Bloated Senior Talent Teams, Constant Reorgs (and other common growth dysfunctions)
The Player Support Newsletter - 28 MON 2024
Introduction: When a Video Game Makes Money
It is a blessing and a curse when the money starts really coming in for a live service game. Most often, teams are woefully unprepared. Beyond the technical challenges of growing CCU, security, and the rest, there are significant management issues that arise. Rarely, if ever, does a game team have someone who is experienced in organizational design, project management at scale, legal, finance, and all of the other necessary operational bits. The closest thing may be the team’s technical manager or lead game designer. None of the standard roles in a game team have the necessary experience and skill to lead a company, but form one you must.
Hiring tends to go out of control because everything is on fire. Players and customers are starting to complain. Your game is now on Reddit and other social media platforms. Technology is falling over and your release management is a big fat mess. With every new release comes new problems and at least a few days of crunch to fix. Of course, you need more people, but you need the right ones, and everyone requires time for onboarding, even if things are so bad that onboarding is just saying hi and receiving software access. The sense of urgency is powerful and overrides normal standards of selection. Key processes are poor quality or non-existent.
Stress is at an all time high, but revenue is also growing to match. We are clearly in the realm of a-good-problem-to-have. I do not think we can avoid the challenges of the hypersuccess that video games and some tech companies face, but I do think we could manage them better. It would be foolish to blitzscale your operational teams early, or to hire a bunch of senior managers without teams before launch. I think it equally foolish if you do not have an organizational growth plan should things go well. Expecting that money will fix everything is careless and could be the beginning of the end.
In this article I write about some of the common signals of thrashing, such as bloating senior talent levels, constant reorgs, and company culture civil wars.
1. Bloating Your Management Layers & Senior Leadership Teams
We all need people who know what to do, but too often companies put too much emphasis on people with management titles. Hiring too many managers means that each of them must then hire the people they need to do the tasks. Some managers have lost the ability to do any task-level work, so they may be ineffective until they get people under them. Management bloat is also revealed in reverse, when a company needs to downsize. In recent years, large companies have fired too many individual contributors, so much so that they have to rehire some of them to launch their next product. There are many cartoons that depict the dysfunction of not having enough qualified people to get the job done.
As you scale, remember to hire great ICs, people who know exactly how to solve problems. They may not be the managers you are looking for, but at least they can provide specific direction and coach those who are more junior. Sometimes, senior leaders cannot even provide basic coaching in the problem space, and they are much more expensive than strong individual contributors. Be especially careful with leaders whose first steps include creating additional layers of management that did not exist before. There is great danger in empire building, especially those without clear business value delivery functions. Unlike great ICs, they tend to know exactly how to create problems for the company.
Good managers and executives with the right experience are also necessary hires as you grow, but this should be done cautiously. The more senior a bad hire is, the more havoc it can cause, especially if your company is still young or going through a major restructuring. (more on this later) It takes time to really get to know someone and you need far fewer of them than you might think. There is also the problem of reduced speed once you grow your management teams to a certain size. Decisions get delayed, vision becomes muddy, and people go off and do their own things with your company resources. Leaders who build the company should agree upon a method of growth that accounts for hiring velocity, manager selection criteria, how new teams will collaborate across silos, org structures influenced by the value that needs to be delivered, and the unique way the company has done so thus far.
2. Constant Reorgs
Restructuring, moving teams around, reorgs, whatever you want to call this activity, doing it too often is a terrible idea. Not only does it cause confusion and stress in your entire workforce, but it does not address any of the fundamental problems you have as a company. Changing reporting lines does not guarantee higher quality data, good decision making, faster delivery, strong management, a game that is more fun, happier employees, satisfied customers, or anything that would be good for the business. It can support a strategy, but it should not be used as if it was the strategy or the silver bullet to end all your woes.
Every time you move teams around, people have new masters. There is no way to know how this will affect your ability to continue to grow your business or maintain your current one. Those managers who are still in touch with execution of business functions just hope that their new bosses either support them or leave them alone. The worst thing is to receive a completely new agenda that is opposed to the current goals. Reorg incorrectly and you will lose the managers and ICs that really matter.
Sometimes, a shuffle is necessary, but these changes should make sense to most of your people. Decisions are too often made in a very small circle of people at the top. This might be okay for emergency actions, but is unwise if your goals are more long-term. There is a difference between an emergency contigency plan and a permanent policy or what should be an enduring organizational structure. I would much rather deploy a temporary task force to understand and solution a problem than haphazardly restructure my company or bloat my leadership staff.
3. Company Culture Civil Wars
I feel like I could write a book on this, but let me keep this short by focusing on the point at which a company buys a civil war - the hiring of a skilled executive manipulator. The first time I learned about this phenomenon was by reading a bunch of Tony Hsieh’s stuff about LinkExchange, the company he sold to Microsoft before he built Zappos. He had hired the wrong people and they made his company a place he did not want to come to work at anymore. In video games, I had a CEO tell me once that the same had happened to him because he was told that he needed to bring on all these senior and executive producers. This happens in every industry.
Hiring an executive from the outside means that they will be bringing in their friends. This is not necessarily a bad thing, but needs to be constrained, especially since the original leadership of the company cannot really know who these new people are. Unless the new executives are friends or strong recommendations from trusted friends, then a team would be wise to limit how many hires and what level of hires this person is allowed to bring in a certain time period. Senior leaders can have exponential positive impact, but the reverse is also true. I once calculated the cost of a bad hire at the director level to be conservatively around $12 million dollars. Hire the wrong CFO, President, or other high level and you may have just hired in the demise of your company. The logo may still be there, but the soul is gone.
Company culture civil wars usually begin verbally, with new jargon, phrases, and other language being socialized. Comparisons between “NEW company X” and “OLD company X” are common. The old leadership might even adopt this language, unsuspecting that they may be setting themselves up for a harder fight. VPs and directors multiply and choose sides. One of the clearest signals, however, is that the original vision of the company probably put something above money. There was a vision that the founders had that went beyond financial gain. Of course, we need to make money, but the amount was subservient to a creative idea or worthy mission. Civil war begins when a top executive is mainly concerned about value extraction for themselves, which can be expressed in ideas like taking the company public and the details of their compensation package. There is nothing wrong with an IPO, but it needs to serve the vision.