Daria Rudnik (00:41.221)
Welcome to Built by People Leaders. I'm your host, Daria Rudnik, and this show is for HR and L&D leaders in scale-ups and fast-growing companies. The people building real impact from within and shaping AI ready organizations. Each episode, I sit down with people leaders to talk about how they build strong cultures and shape organizations around them. It's about HR being seen as a true business partner by leaders and by HR themselves. So let's dive in.

And I'm so excited to introduce our guest today, Stacey Richey Global Vice President of People at SmartCat, where she helps scale a fast growing AI company by combining data-driven decision making with a deeply human approach to leadership. Throughout her career, Stacey has led people organizations in high-growth technology companies. Her current passion is helping leaders embrace AI as a strategic advantage so that they can spend less time on administrative work.

And more time driving business impact and employee success. Welcome, Stacey.

Stacey Richey, Smartcat (01:43.448)
Thank you, Daria. I'm so happy to be here and hello listeners.

Daria Rudnik (01:48.362)
Well, I have so many questions for you, but I'll start with the first one. And I think it's a very interesting and important for many of us is why HR is is the function that need to lead AI transformation?

Stacey Richey, Smartcat (02:02.953)
At the end of the day, AI transformation is a business transformation. And as we all know, every single business transformation eventually becomes a people transformation. The technology doesn't change organizations, the people do. AI changes how the work gets done, how decisions are made, how knowledge flows, how people collaborate, how leaders lead, and what skills employees need to be successful.

Those are all the areas HR already has deep expertise in. And when I think about it and I apply this to SmartCat, we think about this through the lens of market adaptation. So markets don't move in these annual cycles anymore. They move continuously. That pace of change is continuous. And the companies that succeed won't simply have the better technology. They're going to be the companies that can sense that change earlier, understand what the change means.

Align their people and execute faster than their competitors. HR is the department. CHROs, you are the leaders who sit at the center of that operating model because every single one of those capabilities ultimately depends on our people.

Daria Rudnik (03:20.155)
I mean, I love it. And okay, I have so many questions to dive into that. And you're right. I mean it's change is a is a constant thing. It's not a project. You just say, Well, let's implement some change. No, if it's it's ever going and non stopping. I mean, you cannot avoid change now. But before we go deeper into that topic, please tell us about yourself and your journey.

Stacey Richey, Smartcat (03:42.126)
Sure. So as you've mentioned, I have been leading people operations for over 20 years. My background has always been in technology, and I started on the consulting side in private equity, and there is where I really grew up and had the blessing and fortune to really understand the levers that drive business growth.

in companies that ranged as small as maybe your five million dollar companies to those five billion dollar companies. And it was most fascinating experience because I learned then that the companies that make the most success are the people at those companies who are the most aligned, most driven, most healthy cultures. And from my time there, I've gone on the operating side and really been able to apply that

To every single company that I've worked at. And now I find myself at an AI native company in this world where AI is changing all of us and all around us, and this pace of change is so quick. And it makes me so excited to be a part of that change and to be at a company where I feel that is really embracing AI and embracing that change.

Daria Rudnik (05:04.175)
Yeah, that's that's that's amazing. I mean it's good that you can actually implement all of those changes and then be at the I mean leading in this AI transformation, being an active participant, building the strategy around that because it's it's all about the human and workforce. However, there is a research that tells us that like ninety I I think about ninety five percent of CEOs, they don't see HR as strategic partner in AI transformation.

IT, tech, CO, but not CHR. Wha why do you think it's that?

Stacey Richey, Smartcat (05:42.198)
I think it's probably because they are fundamentally asking a different question. And so when we think about the organization, one of the things that I think really helped us at SmartCat center on this AI transformation is we asked ourselves as an executive leadership team together, how do we get 10 to 100 times results using the exact same resources?

And we brainstormed this together collectively as an executive leadership team. So we had those differences of opinions and those viewpoints from sales, from our technology. And at the end of the day, we all know that it only comes down to three levers in a company your people, your processes, or your systems. And what we realized is when we asked ourselves the question of how do we get that 10 to 100x value?

