Google's Management Style

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This is a word document containing a few collection of details regarding the management in google. The Powerpoint presentation for the same has been uploaded by me as well. Do watch it. I hope it helps

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Google's Management Style

  1. 1. Introduction Good morning respected ma’am and all my dear friends. Today I and my group members will not be focusing on two companies comparing them and choosing the best one. Instead, today we will talk on one of the best companies functioning around the globe and which has become a integrated part of our life. To give you a hint I would ask a very simple question what is the first thing you would do on the internet if you are given a topic of presentation on some particular subject? Exactly, We GOOGLE IT..!!! The company google has come up so much that it is an official word in the dictionary which means to surf on the internet. This is something which not every company can achieve. What makes the company so special? A part of their speciality will be presented to you in today’s presentation. Today we will focus on certain management practices prevailing in google’s culture which has led it to such great heights. Google’s Vision, Mission and Focus The most highlighting part of google is the way it comes out with innovation. Before that I would like to just give some information about google’s mission, vision and focus. Slide 1 1. The vision seems like a dream but that is the reason why it is google’s vision 2. Their mission as we read seems like they have been able to achieve quite a bit in this case 3. Finally, as I mentioned earlier, google focuses on innovation along with user experience Google tries to overcome its Weaknesses Over the past decade, Google has inspired envy in trench-dwelling managers around the world. It's not just the unparalleled benefits. It's the way Google approaches innovation. Engineers are encouraged to dream up pet projects in their spare time. Teams self-form around the best ideas. Market-based principles ensure that the best ideas receive funding. It sounds chaotic, democratic...and intoxicating. "Why can't we do that?" countless managers wonder. "Instead, we have to deal with crushing bureaucracy that favours our leaders' personal whims over the most game-changing ideas." Management guru Gary Hamel praised Google in his book The Future of Management, positing that more and more companies would adopt the company's market-based system. There is indeed much to admire about Google's approach, and much to learn from it. 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. However, Google's approach hasn't demonstrated that it can actually, you know, create successful businesses. Despite the hype, more than 95 percent of Google's revenues trace back to Web-based search advertising. Further, as the company's explosive growth has slowed, innovative employees have left to form new ventures. For example, Twitter was formed by former Google employees. In a blog post last year, I said this recession would be Google's "moment of truth." Either it figured out how to bring appropriate
  2. 2. discipline to innovation process to realize its latent potential, or it ended up looking like every other company. The company has at long last recognized that discipline is not a dirty work. An article in the Wall Street Journal last week described how Google plans to build a process to make sure that high priority ideas received the right resourcing. Specifically, it is creating "innovation reviews" where department heads share promising ideas with Google's top leadership, helping executives focus attention and resources on promising ideas early. As CEO Eric Schmidt said, "We were concerned that some of the biggest ideas were getting squashed." It doesn't seem like Google is walking away from its ideals. Rather, it's trying to couple its world-class approach to the "front end" of the innovation process with the world-class discipline exhibited by companies like Procter & Gamble. It might yet struggle to bring these two approaches together. But success could allow the company to create an innovation capability that actually lives up to the hype. There's a general lesson in Google's shift. People think that constraints are innovation inhibitors. They aren't. Unconstrained efforts are often undisciplined efforts that lead to immaterial results. The right constraints in the right places can be innovation accelerators. Constraints can focus creativity where it is most needed. Constraints can help ensure investment flows to where it provides the highest returns. Growing up isn't always a bad thing. We'll see how well Google handles it. Lessons from Google's Management Style There’s a good piece about Google ‘s hiring and management policies in the New York Times. There’s two particular points that interest me. The first is what they identify as being a good manager. The second is about how little formal education seems to matter to them. Both have profound implications for the wider economy. The first: We found that, for leaders, it’s important that people know you are consistent and fair in how you think about making decisions and that there’s an element of predictability. If a leader is consistent, people on their teams experience tremendous freedom, because then they know that within certain parameters, they can do whatever they want. If your manager is all over the place, you’re never going to know what you can do, and you’re going to experience it as very restrictive. The second is that formal education qualifications don’t seem to mean all that much: One of the things we’ve seen from all our data crunching is that G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything. What’s interesting is the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college. It’s not true to say that this means that we’re not a knowledge economy. Google is, clearly and obviously, a knowledge company in the knowledge economy. But if formal educational qualifications
