Kotick's poor decision-making has only deepened Activision Blizzard's crisis | Opinion
The Activision Blizzard boss has prioritised his own survival as CEO over the company's best interests in recent months - a competent board would demand his resignation
It was probably inevitable that the crisis that has swept through Activision Blizzard since California's Department of Fair Employment and Housing filed a lawsuit against the publisher in July would eventually engulf its CEO.
Bobby Kotick has led Activision for thirty years; the notion that the buck did not stop with him, or that he could somehow have been oblivious to the culture of harassment and discrimination that flourished at his company, was always childishly ridiculous. It was only made more ludicrous by the fact that Kotick himself has form in this department: the details of his 2007 treatment of a flight attendant who was sexually harassed on his private jet are included in this week's Wall Street Journal report on his conduct during the crisis, but were also fairly widely reported more than ten years ago when he lost a legal action against his own former law firm over fees related to the case.
Calls for Kotick's removal have abounded since the WSJ piece was published, both from company employees and shareholders, and from the industry more broadly -- ranging from explicit calls in the media to more carefully worded statements of concern from key partner companies such as Sony and Microsoft.
Activision Blizzard has been doing a terrible job of handling the crisis from the outset, and it's now clear that much of that poor decision-making was coming right from the top
Much of the anger at Kotick stems from the details of his own behaviour -- it should surprise nobody that the deep-rooted cultural problems at the company trace right back to the CEO, and the allegations detailed in the WSJ story (none of which Activision Blizzard has rebutted in any substantive way) suggest him to be both someone whose personal behaviour crossed a line into harassment, and someone ready and willing to cover for the harassing behaviour of others.
I don't wish to litigate the question of Bobby Kotick's personality, or whether those actions make him an unsuitable person to lead a public company like Activision Blizzard. That has and will continue to be an active topic of discussion both in public and in private around the industry, but it's ultimately a subjective question. There are, however, aspects of the WSJ's reporting and the subsequent events which are far less subjective, and concern Kotick's suitability to remain as CEO on much more fundamental grounds than personal behaviour -- because they call into question both his honesty with his board and shareholders, and his competence to lead a company through a crisis.
Firstly: if the allegations are true (and again, Activision Blizzard's responses have been weak generalities with no substantive rebuttals to specific points), Kotick appears to have lied about his awareness of serious allegations of harassment and rape within the company. From the outset of the DFEH lawsuit, Kotick has presented himself as being shocked and troubled by the litany of issues raised, with his communications -- both external and with the company's own staff and investors -- carefully painting a picture of a company in which the rot was all happening out of view of a senior executive team, and especially Kotick himself, who remained blissfully convinced that they were running a utopian workplace.
The Securities and Exchange Commission has already subpoenaed the company for records as it investigates whether information about harassment and discrimination claims was properly disclosed. The WSJ's reporting may over-egg things somewhat -- it focuses heavily on the fact that Kotick didn't report to the board about a specific case that was settled out of court, but it's not clear that he actually had a duty to do so -- but the overall picture that emerges is certainly one of a CEO that was willing to be very much less than honest while brushing major company cultural issues under the carpet.
Kotick's position as someone previously compromised by harassment allegations made him an unsuitable person to lead a company facing such issues in the first place -- the way he immediately prioritised his personal claims of ignorance and insulating himself from the crisis, perhaps to the point of outright lying in order to do so, suggests that he was keenly aware of that unsuitability and the likelihood of major consequences for his leadership.
If thirty years as CEO hasn't given him the insight and competence to navigate through this kind of situation, nothing ever will
Secondly, Kotick's actual management -- his direct, hands-on decision-making -- through this crisis has been woeful. Activision Blizzard has been doing a terrible job of handling the crisis from the outset, and it's now clear that much of that poor decision-making was coming right from the top -- and may indeed have been in service of protecting the company's CEO at the expense of protecting the company itself, much less its employees.
This is arguably the first genuinely major crisis that has hit Activision Blizzard, a company that's largely coasted on competence through the past three decades as an early mover in a major growth industry, and its crisis management has been amateurish at best and cartoonishly awful at worst, something it now seems clear comes directly from the firm's top leadership. Kotick's decision-making has been terrible, and perhaps driven by entirely the wrong motivations in the first place. He claimed ignorance of the problems, then drafted a disastrously tone-deaf letter which, when it provoked a hugely negative response from both within and without the company, he attempted to pin entirely on a female executive who had only been at the company for a matter of months, exposing her to a major backlash and making no effort to own up to his own role in the letter-writing.
He oversaw the appointment of a female co-leader at Blizzard as part of the company's response to the crisis, who we now know was being significantly underpaid compared to her male co-leader, despite having precisely the same job role - the almost slapstick level of sexism in this move is only eclipsed by its glaring incompetence. Anyone, up to and including Kotick himself, who signed off on that decision, thinking it was fine and dandy, and didn't recognise it for the PR time-bomb that it was, simply should not be in a leadership position in any business in the 21st century.
Bobby Kotick has led Activision since 1991, so it's unsurprising that even as the company's employees, key partners, consumers, the media, and multiple government agencies turn a critical eye on his leadership, his board of directors is standing behind him -- you'll always be adored by the things you create. His position at Activision Blizzard is an unusual one, after all, as he's one of the few long-term CEOs of a major publisher that's running a business he really built from the ground up (Activision, then Mediagenic, was deeply in debt and circling the plughole when Kotick led a buyout at the start of the 1990s) rather than having been parachuted into a growing company from another industry sector.
The instinct to circle the wagons and protect his own position in the face of a major crisis that could very clearly punch his dance card as CEO is entirely understandable, but that doesn't make it any more tolerable or forgivable -- not from the perspective of investors, who deserve both honesty and competent decision-making that prioritises the company over the individual leader, and certainly not from the perspective of the employees who have suffered discrimination and harassment to which he has turned a blind eye (or worse, perhaps been an active perpetrator).
The fallout from this ongoing crisis -- about to enter its fifth month of almost relentless reporting and scrutiny, with little sign that we're at the end yet -- has made it clear that the internal cultural problems at Activision Blizzard have not only severely hurt and impacted the company's employees, they have also damaged the company more widely. The ability to attract and retain talented, creative staff, and to create a working environment in which they are happy and do their best work, is absolutely crucial to such a company; that the marked decline in the quality of the output of studios such as Blizzard has gone hand-in-hand with an internal culture that was increasingly unpleasant and out of step with the progress being made in workplace culture elsewhere is unlikely to be a coincidence.
Bobby Kotick never showed much sign that he even understood that slow-rolling crisis; now in the face of a much more acute crisis, he has dropped the ball entirely. If thirty years as CEO hasn't given him the insight and competence to navigate through this kind of situation, nothing ever will. Regardless of any kind of subjective view of Kotick's personality or behaviour, his abject failure of leadership and extremely poor decision-making during the company's greatest moment of crisis should lead a competent board to demand his resignation.