Wednesday, April 6, 2011

Google Presentation. Aaron Anselment and Thomas Herpel

Founded in 1998 by Stanford graduate students Larry Page and Sergey Brin, Google has grown into a multi billion dollar corporation. This presentation will discuss how Google embodies the competing frameworks in all areas of the company.

- The Green (Create) Quadrant is demonstrated at Google in terms of its leaders…

o Marissa Mayer, Vice President of Search Products and User Experience

§ Gives a recruitment speech focusing on 9 key points.

· Ideas come from everywhere

· Share everything you can

· You’re Brilliant. We’re Hiring

· A license to pursue dreams (Google's 20% time policy)

· Innovation not instant perfection (get something out there, get feedback, and iterate quickly and often)

· Data is apolitical (use data based decision making)

· Creativity loves Constraints

· Users not money

· Don’t kill projects, morph them

o Eric Schmidt, former Google CEO and Larry Page, founder and current CEO

§ A recent article by Fast Company explains the brilliance and innovation of this management move. Coined as B-I leadership, this multi-generational leadership style including Boomers, Gen Xers and Gen Yers is thought to have high potential. Schmidt was brought in during a crucial developmental stage for Google for “adult supervision”, but the company recognizes that what the company now needs is a leader with a better understanding of younger generations.

- Organizational culture in terms of norms, values, practices and processes

o Google’s 80/20 initiative

§ Employees work on Google projects for 80% of their time and are free to spend 20% of their time on their own projects. This can be arranged in any manner the employee chooses (i.e. 20% of each day, or 20% or their work year).

o AdSense technology

§ Google’s AdSense technology displays text ads relevant to search queries. This insures that all ads are relative to the searcher and the text based system does not interfere with the search.

- Outcomes, or the bottom-line value the organization intends to achieve

o Google is looking to improve its creative process in an effort to better foster the high potential ideas of its employees.

§ This free-for-all approach to management may have actually been slowing progress. By allowing employees to focus on any projects they wanted, most were not getting enough funding or attention; there is not enough time or money to address each idea. Despite the hype of Google’s innovation driven leadership approach, 95% of revenue still came from AdSense advertising.

§ Google is now in the process of adding more structure to their leadership regarding their 80/20 initiative. This is not meant to limit creativity, but rather foster it by recognizing high potential ideas and reallocating teams and resources to give them the greatest chance of success.

- The Blue (Compete) Quadrant is demonstrated at Google in terms of its leaders…

o Google’s leaders believe competition drives business success. When questioned about the competition between Android and Apple at a Sun Valley, Idaho, Google co-founders Larry Page and Sergey Brin, as well as CEO Eric Schmidt said both Google and Apple can thrive amid fierce competition in the smartphone and mobile advertising markets. This is the company’s mindset on all projects.

- Organizational culture in terms of norms, values, practices and processes

o Competition through products

§ Google’s primary arena is the internet. Not only is Google.com the most widely used search engine, their Chrome browser is becoming very popular, and the upcoming Google Me is set to be a direct competitor to Facebook.

§ Another booming product line for Google is their mobile operating system. The Android system has been wildly successful and is now the top competitor to Apple’s operating system.

o Competition through recruiting/retention

§ Google’s greatest assets are the employees who work there. With the company’s reputation they have had no problem attracting some of the brightest minds in the business. Furthermore, and not surprisingly considering the luxurious working environment and free-for-all management style, Google’s turnover rate is one of the lowest in the industry.

- Outcomes, or the bottom-line value the organization intends to achieve

o Though Google is certainly a hugely successful, 100+ billion dollar conglomerate, they got that way by doing right by their customers. Google’s 1st of 10 core principals is to “Focus on the user and all else will follow.” This has certainly given them a competitive edge thus far.

o The 10th core principal states “Great just isn’t good enough.” In every endeavor, Google aims to start great and get better. This is why strong competition will be so important in Google’s future of driving innovation.

- The Yellow (Collaborate) Quadrant is demonstrated at Google in terms of its leaders…

o Larry Page, CEO & Founder (appointed to CEO as of Monday)

§ Page is reportedly eliminating Google’s centralized functional structure to one in which individual business units and their engineers operate autonomously to speed up products and services.

§ The new structure could potentially help nurture core focus and allow greater ability to adapt to market changes.

o Andy Rubin, VP Engineering – Android Smartphone

§ Under Andy Rubin, the Android team has developed its own structure and processes and it’s excelling in the market.

§ Rubin has been successful at delivering results by building a collaborative team.

- Organizational culture in terms of norms, values, practices and processes

o Google.org

§ The mission of the organization is to create awareness about climate change, global public health, and global poverty.

o “Make money without doing evil.”

§ Google believes that advertising can be effective without being flashy and won’t display ads on results pages unless they are relevant to what the user is searching

§ Moreover, advertising on Google is always clearly identified as a “Sponsored Link,” so it does not compromise the integrity of the search results.

- Outcomes, or the bottom-line value the organization intends to achieve

o Network Neutrality / democracy on the web

§ Users should be in control of what content they view and what applications they use on the Internet.

o New technologies and solutions for mobile services

§ Continue to help customers to do any number of tasks on their mobile devices, from checking email and calendar events to watching videos.

§ Diversify Google search on a phone through mobile web, Apps, etc.

- The Red (Control) Quadrant is demonstrated at Google in terms of its leaders…

o Larry Page, CEO & Founder

§ Data driven and created Google’s core search algorithm, PageRank

§ Focused on building merit by doing things right the first time.

o Patrick Pichette, CFO

§ Focused on driving results through each business unit by “Feed the winners” and “starve the losers.”

§ This enables Google to fast track winning ideas to the market.

