Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

http://www.businessweek.com/articles/2012-04-27/why-there-are-no-bosses-at-valve#p1


Earlier this week, Valve Software—the company behind the Half-Life, Counter-Strike, and Portal video game series—released its employee handbook to the public because, according to Valve co-founder Gabe Newell, somebody asked. “I’d mentioned the handbook on a podcast and one of the listeners contacted us and said, ‘Hey, can I get a copy?’ So [designer] Greg Coomer sent him a copy and all of a sudden, it got posted online,” he says. The handbook attracted a lot of attention because, in addition to offering company massage rooms and free food, Valve has a unique corporate structure rarely seen at such a large company: Valve has 300 employees but no managers or bosses at all. Newell talked to Bloomberg Businessweek about his company’s environment and how it works.

Why did you create a workplace with no managers?

I was at Microsoft (MSFT) for 13 years and one of the things I did was go out and talk to customers. I ended up being exposed to a bunch of different organizations that had very different process models. As a result, I ended up thinking about organizational choices more than I probably would otherwise. It became pretty obvious that different types of organizations were good at different kinds of things.

When we started Valve [in 1996], we thought about what the company needed to be good at. We realized that here, our job was to create things that hadn’t existed before. Managers are good at institutionalizing procedures, but in our line of work that’s not always good. Sometimes the skills in one generation of product are irrelevant to the skills in another generation. Our industry is in such technological, design, and artistic flux that we need somebody who can recognize that. It’s pretty rare for someone to be in a lead role on two consecutive projects.

Why is that?

The terminology we use internally is “individual” and “group” contribution skills. A group contributor’s job is to help other people be more productive, and in doing that you sacrifice some of your own productivity. It’s a higher-stress job and you get interrupted a lot more. People will do that for one project. They’ll say, “I really want to do this game,” and everyone will say, “Ha, ha, ha, you’re stuck with it now.” At the end of the project they’re like, “Gee, that was really interesting, but I want to go back and work individually on the next thing.” Some of the highest-compensated people at the company are relatively pure individual contributors.

Was there a specific company that inspired Valve’s model?

At Microsoft, we had very little visibility into the actions of our customers. You know how a lot of computers came with Microsoft Office pre-installed? There was concern among people who were working on Microsoft Office that people would buy computers and reformat their hard drives and install MS-DOS instead of Windows. So we said, “Well, let’s go look at what our customers have on their PCs.” We weren’t going to just ask them. It was a really expensive thing to do. The good news that came out of that was that I think at the time, 20 million people in the U.S. were using Windows.

But what was so shocking to me was that Windows was the second-highest-usage application in the U.S. The No. 1 application was Doom, a shareware program that hadn’t been created by any of the powerhouse software companies. It was a 12-person company in the suburbs of Texas that didn’t even distribute through retail; it distributed through bulletin boards and other pre-Internet mechanisms. To me, that was a lightning bolt. Microsoft was hiring 500-people sales teams and this entire company was 12 people, yet it had created the most widely distributed software in the world. There was a sea change coming.

Today at Valve, we don’t have that traditional marketing or sales organization. Each developer’s responsible for thinking about how to measure and optimize customer satisfaction.

And this is actually more efficient?

Well, you need the right people. Instead of looking for the cheapest people to do a job, we sort of joke that we look for the most expensive. Take someone like Jeremy Bennett, who was working in the film industry on the Lord of the Rings trilogy and King Kong—he was something like the fourth person on the credits to King Kong—and who’s insanely good at what he does. If we put him at Valve, we’ve taken away studio overhead, he doesn’t have to go to meetings anymore, there’s no PR agency to sit between him and our customers. We’ll be more efficient at taking advantage of his skills.

What’s something that Valve isn’t good at?

If somebody is screwing up, we don’t have a lot of internal controls to monitor that. We assume people know what they’re doing. On Half-Life 2, one of the engineers made a bunch of really bad decisions. There was no monitoring system along the way, so it took us about six months longer than it should have for us to catch it. It cost everyone on the team a whole bunch of extra work.

Do you find that people adjust smoothly to this unusual structure?

