I came across this gem via Peter Stoyko’s blog; it’s the Valve employee handbook. Before I share my thoughts, here is what Peter had this to say about it:
Behold: the employee-orientation manual of the future; except, I hasten to add, this manual is for an extremely successful company from the here and now, the video-game maker Valve. Take particular notice of the forthright language … the lack of finger-wagging “thou shalts” … and the networked, fluid, collaborative model of organisation, including the emphasis on mobile workspaces (a subject I’ve been thinking a lot about in the last few years).
My own hypothesis is (and feel free to disagree) that in a hyper connected world where the expectations of entrants to the labour market are set by market makers (like Valve) your work culture will be the single most important determining factor when considering how to attract top talent. I fully acknowledge that salaries and benefits are important but my experience is that most people I know (at least those who are even marginally entrepreneurial) will gladly trade some of their fixed benefits for more engaging work and all the intangibles that come with it.
If you haven’t bothered to read the handbook (you should btw, it will open your eyes to say the least), here is a choice quotation about how the company approaches the issue of hierarchy:
Valve is not averse to all organizational structure — it crops up in many forms all the time, temporarily. But problems show up when hierarchy or codified divisions of labor either haven’t been created by the group’s members or when those structures persist for long periods of time. We believe those structures inevitably begin to serve their own needs rather than those of Valve’s customers. The hierarchy will begin to reinforce its own structure by hiring people who fit its shape, adding people to fill subordinate support roles. Its members are also incented to engage in rent-seeking behaviors that take advantage of the power structure rather than focusing on simply delivering value to customers. (p16)
It’s too late for guys (and girls) like me
The worst part of this isn’t that I’m working in an alien culture but rather just how further removed from the norm it will be for the next generation should it continue down the twisted path of hierarchy first, everything else second.
At some point, the results we aim to achieve must matter more than the myriad of forms, templates, and platitudes we used to get there.
Originally published by Nick Charney at cpsrenewal.ca
Don’t miss my interview with Chris Dorobek on the DorobekINSIDER program where we talk about community culture.
A very thought provoking piece, Nick. Thanks for sharing this. I’m going to type as I think.
As I read this, I consider my 20 years working in and around the Defense Department. In DoD, hierarchy is both necessary and abused. I think the DoD is home to the best and worst examples of hierarchy in action.
Hierarchy is necessary for the military mechanism to operate – units must act as one. Discipline is absolute. Someone MUST make the final and often difficult decisions. There is very little room for consensus building when time is of the essence and men and women are asked to give their lives.
Hierarchies are also abused to the point of creating monarchies for their own sake. Often, the strengths of the military mentality is used against itself by someone with enough power to consolidate more power under him/her. They use whatever techniques they have to fortify their position in the hierarchy. This is only loosely done for the good of the order. Often, it is selfish.
I’m wondering as I write this, if an organization is started with minimal hierarchy, and mixed up often enough to prevent a hierarchy from taking hold, what it would look like over time. Surely the person at the head of the organization must retain general control. How could he/she protect and maintain that general direction and control without a good management team? How could that management team be effective without dividing up the organization into smaller, manageable units?
@Robert: Great point! Hierarchies occur because they are effective ways to handle flows of information and materials. Check out Design in Nature: How the Constructal Law Governs Evolution in Biology, Physics, Technology, and Social Organization by Adrian Bejan and J. Peder Zane.
You want a strong hierarchy in a high-reliability organization because of the high risk and impact of failure in such organizations as fire departments and police departments. For a group making an independent movie, fluid structures with no levels makes sense. Let the mission determine the organizational structure rather than imposing a one-size-fits-all organizational structure whether it be hierarchical, matrix, or fluid.
Nice article. Social media is doing away with the need for hierarchies.
Many of the key discussions at NASA evolve organically on our internal social networking site, Yammer. While it is true that those at the top still make the final decisions, the processes are in transition.
I think the problem is less with hierarchy itself, and more with the way in which people see themselves in their roles, i.e. as authority figures vs. leaders. When trying to raise morale and build a healthy organizational culture, leadership is key.