We realized that so much knowledge lived in people's heads, scattered across Slack messages, meetings, documents, emails, and individual experiences. That's where the human expertise was trapped. And that's where when we started to say, okay, should we really go all in on this AI transformation? What we found was every time somebody left the company, it didn't matter the department

or simply forgot something or it was never recorded, we lost that part of the institutional intelligence. And that's why HR became an early adopter for our AI native operating model, because our work is fundamentally about connecting people, information, and decisions to deliver that value. We wanted our AI to amplify the judgment, not to replace the human judgment but

We recognized as a leadership team, we're only as strong as our people and we're as weak as our weakest people. So if we wanted that real change, we needed to begin with the people. And who's gonna lead that transformation? Your head of people.

Daria Rudnik (07:56.191)
Yeah, and from what I hear, like knowledge management is is one of the huge ways to utilize leverage AI in the organization because there's so much information, people know and then they leave and okay, you get lost. You don't have it. With the AI you have it. You know what I'm curious about? If you like how do you measure performance when like if is a developer or whatever, like a content creator.

And they were doing something on their own, but now they use AI and burn some tokens alongside with that. How do you measure performance together, not just the human, but human plus AI?

Stacey Richey, Smartcat (08:34.357)
Yeah, that's a great question. So we as somebody who is very data driven, I'm gonna give you the quantitative answer first because this speaks right to my heart. So sometimes HR makes the mistake of measuring AI only by hours saved or productivity. Like you're mentioning, every single developer is gonna be using some sort of AI coding assisting, right? But

We certainly look at productivity turnaround time and the administrative effort, but we also measure much higher level value work that, for example, our team can now spend on their time on or our engineering team. If AI gives me back 10 hours a week, I don't consider that a success because I worked fewer hours. I consider it a success because I spent those 10 hours coaching leaders, improving organizational design,

Solving workforce problems that actually move the business. And so, in a really quantitative way, we look at what we are calling the ARR per full-time employee. And this metric has always been around. A lot of your CFOs will know this is capital efficiency. And what it allows us to do, and the hypothesis that we've seen play out, is that

This extra level of productivity that is naturally coming from the adoption of AI results in higher amount of productivity per employee. So, in other words, you can do more with the exact same amount of employees. However, your employees are now also doing more higher value work. They're having those deeper conversations, they're making more strategic decisions. And so

On one side, we have our North Star, which is the ARR per full-time employee. But then we also have the qualitative side, which is how much of the higher value work are we really doing? And we're not replacing this extra bandwidth with more busy work. We're replacing it with this higher level work. And so when I think about that, it's making change earlier, decisions faster, and executing together that

Stacey Richey, Smartcat (10:51.308)
are gonna make organizations output.

Daria Rudnik (10:55.508)
I mean, what I'm noticing is I mean again, you cannot put AI to do more work. You you need to redesign the work and and that's that's such that's such your job. Otherwise you'll just you'll just end up like doing more busy work, checking AI's output all the time. And that honestly that leads to burnout. Like there's so many examples of again developers CN developers who do not write code anymore, but they kind of constantly check in AI outputs and they

Stacey Richey, Smartcat (11:06.837)
Exactly.

Daria Rudnik (11:24.274)
Moving from creators to auditors, which is which is tough. I mean it's it's very hard for them to do that. Do you do you have any special program of how do you understand how the work process needs to be redefined? Or how do you approach that on the organizational level?

Stacey Richey, Smartcat (11:41.955)
Yeah, so the way that we looked at it is a couple things. So we have what we call the intelligence fabric layer at SmartCat. And we started with recording and just gathering as much information as we can within the company to say and identify where is human work slowing us down or perhaps causing misjudgments or misinformation.

So we gathered all of this information. We recorded every single meeting, every single phone call, every single Slack or email. And from there, we were then able to extract and identify signals. From the signals, we can say automatically, hey, this is going to be a really high-leverage workflow that if we automated and if we applied AI to that workflow.

it would really pay off an XYZ ROI. And we went this about this in a very systematic way. And we talk a lot about AI and that transformation. It really starts with understanding the business need and designing work around where you're going to get the bus biggest leverage. Jack Dorsey wrote a really fantastic article around this, around the intelligence layer and work being

organized around jobs to be done and missions to be handled. And that's exactly what we're seeing at SmartCat too is that once you start to identify where those bottlenecks are, eliminate those bottlenecks, you can really start to have a more fluid, dynamic organization that is really built around what are the biggest problems to solve and where do we really need that human expertise, judgment, context, morals in order to solve.