It usually takes people about six months. The ones who take the longest are those who come out of the feature film industry, where there are institutional structures that are incredibly specialized. You may start your career as an animator, but you make a name for yourself as being the guy who only animates mouths on talking animals in movies. You take somebody like that and it’ll take them a while to realize: “Hey, I don’t always have to animate mouths anymore.”

In the handbook, there’s a random reference to ponies. What’s with the ponies?

Oh, if you leave your phone at your desk someone will use it to send an e-mail that says, “I like ponies.” Some people will make more and more elaborate photos of ponies that people might like. There are some incredibly entertaining characters who work here.

Who signs the paychecks? They're your manager.

 Frazzled wrote:
Who signs the paychecks? They're your manager.

Actually, that's 'Who signs the paychecks? They're the person with signatory power for the bank account.'

In the handbook, there’s a random reference to ponies. What’s with the ponies?

Oh, if you leave your phone at your desk someone will use it to send an e-mail that says, “I like ponies.” Some people will make more and more elaborate photos of ponies that people might like. There are some incredibly entertaining characters who work here.

Damn you bronies!



Is this really new? I mean, hasn't it been well known by now that Valve has an unusual internal structure? Still, it is interesting hearing the news from the horses mouth. Some of the background is cool news to me. Not really a follower of Valve's employees. Didn't know Newel's background with Microsoft or what inspired him and his cohorts to create Valve. Cool.

 pretre wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

Actually, that's 'Who signs the paychecks? They're the person with signatory power for the bank account.'

And who gave them the power to sign the paychecks. Anyone who believes there are no managers there is ignorant. There may be very few of them, but they are there.

 Frazzled wrote:
And who gave them the power to sign the paychecks. Anyone who believes there are no managers there is ignorant. There may be very few of them, but they are there.

I think you're confusing Boss and Manager.

 pretre wrote:

 Frazzled wrote:
And who gave them the power to sign the paychecks. Anyone who believes there are no managers there is ignorant. There may be very few of them, but they are there.

I think you're confusing Boss and Manager.

Boss is manager. Boss is Boss! Now if you defeat Boss then you must do battle with Big Boss!

 Frazzled wrote:
Boss is manager. Boss is Boss! Now if you defeat Boss then you must do battle with Big Boss!

Amusingly enough, that is Valve's promotion policy as well.

 pretre wrote:

 Frazzled wrote:
Boss is manager. Boss is Boss! Now if you defeat Boss then you must do battle with Big Boss!

Amusingly enough, that is Valve's promotion policy as well.

hey if it worked for the Klingons...

 Frazzled wrote:

 pretre wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

Actually, that's 'Who signs the paychecks? They're the person with signatory power for the bank account.'

And who gave them the power to sign the paychecks. Anyone who believes there are no managers there is ignorant. There may be very few of them, but they are there.

I am wirth Frazzie on this. Valve is using a ploy of pretending to establish 'equality' to keep up employee morale. There will still be an uneven pay structure, there will be mythodologies for disciplinaries, people who get higher billing or act as spokespersons, people who control the board etc etc.

 Frazzled wrote:
Who signs the paychecks? They're your manager.

I dont know about you, but I don't sit around signing paychecks all day for my goonbas

 Ahtman wrote:

Heh heh. Brilliant.

 Grundz wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

I dont know about you, but I don't sit around signing paychecks all day for my goonbas

But someone authorized does. They just didn't start cutting checks.

no 300 person organization runs without, well organization. it can be very flat, but don't kid yourself.
Someone does the hiring. Someone does the hiring. Someone pays the bills. Someone is in charge of these projects.

Maybe Valve has a hive mind, or a super computer overlord.

 Frazzled wrote:

 Grundz wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

I dont know about you, but I don't sit around signing paychecks all day for my goonbas

But someone authorized does.

I assure you, once you leave the world lemon aid stand circuit there is no one sitting in a back room signing checks all day.

 Grundz wrote:

 Frazzled wrote:

 Grundz wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

I dont know about you, but I don't sit around signing paychecks all day for my goonbas

But someone authorized does.

I assure you, once you leave the world lemon aid stand circuit there is no one sitting in a back room signing checks all day.

