If you can align people with passion, experience and expertise, you'll be remarkably successful...we've been successful with teams of 15, pretty democratically, proposing the two or three games that they think they have the best chance of executing on. We don't let people just randomly stop supporting current revenue products, but we've never really had that issue; usually they want to update them too long, because they're passionate about them. We motivate the right behavior with an aggressive quarterly bonus plan based on total revenue of their studio, so if they can make that revenue by supporting current products, by all means do. As that title gets long in the tooth, you're going to want to be developing the next one in parallel. Teams have been remarkably entrepreneurial about making decisions about doing a version 2 versus creating a sequel, for example.
The only thing we worry about top-down is, do we have people with the experience, expertise, and passion, and are they working on things that align with that; don't force the square peg in the round hole. Make sure that people are being rational about maximizing their earnings potential. And we have to prevent portfolio conflicts, so we don't let people build the same racing game for release in the same month.TechRepublic: How have you guys gotten beyond the typical product management scenario, where every product manager is the champion of his own game vs. looking across the entire portfolio for the good of the company? Niccolo: That comes down to a sense of urgency and it comes from the top. We've had to churn most of our prior management team to get to a group that's OK with the iterative, optionality program. A lot of the new executive team were rising stars in the organization, and open-minded because they weren't part of the old regime. I put my emphasis of action on ensuring that you don't have fiefdoms where everyone has an empire that they're looking after. The compensation alignment is important here. Our executives get paid for company results, with only about half coming from something specific that they control. It's entirely cultural. If the CEO acts flailingly irrationally, or with a lack of urgency, then everyone else will do the same thing. If the CEO keeps a pace of constant urgency, constant paranoia about how you could be better, people tend to get with that program or they don't last very long. TechRepublic: So when you look at some of the old line industrial companies like GM and Kodak that have had challenges staying relevant, and you look at your philosophy of agility, is agility a deciding factor, in your view? Niccolo: I'm a big fan of studying what's happened to the music business or what's happened to Kodak, and I draw inspiration from what I've learned. Platform shifts destroy companies. Intel is a positive example, looking at how they got themselves out of the DRAM business and moved into the microprocessor business, but most companies are not nearly as successful at negotiating change. That's the model that I hope Glu can emulate. But agility needs to be balanced with reading the tea leaves correctly. Getting the timing wrong, too early here or too late there, companies can expend all of their resources flailing, and never building that thing that will replace the products that are going away. Kodak was a flailer because instead of picking one business they tried to be in chemicals, digital, printers, they tried all sorts of stuff. If they had read the tea leaves as well as Intel did, they would have selected the niche in which they could bring value and build a business there.
Glu used to sell our games for $10 a download, and I saw the "freemium" strategy working in China, Japan, Korea, and said this is coming to the US and we have a chance to pioneer and lead. We stopped development completely of all games tied in to feature films when I got here, because I looked out at EA and said, "I can't beat EA, support our legacy business, and build a smartphone business and develop a freemium model, all at the same time." We have to burn our bridges and throw the whole company into making the new thing work, as if you're a startup.
Rick Freedman is the author of three books on IT consulting, including "The IT Consultant." Rick is an independent consultant and trainer, working, through his company Consulting Strategies Inc., to help agile teams and organizations understand agile practices and migrate successfully.