How Google Works — Book Review & Key Takeaways
Have you ever been curious about the way Google works? Did you know that 1 spreadsheet was Google’s main tool for managing resources for many years? This is not a business best-practice book. This is a book about one of the most innovating companies in the world and its uncommon management practices. How Google Works is a book written years ago when Eric Schmidt was still serving as the CEO of the company. Read the world’s #1 book review of How Google Works by Eric Schmidt, Jonathan Rosenberg below!
How Google works is the combined perspectives of how Google get things done in terms of their hiring, culture and history.
It’s a good read if you admire and want to join Google or you’re starting your own company some day. Ever since Google was born in 1998, the company has become one of the most valuable and successful companies in the tech world. But despite having a net worth of hundreds of billions and 20 years of history, the company still maintains a startup mentality.
Google was different to other places Eric Schmidt had worked. Even as CEO he had to share his office.
How Google works talks about the culture that makes the company Google what it is; the culture that is the driving force behind the employees of Google, that aids them to think big and innovate. This books comes out with stunning revelations about the Google culture, with an open call to other companies and entrepreneurs alike to make use of what makes Google tick.
Google has built a reputation for itself, based on cutting-edge technology and integrity.
Google undoubtedly deserves the top seat as being one of the companies which marked the beginning of the Internet Era. The authors emphasize that it is the culture of the company and how it works internally that drove its success. It outlines the overriding philosophy of the founders and current leaders of the company, giving some useful anecdotes along the way.
Any company like Google that is so successful that its name has become a verb deserves to be studied. How Google works gives some insights into the workings of one of today’s richest and most admired companies.
Google has created a culture that’s the envy of a lot of the business world. How Google Works is a peek behind the curtain. Former CEO Eric Schmidt and SVP of Product Jonathan Rosenberg spill the beans on everything from office setup, to hiring, to leadership. I can honestly say this is the most I’ve ever highlighted a book. There’s such a high density of ideas that it’s difficult to summarize, but I’ll do my best…
Takeaway #1: Hire Smart Creatives
Smart Creatives are a subset of knowledge workers whom Google actively seeks to recruit. In my opinion, this and this alone can make a huge difference to any organization. Smart Creatives 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.
A company full of great people attracts yet more great people. One sought-after trait is passion.
Passionate people will often talk at length about their passion, whether its work related or not. No amount of business strategy can substitute for talent. Google’s recruitment process is carried out by a committee of the interviewee’s potentially future peers. The committee make the final decision. Sometimes people are hired even if they don’t suit an available role. Intelligence is high on the list of priorities too but as well as that they should have a growth mindset or in other words, be willing to learn. This is an especially important trait in an industry such as information technology as it allows the person to handle and enjoy major change.
Google, as a company, has an obsessive focus on hiring the right people.
They’ve realized that a team of great people not only does great work, it attracts more great people! This “herd effect” is even more pronounced early in a company, when early hires will impact who chooses to join the team in the future. As attraction, selection, and attrition play out over time, an organization becomes increasingly homogenous in its culture, so make sure to choose wisely. More important than their hiring criteria is the willingness to put the time and effort required into hiring. They would rather their hiring process generate more false negatives than false positives — meaning they are willing be patient and cut ruthlessly when people aren’t a perfect fit.
The technological advancement over the past few decades has brought a highly competitive market.
With the rise of the internet, consumers became increasingly more demanding, as they could easily compare prices and quality (reviews) of products. So companies had to adjust and produce better products to stand out. For those reasons, successful companies need to rely on employees who can give them a competitive edge. These employees are called Smart Creatives by Google. Smart Creatives combine ideas from different areas. They combine business and tech expertise in a creative way. They are competitive, curious and very ambitious. So ambitious that they will even ignore direct orders just to prove a point. They are so passionate about their work that they will have no problem pulling all-nighters.
In the old days, companies were run by people who had deep and specialized expertise. Today’s companies are run by people with more general knowledge and skills.
