“We need to get our people to understand that they should stop seeking promotions!” my colleague stated. “They should be excited about their work and not worrying about being promoted.” We had been discussing who we felt were good candidates for promotions in that year’s review cycle. I responded “That is easy for you and me to say. We are executives and have some of the highest ranks in the company. The company created a ‘game system’ complete with these levels. The levels are things like ‘Sr Manager’, ‘Director’, ‘Vice President’. We reward handsomely the players that beat the previous level and move up to a new level. We send out nice congratulatory emails. We give extra perks and equity to those that level-up. And now you are saying they shouldn’t play the game? This seems hypocritical given that you and I made it the top levels of this game, benefited from it and now you don’t want others to play the same game?”

Promotion Game

When I joined PayPal as Sr. Director, I really didn’t even understand the title. I had several folks tell me, “oh, you will be a Vice President one day”. I told them that it hadn’t been a goal of mine to become a VP. And if you have read my article on my reluctant journey to management, you will understand that titles were never really a driving force for me. Obviously I am no different than the next person. There are rewards for moving up in responsibility and title. And I like it just like anyone else.

So what was the point I was making to my colleague? Was I suggesting that people should seek titles above all else? No, I was calling attention to the fact that we (and most companies) create these ‘game systems’ that reward things like seeking titles. And that we shouldn’t be surprised when people play along.

“As a leader, you must understand the games at play and the games you create. Most team’s seemingly irrational behavior will become understood when you know the game afoot.”

If we don’t want people jockeying for titles, then we need to change the rules of the game. And changing the game is easier than changing human behavior. While no company is free of playing games, Netflix had a fairly pure approach to this. For the time I was there (2007-2011), I never had a single discussion about promotions or had anyone ask to be promoted. Why? We didn’t have levels in engineering! Everybody we hired had the same title of Senior Engineer. Were there other levels? Sure. I was a Director of Engineering. Above me were VPs and C-level. But Netflix rewarded on doing great work. Levels and titles weren’t coded into the game. In fact salary increases and other financial rewards were assessed annually for how it compared to the overall market. It was never tied to your performance review. You could be an individual contributor and make much more than your director. So Netflix just created a different game and it sidestepped the “game of levels” for much of its staff.

The Magic Score of 72

When we rolled out an agile process at a company I once worked for, the leaders were enthusiastic about the majority of the teams scoring 72. The process had been a real slog. And really anything but agile in the way it was rolled out or incorporated. Instead we had 20+ metrics that teams were measured on. And bludgeoned when they didn’t maintain a “proper score”. In order to simplify the process, a formula was devised that computed a single number from the team’s progress across the myriad of metrics. 72 was that magic number.

Now put your thinking cap on. “What is the game that got created?” Yes you are right. “Beat the agile assessment”.

“What is the way you do that?”. Bingo. Once again you are right. “Score 72.” That was  the game plain and simple! And that is what the teams set out to do. Score 72.

What was the real outcome we desired? We wanted our teams to have a continuous, iterative way of working that ensured we had a good feedback loop and could build better and better customer products. We wanted our teams to be agile, not just have an agile process.

But what was the behavior the game created? “Make damn sure you score 72!”

A primary job as a leader is to ensure teams keeps thinking with first principles. Why are we doing what we are doing? What are the outcomes we want and how do we get there? Unfortunately these kinds of corporate games happen in spades and create vanity metrics that make people act in weird ways. People shortcut to the score and no longer ask why they are doing something, but instead get fixated on the measures.

So in this case I couldn’t change the rules of the game, but I could get my team to play a different game. I called my leadership team together. And I told them, “Ok, here is the outcome we want to achieve. I need each of you to really understand from the teams what 2 or 3 things you need to see improvement on in order to become more agile. And at the same time I need you to realize that there is this other game happening that if we don’t play well, we will have all kinds of hell to pay. Our first priority is to do the right thing. But meanwhile let’s figure out how we will hit the score of 72. We will play just enough of their game to keep the noise at a minimum, but at the same time we will create the right game mechanics to produce the right outcomes.”

It turned out scoring 72 was really simple. You just had to do three things consistently (out of those 20+ areas) and you would score a 72 or above! 

The funniest (sad?) moment for me was at the end of this multi-year journey to hear victory declared over reaching the score of 72. I was a stunned when I heard “It is so exciting that our teams hit the target of 72! When we were first designing this process, we had no idea what the right number would be. We settled on 72 but didn’t know if it was right or not. And here we are today celebrating hitting the number! 72 was indeed the right number!”

Such prognostication right? Who knew? You set an arbitrary target and you reward and punish according to that target and lo and behold people play the game and hit the target. Sadly, many people saw it as a victory. We were celebrating arbitrarily winning at a false game while not necessarily reaching the real desired outcome.

Know the game. Have your team play by the right rules!

The reality is all companies play games. You must know the games created by others and created by you. You must understand what behaviors they incentivize and thus the resulting outcomes. Teach your teams to understand the same. Being aware of the game at play is a big piece of the puzzle to shaping healthy teams.