Seriously - in the absence of formal power structures, informal ones will always form, and they are often less accountable and fair than formal ones.
Even at my current corporate job, it's the same situation, but by now I've learned that you just need to take power. The one source of legitimate power you do have as an employee, especially in our industry, is the power to leave.
These days I cultivate a kind "I don't give a shit" attitude that works pretty well.
It looks like officially he isn't the boss, but for almost all practical purpose he is.
The worst thing that happens in such places is, those people using their power to help their buddies, gangs and yes men for their own benefit and political power. If you are not one of them you are screwed.
What's happening here is that in flat organizations it's the -only- power structure and thus becomes more pronounced to our brains which are hard-wired to pattern match for the social power structures.
Another way of looking at this is to see the hierarchical power structure as an abstraction that evolved to address the discomfort (some) people have with a more fluid power structure like at Valve.
The interesting part here is that different people have different tolerance for this though; so much so that it's one of Hofstede's main cultural dimensions called 'Power distance'. 
In informal hierarchies relationships become personal and political. In anarchy, everything is politics and personal.
> Informal power structures in hierarchal groups have less power and they happen only between peers.
I think, unless you work in a very strict command-and-control style company, you're heavily underestimating the influence of the average informal power structure.
In structured organizations there may be rules and processes to handle promotion and management, but I've seen them being gamed by people in power more than I've seen them being used for improving anything.
I've seen a lot of bad decisions being made, but speaking out about them is often not appreciated, so by now I've given up on trying to fix those problems and I just occasionally lament them in the coffee room.
(Note: I work for a formerly large multinational, whose structure and processes have mostly been rusted in place. I, and many of my colleagues, are leaving the company for the lack of a clear direction, which is a result of poor management over more than a decade.)
It made career advancement a game of getting the organization to fund your educational "goals" so you could get a better position.
Turns out though that this left large gaps in the organizational structure where there simply wasn't anybody internal who was qualified to move into a position so they turned to outside hires. As it turns out, outside hires were simply exempt from many of these promotion requirements. So career advancement ended up with people quitting, going someplace else for a few months, then getting hired back into the position they wanted to be promoted to in the first place.
It was an absurd place to work.
e.g. The UK Civil Service is probably very proud of being a meritocracy - where the "best" people are promoted. However, none of their definitions of "merit" actually relate to ability to perform current or promoted roles!
Generally, any organization that has an arbitrary structure that is used to assign roles to individuals in a way that statistically aligns with a usual hierarchy, using some quantifiable metric that makes one group smaller than another.
There's this self-destructive modality that organizations can enter into where politics matter more than product and people worry about their own resume and ego more than functioning as a team to do something greater than the sum of the parts.
If you take any pride in your craft, that's the ultimate red flag to run like hell.
Believe me, if you could compare similar sized organization with same people working with and without hierarchies, you would pick one with hierarchy 8 times of 10.
Nepotism and cliques are bad, but worse is when the behind the scenes/informal leaders are able to make someone else look like the leader, and that person ends up being the strawman for whatever doesn't go as planned.
In places like government you get all sorts of oddball organizational dysfunction, as you generally have a top layer of politically appointed leaders and lower stratums of career/professional leaders who usually cannot be removed and may or may not play ball with the leadership.
Succeeding in this kind of organization requires not only jockeying for position, but more subtly, overcoming the self-imposed coercion. This is where irreverence comes in handy. Once you eradicate fear, you can afford to take the risks required to freely design your relationship with your colleagues such that you have sufficient power. Ultimately you want them to trust you and you want to be able to challenge them on any topic. You want respect, and people respect excellence, confidence, and risk-taking.
If for whatever reason you're working with people who are incapable of collaborating, your irreverence will either be taken as a threat that may change their behavior in your favor, or otherwise you can leave and it won't seem out of the blue.
There was a time when I tried to conform or figure out what other people wanted, but these days I approach people with a clear idea of what I think should be done and say something like: "this is what I'm interested in", with the subtext that I'll just leave if I don't get to do that.
It's a kind of "take it or leave it" attitude.
Personally, having seen Jeri's AR project video, I wouldn't have joined it. It seemed like a rather weak and non-transferable technology that didn't solve fundamental problems with AR and that had limited gameplay possibilities.
