Thirty Minute Mentors Podcast Transcript: Take-Two Interactive CEO Strauss Zelnick
I recently interviewed Take-Two Interactive CEO Strauss Zelnick on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:
Adam: Our guest today is the leader of one of the largest video game companies in the world. Strauss Zelnick is the CEO of Take-Two Interactive, is the founder and managing partner of the private equity firm ZMC, and was previously the CEO of BMG Entertainment, then one of the largest music and entertainment companies in the world. Strauss, thank you for joining us.
Strauss: It's a pleasure to join you.
Adam: Pleasure's mine. You're originally from Boston. But when you were 10, your mom passed away, and you and your siblings moved to New Jersey, and you were raised by your aunt and your uncle. You excelled academically, you got your JD MBA from Harvard before breaking into the world of entertainment. Can you take listeners back to your early days? What early experiences and lessons shaped your worldview and shaped the trajectory of your success?
Strauss: You captured, certainly, at least some of the tragedy of my childhood. And there's some view or shoulder note stereos family tragedy, there are two paths from which they choose. One is a path of feeling victimized, which doesn't lead to good things. And the other is a path of deciding that you're going to surmount those challenges. And that's the most positive way I can put it. That is the path that I think I intuitively chose. I'm not sure I did start with the healthiest reasons. I think that I decided that if I were perfect at everything, bad things wouldn't happen to me anymore. That's not true. And by the way, it's impossible to be perfect at everything. I think that was actually what I learned from the multiple tragedies of my childhood. I also think having lost my first family because, in addition to my mother passing away suddenly when I was 10 my father subsequently abandoned the family, I felt like I had to be the best at everything to make sure that I was taken care of. So that created a lot of energy towards my various goals. I will say from the ages of 10 to 18, it's not like I put much of that into action, I think I sort of somehow believed that if I wanted it or thought about it, a knocker would occur. And I only learned when I didn't get it to Harvard College, that thought I was automatically going to get into it without doing any work, that actual hard work was required. I went to Wesleyan, which was the only school that accepted me for undergrad. And I hit the ground running and worked super hard for the first time in my life. And I did do well. That's what led to my going to graduate school at Harvard. And put me in a position to pursue the career I ultimately pursued.
Adam: Strauss, you bring up something vital for everyone, which is how we look at setbacks. How do we look at challenges? Do we look at them as insurmountable obstacles? Do we look at them as endpoints? Or do we look at them as opportunities to fuel us opportunities to lift us to greater things? And in your case, as you mentioned, it took you a little bit of time to figure out how to do it. But once you can channel your energy in the right way, you're off to the races.
Strauss: Yeah, it was off to the races. I think it's still how I operate today, which is I tend to seek out really meaningful challenges even sometimes when I don't need to.
Adam: You ran 20th Century Fox when you were 32 years old. You were the CEO of BMG when it was a $4.7 billion business. Today you lead one of the largest and most successful video game companies in the world and a major private equity firm. What were the keys to rising in your career and what can anyone do to rise in their career?
Strauss: To start, there's not much that differentiates you from the person you're sitting next to. Presumably, you have similar educational backgrounds and similar skills. The only thing that will differentiate you early on is hard work and your attitude. The hard work thing, I had already started here, I got into the professional world. The attitudes, I was fortunate, I'm not sure I had a great attitude, I was kind of a smartass in high school and college and grad school and I had a sharp tongue, and I could be difficult with other people. It's not like I had great leadership skills or executive skills just naturally. But I had the presence of mind to understand that I would have to alter that behavior to be successful in business. And I remember as I started my first job at Columbia Pictures right out of school, I remember my only business experience before that full-time job was summer experience, which truly isn't the same thing. I'd have the presence of mind to know that I should keep a smile on my face, not engage in any kind of office politics, and not criticize other people. And just be the person who showed up early, stayed late, and said yes. And that's what I did. Combination of hard work, I'm reasonably intelligent. So is everyone else there. And that attitude made a difference. Plus, I made some good choices and found some great opportunities for the company that I was working at, my first shop that distinguished our group right away. My boss got credit for that as he should have because he was the boss. So I was okay with that. He got promoted. And then he promoted me.
