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.

The Idea behind the Campaign

Behind the Scene Video Studio

What is the idea of the “I need your help to find a job” campaign and what is the incentive behind it.

The whole campaign is designed to work as a job ad, and the primary intention is to SHOUT OUT LOUD for some attention. However, it is not just any kind of attention. With the campaign I hope to communicate Out Side The Box Thinking and the values that I stand for, which can be extremely hard to communicate in a job application. It is really about doing something different and letting the world know that I am available at the job market.

I have done a lot of job applications, but getting my first interview seems to be harder than first anticipated. It is understandable due to the current market situation, where there is an overload of available labour. This is why I as job hunter need to be creative and must do anything possible to stand out in the crowed.

I hope the campaign will be sufficient for creating the necessary attention needed to get my first job interview. But I am also depended on the goodwill of my network for the campaign to reach its target audience, which are potential employers that might look for an individual with my qualifications.

Have you not yet seen my campaign video, you can find it all at my job page AlexanderHold.com/job

Inflation of Education

Inflation Road Sign

Over the past many years our society has experienced a massive growth in the number of students finishing a university degree. This development is great for the long term prosperity of the society. However, the short term consequences are quite significant and course what can be described as inflation of education.

What happens in society during times of crises is that the demand for labour falls, forcing either wages down or the level of qualifications for employees to rise. Due to the established unions, the reality of flexible wages is non-existing. This means that employees with less qualifications or short education are overtaken by people with a long education and on paper better qualifications.

Let’s observe the scenario from another perspective. A guy with a bachelor expecting to take a job with the usual requirements of a BA, see that the vacancies are taken by people with a masters level. This forces the bachelor to take positions usually possessed by high-school students or people with shorter educations. Then the high-school students are forced to seek even lower and totally push out individuals with no education at all. What we are experiencing is INFLATION in EDUCATION.

Is it a problem for society?

High education will never be considered as a problem of society. However, in the short term we have a lot overqualified people in positions that won’t be challenged and won’t develop new skills, which will result in lazy employees. The issue with educational inflation is that, at a certain stage in the educational process, research and methods become more important than the actual result. This makes academic mumbo-jumbo that is not of any value to the majority of the companies in the market.

What we should aim for is a closer link between industries and our educational institutions, to make more practical educations that focus on skills needed, instead of theory for the matter of the theory. Society needs to realize that if this inflation continues, we will soon see PHD as a requirement for taking care of kids.