If you look at some of the other famous horizontal management companies like SEMCO, they have a periodic bidding/approval cycle. People make a proposal, ask for a budget, and once granted it have temporary autonomy. The counter-pressure is that however they spend their budget is tracked and transparent to everyone. Hence if you fuck around and blow your whole budget on perks for yourself, your proposal won't be continued next time it comes up for bid. From what I remember SEMCO found 6 months a good period.
This is obviously speculation from limited information, but taking Jeri's comments at face value (which I think is entirely reasonable based on how she's conducted herself publicly in the past) valve seems to be missing that key element of temporary autonomy.
An environment where the socially powerful can raid or eject you at any moment they wish is just going to amplify internal political dysfunction.
Of course if there was a boss, there would be a pitch, a cold, hard look at the budget and then a decision, which you may or may not like, but you would have to live with it. At Valve there's no one person to blame that you didn't get what you wanted.
But the result is the same: The company didn't go forward with an interesting but not-obviously profitable project.
Completely maddening if you ask me.
 https://github.com/liqd/adhocracy/ note the meaning of the name http://en.wikipedia.org/wiki/Adhocracy
This system would work a lot better if there was a pool of monk-like disciples that are trained to be party functionaries without own opinions. Since that probably won't happen, we should IMO accept that personalities play a role in politics.
We call it "liquid organizations": http://thinkship.cc/en/introduction-to-liquid-organizations/
Check it out. We should team up ;) More info at http://lyd.dario.im/
One way to mitigate this would be to dampen the Karma. For example by using a logarithmic scale. effective-karma = log(karma+1)
― Edward L. Bernays, Propaganda
Instead of being a metaphor repetition device try saying what you think straightforwardly. It goes more interesting places.
"Nudge" refers to a concept in mainstream political science that minor behavioural-economics inspired changes can have a more powerful affect than draconian laws.
The Bernays quote is a sort of tin-foil hat extension of that idea, that someone somewhere is so all powerful they can influence the masses to do what they the person wants.
if the slope of economic self interest is downhill, all the nudging and the clever manipulation of people's perception will not get the rock of humanity to move up the hill.
Idiots like Bernays who think the crowd cannot be left to itself because it might hurt itself with scissors, think that small PR related nudges can guide great decisions. Which is probably true if all you are doing is selling washing powder, or have selective confirmation bias.
As for rocks going up hill, old old books, bloke called Sisyphus.
Down at the bottom or at the crest, it's still a rock.
I remember reading that paper in college. It was the first thing I thought of when I read this. While rooted in the experience of liberal and women's groups, it really has lessons for anybody working in any organization that tries to eschew formality, including startups.
"the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of "structurelessness" does not prevent the formation of informal structures, only formal ones ... Thus structurelessness ... is usually most strongly advocated by those who are the most powerful (whether they are conscious of their power or not). As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules. Those who do not know the rules and are not chosen for initiation must remain in confusion, or suffer from paranoid delusions that something is happening of which they are not quite aware."
I think he is quoting someone else, but I dunno who (also the quote might be inacurate, since I translated it from portuguese).
He usually uses this quote when discussing the politics of feminist, to point out that power equality will never be reached, someone always lead, those who step down, will only open positions for others to step up.
It relates to some early (BC) physical theories which proposed that voids are impossible. Also called plenism.
Edit: Good overview at
People need to know what's been decided and what to do, and what others are doing. Whether it's via influence, or via force, people need power.
For instance the open source groups and projects that form at a macro level are more innovative than just one companies structure and would be impossible with that type of organization. The focus of making useful and fun projects goes back to small groups and individuals really though.
There was no formal structure for making new programming languages but individuals (mostly) stepped up to do it to share them because they were free to and the community rewarded that, it also led to many to financial rewards. I think structurelessness is a little messy but individuals and groups (usually small) can shine with the right rewards and outlets. Best organization is small structures within bigger macro ones.
