Culture Communication Isn't Enough + Employee Incentive Systems (Philosophy #18)

go oh yeah we just go who knows what we're doing all right welcome everybody to philosophy Hot Topics all right so on Friday on Friday this time we are talking part two about some specific topics that I believe have a lot of people in the games industry are impacted by or talking about I think part two here is a little bit more personal in the sense that these are topics that I'm personally talking to a number of folks in the game industry about and I don't know how much we'll cover but I know what we wanted to start off with is talking about culture like culture and basically in terms of culture what I wanted to talk about is culture installation versus communication if we get around to it maybe we'll talk for a bit and you know we don't have much structured but the other topics that we may want to cover have to do with incentive systems something that we've briefly touched

upon before in the past in philosophy Friday and maybe also I think an interesting topic that we may want to cover has to do with how product driven should PMS be or how well do PM's need to know product we've talked about different kind of team structures and approaches to product management but that might also be an interesting topic as well because I have noticed in the industry and we can talk about it later in terms of different types of product managers there are some where it's critical to be as deep as possible on the game or the product that you're working on and others where you know people don't know anything about the game that they're working on so we can talk about that but starting with culture culture installation versus communication I'll give the setup Brett and go for her

I'll give this set up and then we can kind of dive into it but the setup is that I believe that I was I just totally flopped I just totally screwed up in terms of culture this word culture we can talk about the definition of that at my studio Leela games and basically what I mean by that is that I actually believe that I'm probably in the very top maybe even like 99th percentile of Executives or companies in which we talk about culture we write it down and we communicate it but I felt that the actual embodiment or manifestation the the actual acting upon what I was calling culture and our values was not being followed through so if you went to my if you went to employees at my at our company and you asked them about the culture you asked them about the values things like that I think a lot of employees would be able

to tell you what our philosophies are they'd be able to recite a lot of things because we talk about or I talk about it so much and I've given a number of talks about it but I think the action it wasn't just it was walking the walk instead of just talking The Talk and so I in terms of people in terms of other people like or in terms of the companies or no I I'm a hardcore [ __ ] Brett I I I definitely want the walk but I think that and especially I I think this was this is actually compounded too by what happened when we went from remote work environment because of covet and whatever else and then we finally got our office set up we all came into the office and it's like okay guys you know what what how like I have spoken so much about hard work you know it's like what are you guys going on five 501 where you

got what the [ __ ] dude oh yeah we have a hard work work ethic oh see you guys later you know what I'm saying like it's um and and then when I went down through a lot of the actual embodiment of our values I didn't see it so uh and maybe just one other point um I I'd love to also hear how you Define culture but through this experience and also talk about some of the advice that I was given by some of the other folks who I talk to for advice on this issue but one thing that I learned and this is something I got from Paul uh one of my co-founders is that there's a difference between values and culture and and so this is how I've now internalized the definition of values and culture values is am I and so for us the way we Define values are the set of philosophies practice this is beliefs that we believe are necessary for our company to achieve success

in the culture is different it's the manifestation of the values so how you actually Act and the specific work practices in in a specific environment for me that's how I Define culture now and I think that that also then must take into consideration the specific Regional uh differentiation so you know we're starting an office in India in Bangalore there's even differences in India between Bangalore and Mumbai and things like that but like the specific ways we Implement policy and how we specifically do things in that office to me that's how I now define this word that we call culture what are the specific policies what are we actually doing in that office as culture and values is like the set of beliefs so we may actually like

if we started as a second studio in Montreal or in turkey or in the Ukraine or wherever I believe that the culture is going to have to reflect some you know not major differences but some differences in terms of policies and things like that because of the local differentiation but let me now I've been talking a long time so I'm going to shut up now turn it over to you Brett what do you think so first what's your definition of culture and how do you think about this problem I'm I'm calling like cultural cultural communication versus cultural installation or the actual practice Yeah well I was pretty excited to talk about this topic because I I I'm with you I don't know if I'm gonna say I completely failed but I've definitely struggled in the last year and a half to base to have the culture manifest across the whole organization I think that's probably the best way I can put it in

terms of yeah what we think of as values we haven't written out I think you know that we have a pretty uh comprehensive uh Like We call we use git book but basically like a internal source of information right like everything so much is in there and when we have people join we send them there and they're sort of the first the first page they read they read our values pretty standard stuff right and we write them out and they're things like treat people like you like to be treated and stuff like that right like um and we write out and then there's a little video that I describe so that's how I kind of like introduce it the other thing that we do is we um sorry I don't know if I'm answering the question how I Define it but I guess this is how I think about it more I don't know if I've defined it well okay and then I I think this will answer the question so this is how we kind of explain our values right and I think we

write them down and then we have them and then we reference them or at least I do right I say like hey for example like I take communication very seriously like I I think it's important for people to communicate clearly concisely to really spend time if they're going to write an email don't just oh this is just my thoughts bro and it's like two pages long like no that's not cool here um please reference and then I'll send a link right um and so that's our values the implementation of it is one is we do live by it from day one and I think that's something that we do really well that some companies fail to do it's like oh we're going to treat you a certain way while you're onboarding we're gonna sell you on this culture and then after you're onboarded boom there's another culture right it's like super nice to like super Intense or super whatever we were very hands off from day one we're very hands off on day 30 we're very hands off on day 360 25 right um that's how we kind of implement it I

