Andrew White: Hello. My name is Andrew White from Saïd Business School at the University of Oxford. And I'm the host of the Leadership 2050 Podcast. I'm here with my guest interviewer- Adam Canwell: Adam Canwell. Thanks, Andrew. Looking forward to this one. Andrew White: And we're here with this minis series focusing on the whole topic of transformation, something that Adam and I have been working on. We're delighted to have Gaude Paez with us from Riot Games. Gaude, welcome. Gaude Paez: Hi, I'm really happy to be here. Thank you. Andrew White: So if I could kick you off with a big question, transformation means many different things in different contexts. For you, what does it mean? How has it shown up? And in a sense, what's the transformational challenge that you're facing? Gaude Paez: It's funny because before we got on the line, I was thinking through original definitions of transformation, and you hear a lot of that in biology. And one that stuck with me was really just the metamorphosis during the life cycle of an animal. Right? And so you think about things like a caterpillar to a butterfly, things like that. And that is a really good, I think, analogy for what happens in business as well because businesses have these different life cycles. There're new technologies introduced, there're new things that happen in the world that can impact whether or not a business can succeed and deliver on its goals. And the ones that I find the most interesting are transformations in culture, the health of your employee base and the way people work together towards that common goal can really make or break a company honestly. Gaude Paez: If you have the best technology and the best product, but your business as people is not functioning well, that can make the difference between whether or not a company succeeds. So that's, to me, I think what I've been closest to in my role as a communicator and in corporate affairs. So for Riot, we've gone through obviously many transformations as a company, we're a PC gaming company. So our first in flagship game, League of Legends, exceeded expectations. It became huge. The number one game in its genre. And working at Riot exceeded people's expectations. So by 2015, in those first 10 years, we were named one of Fortunes top 100 best places to work. We were actually number 13 on the list, so alongside Google and Salesforce and Twitter at the time. So really a place that people craved and wanted to work for. Gaude Paez: But after that, as Riot continued to grow, both in our size and our success, as we scaled, we did face a number of challenges. But also a reckoning in our industry and specifically reckoning around Riot as well. So the entire game industry at the time, probably in 2017, 2018 was really under a microscope for issues of gender discrimination, inappropriate workplace behaviours, things like that, very male dominated industry. And Riot was caught up in a lot of that. And unfortunately mentioned in things like articles and lawsuits, and that was obviously very demoralising for the company and our employee base. And so that kicked off a first cultural transformation led by our people and our D&I teams to upgrade those processes and those programmes that you really need as a grown up company to make sure that you have a safe inclusive workplace. Gaude Paez: We established more concrete values that prioritised inclusivity. So that was an initial cultural transformation effort at the time to really take this crisis that had happened, and how do we make sure that we're then shoring up to ensure that it doesn't happen again? Gaude Paez: But what was interesting is despite this work, so you get all the processes in place and you get all of the nuts and bolts of what you need as a company to make sure that you are creating that safe place to work. What we didn't address at the time, or probably just didn't have the foresight to address at the time was the healing and the trust that needed to happen and be rebuilt within the company. So if you take, back in 2017, negative sentiment, negative press stories, a prolonged period of public litigation, and then you even take that to 2020, then this shock and fear and isolation of a pandemic. We saw that there were some pretty unhealthy behaviours and misaligned expectations that emerged within our company. Gaude Paez: And so we went from being a company that had been about open communication and sharing ideas, and it's morphed into call out culture on internal Slack channels. So for anyone who uses Slack, there's a lot of very easy, real time feedback, but that can quickly turn into unproductive feedback and piling on, if people aren't coming to it with the same expectations. We went from being a company that really supported players in local communities, which we still do, but that again, evolved into demands for social activism on every single issue, even if they had nothing to do with our core business or our industry or even our core communities. So what that resulted in was sponsorships being cancelled, partnership decisions being challenged very publicly. Gaude Paez: It was a regular occurrence for leaders to be questioned and very Riot wide channels, 3,500 people on a Slack saying, "Why didn't we do this? Why was this decision made?" And again, creating fear and demoralisation across the company, which it wasn't really going to foster that creativity and that open communication that we wanted at the company and that had existed before. Gaude Paez: So ultimately, those challenges and those fights and disagreements that were done in very public forms across the company started to distract our teams from our core mission, which is player focused and being focused on our