Gabe Newell on the merits of not hiring managers

After the recent leak of Valve's employee handbook to the public, many in the business world have become curious about the ins and outs of the developer's practices. Bloomberg Businessweek sat down with co-founder Gabe Newell to ask him, among other things, why he chose to organize Valve Corporation in such an unorthodox manner.

Newell told the publication that Valve categorizes employees by “individual” and “group” contributors, rather than by the traditional hierarchy of supervisors and subordinates.

“A group contributor's job is to help other people be more productive, and in doing that you sacrifice some of your own productivity,” he explained. “It's a higher stress job and you get interrupted a lot more... [but] some of the highest compensated people at the company are relatively pure individual contributors.”

Newell also pointed out that a given employee may be managing a group project one day and be contributing as an individual the next. He even went as far as to say that it's “pretty rare” for any one person to take the helm on more than one consecutive project.

When asked what the reasoning behind this structure was, Newell suggested that it was the industry itself that guided the decision.

“When we started Valve, we thought about what the company needed to be good at. We realized that here, our job was to create things that hadn't existed before,” he said. “Managers are good at institutionalizing procedures, but in our line of work that's not always good. Sometimes the skills in one generation of product are irrelevant to the skills in another generation.”

While Valve's practices may make certain traditional businesspeople's heads spin, the continuing success of Steam, which still holds a commanding share of the digital game distribution market, certainly validates Gabe's ideas. Could Valve usher in an age without bosses?