When You Do Good Things, Good Things Happen

Before Facebook and Twitter, there was Arkadium. CEO Jessica Rovello and her husband started Arkadium in 2001 as a gaming platform and have grown their business to 100 employees who provide interactive content for top-tier clients. Arkadium is committed to work/life balance for all of their employees and it shows through the way they’ve chosen to run their business– it’s even one of their core values. On this episode of The Best Team Wins Podcast, Jessica shares her experience in building and growing her team at Arkadium and how things have changed over the last fifteen years.

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Transcripts:

Adam Robinson:	Welcome to the The Best Team Wins podcast, where we feature entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. My name’s Adam Robinson, and for the next 25 minutes, I’ll be your host as we explore how to build your business through better hiring. Today on the program, Jessica Rovello is co-founder and CEO of Arkadium, a firm she founded in 2001. Arkadium is a 100 employee company based in New York City and has been named a top 50 Best Place to Work by Inc. Magazine. Jessica herself has been named a 40 Under 40 by Crain’s New York among many other accolades. Jessica, thank you so much for being on the program. We’re really excited to learn through your experiences today. Welcome to the show.
Jessica Rovello:	Thanks so much. I’m excited to be here, and I love talking about people and culture so especially excited for that.
Adam Robinson:	Well, we’re here today to focus on exactly that. Before we dive into the people side of Arkadium, set the stage for us. Give us the 30-second pitch on who you are and what you do.
Jessica Rovello:	Sure. Arkadium creates visual interactive content for over 500 of the world’s leading publishers. Basically what the means in practice is that we work with companies like the Washington Post, LA Times and CNN, and create interactive content that tries to keep people on their websites for as long as possible. Traditionally, we were in the gaming space, the casual gaming space, so you may know us as the company that created the crossword puzzle that you play every day. We also created the Solitaire that comes shipped on every Windows operating system sold around the world-
Adam Robinson:	You’re kidding me.
Jessica Rovello:	Yeah, so responsible for a lot of people’s wasted time at the office. We like to think of it as stress relief.
Adam Robinson:	Every time I’m on a flight, I will think of you for the rest of my life.
Jessica Rovello:	Good to know. Then, we recently started branching into more data-driven interactive visualizations that can work on essentially any of our publishing partner’s article pages.
Adam Robinson:	Amazing. If listener’s want to learn more about your business, what’s the best way for them to do that?
Jessica Rovello:	They can simply go to our website, Arkadium.Com, and there’s lots of great information there.
Adam Robinson:	All right, very good. Let’s talk about the people side of your business. Take us back to 2001 and the founding of the company, and the moment it got beyond just you and, I believe, your husband as your co-founder, when that first employee came on board. What was the moment where you thought “Okay, this could be something. It’s time to go hire somebody.”?
Jessica Rovello:	That’s a great question. You know, when we started our business, we always believed it would become bigger than just the two of us. I mean, that was corridor belief system in starting the company, and I think as an entrepreneur, when you’re starting something, you have to have that belief in your model, in yourself, in the potential for the future because there’s just too many obstacles that if you don’t have that dogged belief, you’re doomed. Even thought it was just us at the beginning, we always knew that we would be bigger. Our first two employees, actually, we didn’t pay. I don’t know how we got away with that at this point. We were not being paid ourselves. It was the year 2001, the tech bubble had burst and there was not capital to be had, so we were essentially as 25 year olds funding the company from our own bank accounts, which was not really anything.
	The first two employees we had, one of them had worked with us at a prior organization. He was a great designer. He’s still with us to this day, and I think we just sold a great dream and he was willing to take the chance and come onboard. Our second “employee”, also still with us, now a VP and on the management team at our company.
Adam Robinson:	I assume they’re getting paid now?
Jessica Rovello:	They do get paid now. They do get paid now.
Adam Robinson:	What a deal.
Jessica Rovello:	Yeah, we’re not that dynamic. The second, it was his first job. He had just graduated from Princeton, and he really wanted to break into the gaming industry so we said listen, we can give you a metro card, which allows you to ride the subway and maybe we’ll pay for your lunch every once in a while. Thankfully, we did things the right way and he stayed on and now is doing phenomenally well. Yeah, those were our first two. It took us about three years before we could start paying ourselves, and I think we started paying our employees before we could pay ourselves but it was a long time before we could draw a salary.
Adam Robinson:	How did you convince someone … Clearly, you found the right two people … How did you convince them that hey, I have this great idea. You can come work for us for free for an unspecified amount of time and we’re going to go change the world?