"TSA body imaging at home" (http://www.youtube.com/watch?v=vDyo_OQFdAc)
"Home made EL wire" (http://www.youtube.com/watch?v=3RKBGxJJmwg)
"Recording Audio onto floppy discs" (http://www.youtube.com/watch?v=Xpr7B-7BFP4)
"Home made transistor" (http://www.youtube.com/watch?v=-Qph8BNrnLY)
"Homebrew NMOS transistor" (http://www.youtube.com/watch?v=w_znRopGtbE)
j/k it's more of a tin-foil covered shed, but there may be some evidence that tHz radiation causes "resonance effects" resulting in DNA depolymerization:
So get the pat down folks, your genes will thank you!
Granted, a firing is never a graceful affair, but Valve could've done much worse if they wanted to.
It seems to me that Valve was cutting some losses and her project wasn't showing much promise compared to other things they had going on, so they let her go.
Democracy tends to weed out bad ideas but moves at a snails pace. Tyranny is the opposite. It moves at blazing speed but the mistakes are massive. This explains so much about Valve. It's products are high quality but it's a slow company. They're release games very slowly for a company with their money, their source engine is inferior to modern ones, and (not that it matters to me but for some it does) their graphics aren't exact top notch. I think that's why Half Life Episode 3 is delayed for so long, they're working on a new engine to compete with EA's Frostbite 3.
Before EA came out with Origin and Valve starting hauling ass to add features to Steam, Valve didn't look like it was really pushing any new steam features. There was the redesign and that was all. Then as Steam had more competition they starting added Screenshots manager, greenlight, software, source filmmaker, community hub, walkthroughs, big picture mode, linux support, etc...
It feels like the company is trying to stay small and stay the same despite desperately needing to be restructured in order to keep up with competition.
Maybe "staying a startup forever" doesn't work as good as we thought.
That's not an insubstantial amount of games for one company.
This doesn't even take into consideration that they currently run the biggest online games store in the world which is a huge undertaking, and all the moonshot developments they have running that might not even see the light of day.
Valve are not a slow company. They're a savvy company. It's hardly surprising that they don't really have a flat power-structure, but they do seem to have some kind of structure that allows them to continue to innovate in a variety of areas.
Valve has Steam and, with it, a very nice income stream (they're basically rich). While they do try stuff with F2P (dota, tf) personally i doubt Valve is a top tier game maker anymore. It seems to me they don't have the ambition anymore and live the good life while Steam provides.
from WP "According to Valve's founder and managing director, Gabe Newell, the company's investment in Dota was sparked from the collective interest of several veteran employees, including Team Fortress designer Robin Walker, programmer Adrian Finol and project manager Erik Johnson, all of whom had attempted to partake in team play at a competitive level."
So it might be a popular game, but it's not a major development for Valve in the sense that Team Fortress, Portal 2 or HF2 was...and also demonstrates some of the internal culture issues Valve has.
In the case of Dota 2, the game is bringing in millions via the in-game store. The game has 200k active players at any given time, and they're well on the way to 1mil active players in a few years. A significant portion of those players are buying tournament tickets. Most of them are buying custom equipment like couriers, announcer packs, etc.
Dota 2 will be the most lucrative Valve project since Steam. To call it insignificant is to be short-sighted.
If you still think the MOBA genre is insignificant, then perhaps this infographic will offer some perspective: http://www.forbes.com/sites/jasonevangelho/2012/10/12/league...
Source: I worked in the MOBA genre.
Team Fortress was a mod for Quake before HL1 was a twinkle in Gaben's eye. TFC was someone saying "that sure was a fun gameplay mode, but I can't get anyone to load Q1 any more... maybe I'll recreate the same thing over again"
What do you consider a major development? Sure they hired the team behind the original but they still developed the game and put it out with company resources.
Can Valve make the next episode of Half Life as well as Naughty Dog might? Probably not. I can understand where you're coming from, but still think that if you look at the pile of games they've made, add in steam, the f2p systems they're developing and moonshots like the steambox etc, you find a company both involved and agile, not slow and monolithic. But that's just, like, my opinion!
The guys at Respawn, with Titanfall, seem to be doing just fine with such "old" tech.
That is only true at very large social scales, where getting consensus on anything gets progressively harder. In smaller social scales, ideas can spread like wildfire if the social tapestry is dry enough.
Listen to the Grey Area podcast if you think this is wrong.
