How Google Works
Jonathan Rosenberg Eric Schmidt

Ended: May 9, 2016

As Jeff Bezos, founder and CEO of Amazon, says: “In the old world, you devoted 30 percent of your time to building a great service and 70 percent of your time to shouting about it. In the new world, that inverts.”
The second reason product excellence is so critical is that the cost of experimentation and failure has dropped significantly. You see this most dramatically in high-tech industries, where a small team of engineers, developers, and designers can create fabulous products and distribute them online globally for free. It’s ridiculously easy to imagine and create a new product, try it out with a limited set of consumers, measure precisely what works and what doesn’t, iterate the product, and try again. Or throw it out and start over, that much smarter for the experience.
most management processes in place at companies today are designed with something else in mind. They were devised over a century ago, at a time when mistakes were expensive and only the top executives had comprehensive information, and their primary objectives are lowering risk and ensuring that decisions are made only by the few executives with lots of information. In this traditional command-and-control structure, data flows up to the executives from all over the organization, and decisions subsequently flow down. This approach is designed to slow things down, and it accomplishes the task very well. Meaning that at the very moment when businesses must permanently accelerate, their architecture is working against them.
When we contrast the traditional knowledge worker with the engineers and other talented people who have surrounded us at Google over the past decade-plus, we see that our Google peers represent a quite different type of employee. They are not confined to specific tasks. They are not limited in their access to the company’s information and computing power. They are not averse to taking risks, nor are they punished or held back in any way when those risky initiatives fail. They are not hemmed in by role definitions or organizational structures; in fact, they are encouraged to exercise their own ideas. They don’t keep quiet when they disagree with something. They get bored easily and shift jobs a lot. They are multidimensional, usually combining technical depth with business savvy and creative flair. In other words, they are not knowledge workers, at least not in the traditional sense. They are a new kind of animal, a type we call a “smart creative,” and they are the key to achieving success in the Internet Century.
Perhaps the best thing about smart creatives is that they are everywhere. We have worked with plenty of smart creatives who boast computer science degrees from elite universities, but plenty more who don’t. In fact, smart creatives can be found in every city, in every school, in every class and demographic, and in most businesses, nonprofits, and government organizations: the ambitious ones of all ages who are eager (and able) to use the tools of technology to do a lot more. Their common characteristic is that they work hard and are willing to question the status quo and attack things differently. This is why they can have such an impact.
We open by discussing how to attract the best smart creatives, which starts with culture, because culture and success go hand in hand, and if you don’t believe your own slogans you won’t get very far. We then cover strategy, because smart creatives are most attracted to ideas that are grounded in a strong strategic foundation. They know that business plans aren’t nearly as important as the pillars upon which they are built. Then, hiring, which is the most important thing a leader does. Hire enough great people, and the resulting intellectual mixture will inevitably combust into creativity and success. The team is hired, the business grows, now the time comes to make hard decisions. This is where we talk about consensus and how to get there. Our following chapter is about communications, which become vital (and harder) as the organization grows. Innovation is up next, since the only way to achieve sustained success is through continuous product excellence, and an environment of innovative primordial ooze is the only way to get there. We conclude with some thoughts on incumbents and how to imagine the unimaginable.
At that point, Eric still thought Google was a fairly normal start-up. But what happened over the next seventy-two hours completely shifted that perception. In a normal company, the CEO, seeing a bad product, would call the person in charge of the product. There would be a meeting or two or three to discuss the problem, review potential solutions, and decide on a course of action. A plan would come together to implement the solution. Then, after a fair amount of quality assurance testing, the solution would launch. In a normal company, this would take several weeks. This isn’t what Larry did. Instead, he printed out the pages containing the results he didn’t like, highlighted the offending ads, posted them on a bulletin board on the wall of the kitchen by the pool table, and wrote THESE ADS SUCK in big letters across the top. Then he went home. He didn’t call or email anyone. He didn’t schedule an emergency meeting. He didn’t mention the issue to either of
few colleagues (including Georges Harik, Ben Gomes, Noam Shazeer, and Olcan Sercinoglu) had seen Larry’s note on the wall and agreed with Larry’s assessment of the ads’ relative suckiness. But the email didn’t just concur with the founder and add some facile bromide about looking into the problem. Rather, it included a detailed analysis of why the problem was occurring, described a solution, included a link to a prototype implementation of the solution the five had coded over the weekend, and provided sample results that demonstrated how the new prototype was an improvement over the then-current system. While the details of the solution were geeky and complex (our favorite phrase from the note: “query snippet term vector”), the gist of it was that we would compute an “ad relevance score” that would assess the quality of the ad relevant to the query, and then determine whether and where the ad would be placed on the page based on that score. This core insight—that ads should be placed based on their relevancy, not just how much the advertiser was willing to pay and the number of clicks they received—became the foundation upon which Google’s AdWords engine, and a multibillion-dollar business, was built.
Many people, when considering a job, are primarily concerned with their role and responsibilities, the company’s track record, the industry, and compensation. Further down on that list, probably somewhere between “length of commute” and “quality of coffee in the kitchen,” comes culture. Smart creatives, though, place culture at the top of the list. To be effective, they need to care about the place they work. This is why, when starting a new company or initiative, culture is the most important thing to consider.
Think about your culture, either what you want it to be or what it already is. Imagine, months or years from now, an employee working late, unable to make up his mind about a tough decision.26 He walks to the kitchen for a cup of coffee, and thinks back on the cultural values he heard expressed at company meetings, talked about with colleagues over lunch, saw demonstrated by that company veteran whom everyone respects. For this employee—for all employees—those values should clearly and plainly outline the things that matter most to the company, the things you care about. Otherwise they are meaningless, and won’t be worth a damn when it comes to helping that smart creative make the right call. What values would you want that bleary-eyed employee to consider? Write them down in a simple, concise way. Then share them, not in posters and guides, but through constant, authentic communications. As former General Electric CEO Jack Welch said in Winning: “No vision is worth the paper it’s printed on unless it is communicated constantly and reinforced with rewards.”27 When Google
The founders didn’t care about maximizing the short-term value and marketability of their stock, because they knew that recording the company’s unique values for future employees and partners would be far more instrumental to long-term success. As we write this today, the arcane details of that IPO a decade ago are a matter of history, but phrases like “long term focus,” “serving end users,” “don’t be evil,” and “making the world a better place” still describe how the company is run.
Offices should be designed to maximize energy and interactions, not for isolation and status. Smart creatives thrive on interacting with each other. The mixture you get when you cram them together is combustible, so a top priority must be to keep them crowded.
Be very generous with the resources they need to do their work. Be stingy with the stuff that doesn’t matter, like fancy furniture and big offices, but invest in the stuff that does.
Hippos are dangerous in companies too, where they take the form of the Highest-Paid Person’s Opinion. 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. Unfortunately, in most companies experience is the winning argument. We call these places “tenurocracies,” because power derives from tenure, not merit. It reminds us of our favorite quote from Jim Barksdale, erstwhile CEO of Netscape: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”37
Sridhar wasn’t a senior executive at the time, so as the hippo, Sergey could have simply ordered Sridhar to comply. Instead, he suggested a compromise. Half of Sridhar’s team could work on what Sergey wanted, and the other half would follow Sridhar’s lead. Sridhar still disagreed, and after much debate about the relative merits of the competing ideas, Sergey’s idea was discarded. This outcome was possible only because Sergey, as a smart creative, deeply understood the data being presented, the technology of the platform, and the context of the decision. The hippo who doesn’t understand what’s going on is more apt to try to intimidate her way to success. If you are in a position of responsibility but are overwhelmed by the job, it’s easier to try to bluster your way through with a “because I said so” approach. You need to have confidence in your people, and enough self-confidence to let them identify a better way.
For a meritocracy to work, it needs to engender a culture where there is an “obligation to dissent”.
The solution we finally hit upon was slightly less draconian but just as simple. We call it the rule of seven. We’ve worked at other companies with a rule of seven, but in all of those cases the rule meant that managers were allowed a maximum of seven direct reports. The Google version suggests that managers have a minimum of seven direct reports (Jonathan usually had fifteen to twenty when he ran the Google product team). We still have formal organization charts, but the rule (which is really more of a guideline, since there are exceptions) forces flatter charts with less managerial oversight and more employee freedom. With that many direct reports—most managers have a lot more than seven—there simply isn’t time to micromanage.
The building block of organizations should be small teams. Jeff Bezos, Amazon’s founder, at one point had a “two-pizza team” rule,41 which stipulates that teams be small enough to be fed by two pizzas. Small teams get more done than big ones, and they spend less time politicking and worrying about who gets credit. Small teams are like families: They can bicker and fight, or even be downright dysfunctional, but they usually pull together at crunch time. Small teams tend to get bigger as their products grow; things built by only a handful of people eventually require a much bigger team to maintain them. This is OK, as long as the bigger teams don’t preclude the existence of small teams working on the next breakthroughs. A scaling company needs both.
