Corporate Hierarchy, Job Security, and Political Identity

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Tod Kelly

Tod is a writer from the Pacific Northwest. He is also serves as Executive Producer and host of both the 7 Deadly Sins Show at Portland's historic Mission Theatre and 7DS: Pants On Fire! at the White Eagle Hotel & Saloon. He is  a regular inactive for Marie Claire International and the Daily Beast, and is currently writing a book on the sudden rise of exorcisms in the United States. Follow him on Twitter.

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97 Responses

  1. Avatar Michelle
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    says:

    Interesting post Tod. I think you’re on to something in that most people, myself included, are change and risk-averse and find the possibility of working for a company like Valve discomforting because it fails to conform to corporate norms. It makes them nervous in a way that striking out on their own would make them nervous as well–too much to lose.

    Having worked for a variety of entities–both public and private, large and small–over my life, I’ve come to the conclusion that large government and large corporations are essentially the same–bloated, inefficient, filled with ridiculous layers of bureaucracy, and committed to doing the same old things the same old ways. They’re codependent; not independent.  I always get a laugh out of conservative defense of “laissez-faire” and the “free market system” in a world dominated by huge international organizations. If they ever found themselves in an actual “free” market, they’d run as fast as they could in the other direction.

    . . . we just gravitate toward different Gods of bureaucratic security.

    Indeed, we do (although these days most of that security is pretty darned illusory).

     Report

    • Avatar Roger in reply to Michelle
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      says:

      Michelle,

      I totally agree that organizations gravitate naturally toward bureaucratic, sclerotic growth and inefficiency. Totally.

      Competition, transparency and consumer choice are the solutions to both.Report

  2. Avatar Roger
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    says:

    Tod,

    I enjoyed every word.

    Some various thoughts. I have no idea about the Fortune 500 company, but would clarify that delivery of a product is every bit as much of a value added feature as is the production or innovation.

    Second, as a libertarian I love the idea of flat, voluntary projects as you describe with Valve. But yes, they probably need to contract out for the toilets. Love it!

    Third, I agree that conservatives and liberals are similarly resistant to change and the unknown. I would say that conservatives tend to believe in top down control and security from God and liberals believe in top down control and security from Government. Neither has much faith in big business. Indeed I just read an article by Frank Luntz on this being a conservative myth.

    Conservatives and liberals are two churches of the same denomination. They both believe security, order and manna comes from above. Silly rabbits.Report

  3. Avatar Steph
    Ignored
    says:

    I’ve volunteered to unclog the toilet at more than one place of employment. How do I get Valve to hire me?

    Scratch that, I’m already self-employed.Report

  4. Avatar Matty
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    says:

    I’d have to think more to comment on the politics of this but it jibes a lot with my own experience. I spent several years with a large company and while I can’t complain about the actual work (once I got to do it) I grew to hate the culture of people giving orders and writing polices, as far as I could tell for no purpose other than to show they were important enough to be in charge. The one that always sticks in my mind was the form to fill out if you rang another office to demonstrate that you hadn’t driven there to speak in person and so had avoided a risk.

    Anyway I eventually left and set up as self employed. Since then my income has been variable and has yet to return to what it was, not to mention I have to pay 100% of my pension contributions, buy long term sickness insurance etc but would I go back? Fish no.Report

    • Avatar Mad Rocket Scientist in reply to Matty
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      says:

      Same here, having spent 15 years in academia & government, & 5 at one of the largest corporations in the world, I love working for the 500 person company I work for now.  Not as secure, not as many benefits, but more trust, freedom, flexibility, and interesting work to keep me satisfied.

      I think it’d be great to work for valveReport

  5. Avatar Matty
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    says:

    If my toilet needs cleaning I clean it. If it is blocked beyond my ability to fix I hire a plumber and I assume that he knows his own specialism better than I do so I don’t order him about like a minion or demand control over every aspect of his life.

     Report

  6. Avatar Will H.
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    says:

    Sounds to me like a record company.

    I would love to write some music for them.
    I get to edit it though. I’ll consider any criticism as legitimate, but I get the final word.Report

  7. Avatar Kolohe
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    says:

    As I say, it’s a working theory.

    Thoughts?

    I think it’s correct, kulturkamp uber alles

    The flip side of the Valve example is perhaps the military.  As General Clark (correctly) said, there’s some mighty fine soshulism  all up in that institution, but it is of course, a conservative darling.

    I would say that I’m nonetheless skeptical that Valve’s business model is sustainably.  Anybody can be hunky dory in the short term, (i.e. Ford Motor Company) but let’s see where they are in 5 years, or 25.

    And yeah, being part of a sales force, even for a short term, is enough to turn most anyone into a raging Marxist.  (my favorite Glengary Glenn Ross version. )Report

    • Avatar Plinko in reply to Kolohe
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      says:

      Well, at 15 years in, they’re one of the most profitable companies out there, so just 10 more to prove it to you.Report

      • Avatar Kolohe in reply to Plinko
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        says:

        Sez the founder, but private company is private. Steam is an industry leader and is going gangbusters, but let’s see how long that lasts.  And let’s be clear, for a ‘creative’ company, besides Steam they’ve had exactly one other big idea – that they’ve ran with and been very successful with, to be sure.

