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By Greg Zeschuk and Ray Muzyka
Gamasutra
[Author's Bio]
May 15, 2002

Why Grow?

First Steps

Setting Growth Targets

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This feature originally appeared in the Proceedings of the 2002 Game Developers Conference


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Features

GDC 2002: Moving to Multiple Projects

First Steps

Evaluate the Company Culture
What are your company's values and culture? Is it a smaller boutique studio that specializes in making a single type of game, or is it already a more formal corporate environment with a firm grounding in the business of making games? It's advisable to try and match your growth goals with your existing company structure as it will make growth easier. It's possible to change company culture, but it has to be done actively over a considerable amount of time.

Evaluate Management Structure
Do you have the managers necessary to run multiple projects, e.g. if you want to run two projects do you have two producers? Also recognize that new management challenges arise once you are no longer the one resolving interpersonal issues - can you trust the people you have in place to take care of all personnel problems? Is there a clear reporting structure for managers? How do you add new mangers? Do you hire them or promote internally? Are you sure your new managers share your view of management?

Evaluate Communications
How many of your current communication techniques are effective in an organization where you'll talk meaningfully to the majority of people less than once a week? How are you going to disseminate information to the whole company? Who are your internal advisors?

Evaluate Operational Structure
Before growing you need to consider some of the more mundane elements required in running a business, such resources as: office space, copies of software, number of computers, IT staff, and general admin staff. Consider that requirements for some of these resources don't increase linearly as you grow, but instead exceed your expectations, growing practically exponentially. We've certainly found this to be the case with IT staff as we've grown - we hit critical mass and went from one to five full time network/systems administrators (plus two full time webmasters) as our network expanded and as we got more aggressive on the Internet.


Evaluate Company Resources
A growing company needs to consider core resources such as HR completely differently than it did when it was small. A larger company can no longer evaluate issues on a case by case basis and instead needs some general policies that can be applied to a variety of situations. These often relate back to company values - this helps keep them grounded. A larger studio can't avoid some 'red tape' - the key is keeping at as minimal as possible. Our approach has been to establish core company values. We have only two core values: quality in our products, and quality in our workplace, that can be applied to all situations. Our policies are a direct offshoot of our company values.

Evaluate the Preferences of the People at the Company
As archaic and simple as it sounds, this is probably the most important point to consider. You need to have a shared vision of your ultimate target company, and this vision must be shared with the people who are at the company. If they don't agree with the direction the company is going they will simply leave. Carefully consider this when growing your studio as it may literally end up completely different from when you started the process.

Different Structures of the Growing Studio

Team Based Approach
This method involves no overlap between projects - each team is sacrosanct and shares neither personnel nor technology. This does work, but there is little intra-company spirit, and you're more likely to have competition between the teams that can sometimes get ugly. Works well for a 1 or two team company. We consciously decided to avoid this structure as we grew.

Departmental Approach
This method involves overlapping most development duties and assigning them to specialized groups that takes care of their one task. The challenge here is a lack of team spirit; people might have faith in the company, but they likely have little attachment to any particular project.

The Matrix
(Bioware structure) This method is effectively a hybrid of the team and departmental approaches, drawing upon the strengths and the weakness of both. Everyone is both on the team and in a department, but they sometimes have competing goals from the team and department, and hence they need strong leadership (and corporate values/goals) and extremely clear communication to be effective. When the Matrix works it is very powerful, but when broken it is very destructive. The matrix is based inherently on conflict between teams and between the teams and departments hence the matrix leads need to be strong-willed as do the project leaders and departmental leaders. Yet everyone needs to have the overall goals of the company at heart, first and foremost at all times (this should complement and supercede the specific project or departmental goals). This structure works well for a mid-sized developer of 3-6 projects if the communications infrastructure is well-thought out and if appropriate senior (producers, department directors) and mid-level managers (leads on the projects) are available.

Less- or Unstructured Approach
Another possible structure is a much less structured company: multidisciplinary teams form and dissolve on the basis of the needs of subprojects. In this format there is much less management and structure than above approaches. A few developers use this approach with variable degrees of success - the success of the team and project is more directly related to the personal qualities of the team members rather than any particular manager or visionary, though a strong company leader is likely a critical element in this approach succeeding.

Assesing the Impact of Growth

Positive
In addition to business awards and other accolades that indirectly generate increased revenue (via increased company profile leading to improved quality of job applicants, increased availability of financing and better contracts), growth is positive as it can lead to:

Duplication of valuable skill-sets within a company - one of the challenges facing any company is turnover of staff. With a larger company there should be some duplication of skills that can reduce the impact of the loss of key staff. Of course, there is also increased demand in a larger company. In general with more people at the company there is also an opportunity to apply more people to certain problems for limited periods of time - there is an advantage of flexibility of staffing.

