OPENING THE VALVE:

FROM SOFTWARE TO
HARDWARE
GROUP CASE STUDY-WRITTEN REPORT
COURSE CODE: MGN581
SECTION: Q1951
SUBMITTED BY:
Christina Bahera -Roll no 21
Lakshmipriya N-Roll no 22
Surbhi ojha -Roll no23
CH. Vishnu Vardhan reddy -Roll no26
SYNOPSIS:

 Introduction and History

 Insight into the “FLATLAND”
 Analysis of the organization’s culture
 The software
 The hardware
 The mismatch
 SWOT
 Recommendations & Conclusion

INTRODUCTION:

Valve Software is a leading gaming software company, founded in 1996 by

former Microsoft employees Gabe Newell and Mike Harrington, who are the
providers of PC gaming and its digital distribution platform called Steam. They
have found success in the gaming industry by focusing on giving their
employees autonomy. They believed that it would lead to large amounts of
creativity and innovation in the products they create. Due to the nature of their
company structure, the employees at Valve have begun to show interest in the
hardware side of the industry. Valve lets their employees work on what they
think is most important and what interests them the most. As Valve as mainly
focused on software for a longer time, it would have to do some restructuring and
research in order to be successful in hardware venture.

VALVE HANDBOOK FOR NEW EMPLOYEES--INSIGHT INTO VALVE’s

“FLATLAND”:

The employee handbook is a great tool for employees, new and existing, to
learn the company’s mission, values and norms. Valve’s Employee
Handbook was leaked in 2012. It became viral and started receiving praise
from blogs, online magazines and social media personas.

There are plenty of hilarious illustrations throughout the book to keep readers
amused. It describes about their amorphous corporate structure for which Valve
is so famous. It humorous and truly an enjoyable read. Few noticeable points
which describes their structure are as follows:

(a) No managers – a quote from handbook “Manager- The Kind of people we

don’t have any of. So, if you see one, tell somebody, because its probably
the ghost of whoever was in this building before us.”
(b) Cabals – Project oriented groups, Movable cabins
(c) Hiring Process – “T” shaped employees, Multi-disciplinary candidates
(d) Stack ranking, Peer reviews
(e) Company based ranking upon which compensation was based
 ANALYSIS OF THE ORGANIZATION’S CULTURE:

REALITY BEHIND “FLATEND”—SITUATIONAL LEADERSHIP:

The media have claimed that an uncontrollable “hidden layer of powerful

management” arose in Valve to fill the power gap created by its absence of
traditional management practices. Developers in teams share leadership roles
and responsibilities, with fluid authority based on tasks, knowledge, and
interests (von Krogh, Nonaka, & Rechsteiner, 2012). Each team member must
have the capacity to temporarily act as a leader. Over time, team members get to
know each other, and relationships evolve and ease the rapid succession of
authority. Yet, to become leaders and gain authority, team members must share
their knowledge and reveal their interests.

The fundamental principle of the situational leadership model is that there is no

single "best" style of leadership. Effective leadership is task-relevant, and the
most successful leaders are those who adapt their leadership style to
the performance readiness (ability and willingness) of the individual or group
they are attempting to lead or influence.

VALVE’S STRUCTURE—ADAPTIVE AND DECENTRALISED DESIGN:

Valve’s organization can be described as Adaptive organisation structure. By

definition, an Adaptive Culture is simply a way of operating where change is
expected and adapting to those changes is smooth, routine and seamless. With
an Adaptive Culture in place, change, growth, and innovation are a "given" part
of the business environment. They are also decentralized in nature with fewer
rules and procedures which promotes more personal interaction. A team can be
formed at their own will and start upon a project. Post project completion it can
be dissolved and they can go join another team.
HRM—DIVERSITY MANAGEMENT:

Diversity management is a process intended to create and maintain a

positive work environment where the similarities and differences of individuals
are valued, so that all can reach their potential and maximize their contributions
to an organization's strategic goals and objectives. Valve chooses candidate with
broad range of skill with one particular strength (‘T’ shape)

Work life balance is also taken care well in the company. Paid vacations,
authority to hire a family member in project, peer rating, stack ranking etc.

