Karis Mimms Research Essay Dr. Michael Stevenson
The Valve Way or the Highway Flat Structured Management and the Motivated Employee
Abstract
Flat organisation structures and a non-traditional work environment have lead to Valve Corporations success in the gaming industry, that allows workers full autonomy of their workday and projects. With businesses starting to adopt this structure Valve is a unique pioneer of new media workplaces that emphasize self-management. This essay will use the case study of Valve to deploy a close textual analysis of Valve’s Handbook for New Employees and draw on archived online interviews with employees of the company. In doing so this paper hopes to answer how non-hierarchal new media workplaces cultivate a motivated employee, while exploring what the hidden costs of such work are? Thus, understanding the contemporary New Media workplace, potentially displaying how businesses in the Cultural and Technology Industry can move away from the traditional hierarchy management system.
Keywords: Flat Organization, Management, Creative Industry, Self-directed, Motivated Worker.
Introduction
With the digital gaming industry comprising a large part of the creative industry, the American video game developer and digital distribution company Valve is an “industry powerhouse”, founded by former Microsoft employees and has generated billions of dollars a year (Kris Graft, Gamasutra). Valve has implemented a flat organizational structure of no bosses outside of executive management, which makes the company unique in a structure that is common within startups. Although companies have been flattening their management hierarchies in the recent decade to remove middle management as a means to speed up production and empower the worker, Valve practices and preaches an ethos that nurtures freedom and independence of the employee, where individuals choose what projects they wish to work on. This trust appears to be effective to Valve’s accomplishment as the company has produced a variety of lucrative games, including Half-life, Team Fortress, Counter-Strike and Karis Mimms Research Essay Dr. Michael Stevenson their accomplished digital distribution platform Steam (Jeff Wofford). Valves success as a juggernaut in the gaming and development industry begs the question of whether Valve is too good to be true? When a successful company presents and broadcasts itself as the best of the best how does it work so seamlessly and how does a flat management work? More specifically, this research paper wants to discover how non-hierarchal new media workplaces cultivate a motivated employee, while exploring what the hidden costs of working in a boss- less organisation?
When it comes to research of flat management structure in the Cultural and High-Tech industry there are limited reports about this type of management. Silverman (2012) has studied organisation such as Gore-Tex, the multinational manufacturing company and GitHub, a software development platform, who also boast a boss-less structure. Yet Valve is an interesting case study as there is an abundance of former employee interviews whose own personal experiences do not live up to the utopian company that their publicly posted Handbook for New Employees presented in 2012represents. These contrasting opinions can bring to light the complexities of non-hierarchical work in new media workplaces, as well as highlighting the hidden costs of such work. However, Valve is also a thought-provoking case to study as its success has pushed it into the spotlight and could be seen as a champion of Rosalind Gill’s (2010) idea of “contemporary (…) management of self” (18). Yet, within the field of the cultural industry studies a steady amount of research on Silicon Valley workers, entrepreneurship and flexible workplace organisation of tech workers have also been explored (Ross 2004; Kenney 2000; Bahrami 1992). Nevertheless, this essay can contribute to the field a modern specific look at an established and successful flat management workplace who has supposedly kept its same organisation structure since its launch, which is an interesting facet to explore.
The Cultural Industry worker is seen by Banks as “becoming more creative, autonomous and personally rewarding”, yet in his work he wanted to see beyond the hyperbole (4). Written in 2007 Banks writes that there is still limited amount of research on these new media workers yet with the works of Neff et al (2005), Ross (2004), Gill (2010) and Turner (2009) an understanding of the cultural, and more recently the High-Tec industry, has started to be unpacked. Although companies such as Google have been analysed thoroughly with ethnographic research to understand the workers, there is an inadequate amount of research Karis Mimms Research Essay Dr. Michael Stevenson on the gaming business workplace and working practices. Which is where this research on Valve can be significant, as interestingly there is limited, next to no, academic literature on the company who have successful used the same non-hierarchical management since their founding. However, there is an abundance of online news articles, particularly around 2012, when the handbook was made available, and then once again in 2013 when Jerri Ellsworth, the former head of Valve’s hardware department, was fired along with her team working on Virtual Reality hardware. Although the handbook was leaked in 2012, the PDF is now readily available on the company’s official website to download, for prospective employee and the public. By having an overview of these past interviews, a rich understanding can be made of two opposing sides of Valve as having the ideal company structure.
