We'll get to the Valve management talk in a minute. First and foremost, we have to highlight this critical information regarding Valve Software head and co-founder Gabe Newell's secret identity as a Brony, and how that relates to pranks at Valve:
"If you leave your phone at your desk someone will use it to send an email that says 'I like ponies.' Some people will make more and more elaborate photos of ponies that people might like. There are some incredibly entertaining characters who work here.

Of course, then everybody found out that I actually like the TV show My Little Ponies: Friendship is Magic, so I never hear the end of it."
That was Newell speaking with Bloomberg BusinessWeek in a recent interview, following up on the recently loosed Valve Software new-hire handbook. But now that you know about Newell's affinity for magical friendship as it pertains to ponies, you might be interested to know how Valve's bizarre management structure (or lack thereof) got the way it did. As it turns out, Newell formed Valve's structure as a direct response to Microsoft's rigidity. He related a story regarding Microsoft Windows market penetration and id Software's FPS classic, Doom, to illustrate his point.

"There was concern among people who were working on Microsoft Office that people would buy computers and reformat their hard drives and install MS-DOS instead of Windows," Newell said. So, in order to find out if that theory was true, Microsoft didn't just ask its customers, it conducted surveys to get hard numbers. Thankfully for MS, the theory didn't cause any real issues. But the results of the survey were enlightening to Newell nonetheless.

"What was so shocking to me was that Windows was the second highest usage application in the U.S. The number one application was Doom," Newell explained. To him, this was a revelation. "It was a 12-person company in the suburbs of Texas that didn't even distribute through retail, it distributed through bulletin boards and other pre-Internet mechanisms ... Microsoft was hiring 500-people sales teams and this entire company was 12 people, yet it [id Software] had created the most widely distributed software in the world." As a result, when Newell started Valve in 1996, he and his co-founder Mike Harrington focused on hiring the best possible employees rather than providing a ton of oversight for average employees. Newell believes this strategy allows Valve to successfully operate without the same strict structure of other studios. This formula usually works ... except for one time when it totally didn't.

"On Half-Life 2, one of the engineers made a bunch of really bad decisions," Newell explained. "There was no monitoring system along the way so it took us about six months longer than it should have for us to catch it. It cost everyone on the team a whole bunch of extra work." Perhaps two or three engineers made even more really bad decisions after that, explaining why Half-Life 2: Episode 3 seemingly disappeared into the ether? Probably not, but we like to bring up Episode 3 as often as we can.

This article was originally published on Joystiq.