- Organizational culture in terms of norms, values, practices and processes

o Market-based principles ensure that the best ideas receive funding.

§ The system ensures that interesting ideas—even those that aren't obvious fits for Google's capabilities or core business model—receive some degree of attention.

o “Do one thing really, really well.”

§ Focused exclusively on solving search problems

§ Bring the power of search to previously unexplored areas, and help customers access and use search information in their lives.

- Outcomes, or the bottom-line value the organization intends to achieve

o Remove all subjectivity and just look at the data.

§ Too much data becomes a crutch for every decision, paralyzing the company and preventing it from making design decisions.

§ Google has never invested heavily in hiring classically trained designers, and insiders say that due to a constant shortage of creative staff, engineers sometimes decide the look of their own products.

12 comments:

  1. Just entering a comment to show how it's done.

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  2. I guess I'll start. Aaron and Thomas: I thought you did a nice job of providing a balanced analysis of Google.

    I imagined Google to be excessively green with no rules, policies, etc. From your analysis, it seems that they are becoming a bit more red with their new limitations on their 80/20 policy. I see this as a reaction to the necessity to operate efficiently in a competitive environment. They don't have the luxury of simply letting their employees run wild with ideas for years. They are under pressure to continuously produce.

    Another preconceived notion that I had was that while Google provides a great deal of amenities for their employees, they aren't a "warm and fuzzy" company. Again, I think this is a reaction to their operating environment. From your analysis, this seems to be the case. They have yellow aspects for the sole purpose of providing autonomy to their employees to think creatively. But, they don't hold hands and sing "Kumbaya" all day. For the most part, their yellow aspects seem to be customer-focused in their attempt to meet customer needs.

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  3. But could you imagine what the company would be like if they had no red areas? I love that they're a green company, but they understand the importance of being a business.
    Hiring for brilliance just is a great idea, I think. Although it's hard to measure, I feel that makes Google stand out as this epitome of technology companies. Everyone wants to be there and it makes sense with their hiring practices.

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  4. I'm curious what you guys think of Google decentralizing in order to create faster response times for products to go to market? It seems like this is in direct contrast to the red side of things, and will actually hurt incremental improvements in the company. Also, how can they provide funding for the BEST ideas to go to market if there is very little centralized structure? What happens if there are 10 great ideas in one business unit, but the BU can only move forward with 2-3 because of funding? Yet in another group, 2-3 mediocre ideas get pushed through?

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  5. One of Marissa Mayer's (VP of Search Products and User Experience) nine key points that she spoke of during a recruitment speech seemed to make absolutely no sense for a company such as Google: "Don't kill projects, morph them". If the company knows that there are projects out there that have been tried before, or already have invested too much time and resources in projects going nowhere, wouldn't it make sense to cut your losses and prevent in wasting any more time and resources?

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  6. I have to imagine that as Google has gotten bigger and more popular they have had to move more away from the green quadrant and become more involved in the red, which I think is evident as explained in your presentation. Of course they would not be able to get rid of the green quadrant completely and it is important for them to stay in the game and to come out with the next best thing. But I think that they have realized they need to be red to remain competitive and to continue to grow.

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  7. I'm particularly interested in seeing how Google continues to manage their people. One thing that I have learned over the past year about them is that they have hundreds of people under one manager. As they continue to grow, will they really be able to expand manager's responsibilities and grow their people? Think about it, one manager to 100 subordinates = 100 annual performance appraisals. Is that really going to be effective long term? It'll be interesting!

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  8. I find it interesting that Google has been so successful even with the constant threat of competition in this industry. This is one of very few companies that allows their employees to have a voice and gives them the freedom to create their own innovation. They set aside times for employees to think of new ideas and how they would become feasible in their environment. Everyone wants to be recognized for their works and feel that they have in fact made an impact within the organization. Google actually stands by these ideas and gives employees a chance to do so. I don’t believe people wanted to always work at Google because of their great benefits and compensation; rather, it is for the chance to make a difference and feel needed by their employer.

    Clearly this is a green company when looking at it has a whole. But I believe in order for any company to be truly as successful as Google it must have all four color types of employees. Even with ideas being provided we still need individuals who can see cost benefits and people who will put these ideas into working motion. My forecast of Google is continued dominance in their industry until another company can figure out how to lead the industry versus follow.

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  9. I think Google is extremely red and green simultaneously. From the green aspect they have the famous 80/20 policy which gives employees the freedom to explore projects that their "brilliant" employees are interested in. It seems the freedom has been paying off for the company so far.

    Google is also extremely red in the fact that they are incredibly data centric. Nearly every major decision they make is made based on the data, and they have plenty of it. Case and point: they did an analysis on how to be a good boss that was completely driven by data.

    In contrast I don't believe Google is very good in the yellow quadrant. Buzz is a great example how the company fails to understand social environments and personal relationships well.

    Android I think is a good example of Google's blue strengths. They recognized the growing market/synergies and capitalized on the opportunity. However I don't believe their blue quadrant defines the company like green and red do.

    Although the combination of green and red is abnormal, I think it is what makes Google unique and such an innovative company that continues to make blockbuster products everyone enjoys.

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  10. I have to agree with Julie. I feel like decentralization may be a risky move for Google. While it may be a good strategy for bringing products to the market faster, Google risks missing out on a number of projects from one unit that have the potential to bring in significant revenues because funding only allows them to move forward with a few in order to accommodate projects from another group.

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  11. I would agree with Julie and Krista regarding decentralization at Google. It seems that it might lead eventually to creating silos within the business and create the need to compete against each other for project funding and cause groups to lose track of the company's common goals/purpose creating a shift in Google's culture.

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  12. Seems its the age old question on span of control. How much of the operation can the founders expect to manage personally? Have they instituted a culture that allows for decentralization?

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