Background
A popular social gaming service provider, Gamio was founded in June 2009 and headquartered in New York.
This company has been developing online social games that can be accessed via social networking websites such as Facebook, Google+ and Tencent. Also, the games can be accessed via their website- Gamio.com
Nate Waldroff, the founder and the CEO of the company, states its mission as “connecting the world through games”.
True to its mission statement, this provider has launched some great series of online games, the best known being Mystic Trails. This game, was launched on Facebook in October 2009 and within seven weeks, reached 10 million daily active users (DAU).
As of early January, 2012, three of the top five Facebook games (in terms of MAU, according to AppData) were Gamio titles. Overall, Gamio games had over 265 million monthly active users (MAU). Figures suggest that 80 percent of revenue for Gamio comes from Facebook users.
This four year old company is one of the rare internet start ups that are profitable, earning $121 million since the start of 2010.
It has emerged as the Web’s largest social gaming company, recording $828.9 million in revenue in the first nine months of 2011.
The Rise of Gamio
Creativity and Innovation gave way to some great, award winning and category defining games that took the social gaming industry by storm.
The company had a first-mover advantage with a new concept behind their designs – new games for friends to play together.
In a world where video gaming was disconnecting people, the company changed the way people played by creating more social and connected experiences.
Played by ten million of people worldwide, Gamio games were among the most acclaimed and popular games online.
From 2009 to 2011, the growth was tremendous. Considering the success of Gamio, the CEO Nate decided to go for an IPO in 2012. The graph shows the stock performance after that.
Contrary to market speculations, the IPO turned out to be successful. Gamio was able to raise enough funds during the initial months of the IPO.
Gamio’s success was primarily due to its competitive advantage in the industry. Due to minimal competition, it capitalized its competitive advantage very well. It tapped a huge audience and had a wide user base.
Another significant reason for its huge success has been the immense pool of about 3,000 talented employees of the company. Gaming was a new, upcoming and interesting trend, and many skilled people wanted to be a part of this industry. Gamio, owing to its popularity, was becoming a much sought recruiter for this pool. Hence, it had no shortage of highly capable game developers, with a high degree of interest and zeal and who readily accepted the work.
The enthusiasm in their work was evident and they seemed to enjoy the environment of the young company.

Company Culture
Gamio’s culture has been thoroughly driven by metrics and competition.
Each of the games under Gamio, such as Gamipoker and Puzzlin, are run by autonomous teams. This fosters fierce internal competition which in turn, brings out stressful long hours and relentless tracking of progress.
Gamio believes in rewarding the top performers with handsome and lavish rewards like vacations and $100,000 invested stock. In the past, Gamio has sent the team to Las Vegas to celebrate, sponsoring the air travel and luxury hotel accommodations.
Those who perform are rewarded well. Those who don’t perform, perish.
Weekly reports, measuring factors like traffic and customer satisfaction need to be submitted. Teams assess their priorities under an Intel-pioneered system called “objectives and key results”. Mr. Nate collects the reports, and uses multiple spreadsheets to carefully track the progress of Gamio games and its employees.
It has been widely accepted that Gamio’s culture has people subscribing to the belief that long and tiresome work is needed from them. There are rumors saying that it is resulting in a talent drain in the company.
Several former senior employees have often warned that this competitive culture, which has been at the root of Gamio’s success could become a serious liability. Employees have recently filed lawsuits against their employers with claiming hostile work conditions and withheld compensation. In 2011, Gamio settled two class-action lawsuits by game artists and programmers for about $15 million each.
This situation may jeopardize the company’s ability to retain top talent at a time when similar start ups are fiercely hunting for the best executives and engineers.
Setbacks to the company
In the second quarter of 2011, Gamio was set to expand and was acquiring many companies. One of the deals with a game company called MyMiniLife could not materialize. During one meeting where the discussion turned to compensation, Nate Waldrof, dressed in jeans and leather cowboy boots, took out his wallet and a stack of hundred dollar bills which he handed over to a MyMiniLife founder and asked if that much was enough. People present at the meeting found this gimmick insulting, eventually cancelling the deal.
This brought bad reputation to Nate and the company.Also, Gamio lost another strategic deal with TinyFrames, which made other companies skeptical about their relationship with Gamio.
The bad times did not end. Even before Gamio could recover from the incident, the employees started showing signs of frustration. The worker’s complaints about the long hours and stressful deadline periods were rising. The quarterly staff survey solicited 1,600 responses, with plenty of criticism, including one person who said that he planned to cash out and leave.
The teams were stretched and juggled touch deadlines, technical flaws and demands for more data.
As a Gamio banner game-Ristachio approached 20 million users a day, a respected project manager abruptly quit the team. Soon after, the majority of the Ristachio team’s staff members threatened to walk out unless Gamio replaced the group’s general manager. The company relented.
Growth slowed, profits dipped and the company radically cut back its forecasts during the year. Everything that could go wrong for the company went wrong.
Gamio bidded for CutChase, a mobile game company, in November 2012.Gamio had offered $900 million in cash. But CutChase’s founders worried about the company’s reputation after hearing rumors of the company’s rescinding share awards and fierce internal competition. Instead, CutChase agreed to a rival offer from Digital Creatives, worth $650 million in cash and stock and the potential of an additional $550 million if certain earnings goals were met.
Gamio’s monetization efforts have been going in the wrong direction, as its games now sound faddish and haven’t translated well to mobile phones.
Techiemunch, an online journal, recently posted a video of the CEO Nate Waldroff admitting that he did every horrible thing in the book just to get revenues.
With a fast evaporating credibility, Gamio quickly gathered an unpleasant reputation.

