Managerial and Leadership Philosophies: Case of Google

Background
Ref: http://www.coachingtip.com/2011/03/google-too-big-and-out-of-control.html

The Google story started as a legend of popular culture. In 1995, Sergey Brin and Larry Page, graduate students at Stanford University, figured out a way to scan and index the Internet. By 1998, they had incorporated Google, coming up with a company name that suggested the audacity of their ambition. ("Googol" is the math term for the figure 1 followed by a hundred zeros.) And they came up with an informal company motto to signal their benign intent: "Don't be evil." Today, Google reaches billions of pages of content. In 2001, Page and Brin hired their first CEO, Eric Schmidt, who had a Ph.D. in computer science and twenty years of management experience in tech companies; most recently, he had been the CEO of Novell. They settled on an unusual power-sharing arrangement. As Schmidt describes it, "We've agreed that any major decisions the three of us agree." By 2002, Google had become very profitable, thanks to a novel program called AdWords, in which advertisers bid to display their ads whenever the user searches for keywords. If the user then clicks on the advertisement---a "sponsored link"---Google earns revenue on a pay-per-click basis. Through the period of March of 2002 to March of 2011, for example, a small executive coaching company, Signature, Inc., spent over $56,900 on Google AdWords advertisements. However, because of a lack of awareness of policy changes by Google and its decision to outsource AdWords customer service to India (even though Google has an AdWords office in Ann Arbor, MI, USA, where the company operates), the company's AdWords expenditures have been terminated (due a lack of Google management oversight and its customer service being lost in translation). Now, Google leadership seems to recognize that its management capability needs improvement and has taken action to realign top management effective April 2011 and begin to re-engineer management oversight by training its managers to improve internal and external communication. In February 2008 Google Inc. had its second straight month of disappointing growth in "paid clicks," a key metric that reflected the overall health of the company, according to data released by research firm comScore Inc. Since then, the company has been harvesting its dominant market share by raising AdWords "cost per click" advertisements to improve corporate revenue. Concurrently, online advertising competition has increased with Microsoft/Yahoo and others digging into Google's search engine advertising market share through providing better value to online advertisers.

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The key question is does Google's top management have the leadership capability required to turnaround a company whose glory days may have been in the past while Facebook, Twitter, Microsoft/Yahoo, Apple, Amazon and other information technology companies continue to outpace Google? Triumvirate Leadership at Google
Ref: http://www.mbaknol.com/management-case-studies/

Sergey Brin and Larry Page

Eric Schmidt

In 1998, while they were doctoral students at Stanford University, Sergey Brin and Larry Page founded Google. In 2001, Brin and Page recruited Eric Schmidt to be Googles chief executive officer. Schmidt was charged with providing the organizational and operational expertise and leadership for Google, while Brin and Page provided the engineering, technological, and product development leadership. As some pundits have said, Page and Brin knew they werent professional managers or marketers or masters of strategy, so they brought in a grown-up, Eric Schmidt, to operate the company. Googles success can be attributed to its triumvirate leadership of Brin, Page, and Schmidt, who have managed to beat back rivals from Yahoo! to Microsoft. However, one of the Googles biggest mysteries is its leadership triumvirate and how it functions. Page is president for products and is acknowledged as the companys thought leader and someone who gets involved in projects to make sure things get done. Brin is president of technology and assumes responsibility for advertising initiatives, which is the money-making part of Google. Conventional wisdom is that Schmidts job is to break ties between Page and Brin and to communicate with Wall Street and the news media. Insiders say that underplays his role. He sets the companys overall agenda, gives direction on workaday issues the founders dont care to address, and more than occasionally reminds Page and Brin to behave themselves. Schmidt is a skilled bigcompany executive, having had substantial experience at Novell and Sun Microsystems before being recruited to Google. He is a seasoned marketer and a renowned technology expert as well. In April 2007, Schmidt was elected board chairman in addition to being CEO. Google had not had a chairman since it went public in 2004 although Schmidt effectively served in that role. In commenting on the role Schmidt has played in Googles success, David Nadler, a renowned business consultant, says, Page and Brins handoff to Schmidt can be seen as a classic case of redesigning the management structure to complement the strengths of the top people. Nonetheless, Brin and Page seem to be the dominant forces in the company because their stock shares carry ten times as many votes as the ordinary stock shares. Moreover, Brin and Page give
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themselves carte blanche to do what they like, buy what they like, diversify wherever they like and pay no dividends. The leadership triumvirate also has high expectations for Google employees. Google hires only classA talent because Brin, Page, and Schmidt believe that hiring just one B-level person initiates a slide into mediocrity. The company has generous reward and award programs in order to ensure that employees with great ideas dont launch their own entrepreneurial ventures. Moreover, Google essentially lets engineers run the show. Every Google employee divides his or her work time into three parts: 70% is devoted to Googles core businesses of search and advertising; 20% is targeted toward off-budget projects related to the core businesses; and 10% is allocated to the pursuit of farout ideas. The time allocation for off-budget projects and far-out ideas is more than a perk; its Googles seed corn for the future. Brin and Page do not see themselves as infallible seers with a divine right to dictate Googles next strategy and the one after that. Instead, they have created a Darwinian environment in which every idea must compete on its merits, not on the grandeur of its sponsors title. Encouraging creativity and innovation is a Google hallmark, and the company has implemented many policies, processes, and procedures to foster creativity and innovation. For instance, mechanisms are in place to share ideas, get input from peers, recruit people to work on project ideas, and generate support for change. As such, Google is a highly transparent organization for insiders. But Google is not highly transparent for outsiders! Google seems to relish being secretive and opaque and confusing the competition. Perhaps this is no more apparent than in the leadership triumvirates apparently deliberately confusing comments on transparency and corporate strategy. In commenting on the need for transparency in business, Schmidt says, with all the headlines were making, we dont want our announcements to surprise or confuse anyone. We dont want our partners to think were competing against them. Schmidt continues: We try very hard to look like were out of control. But in fact the company is very measured. And thats part of our secret. Page adds: We dont generally talk about strategy because its strategic. I would rather have people think were confused than let our competitors know what were going to do. Schmidt also says that he intentionally propagated the perception of Google as a wacky place to allow the company to build up its business under the radar. Along with not being transparent to outsiders, Google has created some disharmony with them. By taking on Microsoft (desktop software), phone companies (a San Francisco wi-fi plan for free wireless Internet service), eBay (classified advertising), and others, Google has not been making friends. Google even seems to be offending its paying customers, and in some parts of the business community, it is acquiring the image of a somewhat sanctimonious bully. This is an interesting anomaly; particularly given Googles famous slogan Dont Be Evil and its pro-consumer stance. Rather than creating disharmony, Google should have been winning friends. The DNA of Google's Leadership
Ref: http://dna-of-humancapital.blogspot.com/2011/04/googles-leadership-case-study-for-us.htm

