Valve: How going boss-free empowered the games-maker

 
Valve office Valve believes high-performance workers tend to self-improve without a need for managers

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Welcome to Flatland.

Imagine a company where everyone is equal and managers don't exist. A place where employees sit where they want, choose what to work on and decide each other's pay. Then, once a year, everyone goes on holiday together.

You have just imagined Valve.

The video games developer caused a stir when a handbook detailing its unusual structure leaked onto the web last year. Now, in a rare interview, it discusses its inner-workings.

"We're a flat organisation, so I don't report to anybody and people don't report to me," explains DJ Powers, speaking to the BBC on the sidelines of Edinburgh's Turing Festival.

Team Fortress 2 Valve's employees often continue working on a game, adding features, after its release

"We're free to choose to work on whatever we think is interesting.

"People ask you questions about what you are working on. And the response is not to get defensive but to have that conversation and make sure that we're all invested in each other."

Even the furniture in Valve is unusual.

While other firms have fixed layouts, the workstations at the Bellevue, Washington-based company are fitted with wheels.

"We move around a lot and we don't want it to take a lot of time to do that," says Mr Powers.

"We form into teams based on need to complete a feature or complete a game, and then we disperse into new teams.

"The ability to be able to pick up and move and be in another office in 20 minutes as opposed to a day-and-a-half is really attractive.

Valve handbook Valve's somewhat eccentric handbook includes a guide to how to move its desks

"I've moved my desk probably 10 times in three years.

"You just wheel it out of the office and into the freight elevator and go up to whichever floor you need."

Valve's games - which include the Half-Life, Portal, Dota and Left 4 Dead series - are famed for both their quality and high sales.

Its online store, Steam, helped popularise the idea of a digital marketplace years before Apple's App Store.

Now some suggest its new Steam operating system could disrupt the games console market.

One might think the firm's set-up is a recipe for its staff to career off to their own personal passion projects. So how do its complex products ever emerge?

"One of the ways that things get done at Valve is that a critical mass does form," explains Mr Powers.

"There are lots of ideas about what is cool to work on.

"But unless you can find like minded people to work with, you will struggle to get enough resources you need to get it done."

DJ Powers DJ Powers worked at Electronic Arts before jumping ship to join Valve

Traditional management consultants might shudder at the implications, but Prof Cliff Oswick from Cass Business school - who has studied other experiments in what he calls "non-leadership" - commends the model.

"This is the most extreme form I've seen of deliberately moving away from hierarchy," he says.

"What I like most about this is it privileges the idea of dialogue, the idea of collective engagement."

Valve handbook Gabe Newell wanted to create a company without bosses after working at Microsoft for 13 years

He adds that he believes the model works in this case because Valve attracts "elite" performers.

But Mr Powers suggests there's another reason for its success.

"It doesn't work because we have the 1% of the 1%, or however you put that. It works because it was the original philosophy.

"Gabe [Newell] and the crew that started Valve hired people with this in mind.

"That's how we got to a company working effectively for a long period of time under this structure - because it was designed from the beginning."

The firm's stack ranking system is another curiosity.

Staff working on the same project rank each others' technical skills, productivity, team-playing abilities and other contributions.

The information is then used to create an overall leader-board which then helps determine who gets paid what.

Valve office The sofas may be static but Valve's desks and chairs are designed to be moved

Although Valve's record suggests the system can work, Prof Oswick warns that it could go awry were the firm to face a financial setback.

"Peer-pressure is a fantastic way of organising a business," he says.

"And so long as everyone is well paid people don't mind being in the bottom earning quartile.

"But as soon as resources become more scarce, then competition increases, which creates conflicts, which creates tensions, which creates hierarchies, which creates concern about relative positioning."

It's something to bear in mind at a time Valve is expected to embark on a potentially costly foray into hardware.

Valve handbook Valve's first "company vacation" was to Mexico in 1998 when it had only 30 employees

In the meantime employees have an expenses-paid week-long holiday to look forward to.

The company regularly flies all 300-plus members of staff and their families to a tropical resort, most recently Hawaii.

The idea of spending free-time with workmates might sound like a nightmare to some, but Mr Powers says it is something that he and the others genuinely look forward to.

"We travel together once a year and it's fun," he says. "Valve's really a family atmosphere in a lot of ways and that gives us an opportunity for our [own] families to get know each other even better."

There are some caveats to Valve's model.

In a land of equals there's recognition that founder Gabe Newell still has most influence.

Or as the handbook puts it: "Of all the people at this company who aren't your boss, Gabe is the MOST not your boss, if you get what we're saying."

And at a firm which says picking who else to hire is its workers' most important task - it describes the activity as "more important than breathing" - there's an acknowledgement that many talented individuals will not fit in.

"The culture is a flat organisation without a lot of top-down direction," explains Mr Powers.

"That's not a comfortable situation for a lot of people."

Valve handbook Valve's handbook declares hiring is "the most important thing in the universe"

Then there's the fact that when a firm without bosses dismisses staff it attracts attention. A decision to let about two dozen workers go in February made headlines across the tech press.