Eric once chatted with Warren Buffett about what he looks for when acquiring companies. His answer was: a leader who doesn’t need him. If the company is run by a person who is performing well because she is committed to its success, and not just by making a bundle by selling to Berkshire Hathaway, then Warren will invest. Internal teams work in much the same way: You want to invest in the people who are going to do what they think is right, whether or not you give them permission. You’ll find that those people will usually be your best smart creatives.
Once you identify the people who have the biggest impact, give them more to do. When you pile more responsibility on your best people, trust that they will keep taking it on or tell you when enough is enough. As the old saying goes: If you want something done, give it to a busy person.
Manage this by giving people responsibility and freedom. Don’t order them to stay late and work or to go home early and spend time with their families. Instead, tell them to own the things for which they are responsible, and they will do what it takes to get them done. Give them the space and the freedom to make it happen. Marissa Mayer, who became one of Silicon Valley’s most famous working mothers not long after she took over as Yahoo’s CEO in 2012, says that burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you.46 Give your smart creatives control, and they will usually make their own best decisions about how to balance their lives.
We encourage people to take real vacations, although not to promote “work-life balance.” If someone is so critical to the company’s success that he believes he can’t unplug for a week or two without things crashing down, then there is a larger problem that must be addressed. No one should or can be indispensable. Occasionally you will encounter employees who create this situation intentionally, perhaps to feed their ego or in the mistaken belief that “indispensability” equals job security. Make such people take a nice vacation and make sure their next-in-line fills in for them while they are gone. They will return refreshed and motivated, and the people who filled their shoes will be more confident. (This is a huge hidden benefit of people taking maternity and paternity leaves too.)
(Eric was once asked at a company meeting what the Google dress code was. “You must wear something” was his answer.)
Every company needs a “Don’t be evil,” a cultural lodestar that shines over all management layers, product plans, and office politics.
We have no idea what your venture is or even your industry, so we won’t presume to tell you how to create a business plan. But we can tell you with 100 percent certainty that if you have one, it is wrong. MBA-style business plans, no matter how well conceived and thought out, are always flawed in some important way. Faithfully following that flawed plan will result in what entrepreneur Eric Ries calls “achieving failure.”55 This is why a venture capitalist will always follow the maxim of investing in the team, not the plan. Since the plan is wrong, the people have to be right. Successful teams spot the flaws in their plan and adjust.
We are entering what lead Google economist Hal Varian calls a new period of “combinatorial innovation.” This occurs when there is a great availability of different component parts that can be combined or recombined to create new inventions. For
When you base your product strategy on technical insights, you avoid me-too products that simply deliver what customers are asking for. (Henry Ford: “If I had listened to customers, I would have gone out looking for faster horses.”)65 That sort of incremental innovation can work very well for incumbents who are concerned with maintaining the status quo and quibbling over percentage points of market share. But if you are starting a new venture or trying to transform an existing enterprise, it’s not enough. Basing products on technical insights seems like a fairly obvious approach, but it is a lot more difficult to practice than to preach.
“What is your technical insight?” turns out to be an easy question to ask and a hard one to answer. So for your products, ask the question. If you can’t articulate a good answer, rethink the product.
There’s another important benefit of platforms: As they grow and get more valuable, they attract more investment, which helps to improve the products and services the platform supports. This is why, in the technology industry, companies always think “platforms, not products.”
Today, Coase’s framework still holds true—but it leads to radically different outcomes than it did in much of the twentieth century. Rather than growing the biggest possible closed networks, companies are outsourcing more functions and working with a bigger and more diverse network of partners. Why? Don Tapscott put it well in Wikinomics, when he wrote that “the Internet has caused transaction costs to plunge so steeply that it has become much more useful to read Coase’s law, in effect, backward: Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally.”
This is the difference between twenty-first- and twentieth-century economies. Whereas the twentieth century was dominated by monolithic, closed networks, the twenty-first will be driven by global, open ones. There are platform opportunities all around us. The successful leaders are the ones who discover them.
Remember “long-distance call”? That was a thing, once—all innovations that became possible only after the platform went from closed to open.
Open also allows you to harness the talents of thousands of people, because, as Sun cofounder Bill Joy noted, “no matter who you are, most of the smartest people work for someone else.”82 It spurs greater innovation, since people don’t have to reinvent work that’s already been done and can instead focus on pushing the entire system forward with new inventions.
A final thought on defaulting to open is the concept of user freedom, a practice that is the opposite of customer lock-in: Make it easy for customers to leave. At Google we have a team whose job it is to make it as easy as possible for users to leave us. We want to compete on a level playing field and win users’ loyalty based on merit. When customers have low barriers to exit, you have to work to keep them.
Most incumbents who keep their platforms closed employ the argument that opening up their systems will hurt quality, so by keeping their closed platform closed they are just being good corporate citizens, looking out for the interests of their customers. In some cases, like ours, this argument is actually true. Opening up our search and ads algorithms would severely compromise quality, since there are many parties in the search world who profit from a worse user experience. They don’t want users to view and click on the most relevant results and ads, they want users to see and view their results and ads, even if it is a crummier experience for the user. So the search ecosystem is best served, we believe, by keeping secret the algorithms by which we match results to user queries.
In 2005, when we bought what was then a small mobile operating system called Android, there was some debate among our management team about whether or not we should keep it open. Andy Rubin and the Android team initially thought it should be closed, but Sergey suggested the opposite: Why not make it open? Keeping Android open would help us scale quickly in the highly fragmented mobile operating system space. So that’s what we did. Meanwhile, Apple launched the iPhone, built on a closed iOS, opting for control over scalability. Android stayed open, grew extraordinarily, and helped Google smoothly navigate the platform shift from PC to mobile by giving us a platform that was highly complementary to search (more people online with smartphones means more people searching more often). iOS stayed closed and achieved both massive scale and profitability. From the perspective of a new venture, either path is a win, but keep in mind that Apple’s success with the iPhone, just like Google’s with search, was based on an unusual set of technical insights that yielded an obviously superior product in a rapidly growing space. If you can achieve that sort of extreme impact with a closed system, then give it a shot. Otherwise, default to open.
but bring up the topic of their competition and suddenly you’ll have everyone’s full attention. It’s as if, once you get to a particular level in an organization, you worry as much about what your competition is doing as how your own organization is performing. At the highest echelons of business, the default mentality is, too often, siege. This fixation leads to a never-ending spiral into mediocrity. Business leaders spend much of their time watching and copying the competition, and when they do finally break away and try something new, they are careful risk-takers, developing only incremental, low-impact changes. Being close to your competition offers comfort; it’s like covering tactics in match race sailing, when the lead boat tacks whenever the follower does, to ensure that the follower doesn’t go off in a different direction and find stronger wind. Incumbents clump together so that no one finds a fresher breeze elsewhere.
Eric’s Notes for a Strategy Meeting We have spent countless hours working on strategy with our teams. This is an experience you will get to enjoy at some point, once you have gathered a coterie of smart creatives and are ready to write down the fundamentals of your new venture. So when you are on your way to that first strategy jam session, consider these pearls of (we hope) wisdom that we have collected from our own strategy sessions over the years, culled from conference-room whiteboards, Post-its stuck on walls, scribbled notes, and emails to ourselves. The right strategy has a beauty to it, a sense of many people and ideas working in concert to succeed. Start by asking what will be true in five years and work backward. Examine carefully the things you can assert will change quickly, especially factors of production where technology is exponentially driving down cost curves, or platforms that could emerge. In a five-year timeline there are disrupters—and opportunities—in many markets. What will be the disrupters affecting you? There is now almost perfect market information and broad availability of capital, so you need to win on product and platform. Spend the vast majority of your time thinking about product and platform. When there is disruption in a market, there are two possible scenarios. If you are the incumbent, you can acquire, build, or ignore a disruptive challenger. Ignoring the challenger will work for only a short while. If you opt to acquire or build, you must viscerally understand the technical insights and options the challenger will use to attack. If you are the challenger, you need to invent a new product and build a business around it, and understand the tools (business relationships, regulations, and lawsuits) and obstacles incumbents will use to stop you. Consider the role of other players whose incentives can be aligned to help you. Your strategy should include a way you can have people outside the existing business framework (division, company, team) thinking about innovation along with the people inside. Growth matters most. All big successes in the Internet Century will embody large platforms that get better and stronger as they grow. Articulate a rough time frame and the end point you want to achieve. Don’t use market research and competitive analyses. Slides kill discussion. Get input from everyone in the room. Iteration is the most important part of the strategy. It needs to be very, very fast and always based on learning. Many large, successful companies started with the following: 1. They solved a problem in a novel way. 2. They used that solution to grow and spread quickly. 3. That success was based largely on their products. And the coterie you gather to work on this strategy? Choose it wisely. It shouldn’t just comprise the people who have been around the longest or those with the biggest titles, rather it should include the best smart creatives and the ones who will have a good perspective on the changes to…
Smart coaches know that no amount of strategy can substitute for talent, and that is as true in business as it is on the field. Scouting is like shaving: If you don’t do it every day, it shows.