players. So it, again, came to a head and came to a time where we realised mid last year, we have to reshape our culture and reset expectations so that we can actually be the company that we want to be, focus on our players and really gear up for the next phase of growth. Adam Canwell: Fascinating backdrop to the transformation you've been leaning into. And you pull out quite a lot of themes that we've found as we've gone through the research. One of them, what you see at the heart of really effective transformations is a compelling why, or a deep belief that brings people together. And it's almost for you that you want to be the gamers company and that deep mission that you've got, that almost allows you to have a very honest conversation about where you need to go. And that seems to come through in a, bring ourselves back to who truly are we and what do we need to do to stay true to that. That feels like that's a really core part of your transformation and what is important about your transformation? Gaude Paez: Yes, definitely. And I think we are lucky where maybe other companies struggle in that we had always had that very deep focus on our mission. So it wasn't about how do we define our mission or what our place is in this world. Our transformation has been kicked off more about, "Okay, we know what our mission is. We all feel very passionate about it. How do we get there and really refocus and clear out some of that noise that's keeping us from really delivering in the way that we can?" Gaude Paez: So I do think it helps to have that core mission really well established within a company, because it allows you to get to step two and really start talking about the why. I'm sure there are probably organisations that have to step back and just start by reframing and recreating their mission, which I know is much harder. Gaude Paez: So yes, this was definitely a huge driving force in our cultural transformation. Being in meetings about this, it was never about, how do we fix people? Or how do we change it to be something that our CEO wants or our founder wants? It was more about, look, this is our mission. And we are seeing behaviours that are not going to allow us to really focus on that. And it wasn't just about the employees are doing X. It was really about, Hey, we, as leaders actually need to set those expectations and be really honest with our Rioters about what we want, what we expect, what they can expect from us. So it was definitely a two way transformation as opposed to, Hey from the top, here's how it is. We don't like what you're doing and we're going to move forward. So I found, I really respect the leadership team at Riot for thinking through this in a really nuanced way, knowing that if you really want true cultural transformation, it can't just be, "Here's what we think. Now you go do it." We have to have a dialogue and also set expectations about ourselves. Adam Canwell: And it sounds like as well, because link to the need to have a compelling why that we all believe in. What we are also seeing is that as organisations deliberately working on creating a safe environment where all voices can be heard, where people can truly work together to shift it forward. And it feels like what you were saying is you could see that you'd lost some psychological safety actually. And actually one of the core planks of success in your transformation was going to be deliberately working on an inclusive environment where all voices could be heard. Gaude Paez: Yes. And I think that's a really good point you make, because I think a lot of companies, including ours, we talk about being that place where you can bring your authentic self to work and all voices can be heard. But that's a really delicate balance to strike because if certain voices are heard much louder than others, it can create that cycle of, "Hey, I don't want to speak up. I don't necessarily want to promote my opinion or present this idea." And that was some of the things we were starting to see on our internal company wide channels, we were starting to see those behaviours crop up. And again, I think everyone knows, and as a company we know you're free to offer your opinions, but you start to see it just naturally evolve into, without any sort of guardrails, naturally evolve into louder voices than others. And that just doesn't always yield the best ideas or represent an entire company. Andrew White: And I think as Adam said, so much of what you're saying resonates with our research. I think particularly that this isn't about going out and telling a workforce how they have to change. It's about starting with yourself as a leader. So I'm just curious, when you look across the leadership population, were there certain skills or certain approaches that really moved the needle? Were there people, not names, but were there people that stood out? What were they doing? What was the skill that they brought? Once you've done that work on yourselves and thought about how the culture has to shift? That's, I guess one of the things we're really interested in at a practical level. Gaude Paez: I think, again, what I really value about Riot is we don't have a group of three or four people that get into a room and make decisions. So we have a very open and collaborative leadership group at the top that then also brings in those subject matter experts or people on their teams that you think are really going to have a major impact on this work. So by the end of this transformation project, it was definitely a lot of voices in the room and a lot of people playing different parts. So, I definitely think that one major individual who stood out in all of this was our Head of Internal Comms, who had been