Gamio has just delivered second quarter financial results which spell trouble. These results fell far short of analyst expectations-leading to an almost 40 percent drop in share value and predictions of disaster and decline
Concern and Challenges
As described earlier, the culture of independent teams heading independent games can be a messy and ruthless war.
The employees are constantly measured and game designers are pushed to meet aggressive deadlines. There is a heavy focus on metrics, and performance needs to be quantified and justified by the employees, some of whom thrive in this environment while most find it crushing.
In March 2012, Gamio hired its chief people officer, Dan Bass, who formalized the hiring structure and started to trim weak performers, cutting about 30 employees by that summer. Mr. Nate began drafting “M.I.A.,” or missing-in-action, lists to keep track of senior employees who were not doing a good job or who needed to be placed on more ambitious projects.
Gamio also started reducing equity packages through demotions. Some employees were offered a choice: take another role with the same salary and a smaller equity package, or leave the company. It affected a number of senior employees.
Competitors began eyeing the talented but disgruntled staff members. In Semptember, one recruiting firm sent cookie baskets to some 150 Gamio employees. They exploited the current scenario and made the case that they offer much more compelling opportunities for creative people. his has hampered deal making, a critical growth engine for Gamio, on which it had spent about $119 million on acquisitions in the last two years.
Another problem in the company was that the high potential employees were neglected right from the first day at office. The company was never prepared for the arrival of a new employee and no effort was made by the supervisor to get them assimilated into the organization.
Gamio had no system in place to acknowledge employee problems. Problems faced by the employees had been ignored and became worse with time. Sometimes, the decisions were imposed without the knowledge of all of the facts but for the sake of ending the issue.
Nate Waldrof, through his reckless and inconsiderate attitude has lost a considerable amount of respect among his employees. Several former employees describe emotionally charged encounters, including loud outbursts from Mr. Nate, threats from senior leaders and moments when colleagues broke down into tears. Many outsiders viewed Nate as being in over his head. Gamio was paralyzed with an overstuffed bureaucracy and Nate had failed his subordinates.
There have been instances where Nate Waldroff made offers to industry experts to join Gamio for their online campaign and had the hefty salaried offers turned down. One such expert quoted one of his reasons being that he viewed Gamio and its CEO as “evil,” saying “When an entity exists in an ecosystem, and acts within that ecosystem in a way that is short-sighted, behaving in a way that is actively destructive to the healthy functioning of that ecosystem and the other entities in it (including, in the long term, themselves) — yes, I believe that that is evil.”
“Nate Waldroff has the reputation that he is driven to the point of a madman,” said Samuel Eastman, a Securities analyst. “Gamio is driven because it has a gigantic competitive advantage right now.”
Over the course of his entrepreneurial experience, Mr. Nate has been called “stupid” for some of his decisions. To that, he says that he doesn’t care as he believes that if an entrepreneur wants to start his own business, he should never look for a sense of self-worth from his peers and the industry. He considers that a company doesn’t need to be completely understood by people on the outside all the time.
According to him, Gamio has gone through periods where they weren’t understood or even respected by the gaming industry or the tech pundits. But they’ve been working on trying to innovate and change the industry, which is not easy to do.
On their part, efforts have been put to change ways, the company has added data centers and expanded teams to ease the burden on its engineers. Now managers are encouraged to schedule a bigger buffer between project phases and to give teams a week off before a game’s debut. These changes are slow, but are atleast a sign of acknowledgement by the company for employee’s troubles.
There has been a sense of loss of direction within the company. People are unable to articulate what the main strategy is, or why they’ve been coming to Gamio on a day-to-day basis. Company leaders demand creativity of employees after overworking them, and yet ignore most of the ideas that don't follow the same technique/code base that most of their games currently use. They know their job is to fetch numbers, but are unsure of the way they are supposed to do it.
Solutions
The characteristics of The CEO of the company Nate Waldroff can be suggested as:
Contingent reward- the top performers are heavily rewarded and Gamio despise lavish gifts for them.
Management by exception- Mr. Nate watches and searches for deviations from rules and standards and takes corrective measures thereby. Weekly reports are submitted by the general manager measuring factors like traffic and customer satisfaction. Every quarter, teams assess their priorities under an Intel-pioneered system called “objectives and key results.” And based on these reports the performance of the employees is carefully examined.
Laissez faire: Mr. Nate avoids making decision, this is evident from his words”"I don't fucking want innovation. You're not smarter than your competitor. Just copy what they do and do it until you get their numbers."
All the characteristics stated above are of transactional leader. Transactional leaders guide and motivate their followers in the direction of established goals by clarifying role and task requirements. Although transactional approach would generate favourable results for the organisation but transformational leadership builds on the top of transactional leadership and produces levels of follower effort and performance that go beyond what would occur with a transactional approach.
Emotional Intelligence
Nate as shown in the case is a person who has partial awareness of himself and other’s emotions. He is moody and unable to generate much enthusiasm or interest in his employees. He often overreacts to problems and chooses the most ineffectual responses to emotional situations. This clearly shows that Nate has low emotional intelligence. Emotional Intelligence (EI) is a person’s ability to 1) be self-aware, 2) detect emotions in others and 3) manage emotional cues and information.
EI is directly related to job performance. So if Nate has low EI it will not only affect his leadership but also have the similar impact on his employees. Thus Nate needs to increase his emotional intelligence. He needs to empathise with his employees, understand their needs and at the same time be self-aware.
Ohio state studies-
Ohio state identifies two categories of leadership behaviour- initiating structure and consideration
Initiating structure refers to the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment. Nate is characterized as high in initiating structure as he made teams for different games. He also expected workers to maintain definite standards of performance.
Consideration is described as the extent to which a person is likely to have job relationships that are characterized by mutual trust, respect for employees’ ideas and regard for their feelings. Nate is certainly low in consideration
Thus to be an effective leader Nate needs to be high on both. This will ensure more satisfaction of employees with their jobs and more respect for Nate.