For a manager, the right answer to the question “What is the single most important thing you do at work?” is hiring. When Sergey was interviewing Jonathan that day, he wasn’t just going through the paces, he was intent on doing a great job. At first Jonathan chalked this up to the fact that he would be a senior member of the team and would work closely with Sergey, but once he arrived at Google he realized that the company’s leaders pursued interviewing with the same level of intensity for every candidate. It didn’t matter if the person would be an entry-level software engineer or a senior executive, Googlers made it a priority to invest the time and energy to ensure they got the best possible people.
There’s another reason that hierarchical hiring doesn’t work. Leaders (and management book authors) often say they hire people smarter than themselves, but in practice this rarely happens in a hierarchical hiring process. The rational “let’s-hire-this-guy-because-he’s-so-smart” decision usually gets usurped by the more emotional “but-then-he-might-be-better-than-me-and-make-me-look-bad-and-then-I-won’t-get-promoted-and-my-kids-will-think-I’m-a-loser-and-my-wife-will-run-off-with-that-guy-from-Peet’s-Coffee-and-take-my-dog-and-truck” decision. In other words, human nature gets in the way.
From the outset, Google’s founders understood that to consistently hire the best people possible, the model to follow wasn’t that of corporate America, but that of academia. Universities usually don’t lay professors off, so they invest a lot of time in getting faculty hiring and promotion right, normally using committees. This is why we believe that hiring should be peer-based, not hierarchical, with decisions made by committees, and it should be focused on bringing the best possible people into the company, even if their experience might not match one of the open roles. Eric hired Sheryl Sandberg even though he didn’t have a job for her.
A fine marker of smart creatives is passion. They care. So how do you figure out if a person is truly passionate, since truly passionate people don’t often use the “P-word”? In our experience, a lot of job candidates have figured out that passion is a sought-after trait. When someone begins a sentence with the conspicuously obvious phrase “I’m passionate about…” and then proceeds to talk about something generic like travel, football, or family, that’s a red flag that maybe his only true passion is for conspicuously throwing the word “passion” around a lot during interviews.
Passionate people don’t wear their passion on their sleeves; they have it in their hearts. They live it. Passion is more than résumé-deep, because its hallmarks—persistence, grit, seriousness, all-encompassing absorption—cannot be gauged from a checklist. Nor is it always synonymous with success. If someone is truly passionate about something, they’ll do it for a long time even if they aren’t at first successful.
Failure is often part of the deal. (This is one reason we value athletes, because sports teach how to rebound from loss, or at least give you plenty of opportunities to do so.) The passionate person will often talk at length, aka ramble, about his pursuits. This pursuit can be professional. In our world, “perfecting search” is a great example of something people can spend an entire career on and still find challenging and engaging every day. But it can also be a hobby. Andy Rubin, who started Android, loves robots (and is now spearheading Google’s nascent efforts in that area). Wayne Rosing, Google’s first head of engineering, loves telescopes. Captain Eric loves planes and flying (and telling stories of flying planes).
Once they start, listen very carefully. Pay attention to how they are passionate. For example, athletes can be quite passionate, but do you want the triathlete or ultramarathoner who pursues his craft all alone, or someone who trains with a group? Is the athlete solo or social, exclusive or inclusive? When people are talking about their professional experience, they know the right answers to these questions—most people don’t like a loner in the work environment. But when you get people talking about their passions, the guard usually comes down and you gain more insight into their personalities.
Henry Ford said that “anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.”94 Our ideal candidates are the ones who prefer roller coasters, the ones who keep learning. These “learning animals” have the smarts to handle massive change and the character to love it. Psychologist Carol Dweck has another term for it. She calls it a “growth mindset.”95 If you believe that the qualities defining you are carved in stone, you will be stuck trying to prove them over and over again, regardless of the circumstances. But if you have a growth mindset, you believe the qualities that define you can be modified and cultivated through effort. You can change yourself; you can adapt; in fact, you are more comfortable and do better when you are forced to do so. Dweck’s experiments show that your mindset can set in motion a whole chain of thoughts and behaviors: If you think your abilities are fixed, you’ll set for yourself what she calls “performance goals” to maintain that self-image, but if you have a growth mindset, you’ll set “learning goals”96—goals that’ll drive you to take risks without worrying so much about how, for example, a dumb question or a wrong answer will make you look. You won’t care because you’re a learning animal, and in the long run you’ll learn more and scale greater heights.
Most people, when they are hiring for a role, look for people who have excelled in that role before. This is not how you find a learning animal. Peruse virtually any job listing and one of the top criteria for a position will be relevant experience. If the job is for chief widget designer, it’s a given that high on the list of requirements will be five to ten years of widget design and a degree from Widget U. Favoring specialization over intelligence is exactly wrong, especially in high tech. The world is changing so fast across every industry and endeavor that it’s a given the role for which you’re hiring is going to change. Yesterday’s widget will be obsolete tomorrow, and hiring a specialist in such a dynamic environment can backfire.
A specialist brings an inherent bias to solving problems that spawns from the very expertise that is his putative advantage, and may be threatened by a new type of solution that requires new expertise. A smart generalist doesn’t have bias, so is free to survey the wide range of solutions and gravitate to the best one.
Once you hire those learning animals, keep learning them!99 Create opportunities for every employee to be constantly learning new things—even skills and experiences that aren’t directly beneficial to the company—and then expect them to use them. This won’t be challenging for true learning animals, who will gladly avail themselves of training and other opportunities. But keep an eye on the people who don’t; perhaps they aren’t quite the learning animals you thought they were.
Great people treat others well, regardless of standing or sobriety.
But while Jonathan waited for his interview to start, he chatted with the administrative assistant and learned she was planning a trip to California, his home state. Soon he was giving her travel advice and recommending sites to see. When the firm called the next day to discuss an offer, he figured that either there was a mistake or two people were getting hired. But no. Bodsworth didn’t get hired because, according to the interviewer, “He was an asshole to my secretary, and she likes you.” We usually ask our assistants what they think of candidates, and listen to their response. Call it the Bodsworth rule.
As important as character, though, is whether or not a candidate is interesting. Imagine being stuck at an airport for six hours with a colleague; Eric always chooses LAX for maximum discomfort (although Atlanta or London will do in a pinch). Would you be able to pass the time in a good conversation with him? Would it be time well spent, or would you quickly find yourself rummaging through your carry-on for your tablet so you can read your latest email or the news or anything to avoid having to talk to this dull person? (TV star Tina Fey has her own version of the LAX test, which she credits to Saturday Night Live producer Lorne…
We institutionalized the LAX test by making “Googleyness” one of four standard sections—along with general cognitive ability, role-related knowledge, and leadership experience—on our interview feedback form. This includes ambition and drive, team orientation, service orientation, listening & communication skills,…
A person who passes the LAX/Googleyness/three-a.m.-in-the-SNL-bathroom test has to be someone you could have an interesting conversation with and respect. However, he or she is not necessarily someone you have to like. Imagine that person with whom you are stuck at LAX has nothing in common with you, and in fact represents the polar opposite of wherever you stand on the political spectrum. Yet if this person is your equal (or more) in intellect, creativity, and these factors we call Googleyness, the two of you would still have a provocative conversation, and your company will be better off having the both of you on the same team. You often hear people say they only want to work with (or elect as president) someone they would want to have a beer with. Truth be told, some of our most effective colleagues are people we most definitely would not want to have a beer with. (In a few rare instances they are people we would rather pour a beer on.) You must work with…
But from a strictly corporate point of view, diversity in hiring is even more emphatically the right thing to do. People from different backgrounds see the world differently. Women and men, whites and blacks, Jews and Muslims, Catholics and Protestants, veterans and civilians, gays and straights, Latinos and Europeans, Klingons and Romulans,101 Asians and Africans, wheelchair-bound and able-bodied: These differences of perspective generate insights that can’t be taught.…
A typical hiring manager will have a narrow aperture, considering only certain people with certain titles in certain fields, those who will undoubtedly do today’s job well. But the successful manager sets a wider aperture and rounds up people beyond the usual suspects.
you expand the aperture and look for someone who can do the job well tomorrow as well as today, you can find some gems, and you can offer them opportunities their current employer might not be able to. The engineer who wants to move into product management, but is blocked from leaving his team; the product manager who wants to get into sales, but there’s no open headcount. You can get great talent if you are willing to take a risk on people by challenging them to do new things. They will join you precisely because you are willing to take that risk. And those willing to take risks introduce the exact self-selection tendency you are looking for.