        And echoing something said on the other thread, I wonder if Valve’s lawyers in the M&A and general counsel business are allowed to work on anything they want, or if they do what they’re told by the strategic decision makers.Report

        • Avatar Plinko in reply to Kolohe
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          says:

          I’m not sure what you might mean by only one non-Steam idea – between Portal 1&2, Half-Life 1&2, Left4Dead 1&2 and TF2 they’ve got at least four, plus they own one of  the top competitive online FPS properties in Counter-Strike. That doesn’t mean it won’t all crash and burn next year but what company can’t you say that about?Report

        • Avatar Fnord in reply to Kolohe
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          says:

          Exactly one big idea? It’s perfectly fair to suspect that Valve may not be as profitable as people think, and (perhaps more likely) there may well be reasons to think that the game design part of Valve is subsidized by Steam. But, in addition to Steam (which was itself no small innovation), they’ve made gaming history twice with the Half-Life and Portal franchises, and neither Team Fortress 2 nor Left 4 Dead were flops.

          Valve famously makes excellent games, and infamously takes a long time to do so. If you want to take pot shots at Valve, the second fact is probably the easier target.Report

        • Avatar Kolohe in reply to Kolohe
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          says:

          1) Sequels are, almost by definition, *not* new ‘big ideas’.  And multi-player shooters are about as ubiquitous as action movies, doesn’t mean than can’t be well made, but they’re rarely if ever breaking new ground.

          2) Half-Life was truly innovative for its day, (though the first person shooter genre had already been pioneered by Wolfenstein and Duke Nukem, and the whole thing was built on a Quake engine – but then again Shakespeare stole all his best stuff too)

          3) From the all knowing wiki:

          Portal is Valve’s spiritual successor to the freeware game Narbacular Drop, the 2005 independent game released by students of the DigiPen Institute of Technology; the original Narbacular Drop team is now employed at Valve. Valve became interested in Narbacular Drop after seeing the game at DigiPen’s annual career fair; Robin Walker, one of Valve’s developers, saw the game at the fair and later contacted the team providing them with advice and offering to show their game at Valve’s offices. After their presentation, Valve’s president Gabe Newell quickly offered the entire team jobs at Valve to develop the game further.

          So Portal was not really Valve’s “big idea”.  But it’s a very honorable way to steal it, certainly better than his old employer Microsoft ever did.

          I wish the Valve team all the best.  And since this post wasn’t about Valve, that’s all I have to say about that.Report

          • Avatar Plinko in reply to Kolohe
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            says:

            Did you play Narbuncular Drop? I did, and I assure you that team was nowhere near ready to make Portal. The fact that Valve recognized the potential, brought them into their culture and churned out such a massive success is a pretty important detail that undermines the complaint that Valve’s riding one great idea and speaks more to the idea that the company might actually be an engine that can keep producing success. I mean, facebook  or Amazon don’t even have one great idea by your measure but, all arguments about their proper market value aside, it’s hard to argue that they aren’t in a good position to be successful in the future.

            I guess we have to agree to disagree, but I think the facts on the ground do matter. We have our gut reactions to these sort of stories but knowing the details is the opportunity to get over those initial feelings and re-evaluate.

             Report

          • Avatar Fnord in reply to Kolohe
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            says:

            As Plinko points out, Narbuncular drop is not Portal.

            And to the extent that it is? Valve was the one who got the team. And I doubt that Valve got the team because EA couldn’t afford to have a presence at that career fair. If Valve is able to recognize and attract talent that other game companies can’t, I’d call that a win for Valve.Report

    • Avatar Tod Kelly in reply to Kolohe
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      says:

      “I would say that I’m nonetheless skeptical that Valve’s business model is sustainably.  Anybody can be hunky dory in the short term, (i.e. Ford Motor Company) but let’s see where they are in 5 years, or 25.”

      So, here’s the thing – even if this is true, I’m not sure I necessarily view this as a bad thing.  I think it’s quite possible that in order to create a big corporation that continues to grow for 25+ years, you have to sacrifice the company’s actual mission.

      Take the company I worked for in the OP, for example.  Way, way back in the day they invented and marketed a machine that was somewhat transformative (in a positive way) for businesses, and as a result it was rewarded with success.  Many decades later when I worked for them, however, they had hired their competitor to design and build all of their machines for them in order to grow profits and sustain their growth.

      I am in no way anti-profit, but at some point the purpose of the company shifted from producing a quality product that reduced costs for its customers to a company that essentially colluded with its competitors to ensure innovation was capped and prices were artificially high so that growth and profitability were sustainable.  (Prices were artificially high because having multiple “competing” corporations – with all of their overhead, management and shareholders needing be paid – requires more money from the customer to sustain the model.)  This is certainly good from a “keep moneys churning in the system” point of view, but I’m not sure that it actually creates wealth or adds any net positive to the system – and in fact, it kept the industry from advancing in any meaningful technological way.