Jessica Rovello:	I think that, for some people, they’re attracted to infectious enthusiasm and energy and we definitely … We didn’t have any money, but we had that in spades. It’s funny looking back on it because it is fairly standard, I think, these days for people to start businesses and get a seed round, or get a Series A, or have an equity structure and all of these things in place whereby they can attract employees, even if they are just starting out. Back in 2001, it was before Google. It was before Facebook. It was before what we now know of as startup culture. It was a little more freewheeling I would say, and there was no playbook in the same way that there is now. I think they understood that we were insanely driven, that we were going to find a way to make this happen and thankfully, they took the plunge. I still thank them most days for it.
Adam Robinson:	That’s great. The rest is history. Let’s look at now. 100 employee business, that’s real scale. You’ve got people cycling through now. What informs your hiring process today?
Jessica Rovello:	You know what? Can we pause just for a second? I have somebody talking really loudly outside my office and I just want to tell them to keep it down.
Adam Robinson:	Of course.
Jessica Rovello:	Okay, thanks. Hey guys. I’m on a podcast [inaudible 00:07:13]. Okay, I’m back.
Adam Robinson:	I wouldn’t be surprised if that happens on my end, too, so we’re all good. All right, we’ll go again. 3, 2, 1. 100 employee business today, that’s real scale. You’ve got people cycling through the business now, and you got to have some kind of systems and process for picking the right people. How is your hiring decision informed today versus what you did when things were early?
Jessica Rovello:	Yeah, yeah. Totally different. I think this is one of the benefits for being in business as long as we have, and making mistakes along the way. I would say early on, a lot of my hiring decisions were guided by gut instinct, and I don’t want to play that down because it actually is still part of my method when I hire people. I would say I just rely on it a whole lot less. We employ a couple different things. First and foremost, for every position we have, we create what we call a scorecard, which not only lays out the competencies that you need to be able to succeed in that role, but also best case scenario expectations of what success looks like in that role over the course of a year or more. With that scorecard in hand, it becomes really quite easy for us to create and craft an interview around finding out if a person is the right fit for a role.
	It’s very easy to tell if someone doesn’t have the competencies you need, or hasn’t had the outcomes that you need to be able to succeed in a role, so a lot of what we do gets based off the scorecard. We also, as much as we want to be agile, and quick, and nimble, we do try to follow a process, and that process generally involves a phone screen, an in-person, a panel interview with peers that you might be working with and in some cases, a final assignment or task depending on the scope and level of the role. Then, we also just recently started introducing a behavioral test, a two minute behavioral test, that’s become part of our process.
Adam Robinson:	Tell me about the motivation to add the testing? I’m a big believer in it, and certainly the research and science of hiring shows that the right test can be hugely impactful in predicting success, so talk about with our listeners how you came to make that choice and how you’ve implemented it.
Jessica Rovello:	We’re also trying to, especially having our roots in gaming, agile development is part and parcel for what we do as our postmortem’s. We’re constantly trying to improve every process that we have, and being a very people-focused company, that often involves a lot of our people-centric processes. Interviewing and onboarding being a huge part of it. I think I read a statistic at some point that said that even if you’ve done literally thousands of interviews in your life as an employer, that statistics show that still 25% of the time you’re going to get it wrong because there are people who are just great interviews, or you think you’re asking the right questions but you’re not. The desire for the behavioral test really came from two places. One was even if we can shave a percentage point off of that getting it wrong, it saves the company undue amounts of stress, right? Anytime you have to replace an employee, it is extremely difficult, not only for the employee but for the business. Especially a business, again, that tries to be as people focused as we are.
	It’s always a difficult thing to handle if you have a tight knit culture. It’s difficult on the culture. It’s difficult on your bank account because you have to fill a role, and you have down time. Again, the point of adding the behavioral testing was just so that if we can, again, shave one to two percentage points off of the success rate, then we’re doing a better job. That’s one. Number two, our company culture is really founded on our three primary values as a company. Our values are fierce drive, positive energy and living a full life. We found that with some really quick and easy testing, those are things that you can find markers for. Sometimes, somebody can do the job but they’re not necessarily going to be a culture fit. For us, culture fit is not “Do they like to play the same things that I do? Do they live in the same neighborhood that I do? Do I want to go out for a beer with them?” It’s really more “Do they genuinely believe in the same value system that we do as an organization? Do they really value work-life balance?”
	For us, it’s not a judgment. It’s just that if you’re going to work here versus working at a place that you’re working at because it’s going to go public potentially and you want to get rich, those are two very different choices, right? Those are two different values, and it’s not how we’ve built our business. We’re looking for people who do value wanting to work really hard and really smart, but not have it dominate every aspect of their life. That’s just another way we can suss that out in the interview process.
Adam Robinson:	At what point in your history did you develop these three core values? I love how authentic, and real, and tangible those things are. It’s easy to describe. They’re very well defined. When did you do that?
Jessica Rovello:	You know, like everything in the business, that was definitely an evolution. I would say that we always functioned around those values. In terms of when we articulated them, I would say probably six, seven years ago. We’ve had them for a while now.