think though the other thing that I do is editing right so if I see it anywhere I call it editing but it's kind of like our definition of management we don't have the classic managers I I don't like I never like managers and so we don't have managers and we don't have one-on-ones and we don't have peer reviews all those things I didn't really like and didn't find them too valuable so we edit a lot where and it's mostly driven by me unfortunately where it's like like I said if I see an email and I do this not fairly frequently but maybe once every two months where I see so it doesn't take long because people get so like taken aback that I'm actually commenting on their two paragraph email being too long because these emails aren't that long but I'll just be like that that email I'll reply the email but then I'll be like this email's too long and it doesn't take much for them to course correct now where I've failed is we doubled in size I think last year like pretty much and definitely like that didn't trickle down right like what

I'd like to see is constant one thing is constant Improvement like I'd like to see people go into the get book make changes themselves fix the processes recommend changes and I just don't see that like there's a huge disconnect between me and sort of maybe even two layers down like there's a connection to the first layer like the leads and then there's just not really that connection below me in fact I got an email from someone today it was like yeah the you know X Division I felt like was going great until this quarter and it's like I haven't heard anything and I and I'm thinking to myself yo why didn't you email me like like why are you I had asked like how was it why is he telling me three months after it's been bad that it's been bad right like that just that's a failure on my part but it's just like a clearly uh the the culture is not implemented so I think that kind of answers the question is like can we Define them with written documents and we Implement them in the onboarding and

then the constant editing with the caveat that it hasn't worked and I have started to try to write like all hands meetings like or all emails where I'm like hey it's really important that we do this right that doesn't actually seem to be that effective either um so I'm I that's why I said I was kind of interested in this topic because I haven't solved it all right yeah let me actually follow up on a few points that you made Brett well I guess first of all I think that we probably have different views on managers and management but I think that would be a super interesting discussion for a future topic and I I've got a whole framework around that but like one of the points you made about you know codifying the culture clearly is important and then you're saying that you basically edit people meaning like as you see things happen you're you're giving feedback about the culture and one thing that I noticed is that yeah I 100 agree

with you on that I think the other thing too though is that there are I don't know maybe for lack of a better word people who I would probably call yeah yeah yeah [ __ ] okay and what I mean by that that's a great name what I mean by that is like you can codify as much [ __ ] as you want right you can make it simple you can make it long you could like make it clear send them [ __ ] did you read this did you read this did you read this and um they'll be like yeah yeah yeah yeah yeah yeah yeah yeah right yeah so but then they'll do the Opposites what you're saying yeah okay and and some some of them may have even read it but that we we had a couple leads who we let go of where you know I asked these guys five times did you go through the values document yeah yeah okay let's walk through it what is this uh I don't know like [ __ ]

right yeah and then then we actually also just recently we let go of someone after they were on the job for two days oh that's awesome it was kind of like a mutual because because they came to the they came to the company and I was like dude I talked to you about the culture he's like yeah yeah I I didn't know this was for real it's like what so so I think that um you were lying so I I think uh that's great a few things here is that I I think that it's in terms of so values like codifying what we're calling values is one thing but then I think there's two other elements that are important so you also you talked about the editing the feedback part which is 100 critical but the other part I think that's important especially before someone joins your company and I think we're starting to Now integrate more

deeply is we also talk about but like really like almost exaggerate like to some degree I will exaggerate our culture because I want to make sure these yeah yeah [ __ ] get the message you know what I mean yeah so like um I will I will exaggerate our work ethic I will exaggerate things you know and you know I mentioned the five [ __ ] rule you know what I'm saying like I tried it and I don't I don't cuss that much at work but I do I do curse at work at times and at times I I can yell at people but I don't do that a lot but I try to exaggerate just because it's like so I I think there's the the feedback and editing part but I also think there should be an onboarding part where before someone joins it I what I found and maybe a little bit more in India too is that people just want the job yeah yeah okay yeah you know I got it yeah

so you got to be careful about whether they fully understood what you're saying did they look at it so you gotta like walk through like okay no no let's actually walk through this step by step and really see if you understand this or not right so I I think there's like the um the communication of it and then the feedback piece um and then maybe one other thing um I would I wanted to comment on that you spoke about was like you felt like it was important or you you you wish that people would edit uh some of the stuff that you're working on and I do think that again you know now my definition of values versus culture values I think is more long-term like you don't you probably won't change your values that much and for me the values of our company were built based upon so many years of experience and Lessons Learned and things like that but how you

implement that I think should be adapted and adopted on a regular basis and in my opinion may be different from office to office depending on the Dynamics of the specific people the culture the the culture meaning like you know uh you know Indian culture versus Chinese culture versus Western whatever or that that kind of thing yeah I think it's almost should be on a different different groups I I look at it as almost like the military right where you have the Marines the Army the Navy Seals and you have different cultures for different groups right so for example our report business is very repeatable or be like the live Ops group for a game Studio or a live game studio right like that group needs to be pretty um militant right they need to be pretty disciplined they need to get out content every single Thursday or whatever they need to get out of content every single week right it needs to be very disciplined standardized

