Changing CEOs

Though it’s always easiest to take these steps at the first phase of start up, companies retrench all the time. Developers face key moments where this process can have the most effect: prior to a large growth spurt, when a founder leaves or is in a financial crisis. Many game studios redefining themselves after their first game is published go through some transition.

Microsoft did it. LinkedIn did it. Joost just did it. They successfully moved the head honcho out of the the CEO and into another position.

In 2000, Bill Gates graciously handed the helm to Steve Ballmer, and moved to CTO, something close to his heart. In a long planned move, social networking company LinkedIn founder and company visionary Reid Hoffman moved to president and brought in Dan Nye to run the overall company.

In June, Joost’s CEO and one of the founders, Frederick De Wahl, moved over to Chief Strategy Officer, installing Michelangelo Volpi in his place. All three ceded the top position because they knew the company would be better led by someone with more experience who loves running a company. At the same time, they satisfied their own passions by moving back into doing what they love.

No one is going to move an entrenched CEO without harming a company. But if, as the CEOs above did, that person looks at what they are doing for themselves and to the company, they can transition smoothly.

More Than A Formality: The Corporate Board

A game’s publisher and a company’s corporate board both safeguard the financial integrity, quality and timeliness. On a macro level both stay outside the day-to-day company operations while demanding results through the development of goals and require accurate high level reports on a periodic basis. They also provide selected expertise when needed. A publisher hires, reviews and fires a company, the board hires, reviews and fires the CEO.

When the publisher and development company know their roles and work well together, the results are phenomenal. The milestones act as goalposts for a game, spurring the company to act effectively and productively. Honest criticism leads to clear decisions about what should be cut, revamped or kept. In a great relationship publisher and developer share resources, whether it’s programming expertise or marketing art. The same goes for a highly tuned corporate board.

Note that a board and the corporate leaders should not be of the same people just as publishers need to maintain some distance from the development houses they hire. Just as bad publishers can micro manage game design; enmeshed boards want a hand in hiring and firing of employees. Intertwined corporate boards lead to blindness. They give only positive feedback when factual feedback is vital.

The size of a company doesn’t matter. Even tiny companies benefit from having a well run board.

So who should be on the board? From the company side, the CEO and someone representing the financial side of the company. Separating these two out is vital. Even in the smallest companies benefit from having a professional financier prepare and deliver clear, concise reports. Company legal counsel should be present.

Some of the make up of the board is dependent on the focus of a company as well as its culture. A tech heavy game company may wish to have their CTO aboard, whereas one more customer centric may have a representative from a super-user group. Of course, main investors often have board seats in order to ensure their stake in the company.

Other expertise is brought in as needed. Depending on where the company is in their cycle, a board may have Human Resources called upon to give a recruiting report, or have the Director of Business Development to list out upcoming opportunities. Programming may decide to put together a list of things they want to patent.

Equally important is the independent board member.