Daria Rudnik (13:31.371)
I mean, that's amazing. To all our listeners, that's instruction on how to approach AI transformation. Like, listen to it again. Move back to like 10 seconds, one minute, what Stacy was just telling. Record, do the audit of everything you have, understand the signals, make sure you know the the business goals and how they'll match. I mean, that's that's that's amazing. First step. Thanks for sharing this. Do you have any example of like what the work

Stacey Richey, Smartcat (13:54.104)
Yeah, my pleasure.

Daria Rudnik (13:58.291)
the work process or or job or role changing because of that.

Stacey Richey, Smartcat (14:02.956)
Yeah, I can give a couple different workflows examples. So one of them that we use internally is on our sales team, on our go-to-market team, when they are prospecting with a customer and they are needing to research the customer. What other competitors might that customer be considering? Or how do you actually position our product in a way that matches the business value

For what that customer is trying to solve. What we do is we have a couple different agents. We have a market competitor agent, we have an agent that actually creates a value proposition deck directly from this research, and that agent reviews every single thing that's public on the internet, all of the sales calls, all of the correspondences with that customer. So the customer, by the time they're actually talking to one of our

Account executives, we are so informed, so targeted, and we have heard on multiple customer calls, wow, you really know our business. And the reason we do that is because we're leveraging AI in so many different ways. And our account executives, they're not creating presentations, they're not looking up the contact information on Zoom info or whatever web crawler is out there. And as they're doing all of this, we have

Instead of most companies use an AI recorder or transcription service like Gong or something like that, we have our own AI agents giving the account executive on the spot in the moment feedback on places they went really well and places that they could even explore further with the customer. And so that frees up the account executive's time because I honestly, I don't know about you, but I've never met a salesperson who loves creating a deck

for a customer. And so just being able to take away that administrative burden, have all that created for them, and have the messaging and the value so precisely articulated, it's been such a game changer for us.

Daria Rudnik (16:15.026)
Yeah. And I heal I love this like coaching on the job when you get like real time feedback on on how you do and how you develop and what you can do better. That's again another a great benefit of AI, like this this coaching and and making better becoming better in your job.

Stacey Richey, Smartcat (16:31.722)
Exactly.

Daria Rudnik (16:34.228)
Well, since AI is influencing so much work pl work processes, design, workflows, performance management, I guess HR need to change as well. How do you see HR need to evolve and change in the upcoming two to three, five years?

Stacey Richey, Smartcat (16:57.688)
and so I was the question how does HR need to change in relation to AI or just in general?

Daria Rudnik (17:04.98)
Well I think AI is a is a is a big driver for this change. But I mean whatever whatever you feel is right.

Stacey Richey, Smartcat (17:11.458)
Yeah, okay. So what I would say with regards to that, over the next couple of years, I think HR is really gonna shift from managing people and processes to designing intelligent organizations. So what I mean by that is HR is focused historically on attracting talent, onboarding, performance management, compensation engagement, compliance. Those responsibilities are not gonna disappear, but they're increasingly going to be handled by AI.

So the value of HR, in my opinion, is not necessarily gonna come from administering processes. We can automate a lot of those processes. It's gonna come from redesigning how work happens. So everything from like process owner to operating model architect, from knowledge manager to intelligence designer, from

workforce planning, you're not going to be doing workforce planning anymore. You're going to be doing capability planning. So, in other words, it's not how many people do we need. We can run that through a model. It's what's the combination of people, agents, and automation to give us that strongest capability. And then from in my opinion, the most exciting thing in this seat is we're going to be going from change management to continuous adaptation.

So today, the world that we live in, and we've never lived in this world before where change is a constant. HR has the responsibility to help organizations build the ability to continuously learn, adapt, evolve, and then the fourth thing, predict. So at SmartCat, we call that market adaptation, that ability to not only sense change, understand what it means, align the organization, take action, continuously improve and plan.

Because that's what we're gonna have in terms of the next future and this next horizon is going to be not how can you respond to change, it's how do you use this change as a leverage and really take action on it to predict for the next.