Etc right whereas the new innovation team or the new game development team could be more like the Navy Seals and that culture could be very different right they're the the long-haired Navy Seals that don't need that structure right they're they're doing something super unique and first time right so they don't need that standardization so that's how I kind of think about it in terms of implementation across the board like I don't think that there's everyone must be like this in the company you know it's it's and in fact I'm actually thinking about building a little SWAT team to to like Implement my crazy ideas um I think what yeah I think that's important what you're saying is important the situational context right making like if you have values how you implement it policy wise for different groups experts versus novices or whatever I I I I definitely agree I think that helps because it makes sense to the to the employer employee right like we're like this because we release

a Casino report every third you know third Thursday of the month right like that's what we do so we have to be like deadline based Etc whereas my other divisions where it's like okay you're more exploratory or we've never built this new web app before or whatever we don't have a deadline you know we just don't have a deadline because I've never done it before so like how am I gonna I'm just gonna put I mean we've debated deadlines before but like so it's just like you it's situational context exactly and and making it make sense to the to the team that like this is why right and I think that helps a ton because you're not just like this is the culture you know it's like no this is the why behind it this is going to help us make money this is going to help us do better this is going to help us get a report out every third Thursday or whatever it's going to do it's gonna get a live Ops dude you know to be at a certain Cadence that we think we need to keep engagement things like that yeah I mean maybe even another specific example just to drive the point home for folks would be for example let's say you

have as as an objective of the company code quality was important and you have a team of Engineers and so like one policy or cultural manifestation in an office of like let's say junior Engineers could be like we're going to have this practice around pair coding right and so everyone needs to pair a code there needs to be a a more uh more formalized system of code review but let's say you have a team of 15 20-year vets right you've got this small Navy SEALs team it's like hey guys we are going to implement you know and then these guys will be like what yeah like come on you know you know what I'm saying so yeah I think that would be a another specific example yeah and or people to people and what I think we're kind of both sharing as a problem is what I would sort of describe as Legacy culture like they come to your company right and each company is different and

some companies are more different and liquid and grid is extremely different right like we do a lot of things different and Leela games I think is is very different as well right like I maybe would say extreme but it's pretty close to extreme at least from my standpoint yeah and what happens is you're like hey this is how we do like we do like this is how we interview right this happened a couple months ago I think I mentioned on the podcast a while ago I was like this is how we we hire right we don't interview because I don't want you who is our lead writer spending time interviewing right and because I just don't think it's going to add a literally two months ago this guy's been with me like two and a half years and he's awesome 99 times awesome he's like oh you know I was I think I was gonna have phone calls you know I saw him say like he was setting up phone calls with these writers or something and I'm like why like but I actually and I didn't that Tone's not correct it's what it was more like why because I was curious because if you think that there's a way to improve the process I'm I'm totally for

it right like like great make a suggestion let's test it let's go through it let's iterate on it tell me the why I'm totally fine it's not like it's gonna be a huge cause for you to do three phone calls with these people but don't just go do it don't just go do it you're not telling me so you're not improving the product and then I asked him he's like well I thought it would cut back in time I'm like dude this whole system is designed for reasons right like I'm saving money on your time because I don't think it's accurate I think there's biases like there's multiple different reasons why you're not doing it and it just go well I'm gonna take my Relic ideology from the last company I worked at which is we just call people right and I'm gonna bring it over to this company and I've done that too right where I left Zynga that was that was really hard because I think it had a very different culture I would say almost to the point of extreme and when I went to another company it was like oh my gosh I had to shed all of that I have to shed like the bluntness the numbers driven approach the

intensity like the the lack of EQ you know I have to shed all of that and go the opposite direction right and there's a lot of great things about this in a culture but there was also a lot of things that were just so different from this other culture I joined and I got myself into trouble and I think that's what we're seeing right it's like you gotta shed all that and especially when you're at like a company like liquid and grid illegal games because it's it's purposely different and it's very important to the company to be different like that is your sort of Competitive Edge right it's like if Leela games like every other company then it's just a small gaming company that's all it is right I mean right so the fact that you're different is like very important yeah and maybe the other thing to talk about here is like how do you solve this problem of cultural installation in and I actually did talk to a number of folks and there are a couple of people in particular who had a number of

really great suggestions and maybe we could even like if we want to dive even deeper into this maybe I can even invite them on to talk with us Brett uh if they're if they're willing to but I haven't gotten specific permission to you know I should probably ask them about um whether I can share some of the things they talked about but a couple of things that I thought were interesting which I think I can share is one point from one of the guys who suggested that and I won't say who he is but like um when it comes to fixing the culture like the thing that we need to understand is that sometimes and I think you'll probably agree with this right is that um the fastest way to fix a culture is to get rid of the person okay somebody's not okay someone's not a good cultural fit um I you know we've talked about this before I try to be more optimistic about that but I agree like the fastest path

to change is to just get rid of the person because it requires significant investment time and sometimes it requires a dramatic what do we have on that was awesome I was talking about going to remote company dude he was awesome remember we had that panel discussion and they were like 150 people and they wouldn't promote and he said he had to just like get rid of so many people oh sorry I'll think of it later oh um yeah it was like the pixelberry guy and then someone else anyways sorry I should interrupt it but no but yeah oh no no worries but like yeah so I think that's one thing to consider about cultural installation is that are these the right people and if not the fastest path is to get rid of them or to you know do the the painstaking hard work of trying to get people to adapt to the culture and sometimes I think the point that I was trying to make um was that this is like the Elon