Supercomputer pioneer Seymour Cray used to deliberately hire for inexperience because it brought him people who “do not usually know what’s supposed to be impossible.”
way to make expanding the aperture work is to judge candidates based on trajectory. Our former colleague Jared Smith notes that the best people are often the ones whose careers are climbing, because when you project their path forward there is potential for great growth and achievement. There are plenty of strong, experienced people who have hit a plateau. With those candidates, you know exactly what you are getting (which is good) but there is much less potential for the extraordinary (bad). It’s important to note that age and trajectory are not correlated, and that there are exceptions to the trajectory guideline, such as people running their own business or those with nontraditional career paths. Expanding
Hiring senior people is almost always experience-based, and experience is important, but in most industries today technology has rendered the environment so dynamic that having the right experience is only a part of what it takes to succeed. Companies consistently overvalue relevant experience when judging senior candidates. They should be more focused on what talented smart creatives have to offer.
The simple way to keep recruiting in everyone’s job description is to measure it. Count referrals and interviews. Measure how quickly people fill out interview feedback forms. Encourage employees to help with recruiting events, and track how often they do. Then make these metrics count when it comes to performance reviews and promotions. Recruiting is everyone’s job, so grade it that way.
Your objective is to find the limits of his capabilities, not have a polite conversation, but the interview shouldn’t be an overly stressful experience. The best interviews feel like intellectual discussions between friends (“What books are you reading right now?”). Questions should be large and complex, with a range of answers (to draw out the person’s thought process) that the interviewer can push back on (to see how the candidate stakes out and defends a position). It’s a good idea to reuse questions across candidates, so you can calibrate responses.
When asking about a candidate’s background, you want to ask questions that, rather than offering her a chance to regurgitate her experiences, allow her to express what insights she gained from them. Get her to show off her thinking, not just her résumé. “What surprised you about…?” is one good way to approach this, as it is just different enough to surprise a candidate, so you don’t get rehearsed responses, and forces her to think about her experiences from a slightly different perspective. “How did you pay for college?” is another good one, as is “If I were to look at the web history section of your browser, what would I learn about you that isn’t on your résumé?” Both of these can lead to a far better understanding of the candidate. They are also quite specific, which helps you gauge how well someone listens and parses questions.
Then there are Google’s infamous brainteasers. In recent years, we have phased out the practice of asking these puzzling questions during interviews. Many of the questions (and answers) ended up online, so continuing to ask them wouldn’t necessarily reveal a candidate’s ability to reason out a complex problem as much as her ability to conduct research before an interview and then act as if she hadn’t memorized the answers to all of our brainteasers. (A valuable skill, to be sure; just not the one we’re looking for.) The brainteasers also became a lightning rod for criticism as an elitist tool. To those critics, let us say once and for all: You are right. We want to hire the best minds available, because we believe there is a big difference between people who are great and those who are good, and we will do everything we can to separate the two.
The only way to get good at interviewing is to practice. That’s why we tell young people to take advantage of every opportunity to interview. Some of them do but most of them don’t, preferring to spend their time on things they think are more important. They don’t realize what a great gift we are giving them. Come on, we’re saying, you can practice the most important skill you can possibly develop, get paid for doing it, and since you will most likely not be the person’s manager, you won’t have to live with the consequences of a bad hire. They ignore us. Getting people to interview is like pulling teeth.
When completed, the ideal hiring packet is stuffed to the brim with data, not opinion, and this distinction is critical. If you are the hiring manager or one of the interviewers, it isn’t sufficient to express an opinion; you need to support it with data. You can’t say, “We should hire Jane because she’s smart.” You have to say, “We should hire Jane because she’s smart and has the MacArthur Fellowship to prove it.” Most candidates aren’t accommodating enough to win MacArthur Fellowships, so supporting every opinion with data or empirical observations tends to be a lot harder than this example. But when people don’t do it, packets get kicked out of the committee.
This means that yes, the lower-level employee who helps create a breakthrough product or feature should be very handsomely rewarded. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.
Google’s Hiring Dos and Don’ts Hire people who are smarter and more knowledgeable than you are. Don’t hire people you can’t learn from or be challenged by. Hire people who will add value to the product and our culture. Don’t hire people who won’t contribute well to both. Hire people who will get things done. Don’t hire people who just think about problems. Hire people who are enthusiastic, self-motivated, and passionate. Don’t hire people who just want a job. Hire people who inspire and work well with others. Don’t hire people who prefer to work alone. Hire people who will grow with your team and with the company. Don’t hire people with narrow skill sets or interests. Hire people who are well rounded, with unique interests and talents. Don’t hire people who only live to work. Hire people who are ethical and who communicate openly. Don’t hire people who are political or manipulative. Hire only when you’ve found a great candidate. Don’t settle for anything less.
In business, and particularly in high tech, it’s not enough to be great at what you do, you have to catch at least one really big wave and ride it all the way in to shore. When people are right out of school, they tend to prioritize company first, then job, then industry. But at this point in their career that is exactly the wrong order. The right industry is paramount, because while you will likely switch companies several times in your career, it is much harder to switch industries. Think of the industry as the place you surf (in Northern California the most rad waves are at Mavericks, dude) and the company as the wave you catch. You always want to be in the place with the biggest and best waves. If you choose the wrong company or you have bad luck with an aggro boss who drops in on your first wave, you’ll still have a killer time if you’re surfing in an industry with bodacious waves. (Alright, Mr. Spicoli, that’s enough surfer lingo.) Conversely, if you choose the wrong industry early in your career, then growth opportunities within your company will be limited. Your boss won’t move, and you’ll be stuck without much leverage when you’re ready to look for jobs at other companies.
Career development takes effort and forethought—you need to plan it. This is such an obvious point, yet it’s astonishing how many people who have come to us over the years have failed to do it. Jonathan usually gives these folks a set of career exercises, accompanied with his favorite Tom Lehrer line—“Life is like a sewer: What you get out of it depends on what you put into it”112—and a promise that if they put real effort into the exercises, he will help them. Here are some simple steps to creating a plan: Think about your ideal job, not today but five years from now. Where do you want to be? What do you want to do? How much do you want to make? Write down the job description: If you saw this job on a website, what would the posting look like? Now fast forward four or five years and assume you are in that job. What does your five-years-from-now résumé look like? What’s the path you took from now to then to get to your best place? Keep thinking about that ideal job, and assess your strengths and weaknesses in light of it. What do you need to improve to get there? This step requires external input, so talk to your manager or peers and get their take on it. Finally, how will you get there? What training do you need? What work experience? By the way, if your conclusion is that you are ready for your ideal job today, then you aren’t thinking big enough. Start over and make that ideal job a stretch, not a gimme. If you follow these steps, it will work. If you don’t follow them, you will likely prove Yogi Berra’s point that “You’ve got to be careful if you don’t know where you’re going ’cause you might not get there.”
Stats are sexy. Deal with it. The sexiest jobs in the Internet Century will involve statistics, and not just in a parallel geeky fantasy world. Hal Varian notes that it is always a good idea for individuals to build expertise in areas that complement things that are getting cheap, and data, along with computing power to crunch it, is definitely getting cheap. We are in the era of big data, and big data needs statisticians to make sense of it. The democratization of data means that those who can analyze it well will win. Data is the sword of the twenty-first century, those who wield it well, the samurai. So start sharpening that blade, uruwashii,114 and take statistics.
Read Most organizations have an impressive archive of written information. Find the best of it and read it. At Google, we always tell people who come to us seeking advice to ingest the founders’ letter from our 2004 IPO and all the internal strategy memos that Eric and Larry subsequently wrote. These are the clearest, most concise explanations of our values and strategy that can be found, yet many people are too busy to read them. Don’t make that mistake.
And don’t stop at your company’s borders. The web has a lot of written information, and while much of it is drivel, there is a lot of great stuff too. Figure out how to use the various tools at your disposal to tap into the sites and authors you respect. Create circles of other like-minded smart people and swap books and articles. One of the best, easiest ways to get ahead in a field is to know more about it. The best way to do that is to read. People always say they don’t have the time to read, but what they are really saying is that they aren’t making it a priority to learn as much as they can about their business. You know who reads a lot about their business? CEOs. So think like a CEO and read.
