Valve: How to retain talent?

Last week I attended an intensive strategy course taught by Patrick Gibbons, Academic Director at Michael Smurfit Graduate School of Business UCD, where we discussed a series of Harvard Business cases among one was how Valve Software successfully had manged to attract and retain top talented game developers. I found the case study very interesting and super relevant for any leader aspiring candidates on LinkedIn.

Background:
Valve is the software company behind the gaming platform Steam and popular titles like Half-Life, Counter-Strike, Left 4 Dead and Dota 2. Valve was founded in 1996 on the notion that making video games was hard and that most titles would fail, but a few blockbusters would be remarkably profitable. The question was if blockbusters was randomly distributed and hitting that lucrative profitable success was just a matter of chance, in which you just wanted to bet on as many horses as possible.

The perception at Valve was that people who had created a blockbuster before would do it again. With other words blockbusters wasn’t just random chance, it was all about attracting and retaining the right talent that would give a predictable success.

If you want to read the Harvard Business School case study, you can find it at hbs.edu

Valve Software Talent Management Process
Valve Software Talent Management Process

Who to hire?
Valve was looking for T-shape profiles that could contribute across functions in different teams, but had a unique and specialized skill that could be the core of a project. Attracting entrepreneurial profiles that had created a successful game previously was at the core of Valves recruitment strategy, because previous success ensured a higher predictability of future success.

Attracting successful entrepreneurs
How do you attract game developers that have already made a successful game and potentially earned good money doing so? The challenge was that Valve was looking for entrepreneurs that had showcased that they could be stars on their own, and now Valve wanted them to take a job working for somebody else. What Valve came up with was a unique organizational structure that allowed people to work on exactly their preferred project. There would be no hierarchy and no one telling you what to do. Everyone would be involved in strategic decision making, ensuring that everyone had a saying in which projects Valve would be working on. Naturally everyone would be paid well, so there wouldn’t be a direct monetary incentive in leaving.

Retaining talent
Retaining talent is important for any organization. The nature of Valves flat organisational structure would allow for good utilization of peer evaluation and behaviour based compensation. Everyone would be rating each other’s contribution and success of the final project would be affecting compensation.

What made Valve really unique was the fact that Valve would increase every single employee’s chance of delivering the next big blockbuster. As an employee at Valve you would be working across multiple projects at the same time. If you did a good job on someone’s project it was more likely that you could attract talented employees to work on your own project. Remember everyone had the freedom to work on whatever project they liked. Furthermore, by working on several project at the same time you would be spreading your risk. One project might fail as another one would be a success. This way you would still make good money. Similar to managing an investment portfolio and spreading risk across different securities.

The secret source
The secret to Valves successful talent management strategy is how they manged to embed its employees:

  • It was extremely hard for the employees to monitor the size of their contribution to a project. There was no way for an employee to claim 100% ownership of a blockbuster, because so many talented people would have been involved in the project.
  • Every employee was almost guaranteed to be part of a success, working across multiple projects by that hedging their exposure to failure.
  • Every project group was unique, so the risk of a whole team leaving would be minimal, as each individual would have stakes in different projects.

All over Valve was successful in creating an organization that would attract the very best talent and ensure that no employee would be thinking about leaving.

Ask the What if Question?

Sunshine Coast Innovation Centre

Innovation starts when people ask the What if Question? Today I attend a great lecture in connection with the 10 year anniversary for the Sunshine Coast Innovation Centre. The lecturer was Steve Huff, form managing director of Typefi, an automated publishing too used by companies such as Apple, Lonely Planet and Telstra.

Steve Huff was sharing his entrepreneurial experience, which he did really well. In 1999, just after the IT bobble busted, he founded Typefi, after asking the question; What if we could automate book publishing and save the publishers money by shortening the editing process from several days to today’s just 3 minutes. The entire lecture was framed by this question of: What if? Because as Steve said, that is the main question entrepreneurs ask themselves.

Steve shared a great story of an episode with an online conference call with Apple in Cupertino, where they experienced constant fall outs. The Apple employees became pretty frustrated about the situation and Steve Huff and his team had to admit that they did not have broadband.

Even though Steve’s story was pretty amazing, he underlined that being an entrepreneur is a hard job and he also had a few stories to about sleepless nights, extreme frustration and fear. But as he stated, if you are passionate about what you do, you don’t want to take a break from it.

Today Steve has asked himself the question: What if we could supply refugee camps in Africa with lightning and by that minimize the risk of assault and rape of women and children? With this question has Steve set out to create jobs in a whole new industry of lightning under the name of Doble.

