the performance review. Regular feedback corrects behaviors and bridges the gap between behaviors. [26:18 ] As a privately-held company, Sensei Labs is free to make long-term decisions. Jay picks values even over performance because, in the end, that will have the biggest impact on the business. Staying true to those values will affect whom they hire. [28:14 ] Sensei Labs operates as a separate organization from Klick and the Sensei teams do not work on Klick’s projects. Sensei is proudly part of the Klick group of companies but there is no need for a tight alignment between the two. There is an overlap in how the two companies express and define their values. Klick has a pyramid of cultural values with the bottom level being their foundational values. [29:00 ] Jay describes how the layers of the Klick value pyramid match the key inflection points of career advancement. Sensei used the best parts of the Klick values in developing the Sensei Labs values acronym. Sensei looks at the key inflection points of the first time an individual contributor becomes a leader, and the first time a leader becomes a leader of leaders. Those points require different thinking. [30:54 ] Leadership has a science component. The science of leadership goes back to Taylorism measuring productivity with a stopwatch and optimizing the Ford assembly lines. There’s the possible Hawthorne effect of performance rising because it is measured. The science is how you use the data within an organization to optimize it for talent, centricity, and engagement, the premise of Decoded. [31:48 ] Jay explains how leadership is an art, requiring a high degree of empathy. You need to be able to understand the individual members of your team and what drives them. Jay values empathy as the most important trait of leadership. Empathy requires engagement, conversations, and knowing each other. It requires some vulnerable moments that establish psychological safety between you and your team. [34:30 ] People learned hard skills in school and had to figure out the soft skills for themselves. It dodges the responsibility for teaching the part of leadership that is probably more impactful. Jay explores the mistake technology companies often make in promoting engineers into managerial roles with no EQ or managerial skills. That mistake removes a skilled individual contributor and installs an ineffectual leader. [36:54 ] Instead, create a pathway that allows skilled engineers to remain in their craft but to become leaders, take on more responsibility, and make more money. Both Sensei Labs and Klick have parallel tracks for people leadership and craft leadership. As individuals advance, their time is leveraged so that an hour of their time creates more than an hour of value for the organization. [39:54 ] The use of Big Data has changed immensely since Decoded was published. The principle is the same, but if they wrote the book today, their take would be very different. Data is more prevalent in business today. [40:20 ] Most businesses today spend huge amounts on data to understand their customers. They do not use any of the same resources to understand their people. Jay argues that you will have a higher leverage effect by engaging in your team, creating a virtuous cycle of having the best talent on your teams, more customer happiness, more revenue, and hiring even more skilled team members. [42:03 ] There is a difference between ambient data and self-reported data. Self-reported data is always biased. Teams constantly use tools and that creates a digital body language about what they are working on and who they’re connected with and other factors. That data is available through analysis. Jay calls this data a sixth sense. Have guidelines about using the data, so it’s not uncomfortable. [43:35 ] There has been good research on 16 indicators that somebody may be thinking about quitting their job. If you could look across those 16 relative attributes of an employee, “Jim”, you could see changes that indicate that something has changed in ”Jim’s” life. Measuring a ba