October 10, 2023 • 1hr 14min

Strauss Zelnick - Playing to Your Strengths - [Invest Like the Best, EP.347]

Invest Like the Best with Patrick O'Shaughnessy

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Strauss Zelnick, CEO of Take-Two Interactive, the leading game publisher known for franchises like Grand Theft Auto. Zelnick's career spans various aspects of media and entertainment, from television and film to video games. The conversation covers Zelnick's approach to leadership, business strategy, personal health, and lessons learned throughout his career.

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Key Takeaways

Media and entertainment have been a consistent focus throughout Strauss Zelnick's career, driven by his passion for creative businesses
Leadership philosophy centered on identifying talent, creating an environment for success, and delegating with communication
Take-Two's strategy is to be the most creative, innovative, and efficient company in the entertainment business
Focus on both established franchises and new IP to drive long-term success in the video game industry
Health and fitness as a key component of leadership and maintaining energy/performance over a long career
Emphasis on making sound decisions, even with incomplete information, while remaining open to new evidence
Creating value through turnarounds and improving inefficient businesses, though opportunities are rarer now
Motivation driven by achievement and taking on difficult challenges, rather than money or power
Early career setbacks provided valuable lessons in humility and the importance of understanding industry dynamics
Personal loss as a child shaped drive for perfectionism and empathy for others

Introduction

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Strauss Zelnick, CEO of Take-Two Interactive, the leading game publisher known for franchises like Grand Theft Auto. Zelnick's career spans various aspects of media and entertainment, from television and film to video games. The conversation covers Zelnick's approach to leadership, business strategy, personal health, and lessons learned throughout his career.

Topics Discussed

Career in Media and Entertainment (3:10)

Zelnick discusses his lifelong interest in creative businesses and entertainment, starting with early aspirations to be a creator himself before realizing his strengths lay elsewhere. He outlines his career progression:

Started in television sales at Columbia Pictures
Moved to home entertainment and eventually motion pictures
Transitioned to video games, initially through a pre-revenue company

He emphasizes the importance of adapting to new media forms throughout his career, stating: "I realized intuitively that the future was new media. And it was known as new media then. And I became expert in those."

Leadership Philosophy (10:03)

Zelnick outlines his approach to leadership, particularly in working with creative talent:

Identifying genuine talent in both creative and executive roles
Engaging people in a common mission and encouraging high-quality performance
Creating enthusiasm for a shared vision
Willingness to step aside and let talent shine

He emphasizes the importance of creating a safe, supportive environment for creators: "We're not going to do anything crazy on your watch. We're not going to go bankrupt. You're not going to be fighting off silly announcements. I'm not going to be on page six. None of that's going to happen here."

Take-Two Interactive Turnaround (25:26)

Zelnick details the state of Take-Two when he became involved in 2007:

Company under multiple investigations
Financial issues and risk of bankruptcy
Over-reliance on Grand Theft Auto franchise

He explains the appeal of the turnaround opportunity: "What was appealing was it was in the interactive entertainment business, a business I knew well... I had a pretty good sense that interactive entertainment was well positioned for growth."

Zelnick outlines the approach to improving the company:

Settling investigations where possible
Making sound business decisions
Cutting costs strategically, starting with vendor negotiations
Building trust with key talent like Greg Thomas at Visual Concepts

Video Game Industry Dynamics (39:56)

Zelnick discusses the evolution of the video game industry and Take-Two's strategy:

Balance between established franchises and new IP: "If you only bet on your winners in perpetuity, you run the risk of burning the furniture to keep warm."
Importance of unexpected hits: "All huge hits are, by definition, unexpected."
Approach to new platforms: "We try to be where the consumer is. We try to use every distribution method that we can. We try to be ubiquitous."

Health, Fitness, and Leadership (45:25)

Zelnick shares his perspective on the importance of health and fitness:

Initially motivated by vanity, evolved into a personal challenge and community
Emphasis on healthspan rather than just lifespan
Benefits of presenting oneself well as a leader

He reflects on the unexpected impact of his fitness journey: "I certainly wouldn't have expected at 30 that I would be 66 years old and my primary training buddy is 24 and we trained at the same level and he's a fitness model and that he choose to have me as his primary training buddy, that wouldn't have occurred to me."

Decision Making and Leadership Lessons (50:44)

Zelnick discusses influential leaders and lessons learned:

Importance of synthesizing information and arriving at sound conclusions
Balance between analysis and decisive action
Role of conviction in leadership when rooted in facts and knowledge

He emphasizes the need for decision-making: "What I learned is you do have to decide. You got to decide. That's what you're paid to do. And the hardest thing I do is make a decision when everything's unclear."

Motivation and Personal Philosophy (1:06:09)

Zelnick reflects on his personal motivations:

Driven by achievement rather than money or power
Enjoyment in taking on difficult challenges
Focus on helping others achieve their potential

He shares his perspective on what truly matters: "Helping other people achieve their potential, helping other people live great lives, helping other people do interesting things, and helping other people become happy and productive. If I have something that was my own masterpiece, it would be that."

Impact of Childhood Loss (1:11:55)

Zelnick discusses how losing his parents at a young age shaped his outlook:

Drove perfectionism and ambition
Created a sense of urgency in life
Developed greater empathy for others

He reflects on the long-term impact: "The ambition and perfectionism loomed large for probably the first 35 years of my life, and then with some measure of success... I reached a point of bringing out probably some of my finer qualities and maybe mitigating some of the qualities that were driven by this childhood baggage in a negative way."

Conclusion

Strauss Zelnick's conversation with Patrick O'Shaughnessy provides valuable insights into leadership in the entertainment industry, particularly in video games. His career journey highlights the importance of adapting to new media forms and technologies while maintaining a focus on creativity and efficiency. Zelnick's approach to leadership emphasizes identifying and nurturing talent, creating supportive environments for creators, and making decisive actions based on sound analysis. His personal philosophy, shaped by early experiences and a commitment to health and fitness, underscores the importance of continuous self-improvement and helping others achieve their potential. The discussion offers lessons applicable not only to the entertainment industry but to business leadership and personal development more broadly.