Mustang right like it would oftentimes if you want that to actually happen because people change so slowly generally speaking is to have a dramatic consequence right this is why Elon Musk will be like okay hey do this thing or you're fired on Monday right like he literally gives very short windows of time and the consequence is you do this or you're fired and and so like that that's one point I want to make about the cultural installation and then the second point is the um you know I thought this was a really smart um framework was that with another guy I spoke to and I'll I'll actually reach out to both of these guys and maybe we can have a follow-up conversation because the you know the conversations I had with both of these guys were so I I thought very very insightful um is like do you have you actually documented your cultural manifestation and so what he meant by this is like he was like okay and he pulled up my values document when I was talking to him and

just listed in a table he just listed each of my values boom boom boom boom boom boom and then he's like okay for this value what are you doing in the company that manifests this how are you manifesting this value in your company what are you doing specifically is like oh okay that's a great idea every value what are we doing at the company to support that value or to give feedback to that right so um I thought that was another really smart way of thinking about cultural installation is to be very specific about and to think about how does this stuff actually manifest in your company how is it surfaced how is it manifested so um a couple of in my uh you know in my opinion um kind of good insights from both of these guys but yeah maybe we can even go even deeper if we want to yeah it's Friday almost 30 minutes in right now on this so any thoughts on that I'm

interested in this topic so it's fine by me but yeah we do both of those things right I mean we we hire people and then we that basically that first month of them being on board we're clear about the fact that that's a continuation in their hiring process and that's really where we're vetting their cultural fit right like we don't really look at their culture so the the interview if you want to call it the test period what would be sort of a classic interview period all we're really concerned about is are you good at doing the thing we want you to do right and the thing we want you to do we're testing you on right so if if we're trying to find an editor we're gonna have you add it and that testing is going to basically showcase that you're an amazing editor it does showcase some of the cultural stuff because we're not interacting with you and a lot of our stuff is fairly vague so we'll look to see if you Google the answer or or a lot of or for editing for example some people will fix the actual put like we'll put mistakes in

the actual like written uh post and we'll see if they fix those and things like that so if they go the extra mile well yeah okay that's a good sign right then we onboard them and then in that first month that's really where we're seeing okay are you a good fit do you get your work done are you disciplined can you figure stuff out uh do you do you are you okay with the fact that we don't have happy hours and talk about your weekend and all that stuff right and that's where we and then we let people go the second part which I think is very Bill Bell checking in is the culture by serious consequence and I do do that as well uh you know if you don't I just let a lead go last week because was she wasn't fitting the like because she wasn't um not let go I stopped her contract but she wasn't part which wouldn't fit for the culture right and it's just and that's what they talk about Bill Belichick like he doesn't yell a ton I know there's some videos where he does yell I think that so but he's generally actually there was a PM

at Rocky who went uh played for Bill Belichick and Harbaugh and he said Harbaugh would scream his head off all the time right but he but he was but Belichick wouldn't say anything and he just caught you right and that is like the implementation of your culture it's like that extreme and that's how I do do that what I what has happened in our company was is is The Relic culture and what happened was is that basically people I I I delegated the onboarding and hiring process to other people and it's very difficult to be as extreme about people as I am meaning if you get a let's say a b b plus person in right and they look pretty good most people will go oh yeah we can train them and we can um help them along and I'm happy to answer their questions according to the liquid and grit values

that's that's a that's a no like if you're a b b plus player it's either a hell yeah or no okay so what happened was is I delegated it in that Relic culture I just expected people to do more than I think they're really comfortable doing is like letting go be player B plus player and they had so then they they coddled these people for a month or two like you would in another company again not a liquid and great way thing to do and then after two months they go oh you should be on your own like we do at liquid and grit well now you have an on there on your own person who doesn't like being on their own who's a BB Plus player and now you have 10 of them right and then all of a sudden we've got these 10 people asking a ton of questions not figuring out [ __ ] on their own not editing stuff not looking at our documents bogging down everybody right and I think I mean ultimately it's on me but I think that's kind of what happened was that it's like if you're gonna be

extreme with stuff it's when you hire I think it's hard for us as Leaders to expect that kind of extreme thought process from people like below us um in the organization um because we're I don't know I don't we we have extreme thoughts you know what I mean JK like I like your thought of work like it's sort of like once you can that off to like the higher man or something they're like yeah but JK doesn't really mean you know what I mean like it's like that it just like it's watered down a little bit I think and yeah yeah and then yeah um I think that's what happened well let me follow up on a couple of points you made so so one one thing in terms of like and we've talked about this before the the Fire and Ice approach right are you are you cool and collected and by the way Elon Musk also talked about does he yell a lot he said that over the past year he's rarely yelled at people and one thing um that I think about is that

