How google works
Book by Eric Schmidt and Jonathan Rosenberg, Best quotes and summary
Especially in technology, change tends to be revolutionary not evolutionary.
If I give you a penny, then you're a penny richer and I'm a penny poorer, but if I give you an idea, then you will have a new but I'll have it too.
If you hire the right people and have big enough dreams, you'll usually get there. And even if you fail, you'll probably learn something important.
|Meanwhile, within companies the power has shifted as well. Individuals and small teams can have a MASSIVE IMPACT. They can create new ideas, experiment, fail, and try again, and get their successes to a global market.|
But while most companies say that their employees are everything, Larry and Sergey actually ran the company that way.
For years, Google's primary tool for managing the company's top 100 projects, which was available for anyone to see and debated in semi-quarterly meeting. Most projects were prioritized on a scale of 1 to 5.
Google[x], a team working on some of Google's most ambitious projects, built the first prototype of Google Glass, a wearable mobile computer as light as a pair of sunglasses, in just ninety minutes. It was quite crude, but served a powerful purpose: Don't tell me, show me.
|Information technology is happening at an unprecedented pace, and it's accelerating. It's like Moore's Law has run amock.|
Microsoft did aggressively challenge, reportedly spending nearly $11 billion in an attempt to knock Google off its perch as a key player in the Internet search and advertising business.
Today's work environment is radically different than it was in the twentieth century. As already noted, experimentation is cheap and the cost of failure - if done well - is much lower than it used to be. The default term today for these employees - the ones working in information - based jobs who, to put it way too simplistically, think for a living - is "knowledge workers."
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 a new kind of animal, a type we call a "smart creative", and they are key to achieving success in the Internet Century.
|The people that can have the biggest impact of all are the ones we call: Smart Creatives.|
Now, though, the defining characteristic of today's successful companies is the ability to continually deliver great products. And the only way to do that is to attract smart creatives and create an environment where they can succeed at scale.
And who, exactly, is this smart creatives? A smart creative has deep technical knowledge in how to use the tools of her trade, and plenty of hands-on experience. In our industry, that means she is most likely a computer scientist. But in other industries she may be a doctor, designer, scientist, filmmaker, engineer, chef, or mathematician. She is an expert in doing. She doesn't just design concepts, she builds prototypes.
Perhaps the best thing about smart creatives is that they are everywhere. Their common characteristic is that they work hard and are willing to question the status quo attack things differently. This is why they can have such an impact. It is also why they are uniquely difficult to manage, especially under old models, because no matter how hard you try, you can't tell people like that how to think. If you can't tell someone how to think, then you have to learn to manage the environment, where they think. And make it a place where they want to come every day.
|First you have to attract your smart creatives. They aren't easily fooled.|
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 difference, though, between successful companies and unsuccessful ones is whether employees believe the words.
You can look around and still see people who are interested in money and nothing else, but the underlying drives come largely from a desire to do something else - to make a product, to give a service, generally to do something which is of value.
One of Google's stated values has always been to "Focus on the User".
|Power has shifted from companies to consumers, and expectations have never been higher. Companies can't get away with having crummy products, at least not for long. For example, bad product reviews trump clever marketing. Today, great products win.|
Offices should be designed to maximize energy and interactions, not for isolation and status. Smart creatives thrive with each other. We invest in our offices, because we expect people to work there, not from home.
Google’s AdSense product, which developed into a multibillion-dollar business, was invented one day by a group of engineers from different teams who were playing pool in the office.
|All you need is a BIG idea.|
Don't listen to the HiPPOs (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.
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.
Organizational design is hard. What works when you're small and in one location does not work when you get bigger and have people all over the world.
When you have a company of smart creatives, you can tolerate messiness. In fact, it helps, because smart creatives find it empowering, not confusing.
|In other words, most companies are slow by design! This doesn't work in the Internet Century.|
Leadership team maintains focus on product excellence. Operational components like finance, sales, and legal are obviously critical to a company's success, but they should not dominate the conversation.
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. Burnout is a symptom of a mismatch between people and their jobs, and she places the burden on organizations to create more humane work environments.
"Just say No" is like a tiny death to smart creatives. "No" is a signal that the company has lost its start-up verve, that it's too corporate. Enough no's, and smart creatives stop asking and start heading to the exits.
A defining mark of a fun culture is identical to that of an innovative one: The fun comes from everywhere. The key is to set the boundaries of what is permissible as broadly as possible.
|This starts with culture. Smart creatives need to care about the place they work.|
Promote transparency and sharing of ideas across divisions. Open up everyone's calendar so that employees can see what other employees are doing.
Dress according to the circumstances of your day and recognize who you will be with. Eric was once asked at a company meeting what the Google dress code was. "You must wear something" was his answer.
