"We are essentially bossless at Valve. We don't have anybody to report to, nobody works under us, nobody works for us, nobody works in departments, we all have certain skills but we tend to reform and move around," says Jason Holtman, business development manager at games company Valve.
It sounds like a recipe for disaster, but Holtman told the Develop in Brighton 2012 conference the practice makes his company more efficient and creative. As an example, he points out: "Nobody with a classic business skill was involved in the launch of Portal 2."
Outsiders have to look at the history of Valve to understand how the system came about.
The 300-person entertainment company was formed by engineers working on Half-Life in 1996 and as Valve continued to grow it maintained that core philosophy of focusing on building a game.
Holtman says because of the staff employed at launch and because the company has continued to replicate its DNA in the same way, it is still organised around a very flat peer structure.
The unusual system of management relies on localised decision-making to function.
"We believe that everybody in the organisation is actually capable of making all the decisions that have to be made about a product or shipping or business strategy. One of our catchphrases at Valve is, 'Anyone can ship anything.' That actually means you have to be thinking all the way through the chain about will this succeed, will it fail, what am I doing, should I get help. And we believe that localised decision making works pretty well."
According to Holtman, business is not a set of skills. So, while he admitted there are people with very good business skills, he believes they are not what makes up business.
"It's interesting that the way corporations have organised themselves in the past 100 years has become what we think of as business. So to do the business of videogames you think, 'Where's the press relations department or the finance department or the legal department or my business development guy. All those are skills, but they are not actually the business of business," he said.
In one example of what he understands as business, Holtman pointed to the launch of Portal 2. In the classic business model, when it was ready to be announced the business department and marketing teams would be alerted. In Valve's case, the games team took over and used some creative approaches to get the message out.
"The people that announced Portal 2, I think by the time the announcement got together on how we were going to do it, my guess is there was nobody with a classic business skill involved at all until the execution piece came about," Holtman admits.
The team's plan was to leak Portal 2 to the fans first by adding content to the original Portal game. The designers added little radios that usually played soft music in various places in each level of the game. They then put out a forum post on the update notes for the game saying: "Changed radio transmission frequency to comply with federal and state spectrum management transmissions."
"This was two seconds after we made the change in the game and everybody is like, 'What's going on?' and starts going crazy. If you found the radios and finished the level with them, each radio spit out static at you. And it was just a matter of time for people to go, 'That's not static. What is it?'" Holtman explains.
It didn't take long for clever internet users to realise the static was an SSTD feed, which is an old fashioned way of sending pictures. There were 26 decoded pictures in all, including other teases such as a phone number and a BBS address.
The second thing the team did was to change the ending to Portal.
"The team working on the announcement for Portal 2 said, 'I'll just change the last 15 seconds'. They added footsteps coming up behind you and a robot voice that said, 'Thank you for assuming the party escort position' and then simply dragged the camera back 10 feet and faded out to black. This, of course, made everybody go ballistic," he says.
More than 2.77 million people read the main discussion thread on 'Mysterious Portal updates' online, with 12,000 people adding content to it. On top of that main thread there were all kinds of other mini-chains about where to find the radios.
"That's amazing and is better than sending out a press release or buying the side of the Chrysler building," Holtman says. "This is not to say we didn't do the traditional thing. Two or three days after we started we of course put a press release out. The press needs to consume when the date was and what's coming out."
Team Fortress 2
In another example, Holtman showed how Team Fortress 2 had drummed up huge fan support by harnessing the creative power of the game's key staff.
They wrote blog posts as if they were the lead characters from each side in a war, as the two armies had their deaths counted for the first time. The side with the most kills won first access to new downloadable content.
The move meant that even before the content was released, the game received a massive player lift.
"These are classically things that if they were not written or done by the team, would suck. They would have been terrible. If it was somebody in a marketing department doing the writing for us it wouldn't have worked because there is too much of an abstraction layer," Holtman said.
Valve also got the Team Fortress 2 players involved with a competition to create propaganda posters.
"We thought it was a bit of a lark but we got thousands. They went crazy and created all of this content that started to get consumed as part of the marketing for the war update," Holtman shares. "Meanwhile they were actually having fun marketing for us."
To help with the management of that crowdsourcing model of development, Valve created a pretty simple posting site. When that got overwhelmed by a huge number of items it launched Steam Workshop, where customers rate items and the community helps the best stuff rise to the top.
"That let the creators have their own fans. And when that happened they started to solve the business model of making good content. Unlike just sending it to Valve and having it judged, they were able to watch what real people were doing and if users were saying, 'I like this, I want this, you're awesome.'" says Holtman.
"Once you start that virtuous cycle of folks being hooked up, they started making better and better content."
He noted that the vast majority of content now being consumed in TF2 is customer made, with Valve "hardly making anything anymore."
Holtman agrees that the company's management system takes some getting used to but says that physical proximity really helps and suggests teams organise around the product they are making.
"This is something I personally started doing a year and a half ago. I don't think I'd trade back to have an individual office now," he claims.
Some staff issues do still raise their heads and Holtman said it is important to still recognise the input of individuals, even when there is no boss to notice their efforts.
"You need to respect and reward the behaviour. It is not enough to say, 'We're going to be egalitarian, we're going to be flat.' I think you have to admit this is a hard behaviour to do and if you are going to do it you need a process in place where you will reward and recognise people," he explained.
However, Holtman admitted it takes a long time to unlearn certain practices, such as who do I get to sign this off or can I really write that press release?
There is also a question of who decides what the pay scales are in such a flat structure.
"It is a very hard problem," he says of the decisions on what staff get paid. "You have to have all the peers be able to be involved with that. When we talk about salaries or bonuses we have sets of folks that come together and work on that as a problem. They come from across the company, it's not like we have an HR person and an executive committee imposing it."