Communications - Be a damn good router. Chapter 5 of "How Google Works"

Google does not limit information based on seniority, it believes in sharing information on all levels. A quarterly briefing of the board was initiated by Eric Schmidt involving all areas of Google and containing a lot of proprietary information. This gets shared with all employees in a presentation after the board briefing. Everything is shared except if it is prohibited by law – which is not the same as the red marker of death lawyers use for anything containing a risk. As the material is not only share with the board but with the entire company, people work hard to make the material great.

So far leaking has not been a problem – “We trust our employees with all sorts of vital information and they honor that trust”.

People post their personal strategic goals in a document called OKR – Objectives and Key Results.  This is not a description of role or title, but what a person cares about and is working on. The top level shares and reviews their own performance against the OKRs and discusses the ambitious goals they did not achieve. Employees are expected to create their own OKRs in light of this with the company’s best interest in mind.

Google’s leadership style is question based: “The essence of being human involves asking questions, not answering them” John Seely Brown Xerox. Rather than managing, Eric Schmidt would regularly ask questions of the executives and expect them to be on top of the details. People are also expected to understand the big picture – not just the details.

It is important to get bad news out in the open. Google does not punish the miner that brings the dead canary up into the light. Googlers are expected to ask tough questions and a voting system ensures the toughest questions climb to the top of the list and gets answered. When bad news is delivered it is important that it is not sugar coated and that you don’t have all of the answers yet. "If everything seems under control, you are just not going fast enough" Mario Andretti.

Google’s transparency approach: Climb Confess and Comply. This is an analogy for Pilot errors. The first thing a pilot need to do is to climb to get out of danger. Then tell the tower about the mistake and lastly comply with the towers advice on how to do better.

Instead of staff meetings that reinforces the functional boxing of people Google encourages people to present in a more holistic and interesting way – like trip reports or what I learned in my vacation. These kinds of presentations often are more relevant to the business issues at hand than the functional update.

Communication should reinforce, be effective, be fun, be inspirational, authentic, directed at the right people use the right media and finally be true.

In 1:1 meetings it is important that both the leader and the employee bring their top 5 issues to discuss. Hopefully there is an overlap - if not there is a bigger issue at hand. 4 main topics should be discussed: Performance, Relationships Leadership and innovation (Best practices).

Communication with partners has to be handled diplomatic. Many of Google’s partnerships are also competitive in other areas and needs a diplomatic approach. Differences in objectives are fine and should be acknowledged. The communication should be pragmatic rather than ideological and the relationship should be based on the partner’s actions.

Decisions – The true meaning of consensus. Chapter 4 of "How Google works"

Google’s decision to enter China was easy from a business perspective but much more difficult when using the “Don’t be evil” indicators. When present in China Google sometimes experienced that their traffic where completely rerouted to Baidu – their filtered search competitor in china. Even though Sergey Brin was against entering China, the decision was made. The idea was to work inside China to change the system of censorship so Google informed the user when censorship happened. Surprisingly many censorship requests from the government was made against sites that where not illegal according to Chinese law. When Google later came under a very serious hacker attack from China that targeted Gmail accounts – especially from dissidents, the decision was reviewed. Google decided to leave. For leaders, decisions are when the hard work begins. Google’s approach to decisions is that it is not sufficient to take the right decision. The process of decision making, the timing and the way it is implemented is just as important as the decision itself. Even though the decision in reality has been taken, it is important to hear people out and respect their opinions.

Decision that used to be made based on opinions and anecdotal evidence could now be made based on data. Google’s don’t seek to convince – they seek “ let me show you” with data. Those closest to the data are normally best equipped to make decisions and management should let them.

Google don’t believe in supporting decisions with a myriad of financial KPIs , Eric Schmidt is known for stating “Revenue solves all known problems.” Google are against what they call “Booblehead yes” or the “Novell Nod” which is agreeing in public but undermining afterwards. It is not about getting to consensus or yes – it is about getting to the best solution that everybody wants to rally around.

Decisions should be inclusive, cooperative, equal and solution orientated. “Be interested in finding the best way, not in having your own way” Coach Wooden. Deadlines are important – especially with incomplete information. In a deadlock it is the responsibility of the most senior person to make the decisions – a bias for action. Eric Schmidt uses the PIA rule: Patience, Information, Alternatives to help make decisions.

In Google it is know that smart arguments do not convince people – to convince people you need to touch their hearts. This they call the Oprah Winfrey rule. In Google this is done by ending arguments or discussion with “You are both right” to acknowledge the input and value from everybody. Once a decision is made it is important that people are able to “Disagree and commit”. If this is not possible people have to escalate the issue in public and state why. This removes a lot of dissent.

Well run meetings can be very effective. Google has a number of rules to ensure effectiveness: An owner with hands-on experience of the topic, not a matter of being important, easy to kill, manageable in size, time kept and participants involved.