When Toyota invented its famous kanban system of just-in-time production, one of it's quality control rules was that any employee on the assembly line could pull the cord to stop production if he noticed a quality problem. That same philosophy lies behind our simple three-word slogan "Don't be evil".
Find a page that a lot of other pages point to, and you have probably found a page with higher-quality content. This method is the Pagerank algorithm on which Google Search was based.
Giving the customer what he wants is less important than giving him what he doesn't yet know he wants.
|As a result, barriers to entry that have stood for decades are melting away. Every incumbent businress is vulnerable to competition and disruption.|
New technologies tend to come into the world in a very primitive condition, often designed for very specific problems. The steam engine was used as a nifty way to pump water out of mines long before it found its calling powering locomotives.
The most successful leaders in the Internet Century will be the ones who understand how to create and quickly grow platforms. A platform is, fundamentally, a set of products and services that bring together groups of users and providers to form multisided markets.
As platforms 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".
On very compelling and underappreciated aspect of the Internet is how it has greatly expanded the potential to build platforms not just in the technology business, but in any industry.
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.
|Organize the company around the people whose impact is the GREATEST.|
Khan Academy, Coursera, and Udacity are trying to gain a foothold in the education market. No one can predict which, if any, of these disrupters will grow and thrive, or if some of the more nimble incumbents will fend them off. But what does seem certain is that this combination of technology + open will lead to a better learning ecosystem.
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.
Larry Page: But I feel my job is mostly getting people not to think about our competition. In general I think there's a tendency for people to think about the things that exist. Our job is to think of the thing you haven't thought of yet that you really need. And by definition, if our competitors knew that thing, they wouldn't tell it to us or anybody else.
You must be proud of your enemy, then your enemy’s successes are also your successes. Be proud of your competitors. Just don’t follow them.
Hiring is the most important thing you do. For manager, the right answer to the question "What is the single most important thing you do at work?", is hiring.
|Now let's get those smart creatives into the company. Never forget that hiring is the most important thing you do.|
A workforce of great people not only does great work, it attracts more great people.
Also, when you put great people with great people, you create an environment where they will share ideas and work on them. This is always true, but particularly in an early-stage environment.
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.
Hire them not for the knowledge they possess, but for the things they don't yet know. Information technology's growing exponentially… And our intuition about the future is not exponential, it's linear.
Henry Ford said that "Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young".
Create opportunities for every employee to be constantly learning new things, even skills and experiences that aren’t directly veneficial to the company, and then expect them to use them.
You should hire the best engineer you can find, regardless of her coding preference, because if she's the best she can down enough Java to C how to make the Python Go. And when the language of choice changes, she'll be able to adapt better than anyone else.
|These steps aren't just for entrepreneurs, and they just aren't for high-tech businesses. Opportunity is everywhere. Smart creatives are everywhere. Ambitious people who want to build a team of the latter to pursue the former are everywhere.|
The resume tells you that the person got a 3.8 from an elite school while majoring in computer science and running track. The interview tells you that the person is a boring grind who hasn't had an original idea in years.
If you have twelve coins, one of which is counterfeit and a different weight than the others, and a balance, how do you identify the counterfeit coin in just three weighings?
After four interviews the incremental cost of conducting additional interviews outweighs the value the additional feedback contributes to the ultimate hiring decision. So we lowered the maximum to five.
In the most effective organizations, who you work FOR matters a lot less than who you work WITH.
Nothing is more important than the quality of hiring.
Outstanding athletes get paid outstanding amounts. It's not uncommon for the best player on a professional team to be compensated with deals worth hundreds of millions, while the deal the rookie at the end of the bench gets is only in the hundreds of thousands. Are those stars worth it?
Smart creatives today may not share many characteristics with professional athletes, but they do share one important thing: the potential for disproportionate impact.
The best way to retain smart creatives is to not let them get too comfortable, to always come up with ways to make their jobs interesting.
|We learned that the only way for businesses to consistently succeed today is to attract smart creative employees and create an environment where they can THRIVE at scale.|
So always keep in mind, from the outset, that the best way to avoid having to fire underperformers is not to hire them. This is why we would rather our hiring process generate more false negatives (people we should have hired but didn’t) than false positives (we shouldn't have hired, but did.).
If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions, and you have to be run by ideas, no hierarchy. The best ideas have to win, otherwise good people don't stay.
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.
But even businesses like energy and pharmaceuticals, where product cycle times are long, are ripe for massive transformation and opportunity.
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.
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.
|Next comes strategy. Most new ventures start with a business plan. Things are changing so fast, though, that any thorough, MBA-style business plan is guaranteed to be wrong in some important way.|
Perhaps when you were starting out you were just happy to find a job, regardless of your passion. Then as your career progresses you find that it's not the rocket ship you expected it to be. Perhaps you haven't nailed both sides of the passion/contribution equation.
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.
One of the frustrating aspects of being a leader of smart creatives is how little power you actually have.
