Google, Donʼt Choose
Micromanagement
Nilofer Merchant
April 22, 2011
If your company had just announced a 27% increase in revenues in
this market, youʼd probably be quite happy. Giddy even. And youʼd
think the market would be, too. But, for Google, analysts seem
decidedly unhappy. The pundits, critics, and just about everyone
else have been spending many a blog post pointing out what new
strategies Google should pursue (Social! Mobile! No, not social, just
do better search! And so on.)
So it is as Larry Page retakes the helm.
Like many other companies that have a core product line, Google is
struggling to find its next market. Having served tech companies
finding their next market for over a decade, I know a lot about it. The
central challenge at Google is whether they have a framework and
culture for driving growth. And while I might focus on Google for the
point of this article, I believe thereʼs a lesson in here for all leaders.
Like the leaf floating on the riverflow, we could look at the leaf
and say “Whoah, that thing is really moving,” or we could look
at the underlying motion created by the water itself, the
element driving the velocity. While we often measure and manage
the latest “what” in business — the leaf — the thing that creates
high performance growth is the underlying “how” — the river. Thatʼs
what I mean when I say the key challenge that Google is facing is
one of culture. “No, no, no,” youʼre thinking, “Itʼs about keeping the
staff or innovating or making sure the wheels stay on the bus or…”
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My point is that when you have a culture of innovation, people stay,
products ship, and performance sizzles. Focusing on the “how” will
get you the “what,” but just focusing on the “what” typically falls
apart as soon as people change or products ship. (For the purpose
of this discussion, I want to assume the core competency, the “why”
of the business, is known.)
Since the beginning, Google has had a great culture of innovation.
Googleʼs founders knew before they launched that they were
entering a highly competitive market segment. At that time (which
feels like another era) AltaVista, Yahoo and others all had wellknown, viable search products. The founders could have assumed
that having smarter search algorithm would provide an adequate
sustainable advantage, but they didnʼt. They knew that they were
entering a fast-paced space where todayʼs king of the hill can be
tomorrowʼs road kill. How would they be able innovate faster and
better than all of the other firms out there? Not just the big (and now
stodgy) internet firms already out there, but all those up-andcomers led by a zillion next-gen baby Einsteins? Would they be able
to micromanage the vast tidal wave of creativity that they needed to
unleash? No. So how would they keep that innovation on track?
Well, they decided to bet big on a bold new approach. Google
decided to make open information flow a key attribute of their firm.
They treat their talented, principled, creative people like talented,
principled, creative people… not like morons who canʼt be trusted.
Google reveals their direction to everyone who works there.
Strategy and priorities are not just available to everyone; everyone is
expected to know what matters to the company. These were
published and regularly updated — with comments and questions
just as visible. It is, as I understand it, still available live on their
intranet to every employee regardless of level.
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And guess what: In that context, people can be expected truly know
how their project/product is tied to the strategy. This gives Google a
strategic advantage in a two-fold way: First, this expectation that
everyone must know the strategy helps them recruit exceptionally
talented technologists and business people. Visionary doers go
where they will have an impact. The second advantage comes
because open strategy allows decisions to be owned where they
need to be owned. Besides lending clarity, the open strategy culture
ups the ante on all sides to own the commons. When you arm
people with clarity and accountability, alignment naturally happens.
So over the years, talented people came to Google because
they had clarity and the power to create. That led to great
innovation that was highly aligned and produced amazing results.
But doing that with 25,000 employees has other challenges.
Nowadays, the #1 gripe people have about Google is that many
projects do many things but rarely do they make a dent in the
business itself. Instead, Google is at risk of becoming a modern-day
Xerox Parc where the innovation starts there but goes elsewhere to
make money. Thatʼs gotta change. As Rita McGrath points out in her
book on discovery-driven growth, left to their own devices,
employees of most companies will come up with incremental, rather
than breakthrough ideas.
In an effort to get his arms around this issue of fostering
breakthrough ideas, Mr. Page has apparently asked for all managers
to send in 60-word descriptions of projects. Now, the idea must be
to get clearer about all that is going on, which seems hard to argue
with. Perhaps heʼll even winnow the “thousand flowers blooming”
strategy down to create the energy to produce a small bouquet of
jumbo Amaryllis.
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This impulse is instinctive. Know more. Make tough trade-offs.
Decide things. Thatʼs all stuff CEOs are expected to do. It shows a
certain decisiveness that Wall Street admires. So seeking more
information is just part and parcel of that message.
But itʼs also wrong. Itʼs what a 20th century manager would do. To
ask for information to flow up and down a hierarchical chain of
command slows things down. Itʼs old school. As soon as Larry Page
does this, he is putting himself in a position as “Chief of Answers,” a
term I used in my first book to describe leaders who work on being
the smartest guy in the room. The problem with the “Chief of
Answers” concept is just this: it makes everyone else the “Tribe of
Doing Things.” It disables rather than enables people to co-create. It
moves power away from the people and towards titled leadership.
And itʼs contra-indicated. Itʼs not the Google Way. Google has hired
smart people who can understand things. Rather than saying “I
need to know more,” the 21st century leader says “hereʼs what you
need to know so you can make more decisions.”
Building a culture that invites innovation through distributed
decisions and ownership would look like this:
1. Have a set of criteria for what kind of innovation you want.
The most often used model is one of financial returns (you want
to see potential ideas to penetrate $2B markets) but it can also
be about specific markets you want to target, or regions you
want to serve. This will allow people to not only generate ideas,
but to kill off many that donʼt meet criteria.
2. Create a method of investment that lets new ideas ferment
and progress, while steadily getting new resources if
milestones are met. Remember that all early stage innovations
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need more advice than accountability — but accountability and
scarcity of resources is still crucial in innovation. It forces tradeoffs and progress.
3. Let people ask each other the tough questions by creating
bake-off sessions. Create forums for people to present
notions to one another and let them vote on which ideas are
bigger opportunities than others. Let them group together
many projects, to make them bigger. Let your organization get
smarter and co-own the outcomes.
Google has shown us the power of distributed data. Theyʼve led the
way in 21st century management. Now it has to find a way to keep
scaling that concept while continuing to innovate at a ferocious
pace. That wonʼt happen if Larry Page reverts back to being the
CEO as Chief of Answers, just because itʼs the default way big
companies are run.
Nilofer Merchant is a corporate advisor and speaker on innovation
methods. Her book, The New How, discussing collaborative ways to
have your whole company strategize, was published in 2010. Follow
her on Twitter @nilofer.
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