Once Valve is further introduced, a close textual analysis of Valve’s Handbook for New Employees will be imperative to essay as it is an official document produced by the company that displays their specific values and breaks down how the company functions. Alongside this, archived interviews from a podcast and online articles with current (at the time of the interviews) and former workers of Valve, will be concurrently utilized to gain an insight into the employee’s perspective and inner working of Valve, not just how the company consciously projects itself to the public. Using both these methods, first the flat organisation structure will be analysed and then the motivated employee of Valve will be understood through a comparative study of the Handbook and interviews. Through using the case study of Valve and drawing on archived material this paper hopes to answer how non-hierarchal new media workplaces cultivate a motivated employee? While exploring what the emotional costs of such work are? Thus, understanding the contemporary New Media workplace, potentially displaying what the future could hold for the Cultural and Technology industry.
Karis Mimms Research Essay Dr. Michael Stevenson
Welcome to Flatland
Figure 1. Charts depicting Valve’s flat organisation structure as envisioned by the employees (Handbook, 5)
To understand the creative workplace an interesting representation is produced by the Valve Handbook for New Employees, that promoted a stir online and public attention to Valve Corporations when the handbook leaked online in 2012. The 56 pages display a gaming and software company providing their employees with noteworthy trust and freedom: “This company is yours to steer—toward opportunities and away from risks. You have the power to green-light projects. You have the power to ship products.” (Handbook, 4). The internal handbook is seemingly intended to outline the company’s structural philosophy and to orient new employees. However, it also creates an insightful look into the inner working of a company named by Forbes as the “workplace of the future” (Denning). But ultimately the handbook provides new workers with: "A fearless adventure in knowing what to do when no one's there telling you what to do", thus displaying a company without managers (Handbook, Subtitle)
Based in the United States, Valve Corporations was founded by two former Microsoft workers Gabe Newell and Mike Harrington. The company not only makes computer games but also Karis Mimms Research Essay Dr. Michael Stevenson created Steam, a social-distribution network which allows for the online buying, modding1 and downloading of PC games. Yet the company see themselves as more than that: “We’re an entertainment company. A software company. A platform company. But mostly, a company full of passionate people who love the products we create” (Handbook 4). This has led to great success as the corporation “owns the majority of PC gaming digital download market”. According to their handbook the company has been “boss free” ever since its creation in 1996, allowing the individuals working there to have no managers or assigned projects, which could be a reason behind the accomplishments as seen in the company Handbook (vii).
Figure 2. Glossary from page 55 of the Handbook The handbook in question could be read as a tech workers nirvana, or as Ross who researched the new economy workplace terms it, an employee’s “Candyland”, with no managers, freedom to work on their chosen project, brilliant co-workers, large pay checks, bonuses and
1 For more on ‘Modding’ see: http://www.businessinsider.com/video-game-modding-2015- 7?international=true&r=US&IR=T Karis Mimms Research Essay Dr. Michael Stevenson an annual all-payed-for holiday to a tropical island. Although media companies like Google, also provide perks of a workplace that seems more like play then work and maintain a “relatively flat structure”, Valve abides by this structure as one of their most important values (Turner, 78).
The handbook represents a company that doesn’t take itself too seriously, so it is important to create a picture of a handbook full of such personality2. Take for instance their glossary (see fig.2), full of inside jokes about employees and “jargon” to help the new employee not feel like an outside, almost as if they are joining a friendship group. This handbook is a clear example of theorist Rosalind Gill’s ideas, who believes that creative workers have moved away from traditional workplace of the ‘office and tie’ workers to new media work where workers “relate to each other in a casual and informal manner”, an attractive atmosphere for many workers within and coming to the industry (Gill, 6). Similarly, Ross also notes the “non- conformists spirit of their work place mentality” found in the new economy workplace, has moved away from the traditional pyramid organisation, making the environment more humane (3).
Flat Structured Management
When analysing management in cybernetics Stafford Beer (1972) defined the challenges that managers face: “the beginning of wisdom for management at any level is the realization that viable systems are, in large measure, self-regulating and even self-organizing”. Similarly, in relation to the cultural industry, Banks found that “the role of the manager is to try and control and temper the capricious creative to corporate accumulation imperatives” (9). However, Gabe Newell has been able to create a company from its launch that has maintained a boss-less structure, successfully allowing innovation to flourish: “When you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value” (Handbook, 4). Hence, Newell and Valve are
2 For a better understanding of the Handbook download it for free at: http://www.valvesoftware.com/jobs/index.html Karis Mimms Research Essay Dr. Michael Stevenson successful in following Beers concept of an effective manager, while moving away from Banks’ more rigid idea of the controlled employee.
