Who Needs Bosses? Not Game Company Valve

April 25, 2012 -- Video game and software developer Valve Corp, in Bellevue, Wash., has 300 employees--but not a single manager. How to they do that? What's it like to work in a boss-free zone? And what other companies share Valve's approach to non-management?

Valve's website proclaims: "We've been boss-free since 1996. Imagine working with super smart, super talented colleagues in a free-wheeling, innovative environment—no bosses, no middle management, no bureaucracy," just highly motivated peers coming together to make "cool stuff" without anybody "telling them what to do."

It would be wrong to say that up until this week Valve kept its no-boss policy a secret, or that its happy peers toiled in obscurity. The company gets plenty of attention, acknowledgement and feedback from customers, suppliers and reviewers for the best-selling games it makes.

But a few days ago, Valve allowed its unique and quirky employee handbook to be posted on the Internet--and since then, the phones have been ringing off the hook.

The calls aren't coming from would-be game buyers. They're coming from doctors and lawyers, clerks and car mechanics asking either "Can I go to work for you? Boy, I hate my boss" or "Can you teach our organization how to do what you do--get by boss-free?"

All of this attention, says Valve's Greg Coomer, has come as something of a shock. "Surprising," he calls it. "We've been hearing from people well outside our usual audience, from the UK, even from the public sector."

As its handbook makes clear, Valve's approach isn't for everyone. The U.S. Army, for instance, is never going to embrace no-boss-ism. Nor, probably, says management expert and business author Geoffrey Colvin, could FedEx--or any other business that employs tens of thousands and has to function like a Swiss watch, day after day, with precision and predictability.

Coomer agrees. "We know we're unique," he says. But he adds, "We wouldn't advise others against trying it. We're very interested to see others applying it to their organizations."

He says it's taken Valve every day since its founding in 1996 to make its system work. But work it does, judging by results. The company is to video game distribution what Apple's iTunes is to music. Its best-selling games series include Half-Life, Counter-Strike, Left 4 Dead, and Portal. In 2010 privately-held Valve announced it had in excess of 30 million active user accounts.

"Welcome to Flatland," says the handbook, referring to Valve's non-hierarchy. It goes on to explain that hierarchies are great for maintaining predictability and repeatability, but maybe not so good for an entertainment company trying to manage some of the most "innovative, talented people on Earth." Telling people like that "to sit at a desk and do what they're told obliterates 99 percent of their value."

Employees get to vote on their assignments. If they hear of a project they want to join, they literally vote with their feet and with their desks, which all have wheels. They unplug their computers, push back from the wall, and wheel themselves to whatever new project they want to join.

There's a system for reviewing their work and for assigning blame and praise. There's a system for tweaking compensation. But it all plays out without what most long-suffering office schlubs would consider top-down authority. For a full (and vastly entertaining) description of how Valve accomplishes this trick, see their handbook.

The closest Valve gets to having bosses are people called Team Leads. Says the handbook, "Often, someone will emerge as the 'lead' for a project. This person's role is not a traditional managerial one." They serve as clearinghouses of information, "keeping the whole project in their head at once, so that people can use them a s a resource." When the project disappears, so does the Team Lead.

Is it possible to get fired? You bet, and Valve employees certainly have been, says Coomer. But the reason has never been for an honest screw-up. Valve from time to time has hired people who, by temperament, found it frustrating or impossible to work within so gossamer a structure.

He freely allows that not having bosses has its downside. The handbook, in fact, has a section headed "What is Valve Not Good At?" Number 1 on the list: helping new people find their way. After that comes: mentoring people, disseminating information internally, and missing out on hiring people of talent who simply need to work within a more traditional structure.

Management expert Colvin, author of "Management Strategies for Difficult Times," says he can think of only two other companies that do business the Valve way: Fabric innovator W.L. Gore, where, he says, not only is the organization flat but people's business cards list no title (just their name, phone n email).

"This is the company where somebody once said, 'To see if you're a leader, call a meeting and see if anybody comes.'" And the other boss-less company? A Brazilian outfit called Semco.