It's easy to do when you have endless amounts of cash because productivity no longer has to be the main goal. The majority of games companies would go under with no management system in place as their team wouldn't be productive enough to get a product out there. That's why companies have producers in the first place.

I'd say the key to productivity is a schedule and people who are responsible, not producers. The real role of bosses is quality assurance and alignment to business goals, and even that can be done by peer review, as long as the peers are good enough. But in some ways this is the games development version of Total Football - not every team is a Holland '74 or a Spain '12.

Valve puts a huge emphasis on recruiting the right people, and obviously with their success they can be particularly choosy. I believe one of their criteria is "could this person run the company?" They want people that can take the reins of a project if necessary. So it seems to me by hiring people with the capability for management already, they've solved the management issue by hiring talented managers that happen to be game developers.

Sounds a lot like Scrum or Canban. Small team sizes, self organizing, work close to internal / extern customers

@Kerome: I am writing my thesis on leading game production. I agree with John. From what I have found, running a team without a leader is possible but you must have the right people. A well functioning team needs everyone on the team to be leaders. Its also something that requires a lot of: teamwork, the ability for all the team members to be able to resolve their own differences, the ability of everyone to be able to compromise on game features, and so on... I don't know if anyone else agrees but game developers don't usually have these qualities. Every department usually wants to max out their specialty on the game and this will lead to serious conflicts that leaderless teams will be challenged to solve. These Valve leaderless teams are not the norm.

It's definitely not the norm ;) I'd say that only a handful of large teams in the world operate like this, and relatively few would want the burden of recruiting mostly top-quality generalists, which you'd need to do to maintain it in its purest form.

There is much to be said for the normal hierarchical, specialised team structure. But as a counterpoint it's a good area for discussion, and there is a range of compromises in between truly boss-less and highly hierarchical. Not enough gets said about the cost of management structure in many companies.

I'm hazarding a guess (one that might be wrong) that the above conversation is part of what Holtman meant when he referred to relearning some old tactics. The idea of needing management to head production or else production couldn't happen is a big business norm in other industries, yes. However ... It happens when bosses need to tell subs what exactly needs to get done because the corporation is so huge, that's the only way to be clear. Game development doesn't need to be like that. Unless you work overseas from your boss you might possibly talk to him one day, unlike employees in the regional office of a conglomerate. Even then, you likely wouldn't be overseas from your team leader.
(The other reason one might not get production from a team is capability, but if your business keeps trying things they aren't capable of doing, that's another issue all together.)

What they're talking about above isn't particularly innovative -- it's just teamwork, spelled out in big letters -- but there's no doubt that the majority of business models don't rely on their employees to work well together. They rely on them to read a memo, follow directions, then promptly respond, albeit with some elbow room for personality, drive, and difference of life situation. Teamwork in that sense often means trusting your boss or earning loyalty, but rarely do people literally work together.

Video games, ironically, traditionally relied on well rounded generalists, or if not as well rounded, people who could work well on small teams of divergent natures. It's only been very recently that this has changed. Some recent changes have been for the better and some have been necessary with growth and change of tech, but there's no reason that hiring 45 students of questionable experience or training to mold rocks for a year should be any easier in the end than hiring 10 people with well rounded backgrounds and more than one specialty to at least discuss one another's work, if not participate. The main benefit to that sort of teamwork is not that everyone feels they get part of the pie, whether that be a benefit or not, but that each person sees and learns what the next is doing, and why. It makes the nominally good developer excellent purely by dint of knowledge, so not everyone HAS to be a top-quality generalist right out of the gate. Hopefully they end up that way.

If at least one person out of ten who attempted to run their own game business and couldn't because of funding was hired by a similar system, you'd easily get enough competent people. To fit the type you just need someone familiar with creative work, inquisitive with demonstrated ability to learn, and without the massive ego that plagues a fair amount of developers (to be fair, often created by the fear of being overlooked or losing their job). Just like a marriage, where the two people often switch tasks and specialties while communicating (and yelling at each other but laughing it off later) to benefit the whole and be stronger in the future, a good team needs to bond and be allowed to respect (understand) each other. The best way to accomplish that is through action, which is precisely why they're there in the first place anyway -- nothing is lost in the attempt. The boss is there to make sure they're allowed to work, give suggestions when input is needed, care for business concerns beyond the scope of the project, and quality control, somewhat like a decent kitchen.

Who's to say businesses _can't_ find enough top quality generalists? Maybe they don't care to allow them room and/or aren't inspiring them to apply for a job? The video game industry certainly isn't strong worldwide or in multiple languages, but more to the point, is not as dynamic as many generalists -- who seem to often be inquisitive people -- would like.

"We don’t have junior-level positions or internships here, so we are looking for highly skilled folks who’ve been in their industry for a few years who can bring in knowledge and expertise we don’t currently possess."

What people forget is that unless people respect the leader and the leader's respect for his underlings is mutual, a hierarchical system can be just as unproductive as leaving a load of people to their own devices.

My ideal studio is a hybrid:-
1. Pay everyone on each project the same wage. Everyone is a cog in a machine that cannot succeed without all playing their role.
2. Shift ultimate responsibility from leaders to all members of the team. Leave them to manage their work and deadlines against a wider more flexible structure.
3. As problems occur, let them decide the best approach. Their input will make them fell more significant and vital to the overall setup and therefore there passion and commitment will be greater.
4. Rotate staff around all projects to avoid burnout or loss of focus.
5. One team is unfunded and undirected where all members organize themselves into teams or develop their own projects by themselves perhaps enlisting help of other members once its working (IP owned by their employer/royalties are shared). All projects are created on cross platform engines for fast prototyping and widest platform reach. Good projects get published on easily accessible marketplaces like chrome/Google Play/etc. Invest a little profit on PR, or get Kickstarter funding to get a larger audience.
6. Have more, but less expensive projects, some perhaps crowd-funded prototypes. Do not just rely one AAA derivative title that can just as likely sink a company than make it rich.