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How Google's Novel Management System Aids Growth
Carl Bialik from WSJ writes "Gary Hamel, visiting professor at London Business School, argues in a Wall Street Journal commentary that Google's 'novel management system seems to have been designed to guard against the risk factors that so often erode an organization's evolutionary potential.' Among Google's advantages: The 20% rule, an 'expansive sense of purpose' and the credo, 'keep the bozos out and reward people who make a difference.' Hamel also traces the company's evolution from Google 1.0, 'a search engine that crawled the Web but generated little revenue,' to Google 5.0, 'an innovation factory that produces a torrent of new Web-based services, including Gmail, Google Desktop, and Google Base. More than likely, 6.0 is around the corner.'"
Google is currently somewhat insulated because its Class A stock (the publicly traded one) has 1 vote per share, and its Class B stock (held only by a narrow group of insiders) has 10 votes per share, which give those insiders something like 2/3 of the voting power.
Lets not forget that Gary Hamel had Enron "leading the future", his now revised book, with its decentralized management structure. As many of us know, in the current thinking decentralized structures promote innovation at the expense of control. Hamel's one sided view of structure didn't work out so well.
Googles 20% +10% rule is jsut best practice from the 3M post-it case taught to every HBS MBA with the 10% twist. It works. Its not new. Google does some things exceptionally well. But I don't need a revisionist telling me about that.
These ideas aren't new. Have any of you read Built to Last? Google walks and talks like a textbook example of a visionary company.