These new workers have to be Smart Creatives in order to thrive. Smart Creatives work in fast-paced environments where they’re not afraid of risk or change because they have unlimited access to information and computing power. They speak up when they disagree with something, get bored easily, and move around a lot for better opportunities or more interesting projects. Smart Creatives are self-directed collaborators who work hard but need meaning from their jobs if it’s going to be satisfying for them. Their success depends on company culture, which is why Google looks for Smart Creatives as opposed to specialists.
Takeaway #2: Encourage a Memorable Culture
What can you do to make your business more attractive to creative and intelligent people? The answer lies in the company’s culture, that is, in the values under which your business is built. Your culture needs to be strong, and all your employees must understand it and work accordingly. The culture of a company should be a pattern of behavior shared among all staff, as they go about their work.
Google’s culture is based on the mission of the business.
It is summed up in one sentence: Organize the information of the world, making it accessible to all. Because its mission is straightforward, employees know they do not need to ask permission to work in activities that are aligned with this culture. In your company, instead of letting your culture develop by accident, you need to plan and promote it. At Google, the three most important aspects of a creative company’s culture are natural interaction with colleagues; freedom for employees to speak their minds; and independence in decision-making.
To attract smart and creative people, you have to create a company culture which attracts those types of employees.
A good way to test your company’s culture is by making an indirect remark about something, directed to no one in particular. Larry Page did exactly that in 2002 when he found some ads he didn’t like on a Google search page. He left a printed note on a bulletin board in the company’s kitchen with the caption, “THESE ADS SUCK.” In a common company culture employees would have perhaps thought it as a funny remark, but as no one in particular was addressed perhaps everyone would’ve thought that fixing it is the responsibility of someone else. At Google however, a team of engineers who saw Page’s note on a Friday, committed to fixing the problem during their own free time on over a weekend, although they weren’t responsible for the ads.
In order to create a culture where everyone achieves without having to be babysat, Google has made a strong effort to foster a spirit of radical transparency in the organization.
Everyone is on the same page in terms of what the company stands for and what they’re trying to accomplish, and nobody is above the rules. First and foremost, Google employees are required to be very public with their priorities and what they’re working on. Everyone from the lowest employee up to the CEO releases OKRs and snippets. OKRs (Objectives and Key Results) are public, quantifiable goals that are published quarterly. Snippets are quick daily or weekly updates of important activities and achievements. Through these two systems any Google employee can get a pretty good feel for any other employee’s work situation.
Establishing a culture of saying YES is also important as saying yes starts things, which leads to experiences, which in turn leads to increased knowledge.
Sir Richard Branson has developed a nickname at Virgin due to the number of times he uses the word — “Dr. Yes”. Just like the parental habit of the reflexive NO, organizations have a way of saying NO to most ideas or suggestions. Smart Creatives cannot and do not thrive in a no-no environment. Let alone the explicit NO, we have subtle ‘no’s in the form of long processes to go through to get certain new ideas started. At Google, people’s ideas are judged based on the merits of the subject itself and not by who suggested it.
Takeaway #3: No Plan Is the Best Plan
Larry Page and Sergey Brin founded Google in 1998 with the principles of building products that are excellent, accessible services, and focus on the user. They also hire talented engineers who have free rein to do what they want without being encumbered by processes or procedures. If they’re not sure about something, they just go talk to their engineers.
Google’s success reflects its founders’ ability to rethink the way work is done and management principles are applied in order to create an innovative working environment.
When Microsoft realized that Google was a threat, they wanted to discuss business strategy. A board member asked for a plan, which caused problems because the head of products had already tried and failed with his team on a traditional gate-based approach. When Page found out about it he said “Have your teams ever delivered better products than what’s in the plan?” The answer was no so Page threw away the old plan. Rosenberg and Schmidt revised their presentation, but instead of presenting a traditional business strategy they reinforced their message that “the way to challenge Microsoft is by creating great products.”
Most CEOs think their companies need a business plan, but they are wrong. The reality is that more traditional business plans can lead to failure.
