Imagine being a part of a company with no bosses, upper-level management, or HR where bonuses, hirings, and firings were all determined by peer consensus. Imagine a company like this going on to become one of the most successful in its space. This isn’t a joke: It’s the real story of video game developer and publisher, Valve Corporation.
In an interview late last month with the Library of Economics and Liberty, Valve’s former economist-in-residence Yanis Varoufakis (that’s right, a video game company with a staff economist) described the flat management model behind the Seattle-based, 400-employee company that could be worth up to $4 billion.
“The most astonishing aspect of life at Valve is that there are no bosses,” said Varoufakis, an economist from the University of Athens with notable publications on the Euro Crisis. “It contains no explicit hierarchy. It’s based on what several members of the company have described to me as the principles of anarcho-syndicalism. Effectively, free association of employees with one another.”
Anarcho-syndicalism is an economic theory with roots in the early 19th century that articulates a form of government in which self-organized cliques of labor work together to directly achieve goals. In essence: socialism minus centralized government plus trade unions.
The way this manifests at Valve is that, after an endogenous process in which a self-organized committee hires a new employee, he or she is free to join and freely move around any of the company’s myriad of projects. Where Google boasts 20 percent free time for its employees, Valve boasts 100 free time.