The Google Formula for Success

Date: 29-09-2014
Source: The New York Times

Can Google’s winning ways be applied to all kinds of businesses? The authors of “How Google Works,” Eric Schmidt, Google’s former chief executive, and Jonathan Rosenberg, a former senior product manager at Google, firmly believe that they can.

How Google Works“How Google Works” is filled with instructive anecdotes of Google lore.

The critical ingredient, they argue in their new book, is to build teams, companies and corporate cultures around people they call “smart creatives.” These are digital-age descendants of yesterday’s “knowledge workers,” a term coined in 1959 by Peter Drucker, the famed management theorist.

But the new breed is a far cry from the staid, organization men of the past. Smart creatives, the authors write, are impatient, outspoken risk-takers who are easily bored and change jobs frequently. They are intellectually versatile, typically “combining technical depth with business savvy and creative flair,” the authors note.

“They are a new kind of animal,” Mr. Schmidt and Mr. Rosenberg write. “And they are the key to achieving success in the Internet Century.”

Their book, written with Alan Eagle, a speechwriter and communications employee at Google, is filled with instructive anecdotes of Google lore. One early story, from 2002, is presented as a distillation of Google’s distinctive culture. Larry Page, the co-founder, was chagrined at how terrible the ads were that were being served up alongside many searches — random and irrelevant. He printed out the searches with the offending ads, marked them, and wrote on top, “THESE ADS” STINK. He pinned the pages to a bulletin board in the company kitchen, and left for the weekend.

Five engineers worked on the ad program over the weekend, without any direct prompting, and solved the problem. That became the essence of Google’s “ad relevance score,” which presented search-related ads based on their relevance rather than how much the advertiser was willing to pay or how many clicks the ads received. The five “problem-solving ninjas,” the authors write, were not even on the Google ads team.

It’s a neat and telling story. But it’s also true that similar stories of smart, creative entrepreneurial teams solving thorny problems are nothing new.

In a joint interview, Mr. Schmidt and Mr. Rosenberg conceded that point, but what has changed, they argued, is the context of an economy that is increasingly digitized and throwing off data. In the past, bursts of innovation by small teams — from IBM’s development of Fortran, the first higher-level programming language, in 1957, to the Apple Macintosh in 1984 — were exceptional episodes within more bureaucratic corporate structures.

Yet today, the authors insist, fast decision-making and flat organizational models have to become a corporate way of life. Cars, jet engines and medical equipment, for example, are all animated by software and often generate vast quantities of sensor data. So it is not just the Internet companies like Google, they say, that need to operate like Google, innovating and experimenting more rapidly to stay ahead in manufacturing, transportation, retailing, media, banking and other industries.

“The world is becoming increasingly digital,” Mr. Schmidt said. “Every major corporation needs a software strategy, needs a data strategy. If not, then you have no real strategy.”

And smart creatives, the authors write, are the key to digital-age speed, strategy and product success. People with their characteristics, they say, have always been around. But in the digital environment, Mr. Rosenberg said, “the degree to which people with that set of characteristics can have an impact is very different than years ago.”

“The defining characteristic of today’s successful companies,” the authors write, “is the ability to continually deliver great products. And the only way to do that is attract smart creatives and create an environment where they can succeed at scale.”

What about becoming a smart creative? Can it be taught and nurtured? How does one train to become one? Here Mr. Rosenberg, now an adviser to Mr. Page, the chief executive of Google, and Mr. Schmidt, the company’s executive chairman, offered somewhat different takes. Mr. Rosenberg, who has an undergraduate economics degree and an M.B.A., said it really helped to start with some quantitative or technical expertise, like computer science or data science, and broaden out from there.

Mr. Schmidt, who is a computer scientist and a former researcher at Bell Labs, said the important thing was not so much education in a specific discipline but to “think analytically” and to adopt that mind-set and mode of thought. “I don’t think you necessarily have to do a lot more,” Mr. Schmidt said.

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