That is because the traditional plan does not give room for change. Managing a business requires you to respond to new challenges. Let’s assume you have defined a long-term strategy for your technology company. What if a new technology or a new competitor came up, demanding that you react quickly? You will not be so responsive if you are stuck with a flat plan. That is why, in terms of strategy, you will be better prepared for the unforeseen ones if you create a foundation for your strategy rather than a static plan. The difference is that a plan is a step-by-step guide to taking care of your business while a foundation is a guiding principle that will guide you.
A fixed plan doesn’t leave room for fine-tuning. And in the technology business, things change all the time.
A company needs to be able to react quickly to adapt to new situations. That’s why a such a company is better off by certain principles. A collection of principles to apply depending on the situation, provide a much more flexible outline than a static plan. This type of strategy is called strategic foundation. When Jonathan Rosenberg wrote the founding strategy for Google in 2002, he initially planned to deliver to entrepreneurs a typical business plan. However, he ended up writing a much more comprehensive document because he realized what helped guide employees in what to do.
The static strategic plan is dead.
The world has become a more turbulent place, where anyone with a new idea can put it into action before you can say “startup” and launch widespread movements with a single Tweet. This has left organizational leaders with a real problem, since the trusted, traditional approach to strategic planning is based on assumptions that no longer hold. I think that what is necessary today is a strategy that breaks free of static plans to be adaptive and directive, that emphasizes learning and control, and that reclaims the value of strategic thinking for the world that now surrounds us.
Takeaway #4: Enforce Discussions Instead of Decisions
In traditional companies, decision making is usually hierarchical. Senior managers make important decisions, while others agree. However, if you are fortunate enough to run a business with smart and creative employees, things will be different. The decision-making process becomes as important as the decision itself because if the officials do not support the decision, it will not go forward.
Decision-making needs to be a team effort. This process is efficient because it involves all people and ensures that employees will support the final decision.
If you want to encourage this type of decision-making in your workplace, you need to create a way for each opinion and position to be considered and discussed. As a manager, it is up to you to reinforce a discussion, not a decision. In 2004, Google opened an office in China. Traffic and revenue grew for a few years, but then Google was attacked by hackers in December 2009. Google found that the hackers were sourced from China’s government, who were trying to access the personal information of human rights activists and political dissidents. So Google executives met several times to discuss the situation and decided Google.cn would stop obeying the government’s censorship policies. That would make Chinese Google lose traffic quickly, but it was the right thing to do.
The only thing in consensus can be the timing, as discussions can take time.
The focus then should be to leave enough room for discussion. For example, when Google was considering a deal with AOL in 2002, Schmidt recognized the impact on such a decision and arranged daily meetings on the issue for six weeks. By this move, he ensured that the discussion would take place and that it would finish within the appropriate timeframe. At the end of the day, this type of focus on decision making is effective because it involves more people and thus more brains, and it ensures that employees will support the final decision.
There’s more to decision making than just making sure you’ve made the right one.
The timing of when the decision was reached, the process of getting to a decision and the way the decision is carried out are just as important. At Google decisions are made based on data — and lots of it. Decisions are consensus driven. That means that everyone rallies around the best idea for the company. It doesn’t mean that there is unanimous agreement necessarily. Conflict, debate and dissent are all encouraged and help to ensure the right decision has been made.
We get the idea that transparency and freedom to follow your own ideas are crucial for keeping the whole team together and motivated.
And how did they decide what to do with their motivated team? Google used their so called 70-20-10 rule for allocating their resources (headcount): 70% on core business, 20% on emerging products and 10% on long-shot new ideas. To create a similar decision making in your company you should embrace and create ways to consider every opinion and position of your employees. The manager should enforce discussion instead of decisions.
Takeaway #5: Offer Superior Products
Google defines an innovative product as being new, surprising and radically useful — Google’s driverless cars being a textbook example, but how does a company become innovative? The environment needs to be right. It should encourage people smart enough to come up with new ideas and also encourage those who want to join that individual.
