Harvard Case - Outfit7 (A): Human Resource Management and Culture at a Start-up
"Outfit7 (A): Human Resource Management and Culture at a Start-up" Harvard business case study is written by Miha Skerlavaj, Spencer Harrison, Ziga Vavpotic. It deals with the challenges in the field of Entrepreneurship. The case study is 9 page(s) long and it was first published on : Feb 22, 2019
At Fern Fort University, we recommend Outfit7 implement a comprehensive human resource strategy that fosters a strong company culture, promotes employee engagement, and supports the company?s rapid growth. This strategy should prioritize attracting and retaining top talent, building a strong leadership team, and creating a culture that values innovation, collaboration, and employee well-being.
2. Background
Outfit7 is a mobile game developer founded in 2010 by a group of entrepreneurs with a passion for creating engaging and entertaining games. The company?s flagship product, Talking Tom Cat, quickly gained global popularity, propelling Outfit7 to become a leading player in the mobile gaming industry. The company?s success has been driven by its focus on innovation, its ability to adapt to changing market trends, and its strong entrepreneurial culture.
The case study focuses on the challenges Outfit7 faces in managing its rapid growth, including the need to scale its workforce, maintain its entrepreneurial spirit, and adapt its organizational structure to support its global expansion.
3. Analysis of the Case Study
Outfit7?s success can be attributed to several key factors:
Entrepreneurial Spirit: Outfit7?s founders? passion for gaming and their entrepreneurial drive have been crucial in driving the company?s growth. This entrepreneurial spirit has fostered a culture of innovation and risk-taking, allowing Outfit7 to quickly adapt to market trends and develop successful games.
Disruptive Innovation: Outfit7?s Talking Tom Cat franchise disrupted the mobile gaming market by introducing a new type of game that combined entertainment with interactive elements. This disruptive innovation has allowed the company to capture a large market share and build a loyal user base.
Strong Marketing Strategy: Outfit7 has effectively leveraged social media and other marketing channels to reach a global audience. The company?s marketing strategy has been crucial in building brand awareness and driving user engagement.
Global Expansion: Outfit7?s success has been fueled by its ability to expand into new markets and reach a global audience. The company?s international expansion has allowed it to leverage the growing demand for mobile games worldwide.
However, Outfit7?s rapid growth has also presented challenges:
Scaling the Workforce: As Outfit7 grows, it needs to recruit and retain top talent to support its expanding operations. This requires a robust hiring and onboarding process, as well as a clear career development path for employees.
Maintaining Entrepreneurial Culture: Maintaining a strong entrepreneurial culture can be challenging as a company grows and becomes more structured. Outfit7 needs to find ways to encourage innovation and risk-taking while ensuring operational efficiency.
Organizational Structure: Outfit7?s current organizational structure may not be optimal for its current size and global reach. The company needs to consider restructuring its organization to improve communication, collaboration, and decision-making.
Leadership Development: As Outfit7 grows, it needs to develop a strong leadership team that can guide the company?s future growth. This requires investing in leadership training and development programs.
4. Recommendations
Human Resource Strategy:
- Develop a robust hiring and onboarding process: Outfit7 should invest in a comprehensive hiring process that attracts top talent from around the world. This process should include thorough screening, interviews, and onboarding programs that ensure new employees are fully integrated into the company culture.
- Implement a clear career development path: Outfit7 should create a clear career development path for employees, providing opportunities for growth and advancement within the company. This will help retain valuable employees and motivate them to contribute to the company?s success.
- Invest in employee training and development: Outfit7 should invest in training and development programs that equip employees with the skills and knowledge they need to succeed in their roles. This includes training in areas such as game development, marketing, and leadership.
- Foster a culture of innovation and collaboration: Outfit7 should create a culture that encourages innovation and collaboration, allowing employees to share ideas and contribute to the company?s success. This can be achieved through initiatives such as hackathons, brainstorming sessions, and cross-functional teams.
- Offer competitive compensation and benefits: Outfit7 should offer competitive compensation and benefits packages to attract and retain top talent. This includes salaries, bonuses, health insurance, and other perks that are in line with industry standards.
Leadership Development:
- Identify and develop high-potential leaders: Outfit7 should identify high-potential employees and provide them with opportunities to develop their leadership skills. This includes mentoring programs, leadership training, and opportunities to take on challenging roles.
- Create a strong leadership team: Outfit7 should build a strong leadership team that is aligned with the company?s vision and values. This team should be responsible for guiding the company?s growth and ensuring its long-term success.
Organizational Structure and Design:
- Consider restructuring the organization: Outfit7 should consider restructuring its organization to improve communication, collaboration, and decision-making. This may involve creating new departments, establishing clear lines of authority, and empowering employees to take ownership of their work.
