Last time I spoke about expanding your market globally. The question that follows is, how do I build a team or an international office?
I will tackle this with examples of how we did it, or really mistakes we made, as Kabam grew its offices to 6 locations with a workforce of over 1500.
Whether you are considering expanding to a new location or globally, many of these steps still apply.
Step 1: Determine the purpose of your overseas office.
Here are some questions to ask when determining the purpose:
- Do we expect this office to be responsible for our market expansion in this region?
- How much input is expected from this office regarding market expansion?
- Is this location expected to generate revenue?
In February 2010, our CEO decided to take a one week exploratory trip to China. By the time he came back he told us: “Okay guys we are opening an office in China and I already hired the first 3 guys.” While we knew China would be strategically important to us, we did not have a clear purpose for the office, so we decided to have them work on building Facebook apps, as our games were on Facebook at the time.
Only one problem — Facebook was and is blocked in China. So, we had a team who was building on a platform they could not access unless they were on the VPN (Virtual Private Network) in the office, let alone understand how a platform like Facebook would fit in their lives culturally and socially.
Eventually, the office was able to provide strategic importance, but it took a lot longer to get to that point because of the lack of clear purpose in the beginning.
Step 2: Choose your first employees overseas (wisely)
The first employees set the cultural tone, communication tone and strategy for that overseas office and region. They set the quality bar for future hires, location, strategy as well as partnership recommendations in that region. In choosing a first employee for the office, you should create a job profile tightly aligned with the purpose of that office. They represent your company internally and externally in that region.
Here are some questions to ask when creating the job profile:
- How familiar is this person with the industry and the region?
- Have they ran a satellite office before? Bonus points if they have worked for an MNC (Multi-national corporation)
- Have they had P& L responsibility in the past? (if they have P&L responsibility)?
- How culturally aligned is this person?
The company then faces the dilemma when growing a team overseas:
Should this office be grown organically or through an acquisition?
Organic People Growth
Organically is when you hire people one at a time. Usually there is someone from HQ who hires the first few people and individually onboards each hire. This type of growth creates a cultural bond between the HQ and the overseas office, and the overseas office tends to identify with the company. For this type of hiring strategy, it is best to hire the leader first. Then, let that leader make all subsequent hires.
Our China office was grown organically. Our first hire was hand picked by the CEO and therefore, this person reported to the CEO and was quite aligned. The office identified as “Kabam China” and there were weekly calls and a change in time for the All Hands meetings to accomodate them. The good communication cadences between HQ and Kabam China helped keep the office and HQ aligned.
In deciding where we should move our European HQ, we decided to send someone from HQ to head up these efforts. This enabled the company to be truly agnostic upon location (more in the next step), and truly align purpose and strategy to the overseas office. While we built the Berlin office organically, the alignment was much tighter with frequent communication beats as well as the identification of the employees in the Berlin Office.
The best way to build an overseas team organically is to take a trusted leader or early employee from HQ and send them overseas to figure it out. They are the ambassadors of HQ and can inform HQ on best location. And ultimately the team they hire overseas will view that leader as truly a part of the company’s entity.
However, organic people growth takes time, and needs to endure the onboarding and creation of a team. The close connection with HQ can also hamper the new team’s ability to execute and adapt quickly to the local markets. We felt this more accutely in our Berlin office. By the time we realized that our European HQ should be in Berlin (and not Luxembourg), many other gaming companies were already in that location. Talent was harder to find and attract, slowing down any of our growth plans we had in that region.
Acquiring People Growth
People growth through acquisition of a team overseas can bring the tremendous benefit of a fully functioning team from Day One with the ability to execute quickly. Finding a team ready to go for M&A purposes may be difficult but can be done. Oftentimes this strategy is used when the company is looking for a team rather than a location. They have decided they cannot build this talent in house, and partnering does not make sense. Therefore, they are investigating the acquisition front.
This happened with the set up of Kabam’s Vancouver Office. We were able to get the license for Fast and Furious ; however, we had no in house talent to build a racing game. Many physics are involved in the game design of a racing game that we just could not build those talents in house. We learned that the team that build the racing franchise Need for Speed was in Vancouver, Canada and working on some mobile games. We first struck up a partnership. After working togher for some time, it made the most sense to acquire them and securing the Fast and Furious license. From Day One we had a full team expert in racing games. They became Kabam Vancouver and we had opened another new office overseas.
Growing via acquisition has it’s benefits but also its challenges. Culturally the acquired team will likely identify with their team over your company and will not be as aligned with the corporate strategy and goals. More often than not, HQ becomes referred to as “the mothership” no matter if they are just across the street or in another country. Also, culturally there can be distance, not because of geography but ways they want to maintain their old identity. For example, Kabam Vancouver did not want to cater food for their employees daily, unlike Kabam HQ. They currently did not provide it and it felt like a shock to their small office. Instead they continued to hold onto the tradition of going out with colleagues. Instead they would use the extra money to fund pajama movie nights and other office events.
