No Plan Is the Best Plan
When Larry Page and Sergey Brin founded Google in 1998, their guiding principles were: Build excellent products and platforms, and offer superior, accessible services. “Focus on the user,” and the “money stuff” will work itself out. Create the best search engine by hiring talented engineers and giving them free rein. Manage loosely, and let people work without being encumbered by processes and procedures. When in doubt, “just go talk to the engineers.”
When it became clear that Microsoft recognized Google as a competitive target, Mike Moritz, a member of Google’s board, asked for a business plan and wanted to discuss strategy. Head of products Jonathan Rosenberg knew why this request was a problem. He’d initially spent weeks developing a traditional “gate-based” plan for a search product. When he presented it, Page asked him, “Have your teams ever delivered better products than what was in the plan?” Rosenberg said no, so Page discarded the plan. Rosenberg and Eric Schmidt, CEO of Google Inc. since 2001, presented a revised plan to the board in 2003. The version they offered lacked the traditional components of a business strategy, but it reinforced the message that “the way to challenge Microsoft is to create great products.”
“Infinite data and infinite computing power create an amazing playground for the world’s smart creatives to solve big problems.”
Google is a $50-billion company that employs more than 45,000 people in 40-plus countries. Its success reflects its founders’ understanding that Google had to rethink established business processes and management principles in order to create a new, innovative work environment.
“Hire people who are smart enough to come up with new ideas and crazy enough to think they just might work.”
“The Internet Century”
Information is free and accessible via the Internet. Mobile and digital technologies connect people and networks across borders and around the world. Cloud computing makes the storage of computing power and information inexpensive, and almost unlimited. Pre-Internet companies that created businesses built on proprietary information and scarcity of resources are ripe for disruption. Cheap and accessible information, connectivity and computing power lowered or eliminated barriers of entry for almost every industry.
Offering superior products is the only way to stay relevant. People have so much access to information and such a variety of choices that having a large marketing and advertising budget doesn’t guarantee continued success. The costs of risky experimentation that leads to failure and fresh attempts are significantly lower. This has been true for high-tech products for some time. The process of 3D printing – which builds prototypes cheaply – brings this same ease of experimentation to manufacturing. Successfully bringing products to market requires speed. Companies with pre-Internet product-development structures won’t be able to keep up.
“The primary objective of any business today must be to increase the speed of the product development process and the quality of its output.”
“Smart Creatives”
Knowledge workers who thrived in traditional corporations by developing deep expertise in one area won’t have the same impact or value in high-speed production environments. Google seeks smart creatives, people who excel in several areas or tasks, and who enjoy risk and unlimited access to information and computing power. Smart creatives, the lifeblood of Internet Century companies, pursue their ideas, speak up when they disagree, get bored quickly and change jobs often. They are self-directed, collaborative, hardworking and energetic, but not easy to manage or direct. Their work must be meaningful, and that meaning stems from company culture.
“A great start-up, a great project – a great job, for that matter – should be fun, and if you’re working your butt off without deriving any enjoyment, something’s probably wrong.”
On a Friday afternoon in 2002, Larry Page conducted an online search. He disliked the irrelevant ads that popped up. Rather than follow the traditional route and call in the person in charge of AdWords, hold meetings to discuss the problem and plan a course of action, Page posted the offending ads on a bulletin board in the kitchen with the caption, “These Ads Suck.” Search engineer Jeff Dean saw the note and worked with his colleagues over the weekend assembling a prototype of a solution. By Monday, they had laid the groundwork for placing ads by relevancy rather than by clicks or revenue. Their spontaneous efforts greatly improved the AdWords engine. Dean and his volunteers weren’t part of the AdWords team. They understood and supported the company’s priorities and helped out. This reflects Google’s strong company culture.
Basic Beliefs
Company culture is so crucial that you can’t leave it to chance or decide what it should be after you succeed. When Google went public in 2004, Page and Brin outlined its belief system in the IPO prospectus. It said: “Don’t be evil’ and “Focus on the user.” These sentiments act as a decision-making North Star and reinforce a culture in which a Post-it containing the phrase “These Ads Suck” got employees to spring into action. “Every company needs a ‘don’t be evil,” a cultural lodestar that shines over all management layers, product plans and office politics.”
“When it comes to the quality of decision making, pay level is intrinsically irrelevant and experience is valuable only if it is used to frame a winning argument.”
When people visit Google’s campus, they notice the bikes, volleyball courts, gyms, snack areas and espresso machines. The founders patterned the facilities after a university, where employees spend long hours working and have full access to data and resources. Visitors notice the messy, jam-packed cubicles and noisy energy. The disarray is intentional. Smart creatives work better elbow-to-elbow. The crowded, open office design thwarts “facilities envy” and office hierarchies.
“As a leader, it is best not to get lost in details you don’t understand, but rather trust the smart people who work for you to understand them.”
“Technical Insights”
The foundations of Google’s fluid and evolving business are: “Bet on technical insights that help solve a big problem in a novel way; optimize for scale, not revenue; and let great products grow the market for everyone.” A technical insight is an innovation in technology or design that significantly reduces costs or drastically increases a product’s function and usability. One technical insight elevated Google above other search engines: Page and Brin’s decision to determine the quality of a web page based on the number of other pages linked to it.