I think it's also situational so Harbaugh you know in my opinion one of the greatest football coaches oh gosh never no no my opinion in my opinion but no but he has but look look at his terms okay look at this look at his turn around at UC San Diego and at Stanford his first two years with with the Niners what I mean that's very impressive anyway let his record speak for itself okay now is he underperforming a bit at Michigan uh maybe but but here's here's the thing so Harbaugh has um often worked with people who are not Pros right he's had to take underdeveloped people and figure out how to develop them very quickly fire if you're working with Pros you don't need to have that much fire they kind of get it and you can just say

dude you need to fix this or you know we'll cut you but I think when you're working with underdeveloped people it does require a little bit more fire it does require you to get messages messages across through exaggeration and extremism and so I do think that's a difference I think that if Harbaugh with the Niners was he yelling a lot I I don't know but I would guess he was yelling a lot less and more ice than fire with the Niners but I guess what is more extreme um you know like like what is a more extreme thing I'm gonna yell at you or if you don't do it or or I'm going to calmly say if you do not do this I'm gonna fire you see I think it's the same but that's what he wasn't saying that he was saying that Harbaugh would yell at you okay he'd yell at you a lot Belichick would be saying if you don't do this I'm gonna cut you come yeah like that was different he was he was but was he a five-star recruit

from like a Powerhouse high school with with Pro coaches and he knows everything or was he an underdeveloped guy that needed more coaching and training and needed that extremism to get the message my theory this is probably a separate podcast because there's a situation when you're in college at least before they had the the transfer portal players didn't have any any um Power so you could you could literally do whatever you wanted to a college coach could scream at a college player all they wanted they'd have to if they transfer that take a tire year off basically like killing their career okay in the pros they have a lot more power so I mean it's college football is I mean have you seen the South Park on college football I mean it's like if yes I mean it's hilarious I mean you basically don't have any power what are they taking advantage of kids you know like you're just taking advantage these kids sure you give them a scholarship they're

not they're barely going to class so you can scream at them all you want they just they they just don't have a lot of optionality you know I mean it's but yeah I mean back back to the point is like is it back to the point is that you have to be really intense about implementing it I think is the point because I remember when we were smaller and I would grow people on emails and I just remember people being like thinking dude this guy I literally email him once a month and he's telling me it's too long and my and my email is two paragraphs long right but I'm like dude if I let that slide and I let the next guy slide on the next side of that which is a very Steve Jobs type of perspective right it's like B players higher C players C plus players hire D players right it's like the little that you give it bleeds into the organization and compounds over time right like when you just give that little like oh it's no big deal we'll just keep that person who's like a b

player in that position that b player higher is the B minus the B minor is higher is the C the C higher is the D or oh I'm not going to mention that about the email because it's kind of awkward whatever that email becomes three paragraphs to the five paragraphs to the ten and all of a sudden you've got all these crappy emails going around the whole orientation yeah I mean it's it's the Jocko it's the Jocko philosophy of the job of the leader is to maintain the standard of performance especially and I think but let me also oh go ahead well especially I think a lot of things get like get get overlooked because you're small right so you're like ah it's no big deal we're five people and I I'm like no that's not what you want to do because when you get to 20 it's so hard to change right like you can't wait till you're 20 to go oh oh wait wait wait like you know don't schedule really stupid meetings with everybody because we're now we're 20 people right because you're you're now four times the size you got four times many meetings um you've got to do it from day one you know if you're a small company I think like you guys are doing

yeah and maybe the one other point I wanted to follow up which I think is an important one is the point you raised about how culture for you starts at the recruiting phase and this was another point that one of the guys I talked to um challenged me with he's like is your is the source of the cultural problems you have also rooted in your recruiting process are you doing enough in terms of the filtering in the recruiting process to make sure you're bringing on the right people which I thought was a really important point now we actually had implemented and actually because of you Brett because I remember you you had on your liquid and grit podcast you had interviewed Nico ruary who talked about PBI performance-based interviewing and we had after I'd listened to that podcast we had implemented PBI based questions or at least I have in our interview process but then one of the other things that he mentioned which I thought was really cool is he walked me through the star

interview process which is you know um and we're just starting to look at that now and and starting to try to integrate some of that so we haven't done it yet but um I really like the framework in terms of like for the values of your company like you know having a like a like a set of questions to test for some of that stuff and you know again we're we're just starting to look at that but I do think that's the other thing that companies and Executives should look at is you know if you are serious about the culture and by the way I did run a CEO survey last year about you know what is the number one priority of a CEO and it was dramatically culture right so clearly everyone thinks it's important well not everyone yeah but many people think it's very critical and you know and one area to to um to really look at is to your point the recruiting process are you doing it

well enough um so looking at things like PBI um performance-based interviewing types of questions and um at least for us we're starting to look at the star system as well it's hard man should we move on to another topic I'm still thinking about this I I I gotta figure it out you know no I mean we can we can definitely move on I mean the last thing I'll say is that I I just I just haven't figured out I mean I still you know edit and stuff but like ideally everybody's acting like a CEO you know and Singa did a really good job of that like I think it did a very good job of implementing their culture excellent job right well Pinkus had this like everyone's a season yeah no I mean everyone's a CEO and everyone was a CEO dude like one little biggest story before we go and I'll just give an example because I think he did an awesome job yeah we had a meeting it

was Friday lunch with all the product managers so there's probably I don't know 60 70 people in this room and Pinkus was there and he's in the middle I can remember he was in the middle of this big circle of PM sort of standing on the outside and one of the guys one of the PMS raised his hand and sort of says like you know what do you think about this issue or something like that and it wasn't it was a it wasn't a huge it wasn't something that Pincus it was really responsible for it and pincus's response which I freaking loved was I don't see any red tape around here about what you can and can't do you're the leaders of the organization you go fix it like why haven't you fixed it what have I what have I done to make you think that you can't go and fix that what part of our culture makes you think that that isn't a problem that you can go solve like why are you bringing that to me right you're you're the product manager

