A company’s leader must act like a game designer. Before a CEO can lead their company to “win,” they must define the game that their company is playing. A well designed game must meet the following criteria:
- It must have clear rules, objectives, and boundaries. Any game that does not have these elements, regardless of domain, cannot be played effectively.
- The players’ success within the bounds of the game must map to real world financial prosperity for the company such as an acquisition, IPO, or elevated stock price. That is, winning the game must have actual value within society.
- The game must be winnable by the company’s employees in proportion with the expectation of investors. The chance of winning some games may be intentionally low, but the difficulty level must be in line with the potential ROI.
It is the responsibility of all company employees to play the game designed by the CEO or, if necessary, influence the parameters to change. In devising strategies to win, managers may design their own games to optimize the company’s play in the area they are responsible for. This entails designing games that, if won, achieve progress against objectives of the top-level game. For example, a CEO may design a game with the objective to grow web site audience that can be sold to advertisers. The VP of Product Management may then design a game (among others) for his/her reports to increase pages per session to various areas of the web site. A product manager, to win the game designed by the VP of Product, may design a game for the engineering team to reduce page load time. In theory, if engineering can win the ‘reduce page load time’ game, traffic will increase on the site which will fee feed the overarching goal to sell advertising. The sales team will design and play a parallel branch of games to maximize revenue based on the site’s audience level.
Company leadership should be very thoughtful in how game design and play is distributed throughout an organization. While everyone in the company, including the CEO, can toggle between wearing the game designer hat and the game player hat, there are some some important conditions to maintain.
The individuals responsible for the real work — tangible contributions to the product — should spend the vast majority of their time as game players, not designers. Maximum productivity and workplace enjoyment is achieved through entering a flow state. Flow requires clear objectives that are in line with your abilities. While it’s healthy for all employees to question the goals they’ve been given, if they lose trust that have been given the right game to play, they will feel perpetual anxiety that destroys flow, and consequently productivity. An optimal organization does not require individual contributors to constantly redesign their own game.
While a company struggles with execution if game design spreads too widely at the bottom of an organization, a company can also falter if game design is too consolidated at the top of the organization. In his book, The Hard Things About Hard Things, Ben Horowitz emphasizes the importance of pushing accountability down an organization. The question, “Is my company playing the right game?” is perhaps the hardest, most important question a company faces. It is essential that top minds in the company help the CEO answer that question. Otherwise the company is more likely to win the wrong game. This applies to the top-level game and all of the sub-games. In my answer on Quora to the question “What does a great product manager do day-to-day?’, I enumerate a few of the wrong games to play given the phase of the product.
To apply these principles to improve the operations of your company, here are some things to think about:
- What game and sub-games is you company playing? Are they well designed according to the criteria described above?
- Who are the game designers and game players in your company? Are the primary contributors able to focus primarily on playing? Is game design overly consolidated at the the top?