  3. 3. (14% without a college degree? Assuming they’re not talking about the cooks and the janitors but about the engineering and programming teams can you think of another US company with that sort of number without any college?) don’t mean much to them then this is a serious problem for the current methods of education. One of the most important things that an individual must have when joining google as an employee is that he must be always ready and excited to Learn. At Google, even if you don’t know the work that you have been given, it doesn’t matter unless you are willing to learn it and do it with your best efforts. That’s the reason why they don’t give much importance to the educational qualification and focus more on the quality of people that they are hiring into the company. What really interests about these management lessons is that Google is famously engineering driven. They look at the data, crunch it and then think about what they’ve found. Rather than starting with the theory of what ought to be and then trying to impose policies culled from theory. That they are looking at real world data to guide their decisions may be why their conclusions are so different from everyone else’s. Google Project Oxygen We heard my friends talking about Google being very good at management and other such stuff etc. But Google has not achieved such results in a single day. For improving the efficiency of its managers and overall performance of the Googlers in the google offices, Google came up with a plan called as Project Oxygen in the early 2009. The reason to start up with something like this was to Build Better Bosses. Google conducted surveys, feedbacks, analysed performance reviews, correlated phrases, words, complaints and finally came up with 8 qualities that a highly effective manager must possess. Although one might feel that they might have found it in some management book as well but Google wanted to know which qualities are actually required and as a further step towards innovation and development of managers, it also ranked those 8 qualities as per their importance in the organization. There is a notional idea that if I am an expert in the field then I might handle my subordinates well. However, Google found that it ranked last among the qualities of effective managers. What employees values more was the even-kneeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions and not by dictating answers, and who took interest in employees’ lives and career. In short, they valued a person who could connect to them and be accessible whenever required. There have been many books in the market which say that these are the qualities that a good manager must possess in order to be successful. Even organizations tell their managers that you have be good. However, where these people fail is that they don’t show the path to becoming a good manager. This is what google wanted to do for its managers. It ranked the 8 qualities so that the managers would know exactly what they have to prioritize amongst all the qualities. People typically leave a company for one of three reasons, or a combination of them. The first is that they don’t feel a connection to the mission of the company, or sense that their work matters. The
  4. 4. second is that they don’t really like or respect their co-workers. The third is they have a terrible boss — and this was the biggest variable. “The starting point was that our best managers have teams that perform better, are retained better, are happier — they do everything better,” Mr. Bock says. “So the biggest controllable factor that we could see was the quality of the manager, and how they sort of made things happen. Once the data was collected and sorted, google made sure that all of its managers learn about its practical applications as well. For this purpose they held many sessions, seminars, workshops etc wherein they trained their managers how to apply these qualities in practicality. And they were happy to see the results. When the employees were asked to rate their managers after the training, there was a significant improvement in 75 % of their worst performing employees. This is one company which has its own way of doing things and achieves success as well. The following are the 8 qualities of highly effective managers at google. EIGHT HABITS OF HIGHLY EFFECTIVE MANAGERS 1. Be a good coach * Provide specific, constructive feedback, balancing negative and positive * Have regular one-on-ones, presenting solutions to problems tailored to the employee's strengths 2. Empower your team and don't micro-manage * Balance giving freedom to your employees while still being available for advice * Make "stretch" assignments to help them tackle big problems 3. Express interest in employees' success and well-being * Get to know your employees as people, with lives outside of work * Make new folks feel welcome, help ease the transition 4. Be productive and results-oriented * Focus on what you want the team to achieve and how employees can help achieve it * Help the team prioritize work, and make decisions to remove roadblocks 5. Be a good communicator and listen to your team * Communication is two-way: Both listen and share * Hold all-hands meetings and be specific about the team's goals * Encourage open dialogue and listen to the questions and concerns of your employees 6. Help your employees with career development 7. Have a clear vision and strategy for the team * Even amid turmoil, keep the team focused on goals and strategy * Involve the team in setting and evolving the team's vision, goals, and progress
  5. 5. 8. Have key technical skills, so you can help advise the team * Roll up sleeves and work side-by-side with team, when needed * Understand the specific challenges of the work THREE PITFALLS 1. Have trouble making transition to team leader * Fantastic individual performers are often promoted to manager without the necessary skills to lead * People hired from outside often don't understand the specific ways of the company 2. Lack a consistent approach to performance management and career development * Doesn't help employees understand what company wants * doesn’t coach employees on how they can develop and stretch * not proactive: Waits for the employees to come to them 3. Spend too little time on managing and communicating Eric Schmidt’s Best Leadership Practices Eric Schmidt was the CEO of the Google Inc. until 2011 when Larry Page, the founder of Google, replaced him and Eric was given some other legal position in the company. However, Eric has a great hand in the success of Google and its management while the ten years of his CEO life that he spent in the company. Analysts are of the view that, though Eric Schmidt came from a corporate background, his leadership style had many things in common with the culture already created and put in place by the founders of Google. Schmidt’s leadership practices could be summarized in the following five precepts: 1. Get to know your employees. 2. Create new ways to reward and promote your high-performing employees. 3. Let your employees own the problems you want them to solve. 4. Allow employees to function outside the company hierarchy. 5. Have your employees’ performance reviewed by someone they respect for their objectivity and impartiality. Examples of such behavior include the following:
  6. 6. Schmidt used to make a list of his best employees, as identified by multiple levels of peer-references, and interact with them personally to encourage them to implement their innovative ideas and to insulate them from unwanted interferences by others. For rewarding high performers, there were a few systems already in place, such as financial incentives, stock option plans, dinner with the CEO, and so on. In addition, Schmidt created a five- hour long video called The Factory Tour, where the protagonists themselves would explain the idea and its working. In order to make the employees the owners of their work, Schmidt used to provide a very broad definition of the company goal and leave the implementation entirely to the employees. In defining the goal, care was taken to highlight the benefits to the customers and society at large rather than to the company. For example, Schmidt has defined Google’s goal as: “Organizing the world’s information and making it universally accessible and useful.” This is something that every employee can easily relate to, compared to a statement of company targets like increasing turnover by 200 percent. As corporate hierarchies can often obstruct employees’ work, Schmidt reinforced the existing system of allowing employees a certain degree of freedom to create their own projects and choose their own teams. In reviewing employees’ performance, Schmidt made it a point to identify reviewers from among professionals whom the concerned employee respects for their objectivity and impartiality. Google's Business Leadership and Organizational Structure Google Inc. has received a lot of attention and acclaim for its unusual organizational culture, which is designed to encourage both loyalty and creativity. Google has created many significant products through this emphasis on innovation, including the Google search engine, Google Maps and the Google Chrome Web browser. The company is now much larger than it was when the organizational culture first developed, forcing some changes to the original model Leadership Structure Google's corporate structure is not particularly unusual other than the existence of a few unique leadership positions such as Chief Culture Officer and Chief Internet Evangelist. The company is overseen by a board of directors, which passes instructions down through an executive management group. This group oversees several departments such as Engineering, Products, Legal, Finance and Sales. Each of these departments is divided into smaller units. For instance, the Sales department has branches dedicated to the Americas, Asia Pacific, and Europe, the Middle East and Africa. Despite the use of a standard corporate organizational structure, Google has developed a corporate culture based on giving employees substantial leeway to develop new ideas without excessive oversight. Google kind of follows the Laissez Faire type of leadership practice wherein all the workers are given freedom to decide their own deadlines for the project. They themselves evaluate the project work and the areas of improvement. Also if any changes are required they look into it. Laissez-faire
