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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.'"
As the artical points out, Google is pretty much going right where all have gone wrong in the past with traditional business models before. This is what makes them so innovative. The tremendous openess in the company, along with their creedo to do no wrong has also given them a squeky clean public image. The world loves Google and wants to see the friendly Giant smash the mean people eating one.
All that said, how long can Google really maintain it's unorthadox business methods while allowing VERY orthadox investors to buy stocks in the company. I'd say it's only a matter of time, and the price for become a truly large corporation. I can only hope that I am wrong.
Go ahead and call me unreliable; reliable is just a synonym for predictable.
I completely agree with you. Those big companies are in trouble. IBM after all showed only a 25% growth in profit for Q1 2006. And, just a few minutes before I posted this, Microsoft announced a small jump of 16% growth in profit AND a 13% growth in revenue. Leaving the tech industry, Exxon Mobile had a horrible quarter with only $89 Billion in Revenue.
Yeah, those large companies, they are just falling apart....Oh, wait...
Elitism may be out of fashion, but Google is famously elitist when it comes to hiring. It understands that companies begin to slide into mediocrity when they start to hire mediocre people. A-level people want to work with A-level people.
The only problem is that a company cannot thrive longterm with only A-level people. As a software company grows and matures so the average age of the company code base increases, and there's a gradually increasing requirement for maintenance of the older products. A-level people rarely consider their primary task in life is settling in as a maintenance coder on products that are no longer considered to have a substantial "wow" factor.
Having said that, code maintenance can be some of the most demanding work around, as programmers are asked to come up to speed on outdated code they didn't write and make it do things it was never designed to do. But, speaking generally, this isn't considered something that will make you stand out in your company and it's not where A-level people want to be.
Equally well, having everyone take a turn at maintenance doesn't work either. I would imagine that there's few programming tasks worse than taking over code that's been maintained by half a dozen people who only wanted to move on to other things. You probably aren't going to get any of the awards mentioned in the article by burying yourself in old code, regardless how valuable that might be.
A-level people want to do what is best for everybody (for themselves and the company). If Google keeps rewarding people who make the most contributions, then code maintainers will be rewarded. Maintenance is considered a low-tier job at hierarchical companies where only people working on the 'wow' products are rewarded.
The whole point of googles flat structure makes it possible to have maintenance be a sexy task within the organization by allowing rewards to go where they should go too. I would say that 'most companies' create the hierarchy because they don't have the guts to manage the way that google does.
I've worked at far too many companies where the disconnect between espoused values and actual values create the kind of situation you describe (ie maintenance coding is a loser job, best avoided or gotten promoted out of).
Who, exactly, would you like to manage large projects (or large companies)? People who don't know anything about management or business, because they are educated in tech? Yes, occasionally companies run from the top down by techies work, but that's not the reason why they work. Believe it or not, the ability to lead, to allocate resources, to plan ahead, to determine whether something is marketable, to deal with supply chains and distribution, and to keep people happy are skills. Good MBA programs teach those skills. The second /. heresy in this post is the following: the best piece of software doesn't always make the best product! Look, I've been programming since I was 5 years old and so I have the same feelings as the most of you about great software. At the same time, I realize the business world isn't a perfect world. Sometimes your clients don't want it perfect-- they need it now. Sometimes you _could_ spend a few more weeks adding really great functionality to your project-- but marketing research says that it won't change sales numbers a bit.
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Crudely Drawn Games
Its not MBAs that are the problem. Its MBAs that don't know anything about the industry that their company is in. Even worse if they think they know a lot more than they do (ie. PHB). An MBA that is also very technically proficient is worth his/her weight in gold.
Well, everybody does that, don't they? Even the Bush administration does that. The key is in your perception of who the bozos are, and who makes a difference...