at the company for a long time, really understood what it was like to be a player and really understood sort of the evolution of the company and had been there at a front row seat with the troops understanding what their experience had been. Gaude Paez: And she was very instrumental in helping, I think, not just shape the messaging we were giving, but also give feedback to our leaders on, "Hey, maybe we should couch it this way," or, "Hey, if I'm a rioter and I hear this, I might take it this way or hear some additional information that might be helpful for me." Gaude Paez: So really having those subject matter experts get involved early, I think was really helpful to us. I have worked at companies before where you see decisions made from the top. You bring in a few SMEs afterwards for the execution of it. And then there's that gap that you didn't really fill, which is let's get the employee experience and get people who are really close to the ground. I also think that one tactic that I felt was pretty successful was the core team working on this did take time to socialise it and preview some of these ideas with folks within the company that we'd identified as influential and maybe people who might not agree with the direction and really getting their input and seeing, "Hey, how do you feel about this? What can we be thinking through that maybe we're not thinking of." Gaude Paez: So again, it was really deliberately done, not in a reactive way, but in a pretty methodical way to make sure that by the time we rolled it out, we'd gotten enough diverse perspectives on the matter. So I do think the long historical knowledge of a company was important in some of the folks that were involved in this. I think empathy played a massive, massive part in a transformation like this. Gaude Paez: And I can tell you a bit more about exactly what we did, but you'll see there are other companies that have done similar things in a very unempathetic way. And we luckily have the ability to learn from that and see that, Hey, actually bringing a lot of empathy to this conversation and clarity to the conversation was super important. So we did have a number of people on the working group who brought a lot of that to the discussion. But I'd say the biggest factor in all of this was just having leaders at the table who were open. Everyone comes with different opinions on what a culture should be like, but no one came to the table saying, "This is what I think and it has to be this way." Gaude Paez: You have to have leaders who are open to dialogue and really open to alternative ideas in order to get to a consensus. So I'd say those were the big things that stuck out to me. Adam Canwell: Is there anything that surprised you as you look back that you didn't expect or things that worked, that you weren't expecting to work? Gaude Paez: I was pleasantly surprised by the reception to the discussion. So to give you a bit of background on how this rolled out. Basically by mid last year, 2021, we were basically coming up on our next camp and our company uses the climbing analogy, climbing up a mountain. You get to camp one and camp two, and these were all different points of our strategic growth. We have a strategic growth plan we were camp one, we had just finished camp one, coming up on camp one, and this year we were entering camp two. And so there was this moment where we knew, Hey, in order to really have the organisation we want to be able to go and really push through camp two, we need to just reset these expectations now. So by mid 2021, we really started to roll this out over time. Gaude Paez: So we knew we wanted to get to a place where we gave people, here's what we expect, here is what we will be to the world and here's what we won't, here's where we will play, here is where we won't. But it needed to be couched in something larger. It couldn't just be, Hey, we want to make these cultural changes. So we made the strategic decision to really roll it out as part of the onboarding into camp two. So to get into our next phase of growth, we knew we were going to be making a number of changes. We were going to be changing our compensation model. We were adopting a new operating model. We were going to be pretty clear about our remote work policy, hybrid work model. So we knew there were a number of things that writers would need to know if this place is going to be the right place for them. Gaude Paez: So we spent September through December of last year, really rolling out all of those things, including what we expected culturally. Clarifying our social mission, refocusing our D&I efforts and laying out what we expected in terms of professionalism and good citizenship. So this was really a four month communication and implementation process, so that writers could have the full picture of what to expect when they go into camp two. And not to mention also our strategy. So talking about, Hey, here are the big bets we want to take. Here's the strategy we want to take into camp two. Because there may be writers who also didn't agree with that. And so it was really laying out and giving them all of the information they need to decide, "Hey, is this where I want to be for the next few years of my career?" Gaude Paez: And after laying all of that out, in January of this year, we gave Rioters the power to decide whether Riot was still the place for them. And so we introduced something called a Q Dodge, which is a term of when you leave the queue in gaming and essentially it was an amicable opt out. So no questions asked. Anyone who did not feel like this was the place they wanted to be anymore could, they had two weeks to decide and could go in basically resign and they would get