How to Choose
With either strategy, the first employees will set a direction for that location and act as the conduit and representative of the location and HQ for communication and strategy. When choosing either one, it is best to review the purpose of the office, timeline and whether you can build, partner or buy within that time frame. Usually acquiring talent comes along not because the target company is in a strategic location, but because the talent has either a product of strategic value or existing revenue to enable the company to grow. Otherwise many companies decide to build the team organically. The benefits of alignment in execution to the overall company strategy can outweigh the benefits of acquiring.
Regardless of what strategy you choose, we found with two of our first overseas offices who we hired impacted the next big decision — the overseas location. It just so happened that both of our European HQ and China HQ were in close commute to those offices.
Step 3: Choose your overseas HQ (wisely)
One of the most important things to look at when choosing your HQ location is how well the local talent pool lines up with your needs.
- Where can I hire the best talent?
- Who am I competing against for talent?
- Is there a local eco-system to feed off of this talent?
- Are the local partners for me to grow my market share?
- Is the business tenable for the cost of talent and purpose of the office?
Right after hiring the first three guys in China, two of the three were in Beijing. One of them was the GM. We did not give much thought to where to place our China HQ. It would be in Beijing. The GM was already living there, it had the best engineering talent (given that Beijing has the two best universities in all of China) , and it was China’s capital.
We failed to realize that traditional western gaming companies had set up their headquarters in Shanghai. Shanghai had always been the place where the arts and design had thrived. As we moved into more console quality games on the mobile phone, it became harder to recruit just gaming talent as we needed more than just pure engineering talent. While some people made the 4-hr commute from Shanghai to our office in Beijing, there was a lot of talent we were not able to bring into Kabam China for because of the commute.
Our initial European HQ, we decided that Luxembourg made the most sense at the time. It was an multilingual location and we needed people who could speak a lot of European languages. And there was a tax incentive. But a large factor influencing our decision was that it was a reasonable commute for our first European employee, who had come in as part of an acquisition. In retrospect, that was short-sighted. Over time the tax incentive expired, the labor costs were getting too expensive to justify the type of talent that location was attracting, and it didn’t make sense to base such an important decision on one employee’s commute. We eventually had to move our European HQ to Berlin where there was much more gaming talent and better labor laws for our work.
While all the other reasons about the cities certainly justify why you should place an HQ in that city or country, just make sure that the location is determined by the purpose and then the best place to choose that talent and less by its first employees.
Step 4: Build an Integration and Communication Strategy
Congratulations! You have added another location, if not another time zone. which brings on a whole host of logistics and people to care for. If you thought breaking your HQ into two floors was a challenge then this is a +10 challenge.
Integration
How does this office fit in the mission, the strategy and the organization? Each person should know the company’s mission and how their office and their job fit into that mission (strategy). Each person should also know who they report into and what metrics or goals they are responsible for. If you have sorted out the purpose of the office it will be easier.
When our co-founder later took over the China office, the mission was clear. The purpose of the office was to expand revenue by helping the company enter into the U.S. mobile markets. The co-founder built a mobile team in China and focused on building our first generation mobile game. That game — Kingdoms of Camelot : Battle for the North — became our flagship mobile game and earned us the Top Grossing App in iOS the year it came out.
That is what tight integration can do!
Communication
Create a regular cadence of internal communications. There are two levels of this: managerial meetings and all hands meetings. Managerial meetings can be determined by the managers leading those functions.
At Kabam we experimented a lot with all hands meetings. Once a quarter we would try to rotate the all hands timing so that our European offices could join, or so our Asia offices could join. Sometimes we had separate all hands meetings for each continent where just the execs would re-present their presentations. Whatever it is, find a time to meet or communicate regularly with your overseas teams.
Presence
Reinforce your mission and strategy with company presence. Satellite offices feel disconnected and on the outside by default, so anything you can do to help connect them is net positive. Execs or others from HQ should visit consistently, and not only be done when you need to deliver bad news or shut down the office. Rotating normal hosting events make the satellite office feel a part of the company. Kabam had a Design Symposium every 6 months where all the game teams would get together and trade what they have learned and connect with one another. This was hosted in several locations and rotate offices.
Also, make sure there is company branding, schwag and similar benefits as in HQ. The whole purpose of these things, which may seem small, are to align them with your mission, strategy and culture so they can execute as if they were at HQ or even better so that you too can create that #1 hit!
I am co-founder of Kabam a mobile gaming company that recently sold for over $1 billion dollars. We grew Kabam to over 1500 employees with 6 offices worldwide. The thoughts here are my own. If you would like to reach out to me, please DM me on twitter @hollyhliu
Thank you to Karen Lien who read previous drafts of this post.
Article was also Medium