End of Chapter Case—Google

Google is one of the best-known and most admired companies around the world.Adapted from ideas in Elgin, B., Hof, R. D., & Greene, J. (2005, August 8). Revenge of the nerds—again. Business Week, 3946, 28–31; Hardy, Q. (2005, November 14). Google thinks small. Forbes, 176(10), 198–202; Lashinky, A. (2006, October 2). Chaos by design. Fortune, 154(7), 86–98; Mangalindan, M. (2004, March 29). The grownup at Google: How Eric Schmidt imposed better management tactics but didn’t stifle search giant. Wall Street Journal, p. B1; Lohr, S. (2005, December 5). At Google, cube culture has new rules. New York Times, Section C, Column 6, Business/Financial Desk, 8; Schoeneman, D. (2006, December 31). Can Google come out to play? New York Times, Section 9, Column 2, Style Desk, 1; Warner, M. (2004, June). What your company can learn from Google. Business 2.0, 5(5), 100–106. So much so that googling is the term many use to refer to searching information on the Web. Founded in 1998 by two Stanford university graduates, Larry Page and Sergey Brin, Google is responsible for creating the most frequently used Web search engine on the Internet, as well as other innovative applications such as Gmail, Google Earth, Google Maps, and Picasa. The envy of other Silicon Valley companies, Google grew from 10 employees working in a garage in Palo Alto to 10,000 employees operating around the world. What is the formula behind this success? Can it be traced to any single concept such as effective leadership, reward systems, or open communication?

It seems that Google has always operated based on solid principles that may be traced back to its founders. In a world crowded with search engines, they were probably the first company that put users first. Their mission statement summarizes their commitment to end user needs: “To organize the world’s information and to make it universally accessible and useful.” While other companies were focused on marketing their sites and increasing advertising revenues, Google stripped the search page of all distractions and presented Internet users with a blank page consisting only of a company logo and a search box. Google resisted pop-up advertising, because the company felt that it was annoying to end users. They insisted that all their advertisements would be clearly marked as “sponsored links.” Improving user experience and always putting it before making money in the short term seem to have been critical to Google’s success.

Keeping employees happy is also a value they take to heart. Google created a unique work environment that attracts, motivates, and retains the best players in the field. Google was ranked as the number 1 place to work for by Fortune magazine in 2008. This is no surprise if one looks closer at how Google treats employees. In its Mountain View, California, campus called the “Googleplex,” employees are treated to free gourmet food including sushi bars and espresso stations. In fact, many employees complain that once they started working for Google, they gained 10 to 15 pounds. Employees have access to gyms, shower facilities, video games, on-site child care, and doctors. A truly family friendly place, Google offers 12 weeks of maternity or paternity leave with 75% of full pay, and offers $500 for take-out meals for the entire family with a newborn. All these perks and more create a place where employees feel that they are treated well and their needs are taken care of. Moreover, these perks contribute to the feeling that employees are working at a unique, cool place that is different from everywhere else they have ever worked.

In addition to offering many perks to employees, thereby encouraging employees to actually want to spend time at work rather than someplace else, Google encourages employee risk taking and innovativeness. How is this done? When a vice president in charge of the company’s advertising system made a mistake that cost the company millions of dollars and apologized for the mistake, she was commended by Larry Page, who congratulated her for making the mistake and noting that he would rather run a company where people are moving quickly and doing too much, as opposed to being too cautious and doing too little. This attitude toward acting fast and accepting the cost of resulting mistakes as a natural consequence of moving fast may explain why the company is outperforming competitors such as Microsoft and Yahoo! Inc. One of the current challenges for Google is to expand into new fields outside their Web search engine business. To promote new ideas, Google encourages all engineers to spend 20% of their time working on individual projects.

Decisions at Google are made in teams. Even the company management is in the hands of a triad: Larry Page and Sergey Brin hired Eric Schmidt to act as the CEO of the company, and they are reportedly leading the company by consensus. In other words, this is not a company where decisions are made by the most senior person and then implemented top down. It is common for several small teams to attack each problem and for employees to try to influence each other using rational persuasion and data. Gut feeling has little impact on how decisions are made. In some meetings, people reportedly are not allowed to say, “I think…” and instead they must say, “The data suggests…” To facilitate teamwork, employees work in open office environments where private offices are assigned only to a select few. Even Kai-Fu Lee, the famous employee whose defection from Microsoft was the target of a lawsuit, did not get his own office and shared a cubicle with two other employees.

How do they maintain these unique values? In a company emphasizing hiring the smartest people, it is very likely that they will attract big egos that are difficult to work with. Google realizes that its strength comes from its small-company values emphasizing risk taking, agility, and cooperation. Therefore, Google employees take their hiring process very seriously. Hiring is extremely competitive and getting to work at Google is not unlike applying to a college. Candidates may be asked to write essays about how they will perform their future jobs. Recently, they targeted potential new employees using billboards featuring brain teasers directing potential candidates to a Web site where they were subjected to more brain teasers. Candidates who figure out the answers to the brain teasers would then be invited to submit resumes. Each candidate may be interviewed by as many as eight people on several occasions. Through this scrutiny, hiring personnel are trying to select “Googley” employees who will share the company’s values, perform their jobs well, and be liked by others within the company. By attracting kindred spirits, selecting those who will fit in, and keeping potential misfits out, the company perpetuates its own values that have made it successful.

Will this culture survive in the long run? It may be too early to tell, given that the company is only a little over a decade old. The founders emphasized that becoming a publicly traded company would not change their culture, and they would not introduce more rules or change the way things are done at Google to please Wall Street. But can a public corporation really act like a start-up? Can a global giant facing scrutiny on issues including privacy, copyright, and censorship maintain its culture rooted in its days in a Palo Alto garage? Larry Page is quoted as saying, “We have a mantra: don’t be evil, which is to do the best things we know how for our users, for our customers, for everyone. So I think if we were known for that, it would be a wonderful thing.” As long as this mantra continues to guide the company’s actions, we might expect the company to retain its distinctive personality, regardless of what the future holds.

Figure 15.13

Source: http://upload.wikimedia.org/wikipedia/en/e/ee/Googleplex_Welcome_Sign.jpg.

Discussion Questions

1. Describe Google’s culture using the OCP typology presented in this chapter.
2. What are the factors responsible for the specific culture that exists in Google?
3. Do you think Google’s culture is responsible for its performance? Or does Google have this particular culture because it is so successful?
4. How does Google protect its culture?
5. Do you see any challenges Google may face in the future because of its culture?