their full bonus, which is normally paid out in the spring, along with their long term incentives, et cetera, and three months of salary. So it was very much just a, "Hey, let's take some time, think about what you want to do. Think about if all of these things feel good to you, whether it's the cultural changes or our compensation changes or our strategy, and really take all this information in and decide whether or not this is the place for you because once we start moving towards camp two, we want everyone to be full steam ahead." Gaude Paez: And I was pleasantly surprised that our Rioters really took that information in, digested it and asked really great questions that came from a place of curiosity, sometimes concern, sometimes disagreement. But I think sometimes as leaders you can get into your own head and overthink what your employee population, how they're going to respond. And I think I was pleasantly surprised and reminded that our writer base is a mature, curious, intelligent group of folks who took the information and did exactly what we'd hope they do, which is digest it, ask questions and make a decision for themselves. So that was one surprise. Gaude Paez: I think the other surprise was, we laid out this Q Dodge opportunity. Sometimes you have unintended consequences of those kinds of things. You give an opt out, and then you find that a certain demographic within the company then leaves. And so one of the worst things that could have happened was obviously we do an opt out and then all of a sudden, you see the majority of people taking it are women, or the majority people who take it are underrepresented minorities, because that's not what you want out of these kinds of decisions. Gaude Paez: And what was really interesting was, we haven't published the full results, but what we saw is about 4% of Rioters took the Q Dodge. That's actually about the amount of people that we see, amount of attrition that we see in the spring, usually when people take their bonuses. And so we saw that attrition moved up a little bit in the year since we did this in January. But that percentage was virtually identical across every demographic cut. So we did look at whether we saw women take this more often, whether we saw African Americans and Latinos take it more often. And we really saw a very similar, in some cases, almost exact distribution of Rioters opting out across. Gaude Paez: So to me that was actually a really nice relief, because you never want these types of programmes to then reveal that there is a particularly unhappy demographic within your employee base. So those were two things that were just pleasant surprises to me. And I think I would advise any leader that is thinking about having these types of tough conversations or transformations to really give people credit for just how they receive honest conversation. Adam Canwell: I remember working with an insurance company years ago, who did a similar opt out and they lost all of their graduates. So they lost the future talent of the organisation, which was in some ways it was a really interesting data point because it showed that they really didn't feel committed, brought in, that they could build a career. So it was a really interesting point of a voice that didn't feel included. Adam Canwell: And Andrew, I remember early in the research where you were saying, there's a lot here that looks like the creation of a social movement. And there's something, a, the analogy used, Gaude, of movement up, movement through into camp two. And the pause point you have as an organisation to actually ask people to think about it and then recommit to the movement based on genuine belief is a really interesting moment because if we commit to a movement together that we all believe in, we're much more likely to get there. It is got real strong resonance with that, have we got a movement that we are creating together that we're moving on together? Gaude Paez: Yep. Yep. And I think there's also, you may lose really great talent. And that's the thing I think a company does need to prepare for is, you may have a rockstar who doesn't agree with your strategy or doesn't agree with your new compensation philosophy or doesn't agree with your cultural expectations and that's going to have to be okay. For something like this to succeed, you have to take both the good and the bad with it. If you really truly want to reset or at least get everyone aligned with your path for growth. Gaude Paez: So again, it's early days for us, obviously this just happened in January, but I definitely have seen much more productive conversations. One actual part of what we did was we changed our internal communication channels to be a little bit, actually more productive for people who genuinely had questions. So rather than these large open forums that were just places for people to express themselves to an entire company, we actually created channels that were specific to our pillars. So if you have a question about eSports rather than just blasting it out into the open air and expecting our CEO to answer it, there might be our President of eSports or one of his SMEs might actually really have a much better answer for you. And you might actually have a much more interesting dialogue and information sharing and feedback loop that way than just having these large open forums. So we still have open forums, and we did make space for that, but also was just a small change in how we directed those communications, I think really made a difference. Andrew White: Just one of the things that really strikes me, listening to you, is how human this process is, at so many levels, the culture is essentially a human thing, mostly. The workforce