Valve Corporation, a videomaking company in Bellevue, Wash. claims to have been boss free since its founding in 1996. Neither does it have any managers or assigned projects. After a self-organized committe has hired a new colleague, he or she is free to freely move around any of the company’s myriad of projects. The 400 employees recruit colleagues to work on projects they think are worthwhile for the company. The hierarchy is flat and the workday is directed by employees themselves.The company prizes mobility so much that workers’ desks are mounted on wheels, allowing them to move around the office space to form work areas as they choose. At Valve, there are no promotions, only new projects. To help decide pay, employees rank their peers (not themselves) voting on who they think adds the most value. The company declined to provide information about how much salaries vary. Any employee can participate in hiring decisions, which are usually made by teams. Firings, while relatively rare, work the same way: teams decide together if someone isn’t performing well.
The absence of managers creates leaders
As for projects, someone typically emerges as an initiator or leader, says Greg Coomer, a product designer who has been working for Valve for 16 years. When no one takes the lead, he adds, it’s usually a sign that the project isn’t worth doing. When colleagues disagree on whether to keep or scrap products, the marketplace decides, Greg Coomer says. “When we honestly can’t come to an agreement—that’s really very rare—we ship the products and find out who was right. Over time we’ve become comfortable with the idea that we might be making a mistake when we do that; but our customers know that if we screw up, we’ll fix it,” he says.
Valve was founded in 1996 by former Microsoft software developers Gabe newell and Mike Harrington. It created a platform that functions as the worldwide iTunes of video games and has around 55 million users globally. Yanis Varoufakis, the Greek economist who led the negotiations for his country with the European Union in 2014, was economist-in-residence for the company in 2012. He calls this model an anarcho-syndicalist model, free association of employees with one another.
Global trend towards bosses companies
The number of boss-free companies is growing rapidly. Many entreprises have flattened out their management hierarchies in recent years, eliminating layers of middle management that can create bottlenecks and slow productivity. The handful that have taken the idea a step further, dispensing with most bosses entirely, say that the absence of managers helps motivate employees and makes them more flexible, even if it means that some tasks, such as decision-making and hiring, can take a while. Bossless companies appear not just in the USA, but also in Brazil, Australia, The Netherlands, France, Singapore, Canada and Spain. They are not obly typical start up type of organizations; some have over a thousand employees (with the largest in Mondragon, Spain, with 85.000 employees) and some have been working with self-directed teams for over thirty years. According to Terri Kelly of W.L. Gore, the maker of Gore-Tex materials and another boss-free company, designing a company without hierarchy is far from efficient in the beginning. But once the organization is redesigned, there is much ownership for decisions and the execution happen quickly. And a bossless company may not be for everyone. Most employees take anywhere from six months to a year to adapt, and some may leave for more traditional settings.
Conditions for success
Recent research on the value of flat organizations has been mixed. Some studies have found that clearly defined roles can help people work more efficiently. Some conditions need to be in place for self-directed teams to be succesful. Researchers at the University of Iowa and Texas A&M University, found that self-directed teams of factory workers tended to outperform workers in more traditional hierarchies, so long as team members got along well. In such organizations, teams take over most of the management function, they work with each other, they encourage and support each other, and they coordinate with other teams. Especially in highly creative work, that requires good cooperation amongst employees, self-directed teams may work very well. General Electric Co. has run some aviation-manufacturing facilities without foremen or shop-floor bosses for years. The industrial giant says it uses the system to boost productivity in low-volume factories with a relatively small number of employees, each of whom can do several tasks. The plant manager sets production goals and helps resolve problems, but doesn’t dictate daily workflow. Teams, whose members volunteer to take on various duties, meet before and after each shift to discuss the work to be done and address problems to be solved. The first of these self-managed teams began nearly two decades ago in a Durham, N.C., plant, and in the past five years they have spread to other GE facilities. The team structure is being expanded to all of GE Aviation’s 83 supply-chain sites, which employ 26,000.