Know your elevator pitch Let’s say you run into your manager’s manager in the hallway and she asks you what you’re working on. Heck, let’s make it the CEO. What do you say? This isn’t a rhetorical question—try it out right now, out loud. Go ahead—you have 30 seconds. Ugh, that didn’t sound great. You obviously haven’t practiced your elevator pitch. Work on it. Your pitch should explain what you are working on, the technical insight that’s driving it, how you are measuring your success (particularly customer benefit), and perhaps how it fits into the big picture. Know this and practice it so you can say it with conviction. Job seekers should also have an elevator pitch. This shouldn’t be a condensed version of your résumé, but should rather highlight its most interesting parts along with what you want to do and the impact you know you will have—the benefit to the customer and the company. What can you say that no one else can?
This from our estimable former colleague Sheryl Sandberg: “It is the ultimate luxury to combine passion and contribution. It’s also a very clear path to happiness.”
This is why most conference rooms at Google have two projectors. One of them is for videoconferencing with other offices or for projecting meeting notes. The other is for data. When discussing options and opinions, we start the meetings with data. We don’t seek to convince by saying “I think.” We convince by saying “Let me show you.”
A bias toward data is a great way to kill the death-by-PowerPoint syndrome. How many meetings have you been in where the first dozen or so slides are full of words, and the person stands up there and repeats the words? People who are presenting a point of view in a meeting shouldn’t need the crutch of slides to present that argument, only to support it. Slides should not be used to run a meeting or argue a point. They should just contain the data, so that everyone has the same facts. If the data is wrong or not relevant, you can’t fix it with fancy slides. Edward Tufte, the uber-guru of data presentation and visualization, advocates putting more data on fewer slides: “Visual reasoning usually works more effectively when relevant information is shown side by side. Often, the more intense the detail, the greater the clarity and understanding.”123
Getting everyone to say yes in a meeting doesn’t mean you have agreement, it means you have a bunch of bobbleheads. Many leaders strive for “consensus-driven” decisions, but they fundamentally misunderstand the meaning of consensus. For those of you who skipped Latin, it stems from the Latin cum, meaning “together with,” and sentire, meaning “to think or feel,” so it literally means “to think or feel together.” Note that this implies nothing about unanimity; consensus is not about getting everyone to agree. Instead, it’s about coming to the best idea for the company and rallying around it.
Reaching this best idea requires conflict. People need to disagree and debate their points in an open environment, because you won’t get buy-in until all the choices are debated openly. They’ll bobblehead nod, then leave the room and do what they want to do. So to achieve true consensus, you need dissent. If you are in charge, do not state your position at the outset of the process. The job is to make sure everyone’s voice is heard, regardless of their functional role, which is harder to achieve when the top dog puts a stake in the ground.
As General Patton famously said, “If everyone is thinking alike, then somebody isn’t thinking.”
One technique is to throw out a few “stupid softballs” that let people dip their toe in the water of disagreeing with the boss. (“I think we should all pour hydrochloric acid on ourselves. Thoughts?”)
This conflict-based approach works only if it is managed by a single decision-maker who owns the deadline and will break a tie. Often there is too much data, or the data is inconclusive. When that happens, people can debate for hours, a time sink that often ends in mediocre compromise and always incurs a hefty opportunity cost, since there are always better things for smart creatives to be doing than rehashing a decision for the umpteenth time. There is a point at which more analysis won’t lead to a better decision. This is the most important duty of the decision-maker: Set a deadline, run the process, and then enforce the deadline.
Soccer goalies who are facing penalty kicks can double their save rate by simply doing nothing at the moment the shooter kicks the ball, rather than following the common bias-for-action practice of guessing in advance to which side the kick will go and diving in that direction.
The job of the decision-maker, then, is to get the timing just right. Exhibit a bias for action, to cut off debate and analysis that is no longer valuable, and start moving the team to rally around the decision. But don’t be a slave to a sense of urgency. Maintain flexibility until the last possible moment.
when you have three strong-willed leaders, they will sometimes disagree. When that occurred, Eric’s process to get to a good resolution was similar to his general decision-making process: Identify the issue, have the argument (alone, just the three of them), and set a deadline. And he often added a corollary: Let the founders decide.
The tendency of a CEO, and particularly (speaking from experience) of a new CEO trying to make an impact in a founder-led company, is to try to make too big an impact. It is hard to check that CEO ego at the door and let others make decisions, but that is precisely what needs to be done. In general, when you are CEO you should actually make very few decisions. Product launches, acquisitions, public policy issues—these are all decisions that CEOs should make or heavily influence. But there are many other issues where it is OK to let other leaders in the company decide, and intervene only when you know they are making a very bad call. So a key skill to develop as the CEO or senior leader in a company is to know which decisions to make and which to let run their course without you.
There was an honest disagreement, and the team wasn’t making a lot of progress in its meetings. So Eric acted. He set up even more meetings, and he set a deadline. For the next six weeks, the team would get together every day at four p.m. to review the AOL deal. By the end of that time period, they would come to a decision and conclude the negotiations with AOL, one way or another.
It was a critical decision, and when you are considering something that is fundamental to the existence of the company, you should meet every day.
There is a mistake technical and scientific people make. We think that if we have made a clever and thoughtful argument, based on data and smart analysis, then people will change their minds. This isn’t true. If you want to change people’s behavior, you need to touch their hearts, not just win the argument. We call this the Oprah Winfrey rule. (It’s also the way that good politicians operate, but Oprah does it better than anyone.)135 When companies are run by smart creatives and product people, they need to learn the Oprah rule. Otherwise they are apt to make smart decisions, but to fail to execute them well.
There is a simple trick to getting this right. When ending a debate and making a decision that doesn’t have 100 percent support, remember these three words: “You’re both right.” To emotionally commit to a decision with which they don’t agree, people have to know that their opinion was not only heard, but valued. “You’re both right” accomplishes this. It tells the person whose argument lost that there are elements of truth amidst the rubble of their failed position. It provides an emotional boost—people like hearing that they are right. And fortunately, it is often true, since in a…
Then, after reassuring the argument’s losers and articulating what needs to be done, the decision-maker must ensure that everyone who was involved does one of two things…
The forum for decision-making is almost always a meeting, which may be the most hated of all business practices, except for Secret Santa. People complain about meetings and how they are a great waste of time, but in fact a well-run meeting is a great thing. It’s the most efficient way to present data and opinions, to debate issues, and yes, to actually make decisions. Note the italics on well-run though, since most meetings are…
Computer scientists hate inefficiency, so over the years Eric’s team developed a series of rules for meetings that we found to be quite effective: Meetings should have a single decision-maker/owner. There must be a clear decision-maker at every point in the process, someone whose butt is on the line. A meeting between two groups of equals often doesn’t result in a good outcome, because you end up compromising rather than making the best tough decisions. Include someone more senior as the decision-maker. The decision-maker should be hands on. He or she should call the meeting, ensure that the content is good, set the objectives, determine the participants, and share the agenda (if possible) at least twenty-four hours in advance. After the meeting, the decision-maker (and no one else) should summarize decisions taken and action items by email to at least every participant—as well as any others who need to know—within forty-eight hours. Even if a meeting is not a decision-making meeting—for example it’s designed to share information or brainstorm solutions—it should have a clear owner. Again, that owner should ensure that the right people are invited to the meeting, that there’s a clear agenda, that the necessary prep work has been done in advance, and that action items are circulated promptly. Meetings are not like government agencies—they should be easy to kill. Any meeting should have a purpose, and if that purpose isn’t well defined or if the meeting fails to achieve that purpose, maybe the meeting should go away. The decision-maker needs to ask the hard questions: Is the meeting still useful? Is it too frequent / not frequent enough? Do people get the information they need? Meetings should be manageable in size. No more then eight people, ten at a stretch (but we would seriously discourage this). Everyone in the room should be able to give their input. If more people need to know the result of the meeting, make sure you have a process for communicating it rather than bringing them in as observers, which lowers the quality of the meeting and people’s ability to talk openly. Attendance at meetings is not a badge of importance. If you aren’t needed, leave, or better yet, excuse yourself ahead of time. This is especially true of meetings with customers or partners. Many times we have walked into an “intimate” meeting with a senior executive from one of our…
Many companies get the idea right, but their timing is off: They identify the brother, someone ready to take over in the next few years, whereas they should be looking for the son, someone who could take over in a decade. Or they try to lock in the hundred most senior people in the company, not the hundred with the highest potential. The right approach is to look for the outstanding smart creatives who are already progressing rapidly through the ranks. Ask the question, Could one of these people be running the company in ten years? When the answer is yes, give them a lot of compensation and make sure their career doesn’t bog down. Losing these high-potential employees (especially to competitors) is very costly to the company, so be proactive and aggressive in your efforts to keep them happy. It may not always work out, but the benefits of the successes far outweigh the misses.