  7. 7. leadership can be effective in situations where group members are highly skilled, motivated, and capable of working on their own. Since these group members are experts and have the knowledge and skills to work independently, they are capable of accomplishing tasks with very little guidance. Thus, we say that google does not follow this type of practice completely but has some of the characteristics of this type. The 70/20/10 Rule All Google employees follow a rule called the 70/20/10 rule, under which they are expected to devote 70 percent of every work day to whichever projects are assigned by management, 20 percent of each day to new projects or ideas related to their core projects, and 10 percent to any new ideas they want to pursue regardless of what they might be. The company credits this rule with being the driving force behind many of Google's new products and services, because programmers, salespeople and even executives are given enough space to be creative. When the company became too large to easily manage the flow of new ideas and projects, it instituted a schedule of meetings between employees and the company's founders and chief executives. At these meetings, employees can pitch new ideas and projects directly to the top executives. Google allows employees to spend 70 percent of their time on the core business, 20 percent on related projects, and 10 percent on unrelated new businesses. This rule is so important that Google has people on staff to manage the 70/20/10 rule. The engineering and design staff make use of the “free time” to persue new products and technologies, but even the top-level managers adhere to the rule. According to Eric Schmidt, they spend 70% of time on search and advertising, 20% on adjacent businesses like Google News and Google Earth, and 10% on new things like the free wireless initiative (Battelle, 2005). The 20% rule has a good return on investment since about half of Google’s new product launches occur as a result of that “free” time, according to Vice President of Search Products & User Experience, Marissa Mayer (Eckoff, 2009). Google’s Management Function Instead of setting goals for them, Google’s management helps their employees meet the objectives that the employees set for themselves. The company sees its managers as leaders who facilitate inspiration and empower employees. Google’s management function controls employee responsibility in similar way to the United States government, through a series of checks and balances. All employees set out and evaluate goals on a quarterly basis. Although Google’s management makes suggestions, employees use metrics that they choose themselves to measure their progress toward their goals. Supervisors act as managers to ensure that the employees meet their own goals, but employees see them as leaders because the employees themselves set the benchmarks. Effects The company’s leadership allows employees to change the parameters of their jobs when needed. Employees are encouraged to be their own leaders, evaluate their jobs and then propose better ways to do their jobs. Google’s leaders want their employees to “think out loud,” and have open
  8. 8. discussions about their goals and plans for achievement. The structure promotes corporate transparency because employees are able to witness and contribute to the leadership function. As a result, almost every employee has access to almost any managerial meeting. Google’s management realizes that every employee has a stake in the company and employees in turn feel a responsibility for the outcome of the company’s projects. Benefits Google’s methods attract top talent because their management focuses on controlling through shared vision. Where many companies have bureaucratic and linear controls, Google allows employees to set and maintain their own standards. These open policies translate into a distinctive corporate structure that inspires good nature and guidance. Employees love to work at Google, but not just because of perks such as flexible work time and bonuses, they also love the work that comes from the cross-functional leadership structure. What makes Google Special? Google follows a fairly regular functional structure with management positions specialized by value chain activity. As a globally diversified company. These positions are further divided and grouped into regions of interest that aid the company in managing the breadth of its operations. Within each top-level activity, there is a multidivisional structure where small business units are divided on the basis of geography or product market. This hybrid form of functional and multidivisional structure works well for Google. It ensures the centralized planning a large company needs while giving the small business units the flexibility