Google needs lawyers like all other companies – but they do not need lawyers like most US corporations are employing: Backward looking and risk adverse.  Instead they are using what they call “horseback law” where lawyers are expected to ride in like a cowboy in a western movie, access the situation and do something or leave. Most of the time simple advice is needed rather than a full 50 page legal brief.

Talent – Hiring is the most important thing you do. Chapter 3 of "How Google Works"

The most important thing you do is to hire talent – every sports coach knows this is more important than strategy. Scouting is like shaving – if you don’t do it every day it shows. Every leader in Google spends a lot of time with in the hiring process, not just for senior positions, at all levels.

Sergey Brin’s favorite interview question is: “Could you teach me something complicated I don’t know?” To be hired in Google it was not enough to be able to teach or simplify –you also had to be interesting. Explained dating instead of economic theory was one way of getting hired.

Hierarchical hiring does not work in Google. Despite intentions to hire people smarter than them self, managers most often surrender to human nature and hires people that will not threaten them. Google’s hiring practices originates from academia rather than corporate. As most academics rarely leave, the academic hiring process has to work and is elaborate. Peer based committee’s works better for ensuring high quality candidates enter Google – even if there is no specific job at the time. The right people will create their own jobs.

As Google grew and senior managers were not able to control what everybody did but they made a conscious decision about deciding to control whom they hired. As Google managers are expected to find the right people and not be “fighting for headcount”, the hiring manager is not the one making the final decision.

Hiring great people not only creates great work – it also attracts other great people like a herd. “You are brilliant, we are hiring” was the advert which attracted Marissa Meyer to Google. The objective is to create a hiring culture that can resist the siren song of compromise, a song that only grows louder amidst the whirlwind of chaotic hyper growth.

Google wants passionate people, but not people that wear passion on their sleeve – people that live it.  They are also looking for people able to learn – what they call having a growth mind-set. People that decide to set themselves learning goals rather than performance goals. Everybody is a recruiter, Google expects all employees to bring at least one great candidate. The most important skill for a leader is interviewing skills: Prepare, push the limits of the candidate

Google don’t hide that they are elitist – they want the best because they believe there is a big difference between good and great people. Equal hiring is not seen as only the right thing to do but also the most effective: Homogeneity in an organisation breeds failure. It is seen as important how the candidate treat other people in all situations. The interview process is long enough to judge and involves dinner and other activities. In the exponential internet world knowledge and specialisation deteriorate fast and learning becomes increasingly important – much more important than knowledge.

Apart from Passion, Intelligence and the ability to learn, Google is also looking for Googleyness. Integrated in to the word Googleyness are: Knowledge, leadership, ambition, drive, team orientation, service orientation, listening and communication skills, bias to action, effectiveness, interpersonal skills and integrity. You don’t need to like the people you hire, but they do have to be interesting.

Strategy – your plan is wrong. Chapter 2 of "How Google Works"

MBA style business plans are always flawed. This is why venture capitalists always invest in the team and the people - not the plan itself. It is ok to have plans as long as it is understood that things will change and we will figure it out down the path. Iterations are more important than plans.

Even though the plan is fluid, it is important to make the foundation of the plan stable. Give smart people the foundation and let them figure out the rest.

Products should be defined by how much value they provide the user, not how much value they provide Google. Revenue streams can be figured out later. Rely on creating technical insight that drives cost of existing product down or increases usability or functions. Don’t use MBA or Porter logic of figuring out what you are good at and leverage that to expand into adjacent markets.

Google resisted placing ads on their search site and focused on the user experience itself. When noticing accelerated advertising by customers trying to meet their forecast numbers, Google warned them that it would negatively affect their user experience. Google’s focus is growth over revenue.

Competitors are important but you should not follow them too closely. You cannot innovate though imitation. Competitors can however be powerful motivators like Bing was for Google.

Market research is ok but not more important that technical insights. The best things about market research consultants. They are easy to blame and fire when they are wrong.  Google products have always been based on technical insights. This has been proven in a 2009 review of all products. All great products had technical distinction.  A number of perceived popular products that eventually flat lined, were also found to lack technical distinction. Focusing on number of users can trick you into believing you have created a good product.

We have entered an age of combinatorial innovations – the building blocks of new technology. You need to find out who the geeks are in your company.  The areas they are working on is where you find your technical distinction

Most new innovations enter the world in a primitive state focused on a narrow problem and needs to be refined.  The first effective porn filters that Google invented where based on behaviour of people searching for porn. These users effectively defined porn so Google where able to filter it for others. This later developed into technology that was able to define the content of all images on the internet based on the search people used to find them.

Defining products based on technical insights instead of market research prevent me too products. Henry ford: “If I had listened to customers I would have been looking for faster horses.”

In order to achieve something big it is not enough to grow - you need to be able to scale. This is what Google calls a “grow big fast strategy”. It is based on creating platforms that bring together users and providers (much like YouTube) in multisided markets. The power is in creating the network.