Daria Rudnik (19:15.2)
It's it's a great point saying like change is constant, but we as humans can experience different feelings towards change and different feelings towards AI as well. There's a Stanford Future Work study that tells us like 28% of people have some negative feeling towards AI, whether they're afraid that AI will take the job or the AI that the AI will take the human touch from this job.

How do you address that? How do you help people actually start using learning AI and yeah and become more fluent with it?

Stacey Richey, Smartcat (19:52.089)
I think you're a hundred percent right, Daria, when you say that the resistance to chain is is coming from AI is going to replace me. A hundred percent. Here's how I would think about it. I think we make a mistake when we introduce AI as another tool employees have to learn.

At SmartCat, we've intentionally shifted that language. We don't talk about AI as tools. We don't even say AI and tooling in the same sentence. We talk about AI coworkers, AI teammates. Close your eyes and you think of what is the best teammate that you've ever worked with? Who are they? They prepare for meetings, they summarize information, they surface things that you might have missed.

They draft your first version, they help you make decisions, and they take repetitive work off your plate. That's exactly how we want people to think about their AI coworkers. The goal isn't not ever to replace that human expertise, it's to give every employee a teammate that makes them better at what they already do. And just going one step further, this is the power of that intelligence fabric that's constantly scanning for signal because

That is, these teammates, they don't start from scratch every day. They are continuously learning your context. They're understanding your work. They're remembering previous decisions. And they improve through your feedback and your coaching. So over time, they become increasingly effective collaborators because they really understand how you work and what good looks like. And so I've found that

The resistance usually disappears once people experience that relationship for themselves.

Daria Rudnik (21:42.068)
But that also changes how managers and leaders lead and manage their teams because they they don't only have human team members, they also have agents, they have those AI teammates. How leaders need to change in that way.

Stacey Richey, Smartcat (21:58.915)
Yeah, exactly. And so with that, I think the goal of the leader is really shifting from having all the answers to asking better questions. Your AI teammates can bring you the data, the context, and even recommendations. Your job as a leader becomes making those judgment calls, setting the direction, and inspiring people to move forward.

Yeah, and so it's gonna be more about those softer skills, and I think those softer skills are gonna become even more important.

Daria Rudnik (22:36.318)
You said that I mean with AI, information is everywhere. Like there's no higher level access to knowledge. Everyone can access knowledge nowadays. And leaders are not the only people who have it. Everyone can have it now. But what leaders need to do is kind of start having those conversations, asking the right questions, making those judgment calls, making sure that's it's their decision, not AI's decision, making sure people are engaged and and and they really

They l they really grow together as a team. So the it the role of leaders is changing from control, from task delegation, to facilitating conversations to social connections to growth. Yeah, that's that's

Stacey Richey, Smartcat (23:18.196)
Exactly. It they'll be the ones it's the best teams who they can build, both hame humans and AI coworkers is who they'll manage.

Daria Rudnik (23:28.638)
I'm curious if you've noticed any how AI coworkers actually influence team dynamics. Well is it is it something changing when there is a team and there is an AI teammate during the team meeting? Do you see anything around that?

Stacey Richey, Smartcat (23:46.339)
Yeah, that's a good question. I don't think the AI coworkers will ever replace Team Dynamics, but they do change what teams will spend their time on. So for example, teams today spend a surprising amount of time searching for information, sharing updates, documenting work, being aligned. the question I always like to ask is, does your CRO or head of sales

know what is most important in the top KPIs and top deliverables for your head of engineering or your chief technology officer. And if the answer is no because they are not aligned or maybe I don't know because we work from a same source of doc truth, but I don't really know. The answer is you could be doing so much more. And so when you have this intelligence fabric that is your single source of truth across the company

Your AI coworkers take on so much more of that coordination, which allows people to spend more time solving problems, making decisions, collaborating. But also, there is impossible for you to not be aligned because you're working in a system that everybody is working with the same signal, same source of truth. And what my agents are teaching me and sharing with me is coming from the exact same layer in a very quantifiable,

very impactful way that every single person across the business, doesn't matter their function, is using and seeing and interacting with. And I love this example because when we think about this on a global scale and it talks about like the team dynamics, how does that shift? What I've noticed is that we are not spending our time aligning as much as we used to.