No gak sherlock. But someone authorized the cutting of checks.

Entertainment software is one of the few industries where you can operate without many bosses in the traditional sense. You have a lot of very intelligent, well educated people, doing something they love and believe in. Let them use "agile" development and you won't need to do much organising. They will self-motivate, develop their own project plans, and so on. There still will be a management but its role will be higher level strategy, setting over-arching goals and doing the finance stuff.

 Frazzled wrote:

No gak sherlock. But someone authorized the cutting of checks.

Hum, wouldn't that be payroll? Which is distinctly separate from management? Which can be a completely different company, as it is in the case of the company I work for.

 Kilkrazy wrote:
Entertainment software is one of the few industries where you can operate without many bosses in the traditional sense. You have a lot of very intelligent, well educated people, doing something they love and believe in. Let them use "agile" development and you won't need to do much organising. They will self-motivate, develop their own project plans, and so on. There still will be a management but its role will be higher level strategy, setting over-arching goals and doing the finance stuff.

Oh yea, not disagreeing. I can see a very flat organization.

 Frazzled wrote:

 Kilkrazy wrote:
Entertainment software is one of the few industries where you can operate without many bosses in the traditional sense. You have a lot of very intelligent, well educated people, doing something they love and believe in. Let them use "agile" development and you won't need to do much organising. They will self-motivate, develop their own project plans, and so on. There still will be a management but its role will be higher level strategy, setting over-arching goals and doing the finance stuff.

Oh yea, not disagreeing. I can see a very flat organization.

I think Frazzleds point is that no matter how "flat" a organizations structure is someone somewhere in ultimately in charge

Exactamundo.

 Frazzled wrote:

 Grundz wrote:

 Frazzled wrote:

 Grundz wrote:

 Frazzled wrote:
Who signs the paychecks? They're your manager.

I dont know about you, but I don't sit around signing paychecks all day for my goonbas

But someone authorized does.

I assure you, once you leave the world lemon aid stand circuit there is no one sitting in a back room signing checks all day.

No gak sherlock. But someone authorized the cutting of checks.

You must have a spectacular career in goalpost relocation services

Sophistry. Either you cut the checks yourself or you are authorized by the board and checks are cut on your behalf - aka SOMEONES A FREAKING TREASURER. Are you being intentionally obtuse or did you have a really excellent weekend that has quite wore off yet?

Bingo. If all else fails, there is at least one "boss" at Valve, even if there are no others - Gabe himself.

It SOUNDS like what they do, instead of have a traditional manager that is permanently a manager, is have someone assigned to perform manager duties for a particular project. Then when that's done, someone else gets handed the baton. There are of course going to be people who do it better and/or more often than their colleagues, but it sounds like a nice way of doing it - it *should* make it more likely that such power won't be abused. However I can't see that model working for more sprawling organisations.

Another way of looking at it is how managers these days tend to have a lot of administrative tasks to do. They'll submit requests for new staff, leavers, perform pay reviews, measure performance indicators and compile them into reports to submit to THEIR managers... with a mere 300 people in the company, many of them performing tasks that don't lend themselves well to being traditionally measured, you can do away with a lot of this at team or department level. Have some dedicated staff for doing the paperwork, but as with things like payroll departments, legal departments etc. these are hardly bosses - more like support staff.

Who determines pay in such a structure?

 Grundz wrote:

You must have a spectacular career in goalpost relocation services

God, I wish that was a career.

 Frazzled wrote:
Who determines pay in such a structure?

The Wheel™

"Whoever signs the checks" is a bit of a colloquialism for whoever is in charge, not literally the person who signs the checks. Someone (or group) is paying for all this, in some way, and they are the one(s) that ultimately are in control.

 Frazzled wrote:
Who determines pay in such a structure?

The appointed project manager for each project, until such time as their turn ends. Probably with guidelines on exactly how to distribute pay - they'd be made aware of overall budget, of course, and if there's an expected pay grade for certain roles.
With only 300 people it'd be easy to see one person making the decisions on which projects get how much money, and this is also the man who knows how much money the company has too - Gabe again.