are human. The leaders are human. The outside world and how that was changing within the industry you are in was largely a human problem as you described it. And yet you are one of the most sophisticated tech companies in the world. So did technology show up at all? Or is this really a human journey we're talking about? Just to give you an anecdote from another interview we did, a huge tech implementation that was radically changing the company. And when we asked the interviewee the split between the human and the tech, I think it was something like 80/20 or 90/10 in favour of the human. It was all about the people and about taking people with you and the social movement that Adam talked about. And I think it's one of the things that surprised us really is how much it's pivoted towards the people agenda, even in very tech orientated companies or tech orientated change. Gaude Paez: Yeah. So I think tech help us facilitate, you had to take the technology into account when you were thinking about, okay, how are we going to use the tech to help facilitate that? So in the case of internal communication, how do we then restructure our Slack technology and our Slack channels to help us do this? So it was really much more of an executional consideration in this particular case. Again, this was a cultural transformation. But I would say even at the product level, if we're making decisions around how we're going to serve a certain player base or whether or not to change, let's say, our path on a particular game, or even things like how we're going to, let's say implement ways to better protect our data. These are all very tech, heavy types of changes. But what I have found most important has been, how is it communicated? Who's involved in the decision? How do we bring people along for the journey? And how do we give people the why behind it so that they understand why this change is happening? Gaude Paez: It's all very much about the human element of this. And I have a theory because I feel like a lot of our younger folks in our industries, it's a matter of it's... Gaming attracts very young creative people, but you see it, just a whole generation entering the workforce that is used to really getting to know politicians, celebrities on social media where there's an intimacy that I think existed that didn't exist before. And I do think that employees expect a little bit of that out of the leaders that they see at work. Now, obviously, people shouldn't become best friends and things like that, but they want to see the human side of you. They want to understand why you're making these decisions and whether it was hard for you or what your considerations were as you thought through something. If you have to make a tough decision, they want to know if it bothered you, did it sit well with you? And these are all things that I don't think were present 20 years ago in a workplace when I started out. And I do think it's going to be something that all companies, no matter what industry will have to really take into account more. It's just that human factor and that transparency. Adam Canwell: And one final question for me, Gaude, just knowing what you know now, if you were talking to a leader who is just about to start a transformation programme process, what advice would you give to them? Gaude Paez: I would advise, because I experienced it myself that, when you're a senior leader, yes, you have a huge view of the business and you understand probably more than anyone else at your company how you work as a corporation, let's say. You may not have the most knowledge though of what it's like to be an on the ground employee. And that's just the nature of being a leader. You can be as in touch with your workforce as you want, but it's really helpful to get folks who are mid-level managers, people in roles where they're really seeing what's happening on the ground and bring them along and bring them into some of these discussions. Because I think it's easy to forget how something might be experienced by a 26 year old narrative writer or game designer. Gaude Paez: And so I do think don't underestimate some of the distance you might have between the day to day experience of your employees. And it's helpful to get folks who are closer to that in the loop a little earlier. I really do think that pays off in the end in terms of striking the right tone and really thinking through what the experience may be like for the broader employee base. And then I think the second thing I would say is, if you start off thinking about one thing, this is what this transformation has to be, be totally open to the fact that as you think through it, it's going to evolve and it's going to change and be open to some of that pushback or those new ideas. We definitely, probably started from a place of, "Hey, we need to do this. We need to set expectations. We're going to tell people X, Y, and Z, and that's it." Gaude Paez: And then realising as we thought through it a bit more and got more ideas, that we might need to couch this in a different way. We might need to bring other information together for people to fully understand. We might need to bring people into the loop who normally you might not necessarily feel could keep things confidential. And what started off as the idea definitely morphed over time into, I think, an even better place. So just be open-minded. Andrew White: And Gaude, one last question for me. Is there anything else we should have asked you, but we didn't ask? Gaude Paez: I'd say, I think one thing that I would love to stress is, again, a lot of these things, while they might not be executed from the top, they do obviously come from and often emanate from the top. And so really