228 - Leading with Empathy: The Key to Fostering a Productive Work Culture with Rune Labs' Swati Reichmuth

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Swathi Rikmuth, you are the CFO and the COO of a company called Rune Labs, which can be found at runelabs.io. And you guys are working in neuroscience as data, doing data analysis and also helping people figure out how we can work at the intersection of technology and the brain, which I think is pretty cool. Welcome to the show.

Thank you for having me today.

So let's just start with the backstory. Tell us a little bit about yourself and how you got into biopharma. You're not in pharma, you're just in bio, biotech.

Yeah, it's actually an interesting story. Serendipitous, actually. I started out my career as a mechanical engineer working for Cisco here in the Valley and was responsible for helping bring their flagship core routing product to market. And also at the same time, fulfilling on the last leg of their global strategy to outsource all their manufacturing. And they had left their like most complex, high mix, low volume products to the end of that strategy. And, and so I spent a fair amount of time actually on the manufacturing floor looking at how the product was being built, looking at what it takes to to actually bring all the different components together, electrical components, mechanical components, cosmetic components. And I think that's where I really, I would say, leveraging my mechanical engineering background or desire to really want to see how things work and come together, right? Got this appreciation for what it actually takes for the gears to turn, let's call it, right? All the different components that need to make something work. And I think, as I think through now in retrospect, think about my career, right? One of the common threads Really in that is this desire to see not just one piece of something, but really how all the components work and how they come together to make the whole. So anyway, I did, was working at Cisco for a number of years, decided that I wanted to go to business school, and so went to Berkeley for my MBA and wanted to make a career change through that. And so I moved into management consulting. I interned with Deloitte Consulting while in business school and then got a full-time offer and, and joined them working with large Fortune 500 clients through large-scale business transformation. And I'd say this is where I really developed the foundation around how to work in ambiguity, bring, leverage frameworks to be more data-driven and decision-oriented around data and analytics, and leverage that to then help drive companies forward, business processes forward, large parts of organizations forward. Really enjoyed that. And then had this opportunity, was nominated to actually be the chief of staff to, uh, the managing director for all of the Bay Area consulting practice. It was a new role that hadn't existed, and the managing director really wanted help and support building up the firm even as he was out working in client service. And so I took on that role, loved it, um, did it in addition to my client service responsibilities and really wanted to do that full-time actually. But of course, when you're in consulting and billable, you can't just leave that to go do, you know, this other part of the business. And it was around that time that I started thinking about what my next my next move should be. And Samsung reached out to me, um, here in the Valley also. They had launched an innovation center where they were incubating different technologies, and their COO was looking for a, a chief of staff. And so I thought it would be like a great opportunity to now move into the innovation space. This was my first exposure to venture capital, startups, incubation, because the mandate for the, the center, which was 80 people when I joined, was to really incubate technologies, accelerate them, and then try to spin them out into different startups. And really love that role, played a hand in different parts of the innovation economy with Samsung and then happened to do a little bit more of a deep dive in the digital health space. That was one of the verticals that they were incubating. And so to answer your initial question, that is actually how I got into healthcare. It was through this chief of staff technology background and leveraging that in my management consulting experience, move into, into the startup world.

I'm trying to remember his name. Curtis Isaki. Was he involved?

Yes, he was, he was leading the IoT vertical at the time that I was there.

Curtis has been a guest on this show.

Ah, I should reach out to him and talk to him about how now I'm on this show as well.

Small world. Great guy. So that got you into, that got you into the health business and tell us a little bit about what Rune is up to.

