In corporate hiring parlance, the term “tournament system” may sound to the uninitiated like friendly company softball competition. In reality it refers to something far less benign. The practice of hiring large numbers of competitive entry-level candidates and weeding them out through overwork until only a select few remain has been commonplace at law firms and investment banks for years, and has continued on in the tech realm. Amazon has been described as having a particularly harsh work culture as highlighted in recent New York Times exposes, and they are not alone in the relentless drive toward grinding schedules, caustic internal rivalries and an extreme of work-life imbalance.
DAVE: Hi and welcome. This is the first episode of the Cardwell Beach podcast. My name is Dave Donars. I am the Chief of Research at Cardwell Beach. Today we’re going to be talking about an issue that’s kind of popped up from some New York Times articles recently about Amazon, particularly it’s started to extend beyond Amazon and start to talk about the tournament system. It kind of extends just beyond Amazon into tech, finance, advertising, the legal profession. So today’s first installment is an interview with the CEO and one of the founders of the company, Michael Beach. And we’re going to be really discussing the New York Times article, “Work Policies May be Kinder, but Brutal Competition Isn’t” by Noah Shriver, which came out on August 17th, 2015. Hope you enjoy.
DAVE: One of the things that they talk about in the article is this concept of the tournament, which is taking the cream of the crop from certain universities and working those people down over literally, I mean they state this in the article, the next fifteen or twenty years, until one person comes out on top. I mean, that’s really actually brutal. That’s a huge portion of your life to be spent competing at that level. You’re having people put in 100-hour weeks, you’re having people never take vacation days, you’re having people return from very serious family medical issues, you know, within hours just to get back to their desk. And it’s because they’re part of the tournament system. One of the things I want to ask you about is, you know, how Cardwell Beach is structured? How do you guys deal with internal competition? How do you guys go after those issues?
MICHAEL: The tournament thing just feels like there’s a lot of waste built into it… waste and creating unnecessary pressure on one specific person, it’s very much just built out of fear, right? Fear of keeping your specific spot versus losing it. I think that the major difference is when you’re set up like a team where there is a lot of overlap from one position to another and everyone does a little bit of everything, then if two employees are in sales and one is better at finding leads, one is better at closing them, that they can just team up as is needed and do what they prefer to do, and offload what they don’t like to do.
DAVE: Right. So let’s talk about that. What are the advantages of a flat organization versus the really brutal tournament system?
MICHAEL: It’s having specific responsibilities assigned so you don’t even need a ticketing system. You don’t need to say now it’s this person’s job to do this, you know? If you think you can do a better job than someone else on this, jump in and take a crack at it. And if you like it, you will, and if you don’t like it, you won’t. And who wants someone working on something important for a client that they don’t care about, anyway? When you’re looking at very individual roles like the tournament system does, you end up doing all the grunt work that you hate that might be someone else’s paradise to some extent, but you would never know because you don’t want to share credit because credit is so overvalued.
DAVE: That’s good. Let’s talk about vacations for a second, for the people who are working at Cardwell Beach. How often are you pinging them when they’re on vacation?
MICHAEL: We try to not involve people at all when they’re on vacation. Even if things go wrong, we try to manage what went wrong and make the best of it and, you know, finish out smooth, and if we can solve the problem on our own, solve it. If we really can’t, you know, we have to wait, but tournament style you lose one specific person everything relies on them, versus a team with overlap, you kind of don’t notice it to an extent. It’s very kind of smooth while they’re gone, so leave them alone.
DAVE: Your perspective, as the owner of this company. What’s your perspective on a 100-hour work week? Let’s just start there.
MICHAEL: I think a 100-hour work week is fine if you have weeks where you had zero hour work weeks. I think that’s ultimately what it comes down to. I think if you have spurts where you over-exert yourself that is fine, as long as you have time to recover. And the only way you can do that is if people look at not working as valuable as working, and if you’re just focused on products, then it all comes back to quality of life and not working is a big part of that.
DAVE: Right. Let’s dive into that a little bit deeper. What’s your perspective about that balance? Where are people most optimally efficient? What’s the balance there?