It's already there. It's already built in. We're already speaking the same language and using that exact same information.

Daria Rudnik (25:43.445)
Well that all sounds amazing, like the future I want to be in, which is great and I'm sure it is. But do you see what is the biggest challenge or a risk that you see working with AI agents so closely?

Stacey Richey, Smartcat (25:59.641)
Yeah. I think the biggest risk needs to be stated very clearly that if you're treating AI like a technology tool instead of an operating transformation, like an operating model transformation, you're missing the point. So it's putting AI into this bucket of this is just gonna make me

Code faster. It's just going to make me do XYZ faster. At that point, you really haven't thought about it on an organizational level. You haven't really thought about one level up at the entire organization. How can you really leverage the best out of AI? It's how do you connect AI across the organization in a way that is equitable? It's

transparent, it's helpful, it's serving that single source of truth, it's servicing the same information to people who need it. So in other words, if I ask my agent a benefits question, it doesn't matter which country I'm in, how I'm engaged with the company, I'm gonna get that same answer as somebody else who's asking that same question about that. And so

I would say that's the biggest risk. The second thing too is don't forget AI cannot replace human judgment. AI is only as smart as we put it in there. I know there's a lot of debate on there. Have we reached this moment of singularity? Is AI gonna take over the world? And it's scary. I know that companies and it's just human nature to figure things out. I get it. But at the same time, don't let AI control you or think.

For you. Don't forget AI can do the work for you, but it can't do the judgment for you. It can't do the critical thinking, the context, the morals, everything that makes you special as a human. It can't do that. And don't lose sight of that.

Daria Rudnik (28:04.34)
Yeah, yeah, let's stay human. That's that's what we have. That's what we can be proud of, making human judgments. Well, sis, that was an incredible conversation. I mean, I've learned so much from you about like how HR can approach AI transformation, the how it can help organizations speak the same language and have the same context. I have one final question for you. If you if you had a magic wand and could change one people problem or HR problem

What would that be?

Stacey Richey, Smartcat (28:37.206)
Woo.

Stacey Richey, Smartcat (28:43.66)
Let me think. If I could change one, what would that be? That's such a good question. okay, I'm gonna give you the answer and then I'm gonna tell you why, because it's a weird answer and it's not probably one that you would expect. So I would give every single human at all of these organizations the ability to continuously

Adapt and be really excited by that ability to continuously adapt. And we talk about and we used to talk about continuous learning. I think we're in this world now of continuous adaptation, which takes the learning one step further. But I say this, and then here's why I would say it: every challenge we talk about, whether it's talent shortages, skills gaps, burnout, disengagement, all of these challenges that we face as HR leaders.

It ultimately comes down to how quickly an organization can learn and respond and adapt to change. And so what I wish I could give in my magic wand is a whole workforce of people who thrive by being able to recognize change earlier, align faster, and evolve continuously. And so when I think about that, that's what I think about my magic wand.

Daria Rudnik (30:09.544)
Yeah, I stick on to that. I mean, absolutely. Being open to change, learning, adapting, growing will eventually make us happy because we accept the reality that it's ever changing. Thanks for sharing this. Thanks for telling about your experience. I think it was a very valuable episode for any HR leader who is trying to be at the forefront of AI transformation or just like have a peek on what it's like when companies like SmartCash.

How people can find you? How can they reach out?

Stacey Richey, Smartcat (30:43.062)
Yeah, thank you so much for asking. So please go to our website, smartcat.com, CAT. Yes, we love felines and kittens, but it actually stands for Computer Aided Translation back in the days. So you can find us there. And Daria, I also just want to say thank you so much for this opportunity. I really enjoy talking with people who are curious about what's next because I think

We're only at the beginning of what's possible with AI. So I really appreciate you having me and exchanging your thoughts.

Daria Rudnik (31:11.416)
yes.

The future is is really exciting. I'm I'm an AI tech optimist saying thanks for sharing your your story. That was really valuable. To all our listeners, thanks for listening till the end. If you like this episode, please give us five stars on Apple Podcasts and Spotify. Subscribe to our YouTube channel and stay tuned for the next episodes. Bye.