Then there’s the interesting experience of actually executing the succession plan. Those rising superstars tend to get smarter with the passage of time, but the generation at the top still looks at them as brash and inexperienced, and certainly not wise enough to take over. The solution for this is for the leader to remember what he was like back in the day.
The World’s Best Athletes Need Coaches, and You Don’t? In the summer of 2002, when Eric had been on the job as Google CEO for about a year, he wrote a self-review of his performance and shared it with his team. The document included highlights (“developed proper business processes”), objectives for the next year (“run the clock faster without compromising the future”), and areas where he could have performed better. The last category included several points, but one self-critique stands out as the most important: Bill Campbell has been very helpful in coaching all of us. In hindsight, his role was needed from the beginning. I should have encouraged this structure sooner, ideally the moment I started at Google. This was a 180-degree turnaround from a year earlier: When Eric started at Google, board member John Doerr suggested that he work with Bill as his coach. Eric’s reply? “I don’t need a coach. I know what I’m doing.” Whenever you watch a world-class athlete perform, you can be sure that there is a great coach behind her success. It’s not that the coach is better at playing the sport than the player, in fact that is almost never the case. But the coaches have a different skill: They can observe players in action and tell them how to be better. So why is it that in the business world coaches are so unusual? Are we all like Eric when he started at Google, so confident of ourselves that we can’t imagine someone helping us to be better? If so, this is a fallacy. As a business leader, you need a coach.
As the leadership scholars James O’Toole and Warren Bennis note, many businesspeople who rise to positions of power often get there “not for their demonstrated teamwork but for their ability to compete successfully against their colleagues in the executive suite, which only encourages the hoarding of information.”137 We are reminded of the Communist apparatchiks of the Soviet Union, who kept all office copiers behind double-locked, steel-plated doors lest someone use the wonders of xerography to create an unauthorized copy of the five-year plan for grain production.138 Most managers still think like those Soviet-era bureaucrats: Their job is to parse information and distribute it sparingly, because obviously you can’t trust those young rabble-rousers on the lower floors with the information keys to the company’s kingdom.
But the Soviet Union collapsed, and while such a parsimonious approach to spreading information may have been successful when people were hired to work, in the Internet Century you hire people to think.
Your default mode should be to share everything. Case in point: the Google board report. When Eric was CEO, he started a process that continues today. Every quarter the team creates an in-depth report on the state of the business, to be presented to the board. There is a written section—the board letter—which is crammed with data and insights on the business and the products, and slides with data and charts that the product leads (the senior executives in charge of the various product areas, including Search, Ads, YouTube, Android, and so on) use to guide the board meeting. Not surprisingly, much of this information is not for public consumption. But after the board meeting we do something that is surprising. We take the material that we presented to our board and share it with all of our employees. Eric presents the slides—the exact same slides that were presented to the board—to a company-wide meeting, and the entire board letter goes out in a Google-wide email.
Defaulting to open doesn’t just cover board communications. We try to share virtually everything. The company’s intranet, Moma, includes information on just about every upcoming product, for example, and the weekly TGIF meeting usually features presentations by product teams of coming attractions, complete with demos and screenshots of cool things that are under development. Attending TGIF would be like scoring a Willy Wonka golden ticket for those legions of bloggers who love to speculate on what Google will be up to next, because we put it all out there, sharing stuff that in most companies would stay carefully hidden. Again, no grainy photos of screenshots or herky-jerky videos of demos are leaked, furtively captured from the back row. We trust our employees with all sorts of vital information, and they honor that trust.140 OKRs are another great example
Another example is TGIF. The weekly company-wide meeting that Larry and Sergey host has always featured a no-holds-barred Q&A session, but as the company grew, this got harder and harder to manage. So we developed a system called Dory. People who can’t (or don’t want to) ask a question in person can submit it to Dory (named after the memory-challenged fish in Finding Nemo, though, like Dory herself, we can’t recall why), and when they do, others get to vote on whether it’s a good question or not. The more thumbs-up votes a question receives, the higher it goes in the queue, and the tougher questions tend to get a lot of thumbs-up. At TGIF the Dory queue is put on the screen, so as Larry and Sergey go through the questions they can’t cherry-pick which ones they want to answer. They just go down the list, top to bottom, tough questions and easy. Dory lets anyone directly ask the CEO and his team the toughest questions, while the crowdsourcing aspect of it keeps the lame questions to a minimum. Lame answers, on the other hand, are judged in a much lower-tech fashion: TGIF attendees are equipped with red and green paddles and encouraged to wave the red paddles if they don’t feel the questions are fully addressed.
As much as top executives and other company bigwigs may profess to be willing to talk, the open door works only when people walk through it. It can be hard for people who don’t know the organization to start that conversation. As a leader, you need to help them. Some of our best leaders have taken unusual steps to facilitate. Urs Hölzle wrote and published a “user manual”… about himself. Anyone on his team (which numbers a few thousand) can read the manual and understand the best way to approach him, and how to fix him if he breaks.143 Marissa Mayer held regular office hours—another cultural characteristic of early Google inspired by academia. Like a university professor, she set aside a few hours per week where anyone could come and talk to her. People signed up on a whiteboard outside her office (which she shared with a couple of other Googlers who usually decamped to other locations during her office hours), and on Wednesday afternoons the nearby couches were full of young product managers with some question or other to discuss.
In most aspects of life, you need to say something about twenty times before it truly starts to sink in.145 Say it a few times, people are too busy to even notice. A few more times, they start to become aware of a vague buzzing in their ear. By the time you’ve repeated it fifteen to twenty times you may be completely sick of it, but that’s about the time people are starting to get it. So as a leader you want to habitually overcommunicate.
Here are a few of our basic guidelines for overcommunicating well: 1. Does the communication reinforce core themes that you want everyone to get? To get this right, you first need to know what the core themes are. When we say repetition doesn’t spoil the prayer, these are the prayers we are talking about. They are the things you want everyone to grasp; they should be sacred; and there should be only a few of them, all related to your mission, values, strategy, and industry. At Google, our themes include putting users first, thinking big, and not being afraid to fail. Also, we are all technology optimists: We believe technology and the Internet have the power to change the world for the better. By the way, if you repeat something twenty times and people don’t get it, then the problem is with the theme, not the communications. If you stand up at your company’s all-hands meeting every week and reiterate your strategy and plan, and people still don’t understand or believe in it, then it’s the plan that’s flawed, not the method of delivering it. 2. Is the communication effective? To get this right, you need to have something fresh to say. When we say repetition doesn’t spoil the prayer, we don’t quite mean it literally. This isn’t the Pledge of Allegiance, to be pounded verbatim into schoolchildren’s heads until the words are branded on the brain and the meaning has evaporated. Sometimes the presentation of the idea has to be varied to grab (or re-grab) attention. For example, Eric’s periodic memos to Googlers almost always made the point to focus on the user. To make it fresh, in one of his notes Eric pointed out that users are getting more sophisticated, as proven by the fact that search query length was increasing nearly 5 percent annually. This was a new and interesting stat that most Googlers didn’t know. It took a venerable theme and made it relevant. 3. Is the communication interesting, fun, or inspirational? Most management teams are not curious—they are focused on doing the job at hand and tend to keep their communications equally businesslike. Smart creatives, though, have a wide array of interests. So if you come across an article that is insightful or interesting, and somehow relates to a core theme you have been communicating, go ahead and share it. Make it relevant to the team by picking a highlight or arguing a point. People will like it when you take off the blinders and talk about a wider variety of things. They want to be curious. A few years ago Jonathan spotted an article by journalist and founding Wired editor Kevin Kelly called Was Moore’s Law Inevitable?,146 which explored the history of Moore’s Law and predicted that its next iteration was inevitable. He sent a link to the article to his team with a short summary and a couple of simple questions: Do you think the next iteration of Moore’s Law is inevitable? How much longer before the current one runs its course? Given Kelly’s conclusions, is there anything Google should do…
The problem with the typical staff meeting is that it is organized around functional updates, rather than around the key issues facing the team, so you may end up spending too much time on things that don’t matter (do you really need a weekly update on everything?) and not enough on things that do. This structure also reinforces the organizational boxes around people—Pam is in quality control, Jason is the sales guy—rather than creating a forum where everyone has a stake in the key issues of the day.
One of Eric’s most basic rules is sort of a golden rule for management: Make sure you would work for yourself. If you are so bad as a manager that you as a worker would hate working for you, then you have some work to do. The best tool we have found for this is the self-review: At least once per year, write a review of your own performance, then read it and see if you would work for you. And then, share it with the people who do in fact work for you. This will elicit greater insights than the standard 360-degree review process, because when you are initiating criticism of yourself it gives others the freedom to be more honest.