- Implement a performance management system: Outfit7 should implement a performance management system that provides regular feedback and performance reviews. This system should be aligned with the company?s goals and objectives and provide employees with clear expectations and opportunities for improvement.
Company Culture:
- Promote a culture of innovation and creativity: Outfit7 should continue to foster a culture of innovation and creativity, encouraging employees to come up with new ideas and take risks. This can be achieved through initiatives such as hackathons, brainstorming sessions, and cross-functional teams.
- Emphasize teamwork and collaboration: Outfit7 should emphasize teamwork and collaboration, creating an environment where employees feel comfortable sharing ideas and working together to achieve common goals. This can be achieved through team-building activities, cross-functional projects, and open communication channels.
- Prioritize employee well-being: Outfit7 should prioritize employee well-being, providing a supportive and healthy work environment. This includes offering flexible work arrangements, promoting work-life balance, and providing access to wellness programs.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with Outfit7?s core competencies in game development, marketing, and international expansion. They also support the company?s mission to create engaging and entertaining games for a global audience.
- External customers and internal clients: The recommendations focus on attracting and retaining top talent, which is essential for meeting the needs of both external customers and internal clients.
- Competitors: The recommendations address the need to stay ahead of the competition in the mobile gaming industry, which is characterized by rapid innovation and fierce competition.
- Attractiveness - quantitative measures: The recommendations are expected to contribute to Outfit7?s long-term profitability by improving employee productivity, reducing turnover, and fostering a culture of innovation.
6. Conclusion
Outfit7?s success is a testament to the power of entrepreneurship, innovation, and a strong company culture. As the company continues to grow, it must adapt its human resource strategy and organizational structure to support its global expansion and maintain its competitive edge. By implementing the recommendations outlined above, Outfit7 can build a strong foundation for future growth and success.
7. Discussion
Alternatives:
- Outsourcing: Outfit7 could consider outsourcing some of its operations, such as customer support or software development, to reduce costs and focus on core competencies. However, this could lead to a loss of control over quality and a potential disconnect with employees.
- Mergers and Acquisitions: Outfit7 could consider acquiring smaller game development studios to expand its portfolio and gain access to new talent. However, this can be a complex and risky strategy, requiring careful due diligence and integration planning.
Risks and Key Assumptions:
- Attracting and retaining top talent: A key assumption is that Outfit7 will be able to attract and retain top talent in a competitive market. This will require offering competitive compensation and benefits packages, as well as creating a positive and supportive work environment.
- Maintaining entrepreneurial culture: Maintaining a strong entrepreneurial culture as the company grows can be challenging. It will require proactive efforts to encourage innovation and risk-taking, and to empower employees to contribute to the company?s success.
8. Next Steps
- Develop a comprehensive human resource strategy: Outfit7 should immediately begin developing a comprehensive human resource strategy that addresses the recommendations outlined above.
- Implement a new hiring and onboarding process: Outfit7 should implement a new hiring and onboarding process that attracts top talent and ensures new employees are fully integrated into the company culture.
- Invest in leadership development programs: Outfit7 should invest in leadership development programs to identify and develop high-potential employees.
- Evaluate the organizational structure: Outfit7 should evaluate its current organizational structure and consider restructuring to improve communication, collaboration, and decision-making.
- Monitor progress and make adjustments: Outfit7 should regularly monitor the progress of its human resource initiatives and make adjustments as needed to ensure they are aligned with the company?s goals and objectives.
By taking these steps, Outfit7 can build a strong foundation for future growth and success, ensuring that it remains a leader in the mobile gaming industry.
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Case Description
Outfit7 is a digital entertainment firm that develops and publishes animated video games for mobile phones, tablets and desktops. It's flagship product is a series of mobile apps called "Talking Tom and Friends", with close to 10 billion downloads globally. Outfit7 is one of only 46 European unicorns, i.e., privately held companies valued above $1 billion, topping the global ranks of most downloaded mobile games. In 2017, according to App Annie, a leading app-ranking platform, Outfit7 was the sixth most downloaded mobile publisher, and My Talking Tom was the second most downloaded mobile game globally, putting it in the company of tech giants like Facebook, Google, Tencent and Alibaba. Part A describes the growth stage from 2009 to 2014, along with the story of founders Samo and Iza Login. The focus is on setting up the startup and developing a unique organizational culture, leaving the hiring decision (fit or misfit) to students. In Part B, from 2014 to 2017, the start-up moves into scale-up phase after the founders' exit/appointment of a new management team, the focus is on entrepreneurial leadership. In Part C, as tensions emerge from scaling up a unicorn, students must decide what to keep and what to change (how to balance continuity and renewal) as expectations for growth soar.
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