According to Maslow’s need hierarchy theory the lower level needs of the employess i.e. physiological, safety and social needs were being satisfied but the higher order needs such as esteem and self actualization needs were not satisfied by the organisational culture that prevailed in Gamio. They were given various rewards and incentives and good facilities but what Nate lacked in providing the employees was the autonomy to take decisions, self-respect and feeling of achievement. This left the employees demotivated and distressed. Also Nate was unable to provide the employees the environment of self-growth and self-fulfilment
Authority and Delegation
What is seen from the case is that the employees do not have sufficient authority to exercise. Almost all powers of decision making are vested in the CEO. Thus it is important that Nate delegates starts to delegate work amongst his employees. They should not only be given important work but they should also have a say when they suggest or advice changes.

Cognitive evaluation theory- A theory of motivation that states that allocating extrinsic rewards for behaviour that has been previously intrinsically rewarding tends to decrease the overall level of motivation.
It means basically that extrinsic rewards such as pay for work effort that was previously intrinsically rewarding due to pleasure associated with the content of work itself decreases overall motivation.
It is assumed that intrinsic rewards such as interesting work are independent of extrinsic rewards such as pay. Thus when Gamio employed extrinsic rewards such as rewards and incentives for superior performance, the intrinsic rewards, which are derived from individuals doing what they like, are reduced. This caused the intrinsic interest in the task to decline.
Another thing is that rewards are either verbal or tangible. Verbal rewards are when an employee receives praise or appreciation and tangible are monetary rewards. Nate should give intrinsic rewards as they increase intrinsic motivation whereas reduce tangible rewards as they undermine motivation and intrinsic interest.