Yeah. So actually after I was at Samsung for a bit of time, decided that I wanted to, to make a move within, within the startup world. Love digital health at this point, not having had direct experience in healthcare, what I started to realize is that we're all consumers of healthcare and digital health is really the intersection of technology and people, right? It's about bringing technology, leveraging technology outside of the doctor's office to help manage your health, your disease state. We spend 99.9% of our time outside of the doctor's office, yet we make all our decisions about healthcare in the 15 minutes we go see our doctor. And so this intersection of technology and people, I think, was like the real catalyst that got me pretty excited about being in this space. And so when I thought about my next role, I just, I networked within, within digital health and got introduced to a gentleman named Kal Patel who was incubating another startup in a large corporation called Flextronics. And I say that was, the rest is history, because that was really my first exposure to building a startup, raising fundraising, going out into the markets, scaling a big company from employee 10 to 400. And, and I, I tell you a little bit about that because that is actually my connection to Roon. While at Bright Insight, I had multiple roles. I did everything from being the first program manager and client engagement manager with our first flagship customer to helping us actually carve ourselves out of our parent company, Flextronics, securing Series A fundraising. And then at points I went deep into the business, building up different parts of the business. And in my last stint there, we brought in a COO to— who had experience from private equity and other parts of industry running companies at this stage. And I had made it known to him that I would like to be a COO. And so when our sister company, Rune, in the sister company in the same portfolio as one of our investors, was looking for a COO, my boss at the time referred me and recommended me for this role.

Wow.

What an amazing career.

Yes, I've been fortunate enough to have great people who have been supportive of my career. And I think not just supportive in like introducing opportunities to me, but actually giving me those opportunities. So my previous boss, Ryan, who I worked with that bright insight. When I started to work for him, he gave me the finance function to manage. He gave me corp dev function to manage, partnerships, a lot of these like corporate functions that I think really allowed me to the point I was making earlier, take a step back and look at the business as a whole and look at like how all the parts were coming together.

So you're taking your mechanical engineering basic training and applying it to organizational development.

Yes, absolutely.

Good for you. So you've been with, you've been with Roon, what, a little less than 2 years?

Yeah, it's about a year and a quarter at this point.

And what have you learned in the jobs that you have now, COO and CFO?

Yeah, I think the biggest difference when I came over to Roon, right, um, my previous company Bright Insight, I was doing a lot of this work. At Roon, I was now accountable for that work, right? There wasn't a COO above me that was going to be taking all this information and influencing the company in a certain direction, influencing the leadership team, influencing all the employees, working with the board to get their support. And so I think that I'd say the biggest learning I've had is really around taking the time. It's not just about doing the work, it's about taking a step back and saying, here's all the work, here's all the analysis that exists, crafting the right messages with that information, right? And then being the person who's actually pushing an agenda forward with that information and that data, right? Not necessarily having someone else do that. And I think that's like— that to me was probably— I thought I knew what I was going to be doing when I came here, and I was doing all that, but that like sense of responsibility and accountability was something that, um, definitely I had to really step back.

And I think what you just described is one of the hardest things for leaders, where for a large part of their career, they're producers and they're getting graded and evaluated on how well they produce goods and services. And then they're moved to a leadership position where they no longer are responsible for, for producing. They're responsible for leading, yeah, producers. And they don't get graded on their own individual production. Their grade depends upon how well they can get people to produce for them. And a lot of people fail at that.

There's, there's a lot of courses around manager training and how to move from an IC to a manager. There's very little out there about how you move from manager to like more senior levels in the organization. And I have actually found that the best, through the best medicine for me, let's call it, was networking. So I actually spend a lot of active time networking and it's something that I would say previously I would have thought, oh, that's taking me away from my day-to-day where I'm producing. And now I realize that is actually a part of my job, right? So I meet with a lot of other female CFOs, COOs. I'm part of the Chief group that I mentioned, and there's combination— that's all women, but it's combination of women in different industries and different roles. And for me, actually talking through business situations with them, how I'm handling a certain situation, not just from a business perspective in terms of the data and the analytics, but like how you're engaging with people and the relationship relationships, right? That is actually how I've— that's the training or the learning that I'm getting on the job is really by talking to other people and learning about how they're navigating.

Amazing.

So what is it that gets you up in the morning, gets you excited to go to work?

It's a few things. Let's see if I can synthesize them. I like, as I mentioned to you earlier, seeing the big picture and how all the pieces fit together. And so I like this combination COO-CFO role for that reason, because I have legal, finance, people, strategic planning. And what that allows me to do is actually be in many parts of the business and look at how each of those is interacting with each other to get us towards the ultimate goal about building this business, moving it forward in the right way with the right metrics. And so, um, I think that ability to have that oversight is really exciting to me, but I still am a, a I'm a doer. Like I can't completely let that go. And so I like, I'm not, let's say if I use finance as the example, I'm not building the financial model anymore. I have a great like finance, finance team that's doing that, but I am in that model looking at how if I tweak this or tweak that's going to impact part A or part B of the business. And so to me, I think being able to be on the business and in the business at the same time is, it's pretty fascinating. And at the moment I'm actually working really closely with our business development team on like pitches to our customer. But then that allows me at the same time to, as we structure contracts, think about it from like the finance perspective and the business we're trying to build and influence it that way. And so I like this sort of ability, which is nice in the startup world to be in the business and on the business at the same time.