Google and Larry Page have been making news recently both purposely and inadvertently around the topic of leadership. It has provided a near constant case study of leadership in large
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organizations. The question is what does it mean and what is the impact of these activities? If you are a big financial services firm...you are only interested in the bottom-line quarter-to-quarter. If you are an employee...you want to know what it all means to you and your work and life. First, there was the identification of the 8 Point Plan to Help Managers Improve + 3 Pitfalls. Google put its collective data mining and analytic capabilities to task to scientifically identify what good mangers need to do to be effective leaders, codenamed Project Oxygen. The NY Times discussed it and its implications in a lot of detail. It is a solid list and one that many organizations would do well to base the creation of the right leadership culture. Googles 8 Point Plan to Help Managers Improve Googles Rules: In early 2009, statisticians inside the Googleplex embarked on a plan code-named Project Oxygen. Their mission was to devise something far more important to the future of Google Inc. than its next search algorithm or app. They wanted to build better bosses. To engineer better managers, Google pored over performance reviews, feedback surveys and award nominations, correlating words and phrases as only a data-driven company like it can do. Here is an edited list of directives it produced in order of importance as well as a few management pitfalls it found. Eight Good Behaviors 1. Be a Good Coach Provide specific, constructive feedback, balancing the negative and the positive. Have regular one-on-ones, presenting solutions to problems tailored to your employees specific strengths. 2. Empower your team and dont micromanage Balance giving freedom to your employees, while still being available for advice. Make stretch assignments to help the team tackle big problems. 3. Express interest in team members success and personal well-being Get to know your employees as people, with lives outside of work. Make new members of your team feel welcome and help ease their transition. 4. Dont be a sissy: Be productive and results oriented Focus on what employees want the team to achieve and how they can achieve it. Help the team to prioritize work and use seniority to remove roadblocks. 5. Be a good communicator and listen to your team Communication is a two-way: you both listen and share information. Hold all-hands meetings and be straightforward about the messages and goals of the team. Help the team connect the dots. Encourage open dialogue and listen to the issues and concerns of your employees. 6. Help your employees with career development 7. Have a clear vision and strategy for the team Even in the midst of turmoil, keep the team focused on goals and strategy. Involve the team in setting and evolving the teams vision and making progress towards it. 8. Have key technical skills so you can help advise the team Roll up your sleeves and conduct work side by side with the team, when needed. Understand the specific challenges of the work. Three Pitfalls of Managers 1. Have trouble making a transition to the team
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 Sometimes, fantastic individual contributors are promoted to managers without the necessary skills to lead people. People hired from outside the organization dont always understand the unique aspects of managing at Google. 2. Lack a consistent approach to performance management and career development Dont help employees understand how these work at Google and doesnt coach them on their options to develop and stretch. Not proactive, waits for the employee to come to them. 3. Spend too little time managing and communicating
Source: http://thinkonestepahead.com/googles-8-point-plan-to-help-managers-improve

Project Oxygen: Googles Quest to Build a Better Boss

Ref: Adam Bryant, March 12, 2011; http://www.nytimes.com/2011/03/13/business/13hire.html?_r=1&pagewanted=all

In the quest to build better bosses, the people analytics teams at the company produced the Eight Habits of Highly Effective Google Managers, as detailed above. Now, brace yourself. Because the directives might seem so obvious, its hard to believe that it took the mighty Google so long to figure them out: Have a clear vision and strategy for the team. Help your employees with career development. Dont be a sissy: Be productive and results-oriented.