      If Valve (or some other company) is able to make a lot of money for five or ten years making something new and awesome, and then due to changes in the market/ability to attract talent/general apathy & inertia over time/etc. is forced to shut down – and all of its players go off to explore new challenges – is this a bad thing?  The way we currently judge corporations it absolutely is – but I’m not sure that doesn’t say more about the way we judge corporate success than it does how successful certain business models are.Report

      • Avatar Kolohe in reply to Tod Kelly
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        says:

        Hey, I’m the vulgar glibertarian here, far be it for me to complain about people bowing out when a company becomes the pits.  I *like* going Galt and creative destruction.

        But I do realize it’s destruction.  And some of those attached to the ancien regime may be real and truly fished.  And whence the need for government.

        (and then you get the old Navy damage control saying – “well, the good news is that the flooding put out the fire….”)Report

      • Avatar Plinko in reply to Tod Kelly
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        says:

        This probably isn’t the place for the discussion, but perhaps the greatest unanswered (more importantly, frequently unasked!) question of business organization is how to wind down a corporation properly. It’s a bad thing mainly in that nearly all the time the winding down process ends up wasting a large portion of the profits previously made that could have been put to more productive uses.Report

      • Avatar DensityDuck in reply to Tod Kelly
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        says:

        “Prices were artificially high because having multiple “competing” corporations – with all of their overhead, management and shareholders needing be paid – requires more money from the customer to sustain the model.”

        Which is a perfect way to describe the publishing industry, and that’s currently being disintegrated by Amazon and the rest of the ebook market.

        “If Valve (or some other company) is able to make a lot of money for five or ten years making something new and awesome, and then due to changes in the market/ability to attract talent/general apathy & inertia over time/etc. is forced to shut down – and all of its players go off to explore new challenges – is this a bad thing?  The way we currently judge corporations it absolutely is…”

        um what

        No true believer in the free market would say that it’s a bad thing that an old slow useless company went out of business.

        You’ll find just as many critics of TARP on the nominal-right as on the nominal-left.Report

  8. Avatar Plinko
    Ignored
    says:

    Great post, Tod. I must not have been brave enough to get far enough into the testing ideology comments far enough to catch the Valve exchange.

    The Valve model isn’t for everyone, either as an employer or an employee. That security bit (“what am I supposed to be doing?” at least as much as “will I still have a job next year?”) is too important to too many people for it to work for them. More importantly, the type of work that most people could successfully do in a Valve model surely does not line up with the work that is really out there – so a lot of people end up mismatched and therefore will probably be more productive in a hierarchical organization where there are extrinsic motivations.

    The dark joke in all of this, then, is that though most people would probably be happier in a flat organization, the hierarchical organization should have to pay significantly more, the theory says. But since the industry where flat works is a ton smaller (and I strongly suspect so it shall remain), the flat organizations have to be extremely choosy and generally have to reward people lavishly lest someone poach their talent, so the employees of the flat organizations have a better quality of life and a higher compensation.Report

    • Avatar Kolohe in reply to Plinko
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      says:

      That seems exactly right, and resembles everything I’ve ever heard about Google (and in the old days, Microsoft)Report

    • Avatar Tod Kelly in reply to Plinko
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      says:

      “The Valve model isn’t for everyone, either as an employer or an employee.”

      I think this is absolutely correct.  In fact, I think with the wrong group of people it could be a huge disaster.  In the next few weeks I think I’m going to write about NUMMI, where General Motors had one of its worst performing plants turn into one if its most successful be essentially becoming flatter.  Attempts to copy the formula in other places within the company are disastrous, though, because the laborers and the upper management all worked so hard to make sure it would be unsuccessful.Report

  9. Avatar wardsmith
    Ignored
    says:

    Tod, I self-profess as a Libertarian/Conservative, but Hanley’s test had me squarely in the Libertarian camp. That said, I have no fishing idea what you’re talking about conservatives “hating” Valve. Makes zero sense to me. I’ve worked at the mega-corp and it sucked exactly as it should. I would state for the record that the place was overrun with liberals with only the slight exception of some of the senior management. All the lower level VP’s on down were libs. On the other hand, at the relatively small companies I’ve run and been involved with (similar in ways to Valve) the majority were libertarian or conservative leaning although largely apolitical as far as partisan elections were concerned. My best software and electrical engineers rarely even knew when an election was occurring and could care less about red/blue team conversations. I did have one employee who had been a sergeant in the Air Force special ops. He was the only one who regularly complained to me about not giving him enough “orders”. I said, “You’re a big boy, you see something that needs doing you have the authority to get it done”. He’d say, “But what if I need help?” and I’d say, “Ask for it”. He never gravitated to our system, he needed top-down command and control. Eventually he quit at a most inopportune time. We had already signed the sale paperwork and I’d stuck my neck out telling the acquiring company that ALL my employees were critical to the organization (so they would all get stock options in the acquiring corp). His quitting when he did cost us some headache and cost him about $250K in options alone. The command and control company he went to was bankrupt 2 years later.