Every successful Google product formed around a technical insight, including AdWords, Chrome and Knowledge Graph. Many companies rely on marketing tactics to increase their market share and profits. But when market research takes precedence over technological innovation, the only result is incremental improvement. Market research can’t lead to disruptive innovations because customers can’t ask for something that doesn’t exist. Find inspiration by combining existing data and technology to invent something new. Or broaden the scope of how you use your technology. Just as people used the first steam engines to pump water from mines, the web was originally developed for sharing research.
“Giving the customer what he wants is less important than giving him what he doesn’t yet know he wants.”
Scale
In the Internet Century, “it’s not enough to grow, you need to scale.” Scaling must be an integral part of your business philosophy, since competitors abound and advantages disappear quickly. Creating, building and growing platforms offers the fastest path to success. Platforms such as YouTube, Amazon and Android are the hardware or software you use to host a set of products, services and technologies that bring users and providers together. The more a platform grows, the more investment it attracts, which in turn improves the overall quality of the products and services that are available.
“When you can reach out and tap someone on the shoulder, there is nothing to get in the way of communications and the flow of ideas.”
“Googleyness”
Googlers at every level commit to hiring the best possible people. Google follows a university-type, peer-based hiring model. Committees make hiring decisions, which Google views as “too important to be left in the hands of a manager who may or may not have a stake in the employee’s success a year later.”
When you hire great people, smart creatives follow. They want to collaborate in an environment of idea sharing. Look for intelligent people with a growth mind-set, and judge for character: Seek people who are trustworthy and respectful of others. “Exile the knaves,” – that is, employees who lack integrity. “Fight for divas.” Divas may be quirky, difficult and hard to get along with, but they bring new perspectives and creativity to your team.
“The very nature of mature companies is to be risk-averse and to attack big change like a body attacks an infection.”
Imagine being stuck at the airport for six hours with a potential hire. This test for Googleyness is part of the company’s candidate screening, which includes “general cognitive ability, role-related knowledge and leadership experience.” Assessing candidates’ character traits does not mean you must like them or want to socialize with them. Colleagues don’t have to be your buddies. A diversity of backgrounds, experience and viewpoints creates a healthy work environment. Google’s hiring philosophy centers on gathering smart people who contribute to the product and the culture. Hire active doers who are enthusiastic, self-directed and collaborative. Seek ethical people who communicate openly. Don’t hire to fill a job; hire when you find the ideal candidate.
“The business should always be outrunning the processes, so chaos is right where you want to be.”
Decisions
Every business leader and team member must make decisions. The process, timing and implementation of a decision matters as much as making the right choices. In 2009, Chinese hackers attacked Google to steal source code and compromise the Gmail accounts of Chinese human rights activists. Deciding how to react was one of the most important choices in the company’s history. Schmidt, Brin and Page met with their team to hash out a decision, a process that took several hours. Everyone participated in the heated discussion until the weary group took a vote. They announced their intentions publicly on January 12, 2010; by March, they shut down Google.cn.
Rely on data – not intuition or experience – to make subjective decisions. The people closest to the situation know it best. Take advice from your smartest people. Encourage everybody to speak up, and provide a safe atmosphere for disagreement. Let the decision maker who manages this “conflict-based” approach be someone who knows when to enforce a deadline and end the debate. A consensus-driven decision-making process demands “inclusion, cooperation and equality.”
“Create an environment resilient enough to take…risks and tolerate the inevitable missteps.”
Sharing
In traditional businesses, executives controlled the information flow and chose who got to see what. In the Internet Century, “information is the true lifeblood of business.” Smart creatives need as much data as possible. Today, leaders ensure that information flows throughout the company. Google shares everything. This includes the Google board report, except for items prohibited from public view by law or regulation, updates on products in development, and individual employees’ “Objectives and Key Results” (OKRs). Googlers, including the CEO, write and post their OKRs every quarter. They post “snippets,” one- or two-line status reports about their current projects. Google teams conduct postmortems after product launches to discuss what worked and what needs improvement. The executive team fields tough questions at companywide meetings.
“Canaries are dying in the coal mine, but at least you are aware of the avian carnage and the poor guy who brought their sad yellow corpses up into the light knows he won’t be thrown back down the shaft.”
Overcommunicate important messages. So they register with your intended audience. To overcommunicate well, reinforce a few core themes regarding values, strategy and guiding principles that you want every employee to embrace. At Google, these tenets include: Focus on users, think big, don’t fear failure and be a “technology optimist.” Continuously reframe your message – via email, video and social networks – to keep it fresh. Always be authentic.
The Requirements of Innovation
“Google Wave” was developed from a team in Sydney, Australia, that devised it as a new and better way to communicate via email. It turned out to be a spectacular failure, and Google shut it down a year after launch. But Wave “failed well” in that it produced new technology, Google pulled the plug at the right time, and other teams recruited Wave engineers. Google values even failures for their technology and market insights. Google believes innovation must “be new, surprising and radically useful.” This includes self-driving cars and thousands of incremental improvements the firm makes to the search function every year. Google challenges employees to follow Larry Page’s mandate to “think 10X.”
“Good news will be just as good tomorrow, but bad news will be worse.”
Innovation resists management: It must unfold organically. Innovation occurs when untethered people and free flowing information interact in new, creative ways. Don’t assign innovation to a specific team; make it integral to the organization. Creative ideas need followers. Nourish ideas that inspire people to contribute their energy and expertise.
