Some people dream of working in a place with no managers and full reign of their projects. It's called a flat hierarchy and the management style is gaining traction among start-ups. 

However, Jeri Ellsworth, a former employee with Valve, the mammoth software company behind Steam and the gaming smash "Half Life," learned the hard way about flat hierarchies. To her, it wasn't a dream so much as "a pseudo-flat structure," she said in a recent Grey Area podcast

"The one thing I found out the hard way is that there is actually a hidden layer of powerful management structure in the company and it felt a lot like high school," she said. "There are popular kids that have acquired power in the company, then there are the trouble makers who actually want to make a difference." 

Ellsworth said she had trouble recruiting students for a hardware group. "We would interview very talented people, but they would be rejected by the old-timers at Valve as not fitting the culture." And while the flat structure "worked great for a handful of people," she found internal processes got more cumbersome once the team members grew to 300. 

Without managers to keep them in line, productivity suffered and communication broke down as as well. As a result, many jockeyed for projects that weren't suited to their skills so much as their interest in earning a bonus. "I'm really, really bitter, because they promised me the world and then backstabbed me," Ellsworth said of her former colleagues.