MICHAEL: Sure, good question. I think that the balance is 10 percent of what you’re working on roughly you’re going to have to adapt your schedule to someone else’s schedule, just for the sake of actual meeting and you know, having one on one communications. But outside of that, I think it’s different for everybody. Someone might get into a groove of working at night, versus the morning, and being more productive. If you work when you’re most productive, you’re passionate about it, you’re in the zone, it’s better output, you’re not just half working. And then when you’re not working you totally disconnect. So I think being able to totally disconnect and then just come back and work on your own terms is incredibly rewarding and just max productivity with kind of ease to some extent.
DAVE: Have you ever worked a 100-hour week? There are only 168 hours in a week.
MICHAEL: Yes. Over a hundred hours? Is that what you said?
MICHAEL: Uh, yes. But I will tell you, my 100-hour weeks were much, much more common at other places than here, even though you would think it would be here. But it’s different when the pressure is just the end goal, the results that you’re having to go after.
DAVE: Did you feel micromanaged at GREY? Your previous employer, GREY.
MICHAEL: I felt totally not managed at GREY. Like very, half not-managed, half managed. You know, the people who actually look at your work and review it and say “I like this, I don’t like this, change this, don’t change this,” there was basically no management except for Rob Baiocco, who owns BAM, who is probably the best guy I ever worked for anywhere, but he was at GREY. But the type of management would be making sure people are there at 9:30 in their seats, and on the creative side there was no management because it was just so competitive. So you’d be working with creative directors who would rewrite and remake all the stuff that multiple teams had spent time creating because they were just not managers, they were good creatives. And then micromanaging is totally separate, and that was just from administrative end for perception, you know, if clients were in, make it look like people are here and busy and getting the emails of, you know, someone picked up a guitar, someone skateboard, you know, look like we’re having fun.
DAVE: Yeah. I always thought it to be the most dangerous work environment if they have like a nap pod or something.
MICHAEL: Yeah, yeah (laughs).
DAVE: Where it’s just like fuck, they want us to sleep here.
MICHAEL: Yeah, yeah. I remember that back when we were back at 48th and 3rd. I’m pretty sure my friend [inaudible] slept in there a few times. I remember sleeping on the floor, I slept there in Biaco’s office. Four pitches that I won probably because of handshakes that happened at dinner days before the pitch, anyway. Yeah, just killing yourself for stuff that you have no visibility on the real deal as to why you’re even in the running for the account.
DAVE: I really want to go back to this thing where you painted a pretty good picture of people in a very competitive environment kind of really pushing themselves to the limit for pitches that had already been won or lost, and the higher ups knew that. And it was a game, it was a test.
DAVE: It wasn’t part of work.
MICHAEL: I just don’t know why you’d want to do that to your people.
DAVE: And what about transparency to what you guys as founder discuss, versus what gets communicated out to the full team?
MICHAEL: I think for us for transparency… we would have meetings every week and everyone in the company on the phone for a status meeting. But the reason is it’s just not necessary, and that’s why we don’t have the same status meeting every week at the same time, or some people do this every day, starts every Monday at 8:00 a.m. It’s just extra and doesn’t make sense and it’s forced, you know? We’d rather have stuff as it’s needed, have a strong status meeting every three weeks if all’s going well and we’re hitting our marks. If we’re not, you know, meet every day in person if that’s kind of what it takes.
DAVE: And so let’s talk about that. Performance reviews, other kind of ways you codify, like ticketing systems, other ways that you’d codify those. You guys don’t have that, right? It’s not part of what you do.
MICHAEL: No, we don’t. But I would say it’s constant focus on what are the biggest goals, and then what are the smaller goals within that, and what are the action plans to get there and how best we get there? And if things aren’t happening, it is never to think, the thing, I think people will stick around with us. I’ve read in one of the articles about, for Amazon, this is either for you or it’s not for you. It’s love it or hate it. And I think for us it’s either it works beautifully or it doesn’t work at all. And that’s probably true for every good brand or company.
DAVE: Have you ever lost talent due to the work culture at Cardwell Beach?
MICHAEL: Yes, definitely. I’d say things just did not work out, and it was never anything went down in flames, it was just kind of not a good fit. Finding someone who stays hungry but also ready for this I think is the challenge, and why we’ve lost anybody before because of the culture.