So you get to have your cake and eat it too.

I get to have my cake and eat it too. And that's what gets me up in the morning.

So what do you think, Swathi, what do you think it is that's unique about you that has made you so successful? Because you, it's a pretty amazing career trajectory that you've been on.

It's— I would say it's almost hands down my ability to build relationships at all levels. And when I was an engineer, 22 years old, there was, you know, I would work with a lot of other engineers who— engineers were known to have difficult personalities. And I remember even from, from that time, my ability to get engineers who were designing something to make sure they were designing in a way that could be built and replicated is that I would spend time with them in their cubicle and talk to them about how they were building design, and sometimes I would just spend like an hour in there because I was building this relationship. One, because I genuinely wanted to know again how things are done, but two, I also realized that by building those relationships, it was going to be easier for me to then achieve what I needed to do, right, as part of my role. And I think that's been key to my success. I think being an engineer and then having gone to business school and then been a management consultant and now in startups, it's the thing that I think I tried to probably hide because in all these roles it's about having gravitas and bravado and really coming forward with all that analytical rigor. And I, maybe about a year and a half or 2 years ago, after having my previous startup, we scaled it to almost 400 people and 2 to 3 international locations, which I had been heavy— I had a heavy hand in, uh, making happen. And I took this personality test, it's the DiSC one. There's many out there, but this is the DiSC one. And I was a— I'm a solid I, and I really thought I would be a D right after having gone through this career trajectory. And that's when I realized that my superpower is relationships. And that's actually how I, I'm able to— I'm also known for being very goal-oriented, very focused, being very execution-oriented. But I think the results come as a, as a product of being able to build relationships.

One of the things that I'm teaching, teaching leaders today is that if you want to build good relationships, abandon reason.

I think that's probably a good thing. Maybe a little bit of both.

Rationality has no place in relationships. Yeah, I think problem solving and decision making and reasoning are critical tools. Yeah, but they don't build relationships.

I, I would agree with that. I, I tend to use those as the foundation for which to maybe have data to support what I'm trying to do, but I, I would agree with you. Relationships Actually, my previous boss, when he referred me into this role, we still keep in touch pretty regularly. And I was just having a conversation with him maybe in the last couple of months and talking about when you first meet someone, whether it's even if it's in the most intense business situation, what we both do, and we both said the same thing, we actually spend time getting to know them as a person first, because that is actually how you build the relationships, right? What are they interested in? What is their family life like? These are things that I'm genuinely interested in, right? Just to know about you as a person, because I think that's how you can actually then connect on the business side.

You're absolutely right. And notice that there's no reason and rationality in that.

No, there is not, right? That means it—

And that's the other thing I teach. I said there's no such thing as rationality. And humans are not rational beings. There's no science to support that a human, that our essential human nature is that we're rational. All the science supports the idea that we're emotional beings. So I think what you've come, stumbled onto is that relationships are important. And although you as an engineer may not put it this way, are learning how to recognize the emotional nature that our human— I'll reframe that. You recognized implicitly that our essential human nature is to be emotional, not rational.

Yeah, I agree with that. Fair statement.

And when you— so when you're building relationships, you're responding to people's emotional presence, not their rational presence. Now, you may In a decision-making process, you use rationality to justify the emotional decision you've already made, which is good. But, you know, it's emotions that dominate and control how we get along with each other.

Yes. I actually like the way you just put that. You saying yes to rationalize the emotional decisions. I think that's right.

All decision-making is emotional. There's no such thing as an unemotional decision. We can justify it with reasoning and critical thinking and all the tools that you've learned as a mechanical engineer. I've learned as a lawyer, we have all these tools at our disposal, but fundamentally the decision we make is an emotional decision.

Yes.

Yeah. And that's critical. So that gets me to the core of what I'm all about, which is what two, two concepts. One is leadership empathy.

Mm-hmm.