The anniversary also gave the opportunity to say hello to Gideon Shalwick, an online video marketing entrepreneur specialized in turning online videos into cash. I had the pleasure of sitting in on a guest lecture held by Gideon just a week earlier on Campus. It was a great lecture, and I was happy to be presented with the opportunity to have a little chat about Gideon’s book publishing history.

All over a regular Thursday turned into an extraordinary Thursday. Now I am about to ask myself the What if Question? And so should you?

Have you heard about Everplaces?

Everplaces

Everplaces is a web based bookmarking service, created to make it convenient for everyday users to save and share unique places they like, to be rediscovered on a later entry. Everplaces is still very young, and is still in Beta, which is very common for technology businesses.

So what is Everplaces and what can it be used for?

Well, Everplaces is as simple as it sound just very good a bookmarking your places. So when you go out for dinner somewhere new, and you have an enjoyable time, you will be able to save the location, an image and a short description, for you to find it later. This can be applied to all sorts of categories that you might find interesting and it is all operated via your Iphone, or you can go online on your labtop and access the service online.  Furthermore, Everplaces allows you to share those places with friend and followers on Facebook and Twitter. It is as simple as that, So Far!

So why is Everplaces different?

I’m not so sure that Everplaces really is that unique, as a lot of different services out there allow you to save or bookmark stuff. However, Everplaces approach might be just be what separates them from the crowd. What Everplaces have done is to aim at the later adopters of the geo location service and make the product very simple for everyday people to use.

Everplaces have in a short time become very good at bookmarking, and is now moving on to bigger adventures. Everplaces is extending the service to now include the opportunity for exploring the places of ones friends. This is a necessary strategic move for Everplaces to become a real service and not just a cool feature, mainly centred on an App.

Near future for Everplaces!

No one should ever try to predict the future. However, looking at the challenges Everplaces is facing, a very interesting future is ahead of them. I’m not to say whether or not the service will be a success or a failure, but for me it is very clear that for the service to evolve, the development of its “Explore” feature is very important. Everplaces must look into how to utilize all these bookmarks and make them beneficial for the user, in relation to exploring new areas.

Without knowing, I could hope that Everplaces over time will make it possible to pick up the bookmarks of friends, and via GPS location be able to tell me what the people I trust liked in just that place. Still without knowing, I could imagine that this is what Tine Thygesen and the rest of the team at Everplaces is working on.

I’m on Everplaces…

I have been playing around with Everplaces online service and if you want to take a look yourself, visit my Everplaces profile here.

You can sign up and start adding your favourite places, so you won’t ever forget them.

Live your dream today!

Live your Dream

I am following a famous Danish entrepreneur on several social platforms, and here the other day I received a newsletter in the occasion of his 40 years birth day. The name of the entrepreneur is Martin Thorborg, and he is famous for founding several internet based companies and is today putting a lot of effort into helping Danish entrepreneurs via his entrepreneurial talk show.

The message of the newsletter is very essential for all people walking this earth, and it inspired me to do this article.

Mankind is getting older day for day, and that is a fact that no one can change. That also means that we do only have a given time to live our life, before we die and disappear from the surface of the earth.

It seems to be normal for people to look back at their life from time to time and take a look at what they have achieved. Hopefully are many happy with their achievements, but often do people look back and see what they never did. This causes depressions and other forms of bad excuses for doing nothing about it.

As long as you are busy, it is easy not to take responsibility for your life, and it becomes very easy to forget the childhood dreams and the list of things that you wanted to achieve with your life. The main problem might be that adulthood with all its demands, which tend to overshadow your dreams, and you end up feeling comfortable in the daily routine far away from action and excitement.

Those who look back and still remember their dreams have an exclusive opportunity to take action right away, but often is the dream postponed to tomorrow and the cycle keeps happening day after day for the rest of their life. The only result is regret.

So is it too late to live your dream if you are 40, 50, 60 or something else?

The answer is no.

It is never too late to live your dream. As a clever man once said: “today is the first day of the rest of your life”.

The most important is never to let your dreams die, but instead share them with the world and turn dreams into reality. Because life does not start tomorrow, it starts today – Do not waist it – You only have this one life – So get the most out of it!

Ivaerk & Vaekst 2009

Ivaerk 2009

I participated in Ivaerk & Vaekst 2009.

“Ivaerk and Vaekst” is a trade fair show targeting Danish entrepreneurs. During the fair there were a lot of lectures and workshops. For the first time I meet the famous Danish Entrepreneur Martin Thorborg who were speaking about how giving away for free can make you rich. I also attend a workshop with David Madié from Growth Company about How to start a business in Denmark right now.

Read more about Ivaerk & Vaekst (in danish)