Adam Robinson:	What’s been the impact, then, in terms of day-to-day operating the business of having those defined and published internally?
Jessica Rovello:	Oh, it is a game changer. When I talk to entrepreneurs about the things that they may not be paying attention to that could be hugely impactful to their business, this is one of the things that I always go back to. To have those central values, it aligns not only all the people in your company around what you stand for, but it really helps clarify in the decision making process if you should go one way or another. I find that to be incredibly helpful. Everything from making a budgetary decision to a decision about an employee, it always goes back to the values. You’d be amazed when you put the lens of those values on things, how much more easily and more comfortably you can make a decision and live with the decision.
Adam Robinson:	Let’s talk for a second then about the leadership of the organization. It sounds like the core values are set, you’re living them, they’re authentic, that informs hiring decisions at the line level. Talk about your leadership team. When it comes to the people side of the business, what do you think you’re great at, and where do you think there’s room for improvement?
Jessica Rovello:	The leadership team, I would say, is very strong in that we’re incredibly aligned. We have a very solid mission. We have a very solid vision for the next three to five years as an organization. We’re all growing in the same direction, and that is really truly what you want most from your leadership team. You want that alignment. You want that transparency, accountability and collaboration with your team. We’ve worked very, very hard to achieve that and I think that we have. One of the things that we’re constantly trying to get better at, and I think even the best performing organizations always have room to get better at, is candid feedback and transparency. That’s just something we’re constantly trying to hone more and more and more. Our entire staff knows what our revenues are every single quarter. We’re about to rollout dashboards for complete transparency into all of our finances. Every single individual in the company can see what any other individual in the company is working on and what their goals are on a quarterly basis.
	They can recognize them, if they’re doing a great job, through software tools that we use. Then, on the performance management side, that’s something that we’ve really started to hone more and more over the last year and really turned on its head. Much of it revolves around feedback and candor, both from managers to employees, and then back from employees back to management. Even so, I think that’s something that just takes constant cultivation, reminding, training, because it’s not a normal, natural thing for most people. It’s not a normal and natural thing for most people, who either have a professional history or don’t, to want to criticize or give candid feedback to their boss or to the company. What we found is if you’re not trying to constantly trying to cultivate that, then what happens is that feedbacks happening anyway. You’re just not hearing it. It’s being said behind your back, and then you’re in for a big surprise.
Adam Robinson:	Let’s stay on that topic of feedback. What’s your philosophy, then, on delivering feedback or coaching when the jobs just not getting done?
Jessica Rovello:	Yeah. We try to center all of our conversations, and I guess our ethos around people, really in, I would say, care for the individual, without sounding too cheesy. What I mean by that is if you really truly care for someone as a human being, and you ultimately want what’s best for them, then you really start to see feedback … Critical feedback and positive feedback … as a component to which you are caring for them, right? If they are screwing something up, and you are not being honest with them about it, then you’re really not caring for the outcomes that are going to happen to them as a result. The way we try to approach things is one, we train people to provide feedback on the spot, or as quickly as possible, when they see something happening. Again, this goes for both critical feedback and positive feedback. Positive feedback is, by far, the one that’s the most powerful, I find, because it encourages people to repeat great behaviors, but it’s something that people always forget to do.
	I tell people if you see somebody running a great meeting, say “Hey, Jim. Can I give you some feedback? That meeting you just ran where you had an agenda, you stayed on time. I felt like everybody was really collaborating well. Great job. Keep it up. Do that again.” I find that to be much more powerful than the opposite, which is just like “Hey, Jim. Can I give you some feedback? That meeting was less than stellar.” Blah, blah, blah. That’s something you constantly have to remind people to do. Generate that positive feedback. That’s one thing. Do it in the moment. The other thing is we force moments on people. We work like many companies do with a weekly one-on-one schedule between manager and direct, and in the software tool that we use, we have a specific section on feedback. What feedback can you provide to your manager, and what feedback can they provide to you? If for some reason, they didn’t provide feedback in the moment, or didn’t have the opportunity to, we’re honestly trying to elevate and bring awareness to the fact that you should be doing it.
Adam Robinson:	That’s great. Let’s look at the other side of the ledger, then. It sounds like you’ve got some real intention behind feedback. I think positively and negatively, which I love that you called that out. What’s your philosophy around compensation and rewards for success?
Jessica Rovello:	This is something that we took a really fresh look at this year as an organization. Again, so we could be really intentional with what it was that we were doing. We decided to do a couple things. First and foremost, as an organization, we had never done across the board bonuses for people. That was just something that if we had a good year, we’d issue a bonus. What we actually decided to do for the first time, and this ties into the transparency with the company, is create a portion of everybody’s total compensation as a bonus based on company performance making up the vast line share of the bonus, so company performance accounts for let’s say 95%. Then, department and individual kicks in a little bit more. The goal behind that was really to hammer home the concept that we want to operate as a unit, and not as a set of individuals. Where can we collaborate more? Where we can we help each other more? It’s not about an individual trying to claw their way ahead of other people. It’s really us operating and succeeding, or failing, together as a unit.