Jeri couldn't get buy-in for her projects at Valve so they failed. For a project at Valve to succeed you need to convince a number of other people at the company that your project is a good idea and that they should help you work on it. It sounds like she wasn't able to convince others at the company to come help her on her ideas (maybe because she didn't put forth the effort, she wasn't good at selling it, or no one thought her ideas were worth it).
Valve has a very specific culture and you have to really have a certain personality to fit in. Sounds like maybe she wasn't a good fit.
So, the question becomes "If Valve can't retain people like Ellsworth, are they systematically missing out on innovating? Do they have a systemic blind spot?"
I don't know the answer to that, but that's the real question. Saying someone isn't a good fit end of story is missing the point from a business process and innovation perspective.
From what I know Valve is very selective. It seems that both Ellsworth and Valve thought it would be a good fit but for whatever reason it turned out it wasn't. While they lost out of her many talents they preserved their culture which has been very successful so far.
Sounds a lot like high school to me :-)
Sounds a lot like most work environments to me. :-)
Some people are perceiving Jeri's emotional crying about the experience as "whining" and "complaining." I don't think she's "butthurt" about the experience at all. It is just that it was intense and very personal, near to her core.
The interview from which the guardian article is highly condensed (remember to take your grain of salt) is a very inspiring example of going from one peak to another. She is certainly very savvy to go from being laid off in the morning, to marching out the door with the IP she created. We should all learn to be so clever!
So yes, she has nothing to whine about and no, she hasn't actually been whining about anything, only crying while telling the story because it was so intense. The world has sometimes gotten used to softballs, but Jeri is a hard-banger all the way. She mentions in the interview that she's actually going so far as to make a custom ASIC for the AR product. That's a step you only make if you are foolish and wealthy, or preparing for a major, major market movie. In EE terms, it's a cost-reduction move that only makes sense in >10K-100K quantity (well, depends on margin. Government contracts have lower thresholds.)
Virtually every single Valve article posted and upvoted here is overwhelmingly positive. The fact that Valve is worshipped in this manner should be sufficient to raise alarm bells, as Mark Twain once said, "Whenever you are on the side of the majority, it is time to pause and reflect." This woman is making some very, very valid remarks about Valve as a company. My hope is that she continues to do so until Gabe himself listens and takes steps to implement the necessary changes.
The cake didn't have icing on. Or it had different icing. I dunno anymore because you put that sexism icing on and now I can't see the other icing.
This seems like a nitpick, but it makes it hard for me to take the rest of the article seriously....
In any case a structure, though not official always exists. Somebody on the top is always going to ask his trusted lieutenant when it comes to doing reviews, 1-1, appraisals, deciding hikes and promotions etc.
Your best bet is to keep yourself to a small company. Nothing you are likely to do to a large company can bring about genuine change.
Unless, of course, you're near enough to the top of its structure, formal or informal...
To bring about change in any large company, you need some partner in the high-mid level management who can assist you in bringing about that change. Now this is the problem, if the system is rotten to the core, simply firing the low level solves no problems. You really need to clean the mid level management, and you will never get a true picture of what is going on. All you will see is numbers that will those guys look fabulous.
One of the reasons why Jack Welch got tremendous success with stack ranking was because the managers were subjected to same kind of measurements some one at the bottom was. There fore he was able to clean up a good deal of crap in the management layers.
Unfortunately this is not possible to implement in most companies as either they lack a 'real' leader or the ones implementing, make the process such that they exempted to be judged as a part of it.
"...There are popular kids that have acquired power in the company ... I was struggling in the company to make a difference"
There IS a always a hierarchy and she failed climbing it.
The totally uniform power distribution idea only works if you have totally uniform employees. As soon as you have signifigantly different skillsets and workflows - which you need to do different kinds of work - then employees become uncomparable and shortly afterwards unequal.
The size of Valve is also over Dunbar's number, so they're beyond the range of what can be organised with informal social operations anyway.
Also, Valve, being a game company, has always had a diverse set of skills with artists and software engineers being the most obviously different. Their success has been a lot to do with efficiently integrating these together.
So they have to have something like that, otherwise nothing would ever get done. People don't just magically do things.