Adam: What I'm hearing from you Strauss is, number one, you are laser-focused on being the best version of you. Simply showing up every single day, trying to get the best that you possibly could out of yourself. And number two, being the best team player that you can, through hard work a positive attitude, and trying to help out other people to the best of your abilities.
Strauss: Yeah, absolutely pretty well.
Adam: Can you talk a little bit more about your approach to leading people, leading teams, leading businesses? And what do you believe are the key characteristics of a great leader?
Well, first of all, I don't think there's just one approach to leadership, there are numerous different styles. And my style is different than many others. I tend to be collaborative. I like working with teams, I want to be surrounded by the best and the brightest, and I'm good with people who are smarter and more expert than I am. I'm self-confident enough to get out of their way and let them do their jobs. I believe in delegation with information, a lot of coherent, straightforward, rational communication, rapid decision-making when it's possible, and sensible or willingness not to make a decision when you don't have sufficient information and waiting a bit is likely to provide that additional information. I agreed upon the stated vision, goal-set strategy, and culture and aligned economic incentives. I left that one for last but it shouldn't be last. In a for-profit enterprise, you have to start by aligning economic incentives. Or all together too many leaders and companies that say nice words about all of us being in this together or pulling in the same direction or, God forbid, being a family, and then the soils are reserved for the boss or a very small group of people? I don't believe in that. I believe in sharing widely and making sure that the economic benefits are distributed by the performance of the enterprise.
Adam: What do you look for in the people who you hire and what are your best tips on the topic of hiring?
Strauss: We do use standardized tests. Some people I work with don't like doing that, but I believe in it. We look for appropriate experience and education. And then we go through it in our classes the same way everyone else does. In my case, because ultimately it's my job to recruit, retain, and motivate our talent, both creative and executive, I'm looking for a certain spark that I see in immensely talented people that I can't describe. I've said that before though and people misunderstood that I believe I have some magical Bobby walk down the street and grab someone off the sidewalk and say you should be making video games or whatever. We make a lot of other friends of entertainment at ZMC, and it's nothing like that at all. People do it to show up and be suited to the job. But I think I'm an empathetic listener. I have a knack for truly understanding people who they are what motivates them to care about and frankly how good they are. So I take all the normal approaches and use all the normal materials as far as tasks, interviews, resumes, and light references. When I'm responsible for the ultimate recruiting decision, I am looking for a special quality of talent that is hard to describe and that I find more often than not.
Adam: Do you have any tips for anyone listening on how to find that? Might be hard to describe, but how do you find that? How do you identify it and bring that into your organization,
Strauss: You have to step out of yourself and focus on the other person. Not too many bosses are good at that. Most of us are very focused on ourselves, how we're doing how we're coming across how our day is going, and what we want for dinner. We're not good at thinking about the other person, if you dig into the other person, really, in a highly empathetic way. It's amazing Kumar. It's hard to tell on a podcast like this because I'm the one talking but I consider myself a really good listener. And I will listen so until they are done talking. And then it's my job to reflect to them what they said and to listen to the words of also the music, which is to say, actually understanding the meaning and the emotions in addition to the words that were said to understand the person truly. And we all can do that. But it requires a willingness to listen, be quiet, insightful. It's why you can go to a psychic and a psychic can tell you a lot about you. It's because people who do that successfully, are great listeners and are highly empathetic, and actually can understand between the lines what's going on with you. They're not psychic, I'm sorry to tell you that. Among other things, they were so psychic, that they wouldn't be making money being psychics. They'd be trading the markets. But they do have a facility for understanding people and drawing conclusions from the meaning of words where the words and the emotions behind the words express the meaning if that makes some sense. And that is my job. So I sat with a young man earlier today, super crisp and presentable, great resume, and he was looking for career advice. And after five minutes of listening to me, it struck me that he didn't need any advice at all. He was in a great place. And that's accurate. But there was one area that I thought he needed to dig into more. And I listened so much. In the end, I said, "I think this is the area you may need to focus on. I think you should reflect on it. This is a thing you've not at all dug into. Is that right?" He said, "Yeah, that's right." And I only knew that because I felt it, not because I'm a psychic.