Respond quickly. There are people who can be relied upon to respond promptly to emails, and those who can’t. Strive to be one of the former. Most of the best—and busiest—people we know act quickly on their emails, not just to us or to a select few senders, but to everyone. Being responsive sets up a positive communications feedback loop whereby your team and colleagues will be more likely to include you in important discussions and decisions, and being responsive to everyone reinforces the flat, meritocratic culture you are trying to establish. These responses can be quite short—“got it” is a favorite of ours. And when you are confident in your ability to respond quickly, you can tell people exactly what a non-response means. In our case it’s usually “got it and proceed.” Which is better than what a non-response means from most people: “I’m overwhelmed and don’t know when or if I’ll get to your note, so if you needed my feedback you’ll just have to wait in limbo a while longer. Plus I don’t like you.”
When writing an email, every word matters, and useless prose doesn’t. Be crisp in your delivery. If you are describing a problem, define it clearly. Doing this well requires more time, not less. You have to write a draft then go through it and eliminate any words that aren’t necessary. Think about the late novelist Elmore Leonard’s response to a question about his success as a writer: “I leave out the parts that people skip.”147 Most emails are full of stuff that people can skip.
Clean out your inbox constantly. How much time do you spend looking at your inbox, just trying to decide which email to answer next? How much time do you spend opening and reading emails that you have already read? Any time you spend thinking about which items in your inbox you should attack next is a waste of time. Same with any time you spend rereading a message that you have already read (and failed to act upon). When you open a new message, you have a few options: Read enough of it to realize that you don’t need to read it, read it and act right away, read it and act later, or read it later (worth reading but not urgent and too long to read at the moment). Choose among these options right away, with a strong bias toward the first two. Remember the old OHIO acronym: Only Hold It Once. If you read the note and know what needs doing, do it right away. Otherwise you are dooming yourself to rereading it, which is 100 percent wasted time. If you do this well, then your inbox becomes a to-do list of only the complex issues, things that require deeper thought (label these emails “take action,” or in Gmail mark them as starred), with a few “to read” items that you can take care of later. To make sure that the bloat doesn’t…
Handle email in LIFO order (Last In First Out). Sometimes the older stuff gets taken…
Remember, you’re a router. When you get a note with useful information, consider who else would find it useful. At the end of the day, make a mental pass through the mail you received and ask…
Make it easy to follow up on requests. When you send a note to someone with an action item that you want to track, copy yourself, then label the note “follow up.” That makes it easy to find and follow up on the things that haven’t been done; just resend the original note with a new intro asking “Is this done?”
Help your future self search for stuff. If you get something you think you may want to recall later, forward it to yourself along with a few keywords that describe its content. Think to yourself, How will I search for this later? Then, when you search for it later, you’ll probably use those same search terms. This isn’t just handy for emails, but important documents too. Jonathan scans his family’s passports, licenses, and health insurance cards and emails them to himself along with descriptive keywords. Should any of those things go missing during a trip, the copies are easy to retrieve from any browser.
Bill Campbell once suggested to us an interesting approach to organizing 1:1s (aka one-on-ones, the periodic meetings between manager and employee). The manager should write down the top five things she wants to cover in the meeting, and the employee should do the same. When the separate lists are revealed, chances are that at least some of the items overlap. The mutual objective of any 1:1 meeting should be to solve problems, and if a manager and employee can’t independently identify the same top problems that they should solve together, there are even bigger problems afoot. Bill also suggests a nice format for 1:1s, which we have adopted with good results: 1. Performance on job requirements a. Could be sales figures b. Could be product delivery or product milestones c. Could be customer feedback or product quality d. Could be budget numbers 2. Relationship with peer groups (critical for company integration and cohesiveness) a. Product and Engineering b. Marketing and Product c. Sales and Engineering 3. Management/Leadership a. Are you guiding/coaching your people? b. Are you weeding out the bad ones? c. Are you working hard at hiring? d. Are you able…
Board Meetings—noses in, fingers out The goals of a board meeting are harmony, transparency, and advice. You want to exit the meeting with the board’s support of your strategy and tactics. You need to be completely transparent in everything you communicate. And you want to hear their advice, even if you plan to ignore it—they are usually trying to be helpful, and cannot have…
As CEO, Eric started his board meetings with a concise review of the highlights and lowlights of the previous quarter. The lowlights were especially important, and Eric always spent more preparation time on them than anything else. This is because it is always harder for people to present bad news to a board than good. The highlights are easy, but when you ask a team for a list of lowlights, you often get a sugarcoated version of the truth: “Here’s the problem but it’s not all that bad and we already have a solution in the works.” This can’t possibly be true for all the problems the company faces, and the board knows it. So the best approach is also the honest one: We have difficult problems and we don’t have all the answers. Eric’s lowlights brought up issues ranging from revenue to competition to products, honestly and frankly, which always set the…
Board members want to talk about strategy and products, not governance and lawsuits. (If this isn’t true, get new board members.)
As Henry Kissinger said in 1969, when he was the US National Security Adviser, “We have always made it clear that we have no permanent enemies and that we will judge other countries, including Communist countries, and specifically countries like Communist China, on the basis of their actions and not on the basis of their domestic ideology.”150 Less than two years later he traveled to China, in secrecy, which led to the reopening of diplomatic relations between the two countries for the first time since World War II.
The business should always be outrunning the processes, so chaos is right where you want to be. And when you’re there, the only way to get things done is through relationships. Take the time to know and care about people. Note the little things—partner’s and kids’ names, important family issues (these can be easily recorded in your contacts). Eric believes in the three-week rule: When you start a new position, for the first three weeks don’t do anything. Listen to people, understand their issues and priorities, get to know and care about them, and earn their trust. So in fact, you are doing something: You are establishing a healthy relationship. And don’t forget to make people smile. Praise is underused and underappreciated as a management tool. When it is deserved, don’t hold back.
your customers are asking for it, you aren’t being innovative when you give them what they want; you are just being responsive. That’s a good thing, but it’s not innovative.
For something to be innovative, it needs to be new, surprising, and radically useful.
Google[x] has a simple Venn diagram that it uses to determine if it will pursue an idea. First, the idea has to be something that addresses a big challenge or opportunity, something that affects hundreds of millions or billions of people. Second, they have to have an idea for a solution that is radically different from anything currently in the market. We aren’t trying to improve on an existing way of doing something, rather we want to start over. And third, the breakthrough technologies that could bring that radical solution to life have to be at least feasible, and achievable in the not-too-distant future.
“Innovative people do not need to be told to do it, they need to be allowed to do it.”
A century later, Marissa Mayer ran meetings at Google that were like The Gong Show187 for geeks. People got up to present their ideas and could keep talking until they were gonged. The better the demo, the longer the person was allowed to go on. Then Craig Nevill-Manning, who founded our New York engineering office, morphed that idea into weekly “Beer and Demos” meetings, where people would gather to sip beer and watch demos, voting with marbles for the ones they liked best. (The demos, that is. The beers they voted on by continuing to drink them.) Patterson and Denny (and Marissa and Craig) were smart enough to realize that good ideas could come from anywhere. They knew that workers could not only work, but think too. This is more true than ever today, when everyone in the organization is armed with abundant information and great tools. In fact, the biggest danger is not the conceit that only managers have good ideas, it’s the conceit that only the company’s employees have them. When we say good ideas come from anywhere, we mean anywhere. They are just as likely to come from outside the company as from inside.
Similarly, when our Geo team set out to chart the world’s geography, they discovered that for many areas good maps simply didn’t exist. They created a product called Map Maker, which lets anyone contribute to Google Maps. Live on a street that doesn’t show up on the Map? No problem: Just draw it in and we’ll add it (after we check to make sure it’s actually there). Thus was built a new community of grassroots citizen cartographers, who made it so that maps of entire cities were just a mouse-click away for our users. For example, they mapped over twenty-five thousand kilometers of roads in Pakistan in just two months.
Ship and iterate doesn’t always work. After launching, some products will get better and gather momentum while others will wither. The problem is, by the time a product has gone to market there has been a significant amount of resources and emotion invested in it, which can get in the way of good decisions. Forgetting sunk costs is a tough lesson to heed, so in a ship-and-iterate model, leadership’s job must be to feed the winners and starve the losers, regardless of prior investment. Products that get better and gather momentum should be rewarded with more resources; products that stagnate should not.