How can a company then encourage innovation? You create the conditions for innovation to flourish.
Enforcing innovation rarely works because external motivators are harmful to intrinsic motivation. One of Google’s employees was Head of Innovation at Yahoo before he joined Google. The reason he quit Yahoo was that his 12-year-old daughter pointed out that wasting an engineer’s precious time by lecturing him on innovation wasn’t very innovative in itself. So how can we create the right conditions for innovation? One simple rule is trying to shoot for bigger goals by “10xing” everything. For example, striving for a product which is 10 times better and has only 1/10 the cost of its current alternative.
The main source of innovation is represented by the people. Not the competition.
Hiring smart and creative employees is about innovation. But is it possible to force one to be innovative? Many companies try to force change artificially, for example by appointing an innovation director, but this approach tends to fail. Although you can not make your employee more innovative, you can also follow some tips to generate a climate that encourages innovation. First, set challenging goals for your employees. Another way to encourage innovation is by being open to taking risks. For example, in Google, 70% of the company’s budget goes to the main projects, 20% to partner projects and 10% to new experiments. In this way, even projects that seem risky still receive investments, which keeps innovation in the company.
Many great products of Google are actually designed by Googlers in their free time when they see the need to do it.
Google always emphasizes the technical insight component of their products, meaning the ability to reduce costs or transform functions significantly. In order to improve those insights, they want their product managers to not only analyze the data available, but understand the trending in the industry and how they could impact the industry. Regarding product development strategy, the worst thing to do is to overfund an idea. This would not help with spurring the innovation.
Innovative people do not need to be told to do it, they need to be allowed to do it.
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. A good failure is a fast one. It’s NOT about money. Keep in mind that being focused on your competition is more likely that you will never deliver anything truly innovative. There are three criteria to determine if Google would pursue an innovative idea: 1) addresses a big challenge or opportunity, something that affects hundreds of millions or billions of people. 2) an idea for a solution that is radically different form anything currently in the market. 3) feasible and achievable in the not too-distant future. And 4) technology, how it will evolve.
How Google Works has great insights about the things which made Google one of the most innovative companies in the world. I am quite sure that the authors never wanted this to be the typical management practice book, but rather a description of their personal views about what made their company great.
How Google works is an incredible opportunity to learn from two of the best in the world at what they do.
If you’re a startup founder, or anyone managing other people, looking to design systems to allow your employees to succeed without you peeking over their shoulders, this book will completely change the way you work. I can’t recommend it enough. The writing itself is great, the authors made a good job in making this a very entertaining book to read, with almost every second page having a funny joke.
I had a tough time picking out a few gems from this book, because the whole book is a takeaway.
If you are an entrepreneur or if you head a company in any industry, not necessarily IT, this book will give you valuable ideas. If you manage a group of people, this book will tell you how you can improve on it. This is not an abstract version of a few management principles, but a disclosure of how they do it. Starting from hiring and interviews to email culture, many things that matter are put down in detail with the reason behind the principle.
The current age is one where many industries are feeling the effect of the disruption caused by technology.
Gone are the days where people only watch video on a television for example. There are economic impacts to these industries due to this, so what can we do to survive this period? Businesses should leverage new platforms to their advantage which will enable them to produce great products. Computers will continue to make lives easier and better but for yet more people. Speed will continue to increase, as will the amount of collaboration thanks to the free flow of information. The future is bright as technology will transform practically every industry or field.
To sum it up: The company culture defines the company’s success. So focusing on creating the right culture and conditions can be the primal way to the long-term success of a company.
I would definitely recommend reading this book if you ever wanted to learn more about Google, if you’re into recruiting (or if you feel like being entertained by Eric Schmidt’s jokes). And as the authors conclude at the end of the book: I hope this book will inspire you to build the next big thing, maybe the company which will render Google irrelevant! Since we’re all still constantly improving and learning, I want to turn it over to you guys: What practices have you learned to empower and motivate your employees? Share your thoughts in the comments below!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.