to innovate like a small start-up company Culture Google’s informal corporate slogan is, “Don’t be evil.” The motto was first suggested by Paul Buchheit, the creator of Gmail, who said he “wanted something that, once you put it in there, would be hard to take out.” He also added that the slogan was “a bit of a jab at a lot of the other companies, especially our competitors, who at the time, in our opinion, were kind of exploiting the users to some extent.” The name of the company is a play on the mathematical term “Googol”, 1 followed by 100 zeros. It represents the company’s unique vision to organize more information and make more money than customers and investors thought was possible. Eric Schmidt, Google’s CEO, is fond of saying that according to their math, it will take 300 years to accomplish their goal (Mills, Google Reveals its 300-year Plan, 2005). These quirky things are part of what sets Google apart from the rest of corporate America. Even their IPO was unique – they use a Dutch auction in which the market determined the initial stock price to prevent insiders and institutions from quickly selling for a profit (Salkever, 2004). Google's unofficial motto is “Don't Be Evil,” and many of its policies and corporate decisions are based on trying to live up to this motto. Although it may seem eccentric to pursue such an approach in a business environment where profit is always the final concern, employees report feeling very differently about working at Google as opposed to other companies. According to a New York Times article from 2005, Google employees interviewed said that they felt a sense of being personally invested in the company's sense of mission and future success. A 2009 article in The Economist found that the company's growth has produced some problems, with teams developing new ideas
  9. 9. secretly in isolation from each other, resulting in some resentment from other teams in the company. Employee Perks Google is often lauded for the way the company treats its employees. Fortune magazine ranked Google at the top of its lit of the best companies to work for in 2007 and 2008 (Fortune, 2008).Perhaps that’s because Google’s corporate vision includes such axioms as, “You can be serious without a suit.” (Google, 2008) “The goal is to strip away everything that gets in our employees’ way. We provide a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses – just about anything a hardworking employee might want. Let’s face it: programmers want to program, they don’t want to do their laundry. So we make it easy for them to do both.” -Eric Schmidt, CEO Facilities  If an employee's bangs are getting in the way during a furious coding session, he or she can schedule an on-site haircut free of charge.  To work off all those calories, employees can head over to a gym filled with equipment. For the aquatically-inclined, Google also provides swim-in-place swimming pools. These pools are narrow and not very long. Electric water pumps provide a strong current that flows in one direction. Employees swim against the current, staying in place within these small pools. Lifeguards are on duty to keep employees safe.  Employees can play against each other in a quick game of ping pong, billiards or foosball -- you can find game tables in several of the buildings on campus. There are also video games for employees who prefer to let their thumbs do all the work.  If an employee spills some of that fancy juice on his or her clothes, all is not lost. Google has laundry facilities available to employees on site. The company even offers dry cleaning services. It's not unusual for Google employees to bring clothes in over the weekend to do laundry at the Googleplex.  Google's healthcare plan includes on-site medical staff. If an employee suffers an injury or feels ill while at work, he or she can make an appointment with a doctor at the Googleplex.  Even with all the benefits and perks at the Googleplex, work can become stressful. Fortunately for Google employees, they can take advantage of a subsidized massage program. For a small fee, the employee can receive a massage from a licensed therapist in a private room. In fact, Google's massage rooms and bathrooms are some of the only areas in the Googleplex that have opaque walls. Transportation Around the office Google’s employees get around on Segway and Razor scooters, and recently, custom bicycles. But for the longer morning commute from home, they offer free bus rides to the main Mountain View office. ”We are basically running a small municipal transit agency,” said Google’s director of security and safety, Marty Lev (Helft, 2007). The busses feature bike racks and
  10. 10. leather seats, internet access, and allow pets onboard. For nearly a quarter of Google’s home office staff, this transportation keeps them from having to spend hours in the Silicon Valley traffic. Food Google hired their first chef in November 1999 when Charlie Ayers, ex-chef for the Grateful Dead, won a cook-off judged by the company’s 40 employees. Ever since then “an unending supply of wholesome, free food” (Dudley, 2007) has been the trademark bonus of the Google corporate environment. There’s a rule that workers can never be more than 100 feet away from food, and the elaborate snack stations scattered throughout the office halls prove it has been carried out.