I'm super sick of these articles patting Valve on the back for its super-innovative business structure.
The fact is, you can afford to have a goofy office like this when you've already achieved a comfortable level of success. Valve has been free and clear ever since Steam became the go-to place for digital game distribution, and Github is pretty comfortable in its place as the top source code host.
Emphasizing these companies kooky structure conflates correlation and causation. It's not that they're profitable or interesting because of their management structure: instead, they can afford to play around because they were early movers in a very profitable space.
I'm curious how you think it's possible for a structure like this to emerge after some level of success? You think that any company sets up a traditional management structure, accomplishes success and then fires all the managers and tells everyone to work differently? Or do you think it might be more likely that thinking differently early on about how to treat employees and how to focus creative energy somehow helps to achieve that success?
GitHub has always run this way, since it was 4 people. When we tell people how we operate, they have always responded that it will never scale - people have told us that since we were 4. We're now at nearly 100 employees and it's still working great. Valve is 300 and Gore has several thousand, so we're pretty sure we can keep going this way. We are slightly different than Valve, but their handbook really resonated with the way we do things. The main difference between companies like Valve or GitHub and many other companies is that we don't look at other places and ask ourselves how we can copy their structures, how we can cargo cult their success, instead we look at our problems and ask ourselves how we can address them in the best way possible. It appears that Valve has done the same thing and we've come to some similar conclusions.
I think this is a big reason why we've been successful - that we ask ourselves this when approaching product too. You say we're sitting pretty at the top, but when we started there were tons of source hosts. Valve was just as bad - starting in another industry that was totally saturated. The reason we were able to break through I believe was largely due to the fact that we thought about problem solving differently than the industry leaders that we started up against.
The real point you should take from the article is not that Gore or Valve or GitHub are lucky, but that we approach problem solving in a very different way and that might be an interesting thing to take a look at. If all you read in an article like this is that we're 'goofy' or 'kooky' then you're missing everything that's important and it's a waste of time for you to read the article at all. In fact, if that's what you take and then you try to copy us you will fail horribly in what you do, because you're blindly copying the least important of the many symptoms of this approach.
Approach problems from first principles. Figure out what the best possible experience would be for the person using your product (not just the person buying it). Make that experience a reality. Don't copy anyone. Do that same thing internally. Now what does your company and your product look like? That should be what you take from this article.
I don't know if it's possible to figure out which is the chicken and which is the egg in these cases.
Semco, a Brazilian manufacturing company, has been using a "boss-less" style of management since the 1980s. From what I understand they were not exceptionally successful before they implemented this management style.
I think it's more complicated then that. The fact is that there are multiple ways to do things. These different ways have different tradeoffs.
You know, if you are just starting to found a company with 2-3 friends, chances are you jump into eachothers' roles as needed. There may be an official hierarchy but chances are pretty good that this hierarchy exists mostly on paper. As you hire employees, typically you want to maintain control and this is where management structures come in.
I think that there are all sorts of possible management structures that could work and these have different advantages and disadvantages.
I forwarded Valve's employee handbook to an economist friend a few months ago, and he suggested that whoever set up the company was actively experimenting with public choice theory, and that from that perspective the good and bad things mentioned in the handbook were not that difficult to suss out from the structure.
Many popular web-centric software companies operate this way, and it's basically how open source software development operates.
Anyone with even an ounce of management skill and education knows that when you have skilled people working for you, you get out the way and let them do their thing. This isn't exactly news.
You might not have a manager , but you always have a Boss to a certain extent. There is always someone who is named as the companies MD/CEO , someone who has the authority to legally hire you / fire you. So therefor their opinion will always be more important.
Also the problem with having the team evaluate someones performance is that teams are vulnerable to cliqueness and groupthink and you may therfor often end up with decisions that are based more on popularity than anything else.
In theory at least a good manager should be able to step back from the inter-employee politics and make judgements with some degree of perspective.
There's always someone more invested. Management can pay lip service to flat hierarchies and all that, but at the end of the day structure emerges more or less by consensus, the same way everybody realizes the guy who always farts or something. The common-if-not-genetic "desire to be led" causes people to produce hierarchies for themselves, to produce their leaders. This isn't robotic, but it comes naturally to a lot of people, even if only to confer authority upon that person.
Here's the question I don't get - how do you fill "support" roles? Like how do admins fit into this structure? Or HR? Are there really people, who given a job at a video game company and no defined role, would choose to set up meetings and answer phones?
Or similarly, how do you determine that some devs build awesome video games while others maintain a corporate intranet or do some much more mundane task?
Clearly, it works. And in a theoretical sense, I can see why when everyone has somewhat similar skillsets. Can someone fill in the blanks for me when there are specialists and support people involved?