    As for broken toilets, we had janitorial service as part of the rent in our Class A office space. There was a week however where the janitors had gotten way behind (turned out a couple of them had been fired). So there I was, president of the company looking at overflowing waste baskets all over the office. I could have ordered someone to empty them, but looking around, everyone was productively engaged. The one not suitably busy as it turns out was yours truly. I was going around emptying the trash when a client came to visit. He wanted to meet “the boss” and someone pointed me out. He laughed and said, “Very funny”. I had my VP of sales pretend to be me and he even gave him my card. Caused some confusion later on because my VP was black.Report

    • Avatar Tod Kelly in reply to wardsmith
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      says:

      Yeah, I think that those that identify as libertarian conservative would not fall into this category.

      I also think that engineering and software companies employees tend to skew more libertarian than other kinds of large corporate employees.Report

    • Avatar DensityDuck in reply to wardsmith
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      says:

      ” I have no fishing idea what you’re talking about conservatives “hating” Valve.”

      I was kind of wondering that, too.  Could we get some citations on that?  It seems like such a significant claim that there ought to be, like, at least one article showing Massive Conservative Dislike of Valve Software.Report

  10. Avatar James Hanley
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    says:

    Re: Valve vs. bureaucracy, and the conservative reaction:

    My quick theory, based on prejudice and several intoxicating drinks.  Conservatives tend to like hierarchy (not the more libertarianish ones like Ward, and not all of them by any means, but more so than liberals) because they tend to like order, but they tend to like the kind of hierarchy where the higher ups can kick ass and make the lower downs perform.  Valve lacks hierarchy, so obviously it lacks that kind of attractive order; it smacks of hippie commune.  Bureaucracies have hierarchy, but not of the kind where the higher ups can kick ass, because the lower downs have protections that make it hard for the higher ups to control them, so they also lack the kind of order conservatives tend to like; it’s like having a court order restraining you from withholding the kids’ allowance if they don’t wash the dishes.

    That particular type of conservatives’ ideal order is the military–top to bottom hierarchy with the understanding that when the higher ups says jump, the lower downs say, “how high?” and by god you can bust ’em if they don’t.Report

    • Avatar Tod Kelly in reply to James Hanley
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      says:

      I agree that conservatives like hierarchy, but I think in this case there’s something else going on.  Most conservatives I know that are on the low end of the pecking order in their company still think flat organizations are a terrible idea.  Even those that hate their job and boss and bitch about feeling powerless.Report

      • Avatar James Hanley in reply to Tod Kelly
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        says:

        Tod,

        I think that’s because while they don’t like being on the bottom end of the hierarchy, they still like the hierarchy.  They don’t want to eliminate it, god forbid; they just want to be the ones kicking ass instead of getting their ass kicked.Report

        • Avatar Kimmi in reply to James Hanley
          Ignored
          says:

          no. they’d make horrible blackshirts (see? not godwin!). They bitch because that’s what peasants do. People who actually make decisions and do better things with their lives? They get off their duff and do something better.

          I may hate my job –but I’ve got plans, and I know the instant that I will be out of there and in something I like. (don’t actually hate my job — but if I did.) Bitch? maybe. but not the same way.Report

      • Avatar Tom Van Dyke in reply to Tod Kelly
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        says:

        Considering the gov’t bureaucracy votes overwhelmingly Dem, as do the low totem pole service unions, I’m not following these generalizations.

        This conservative is fine with the Valve model, which is clearly a meritocracy, up or out.  No free riders @ Valve, of this I’m sure.

        This isn’t to say a lib can’t work @ Valve or a Repub can’t work for city hall or the post office.  [Although on the latter two at least we’re not playing the odds.]

        And though it’s true righties dig order, the left has its set of orthodoxies too.  Just breach one and find out the hard way.

        Perhaps there’s a generalization to be made here somewhere, but if the left gets Valve, it also gets the DMV.  😉

        Report

        • Avatar Tod Kelly in reply to Tom Van Dyke
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          says:

          Correct me if I’m wrong, but were you not just a few days ago declaring Valve’s model a joke?Report

          • Avatar Tom Van Dyke in reply to Tod Kelly
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            says:

            Not atall, Tod.  I pointed out that it’s rare that the stars line up correctly, and that the service workers are not treated the same way as the stars.  It’s egalitarian only to a point: as Simon pointed out, it’s more like Athenian democracy, where an elite do their elite thing and the slaves, women and lower sorts keep the boiler room running.

            Valve is a lot like a successful rock band, but we know they seldom last, and Ringo always gets paid less anyway.

            ;-P

            More common is The Police, with one monomaniac, a great drummer whose brother owns a record company, and some mook Sting teaches the guitar parts to.

             Report

            • Avatar Murali in reply to Tom Van Dyke
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              says:

              Valve is a lot like a successful rock band, but we know they seldom last, and Ringo always gets paid less anyway

              The reason places like Valve are going to succeed over the long term is that such institutional structures select highly self motivated and driven people. They are almost always going to get higher productivity than the competing company which has a more traditional structure. And because they are more self motivated, they have few points along the command structure where if things fish up everyone loses. Also note that while they’re flatter, they are not completely flat. Think of this as a kind of hyper-capitalism. In the traditional corporation, how things function within the corporation is kind of like socialism. Many things are ultimately centrally managed by the higher ups. But in companies like valve and appco, because the average jo has has more opportunities and actually competes and cooperates with other average joes, you get something a lot more flexible and sustainable.Report

            • Avatar Jaybird in reply to Tom Van Dyke
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              says:

              Without Ringo, the Beatles would have broken up 3-4 years before.

