Sacred Idols
In Life and Startups
Photo by K. Mitch Hodgeon Unsplash
Last weekend America celebrated its 204th birthday - amidst a pandemic. This holiday is usually met with enjoyment, remembrance, awe, and sacred moments. But this year, it was marked with a stark reminder of loss. Loss of normal, loss of tradition and loss of life. In startups, loss can be self inflected because it is easier to add than to remove.
The most successful organizations question their sacred idols. They rarely question their values, but they always question their sacred idols.
Danger happens when organizations don’t question their sacred idols and question their values instead.
Sacred idols are things which a person or a group of people hold to be sacred and therefore you cannot remove. They are usually the output of beliefs and that idol represents that belief. Rather than holding onto the reason for the belief, organizations (and societies) go to extremes and hold onto specific rules that do not capture the intent at all. This is where danger seeps in. [a] And, this is exactly how the serpent tricked Adam and Eve, dooming mankind forever - or so the story goes. [b]
Those that do not question their sacred idols eventually fail and die. Kodak, the top film company, fell victim to the Innovator’s Dilemma.[c] They had digital camera technology before anyone else, but because they would not risk their photography and film business, they ignored the digital camera problem space. This allowed many others to not only enter the digital camera space, dominate, and eventually kill Kodak’s film business. Now, you’d be hard pressed to find anyone from GenZ who has heard of Kodak. [d] Part of the Innovator’s Dilemma is a result of not questioning what has worked before. Signs that an organization falls victim to “sacred idol thinking” when you hear these sentiments: “we’ve always done it this way”, “[person’s name] won’t be happy about it” or “we can’t touch our money maker”.
As each stage of the company grows, what sustains the customer base looks different than what was done before. The product that made the company successful, the team stops iterating that product because it’s too risky, for fear of turning away existing users. Yet, at the same time if you do not innovate you will lose market share.
Therefore, sacred idols look different at each stage of the company. Questioning or removing them is incredibly painful for all those involved.But with the pain there is growth and some celebration at each stage.
Early Stage (🚣The Rowboat Phase) [e]
Nothing is sacred yet because you are starting your company. Everything is new, there is no “we’ve always done it this way”. This is probably some of the most freeing times within an organization as founders because you feel the highs and lows of the business as well as direct impact. A customer signs up and everyone cheers, the customer leaves and no one is excited. It is as if you are in the rowboat phase. There are no sacred idols and so you have the most freedom to try anything.
💡Product
Once the product is launched, a team can fall into the trap of treating sunk costs as a sacred idol. The team gets tied to the assumptions and ideas so much that they may not be paying attention to the data. Or worse, you raised money based on a certain problem space and worry about what investors will think if you switch. If you find yourself thinking these things you may be blinded to the truth. At this stage, the best way to combat falling into this trap is to continually talk to users, re-launch, and base your decisions on data, even if there is a lack of it.
👫Team
As you work with one another through ups and downs, you will find the bond that you build becomes sacred. Oftentimes people will describe this stage as a “family”. It’s because everyone knows one another and no one needs to work through someone else to get something done. During this phase, it is easiest to have a role be a title. For example, co-founder can be a title. In fact organizations are often pretty flat because the number of people is so few and the flow of information needs to travel almost in real time. These bonds manifest itself in three ways that people hold as sacred idols:
Decision Making - Early on because our access to information was flat, people began to expect to be consulted on decisions that they cared about. Once we hit about 30 people, this decision making process was not scalable, and it was very clear when we needed to move offices. We had to question our sacred idol of access to information and its impact on decision making quality and speed and make that tradeoff.
Seating - Pre-COVID days in an open office environment, where you sat in juxtaposition to the CEO was a big deal. For some reason we as human beings associate proximity with actual proximity to power. Many people would make an argument on why they needed to be close to the CEO physically. As the company became larger, this became one of the largest political battles in our company. To exacerbate matters, we also did not allow execs to have offices.
Meetings - Having a weekly all hands meeting was something that people enjoyed and we were all very open with the numbers even though the competition was fierce. We prided ourselves on transparency and no calendar was hidden. Having access to a calendar was access to information. But at some point having access became a sacred idol and we had to question the cost of having meetings visible to everyone. Early on this may not matter as much, but in a post-COVID world your access to information may be via meetings. Being included or not in a meeting signals access. What is worse is knowing the meeting is happening and you are not invited. This may be why at some point many companies hide calendar access.
At this stage team members look at each other more as a “family”. So anything that questions the trust of a family (not being included in a meeting or getting cut out of information) feels like you are breaking something sacred. And when that happens perhaps you should pay attention and wonder if you have a sacred idol that needs protecting or not.
Growth Stage (🚤The Speedboat Phase)
During this phase, you are scaling and hiring like crazy. Parts of this phase can start as early as 30 employees and last until however long the pace of revenue or employee headcount grows.
