How Valve gets the new economy: treat your employees as the adults they can be

In a blog post about how Valve operations are significantly different from other environments he had worked for, Michael Abrash made some very astute observations about how our current creative economy is significantly different from anything that went before. He states:

“almost all the value was in performing a valuable creative act for the first time.”

He continues to observe that this essential change results in rendering most of the existing command and control structures irrelevant. I quote him again:

“If most of the value is now in the initial creative act, there’s little benefit to traditional hierarchical organization that’s designed to deliver the same thing over and over, making only incremental changes over time. What matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation.”.

Hence, traditional command and control no longer works if you want to be successful in the current economic reality. Or if it still works, you’re in reality one disruption away from irrelevance.

But traditional organizations, built on command and control, have a hard time doing what they should be doing: giving their responsible employees the trust that they will act as grown-ups and focus on what their most relevant contribution can be. Now, this is not easy for organizations, but it’s a significant challenge for the employees as well. Mr. Abrash again, when speaking about that maturity and the responsibility it entails:

“That it is their responsibility, and theirs alone, to allocate the most valuable resource in the company – their time – by figuring out what it is that they can do that is most valuable for the company, and then to go do it.”

However, and this is key, allowing your employees adulthood is also allowing them to make their own mistakes and allowing for the group to help them in correcting them. He states:

“Sometimes people or teams wander down paths that are clearly not working, and then it’s up to their peers to point that out and get them back on track.”.

The challenge is therefore to allow your collaborators the freedom and give them the trust to fail, but also to succeed. Get out of their way and make them create.

I would like to extend this. The success of our future organizations will depend not on the level of command and control we build, but on the level of trust and allowances for useful failure we are willing to give our collaborators. This is the new economy, where the significantly reduced layers of management, if any, only exist to allow the collaborators to play for epic wins. For the rest, they need to get out of the way.

I encourage you to read the entire article here.

Thank you, Mr. Abrash, for some great insights.