              Believe it.Report

        • Avatar Jesse Ewiak in reply to Tom Van Dyke
          Ignored
          says:

          Never had a single problem going to the DMV. Only time it was ever difficult was when I dawdled and forgot to renew it my ID until the end of the month.

          Now, calling about my credit card bill that was weird on the other hand? Eighteen phone menus and a customer service person who was dimmer than an evil government-mandated light bulb.Report

    • Avatar Burt Likko in reply to James Hanley
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      says:

      Was busy yesterday so if I’d been actively blogging I might have beat Mr. Hanley to this point. I might even go a step further and suggest that there is a personality type for whom hierarchy and formal structure is an inherent good. For me the question is a) whether and b) why such personality types gravitate more to the conservative than liberal camp — or, to my way of thinking, to Team Red rather than Team Blue. (I make that backtracked in recognition of Wardsmith’s point that only a fraction of self-identified conservatives find a Valve-like corporate culture distasteful.) Certainly Team Red’s identification with Big Money and the military must be a factor. So too must be a disparity in vision of the proper function of institutions as molders of social activity.Report

      • Avatar Kimmi in reply to Burt Likko
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        says:

        This is an America thing. Propaganda has been on team red’s side for so long. Also, the blackshirts (again, not godwin!) and authoritarian personalties gravitate to “not flipfloppers”.

        In russia, thsoe people vote communist.Report

      • Avatar Will H. in reply to Burt Likko
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        says:

        I’m happy to inject a contrarian view (go figure).
        I think both Teams are inordinately hierarchal; they just go about it in different ways. Like the Team Red vision of colonialism is much different than Team Blue’s vision of it. They both want it. They just want to go about it in different ways.
        Team Red: pro-corporate; Team Blue: pro-Wall Street– What’s the real difference?
        Team Red: pro-military; Team Blue: pro-“peace-keeping missions”– What’s the real difference?

        Partisan: A person who believes that one side is not lying to them.Report

  11. Avatar Fnord
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    says:

    While I recognize that knee-jerk responses are hardly going to be based on informed opinions, it’s funny to think people suppose Valve offers worse job security than the mainstream game industry.Report

  12. Avatar Mike Schilling
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    says:

    The best description of the Valve model is “capitalism”.  It rewards having a good idea, assembling the resources to implement it, and making it successful.  It also rewards predicting which projects will be successful and investing in them (albeit with time and effort rather than money.)  Entrepreneurs and investors: what’s for a conservative not to like?Report

  13. Avatar DensityDuck
    Ignored
    says:

    Read the first bit, thought that the author was going for “most white-collar jobs were really just part of a bucket brigade, and in 2008 everyone decided it was time to buy hoses.”

    Then in rolls all this garbage about how conservatives just can’t handle the Total Anarchy of Valve Software and so they all hate and fear it. No quotes, no sources, no corroboration, not even a goddamn link?  Really?  Really.Report

    • Avatar Tod Kelly in reply to DensityDuck
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      says:

      Duck, you really need to start reading the posts prior to commenting.Report

      • Avatar DensityDuck in reply to Tod Kelly
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        says:

        “Conservatives are ideologically opposed to the organization used by Valve Software” is an extremely strong claim that requires more support than “u nid 2 read post lol”Report

        • Avatar Tod Kelly in reply to DensityDuck
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          says:

          Then you’ll have to show me where I said “Conservatives are ideologically opposed to the organization used by Valve Software.”

          lol.

          I was under the impression that I made the argument that in threads here and in my personal experience, conservatives disrespect flat organization plans like the one at Valve, despite it being something they should ideologically embrace.

          But your reading of the headline and not the content was good too.Report

          • Avatar DensityDuck in reply to Tod Kelly
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            says:

            “Why is it, then, that conservatives so hate companies like Valve?

            In my experience, I have to say this is not a League phenomena; this is actually a pretty common reaction from self-described conservatives toward companies like Valve. Given the choice between working for (or even acknowledging the inherent worth of) an organization like Valve or the Fortune 500 company I worked for, for most conservatives it’s not even open for debate. The company I worked for is a blessing, and Valve a joke to be openly mocked. In fact, in my experience conservatives don’t simply disrespect companies like Valve, they are downright hostile toward their very existence.”Report

            • Avatar Tod Kelly in reply to DensityDuck
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              says:

              I’m sorry, I missed the part where I said they were ideologically opposed to it.  Could you underline that part?Report

              • Avatar DensityDuck in reply to Tod Kelly
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                says:

                *sigh* I suppose you’re right that you didn’t use the word “ideological”.