A corporate culture is certainly defined by its political structure: some companies are monarchies if not tyrannies, some are democracies and some like Valve are closer to anarchies. This is decided by the founder's preferences.
I've heard various #s between 50 and 160 batted around as optimal sizes of organizations, after which you need more structure. The challenge is that interpersonal relationships grow n^2 with organization size. This is in part why the Mythical Man Month tells us to not add bodies.
A high level summary of some the research is here -> http://jstrande.typepad.com/blog/2004/07/optimum_organiz.htm...
Intuitively this makes a lot of sense. At some point you have to say, "You do your part, and I'll own mine, here's the deal we're setting up to get each of our parts done, but we each have some autonomy in how to do it."
Valve does appear to try very hard to avoid enshrining hierarchy. No org charts. What people work on can be very fluid.
Doesn't mean it's nirvana.
It is only human nature: to strive for authority, to build little exclusive clubs around it, and to suck up to such authoritative group of people for a sense of security if one not part of such a group. Decades and decades (centuries and centuries?) of human society has trained people in this mechanism regardless of race, gender or religion. So ValveSoftware, even with good intentions, is fighting against a trait that is part of being human. Regardless of how flat Gabe wants it to be, some people will become more and more important on the part of the company they are working on as their time goes by at Valve. And they will form old-timers club who will feel like they are on the next level, and start to form the barrier from the rest.
Only viable solution towards truly flat structure would be to not give anyone a chance to become an old-timer, a.k.a., one too important/authoritative: recycle people to different parts of the company as soon as arguments like this one arises: "OK group, what you all are suggesting for this product's next phase is really great and all, but we will need to ask Mr. X because he had been working on the product since the first iteration, and he knows about it all, so he knows what is best for the product."
"When Boris entered the room, Prince Andrey was listening to an old general, wearing his decorations, who was reporting something to Prince Andrey, with an expression of soldierly servility on his purple face. “Alright. Please wait!” he said to the general, speaking in Russian with the French accent which he used when he spoke with contempt. The moment he noticed Boris he stopped listening to the general who trotted imploringly after him and begged to be heard, while Prince Andrey turned to Boris with a cheerful smile and a nod of the head. Boris now clearly understood—what he had already guessed—that side by side with the system of discipline and subordination which were laid down in the Army Regulations, there existed a different and more real system—the system which compelled a tightly laced general with a purple face to wait respectfully for his turn while a mere captain like Prince Andrey chatted with a mere second lieutenant like Boris. Boris decided at once that he would be guided not by the official system but by this other unwritten system."
It also largely explains why we haven't seen HL3 (which I don't really mind as long as there's another Portals soon).
Lots of projects in such a company will die. But I don't believe for one second that it's due to some elite clique trying to hold everybody else down.
The much more obvious reason is that the concept was mediocre, hence why it couldn't get any backing internally.
It's of course always easier to claim conspiracy and unfairness, than it is to realize that whatever concept you thought up was no good.
There's a lesson in this situation about facing facts early, not being blinded by your own perceived brilliance and not brushing off criticism too easily.
Of course, the risk of that kind of approach is that there's no really a way of make external decisions, as there is no way of disrupting the spontaneous organisation (because there's always going to be some organisation), so consensus with "the group" (meaning basically the leaders) needs to be reached. And that can be very difficult.
I would like to know (and never will) if Valve's game development arm balances out financially, or if it's just a loss leader to get people onto Steam, which will provide them with more distribution revenues down the road.
Also, I didn't think Half-Life 1 or 2 were that good, so sue me. :)
The only company I've seen in-person that was trying it is Basho, and while I got a really bad impression of their culture, I think that had more to do with their "Topgrading" cargo-cult hiring practices than with their structurelessness
Let's say you and I have a chat in the corridor or the conference room and the result of this chat is that we converge to the view that we need an additional software engineer or animator or artist or hardware person.
The people dealing with software were called "engineers", and the ones dealing with hardware "persons". Huh.
It's also likely that she was using the term to be more specific. For example, I have a degree in Computer Engineering, and have held positions in hardware (as a Firmware and Electrical Engineer), but now I write software (as a Software Engineer). I used to be a hardware person, but now I am a software person. I have been an engineer throughout.