Gabe Newell has argued that the traditional corporate structure of some game companies has kept them from being flexible enough to react to the rapidly changing industry.
Speaking to the Washington Post in the first of a two-part interview, the Valve founder and president explained that his company's unusual “flat” structure was partially a result of his background in computer science.
“Part of me as somebody with a computer software background thinks most systems that have trouble scaling it's because of internal communications bandwidth problems,” said Newell.
“If you look at the old way of doing things called master-slave computing systems, they tended to clog up around I/O if you really want to scale something to huge levels what you have to do is have as much local data as possible and minimize the amount of shared state between all of the different processors.
“That's a description of about how some engineer at Google who is thinking about how they do search, but it applies to organizations just as much as describing very, very large computing problems.”
For Newell, traditional structures imply specialization; an employee is designated an expert in a given topic and given management responsibilities, and that means it's in that worker's vested interest to make sure their area of expertise is included in future projects.
This means lots of segmented groups of workers fighting to be included despite changing needs, all vying for the ears of the brass. To keep the computer science analogy going, data has to be lost in order for information to be transmitted.
“So specialization in gaming is sort of the enemy of the future,” Newell explained.
“We had to think about if we’re going to be in a business that’s changing that quickly, how do we avoid institutionalizing one set of production methods in such a way that we can’t adapt to what’s going to be coming next.”
Another benefit of a flat structure is that it places every worker in more direct contact with their consumer audience, who are in effect the real bosses of any business.
“We definitely in a sense have an army of customers who are always helping us stay honest. That's way better,” Newell continued.
“We've essentially crowd-sourced supervision of a lot of these decisions to our customers and it works way better than almost any other system we could design. They're rabid, they're passionate, and there are a lot of them.”
Valve's structure – or lack thereof – has drawn a tremendous amount of attention since the company's employee handbook was released to the public.
While most of the reaction has ranged from cheerful curiosity to rabid enthusiasm, there have been a number of detractors.
Those voices of dissent got a good deal of information when a group of employees were let go early last year, including hardware engineer Jeri Ellsworth.
Ellsworth voiced her own critique of the company's organization in a videocast interview, in which she argued that the lack of structure fosters cliques rather than truly open communication.