                I mean, you said “hate”, “openly mocked”, “not even open for debate”, “downright hostile”.  But you sure didn’t say “ideologically opposed”.  I guess it’s true that I came up with that interpretation all on my own.Report

              • Avatar Tod Kelly in reply to DensityDuck
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                says:

                What I said was that even though they were actually ideologically in line with flat companies, most conservatives I know mock or sneer at flat organizations.  Including the conservatives here.  Including, in a way, you down below.Report

  14. Avatar Patrick Cahalan
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    says:

    For each bit of data collected on a prospect you had to input that data in the computer system so that Home Office could access the information. You were then required to retype it on an electric typewriter using old forms and forward those forms along to Home Office  – because they couldn’t actually access the data we input on the network. The huge potential cost of a new system was the reason giving for not changing; the huge sunk costs of the current system was the reason giving for needing to do the pointless data entry.

    Everything about this paragraph was totally non-awesome and made me laugh, and laugh, and laugh.

    I think it’s quite possible that in order to create a big corporation that continues to grow for 25+ years, you have to sacrifice the company’s actual mission.

    There’s something to this.  Companies that survive past N years for some significant N have rather discarded their previous mission for the new mission, “Survive for N+M years”, for M ~ the next market cycle.Report

    • Avatar Tom Van Dyke in reply to Patrick Cahalan
      Ignored
      says:

      Heh.  And when management gives you a copy of “Who Moved My Cheese,” you’re screwed.

      http://icheese.appliedinternet.com/

      1. Sometimes the cheese will be forced down your throat. When that happens, the correct response is “thank you sir, may I have another?” Remember, they know how old you are and after a certain age, they really don’t care if you stay or leave, and would prefer it if you left so they don’t have to provide a severance package. Forcing cheese down your throat will help them, and if you choke, no loss. There are others where you came from.
      2. When cheese is scarce, watch out! There are people you work with who are incapable of finding their own cheese. They are, however, capable of talking loud in meetings and criticizing the work of other as their only way to show management how important they are. Management, unfortunately, is clueless on technical matters so this will be the only way they can make a judgement, and they will start taking your cheese and giving it to these people.

      Report

  15. Avatar MaxL
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    says:

    Tod,  a very thoughtful post.  I never had the joy of working for Giant Megacorp Inc, your description was had me laughing. I have had the slightly less funny pleasure of being part of a couple of startups that flailed about and finally drowned in their own chaotic little sea – but I couldn’t help going back for more.  That’s because there is nothing so rewarding as being part of that small, spontaneously formed team that wins in a league of giants.   Each person on it wears a stack of hats and laughs about what title we want to put on our business card today.

    I tried to add my response yesterday and had pictures and links and everything!…but of course that much multimedia madness made the system barf on my comment.  So, without any embedded images or links, here are the parts worth typing twice:

    In the original comment thread to James Hanleys post, we were talking about Political Compass.  It labels the bottom left quadrant as left libertarian or, even better, Communitarian Anarchist.  If nothing else, the Valve EHB is function Communitarian Anarchy, right? Here is link to that Political Compass image:  http://www.politicalcompass.org/images/axeswithnames.gif.

    I think Political Compass is using Jonathan Haidt’s work on moral psychology and politics to build the their test.   Here is a link to his UVA home page:  http://people.virginia.edu/~jdh6n/

    In any case, It’s interesting that the reaction to the Valve EHB doesn’t just fall along the left right axis, but also and even more strongly along the vertical Authority v Anarchy axis.  I would love to know which was the stronger predictor there, because I have a feeling that there is either a missing z axis or that the x axis is actually some sort of predictor for the y.    I don’t know of they score the quadrants linearly, but I think it’s pretty clear that Valves small dose of anarchy is anathema to self described right leaning libertarians, yes?

    Finally, I would love to chew on how this presentation by Dan Pink either explains some of the reaction or causes a similar split in who agrees and disagrees with him. 

    Report

  16. Avatar MaxL
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    says:

    There is an excellent short essay by Clay Shirky on “The Collapse of Complex Business Models” that  speaks directly to your post. I can’t recommend it more highly:

    dubdubdub shirky dot com  /weblog/2010/04/the-collapse-of-complex-business-models/

    On growing bureaucracy or process:

    “Early on, the marginal value of this [government’s or large company’s] complexity is positive—each additional bit of complexity more than pays for itself in improved output—but over time, the law of diminishing returns reduces the marginal value, until it disappears completely. At this point, any additional complexity is pure cost.”

    Yep.  And flattening the org chart is a rational, if radical, response that, right? He finishes with this, and I think it is a significant reason why Valve’s approach at minimum appeals to a sense of novelty:

    “When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.”

     

     Report

  17. Avatar Jeff Wong
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    says:

    I didn’t see the part where conservatives hate non-hierarchical reporting structures. Not even so much as “there should be bosses so that someone is responsible for making the decision and everyone is contractually obligated to follow that person.”

    Sounds like a cool way to work. If stuff breaks down, it’s everyone’s fault!Report

  18. Avatar Jaybird
    Ignored
    says:

    I have had the pleasure of working for giant multiconglomerate corporations. The upside of being a very small cog in a very big machine is that it is possible to get lost in the shuffle. I did my job, I was under the radar of everybody, there were politics, sure… but if you just did your job and stayed under the radar, you could continue to do your job and stay under the radar.