THE SOFTWARE:

Steam is a video game digital distribution platform developed by Valve

Corporation. It was launched in September 2003 as a way for Valve to provide
automatic updates for their games, but eventually expanded to include games
from third-party publishers. Steam offers digital rights
management (DRM), matchmaking servers, video streaming, and social
networking services. It also provides the user with installation and automatic
updating of games, and community features such as friends lists and
groups, cloud saving, and in-game voice and chat functionality.

THE HARDWARE:

Steam Machine is a line of prebuilt gaming computers designed to

operate Valve Corporation's SteamOS through the Steam client. To support the
Steam Machine and SteamOS, Valve released the Steam Controller, a
customizable game controller and Steam Link, a device that allows consumers
with Steam software to stream content to a monitor. Following a two-year
testing period, Steam Machines and its related hardware were released on
November 10, 2015.

WHY DID THEY OPEN THE VALVE FROM SOFTWARE TO

HARDWARE?!
Valve was certainly been busy working on moving the gaming experience
forward. It focused more on its customer service, after being graded an “F”
from the Better Business Bureau for its efforts. Main reason was to increase the
customer experience. Recently this month the company made a series of
announcements during the Game developers conference, including unveiling its
own virtual reality headset, revealing the final version of the steam controller,
and disclosing new details about steam machines.

THE MISMATCH:

In software development, people have a strong bond of common knowledge

based on design philosophies and approaches, language and terminology, and
engineering tasks. It helps them implement creative ideas in physical machines
and graphic environments. Hardware development tends to be more an
interaction of a team of specialists whose skills interlock and generally requires
far more planning and upfront investment. It demands deliberate planning and
constrained activity.

This would lead to mismatch between hardware and software people if they
work in same cabal as the flat hierarchy of the valve would be disturbed.

The most difficult challenge was that, in software model one can test the
product and get real-time feedback and work upon improvisation. In hardware,
it takes long lead times, legal and regulatory challenges and complex
organization hierarchies.

SWOT ANALYSIS:

1)STRENGTH-

 Gabe Newell
 Innovative and diverse employees
 Work life balance
 Openness to users – steam greenlight
2)WEAKNESS:

 Decentralized structure won’t work for hardware

 No separate cabals for hardware
 No mobile apps

3)OPPOURTUNITIES:

 Millennials
 Hardware expectations of consumer
 Bringing games to living room – Family time, more consumers

4)THREATS:

 Competitive companies like EA, Xbox, play station

RECOMMENDATIONS:

1. Short term vs Long term:

Hard ware projects are long term when compared to software
development. So rather combining the cabals, it should be considered as
two different cabals to avoid clash.
2. HR team and Training:
-Since hiring can be done by the staff member also, the company should
ensure proper training of the new employees. Mentorship from a senior
employee will also help them understand the organisation structure better.
-Hardware team can be given special trainings with skill specific
workshop
-For scanning of new employees

3. Assigning one team leader after the cabal is formed through voting.

CONCLUSION:
Trying to create any sort of product or products for this varied population must
be aware of this varied market. As it is the same market that has made so many
genres and different types of games so successful on the platform, it is also the
same population that can sink them as well. If a new piece of hardware is going
to be made, and games designed for it, it also needs to target the correct group
of people. Valve needs to accept what the PC gaming market really is and needs
to create hardware and software around those truths. Keeping in mind the
competition and consumer the valve should develop its own hardware to shine
in the industry.

REFERENCES:

1. https://www.researchgate.net/publication/282423546_Valve's_Organization_Opportunities
_and_open_questions

2. https://assets.sbnation.com/assets/1074301/Valve_Handbook_LowRes.pdf

3. https://www.gamesindustry.biz/articles/microsoft-and-yahoo-rejected-steam-says-valve