of this organization and it was like whoa like I I loved it you know and it was just an awesome response because it was like go fix it dude you know like why are you bringing that up not what was it like a he did it much more eloquently I mean not maybe eloquently but he more clearly than I am but his main point was the same which is you're bringing up something that I've made it very clear you can go fix if you think that's a big issue go do it don't fix it you know we'll reward you for it you'll get you'll get a big bonus and all this other stuff and there's no red tape nobody's saying you can't do that you know so right so maybe we hit upon one more topic since we ran so long on culture and so that would I think we should talk about incentive systems and I'll which I think that's great because I mean I actually was thinking about like a second system like why would like why would anyone you know comment on my work right like

that's what I asked him to do but there's really a lot of risk right I mean they don't know me yeah right so the the setup for this is that we are seeing especially in the current environment now we we talked about global recession and potential macro economic factors in the last podcast and how that might make things a diff a different situation but the current situation from an employer perspective that we're seeing is that even at startups I'm even seeing people who are one of the first 10 employees jump within a year right because the job market is so hot right now especially gaming super hot and you know I think we have talked before about this notion around incentives how do you create a system of incentives to really promote the behavior the culture the values that you want to see manifest in a company and I know I've talked about this before

but let me also bring up a couple of quotes from Charlie Munger some of some people don't like Charlie Munger I I think Charlie Munger is great very insightful but one of his famous quotes is about incentives and he says quote never ever think about something else when you should be thinking about the power of incentive so he's saying power of incentive is very strong further well I think I've been in the top five percent of my age cohort all my life in understanding the power of incentives and all my life I've underestimated it and never a year passes but I get some surprises that pushes my limit a little further so main point being what we're seeing today is we're seeing a bunch of people jumping we're seeing kind of comp go crazy so then how do you create a system within a company to align employers and employ employers

and employees in the same way and to help in you know incentivize people to stay at a company for a longer time or to support the values of the company and you know one thing you know I know you know Paul Brett for the audience Paul is my co-founder and he's a crazy bastard and so one of the things that he's done is like for a specific role he pulled all these resumes he put them on a [ __ ] mural board and he like plotted like career progresses I'm like what what does this do but it's actually really insightful in that you see these people and you see for a specific role like typical career progression paths and people just jumping every like within about a year right and so clearly what we're seeing is that in the current job market in the current environment and not only for India but for the West these people who are just jump jump jump jump because it would appear that whatever incentive

system and they're jumping so much I don't think it's the company I think it's the system at the companies to incentivize them to stay but I don't know what do you think Brett uh yeah that's a that's a tough one um I would say another area of weakness of of mine is incentives um at least monetarily uh I guess that's the first thing I would think about is how do you I would I would think more broadly in terms of incentives okay a couple actually I do have a couple thoughts okay so why don't I think more broadly in terms of incentives right I think to me money incentives or salary is sort of like um releasing a sale in games right it's it's like very easy product management it's not that creative and it kind of works to a certain extent right like it has a short-term bump right like when you pay someone for example like when we got paid at Singa wild bonuses like 50

with stock and salary both like it almost became standard you know and that's what they say about bonuses like it almost becomes in your mind that you just like normally get it and so I that's the first thing I would think pretty widely I mean there's flexibility in work there's flexibility and location there's medical there's Dental there's ownership there's autonomy there's tons of different things that you can there's um happy hours and culture right there's like so many different things that you can offer as incentives the level UPS titles right that's a great thing uh to think about and like I said I just think but like oh give them a raise right like that's that's probably why all the salaries have gone up so much is because people aren't like thinking very creatively and you don't want to be competing with Facebook and or meta and Google and stuff because they just have like the deeper Pockets the second thing I would say is uh that

I think that um I totally forgot what the second part was in my incentives um all right yeah I don't know what I was gonna say about it well maybe you could hold on to that thought maybe I could also add a bit more context um so what I I think there are and maybe we could actually have a separate podcast that focuses on this and we can invite a few folks to come talk talk to us as well but um I remember there was a TED Talk that spoke about the impact of offering higher Financial incentives and after a certain point it's not that effective apparently and I I'll go back and try and find that um but also when I think about India versus China I do notice a pretty dramatic difference in the way that incentives are structured so um in India for example not many people value or know about employee stock options for example and so there is less

like Silicon Valley everyone wants Equity right um in India there's less on that and more on what is my CTC which is like just the cash comp that they're gonna get and I think the culture right now or the current environment in India is basically I'm just trying to get step UPS in the cash that I see in my hand in my pocket every month so they're gonna try to max out their cash comp and then they don't they don't even also they also kind of undervalue equity because they're in their minds they think after a year the easiest way for me to get an increase in salary is just to switch companies it's not to stay at the same company like that which is the easiest way the right way yeah which is also largely true in the West too right you get like a 10 15 when you leave a company so that's actually kind of like um you know India may be extreme in that