Adam: The power of listening can't be understated. A key theme through so many of these interviews on this podcast, through so many interviews that I've done with so many of the most successful leaders in America, the very best leaders, the very best listeners are invested in genuinely hearing what the other person has to say, caring about the other person and caring about what is coming out of the other person's mouth. Empathy is one of the most important characteristics of the most successful leaders and it transcends the topic of hiring. It's something that you need to have to be great as a leader. Period. You're in the business of trying to hit home runs throughout your career in other businesses, you've been in the music business, and movie business, and you're also in the business of trying to hit home runs which comes down to being able to cultivate a culture that fosters innovation. What advice do you have for anyone listening on how to create an environment that generates the kinds of hits that can carry an organization?
Strauss: You have to start with a greater talent. You have to identify, recruit, retain, and motivate the most talented people in the business that you're at. We not only want people to pursue their passions creatively, we insist that they pursue their passions. We don't work on projects, about which our creative teams are not passionate. They need plenty of money or in terms of infrastructure, but they also need emotional support. And they need to be insulated from the vagaries of the marketplace or external events. You need to have a plus marketing organization and have the resources to deploy it through a second fan, eyes on the balance sheet to pursue the business that you're in even if you have a couple of failures in a row. It was one of our first jobs when we took over take two which was to solidify our competence sufficiently to withstand a bad day or a bad season. And when we had some bad days, not many thankfully, about one bad season that I can recall. But we were in a position where the company was strong enough to survive it. So making hints comes down to fielding that sound, agreeing upon the strategy and the culture, agreeing on the goal, aligning economic interests, providing support to that talent, and getting out of their way as they do their work by constantly encouraging. I've been doing this my whole career, I've been in every entertainment business that exists. And the teams that I've managed have generated more hits in each field than any other team. Having made the movies, I didn't make music, I didn't make the TV shows, the games, and I didn't have my fingerprints on any of it creatively or very rarely in a very small way. But somehow, we've been able to replicate these very high hit ratios across industries. And you notice I use the pronoun we and that's not because I'm aggrandizing myself. It's because I'm referring to the team with which I work on my activities. I have to believe after having this track record for over three decades that it's a system, it's not just the video, although I've certainly been very fortunate.
Adam: What I'm hearing from you, Strauss, is bringing the right people, giving them direction, but also giving them room to make mistakes, giving them room to fail. And when they do fail, make sure that you have the resources to bounce back from failure. Because if you don't, it'll put you out of business. Because when you're swinging for the fences, you're going to swing and miss a lot. So, make sure you're prepared for that.
Strauss: You're completely right. And there was a company years ago that in a weak moment, I predicted publicly would go out of business. And I spent six months, but turns out it took them eight months to go out of business. So I was off by two months, but they did go out of business. But the reason I knew they were going out of business is they didn't have enough capital to market the properties they had in the pipeline unless everything went perfectly and that is never the case. There were public companies, so they disclosed their balance sheet. I knew from looking at their balance sheet that they were out of business.
Adam: The strategic planning component cannot be understated. And that's really where your job as a leader comes in. Knowing what your role is. Something that you shared, which I love is you aren't the guy sitting in the room, generating ideas around what movie should we produce, what music should we produce, and what video games should we produce. But your job is to come up with a game plan around who are we bringing in. What is the marketing plan? How do we ensure that we have enough capital deployed, it fundamentally comes down to something that you brought up right at the beginning of the conversation, knowing yourself, understanding yourself, knowing where you fit into the equation, knowing your role on the team and executing your role to the best of your ability.
Strauss: I think that's about right.
Adam: How do you effectively balance your time and your focus on running a huge video game company with running an entirely separate business?