    Until, of course, the Outsourcing Megatrend started…

    After that, I have had the pleasure of working for small companies on the verge of becoming medium companies and watching them play the game of “growth through Mergers and Acquisitions” (which, honestly, strikes me as an accounting gimmick more than anything that actually succeeds at adding value). There were politics, sure… but if you just did your job and stayed under the radar, you could continue to do your job and stay under the radar.

    Until, of course, the Great Recession started…

    Anyways, I prefer the security and anonymity of the large companies and I prefer the dynamism and close culture of the small companies. If only there were some way to have all of them together at the same time…Report

  19. Avatar wonkie
    Ignored
    says:

    A point of disagreement: you say that conservatives distrust government. I think that it is more accurate to say the self-identified conservatives claim to distrust government. It’s a claim es them a gratifying sense of being for freedom and responsibility and apple pie and all kinds of good things. But, based on the kinds of policies and laws that self-identified conservatives support, are they actually suspicious of government power? Heck no. It’s a instrument that they don’t hesitate to use. They just don’t want to talk honestly about the pattern of usuage.Report

    • Avatar Tod Kelly in reply to wonkie
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      says:

      A good point, in the same way that liberals don’t really hate corporations.  As I said in the OP, I suspect that verbiage on both sides about government/corporations says more about partisan machinations than it does day to day preferences.Report

  20. Avatar DensityDuck
    Ignored
    says:

    Valve employees can choose what project to work on the same way that bees can choose what flower they drink from.  Nobody tells a bee where to go, but nobody’s going to claim that a bee has freedom the way we’d understand the term.Report

    • Avatar Tod Kelly in reply to DensityDuck
      Ignored
      says:

      I’m not sure I understand this argument.  So a Valve employee does not have total freedom to anything they like, even if it’s against the mission of the organization.

      OK.

      So…  what?

      It’s also a little weird that you and Tom start off by talking exception to my noting that conservatives I talk to generally mock companies like Valve, because you conservatives LOVE that stuff.  And then, once that point is made, you begin to trash what a silly concept companies like Valve are.Report

      • Avatar DensityDuck in reply to Tod Kelly
        Ignored
        says:

        “you conservatives LOVE that stuff”

        GIVE US A FUCKING LINK OR SHUT THE HELL UP.

        This is the Internet.  Stuff can be found.  Stop acting like you can just say “oh well you KNOW that you ALWAYS do this”.  Back up your claims!  Source your statements!  You talk as though this is something that’s common and obvious.  Why should it be so hard to find? 

        I mean, let’s just recap here:  You’re claiming that Valve is a true meritocracy but that conservatives hate it because it isn’t heirarchical, and that therefore this shows the fundamental hypocrisy of conservatives.  And you do this without evidence of any kind.  If someone made such a blatantly unsupported assertion like that about liberals you’d be outraged, and rightly so.Report

        • Avatar Tod Kelly in reply to DensityDuck
          Ignored
          says:

          I knew I could get you to reach for the all caps.Report

          • Avatar DensityDuck in reply to Tod Kelly
            Ignored
            says:

            Hey, just so we all agree that your whole argument is a strawman, here.  I mean, if you can’t back up your assertions then at least you can make the other side look bad and that’s almost as good as actually being right, isn’t it?Report

            • Avatar Tod Kelly in reply to DensityDuck
              Ignored
              says:

              Is it a straw man?  It might be.  As I said in the OP, I’m just going off of the way  people here reacted to Valve, and my experience with how people react to flat organizations.  Those data points may well be skewed.  Which is why I asked for feedback.

              And while it may be skewed, I must say the people who disagreed were Ward, who made a really excellent point, and you and Tom – who, as I said, followed up your defense of how cons don’t mock flat companies by mocking flat companies.

              Still, I might well be wring.Report

              • Avatar DensityDuck in reply to Tod Kelly
                Ignored
                says:

                So we have at least learned that when you say “conservatives” you actually mean three commentors on a blog, at least one of whom said that flat heirarchies were fine but not actually the kind of platonic-ideal freedom you suggest.  What else have you got?Report

              • Avatar Tom Van Dyke in reply to Tod Kelly
                Ignored
                says:

                Since my name is used here, all I can say is that’s not my position.

                Y’d have to show the model work elsewhere and that Valve Inc isn’t just an accident of history.  Video games are an impossibly lucrative business, but what would have happened if the founders, Microsoft veterans, hadn’t had $$$ to live on for 7 years before incorporation, or if their first product or two had more broken even than been immensely successful?

                Obscene profits cover a lot of institutional inefficiencies.

                So too, video games have little in the way of real world obligations: product liability, worker safety. Getting sued for late delivery on a product. No Crash Test Dummy Department or lab rat overhead for video games.  Just free soy cakes and massages.

                Labor unions!  How to fire a mook?

