Growth is a good thing, of course - It can be exciting, and is a measure of validation for our ideas and hard work. Growth can also cause challenges: process overhead, endless stakeholder meetings, high degree of specialization, and losing speed - these
How InnoGames company structure evolved as we grew from three to over 400 people
Growth is a good thing, of course - It can be exciting, and is a measure of validation for our ideas and hard work. Growth can also cause challenges: process overhead, endless stakeholder meetings, high degree of specialization, and losing speed - these are common problems for many businesses in the gaming sector. That is why entrepreneurs constantly need to consider the unique risks of fast growth, as we do at InnoGames.
When our three founders started out developing games over ten years ago it was in a true start up spirit, everyone was contributing where it was needed most.
On the back of their first success, the company grew a hell of a lot and there certainly was the risk for InnoGames to lose sight of the spirit and strengths that made us so successful to begin with. Admittedly, this is a natural process that all growing companies will go through. The big question for our future was how to evolve as an ever expanding organization.
InnoGames is very much a product company, and in the past, our three founders were still quite involved in all the decision making related to games. They were essentially our product owners which made sense back then due to the small size of the overall team and their passion of games.
In 2010, things started to get more sophisticated though. We brought in an investor who owns a minority share in the company. All of a sudden, things such as bringing on board a CFO were important, and by 2012 we had grown to 250 people.
Beginnings with a Matrix Structure
The matrix structure has a lot going for it: resource coordination, knowledge sharing, drawing on specialist expertise across the business, and time for top management to focus on strategies and policies were all sound advantages of this structure that we wanted to take full advantage of.
Upon implementing it, our founders were no longer product owners. We now had producers and product managers in charge of our products.
We managed to create our biggest hit to date with this type of structure. Forge of Empires launched in 2012, pushing us solidly above the 100 million registered user mark as a company. Motivated by this huge success, we set out to do something incredibly hard - developing cross platform games. My colleague Dennis Rohlfing wrote a great piece on the lessons learned pursuing this.
In a nutshell, the matrix structure worked tremendously for Forge of Empires, a top 50 grossing strategy game in all our key markets, but it caused a lot of issues for subsequent games we were working on, and we knew we needed a change.
Why?
Each employee was answering to two immediate supervisors. A functional supervisor (Engineering, Art, Game Design, Marketing, Analytics, Customer Support, …), and a product supervisor. This lead to unclear, and sometimes even conflicting goals given to staff members and even if goals were aligned, staff members still had the dilemma of needing to figure out who’s goal to work towards more urgently.
For us, the matrix structure resulted in over-specialization. Our key strength from the early days was slowly eroding. We had less people willing to take a 360 view on the project, helping out where it was needed most.
We developed High Communication Overhead – “too many cooks in the kitchen” syndrome, ultimately taking away empowerment from the teams and their respective product owners.
Yet, the most important lesson learned deserves its own paragraph.
Within the matrix structure, we had simply taken it one step too far.
Production (developing our new games), and Product Management (developing and running our live games) were now run by different people at head level. Furthermore, each individual was also reporting to a different C-Level executive.
While we all got along great, and communicated well with each other, it was probably this constellation that made it even harder than it already was to create a successful, kick ass game. Our recommendation to anyone thinking of doing this… don’t.
As Production finished their MVP, Product Management took over. We now lovingly refer to this hand-over as “throwing the project over the fence”. Changing product owners at one of the most crucial times – when a project is about to go live – is never a good idea! Not to mention that the new person might have a slightly different vision, and perhaps might have even staffed the team differently.
It also doesn’t exactly encourage the product owner during production to think about the challenges of live operations, because he is simply working towards his production milestones.
So, we decided to do things differently.
Changing to a Studio Structure
We wanted to accomplish five things:
Building an effective and scalable organizational structure with smaller, high performing teams
Stopping the concept of “throwing the project over the fence”
Empowering product owners and integrating them into the company‘s leadership structure
Empowering cross-functional product teams to make their own decisions
Faster decision making with less process and communication overhead
In 2014, we largely scrapped the matrix structure and made important changes at the product level of the organizational chart.
More specifically, we scrapped it for all departments that are heavily involved in the making of games:
Each product now has its own leadership team and a self-sufficient team in place to do anything they wish to do. Game design, art and engineering are fully integrated into their respective product teams.
Each product is run as a small business, where product owners now have the sole responsibility for the revenue side of the business and they have full P&L responsibility for their product. They are responsible for assembling and leading the full product team.
There is no more “throwing it over the fence”. Product owners manage the full process from game concept to delivering a marketable gaming product. Once the game is live, the original vision owners remain on the title, scaling it through the growth phases and developing more content for their game to maximize mid and long term business potential.
For the organization as a whole, we created studios.
A new role of Studio Director was created, with full control and responsibility over all aspects of their respective studios.
We decided to cap each studio at max 100 people, as we believe that we can create successful mobile and cross-platform titles with product teams of max 20 people.
Our studio directors now all report to the same person, the Chief Product Officer. Together, this group formulates the strategic path for InnoGames’ games business, and then they set out individually to manage their studios to achieve the aligned strategic goals.
This change in structure is already showing great results for us, for example:
Since its inception, we launched Elvenar with great success. The key KPIs are looking even stronger than those of Forge of Empires.
We are seeing much stronger personal identification with our products and our empowered teams are demonstrating great decision making, setting their products up for future success.
We have become much better at failing fast. Now that the communication overhead is reduced, we are creating more concepts and prototypes than ever before. More thought goes into which idea we actually go ahead with, and ultimately end up investing 12-24 months and several millions of budget into it.
The new structure allows us to focus on covering more genres than ever before. We have more games in development now than in the past, with each studio working on several new mobile titles in the strategy, RPG and simulation genres.
We opened a studio in a second physical location, and are now creating great games in both the beautiful cities of Hamburg and Düsseldorf.
Several new titles are going to be soft launched later this year, using Unity and the Unreal Engine. In terms of production value, our new games are taking another major leap beyond what we have done so far.
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