regard in terms of cash right now right that's that's that's kind of like the and that's not everybody no it's I'm making broad generalizations here but if we were to think about it as PMS from a strategic perspective that's kind of like the general environment in India as opposed to China like so you know when I was at fun plus one of the things that was crazy is just the sheer amount of variable comp right and so you can literally get more than your yearly salary as a bonus and so I remember this like even starting two months from when that bonus is this to be coming out like all of a sudden anything I say immediately done yeah the effort right work ethic everything we did quarterly at Zynga because it was like you got your bonus like a month into the quarter

and it was two months before the next grading you know so it's just like you get your bonus and you're like I gotta start working tomorrow like there was no time off yeah the quarterly yeah yeah so China so like India again it's all about cash now as much and they don't want variable they just just I want you know as much guaranteed comp as possible China there is so much variable comp and the other thing is that and I can't speak to all companies but I know a number of companies and even at fun plus you know I you know in terms of like um if the game does well this notion of profit sharing or these huge bonuses whether it's a REV share or like you will get and um I recently talked to somebody who talked about how there's a person at their company that has like a

two million dollar bonus if they hit the now obviously it's got to be a big hit but then that guy gets paid out too and he's like these guys work like [ __ ] like they want that bonus yeah the well a couple things come to mind well the first thing I remember what I was going to say which is what I was trying to say with comp is go wide like think of different things and then be creative with salary and I think we're not creative enough here in the West on salary right it's like fixed salary yeah and Equity like it's so simplistic right there's hourly pay there's extra pay we do something for example if we'll like if someone wants to level up we'll give them tasks that are in a level up and then they charge at a level up salary for that work so they sort of transition to the next level gradually right and then they actually invoice on two different salary bands so that's sort of like an example of creativity and you're talking about two different cultures that do it uh I came from hockey where we would I'd be

literally making like one guy's name making it like 80k and the guy next to him has a million dollar signing bonus right like with a 800k salary and they're both going to go play the same exact game right and it would and everyone also knew each other's salary so that was an interesting that's the kind of dynamic I came from where then you come from then you go to work and everyone sort of more or less makes generally the same amount and no one knows each other's salary so I mean in terms of a company perspective variable is much better right because then you you can you can hold back on costs if if you're not doing well and you can reward People based on their um based on their performance we don't do bonuses I think I think again I I stay a little bit away from a moment only because I feel like my my hypothesis is that people want to work um and I feel like some of these things are short short term and short-lived like you get these people who get two million dollar bonuses and they burn out

or might have to get a two million dollar bonuses they're like well what's the point now right so for me it just in my experience with with Zynga for example like once the table turned on zynga's Equity I mean everyone was everyone laughed right not everyone but let's say like a ton of people left so does it work like I I I as long as things are good it works and that's not exactly a good system right because you know you don't want everyone just to jump ship when they know the money's gone so that's why I've kind of stayed away from uh um I've also been paid a lot I did I like experienced the Netflix model I think that's actually a very good retention play where you get your salary based on like that meets the bonus and salary of other options and that that was very effective on attention because you're just like you have to take a serious salary hit and a lot of risk to jump ship and if you can afford to do that with like your top players I

generally think a little bit more like that right like I I if they're the top players like I kind of want them to be getting paid a base and a bonus in their weekly paycheck that is good enough that if they go somewhere else that other company is going to go oh my god um we'll give you you know 60 of that of a base and maybe you'll make that in a bonus right and they're going whoa I'm literally getting guaranteed by Brett and liquid regret this amount and you're saying I gotta like now take this risk based on your like ious or whatever your promise note like yeah that's a that's a very effective um salary incentive structure I found but I don't think yeah I think what I think the difference is is I think a lot of people are giving that on day one right and we don't give it until you're like two years in right like you start out low and then the people who are the amazing workers at like underground we have like a lot of them but like the top of the top

I shouldn't say this on the father but yeah like they they get like you know yeah we had to edit this out but they they get like their salary goes up goes up you know pretty dramatically right to the point where I'm like you're completely happy with your salary like you know like yep okay great because I don't want you jumping [ __ ] for that reason like there may be another reason but it's not that one right um yeah I think it may be it to the point that we've already underscored quite a few times around situational context right like variable pay probably depends on the kind of um what the employee is expecting what they're willing to accept variable pay in India for example just because it's not done a lot people are going to want more and also are you is your company even set up to do variable pay meaning variable pay tied to specific performance that is well communicated to an employee and is that is also

evaluated fairly because the other thing too is like if you have variable pay and you have a shitty manager yeah then that's that's like the one reason why people leave is they have shitty managers I can I jump in here so the one thing I just had a vision because this is what I think is ideal like I'm because we have people like people like crap on Millennials but we have great workers who are millennials but a lot of times I'll be like hey do you want to work an extra week and I'm like no I just want to work three out of four weeks but they're amazing but they only want to work three out of four weeks a month but they're amazing right what I think is probably ideal I'm gonna see if I can build this and I'll get i'll maybe report back he's like a spreadsheet right where you're like okay you're a 2 000 you're let's say you're worth a million dollars right and then you have like these inputs and it's like three days off or let's say you know days off and then you can like toggle it uh medical you can toggle it like you know