Actually, as I approach retirement age, I'd love a basic wage job working with clever people and smoothing the edges a little; thinking ahead and setting stuff up.
Note to startups: Your local 50+ and 60+ people may like the involvement. You could get a lot of experience/support for not much money depending on how local pensions work.
I imagine you'd advertise for a support specialist in the traditional sense, but once hired, they wouldn't have a job title. Their skills would be in customer support though so that's what they would naturally do. If they tried to work on development, but had no skills, then the group would remove them from the project. They'd then have to go back to support or find something else they can work on with their skill set.
To me, setups like this -- along with employee owned models like the one at the Mondragon Group -- are the future. It's always struck me as strange that we value democracy so much in our government, but not in our businesses.
To help decide pay, employees rank their peers—but not themselves—voting on who they think creates the most value.
Considering how larger society often 'ranks' and rewards people (e.g. celebrities, local politicians), I wonder if these schemes could be a breeding ground for contempt or cronyism.. or, more likely, people who are happy to work at such companies rank compensation as a high priority and mismatches aren't that important?
The idea of worker autonomy is implied a lot here. Should that go hand in hand with workers having a direct influence and role in determining their compensation with whoever holds the pursestrings?
While I don't disagree with your thesis, politicians and celebrities are usually unknown, or at least only known through small appearances in the media. You work with your colleagues so I would expect a fairly different dynamic when it comes to making these judgements.
I came here to comment on that sentence. I think it's a great idea, at least compared to the alternative of evaluating yourself. That's how it's done where I work. I mean talk about the LEAST objective person you could ask.
I applaud Valve's visionary business organization. As a developer I'm sick of having to work under liars and frauds who have misrepresented their technical ability and knowledge to get into an 'engineering management position' they are not fit for. The costs of job changes is very high to me, and if there were more companies like valve, tech would be a much better place to work.
This is fairly common (liars and frauds...), though there are some great managers out there: they're just as rare as great developers, and worth their weight in gold when you find them.
Forget about the legal risks; how does that even work? If I don't think my coworker is doing a good job, am I supposed to secretly whip up enough votes to have them fired?
I get the sarcasm, but Gaben said that is exactly why. Nobody came forward with some great idea to make the game really good, so they never started it, and instead worked on things like Portal 2.
I just switched from a horrible boss/manager to a not that small private software company where the developers are very respected and don't have any managers.
And... while it is a lot better than a bad boss, no management is not ideal in my experience. Ideally what you want is a good manager.
I'd like to see someone look at the mechanics of how boring, menial, repetitive grunt work is performed under this model. No doubt Valve/Gore/etc has a lot of that to do, just like any other business. And obviously it gets done. But I'm interested in how that looks up close. Does this kind of work tend to find its way to those in the company who don't have a problem rolling up their sleeves and gutting it out? And if so, do they ever end up resenting it?
In my current (traditional) workplace, you're responsible for your own grunt work, there's no pushing it off on someone else. That is enforced by management, however, and if that traditional management disappeared, I imagine the distribution of grunt work is one of the first things that would change.
This is the only true way a boss-less organization can work. And I assume you mean voting equity. Vesting requirements would be OK, but stuff like options or Google's non-voting shares wouldn't be.
[+] [-] Sivart13|13 years ago|reply
The fact is, you can afford to have a goofy office like this when you've already achieved a comfortable level of success. Valve has been free and clear ever since Steam became the go-to place for digital game distribution, and Github is pretty comfortable in its place as the top source code host.
Emphasizing these companies kooky structure conflates correlation and causation. It's not that they're profitable or interesting because of their management structure: instead, they can afford to play around because they were early movers in a very profitable space.
[+] [-] schacon|13 years ago|reply
GitHub has always run this way, since it was 4 people. When we tell people how we operate, they have always responded that it will never scale - people have told us that since we were 4. We're now at nearly 100 employees and it's still working great. Valve is 300 and Gore has several thousand, so we're pretty sure we can keep going this way. We are slightly different than Valve, but their handbook really resonated with the way we do things. The main difference between companies like Valve or GitHub and many other companies is that we don't look at other places and ask ourselves how we can copy their structures, how we can cargo cult their success, instead we look at our problems and ask ourselves how we can address them in the best way possible. It appears that Valve has done the same thing and we've come to some similar conclusions.
I think this is a big reason why we've been successful - that we ask ourselves this when approaching product too. You say we're sitting pretty at the top, but when we started there were tons of source hosts. Valve was just as bad - starting in another industry that was totally saturated. The reason we were able to break through I believe was largely due to the fact that we thought about problem solving differently than the industry leaders that we started up against.