I’m reading this article juxtaposed against an article entitled “Why Everyone Will Have to Become an Entrepreneur” – while organizations will continue to have some structure, I’m thinking it will be much more modular and projectized….and maybe even gamified…or, at least, I hope it will be – where various people get their shot at leading the charge on a given challenge and multiple approaches are tested with the winning solution adopted. Hard to do that with a tight hierarchy. Need to be loose and flexible.
Wow, reading this handbook makes me want to learn to code and make video games. These are the Steam people. Ooooh, geekthrall. I’ve never considered living in Washington…and I don’t know if I’m “T” enough for them, but how cool to be that kind of employee?! I love the style of the guide. I particularly love the section on “What Valve Doesn’t Do Well” – that is darn innovative in itself.
After reading this post in Portals and KM, I think the real issue is not the structure but how people are treated in the structure.
“‘[I]n a recent survey of distributors and manufacturers by Bill McCleave, three characteristics kept appearing as critical to good management: communication, listening and the ability to delegate (aka macro-managing vs. micro-managing).’ Yet I hear constantly from friends that their bosses are still doing the old micro-managing thing. And they are not happy as a result to no surprise.”
This argument is further reinforced by Davenport’s latest book, Judgement Calls, which describes twelve case studies on good decisions made by organizations. The common theme in these disparate organizations (hierarchical to a family-run business) is the use of strong collaboration, listening, and leaders willing to accept feedback.
I think the quest for the perfect structure is not possible and really not necessary. Concentrating on empowering individuals, learning to collaborate effectively, and removing barriers to good teamwork is a much more effective strategy.
The idea that people are more important than the structure (which was raised by many of you in response) is one that I agree with. I particularly like David’s comment about hierarchy versus monarchies. I also understand the need for more strict hierarchy in particular fields of work (military, law enforcement, etc) but that doesn’t mean those systems aren’t necessarily problematic in their own right.
Regarding Robert’s point, I’m not advocating for the strict elimination of command hierarchy as an organizational structure but rather hoping that we can be more sensible in its application. At the end of the day (as everyone pointed out and I mentioned above) we are all people. We often fail to question a rule or norm because we are simply expected to follow. At some point someone needs to step up and question whether or not the application of a particular rule/norm still makes sense in that context.
I’ve argued previously (Peak Bureaucracy: Perhaps its time we considered alternatives) that perhaps we need to consider moving to a greater number of smaller agencies in order to flatten our increasingly vertical organizational.
There is also the FedCloud model, which is interesting, if not untested (to my knowledge).
Nicholas, Tim O’Reilly came up with a three minute video asking if government should become a platform. Then a lot of the make work that doesn’t work has no place. I’m sitting on jury duty today, watching the employees apologize for the system. The system makes sense, I don’t see much completed work being attempted.
I really need to read that whole employee guide on my free time, it looks awesome.
I previously worked for an organization that had very little hierarchy. It really allowed the organization to change quickly and encouraged everyone to think in innovative ways. I felt invested in the outcomes of my work and was never afraid to seek advice and information from key decision makers, including the CEO. There was also extensive collaboration across departments to achieve great outcomes, something hierarchy can very quickly undo I think. Overall, people were important to the company, and I always felt the few leaders we had made it clear that this was the case.
Granted, it was a smaller office (in the 50-75 person range) and perhaps that made it more workable to have less management.
I’m curious how a company that writes software as its core competency using structured programming neglected to write the structure for the company itself. How do they perform code reviews, or is this not done? Is the original design not structured? And what about their accounts payable and receivable?
Unless I missed something obvious it sounds to me like somebody in management is being overpaid to do nothing. No wonder they chose not to go public.
@Dennis – the company didn’t “neglect to write” a structure for itself… it very consciously CHOSE not to. Read a few chapters (it doesn’t take long, I read the whole thing in 30 minutes and a few intro bits shouldn’t take more than 5 minutes) – they very seriously don’t want to hem each other in. They make a big deal about hiring being the most important thing in the entire company and that ANYONE can hire. I suspect strongly that they use contractors/subs for the accounting stuff. There is NO ONE in management – the big boss works in the structure everyone else does. They also address not going public — because it means they ONLY answer to the customer (not to stock-holders, stakeholders, or boards). Pretty cool stuff when you look over both the intent and the results so far.