If you want to change people's behavior, you need to touch their hearts, not just win the argument.
A badly run meeting - we probably don't need to tell you this - is a giant, demoralizing time waster. 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.
The backward-looking, risk-averse approach to the law, which is so common in corporate America, doesn't work in the Internet Century, when business evolves at a pace that is several orders of magnitude faster than the pace of legal change.
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?
Bill Gates in 1999: Power comes not from knowledge kept but from knowledge shared.
The essence of being human involves asking questions, not answering them.
Snippets are like weekly status reports that cover a person's most important activities for a week, but in a short, pithy format, so they can be written in just a few minutes. Snippets are shared with everyone.
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. Tho more thumbs-up votes a question receives, the higher it hoes in the queue.
Conversation is still the most important and valuable form of communication, but technology and the pace of work often conspire to make it one of the rarest. How often have you emailed, chatted, or texted someone who was sitting only a few feet away?
|When it comes to communications, default to open. Maximize the velocity and volume of information flow.|
Some of our best leaders have taken unusual steps to facilitate. Urs Holzle wrote and published a "user manual"... about himself. Anyone on his team can read the manual and understand the best way to approcha him, and how to fix him if he breaks.
Most of the best, and busiest people we know act quickly on their emails, no just to us or to a select few senders, but to everyone.
To build platforms and successful product ecosystems, companies must work with partners. This often creates interesting situations where the two companies may be competing in some realms but collaborating in others. The key to success in these situations lies in one of the oldest of the communications arts: diplomacy.
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.
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.
Ask yourself, what will could be true in 5 years?
Innovative people do not need to be told to do it, they need to be allowed to do it.
|Ideas come from anywhere.|
All companies that want to be innovative, which is to say all companies, need to start by creating an environment where the different components of creation are given free rein to collide in new and interesting ways, and then give these new creations the time and freedom to evolve and live, or, much more often, stagnate and die. To put it another way, the CEO needs to be the CIO (Chief Innovation Officer).
When creating a movement, attracting the first follower is the most crucial step. "The first follower is what transforms a lone nut into a leader".
Robert Noyce (Intel), said "Optimism is an essential ingredient for innovation".
But focus on the user is only half the story. The full sentence should read "focus on the user and all else will follow". This means that we will always do what's right for the user, and we trust that our smart creatives will figure out how to make money from it. It could take a while, so sticking it out requires a lot of confidence. But it is usually worth it.
If you want to create a car that gets 10 percent better mileage, you just have to tweak the current design, but if you want to get one that gets five hundred miles per gallon, you need to start over. Just the thought process - How would I start over? - can spur ideas that were previously not considered.
|Smart creatives. When you put today's technology tools in their hands and give them lots of freedom they can do amazing things, amazingly fast.|
Let’s assume you are a brilliant smart creative just graduating from college. You have two competing job offers, which are virtually identical except for one difference. One of the companies tells you that they like to try to make things 10X better, while the other settles for 10 percent improvement. Which one will you choose?
70/20/10 rule. About 70 percent of the projects were related to the core businesses of search and search advertising, about 20 percent were related to emerging products that had achieved some early success, and about 10 percent involved completely new things that had a high risk of failure but a big payoff if successful.
20 percent time, the Google program whereby engineers can spend 20 percent of their time working on whatever they choose. 20 percent time has spawned a host of great products. 20 percent time is about individual freedom, while 70/20/10 is about resource management.
Marissa Mayer ran meetings at Google that were like The Gong Show for geeks. People got up to present their ideas and could keep talking until they were gonged.
The right criticism is motivating, but too much has the opposite effect.
No one on the Wave team (Google drops Wave because of lack of users) lost their jobs, and in fact most of them were highly recruited within Google after the project shut down, precisely because they had worked on something that had pushed the boundaries. And it failed after having created a lot of valuable technology: Pieces of the Wave platform migrated to Google+ and Gmail.
|It's best to work in SMALL TEAMS, keep them crowded, and foster serendipitous connections.|
It helps to see failure as a road and not a wall.
When reach and connectivity are completely global, when computing resources are infinite, and when a whole new set of impossibilities are not only possible, but happening, what will that do to your business? Technology progress follows an inexorable upward trend. Follow that trend to a logical point in the future and ask the question: What does that mean for us?
Infinite data and infinite computing power create an amazing playground for the world's smart creatives to solve big problems.
Health-care consumers suffer from a dearth of information: They have virtually no data on procedural outcomes and doctor and hospital performance, and often have a hard time accessing their own health data, especially if it is held by different institutions.
|Try to imagine the unimaginable, because unimaginable things are happening a lot.|
Probably, somewhere in a garage, dorm room, lab, or conference room a brave business leader has gathered a small, dedicated team of smart creatives. Maybe she has a copy of our book, and is using our ideas to help her create a company that will eventually render Google irrelevant.