Strauss: Again, a delegation of information, A+ teams. There's an A+ management team here at Take-Two, add an A+ team at XBMC. And they have a great deal of latitude, and their economic interests are aligned because I share. We've also been working together for a very long time. So the senior team at ZMC has been together since 2002. The senior team has been together here at Take Two since 2007. By the way, if you ever want to find a way to determine whether an entertainment company was successful, look at how long the senior management team has worked together. There's a direct correlation between the tenure of the senior management team and the success of the entertainment business. You need to have time to make the properties and distribute them, succeed in them, and now and then fail on them. And you have to have the opportunity to do it over and over again, without the risk of being fired to deliver an A+ result. Warner Communications, when it was Warner Communications, had the longest-tenured team in all of its businesses. And basically, it was number one in all of its entertainment businesses a long time ago. We're going back to now the 80s. And they were number one on television number one in music and number one in motion pictures. And Steve Ross, who granted business wasn't a creative guy, didn't take credit for the creative work. And if you're wondering whether I took a page out of his book, the answer is I took the bulk out of this book, not a page out of this book. It's where I learned a lot of this. I didn't know him well, but I've met him a few times. And that was his approach. And it worked because it seems we're long tenure.
Adam: I interviewed with Stevie Van Zandt. Stevie has this incredible unique background as a creator, creating highly successful songs, creating lots of different businesses in different industries, and creating highly successful characters. And something that Stevie shared, which was interesting, really goes right to what you shared, which is all too often, we're judged based on how we perform today, or how we perform in this one quarter. Creativity, innovation, and greatness aren't achieved in a day, aren't achieved in a quarter. It takes time. And as a leader, you need to give rope, you need to give a latitude, you need to ensure that the people who you're leading, have the time to get there. And at the same time, you want to ensure that you're leading with accountability.
Strauss: Well, if you align economic interests, it's a whole lot easier. If everyone has a stake and being timely in addition to being successful, it certainly helps. So again, we all agree on the goal set, and then we push in that direction. And if things take longer than expected, we've also agreed on that.
Adam: Setting clear goals, setting clear metrics, ensuring that everyone is aligned, ensuring that everyone's pointing in the same direction.
Strauss: Exactly.
Adam: You've led several incredibly significant deals throughout your career, including what was then the largest transaction in the history of gaming, when Take-Two acquired Zynga for $12.7 billion. What are your best tips on the topics of negotiations in deal-making?
Strauss: I try to show up, honestly, and never mislead people. And if I say I'm gonna do something, I do it. And if I say I'm not going to do something, I don't do it. I don't play games. I'm not tricky. I'm straightforward. In the case of that deal, I spent three years getting to know Frank Gibeau, CEO of Zynga, who's still here now running Zynga successfully before we were able to reach a deal, and we had numerous meetings, that I think by other people's views, totally non-productive. My view was we had to get to know one another for me to determine whether it made sense to be in business together. And that it's always my pleasure to get to know people and I used to tell people, many situations never lead to anything and to be okay with it. And I had no idea what it ultimately would be like to make a deal but I was willing to invest the time in building a trusting relationship. In those three years, I had no reason to get anything done. Because I didn't see him building Zynga as an independent company quite successfully and showed no interest in doing something. So I guess I'm ancient and I'm straightforward.
Adam: And you also reinforced two key themes of this conversation. Number one is the importance of taking a long view. And number two, the importance of investing in relationships.
Strauss: Yes, that's right.
Adam: A big part of who you are, is your commitment to health and fitness. You've earned the nickname
”America's fittest CEO.” If you Google “America's fittest CEO,” your name comes up as the first seven or eight names listed. I don't know if you have a good SEO guy, or if you legitimately are America's fittest CEO.
Strauss: I'm not sure those are the only options but no, we don't have anyone optimizing my search results.
Adam: You wrote a book on your fitness journey, called Becoming Ageless. And in that book, you write about how you didn't reach peak physical shape until you were in your late 50s. What is your daily routine? And how can anyone optimize their day and optimize their health and fitness?
