Google (NASDAQ: GOOG) is one of the best-known and most admired
companies around the world, so much so that “googling” is the term
many use to refer to searching information on the Web. What started
out as a student project by two Stanford University graduates—Larry
Page and Sergey Brin—in 1996, Google became the most frequently
used Web search engine on the Internet with 1 billion searches per
day in 2009, as well as other innovative applications such as
Gmail, Google Earth, Google Maps, and Picasa. Google grew from 10
employees working in a garage in Palo Alto to 10,000 employees
operating around the world by 2009. What is the formula behind this
success?
Google strives to operate 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 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.” This emphasis on improving user experience and always
putting it before making more money in the short term seems to have
been critical to their success.
Keeping their 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 “Best Place to Work For” by Fortune magazine in 2007 and number 4 in 2010. This
is not surprising if one looks closer to how Google treats
employees. On their Mountain View, California, campus called the
“Googleplex,” employees are treated to free gourmet food options
including sushi bars and espresso stations. In fact, many employees
complain that once they started working for Google, they tend to
gain 10 to 15 pounds! Employees have access to gyms, shower
facilities, video games, on-site child care, and doctors. Google
provides 4 months of paternal leave with 75% of full pay and offers
$500 for take-out meals for families with a newborn. These perks
create a place where employees feel that they are treated well and
their needs are taken care of. Moreover, they contribute to the
feeling that they are working at a unique and cool place that is
different from everywhere else they may have worked.
In addition, Google encourages employee risk taking and
innovation. How is this done? When a vice president in charge of
the company’s advertising system made a mistake costing 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 they
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 working on the cutting edge may explain why the company is
performing much ahead of competitors such as Microsoft and Yahoo!
One of the current challenges for Google is to expand to new fields
outside of their Web search engine business. To promote new ideas,
Google encourages all engineers to spend 20% of their time working
on their own ideas.
Google’s culture is reflected in their decision making as well.
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 senior person in charge 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…” but instead must say
“the data suggest….” 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 may be difficult to work with. Google
realizes that its strength comes from its “small company” values
that emphasize risk taking, agility, and cooperation. Therefore,
they 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. Each candidate may be interviewed by as many as
eight people on several occasions. Through this scrutiny, they are
trying to select “Googley” employees who will share the company’s
values, perform at high levels, and be liked by others within the
company.
Will this culture survive in the long run? It may be too early
to tell, given that the company was only founded in 1998. The
founders emphasized that their initial public offering (IPO) would
not change their culture and they would not introduce more rules or
change the way things are done in 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.”
Based on information from Elgin, B., Hof, R. D., & Greene,
J. (2005, August 8). Revenge of the nerds—again. BusinessWeek. Retrieved April 30, 2010, from
http://www.businessweek.com/technology/content/jul2005/tc20050728
_5127_tc024.htm; Hardy, Q. (2005, November 14). Google thinks
small. Forbes, 176(10); Lashinky, A.
(2006, October 2). Chaos by design. Fortune, 154(7);
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. Retrieved April 30, 2010,
from http://www.nytimes.com/2005/12/05/technology/05google.html;
Schoeneman, D. (2006, December 31). Can Google come out to play?
New York Times. Retrieved April 30, 2010,
from http://www.nytimes.com/2006/12/31/fashion/31google.html;
Warner, M. (2004, June). What your company can learn from Google.
Business 2.0, 5(5).
Discussion Questions
Do you think Google’s decision-making culture will help or hurt
Google in the long run?
What are the factors responsible for the specific culture that
exists in Google?
What type of decision-making approach has Google taken? Do you
think this will remain the same over time? Why or why not?
Do you see any challenges Google may face in the future because
of its emphasis on risk taking?