💡Product
At this point the product is growing and you are barely holding on because you have product market fit. If not, you should not be hiring. Outside of so many other things you need to do, one of the sacred idols you will need to watch out for is fear of doing something differently. “If it ain’t broke, then don’t fix it”. While this is true, this can become the beginning of a sacred idol of “we always done it this way”. An example of this was when our game Kingdoms of Camelot first launched we had no idea it would become such a hit. The most popular features were also the most lucrative features. But we never changed those features, we just kept adding features. It became hard for us to go back to remove features or improve existing ones. Also we were growing so fast. Soon the game became complex to maintain and even adding features became problematic. While the game franchise served us well, making over $350M in its lifetime, how much more could have been made if we would have questioned “if it ain’t broke don’t fix it” sacred idol mentality.
👫Team
Oftentimes during this phase early employees will say the culture is changing and it is because the company is growing. They don’t have direct access to the CEO anymore. Trust begins to get built through people because you begin to put in people managers. At the same time your product continues to grow, and ensuring the right team in the right places can really continue to fuel that growth. Common sacred idols in this phase become the following:
Early employees - This is the hardest one to admit, but people, including co-founders, can be sacred idols. These are the people that can’t be “fired”. From a founder perspective they also feel sacred to you. Especially the ones that believed in you in the beginning, did great work but have a hard time either reporting to someone else, have people report to them, or specializing in their new and/or changing role. By the time we exited 11 years later, almost all of the first 30 employees left along with one co-founder. The bulk of these early employees left during this phase. They missed the familial nature of a smaller organization. One employee told me that whenever performance reviews were introduced it was his cue to leave. While it happens, I do think that the care you give in saying good bye to your early employees sets a tone for everyone else during their time at your company.
Roles, Titles & Rank - Titles and roles are the best expression to the outside world of your rank within an organization. Introduction of hierarchy threatens the bond built during the first phase. Therefore rank becomes a painful sacred idol that many early employees and co-founders need to take a hard look at and question for themselves as well as for the organization.[f] For a co-founder, this could be taking a role that is not what they started out as. At our company, every founder who wasn’t the CEO, ended up doing a job bigger and different than what we started out as. The CTO became GM of China, the front end co-founder became the GM of a Game and then Platform and I found myself Head of HR (among other roles). At times it was painful, exciting and frustrating, but it was always definitely a great learning experience.
Scale Stage (🚢The Yacht Phase)
By the time we hit 1500 employees [g], we were clearly in the scale phase. We moved as quickly as a yacht. The sacred idols look different. While there are people, it doesn’t seem like anyone is protected. The organization becomes a machine and if a part of the machine is broken it gets replaced. This is why when a leader leaves an organization at this phase, the entire group tends to go with them. Sacred idols in this phase are all too common, that books and case studies are created around this: The Innovator’s Dilemma and How the Mighty Fall. We ran into the classic Innovator’s Dilemma on many fronts.
Removing the sacred idols is tougher than identifying them.
For us our sacred idols came in these forms:
💡Product
Our games were declining over time and we had to create new games. At the same time we were maturing as an organization and needed to make revenue forecasts that were realistic. Therefore we became risk-averse on our existing games, and more risky on our new games.t
The production costs and timelines were getting more expensive, but outcomes were still binary and unknown. We found ourselves not only revising forecasts (which impacted hiring and costs), but also, we found ourselves needing to buy revenue if we could not make revenue. We were constantly in search of our next hit. We turned to not only creating a Publishing arm but offering a fund so as to find new game developers that can move faster and therefore innovate faster than us. We even considered turning on a venture arm to get innovation in to move faster.
👫Team
We played with bonus structures and stock options to re-introduce the feeling of ownership and impact within the organization. By this point people are leaving managers and not the company.
Appearances - As we grew, appearances became more important because we had more scrutiny. This came into play when we had to balance operations, customers, legal, investors and press. Communications became a driving force and oftentimes we’d have to remind ourselves that the narrative was not the sacred idol. For example whenever we had an announcement we decided early on that employees should never find out news about their company via an outside source. That was our check to make sure appearances were not our sacred idol. Because, you can’t create a successful company of real value on appearances, press and marketing alone. You need product and customers.
Leaders - The toughest decisions anyone needs to make is taking out an executive when they are successful but whose behavior has gone off the rails. We’ve had a lot of issues especially as we got bigger. It’s partly because an executive’s behavior is amplified. The dilemma is if the behavior is worth the success it brings. While each situation is different, I’ve never heard a manager say after they let someone go, “I wish I would have kept them longer”. It’s always the opposite: “Why didn’t I do this sooner”. Don’t let one leader become a sacred idol. You will see how much they prevent your growth.
To question a sacred idol is one thing but doing something about it is a different thing. Many organizations may know their sacred idols but may not have the courage or the answer on what to do about it. If you remove the sacred idol, you need to decide what to replace it with. And at this point, when you replace a machine part, you aren’t quite sure what other parts of the machine the replacement impacts. But if you don't do it, you could die.
The most successful organizations question their sacred idols. They rarely question their values, but they always question their sacred idols.
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