And your thought on that. And two, the importance of listening as opposed to talking. And as you're reflecting on your career, tell me a little bit about what you think of those ideas.

Yeah. So I actually was asked in an interview at one point, if you could start a movement, what would it be? And my response, I reflected on that for a while. I was like, what sort of movement would I start? I didn't exactly know how to answer that. I took a weekend actually to think about the answer to that one, because this was a written interview that I had done. And, and The answer actually came out to be I would lead a movement in which you're leading with empathy. And it stems from this notion of relationships, actually, right? And the reason I say lead with empathy is because a lot of what I do— and I talked earlier about one of the skills I had to learn pretty quickly as I took on this role when I was now accountable— is how do I influence folks? And my MO in influencing is to help take people on the journey. When you just tell them what the outcome is or what you want them to do without context and understanding, it is very difficult to get people to move along on the journey, right? And so I, I, as part of my management consulting experience, I, I'm a practitioner of change management and, um, this is one of the things I learned. And so when I talk about leading with empathy, it's like, what— when I, I think about this in the work context, like what motivates people to come to work, right? When you talk about building culture, And people think it's, especially out here in the Valley, it's like perks, like free meals and activities and all this stuff. And I think especially now in this remote environment that we're in, people want to come to work. And our job as leaders in building culture is, is to build an environment where they're doing their best and product— most productive work, right? And the way to do that then is to make sure you're acknowledging the work that they're doing. It's not always going to be great, but when you want to give them feedback, it should be in the form of areas. I call it areas for growth, not areas for improvement or constructive criticism, because that's what it is. It should be how do you help people grow? And so acknowledging work, great work that they're doing, and then acknowledging sort of areas that they need to grow in, because we all need to grow. It's being transparent, right? And this doesn't mean that transparency then oftentimes people think means, oh, I have to disclose like sensitive information. No, it just means that you have to be able to have the right conversation with folks so that they understand the broader landscape in which things are happening. And that's also helping them give context. So like when I actually started working here at Roon, right, one of the things that I, I was part of my role is move us in further along in the startup journey was to not just be a company focused on product or engineering, but really think about how that translates into how do we go to market with that. So to be more of a company that's not just about building, but that can actually take that product and bring it to market in a meaningful way and If we do that, then we are actually fulfilling on our mission to help people with Parkinson's, which is our first use case. But if we just focus on the product and the engineering, we actually don't figure out how to take it to market. We're not fulfilling on our overall mission and spending a lot of time painting that whole picture. Yes, we need to move the company in a direction, but here's why we need to do that. Here's why it's important. And as you start to bring people along in the journey and then connect with why they're personally there, right? It's to do good work. To be mission-driven, but then enabling that platform, right, by connecting with them. That's, I think, what I think about when I'm leading with empathy. It's not just telling someone what to do, but it's providing context. Now, that doesn't always mean that you're gonna like it, but at least you understand, right, why it's a certain way.

So I'll just give you my reflection on it. It's similar, but a little bit more nuanced. First of all, We need to define empathy, and most people don't know how to define it. Empathy is the ability to, to, to read, assimilate, interpret, and reflect back the emotions that another person is experiencing. That's the pure definition of empathy. And so when we are engaged in empathy, what we're doing is essentially validating another person's emotional experience from their frame of reference. And talk about neuroscience, some great studies out of Lieberman's lab down in at UCLA showing that when you do this process called affect labeling, it inhibits the emotional centers of the brain and at the same time activates the right ventrolateral prefrontal cortex, which turns out to be the part of the brain that creates emotions in the abstract. And the, the cognitive construct of emotion is created in the right ventrolateral prefrontal cortex. And what has been discovered is that when you tell somebody what they're feeling, you can calm them down in less than 90 seconds. And once they feel heard, they're ready to do anything, whether it's solve a problem or solve a conflict. In my world as a mediator and a peacemaker, that's the domain I work in. Or if you're a leader, To your point, when people feel heard and validated, they can go along with a decision that they don't agree with because they've been heard and listened to. And the biggest mistake that people make in leadership is not having that skill, not knowing how to listen to people so they feel heard, even though there may be sharp disagreement over the decision. It's not about the decision.

It's about acknowledging the feelings, which is to your other question about listening and leading.

