Lessons Learned from Goodgame Studios’ Major Reorganization

Lessons Learned from Goodgame Studios’ Major Reorganization:
Increasing Production by Organizational Change

The following is a field report written by Robin Kiera, Inhouse Consultant at Goodgame Studios, sharing his experiences from change projects in traditional and tech companies.

Sometimes it’s the Structure:

After the reorganization of Goodgame Studios, the number of releases and game development projects has increased.

At the beginning of 2015, Goodgame Studios, the leading German games developer and producer of Goodgame Empire, Empire: Four Kingdoms, and Big Farm, reorganized its game development departments from an integrated matrix structure into an autonomous studio structure. At first glance, there seemed to be no reason for this, considering that 2014 was a record-breaking year with tremendous growth in revenue and a doubling of the company’s size to 1,200 employees. Nevertheless, only one new game was released during that year. After an in-depth analysis, management decided to improve the company’s game production structure to ensure future success.

Today, one and a half years later, the company has already seen significant benefits: their live games continue to generate very healthy revenue, and the number of new releases and games in development has increased. There are currently several games in the soft launch phase, and the company has a full product pipeline. Clearly, the reorganization unleashed the potential of a company that had been limited by a structure it had outgrown. And it was thanks to their passion for the company and the selfless behavior of so many people that the incredibly fast process was successful and even possible.

How it all Began

Shortly before I joined the company in January 2015, Christian Kaul (Head of Organizational Development and Corporate Growth) invited me to the company Christmas party with almost a thousand Goodgamers in attendance. Coming from a large, traditional company with more than 140,000 employees, where at 32 years old I was among the youngest in the strategic staff division where I worked, I thought: “Wow! All these people are mostly younger than me and are making a couple of hundred million in revenue!”. The next thing that left me astonished was their pure passion for games and their company.

In the Beginning: the Pain Points of a Matrix Organization

On one of my first days, the product lead of one of our new projects was so kind as to invite me to a meeting. He was fully responsible for the progress of the game development project. However, it was very surprising to see that other managers, supervisors to most of the staff dedicated to the project, could reallocate colleagues as they wished - without the consent of the product lead. Therefore the product lead had full responsibility but almost no influence. Even worse: managers outside of the project had a tremendous impact on the project while having no responsibility for the project itself.

While a matrix organization can work effectively and efficiently for a certain size of organization, here it was obviously not working anymore. The management of the company wanted a new structure with clearer responsibilities and duties in order to increase game development output. Therefore a small project team carried out a systematic, in-depth analysis of the structural root causes of several organizational pain points in order to improve production of future games. While it was clear that changes needed to be made for new projects, it was decided that most of the live games should be bundled into two studios, keeping a big part of the structure intact. The decision was made so as not to pose a risk to existing revenue streams.

A Small and Dedicated Task Force

Several organizational scenarios with different advantages and disadvantages were developed. Slowly and carefully, several key stakeholders, especially managers in the matrix organization, were asked to contribute ideas and opinions. Only six weeks were scheduled for carrying out the entire process, from the decision to introduce a new studio structure to its final implementation.

It was important for a smooth implementation to inform all relevant people managers and to discuss with them which team member should be allocated to which new organizational unit and position. Intense discussions took place - all focused on designing the most promising and fitting structure and most prudent allocation of people. These were followed by the creation of an implementation and communication plan for several hundred people, with a lot of changing of jobs, titles, projects, and workplaces. But then an obstacle arose.

Rumors: Agile Communication Management

Very soon rumors began to spread that the company was planning major organizational changes, and employees began to worry. With the support of corporate communications department, several measures were implemented to ease tension. Of crucial importance was an all-hands meeting with the entire game production staff, where the CEO Kai Wawrzinek made clear that: “We will change things - but we do this out of a position of strength after a record-breaking year you all made possible.” This very personal note in particular helped to address the concerns of the employees affected by the changes.

A little later, within only two days, the people managers had several hundred one-on-one talks with their employees, offering new positions in the new studio structure. An overwhelming number of people agreed immediately to their new positions. Meanwhile, the relocation of several hundred employees within both old and new office spaces was being set up. Last minute changes were adapted due to the speed of the project, it was tremendously important to make sure that every single employee was integrated, talked to, and offered a suitable position. By the following Monday, most new teams had already started working at their new office locations.

Mission Accomplished?

The very strategically planned and effectively implemented change of the company structure was not the end but rather just the beginning. Excellent employees were given more responsibility in the new structure. A lot of follow-up projects addressed specific structural topics. Even though there still remain some issues to be resolved, the reorganization was successful. The live games continue to drive revenue thanks to the constant release of new features. New game development projects were started, and by the end of 2015, two new games, Legends of Honor and our first match-3 title, had already achieved their soft launch. Furthermore, we have several new games on different platforms already heading in that direction for 2016.

Lessons Learned

The successful restructuring project taught us several lessons. Here are a few:

• Have Amazing Employees and Dedicated Management

In my experience, such substantial changes in such a short period of time would not have been possible in most traditional companies. They probably would have taken months or even years to carry out. Goodgame Studios needed only six weeks, from the management’s final decision to the start of the new teams. There is one central element that made this possible: the employees. I had several conversations with managers in the matrix organization who said that changes needed to be made and that studio structures would be a better option, even though they would lose most of their direct reports. Some were even technically downgraded. The two managers with the most to lose said independently of one another: “I will lose most of my employees to the studios, but for the company, it is the right thing to do.” In addition to these two examples, most employees accepted the changes very quickly or even embraced them.

• Trust Traditional Change Management Tools

Even though the gaming industry has its own rules, conducting profound restructuring projects in large organizations often relies on traditional change management tools - such as analysis instruments, planning, and communication methods. It proved valuable to combine company and industry specific aspects with proven tools from traditional companies.

• Be Flexible

Even though the theory of organizational best practices would have encouraged the company to also reorganize their departments with live games, the company displayed flexibility by changing structures where beneficial and keeping old ones where necessary, thus finding a practical solution that provided financial and organizational stability.

• Address Pain Points Early On

After one year, the change is already bearing its first fruits. Without the reorganization, the company would most likely not currently have such a full product pipeline with several independent studios working on a significant number of titles. In addition, a studio structure like this is scalable. While it was hard to start a new project in the matrix structure, now it is easy to open or close new studio entities if needed. Management addressed structural pain points with exemplary dedication after a record-breaking year - in a moment of strength. Most management literature recommends this, but only few companies do it. Therefore the timing of the reorganization can be regarded as an example of how to address pain points early on and solve the root cause of structural problems.

• Change is Never Over

While Goodgame Studios has reached its primary goal of creating an efficient and streamlined development process that is suited to fostering the growth of the company, the new structure has also created new challenges. Early on, management realized that the reorganization process they had initiated would not just mean reshuffling teams and moving people from A to B. What it meant was a long-term commitment to these changes that would involve several departments, including staff development, to this very day. Embracing change is the key to successful change.

Robin Kiera’s Linkedinprofile: https://www.linkedin.com/in/dr-robin-kiera-33536931?trk=nav_responsive_tab_profile

Robin Kiera’s to Xing (German Linkedin) profile: https://www.xing.com/profile/Robin_Kiera?sc_o=mxb_p

Comments