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In an email exchange, the co-founder of Valve explains exactly why its flat structure works well, and how he hopes to take a more active role now that it's matured.

Christian Nutt, Contributor

March 25, 2015

1 Min Read

"I may like you, but if you aren't helping me get shit done, then I will value you less than someone who does."

- Gabe Newell on how Valve's flat management structure works in practice

There's a lot interest in how Valve structures its development teams. That interest arose naturally from the company's success, but also from its employee handbook, which went public in 2012.

The company has a flat structure and shuns hierarchy, which led one person to write to Gabe Newell to ask about the effects it has on the company. That email conversation with Gabe Newell sheds some more light on the subject. It's been verified as real by a Valve spokesperson, so we're sharing it with our readers.

In it, Newell says that the flat structure helps drive success by removing "perverse incentives" that arise in hierarchical structures.

"At Valve, the goal is to have as efficient a connection between creators and consumers. Each person is trying to think about how to create as much value for customers as possible. How do we keep people honest? By creating an efficient market for people's time."

An incredibly surprising revelation from the email: Valve doesn't do financial forecasting, and Newell says, "None of our choices have been made by financial analysis, we don't have financial budgets..."

Newell also said that now that Valve's culture is well-established, he's willing to share his opinion more internally -- something he'd avoided so as not to become a "single-point of failure" for the company.

You can read the full email here, via a Reddit post.

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