Mr Powers would not discuss the event, but when the Verge news site interviewed two of the laid-off employees they appeared to still be on good terms with the company, revealing they had been allowed to retain the intellectual rights to the project they had been working on.

Half-Life 2: Episode 2 Many gamers wish Valve's employees would decide to release a new game in the Half-Life series

Other companies might blanche at such ideas - and Mr Powers acknowledges it would be a bad idea to retrofit Valve's model to existing businesses - but he indicates there are lessons for start-ups.

"I think the fact that we're not managed by people and we're not managing people and you're able to formulate your own ideas and work with whoever it is to come up with a project or feature - that's empowering," he says.

"It's a community of respect and the best idea wins no matter who it comes from, whether they've been at Valve for a year or founded Valve."

 

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  • rate this
    -2

    Comment number 155.

    Ah ... perhaps this explains wht I can't get any useful technical support from this company. 'Not me, ask someone else,' seems to be stock answer to my questions.

  • rate this
    +1

    Comment number 154.

    @147 You clearly haven't understood or possibly not read the content of the article.

    In summary, it works for Valve - demonstrably. It does not work for everyone.

    @99 - where does it say it's new?

  • rate this
    +4

    Comment number 153.

    My company is run by a family and new positions and promotions generally go to Managers children or relatives, completely bypassing long serving employees and favouring young school leaving relatives.

    Whilst I hope I dont seem bitter, I cant help thinking that a company that has a diplomatic approach wouldnt tend to dissapoint many of its staff and would only benefit in the long run.

  • rate this
    0

    Comment number 152.

    if only the NHS was like this!

  • rate this
    0

    Comment number 151.

    Am I right in thinking that Half Life is the "Chinese Democracy" of the gaming world?

  • rate this
    +2

    Comment number 150.

    At least the decisions makers know what they are talking about - unlike my experience with Zurich insurance - top-down approach chipped away at a successful business unit - a management team without business insight because outsiders, & before that, McKinsey's - more good money after bad. Very hierarchical. Rock bottom morale.

    Kind of happy I was made redundant, all in all, & so is my new boss.

  • rate this
    +5

    Comment number 149.

    @12.ravenmorpheus2k

    Valve provide the platform Steam, its up to the developers who write the games to test them on the platform before releasing to the general public. It's not up to the platform provided to internally test every piece of content placed on it by third parties.

  • rate this
    +1

    Comment number 148.

    Half Life 2 was one of the most delayed games of all time. That is due to lack of management. However, it would have been a much lower quality game if there was management involved. Its all well and good for games but certain businesses, timings and therefore management, are crucial.

  • rate this
    +1

    Comment number 147.

    Good management > no management > bad management.

    Having worked for management who were totally irrational and impossible to have an adult conversation with, I can see the attraction of this idea. But there is a danger of replacing a hierarchy of bad managers with a flat structure of an even greater number of crazies to deal with.

  • rate this
    +2

    Comment number 146.

    3 pages of the handbook posted = Half Life 3 confirmed!

  • rate this
    +3

    Comment number 145.

    @99 "Fascinating - but not new. The scientists involved in the Manhattan project had a similar way of working (much to the despair of their military overseers)."

    I think that was probably just Richard Feynman. Read the biography "Genius" to discover more.

    The attitude to H&S at Los Alamos is interesting reading, both hilarious and tragic.

  • rate this
    -2

    Comment number 144.

    Works for small companies where roles are clearly defined.
    Organisations beyond 120 people lose a sense of community: people find it difficult to know the basics about one another-what other people do, how they fit in, what relative status they have.
    Status depends on earning power & knowledge level.
    Large organisations require complex command and control systems and are by nature, less efficient.

  • rate this
    +2

    Comment number 143.

    Pff, we all know GLaDOS runs the show.

  • rate this
    +7

    Comment number 142.

    It is about time we questioned the validity of the boss-worker hierarchical structure.

    A person with authority is often more likely to act in their own interests than those of the company, and fail to see how each employee can best contribute.

    Employees know what they're good at - what interests them is what they'll do best. Letting workers make their own decisions also greatly improves moral.

  • rate this
    +7

    Comment number 141.

    In organisations of highly skilled people this makes sense - managers tend to not understand the work and therefore are worse than useless.

  • rate this
    0

    Comment number 140.

    1 + 2 = 3. HL3 confirmed.

  • rate this
    +1

    Comment number 139.

    where will all the pretentious people go, what will they do, there will be dole cues of people with pointless BA an MBA mumbling pointless acronyms and buzz words, gangs of ex managers hanging around street corners in mock power meetings and screaming at passersby pointless orders, is this a Britain that we want to live in, where there children have to go without homous and couscous is it.....

  • rate this
    +1

    Comment number 138.

    So that's why Half Life 5 is never going to be released !

  • rate this
    +6

    Comment number 137.

    Not only would this be beneficial for competant workers who know, understand and care about their job/business, but it also eliminates manager favourites getting preferencial treatement, and the opposite.

  • rate this
    +22

    Comment number 136.

    Where I work we have about six layers of managers before you actually manage to dig down to the people doing the bulk of the work. And of course it's the managers that get credit for everything, even if the ideas have come from their entry-level analysts.

 

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