That's right. And that's, you and I are aligned in terms of if we were to start a movement. In fact, I am starting a movement of how to teach people to listen to emotions as opposed to words, getting this mindset shift that we're emotional beings, not rational beings. Learning how to listen to other people into existence, learning how to validate people so that they will follow you anywhere as a leader. It's powerful.

Yeah, it is powerful. And I'll tell you, I, I talked to you about leading teams, building teams. I like being the person that people see as the person who can do that and get things done, but I do not like being the center of attention. So I like being social, I like being in groups, I like being in the middle of groups, but I don't like to be the one talking.

Let me guess, you're introverted.

I'm actually not. You think that I would be. I, I extroverted in the sense that I thrive in social settings, but— Okay.

So you are extroverted.

I am extroverted, but I don't like to talk that much. I, I prefer that other people talk to me.

Huh. Interesting. Yeah, no, I, I think that you're onto it. I think you got the right thing. And I, the whole concept, this is the concept of that I'm teaching and I teach down at Pepperdine. I'm an adjunct down there at the, at the Schaus Institute for Dispute Resolution. I teach a course called Decision Making Under Uncertainty and Stress. And my students are LLM students. These are doctorate of laws above postgraduate law degree and master's degrees in dispute resolution and then regular law students. And I'm teaching them about all of this stuff. And it's, it's amazing to watch their brains open up. As they begin to practice this stuff and learn it. So it's, it's pretty cool stuff. I, I think it's really transformative. So what, what's the future look like for you?

Oh goodness.

Are you gonna be a CEO somewhere sometime?

It's not, maybe it'll happen, but it's not something I'm actively seeking. Of course, when you become a CEO, the first question everyone wants to know is, oh, didn't you want to be a CEO one day?

Not necessarily. CEOs sometimes are cut from a very, they're operators and, and they don't want to be the visionaries and the people out there that are really detached from the day-to-day stuff. So I, I didn't have any judgment in that. I was just curious.

No, I, I don't mean that you had judgment. I just get asked that question. I think it's the natural next thing that people think that one would do in like a COO role. And for me, I just really like being an operator, being in that role and connecting all the dots. And I, I definitely see myself doing this for the foreseeable future. I, you know, you talked about teaching and learning. One of the things I do is I do advise a, a small VC fund and through them some startups. And when you ask me what's next, it's some combination of being an operator, but probably doing a bit more of that. I think the best— I'm now, I'm going to blank on the saying, but when you're doing something, you're doing it, you don't even realize all the things, all the muscles you're flexing and all the experience you're getting and like all the tools you're using until you start talking to other folks about it. And, um, so I think that for me, I'm actually learning best when I'm doing, but also communicating that. And so—

watched you teach.

Yeah.

That's— I knew it. As soon as you said it, it would gonna come to me. And so, yeah, I think it's doing more and helping grow this company and then also leveraging that experience to help other founders and CEOs. For you.

One more question. What's one thing about yourself, Swati, that we would never know about unless you revealed it to us?

Gosh, that is a trick question. I already told you that I'm social, but maybe that, that you would have gathered. I actually am really— oh, you're stumping me here, Doug. I have—

you wouldn't know that I was a jazz violinist unless I told you that.

No, that's a, that's a pretty good prompt. One thing you wouldn't know about me is, uh, I— okay, this is random— I really like doing puzzles.

I picked that up Like jigsaw puzzles?

Jigsaw puzzles. And I picked it up during the pandemic because we were all at home and picking up different hobbies. And, and I love doing them to the point where I'm actually thinking in the next month or so, I wanna buy like a, what's called a puzzle board. Cuz now we're out of the pandemic and so I don't have time to sit there on a weekend and do a puzzle anymore. And, and so you can buy these puzzle boards that you do the puzzles on, you can move them to the side and come back to them. And so, um, that is one thing I'm very interested in. Enjoy doing. I actually have a lot of thinking time. I could get into a puzzle and then my mind can go to another place and I can iterate on things.

And so it's actually kind of therapeutic doing a different kind of thinking when you're puzzle— doing puzzles. Really interesting. I think this has been a great conversation. I'm amazed at you. You're really doing amazing work.

And Doug, I appreciate the opportunity to chat with you today.

Absolutely. Take care.

Thanks. You too. Bye.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes. Go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team.

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