Figure 3. A diagram created by Valve to show working without a boss (Handbook, 28)
In Michael Abrash’s blog post on working for the company, he believed there to be no use in traditional hierarchies if one wants to produce something innovative. Abrash states hierarchical management was originally used for military organisation to get every soldier doing the same job in the unit, which was the perfect fit for Industrial Revolution as the “objective was to treat each person as a component, doing exactly the same thing over and over”. Through the handbook one can see a clear difference in their value of treatment of their workers, with the handbook subtitle referring to its pages as “a fearless adventure in knowing what to do when no one’s there telling you what to do”, highlighting a move away from a top-down organisation. Simply put, Valve’s famous flat structured management refers to a company without hierarchies which the following comments encompass this very idea: Karis Mimms Research Essay Dr. Michael Stevenson
“Hierarchy is great for maintaining predictability and repeatability. It simplifies planning and makes it easier to control a large group of people from the top down (…) That’s why Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody “reports to” anybody else. We do have a founder/president, but even he isn’t your manager.” (Handbook, 4).
However, this belief of a lack of structure is not unanimously shared. During the US women’s liberation movement from the 1970s, Jo Freeman criticised and pushed for organisation within their movement. She stated, “any group of people of whatever nature coming together for any length of time, for any purpose, will inevitably structure itself in some fashion. The structure may be flexible, it may vary over time, it may evenly or unevenly distribute tasks, power and resources over the members of the group” (Freeman, 1972). Although in parts one can see the positive correlation with the Handbook’s hopes for their employees, it also shows a hidden element, that flat structures “become a way of masking power”, as Freeman calls for explicit structure from formal management (Freeman, 1972). This concept highlights former employee Jeri Ellsworth’s negative response to having worked at the company in her interview with The Grey Area podcast, accusing Valve of having a “pseudo-flat structure”. She had to battle against Valve’s organisation of peer reviews, open hiring and colleague ratings, to hire her own crew to work on a Virtual reality hardware project that eventually ended in her firing. Ellsworth’s dismissal was a rarity to the company as the company fires employees through a peer-driven process, which garnered an accumulation of attention by online news articles in the tech industry websites such as Develop and Wired as well as mainstream news outlet Time (French; Warr; Greenwald). Ellsworth details the other side of Valve’s admired structure of a hidden management: “there is actually a hidden layer of powerful management structure in the company. And it felt a lot like High School. There are popular kids that have acquired power, then there's the trouble makers, and then everyone in between” (French). It was during the company’s systematic peer-review process3, a key part of Valve’s flat management structure, that saw Ellsworth’s ideas prevented (French). Likewise, former employee Rich Geldreich concurred “some particularly nasty devs [developers] will do
3 Peer-review process is quoted as something “which can see colleagues that you rarely interact with vet your work and decide if your employment is safe” (French). For more on peer-review hiring and firing see Greg Coomer’s interview at http://www.pcgamer.com/valve-firing-process-peer-driven/ Karis Mimms Research Essay Dr. Michael Stevenson everything they can to lead you down blind alleys, or just give you bad information or bogus feedback, to prevent you from doing something that could make you look good”. As can be understood, the flat structure removes organization, with Silverman interview with a GitHub employee admitting that boss-less organisation could be “chaotic at times”, which we will see later in the essay to be an inhospitable environment for some Valve workers as well (3).
Figure 3. A diagram from the Handbook informing employees on how to move their desk that allows for freedom of movement around the office (Handbook, 18).
