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Boss-less Management: A peek into the flat hierarchy of Valve

Imagine you are working for a company with no managers or bosses. You are told there are no managers and you can decide which projects to work on. You don’t like to sit next to someone, you can move wherever you want in the office. This is no fantasy. It’s a computer game development company called Valve. Based in a suburb of Seattle, Valve has produced well-known games such as Half-life, and a hugely successful digital distribution platform called Steam. It has recently started developing hardware for game developers.

In 2012 Valve’s new employee handbook was leaked. Fawning articles about this unique and amazing company appear everywhere from the BBC to Harvard Business Review. Valve’s economist in residence – Yanis Varoufakis, the former Greek finance minister – appeared on a Podcast describing the company’s unique system of rewarding employees (www.guardian.com).

So how does projects start!

As there are no bosses in Valve, anyone in the company can come up with an idea or a project. Most of the projects are started from an individual employees or a group of employees, which is followed by recruiting people to form a team. When enough people join the team, the project starts. However, it is important to understand that even though there are no managers, there is performance management system. There are a group of designated people who interview all the employees and ask them about their colleagues and the experience of working with them. The data is collected anonymously and then every employee is given a report on their peer’s experience of working with them.

Valve has grown rapidly from the time it was founded in 1996 by former Microsoft employees Gabe Newell and Mike Harrington. According to the company, the most important thing ‘’is to empower employees’’. The company has contributed its growth and success to its organizational design which ensures hiring the most talented people around the world. According to the company’s handbook, ‘’ any time you interview a potential hire, you need to ask yourself not only if they’re talented or collaborative but also if they’re capable of literally running this company, because they will be.”

How this helps the company!

According to the in-house economist, Yanis Varoufakis, ‘’ Valve is, at least in one way, more radical than a traditional co-operative firm. Co-ops are companies whose ownership is shared equally among its members. Nonetheless, co-ops are usually hierarchical organisations. Democratic perhaps, but hierarchical nonetheless. Managers may be selected through some democratic or consultative process involving members but, once selected, they delegate and command their ‘underlings’ in a manner not at all dissimilar to a standard corporation. At Valve, by contrast, each person manages herself while teams operate on the basis of voluntarism, with collective activities regulated and coordinated spontaneously via the operations of the time allocation-based spontaneous order mechanism described above.’’

The leaders of companies like Valve have discovered something that researchers have known for decades: when individuals feel free to determine what they’re working on or how they work, they’re more motivated, more loyal and more productive. While Valve’s almost free-form structure may not be ideal for every company, the lessons learned here about improved productivity and engagement are of use to all (www.Inc.com).

However, things does seem to be what it actually looks like. According to one of the ex-employee of Valve, who described the company as ‘’pseudo-flat structure’’, there is a hidden layer if management hierarchy and structure. A structureless organization can be dangerous. Rules, regulations, and structure is very important to make sure everyone understands how they or the whole organization works.

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