Open platforms are more capable of disruption because it attracts other companies and talent to help co develop to drive down cost and increase functionality. All of this disrupts the owners of closed platforms business.

Rather than locking in the customer, Google has a team that is working towards making it easy for user to leave Google.  Google believes that user freedom is in the best interest of the company.

Culture - Believe your own slogans. Chapter 1 "How Google works"

Culture needs to be in place early. It stems from the founders but is best reflected in the trusted team the founders form to launch their venture.  It is not only about making people do great things but also about attracting people that can do great things.  Attraction, selection and attrition is part of culture.

Google has a “no blame” culture meaning a yellow post-it sticker with “These ads suck” from the founder is taken as a challenge not blame. The challenge can be taken by anybody.  The sticker also points out those results were not in line with the mission of “organising the world’s information and make it universally accessible and useful. It is not culture if it is designed to look good on a wall. It is important that it reflects what you do – that you believe your own slogans.

The IPO letter was contested by Wall Street for including words like “Long term focus”, “serving end users”,” don’t be evil” and “making the world a better place”. Despite warnings the document was not changed.

Google offices are designed like a dorm to invite to university style work ethics and creativity. Plenty of perks but crowed with no individual offices.  Closeness and lack of title is important. A petri-dish for creativity.

Google fight against the culture of the Highest Paid Persons Opinion (Hippo) matters the most.

Google encourage a culture of Meritocracy – where the quality of the idea matters more than who it came from. They are inspired by the McKinsey & Company’s culture where employees are obliged to dissent if it is in the best interest of the company or customer.

Equal opportunities employee although groups often proudly display their associations (Like Gayglers – LGBT in Google). “It doesn't matter who you are, just what you do.”

The organisational structure is aimed to be flat, informal and without perks. Dis-Org has been tried but did not work. Now organisation is built around rule of 7 meaning leaders have a minimum of 7 reports. The high number of reports makes it impossible to micromanage and direct. Organisations or reorganisations are not seen as solution to problems, more a fight of interests. If they indeed has to happen they will be implement fast, preferably a day – even if the details have not been worked out.  Google want to organise around people with performance and passion, not people with functions and title.

The company try and use the Bezos (Amazon) two pizza rule – keep teams small enough that you can feed them with two pizzas. Team effectiveness drops with number of members.

Don’t believe in work life balance but individual’s responsibility for both work and home life. Don’t believe in people being indispensable and workload should be shared. Focus is on making sure that both work and family life contributes positively. There is a culture of fun and a belief in saying yes as the default.

The culture is egalitarian and leadership is be example embodied in “Israeli Tank Commanders” that don’t lead with “Charge” but with “Follow me”.

The Google dress code:  You must wear something

Don’t be evil is not just a corporate policy, it is seen as an empowerment of employees, a way of letting them check their moral compass.

Introduction. "How Google works" review

Eric Schmidt and Jonathan Rosenberg’s introduction describes how it was to join Google in the early days. It describes a company that has rejected most of the existing management philosophy and centred activity on talent, skills technology, learning and culture.

Even though they were hired to lead, S&R had to take the approach of students to learn from the people that had been part of the founding team. This is embodied in the quote from coach John Wooden: It is what you learn after you know it all that counts.

The aversion against planning and allocation of resource that is the foundation of most large corporations is seen as an asset for Google.  Focus was on creating products that would beat any conceivable plan or schedule. The only real management tool used was a spread sheet with the top 100 project ranked from 1 to 5 in importance.

The philosophy in the company was to hire the very best engineers and get out of their way. Their products and product development had an intense focus on the user. Income streams would follow if the product was good enough.

Microsoft was the gorilla in Google’s jungle. Not only were they seen as a dangerous competitor but also as a potential acquirer of Google and as a  powerful motivator. “When we gets noticed they will come after us – wave after wave” and they did.

Schmidt and Rosenberg outlines why they believe the old industrial thinking needs to be replaced with thinking more appropriate for the internet century. They see the internet century being defined by 3 major developments:

-          Information through the internet: It is free, copious and ubiquitous

-          Global reach though mobile devices and networks: Low cost and widespread

-          Infinite computing, storage and applications through Cloud computing : No investment need

They believe that this has lowered the cost of production through 3 factors: Information, Connectivity and computing power. As a result of lower production cost power that has been with the manufacturer and has moved to the distributor is now moving to the customer as predicted by Drucker. It is not possible to fake customers though marketing – the product has to be excellent to compete. As Jeff Bezoz (Amazon) puts it: : In the old world you spent 30% of your time on creating a product or a service and 70% of your time shouting about it – In the new world, that inverts.

The product development is also changing from the old stage gated system with strict resource control and minimisation of risk as the controlling paradigm to a system of experimentation. With new 3D print technology and access to cloud computing experimentation has become low cost and low risk. The Google Glass prototype was made in 90 minutes.

Google want to attract and develop “smart creative” people with engineering skills.  You cannot tell people like that how to think. You have to learn to manage the environment where they think and make that place where they want to come every day.