                Valve admits that “a poor hiring decision can cause lots of damage, and can sometimes go unchecked for too long.” But the company adds, “Ultimately, people who cause damage always get weeded out.”

                Yes, they’re a nuisance at an insanely profitably business, but most businesses run on pretty tight margins.  “Weeding out” isn’t easy.  Is there any doubt that a union would destroy Valve’s very essence?

                There’s a structural tension between egalitarianism and meritocracy.  Valve’s fabulous profitability papers over it, but a few stinkers in a row, a few lean years?  The headhunters are all over Valve like white on rice.

                So too—and I’ve seen this with law firms—if the top dude is so loaded he doesn’t care much about money, it gets spread around pretty well and what would be major problems and inefficiencies elsewhere are minimized.  In this case, Gabe Newell is just about a billionaire.  He really can’t be bought, so as long as it avoids stinkers and his health holds out, he keeps the doors open.

                I also notice that Valve, in cutting out the middleman, the video game retailer, gets 70 cents on the dollar instead of 30, which was the norm  A happy happenstance of accelerating technological innovation—20 years ago, the very same company is only half as profitable.

                Luck, some people call it, a unique alignment of the stars and planets.  There are many factors to be accounted for [no product liability, no unions, obscenely high margins] before we credit Valve’s structure for its success.  Afterall, Microsoft and Apple are fairly fascistic operations and they do just fine.

                 

                 

                 Report

              • Avatar Patrick Cahalan in reply to Tom Van Dyke
                Ignored
                says:

                There’s also a temporal alignment issue.

                Apple seems to do just fine nowadays, but remember when Microsoft had to give them a bucket of money to keep them from falling apart?

                Valve looks great right now, but how many video game creators compete with them in that market space right now?

                It’s all about when you cash out, really, and what you paid to get in the game.  Everything else is just a snapshot in time.Report

              • Avatar Tod Kelly in reply to Tom Van Dyke
                Ignored
                says:

                Tom, this is actually kind of what I’m talking about.  I’m not sure that I spoke anywhere about Valve being awesome because it is egalitarian.  Like, at all.  In fact, I’m pretty sure it isn’t, or at least it is just as fair as most other jobs out there in the corporate world.  I talked about it being a) efficient & profitable, b) able to stick to its core mission (and therefore make positive contributions to the market) and c) more team driven than top down micromanaged.  And I’m not sure how pouting out that they are not union is a burn on my appreciation of that organization, or of similar organizations.

                I’m not sure where the “anti-communist” arguments are coming from, since I’m not arguing that Valve is (or should be) an example of communism. Or liberalism.

                When I talk about conservatives in my experience being dismissive and mocking about non-hierarchical orgs, this – what you’re doing right here – is kind of what I mean.

                 Report

              • Avatar Tom Van Dyke in reply to Tod Kelly
                Ignored
                says:

                Thx, Tod.  I spent at least an hour on that reply, researching, mulling, musing.  i took and take our colloquy quite seriously, and have shown up with more than my stick in my hand.  It was an analysis, not a speech.  The most interesting thing to me is that the fans in the comments section seem to think of Gabe Newell like Springsteen—the Boss.  The coolest boss of all time.

                That my hard-mindedness in the light of the real world and of human nature would be “dismissive” or “mocking” would miss the point.  If my tone is light, it’s for readability, not smugliness.  Onstage, The Boss is first among equals in theory, but that’s a fiction: there is no E Street Band to speak of.

                Ladies and Gentlemen:  And the Pips!

                If I may speak in generalizations about conservatives, Tod, being one meself of the Burkean variety, any proposal on how to improve the world that doesn’t account for human nature is nonsense.  That is the argument here. The Valve model as presented here doesn’t hold upon further inspection.  No Newell, no Valve, and that’s the name of that tune.

                I’m w/Drucker and McLuhan: there’s always a monomaniac behind it.  In the case of the Beatles, it was McCartney.  Do you think John or George or Ringo conceived of Sgt Pepper’s band?  The Magical Misery Tour?  The suite that closes Abbey Road?

                Who volunteered to learn the bass after Stu Sutcliffe bailed?  There was only ever one team player in that band.  The jerk, the uncool one.

                Not only do I stand behind my prev comments, Tod, I hereby double down!

                 

                Thx for a good discussion. love,—T.Report

      • Avatar DensityDuck in reply to Tod Kelly
        Ignored
        says:

        “So a Valve employee does not have total freedom to anything they like, even if it’s against the mission of the organization.”

        You speak approvingly of a “flat heirarchy” but that’s not actually something special.  All kinds of organizations do it, and it doesn’t imply any greater or lesser degree of freedom on the part of an employee.  The work still has to get done, and the workers don’t get to decide halfway through making a multiplayer FPS that they’d actually rather make a single-player Metroidvania game instead.

        I think what I’m still trying to get my head around is what about conservative philosophy makes it inherently opposed to reduced-management heirarchies, and I was kind of hoping that you’d have some actual support for that statement, but apparently you consider the assertion to be its own truth.Report

  21. Avatar Jason Kuznicki
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    says:

    Can you imagine how much our economy would produce if everyone were as efficient as they pretend to be?Report

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