What is Knowledge Management? The short answer is that it is What Valve Does. (note: The jury is out on whether this is really from Valve, but either way, all my arguments still apply. I’m going to act like it’s real.) The long answer is much more complex, but bear with me because it will bear great fruit at the end.
What is KM? (The boring part that makes the rest of the post really cool)
(Side note: The main concentration of my Master’s in Library and Information Science was in Knowledge Management, so I’m not just making all of this up, I do have experience with it)
Knowledge Management is difficult to define easily, and means something different to a lot of people because it can be implemented in many different ways in many different business structures. (Note: Information is stuff that you can easily organize and hold in your hand or put on a computer. Knowledge is what you keep in your head. Don’t know what I mean? Try to explain to someone who is blind what the color blue is.)
Wikipedia has a definition, but it’s kind of confusing.
Strangely, I find the best way to describe KM is to talk about what it’s not. Quotes that follow are from here.
“If only HP knew what it knows it would make three times more profit tomorrow”
Lew Platt, ex CEO Hewlett Packard
And what that really means is what follows:
“Knowledge Management is the discipline of enabling individuals, teams and entire organisations to collectively and systematically create, share and apply knowledge, to better achieve their objectives”
Ron Young, CEO/CKO Knowledge Associates International
So the trick with KM is to take all of that Knowledge in a company (not information), and be able to use it.
Valve uses KM, and I do not even think they meant to (The beginning of the cool part)
Valve released/leaked an Employee Handbook a little while ago, and I highly recommend you read it. (I know, you didn’t even read the employee handbook at your current job, but trust me on this one, it is AMAZING.)
The employee handbook is a way to help new employees integrate into the Valve system, which is very unique. In a nutshell, Valve is completely flat. Completely. There’s a founder, but he has no more power than the guy who was just hired. There are no managers. No hierarchical structure whatsoever. Because, according to Valve:
“The hierarchy will begin to reinforce its own structure by hiring people who fit its shape, adding people to fill subordinate support roles. Its members are also incented to engage in rent-seeking behaviors that take advantage of the power structure rather than focusing on simply delivering value to customers.”
So Valve instead focuses on hiring the best person for the job. And then having the people working at Valve hire someone who is even better than they are, thereby growing the awesome of the company.
It is brilliant, and it is KM because of the elimination of silos.
Knowledge Silos in a traditional model
The idea is to take all of the ideas within a company and let them run wild and work as they will. Do not stifle the company with bureaucracy or a hierarchical structure. Just get the job done. It is such a brilliant idea, and yet it almost never happens because it is extremely difficult to make happen. Valve even acknowledges this on Page 49.
Q: If all this stuff has worked well for us, why doesn’t every company work this way?
A: Well, it’s really hard. Mainly because, from day one, it requires a commitment to hiring in a way that’s very different from the way most companies hire. It also requires the discipline to make the design of the company more important than any one short-term business goal. And it requires a great deal of freedom from outside pressure—being self-funded was key. And having a founder who was confident enough to build this kind of place is rare, indeed.
One of the main key points that they acknowledge is the hiring process, and hiring of great talent. Hiring the right people that can work in this type of system is really key. If people are not self motivated and do not know how to form their own teams or work on their own projects, this system would fail utterly.
So what else does Valve talk about in the Employee Handbook that is different from most institutions?
They are absolutely and completely supportive of their employees both at work and in the rest of their lives.
for the most part working overtime for extended periods indicates a fundamental failure in planning or communication. pg. 17
Nobody has ever been fired at Valve for making a mistake. It wouldn’t make sense for us to operate that way. Providing the freedom to fail is an important trait of the company— we couldn’t expect so much of individuals if we also penalized people for errors. Even expensive mistakes, or ones which result in a very public failure, are genuinely looked at as opportunities to learn. We can always repair the mistake or make up for it. pg. 20
Valve pays people very well compared to industry norms. Our profitability per employee is higher than that of Google or Amazon or Microsoft, and we believe strongly that the right thing to do in that case is to put a maximum amount of money back into each employee’s pocket. Valve does not win if you’re paid less than the value you create. And people who work here ultimately don’t win if they get paid more than the value they create. pg. 27
And they have an employee vacation for a week every year! So awesome.
Pg. 34 of the Valve Employee Handbook
Keeping your employees happy and fostering a “flat” organizational structure is great, but it is being able to utilize that structure that really matters.
Which brings me to my next point:
Communities of Practice
Valve calls them “Cabals.” Compare the Wikipedia definition to what was being described by the Cabal article about Valve from Gamasutra. To me, t hey are the exact same thing. The crazy/amazing part is not that Valve was able to discover this on their own, but that they followed through and took it as far as possible. This is an amazing case study of communities of practice. I can think of many Knowledge Managers who would give limbs to get into this company just to observe and see how it actually works on a day to day basis.
I guess the Information/Knowledge Community better start noticing the Video Game world a lot more then, because that is what Valve does.
Please, it can’t be that easy.
There are problems with the system, there are problems with every system. Valve even acknowledges them on page 52 of the Handbook.
What Is Valve Not Good At?
The design of the company has some downsides. We usually think they’re worth the cost, but it’s worth noting that there are a number of things we wish we were better at:
• Helping new people find their way. We wrote this book to help, but as we said above, a book can only go so far.
• Mentoring people. Not just helping new people figure things out, but proactively helping people to grow in areas where they need help is something we’re organizationally not great at. Peer reviews help, but they can only go so far.
• Disseminating information internally.
• Finding and hiring people in completely new disciplines (e.g., economists! industrial designers!).
• Making predictions longer than a few months out.
• We miss out on hiring talented people who prefer to work within a more traditional structure. Again, this comes with the territory and isn’t something we should change, but it’s worth recognizing as a self-imposed limitation.
In my mind, these are problems that other systems may not have, but they are not system breaking problems. It is just a system that people are not comfortable with and requires a lot of self motivation. It also requires a lot of collaboration and being able to work well in an environment that no one in many education systems are trained for. There is no teacher/boss/manager telling you what to do. Something needs to be done? Do it.
Inside the company, though, we all take on the role that suits the work in front of us. Everyone is a designer. Everyone can question each other’s work. pg. 37
In my mind, the biggest problems that Valve now would have are problems that no one except Valve employees could know about. I am sure they have Knowledge and Information Systems that could use looking at, that are inefficient, that store things in ways that are hard to find and just lose information in the mass of information they have. But that is a problem a good Knowledge Manager could solve over time, especially in an environment like this. (Hey Valve, if you’re looking for someone like that, I know a guy. /winkwink /nudgenudge)
There is no way a large company could do this. It’s too big!
I’ll let the book speak for itself:
Concepts discussed in this book sound like they might work well at a tiny start-up, but not at a hundreds-of-people-plusbillions- in-revenue company. The big question is: Does all this stuff scale? Well, so far, yes. And we believe that if we’re careful, it will work better and better the larger we get. This might seem counterintuitive, but it’s a direct consequence of hiring great, accomplished, capable people. Getting this to work right is a tricky proposition, though, and depends highly on our continued vigilance in recruiting/hiring.
Other thing I thought was cool
They have a glossary at the end of different jargon, lingo, and code words that employees use regularly. This is so helpful to new people and really just increases how fast they can be integrated into the company. Every office/group of people/community of practice should have something like this.
Valve has instituted a structure that allows for a very organic use of Knowledge Management. I hope they release more information about it. Plus, working there looks like it would be great.
Ding! You’ve Leveled up! Please see your local librarian for training.
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