Valve’s lack of structure in management is also echoed in the furniture and office layout allowing workers mobility and autonomy as the desks are all mounted on wheels, so that there is no fixed layout to the open office space (see fig.3):
“Why does your desk have wheels? Think of those wheels as a symbolic reminder that you should always be considering where you could move yourself to be more valuable. But also think of those wheels as literal wheels, because that’s what they are, and you’ll be able to actually move your desk with them.” (Handbook 6) Karis Mimms Research Essay Dr. Michael Stevenson
The handbook is emphasizing the lack of organisational structure which they believe helps employee be more productive with their time and work as they can pick up and move their desks to the next project. In an interview with the BBC, employee DJ Powers emphasizes the value of mobility: "We move around a lot and we don't want it to take a lot of time to do that. We form into teams based on need to complete a feature or complete a game, and then we disperse into new teams." (Kelion)
This mobility found within Valve’s organisational structure and layout works specifically in the New Economy workplace, as Bahrami reflected the down-sizing of companies not only relates to deucing costs but also reflects the rise of “information and communication technologies” used in the workplace to replace the “traditional middle management”, such as sharing data bases and email (34). 25 years later Valve’s handbook shows a furthering of these technologies with an online computer location tracking system: “The fact that everyone is always moving around within the company makes people hard to find. That’s why we have http://user—check it out. We know where you are based on where your machine is plugged in, so use this site to see a map of where everyone is right now” (Handbook 6). Although this could be perceived as helpful, there is a certain panopticon feel to this management, which Rich Geldreich vocalised in his personal blog after working at Valve, where he lists his grievances with working in an open office environment. Although the worker has freedom of movement, this mobility can be monitored. Thus, a key aspect of Valve’s company values is embedded in freedom of movement through the workers own self-motivation to be valuable, but not everyone sees this as beneficial.
The Motivated employee
A week-long all expenses-paid tropical company holiday for employees and their family members seems like a pretty encouraging prospect for workers to stay motivated (Handbook, 33). But what other aspects of Valve keep the autonomous worker motivated without a manager overseeing their productivity? Is an obvious answer through hiring of motivated employees? As an assumption, many CV’s contain the sentence “I am a highly motivated individual,” yet it appears Valve truly values and hires individuals who are self-driven. Greg Coomer, a veteran worker at Valve, explicitly states this to be key to the company’s success: Karis Mimms Research Essay Dr. Michael Stevenson
“Hiring highly motivated workers is vital to making a boss‐free system work. And it isn't for everyone. Most employees take anywhere from six months to a year to adapt, though some leave for more traditional settings” (Silverman, 2). Valve thus hires what Abrash says to be “the sort of people capable of taking the initial creative step, leave them free to do creative work, and make them want to stay”. It is the individual who must govern themselves and be driven to create and set high standards for themselves. Yet employees of Valve are not just an average creative worker, Yanis Varoufakis, Valve’s “economist-in-residence” at the time, is quoted as explaining: “Most of the people there, all of them, have been hand-picked to be excellent at what they do. They're usually on top of their game elsewhere before they join the corporation” (Cifaldi). This luxury aids in a competent flat management structure whose employees are stimulated in their work. Just as Google allows for 20 percent of work time for employees to spend time on working on what they want to work on, which “subsidizes the individual development”, whereas Valve has a 100 percent employee freedom (Turner, 79).
As noted previously, Valve has removed managers breathing down the necks of their creative workers and replaced it with self-government, mobility and freedom to choose what is of value to the worker. Gill relates this idea of the expectations put onto new media workers with “new liberal form of governmentality”, which can be seen throughout Valve’s handbook. Whereas Gill sees this “management of the self” as a highly strenuous and never-ending mission, Valve in fact celebrates the fact that the workday is completely directed by the individual and even acknowledges overtime, an aspect the Gill found to be prevalent amongst her New media worker interviewees, as a fundamental failure (19). This is shown when the handbook notes: “for the most part working overtime for extended periods indicates a fundamental failure in planning or communication. If this happens at Valve, it’s a sign that something needs to be re-evaluated and corrected” (17). By allowing certain freedom for Valve workers yet showing that they expect employee not too forsake their life outside of work puts a sense of trust in the company and challenges the norms often found in new media work put forward by Gill. Karis Mimms Research Essay Dr. Michael Stevenson
Figure 4. Valve showcasing the many roles one employee can be if they chose to (Handbook, 36). Another way in which working at Valve cultivates a motivated employee is through Valve’s “fluid” working roles, so that all workers are equal (Handbook, 36). Valve gets rid of roles and champions Rosabeth Moss Kanter’s early dislike and thoughts on regiment working roles, where she describes that “segmentation occurs when job definitions become prison walls and when the people in the more constrained jobs become viewed as a different and lesser breed” (181). Rather than prison walls Valve has open fields where creativity can flow, the Handbook can be read as hoping that this creativity will motivate the other workers around to do the same. The positives are in abundance and DJ Powers acknowledges that “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," and goes on to say, “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”. However, the comments from Ellsworth and Geldreich earlier in the essay do not match up to this ethos, which Gabe Newell has publicly admitted being an aspect of Valve that is not always hospitable for workers. In a recent interview with Gamasutra Newell plainly states: “There are plenty of great developers for whom this is a terrible place to work for workers who need a structured environment. Everybody thinks they want a lot of autonomy, and to be self-directed. Turns out that a lot of people don't. So, you can have really capable, successful developers who won't work well in this environment.” (Wawro). Karis Mimms Research Essay Dr. Michael Stevenson
Valve is a company that values its employees choosing their own ‘adventure’ with 100 percent of their time being put into self-directed projects. Bahrami calls these individuals the “versatile employees”, a term which reflect Newell’s quote above, which not all workers in the new media workplace can adapt to and ultimately left unhappy with the environment they work within (43).