The real point you should take from the article is not that Gore or Valve or GitHub are lucky, but that we approach problem solving in a very different way and that might be an interesting thing to take a look at. If all you read in an article like this is that we're 'goofy' or 'kooky' then you're missing everything that's important and it's a waste of time for you to read the article at all. In fact, if that's what you take and then you try to copy us you will fail horribly in what you do, because you're blindly copying the least important of the many symptoms of this approach.
Approach problems from first principles. Figure out what the best possible experience would be for the person using your product (not just the person buying it). Make that experience a reality. Don't copy anyone. Do that same thing internally. Now what does your company and your product look like? That should be what you take from this article.
[+] [-] pchivers|13 years ago|reply
Semco, a Brazilian manufacturing company, has been using a "boss-less" style of management since the 1980s. From what I understand they were not exceptionally successful before they implemented this management style.
http://en.wikipedia.org/wiki/Ricardo_Semler
[+] [-] einhverfr|13 years ago|reply
You know, if you are just starting to found a company with 2-3 friends, chances are you jump into eachothers' roles as needed. There may be an official hierarchy but chances are pretty good that this hierarchy exists mostly on paper. As you hire employees, typically you want to maintain control and this is where management structures come in.
I think that there are all sorts of possible management structures that could work and these have different advantages and disadvantages.
[+] [-] jacobquick|13 years ago|reply
[+] [-] f1881bbee31|13 years ago|reply
Anyone with even an ounce of management skill and education knows that when you have skilled people working for you, you get out the way and let them do their thing. This isn't exactly news.
[+] [-] Evbn|13 years ago|reply
[+] [-] jiggy2011|13 years ago|reply
Also the problem with having the team evaluate someones performance is that teams are vulnerable to cliqueness and groupthink and you may therfor often end up with decisions that are based more on popularity than anything else.
In theory at least a good manager should be able to step back from the inter-employee politics and make judgements with some degree of perspective.
[+] [-] einhverfr|13 years ago|reply
My experience though is that it is rare for managers to step back and that they are just as susceptible to groupthink as teams are.
[+] [-] rhizome|13 years ago|reply
[+] [-] balloot|13 years ago|reply
Or similarly, how do you determine that some devs build awesome video games while others maintain a corporate intranet or do some much more mundane task?
Clearly, it works. And in a theoretical sense, I can see why when everyone has somewhat similar skillsets. Can someone fill in the blanks for me when there are specialists and support people involved?
[+] [-] keithpeter|13 years ago|reply
Note to startups: Your local 50+ and 60+ people may like the involvement. You could get a lot of experience/support for not much money depending on how local pensions work.
[+] [-] goochtek|13 years ago|reply
[+] [-] baby|13 years ago|reply
[+] [-] patdennis|13 years ago|reply
If you're interested, here's some info on Mondragon http://en.wikipedia.org/wiki/Mondragon_Corporation
[+] [-] petercooper|13 years ago|reply
Considering how larger society often 'ranks' and rewards people (e.g. celebrities, local politicians), I wonder if these schemes could be a breeding ground for contempt or cronyism.. or, more likely, people who are happy to work at such companies rank compensation as a high priority and mismatches aren't that important?
The idea of worker autonomy is implied a lot here. Should that go hand in hand with workers having a direct influence and role in determining their compensation with whoever holds the pursestrings?
[+] [-] rrreese|13 years ago|reply
[+] [-] ams6110|13 years ago|reply
[+] [-] codeonfire|13 years ago|reply
[+] [-] nerd_in_rage|13 years ago|reply
[+] [-] keithpeter|13 years ago|reply
Wonder if that kind of 'firing' ends up in court?
[+] [-] crazygringo|13 years ago|reply
The reasons for firing someone can be documented just as well by a team as by an individual.
And remember, these are US companies, so employment is at-will.
[+] [-] eli|13 years ago|reply
[+] [-] datalus|13 years ago|reply
[+] [-] zanny|13 years ago|reply
[+] [-] fghh45sdfhr3|13 years ago|reply
And... while it is a lot better than a bad boss, no management is not ideal in my experience. Ideally what you want is a good manager.
[+] [-] Scramblejams|13 years ago|reply
In my current (traditional) workplace, you're responsible for your own grunt work, there's no pushing it off on someone else. That is enforced by management, however, and if that traditional management disappeared, I imagine the distribution of grunt work is one of the first things that would change.
[+] [-] unknown|13 years ago|reply
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[+] [-] yuhong|13 years ago|reply
[+] [-] tluyben2|13 years ago|reply
[+] [-] icandoitbetter|13 years ago|reply
[+] [-] vorg|13 years ago|reply