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Operating with no managers, teams are formed on a skill basis, increasing efficiency and eliminating hierarchy

Key facts

  • Valve¹ is an entertainment software and technology company founded in 1996 and headquartered in Bellevue, Washington. It develops video games and other related technologies.
  • Valve is a developer of leading-edge technologies including the Source game engine and Steam, a leading platform for digital content with over 75 million registered users.
  • Valve is valued at $4 billion with approximately 330 workers worldwide.

Uniqueness

  • Valve has a flat structure with no managers; the company hires talented and innovative self-starters and, staff can then pick and choose the projects they work on.
  • Performance is based on peer ratings, each employee ranks one another on technical skills, productivity, team-playing abilities and other contributions to determine salaries.
  • Mike Harrington, the founder of Valve, says the model works because of its original philosophy.

Value

  • Valve has over 125 million active users worldwide on their gaming platform Steam. It now has 4,500 games and 400 million pieces of user-generated content.
  • Workers benefit from having no formal management structure, rather they are able to choose or start new projects based on their interest and skill level.
  • Profitability per employee at Valve is higher than that of Google or Amazon or Microsoft.

Approach

  • Valve focuses on talent; the company’s handbook stresses that the hiring of people is the single most important thing.
  • Employees operate in small, independent, multi-disciplined teams, which are formed around projects and activities.
  • Valve is able to attract the best employees through paying people very well compared to industry norms and fostering a culture organized around skills and interests rather than function and seniority.
  • Valve is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative.  An overview of the DTI program can be found here.

1. Sources: Valve, WEF/Accenture Analysis

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