Strauss: Well, you start by knowing what you want and not everyone has the same goal. So I'm loathe to give people advice that doesn't start with fully understanding what it is that that person wants. And I'm allergic to people that are in the position I'm in, explaining to other people how awesome they are, because they get up at the crack of dawn and do endless amounts of exercise and meditate, serve breakfast to the homeless, and then get to the office, crush it at the office and then go home and read stories to their small children. Volunteer again in the evening, and then journal. You get the picture. I just do the very best I can, and try to act in ways that are consistent with my own goals. I have four areas that are priorities for me. I don't think you can have more than four. Mine are family and friends, work, business and charitable work, and mentoring and coaching. So there are a lot of things. I love museums, but I don't have time to go to museums as much as I would like, just for example. So my day starts with exercise. Most of the time, I'm usually working out at 6:30 or a quarter of seven. Generally speaking, I'll be having my first business meeting, or personal meeting for that matter at by around 8:15. I don't usually eat breakfast, but sometimes I do that. But I sort of believe in intermittent fasting. And I sort of intermittent fast. In that, I don't tightly manage the hours of fasting, but I do generally skip breakfast. I eat reasonably healthily. Although I do eat too many sweets, and I do eat carbs. Not in a massive quantity usually, but I do eat them. I don't drink alcohol. I don't drink sugary drinks or diet drinks. I don't eat a lot of fried food. I maintain a weight that's basically within five pounds, been for the last 30 years. Sometimes I exercise for one day, I generally will take one rest day. And I do a bunch of different things. So I do weight training and high-intensity interval training, and I cycle when it's warm enough. I don't do trap lots, I don't do endurance events or splashy races. That's not my style. And I train with a bunch of other like-minded people of all ages. And that brings me a lot of joy. But that's just my approach. And it's software overload. I probably devote more time to exercise than most people care to. And I probably care more about my physical condition than most people do. You don't have to do what I do to be in very good healthy shape. If you walk 30 minutes a day, four days a week, you're probably in excellent shape and all the ways that matter. Unreasonable muscle tone, shouldn't be overweight, your heart is in good shape. 30 minutes of walking, four days a week, if you do nothing else, is not terrible. 30 minutes of walking, four days a week, and two days a week of weight training would be far more for most people. You simply do not have to do what I do. But if you want to be in peak physical condition, yeah, it's more than that.
Adam: Strauss, what can anyone listening to this conversation do to become more successful personally and professionally?
Strauss: Define what success means to you first and foremost. What does personal success mean and what does professional success mean? Don't get any attention at all to my journey. My journey is my journey. Pay attention to what you want out of life. Most people don't care all that much about money and work positions. Most people don't want to be the CEO of anything. Most people want to have serene happy, engaging lives. And there are numerous different ways to have a fulfilling life. You have to be willing to reflect on who you are, and what you want and put to the side expectations placed on you by your parents or acquaintances, your perception of what society wants from you. I went to business school and law school. And basically, all of my peers went to consulting firms or financial services companies because that was what was expected to offer. It was prestigious and paid well. I was the only one who went to the entertainment and I went to a low-paying job in sales of all things where people were astonished. But of course the implication was they cared. And they didn’t. And they don’t. No one cares. This is my path, and no one else's. And it's irrelevant to pretty much everyone except me. So maybe that frees some listeners to reflect seriously on what their path should be leading to their definition of success. Here I am, I set out to have a happy family, have had the same wife for 34 years, and have three kids I have great relationships with. But it was perfect always along the way. I make enough money to be very comfortable. I love what I do most of the time. I get to have a great deal of control over my day-to-day life, I exercise a lot, very charitable. We want hands-on work to help other people. That's the life I set out to have. I'm fortunate to have most of what I set out to have. It's not perfect, and I didn't get everything I wanted to the very least. But where I've landed so far, hopefully, a long way to go, is consistent with my vision for success. But it started with not accepting someone else's vision for me. It started with me being honest with myself about what life would mean to me if I pursued it in a certain way and what it would mean to me if I didn't.
Adam: Strauss, thank you for all the great advice, and thank you for being part of Thirty Minute Mentors.
Strauss: Thanks for having me.
Adam Mendler is an entrepreneur, writer, speaker, educator, and nationally-recognized authority on leadership. Adam is the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal-winning athletes, political and military leaders - for intimate half-hour conversations each week. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities, and non-profit organizations. Adam has written extensively on leadership and related topics, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. Adam teaches graduate-level courses on leadership at UCLA and is an advisor to numerous companies and leaders. A Los Angeles native, Adam is a lifelong Angels fan and an avid backgammon player.
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