The Innovation Formula

CHAPTER 6 COLLABORATION How to get people working with the un-usual suspects

Most large organisations produce a handbook for employees. The handbook generally talks about the company values, policies and procedures, how to apply for annual leave, and so on. It's the sort of thing you are given on your first day and probably never look at again. Every employee handbook I have ever laid my eyes on would double as a good cure for insomnia. So I reacted with great surprise when a friend of mine said to me a few years ago, ‘You should check out Valve's employee handbook — it is awesome!'

I had never heard of Valve — probably because I am not a gamer. But if you are a gamer, you probably know exactly who I am talking about. Valve was started in 1996 by two ex-Microsoft employees, Gabe Newell and Mike Harrington. It is the company behind the Half Life series, which by its tenth birthday had sold over 20 million units and picked up over 50 Game of the Year awards. Valve's video game digital distribution system, Steam, had over 75 million active users in 2013, and the company has an estimated value of around US$3 billion.

When starting Valve, Newell and Harrington recognised that finding incredibly talented people and convincing them to come to Valve (and indeed stay at Valve) was going to be critical to the company's success. And they felt that the best way to achieve this was to do away with hierarchy, functional departments and managers. Valve: Handbook for New Employees explains: ...