bonus structure you can toggle it and then it just like changes your salary based on what you're interested in because like you said I mean everyone's different I'll have Millennials be like I don't care about medical in fact most of the people I have don't care about medical right so I don't want to go off and like get the medical they're all like yeah we're totally fine with medical right but it might be something else or something else um and let them kind of pick and choose and then you just have this like this like toggle that just changes that million so the millions stays set right that's my point and if like you toggle up so you work like one day or one day a month you know the actual salary pay is like half of it or whatever you know does that make sense and and yeah it does it does um and maybe the the one other point I want to bring up in terms of incentives is and and I do think we should probably have another talk on this to really break it down in more specific depth and talk about different ways of approaching it but uh and we may have I may have talked about this before is that understanding

what the employee is looking for right because there's going to be some employees who just want financial gain we have a number of employees who their number one ask was we want we want more training can you build a training program for us and that's you know you do that we're not going anywhere you know it's like okay I mean and and like and we do have and so we're actually formalizing more rather than making more informal like specific uh so we do have like a skills development Matrix and things like that but it's not we don't have it manifested in terms of here is a curriculum and a class and recording like classes and having specific like you know materials and things like that rather than teaching them kind of you know in the moment and things like that so I would say that um maybe the other thing to understand about incentive systems is to have a utility belt of different types of incentive structures or things that you can give to employees

that might be completely Financial related that might be variable um Equity related or cat or whatever it might also be skills development it may be you know uh the ability to lead us to certain project or it might be other things that because everyone's different and different employees may be looking for different things I think the the system that you implement in the specific way in which you create these incentive systems for different people in the company would be important to retain them or to you know get them to act in the way that you want them to and that's that's I think the other part we didn't talk about is then also in systems of incentive around behavior and culture support but you know maybe we can save that for another time yeah it's two topics that both of us need sounds like need uh to to improve but this was very interesting to me because there are

two topics I I you know like some things I do come in here I'm like I'm pretty con like I've thought about this I feel pretty confident about it there's there's areas in my business where I'm like I've really spent a lot of time under this and these are definitely two areas where I wouldn't say that I wouldn't say that well and clear it clearly incentive systems is something nobody's good at right like I mean we're seeing some of the best companies like literally the best companies lose people even when they like in one case I know that to retain one person at a certain company I won't name the company they had the 5x this guy's salary that you know then and this is a company that pays well you know so anyway yeah it begs the question of whether it's possible I think there's some of that too it's like you know especially when you're small it's like if somebody leaves there is an element of a reaction right I mean people just leave and and they're not necessarily

going to tell you the real reason they left or this and that right so I think preparing for people to leave is also really important and being okay with them leaving is something that you just want to try to build in your systems you know because no retention system is going to be Flawless ours is actually amazing like we honestly have had like one regrettable departure in six seven years which is kind of insane to think um right but but we're we're you know but you got to be prepared you know like you just gotta be yeah for it but um and another future topic before we close here just just so I don't forget is to your point like one of the other things to think about when it comes to like whether it's incentive systems and and things like this are like also this notion of anti-fragility which we should save for another topic on another day but like how do you create how do you design your company or your

team to be anti-fragile versus being highly optimized but you know you don't want departure one person totally [ __ ] you up that is an amazing topic and I'll tell you because it's so under thought of it's just like humans in general right like we are always thinking of like the small optimization and never like the Black Swan event you know I was just talking about it with yeah and it's it's it's manifesting right now at a macro day right like all the supply chain [ __ ] ups right it's just like oh the fact that we designed for efficiency so little sympathy for companies that are having those issues in China right now I'm like you you took the thing that makes your company all the money right and you went and had it developed in a country that's on the other side of the planet that you know nothing about that has that has that that you know like you don't speak the language you don't know the people the culture is very different

than ours there's some things that don't seem to be you know and then some like for what for like three four percent margin savings like it's such spreadsheet management it makes me sick like it's funny I see I was at um I was at Phil's you know Phil's Coffee yeah I went to Phil's for the first time in like three three years right because the pandemic I've been there and I go up to the like I go up to the coffee makers you know how you used to do it where you like go straight to the coffee makers and then like chat with you and you can like tell them what you want they can make I like go out to them they're like oh no no no we don't do that anymore you go over to the cashier and I'm like I go I so so instead of doing the bank teller split line right I go over the cashier like and I don't have a a great conversation and unique relationship with the person who makes my coffee and like customize it like no no you just go pay right and I went over there and I was with a buddy and I go I bet you something changed with ownership and I

went over there and I was like is something changed with the Phil's ownership he's like yeah the the original owner of Phil's has is very like I guess he's very ill unfortunately and he's no longer like working on it and we have a new owner of the company as of like two years ago and I was like I I knew it dude it's like it's such a it's such Excel Management right like oh we could improve efficiency by having people go to the the cashier right like we'll we'll look at we'll save it we'll save one percent but you've taken away what's so unique about Phil's it's like I mean obviously the coffee's great but like that that like direct communication with the maker of your coffee just gone just like let's just get rid of that because we'll get one percent you know and it's like God this like Excel spreadsheet management decisions is so bad okay all right anti-fragile team structure future topic coming up but yeah I think we both got a bounce right now for anyone else who has made it this far in the conversation thanks for speaking

with us and we will catch you next time yeah email Brad don't email me I got way too many emails right now all right cool thanks Brett thanks [Music] thank you foreign [Music]