	That’s where the philosophy behind our bonus structure came in. Then, on the compensation side, for all of us who are employing people right now and a 4% unemployment rate, and especially people working in tech, we know that it is a highly competitive market. What we’ve done is we just did market assessments in our region, in our country, in our industry to really benchmark what every salary is for every position, and then we made our decision based on what we felt we had to offer from a total comp perspective of where we wanted to be on that spectrum. I think every company should try and do the same. Do you pay at 100% of market? Do you want to be the highest payer in the market? Do you want to be at 50% of the market? Do you want to be at 20% of the market? There really is no right or wrong answer there. I think it’s more of a holistic approach to … If you’re offering 401k, if you’re offering health benefits, if you’re offering work-life balance, how does that factor in to the total comp decision that you make as an organization.
	I think the important thing for us, however, is just being crystal clear that we are now going to operate within those confines. We were not going to be a company that if someone was like “Hey, I got an offer and they’re doubling my salary,” we would say okay, we’ll double your salary, too, because we didn’t have the framework or the research to be able to make the decision. Yeah, it’s been a fairly big change for us over the last year, but one that I’ve been really happy with.
Adam Robinson:	Let’s tie all this together then, and ask for your overarching philosophy as you approach the next phase of growth for your business. Philosophy toward the people side of the business, if you could sum that up. What’s your approach and what do you think it will need to be as you continue to move the business ahead into the next 15 years?
Jessica Rovello:	If I had to give you a soundbite that encompasses everything as far as our thinking goes and our approach towards people, and our approach toward partners, and our approach toward product, I would say it’s this, and I say this to my kids all the time. When you do good things, good things happen. I think that that’s how we’re trying to approach what we do. We fundamentally believe that if we keep our people, if we do good things, if we operate as great employers, if we give people the opportunity to stretch and grow their careers, if we give them an opportunity for ownership in the business, of transparency in the business and empowerment in their roles, then only good things can come from that. Good things will happen. They will happen spontaneously and joyously. That’s what we’re really focused on. How do we constantly get better so that we can make those good things happen.
Adam Robinson:	Final question for you here, Jessica. If you were to come back on this show a year from now, and report to the audience on whether or not you successfully tackled the single biggest people related issue or opportunity that you have in front of you in your business today, what would you be telling us you were successful doing?
Jessica Rovello:	Hmm. I need a minute to think about that one.
Adam Robinson:	Sure.
Jessica Rovello:	Essentially, what’s my biggest people problem today, and if I could come back in a year and say I tackled it and here’s what I did, what would I be saying to you?
Adam Robinson:	It could be opportunity, and if you wanted to speak more broadly about the business and what you’re trying to accomplish, tie it to some growth goal that you set or 10 year target, it’s all fair game. There’s no wrong answer here.
Jessica Rovello:	For me, personally, I think what I am really passionate about, driven to do both through my business and to share with the larger entrepreneurial community is that there is a different path. What I mean by that is that I feel that for the last six or seven years with the economy on the upswing, with startups and startup culture becoming what it has been, with funding and capital being more accessible than it’s ever been before, that many businesses have fallen into the mindset, and the trap, of thinking that there is one way to build a business, especially a tech business. That is to grow at breakneck speed, to bring on as many people as quickly as you can, to raise revenue year over year in any way that you possible can, even if you’re not profitable and to do that, I think, to the detriment of people’s sanity in many cases.
	If I could accomplish anything in the next year, it would just be to start getting the message out to people that there are other alternatives to that way of doing business, that there are more sane, more 21st Century, more organic, more sustainable … Just like we have in many other aspects of our life, whether it be in food or the environment, or anything else, bringing that to business, making more people aware of that would be a great accomplishment, I think.
Adam Robinson:	That’s the final world. Ladies and gentlemen, you’ve been learning from Jessica Rovello, co-founder and CEO of Arkadium. Jessica, thank you so much for being with us today.
Jessica Rovello:	That’s a lot.
Adam Robinson:	That’s a wrap for this week’s episode of The Best Team Wins, where we feature entrepreneurs whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson, author of the book The Best Team Wins, which you can find online at www.TheBestTeamWins.Com. As always, thank you for tuning in and we will see you next week.
Speaker 1:	Thanks for listening to the The Best Team Wins podcast with Adam Robinson. You can find out more information about Adam and his book, The Best Team Wins, Building your Business Through Predictive Hiring, at TheBestTeamWins.com. Thanks again for listening, and we’ll see you next week.