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The 5 principles of an advisor

The 5 principles of an advisor

Hi, it’s Joakim here. This is the first guest post on EGD News, and I’m proud to have my friend, Kim Nordström, being the first guest writer. If you haven’t seen Kim’s talk at the Deconstructor of Fun event in Istanbul, you can watch it here. Please enjoy this piece.

As a founder or CEO of a company in the game industry, you might think that the challenges or struggles you are going through are unique for you and your company. I can tell you they are not. Many companies follow similar patterns without knowing it.

I was previously the Chief Strategy Officer at Paradox Interactive until I left at the end of 2021 to instead focus on advising other game industry execs. Before Paradox, I was VP & GM at King; before that, I have made games since my first release in 1995. I have spent the past 18 months advising, interviewing, and working with founders & CEOs to add value based on my experience and learn more. During this time, I have interviewed over 70+ very successful leaders and advised over 30 small and large companies for a short or longer time. I have also made 15 smaller investments in startups and funds.

I am driven by a quest to understand what makes some companies so wildly successful, where most others seem to fail, and find the patterns and similarities. Also equally interested to know where the most successful companies go wrong and what they eventually do to end up in decline. I did a keynote at RovioCon at the end of last year and one keynote at Deconstruction of Fun in Istanbul at the beginning of this year on this topic.

I have accumulated tons of new learnings throughout my advising sessions and interviews. One of the most exciting learnings is that many companies more or less follow the same patterns. On a detailed level, many things are different within each company, but on a larger strategic view, many gaming companies go through the same patterns and challenges.

Here are seven specific learnings that separate successful companies from failed ones:

1. All successful game companies transition through the same phases. Every company starts as a Startup, and if your company does well, the company will transition into a Growth phase. All companies will eventually peak in Growth, regardless of what you do, and will end up in a Mature phase where you must reconsider what choices are needed to get back into Growth. If you make the wrong decision in the Mature phase, you end up in a Decline phase. Each phase requires different leadership styles and strategies and has different assets and capabilities. Understanding which phases your company is in, identifying the criteria and characteristics of that phase, and acting accordingly, are foundational.

2. Hubris always comes with success. It's very human to believe you can achieve anything once you have tasted the sweet taste of success. Only the ones that have already been through the hubris that comes with success know-how indeed to manage it. For the rest of you successful peeps, surround yourself with truth-sayers that have been through the hubris period and listen to them carefully.

3. Unclear alignment in leadership is one of the main factors for failure in a startup. Not only for startups but also for companies in the Growth or Mature phase is that the leadership believes they are aligned and want the same things and why, but it often turns out that they don't. Having a clear purpose for the company that all the founders agree with and a clearly defined "ways of working" that everyone works accordingly to is what often separates the successful from the failed ones.

4. Unwillingness to capture already created value within the company and instead focus on building new value. If you have invested time and money into building a new game, reuse that value to the max. The more you focus your company and team's time on one specific type of game, the higher the possibility that you will become an expert. I often run into companies that discard their collective knowledge to explore some other new opportunity. In contrast, you should double down on what you are good at to become great rather than get lucky by being opportunistic. One of my most disliked pieces of advice I give companies is "build the same game repeatedly until you are one of the best in the genre." Capture the value you create.

5. Building a game for yourself will eventually lead to failure as you won't truly listen to the audience. A classic controversy concerns "whom" you are building your game for. An experienced game studio can enjoy building any game because they care more for the feedback loop they get from the audience and the freedom of running a commercially successful game rather than pleasing themselves with a specific type of game. The real boss of any successful gaming company is the audience.

6. A CEO is often lonely. Even surrounded by the best founders, a great board, and truthful advisors, the CEO is a lonely role and, in a way, needs to be. Everyone, including your co-founders, will look to you as the CEO in the most challenging situations to solve the challenge. You need to be positive even on the worst days, be honest and open about the situation, and still find ways to motivate people to work with a focus toward the goals. Don't mix up loneliness with being alone; you need to involve the right people around you in the mix but don't make the mistake of thinking that someone else will solve the decisions that are yours as a CEO. Own it.

7. Change is the most formidable challenge there is when leading a company. Constantly finding the balance between "when to change" and "not change" is, without a doubt, the most common problem for leaders to figure out. A Startup might run after opportunities as they present themself rather than focus the company on what you can be great good at, while it's the opposite with larger Mature companies that get stuck in "old wheel tracks" and mix up the ability to change with too high-risk. Finding the right mix of change in a game company is commonly underinvested in decision-making or company strategy. Ensure the company is built for a certain level of change from day one.

These learnings have guided me and my role as an advisor. Over the past 18 months, I have learned to recognize patterns, what's good or wrong, and how to use them to add value to the companies I work with. It has a certain beauty because I can always give a valuable outside perspective when used right. Being an outsider is something that the advisor can give that no other role can. I think about it like "looking outside in" at companies.

I don't report to anyone there. I am also not on the board or an investor, so I can be completely blunt about what I see and hear. Essentially. I don't have an agenda I want to achieve for that company, and I am not emotionally involved. I can be very blunt. This part is crucial. I help companies I have invested in and am on the board, though I try to stay mindful of this and not become too caught up emotionally or start to protect my interests.

Over this time, I have used this to identify more concretely how I work as an advisor and conclude with five principles I start with for every new person or company I talk to.

My five core principles as an advisor are:

1. I can only help people who want help. Those I advise, mentor, and coach should want to get my feedback, improve and learn. If you are unwilling to listen, learn and change, this is pointless, and we are wasting our time.

2. I will tell you what you need to hear, not what you want to hear. To begin with, this is why people need an outside perspective, from an advisor, to hear the truth from someone else and point to the elephant in the room. And, yeah, it’s often a bit rough in the beginning.

3. I will prioritize your company first and the needs of the founders and CEO secondly. I am, of course, there for the people, but we need to agree that any company needs “the right people at the right places” and that the end goal is always to do what is best for the company long-term

4. Here comes my disclaimer: I apologize for being frank and direct. I come with good intentions. Sometimes my timing will be bad, and I will say something wrong, or my interpretation will be wrong. So for that, I apologize in advance. I want to speak my voice and say what I believe is necessary without hurting anyone’s feelings or stepping on the wrong toes. There is a delicate balance, and I am learning as I go; bear with me.

5. If I don’t add value, I am out. I aim to be the first to tell you when I am no longer needed.