Too often, the tendency is to feed the losers in hopes of making them winners. When Jonathan ran products at Excite@Home, the company’s portal,, had various sections, such as news, real estate, sports, finance, and so on. Each of those sections competed for clicks on the front page, and when a section’s traffic dropped, Excite’s management would try to rectify the situation by moving that section to a better spot on the page. Hey, finance, your traffic is dropping this quarter and you’re behind on your objectives. No problem, we’ll pop you to the top of the page! Excite used data to determine which of the content areas were losers, but rather than starving those sections and forcing them to improve, they fed them by giving them better real estate. In retrospect, Excite’s mantra wasn’t so much to focus on its users as it was to focus its users on its worst products so it could meet its artificial objectives. Which, as it turned out, didn’t Excite anyone.
As Larry says, if you are thinking big enough it is very hard to fail completely. There is usually something very valuable left over. And don’t stigmatize the team that failed: Make sure they land good internal jobs. The next innovators will be watching to see if the failed team is punished. Their failure shouldn’t be celebrated, but it is a badge of honor of sorts. At least they tried.
Management’s job is not to mitigate risks or prevent failures, but to create an environment resilient enough to take on those risks and tolerate the inevitable missteps. Author and professor Nassim Taleb writes about making systems that are “antifragile”: They don’t just survive failures and external shocks, they get stronger as a result.192 Don’t get us wrong: Failure is not the objective. But, if you are measuring the health of your innovation environment, you need to count the failures as well as the successes, to become more “antifragile.” As Dilbert cartoonist Scott Adams says, “It helps to see failure as a road and not a wall.”193 Mulla Nasrudin, the thirteenth-century wise fool of Sufi lore, seconds the notion: “Good judgment comes from experience; experience comes from bad judgment.”194
While we believe in paying extraordinary people extraordinarily well for extraordinary success, we don’t pay people for successful 20 percent projects. Dan Ratner may have received very generous compensation for being part of the transformational Street View product team, but he didn’t get anything directly tied to his work on trikes.197 We don’t provide any monetary incentive for 20 percent projects for the simple reason that we don’t need to: It may sound corny, but the reward comes from the work itself. Several studies have shown that extrinsic rewards don’t encourage creativity, and in fact hinder it, by turning an inherently rewarding endeavor into a money-earning chore.
Since Hurricane Katrina, that 20 percent project has turned into a full-time Crisis Response team in, the organization that leads philanthropic initiatives across Google. Aided by that team, Googlers have used our platforms to help people suffering from natural disasters ranging from the 2008 Chinese New Year snowstorms that stranded thousands of travelers to the 2011 Japan earthquake and tsunami that killed thousands and left hundreds of thousands more homeless. With each disaster, they come up with new ways to use our products to help people, building on previous experiences. Most of them don’t get paid a dime for their efforts. They are motivated by the work itself.
In the twenty-first century, The Corporation as a hub of economic activity is being challenged by The Platform. We’ve touched on platforms in the Strategy chapter, but picture (which was subsequently bought by Amazon). A platform is a very different sort of hub than a corporation. A corporation’s relationship with consumers is one-way. GM decides how to design, manufacture and market a new product to its consumers, and sells it through a network of dealerships. In contrast, a platform has a back-and-forth relationship with consumers and suppliers. There’s a lot more give-and-take. Amazon is a corporation, but it is also a marketplace where buyers and sellers come together. Amazon does not just dictate what it sells to consumers. Consumers tell Amazon what they are looking for, and Amazon sources it for them. Consumers have a voice; they can rate products and services.
Venture capitalist and Sun Microsystems cofounder Vinod Khosla, who sometimes speaks at the class Eric teaches at Stanford, points out a couple of simple reasons for this. First, at the corporate level, most innovative new things look like small opportunities to a large company. They are hardly worth the time and effort, especially since their success is far from certain. And at an individual level, people within big companies aren’t rewarded for taking risks, but are penalized for failure. The individual payoff is asymmetrical, so the rational person opts for safety.
As Vinod Khosla points out, in 1980 it was hard to imagine that microprocessors would be everywhere, not just in computers but in cars, toothbrushes, and just about everything else.206 In 1990, when cellular telephones were the size of a sewing machine and cost a fortune, it was hard to imagine they would be smaller than a deck of cards and cost less than a night at the movies. In 1995, it was hard to imagine that the Internet would have over three billion users and over sixty trillion unique addresses. Microprocessors, mobile phones, and the Internet are all ubiquitous today, but virtually no one predicted that when they were in their incipient stages. And yet we all keep making the mistake: The general reaction when Google’s self-driving car was announced was incredulity. Cars that drive themselves couldn’t actually happen, could it? We can’t imagine it not happening. So forgo conventional wisdom, crank up that imagination, and ask yourself what could happen in your industry in the next five years. What could change most quickly, and what will not change at all? Then once you have an idea of what the future could hold, here are some more hard questions to consider.
How would a very smart, well-capitalized competitor attack the company’s core business? How could it take advantage of digital platforms to exploit weaknesses or skim off the most profitable customer segments? What is the company doing to disrupt its own business? Is cannibalization or revenue loss a frequent reason to kill off potential innovation? Is there an opportunity to build a platform that can offer increasing returns and value as usage grows? Do company leaders use your products regularly? Do they love them? Would they give them to a spouse as a gift? (This obviously isn’t applicable in a lot of cases, but it’s a powerful thought experiment.) Do your customers love your products? Or are they locked in by other factors that might evaporate in the future? If they weren’t locked in at all, what would happen? (Interesting corollary to this question: If you forced your product people to make it easy for customers to ditch your product for a competitor’s, how would they react? Could they make your products so great that customers want to stay, even if they don’t have to?) When you go through your pipeline of upcoming new major products and features, what percentage of them are built on unique technical insights? How many product people are on the senior leadership team? Does the company aggressively reward and promote the people who have the biggest impact on creating excellent products? Is hiring a top priority at the C-suite level? Do top executives actually spend time on it? Among your stronger employees, how many see themselves at the company in three years? How many would leave for a 10 percent raise at another company? Do your decision-making processes lead to the best decisions, or the most acceptable ones? How much freedom do employees have? If there is someone who is truly innovative, does that person have the freedom to act on his ideas, regardless of his level? Are decisions on new ideas based on product excellence, or profit? Who does better in the company, information hoarders or routers? Do silos prevent the free flow of information and people?
A digital infrastructure is a must-have, as is an immigration-friendly policy. Most important, though, is the freedom to innovate. Regulations get created in anticipation of problems, but if you build a system that anticipates everything, there’s no room to innovate. Furthermore, incumbents have a big influence on the creation of regulations, and there is often a lot of movement between the public and private sectors, so the people who are making and enforcing innovation-killing regulations today become the executives in the private sector who benefit from them tomorrow. There always needs to be space in the regulatory environment for a new company to enter. For example, in the US automotive industry a new entrant, Tesla, is running into regulatory roadblocks in several states that are preventing it from selling directly to consumers.207 The regulations protect auto dealers and reduce consumer choice in those states. During the next round of automotive innovation, self-driving cars, there will be an accident. Someone will get hurt or killed, which may have the effect of casting doubt on the entire industry of self-driving cars. When that happens, governments should resist the impulse to enact highly restrictive regulations, similar to the UK’s nineteenth-century “red flag” law,208 that force the new technology to jump through much higher safety hoops than regular, people-operated cars (which crash too, with frightening regularity and results). If data empirically show that a new way of doing things is better than the old way, then the role of government isn’t to prevent change but to allow the disruption to occur.
Google has a product called Fusion Tables, which is designed to “bust your data out of its silo” by allowing related data sets to be merged and analyzed as a single set, while still retaining the integrity of the original data set. Think of all the research scientists in the world working on similar problems, each with their own set of data in their own spreadsheets and databases. Or local governments trying to assess and solve environmental and infrastructure issues, tracking their progress in systems sitting on their desks or in the basement. Imagine the power of busting down these information silos to combine and analyze the data in new and different ways.
When reigning world champ Garry Kasparov lost his chess match to IBM’s Deep Blue computer in 1997, we all thought we were witnessing a seminal passing of the torch. But it turns out that the match heralded a new age of chess champions: not computers, but people who sharpen their skills by collaborating with computers. Today’s grandmasters (and there are twice as many now as there were in 1997)212 use computers as training partners, which makes the humans even better players. Thus a virtuous cycle of computer-aided intelligence emerges: Computers push humans to get even better, and humans then program even smarter computers. This is clearly happening in chess; why not in other pursuits?
health care, for example, real-time personal sensors will enable sophisticated tracking and measurement of complex human systems. Combine all that data with a map of risk factors generated by in-depth genetic analysis, and we will have unprecedented abilities (only with an individual’s consent) to identify and prevent or treat individual health issues much earlier. Aggregating that data can create platforms of information and knowledge that enable more effective research and inform smarter health-care policies.