having... We're very lucky to have a CEO, two founders, a head of HR, a president of operations that are really open to change and open to how to make something the most successful decision it can be. I've worked at other companies where the employee sentiment or the employee reaction isn't taken into consideration the same way and the importance isn't placed on that as it is the decision itself. And so I do think that having a very human oriented group of leaders who come from backgrounds, so many backgrounds, consulting, gaming, banking, these are all folks who came up in different ways, but there's this across the board, the common theme among our senior most executives is really an openness and a recognition that we're going to be an evolving organism. Gaude Paez: Different generations are going to come in. Different player needs are going to come into play. And so really being open to change and making those decisions is important. And you don't always, you don't always see that in established companies. So I feel really fortunate here that we have those kinds of leaders. Andrew White: Gaude, that's been fantastic. Thank you so much for spending time with us today. The insights that you've brought really confirm the research, but over and above that, I think the story really brings to life, the whole subject that we're looking at. And we're very, very grateful. So can we offer you our best wishes for everything you're doing, the leadership that you're showing. And thank you for being with us today. Gaude Paez: Thank you. Adam Canwell: That was fascinating, Andrew, wasn't it? I think, brought to life lots of the key themes in the research. But the bit that really stuck with me was that pause and then the invitation for everyone to move forward together, if that's what they wanted to do. So that real co-construction of a social movement as you spoke about early on, which I found absolutely fascinating at the heart of a successful transformation. Andrew White: It was so interesting, wasn't it, in that it was that creation of a social movement. And you saw the different dimensions of it. One is that you can't do this just from the top down and the top has to work on themselves first. And then it's about weaving people's beliefs, their views, but you've got to put some boundaries around it. Essentially, it's a company and it's got to move forward. And I thought the whole way in which putting the gamers at the heart of it, you saw the role of purpose giving that central focus. But also what she was saying about the leaders as well and how they were showing up and what they were doing. And clearly the amount of effort that they've put into listening to people to understand people. Adam Canwell: And it was interesting, because I think one of the other things that really struck me is part of the research on things we speak about is that need for leaders to get the people across the organisation to really speak up, to create it a psychologically safe space where everyone can speak up. But of course, what Gaude brought was also, you've got to get people to do that in an inclusive way. Andrew White: Yeah. Adam Canwell: So you don't want speak up from the few that then drowns out other people because they feel sidelined and you could see they'd almost lent in too far to give safety of speak up. And then they had voices that were too loud. So it's an interesting balance of, absolutely, we want people to feel safe. We want people to feel that they can express their views. But they've also got to think about their colleagues and doing that in a way that doesn't drown other people as well. Andrew White: Yeah, I thought it was. Yeah. And also how you use tech to do that, the adjustments that they made to their Slack process and how they were using that technology in a more focused, aligned way, not in, I suppose, an uncontrolled way and what rules of engagement, how they changed the implementation of that, I thought was really interesting as well. Particularly across large organisations where it can't all be one to one or small groups, but you're having to use technology to mediate that communication. Adam Canwell: And as you said, a cutting edge digital company that at the forefront of the digital transformation going on in society really. And clearly saying, this is all about humans at the centre. Yeah, it's brilliant. Andrew White: I know. And it's something we're hearing time and time again, isn't it? And I don't think it's that the techs are important or that it's not difficult, but this just seems to be so much more critical. There are still challenges with the tech. The tech still is the infrastructure. And I think there's a lot of questions around tech, particularly around social media and the ethics. But then you go, it takes you back to the human doesn't it, to the impact it's having on people, the user experience and all of those things. Andrew White: Many thanks to Gaude Paez from Riot games. You've been listening to a special transformation edition of Leadership 2050 with me, Andrew White and Adam Canwell from EY. We're taking a short break now, but we'll be back soon with a brand new series. Subscribe now and you'll be the first to know when the new series is out. Until then, don't forget to check out our library of past episodes, wherever you get your podcasts. And if you'd like to hear more from Said Business School, exploring leadership, please visit oxfordanswers.org. Leadership 2050 is a podcast from Said Business School at the University of Oxford. The producer is Eve Streeter. Original music is by Cy Beck. And our executive producer is David McGuire for Stable Productions. From me and all the team, until next time, thanks for listening.