Figure. 5 an image from the handbook highlight the collective responsibility and values of Valve (Handbook, 23) Nevertheless, the key to Valve successful flat management appears to be found in their ability to produce collective autonomy amongst its workforce. The handbook states: “Over time, we have learned that our collective ability to meet challenges, take advantage of opportunity, and respond to threats is far greater when the responsibility for doing so is distributed as widely as possible” (Handbook, 23). This idea can be traced to James Surowiecki’s book The Wisdom of Crowds, who understood that groups can work even more smarter together than the few cleverest people within the group (xiii). Although he refers to the everyday group of people working together, put this with a highly intelligent workforce selected for their motivated work ethic, by working in a group without hierarchy Valve has the luxury of a variety of individuals who each bring their own benefits and can “steer the company as a collective” (Wofford). Throughout the handbook Surowiecki’s ideas are reiterated “instead of trying to direct their efforts from the top down, their collective solution is likely to be better than any other solution you [the manager] could come up with”, which appears to be correct if Valve’s success is anything to go by (Surowiecki, 70).
Finally, when researching the developing flexible organisation of the high-tech sector in the 1990s, Bahrami concluded that the critical challenge for these businesses is the Karis Mimms Research Essay Dr. Michael Stevenson transformation from a “traditional organisational system” of hierarchies and tighter worker roles to becoming more flexible (48). This research has found that Valve has outmanoeuvred this by starting as a flat management and keeping to its flexible organisation, allowing the company to grow around this structure. Although earlier this research found that a key aspect to Valve’s success was through hiring of “elite performers”, others view their success differently (Kelion.) DJ Powers interviewed by the BBC clarifies:
“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." (Kelion).
By creating a company with an ethos of no bosses, Valve has had the luxury of building an organisation that has kept to its original idea. However, this structure could be difficult for other large companies to emulate, but would be a key model for startups (which is already often the case) to keep using, rather than with the success of the business going to a traditional mode of management. This is echoed in observations made by Ellsworth and Geldreich who noted that flat management structures would work well on a small scale as the problems arose primarily from “a lack of communication of actual management” at a large company like Valve (The Grey Area podcast). Yet Valve continue to flourish, which potentially shows that if a company begins with a flat structure, and implements it without question, then it can and does work, but the hidden costs to the employees may still prevail.
Conclusion To conclude, this research is far from being complete, this preliminary research into Valve Corporation exhibited a rich case study into understanding the modern creative workplace. Yet much of the research stemmed from online articles, podcast and interviews from the period of 2012 to 2015 due to the high-profile leak of the handbook and the firing of Ellsworth. It is also important to note that many of the archived interviews used are from workers who have left (which probably influences their opinions of the company) and the other interviews were from around the time Valve had a workforce of around 300 employees, which would Karis Mimms Research Essay Dr. Michael Stevenson have grown significantly since. To expand this research further the following method and steps would be taken: Just as Ross (2004) entered Google and observed through physical presence, being amongst the workers of Valve would have its benefits to research, however as a large and important company, situating myself there is a highly unlikely prospect. Rather, interviews could be taken either through email or video-call with current employees, and an understanding in changes or any new ideas could be gathered. If interviews with current employee could take place, a more grounded theory analysis could arise. This would be done through constructing semi-structured interviews to pose questions to current employee of Valve on their own views on the company’s flat management and how they are motivated without a boss. Their answers would hopefully create a dynamic process and new themes would appear that were not found from archived interviews. Yet what this research has revealed so far is that although contrasting opinions show cracks in a supposedly utopian workplace, it appears that the non-hierarchal company does in fact cultivate a motivated employee to perform autonomously while still able to work as part of a team. Although the hidden costs of such work are highlighted by former individuals who do not fit into Newell’s vision of a self-directed employee, the company represent how new media workplaces can successfully move away from the traditionally managed into a structureless organisation.
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