Management by objective – From the case it is seen that there is a complete discord between the CEO and the employees. Employees complain of long tiring work and stress at the workplace. The solution to this problem can be the introduction of Management by Objectives. It is a program that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress.
Nate needs to set goals which are tangible, verifiable, achievable and measurable along with his employees. The result will be a hierarchy that will link objectives at one level to those at the next level. And for the individual employee, MBO will provide personal performance objectives.
Self-Knowledge-
Nate needs to concentrate on self-knowledge to learn more about himself and the way he leads. Three important methods which can be adopted by Nate Waldrof include:
Self-assessment.
Self-reflection.
Soliciting authentic feedback.
Self-Assessment
We tend to be an outward-oriented society. That tendency leads us to think that both our problems and their solutions are outside of us.
Significance-The upside of this is that we become good at recognizing and analyzing the world outside ourselves. But the downside is that we tend to overlook the ways in which we ourselves are impacting the world around us. We tend to be less aware of the choices we make, our own responses to situations. Nate needs to self-assess himself so that he knows appropriately about his reactions to situations which occur in the organization. For example employees have seen him shouting at others and showing similar reactions to situations which do not please him.
Approaches-There are many approaches which can be followed by Nate and other leaders in the organization.One approach can bea simple self-assessment that focuses on proficiency and time spent on various leadership activities. He needs to see how effectively he leads people and the consideration he shows towards his employees
Another approach is that Nate can get others to rate him using the same instrument. This will give him an idea about the degree to which his view of himself is aligned with how others see him.
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Self-Reflection
Self-reflection is another method for increasing self-awareness. Self-reflection is the ability to “hit the pause button” and critically assess yourself or a situation.
Importance-Why is self-reflection important to Nate’s leadership?
Self-reflection will help ensure that he is taking actions that are soundand not simply running on “auto pilot,” but rather he is conscious about doingwhat is most important in any given situation.
Self-reflection can help him learn from his experienceto avoid the trap ofsimply repeating things that aren’t working.
Self-reflection will allow him to notice his habitual ways of responding so thathe can have the option of approaching things differently.

Authentic Feedback
The third technique for increasing self-knowledge is soliciting authentic feedback from others. Leaders who know themselves and let others know them are those who command respect and trust. Soliciting feedback is one of the most effective methods for increasing the open area of the Johari Window, “Known to Self and Others.” Feedback is critical to self-knowledge and thus, your ability to lead. This technique will help Nate to know if he is leading in ways that are effective for those whom he leads.
Feedback can be informal. Feedback is often thought as a formal process that happens once or twice a year. To get better responses Nate should take feedback informally and frequently. It is vital to ask for and receive feedback in a way that encourages others to tell the truth as they see it.
Feedback requires trust. People may be reluctant to give you honest feedback if they don’t trust you. That willingness to be honest is built on trust that develops over time. And to some extent, most of us have a tendency usually unconscious to do things that inhibit others from giving us truthful feedback. Thus Nate should work on building trust through team building, empowerment, shared vision so that he can take advantage of true feedback

Throughout this case, we saw that this company has been surviving mainly because of the competitive advantage it has. The CEO has been a creative genius when it came to conceptualizing the games in the company’s initial days.
This company could draw fresh talent and came across as a refreshing, exciting and lucrative place to work at. However, as time went by, the CEO’s stress on metrics began burdening the employees. The CEO must realize that his short term revenue targets are compromising on the long term sustainability of the company. Although the pressure to perform, and to provide quantifiable results has been yielding instant and drastic results, these may not last long as they have been having a negative impact on the perception of the stakeholders, as these results are highly quantitative, but lack the qualitative substance of long term reliability.
Internally, Gamio has failed to convince the employees that they are valued and are considered a worthy asset to the company. According to them, their talent is being wasted away. They are asked to be creative, but most of the innovations are rejected unless they are highly result oriented. This acts as a major demotivating factor to employees who are enterprising, and almost always have a set of competitors trying to lure him to join their companies.
The company could use its existing system of independent work teams for different projects, in creating a feeling of ownership to the projects that the team members undertake.
This helps them identify their personal goals of growth and enrichment that best thrive in an independent and autonomous atmosphere. These personal goals, when reflected in the quality of work presented by these employees, will automatically be reflected in the organization’s goals which will keep the organization sustainable, up to date and innovative.
Instead of focusing only on metrics for performance assessment, quality should also be focused on. The internal competition which today is reflected in numbers should be reflected in form of quality improvements, newer technological advancements, more refined styles of working etc. These are elements that may not directly show up in the profit sheet, but have a significant indirect role in adding value.
Internal competition is essential for motivation as long as it is healthy. Weekly team bonding sessions will foster a friendly and relaxed atmosphere where Nate as the CEO is could transfer his enthusiasm and energy to his employees by without distracting the teams from their tasks at hand.
The company would thrive in the atmosphere of motivation, healthy competition, enthusiasm and innovation this way