More development bandwidth to try a variety of design ideas - with more people and projects you can try out more ideas. This is of course of benefit in that the more projects you release the larger chance you have for a success.

Increase in the value of the shareholders' equity - as owners of the company this will ultimately translate into better sales prices should the owners decide to sell. It will also allow greater debt capacity (you can borrow more if your equity is worth more - since banks look at things like debt to equity ratios).

Improved compensation and opportunities - growth also provides opportunity to reward staff with increased compensation and provides an outlet for staff to grow within the company (instead of leaving it). In short, growth allows for more opportunities for people with more experience and has the potential to keep them stimulated in what they are doing longer.

Negative
Growth can be destructive when it leads to:

Less personal accountability for success of all of the company's projects. In a large faceless company it's hard to get excited about every release. There is a careful balance that must be managed to be large enough to do a lot, but not large enough that people don't care.

Fragmented communication. Probably the first thing you'll notice in a larger company is that communication is much harder than when the company was smaller. At Bioware we've worked very hard to maintain strong communication as the glue that holds the company together.

A lack of focus for both the company and individuals. As a company grows there often is a loss of focus as competing forces within the company pull it in multiple directions. When it gets too large to be controlled by the existing management it will quickly spin out of control.

More complicated business and personal interactions. In the early days of Bioware life seemed much easier and simpler. Perhaps it was, or perhaps we were just naïve. Whichever it is, we can never return to the free and easy approach of our first few years.

Running out of money and bankruptcy. The big scary result that is perhaps the most common result of growth. Once the company hits all the above bad points this one usually isn't far off. It unfortunately happens more often than we all realize!

How do you Reconcile Competition for Resources?

Balancing projects within a growing company is challenging and fundamentally different from the issues faced by a one-project company. Not all projects have equal potential so senior studio personnel have to sometimes make hard decisions to decide who gets most of the pie. Some ideas on how set priorities include: priority based on release date, priority based on potential, priority based on project momentum, and most importantly the potential for profit (return on investment, net present value, etc.) from a given project. It's most wise to put your money into the sure bet with the greatest and quickest chance of profitability.

Communication Rechniques for the Growing Company

Open Communication
One way to communicate is to tell everyone everything all the time. This gets hard if you have bad news to share. Open book policy means that people have expectation of getting more information all of the time - if you stop providing this at some point rumors will run rampant (e.g. in terms of financials people will wonder whether the financials have deteriorated). So, once you go down this path it's very hard to turn back.

Structured Communication
Another way to communicate is to carefully structure communications either in company meetings, personnel meetings or company bulletins and memos. This makes it easier to share information but can lose that personal touch. This usually involves the partial sharing of financial information, and open discussion of company direction at frequent team and department meetings, and full company meetings. This is the approach we take at Bioware.

Rumor-dispelling
Zeschuk's law: The number of rumors generated at a company per week is directly related to the size of the company! In a growing company people often don't know whom to believe when it comes to what sounds like important company business. It's important to understand that rumors are a sign of a lack of communication and they should dissipate once communications improve.

No or Poor Communication
This is bad - avoid it! (If you're wondering why, that's proof right there that no communication is something to avoid. Effective communication can be a lot of work sometimes but in the end [in our experience] it will save reams of time and is well worth the up-front cost in terms of time).

How Can You Tell When You've Grown Too Fast?

Some simple metrics to gauge when you're grown too fast: you don't remember the names of people in the company (of course, this can also be due to the porous memory of a manager), people aren't sure who their 'boss' is (this can also be due to poor communication of what the company org chart looks like), failure of scheduling for no apparent reason, poor integration of new personnel into existing projects or departments, and deterioration of the company financials.

Other metrics to consider include looking at financials more closely - some common ratios to consider such as:

ROA, ROE, ROI, debt ratios, inventory turnover, days inventory, measures of cash flow, measures of profitability, etc., may be useful to look at (and having a good internal financial system and controls will allow for these ratios to be understood and evaluated).

Another area to consider is role definitions: are people overloaded due to increasing demands on their time in a rapidly growing company? One way to tell this is for staff to write down everything that they are doing in a day - this allows you to identify specific roles that are being filled on a project and in a company, and consider ways to hire more people to delegate to should people get overloaded.

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Setting Growth Targets


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