The list goes on, reading like a whiteboard gag from an episode of The Office. My first reaction was, thats it? says Laszlo Bock, Googles vice president for people operations, which is Googlespeak for human resources. But then, Bock and his team began ranking those eight directives by importance. And this is where Project Oxygen gets interesting. For much of its 13-year history, particularly the early years, Google has taken a pretty simple approach to management: Leave people alone. Let the engineers do their stuff. If they become stuck, theyll ask their bosses, whose deep technical expertise propelled them into management in the first place. But Bocks group found that technical expertise the ability, say, to write computer code in your sleep ranked dead last among Googles big eight. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees lives and careers. In the Google context, wed always believed that to be a manager, particularly on the engineering side, you need to be as deep or deeper a technical expert than the people who work for you, Mr. Bock says. It turns out that thats absolutely the least important thing. Its important, but pales in comparison, much more important is just making that connection and being accessible. Project Oxygen doesnt fit neatly into the usual Google story line of hits (like its search engine) and misses (like the start last year of Buzz, its stab at social networking). Management is much squishier
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to analyze, after all, and the topic often feels a bit like golf. You can find thousands of tips and rules for how to become a better golfer, and just as many for how to become a better manager. Most of them seem to make perfect sense. The problems start when you try to keep all those rules in your head at the same time thus the golf clich, paralysis by analysis. In management, as in golf, the greats make it all look effortless, which only adds to the sense of mystery and frustration for those who struggle to get better. That caveat aside, Project Oxygen is noteworthy for a few reasons, according to academics and experts in this field. H.R. has long run on gut instincts more than hard data. But a growing number of companies are trying to apply a data-driven approach to the unpredictable world of human interactions. Google is really at the leading edge of that, says Todd Safferstone, managing director of the Corporate Leadership Council of the Corporate Executive Board, who has a good perch to see what H.R. executives at more than 1,000 big companies are up to. Project Oxygen is also unusual, Safferstone says, because it is based on Googles own data, which means that it will feel more valid to those Google employees who like to scoff at conventional wisdom. Many companies, he explained, adopt generic management models that tell people the roughly 20 things they should do as managers, without ranking those traits by importance. Those models often suffer a lot of organ rejection in companies, he added, because they are not presented with any evidence that they will make a difference, nor do they prioritize what matters. Most companies are better at exhorting you to be a great manager, rather than telling you how to be a great manager, Safferstone says. Project Oxygen started with some basic assumptions: People typically leave a company for one of three reasons, or a combination of them. The first is that they dont feel a connection to the mission of the company, or sense that their work matters. The second is that they dont really like or respect their co-workers. The third is they have a terrible boss and this was the biggest variable. Google, where performance reviews are done quarterly, rather than annually, saw huge swings in the ratings that employees gave to their bosses. Managers also had a much greater impact on employees performance and how they felt about their job than any other factor, Google found. 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. The question we then asked was: What if every manager was that good? And then you start saying: Well, what makes them that good? And how do you do it?

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In Project Oxygen, the statisticians gathered more than 10,000 observations about managers across more than 100 variables, from various performance reviews, feedback surveys and other reports. Then they spent time coding the comments in order to look for patterns. Once they had some working theories, they figured out a system for interviewing managers to gather more data, and to look for evidence that supported their notions. The final step was to code and synthesize all those results more than 400 pages of interview notes and then they spent much of last year rolling out the results to employees and incorporating them into various training programs. The process of reading and coding all the information was time-consuming. This was one area where computers couldnt help, says Michelle Donovan, a manager of people analytics who was involved in the study. People say theres software that can help you do that, she says. Its been our experience that you just have to get in there and read it. Given the familiar feel of the list of eight qualities, the project might have seemed like an exercise in reinventing the wheel. But Google generally prefers, for better or worse, to build its own wheels. We want to understand what works at Google rather than what worked in any other organization, says Prasad Setty, Googles vice president for people analytics and compensation. Once Google had its list, the company started teaching it in training programs, as well as in coaching and performance review sessions with individual employees. It paid off quickly.
Michelle Donovan, left, and Prasad Setty were on the team that led Google's management effectiveness project

We were able to have a statistically significant improvement in manager quality for 75 percent of our worst-performing managers, Bock says. He tells the story of one manager whose employees seemed to despise him. He was driving them too hard. They found him bossy, arrogant, political, secretive. They wanted to quit his team. Hes brilliant, but he did everything wrong when it came to

Laszlo Bock of Google says its study found that a boss's technical expertise was less important than being accessible

leading a team, Bock recalls.

Because of that heavy hand, this manager was denied a promotion he wanted, and was told that his style was the reason. But Google gave him one-on-one coaching the company has coaches on staff, rather than hiring from the outside. Six months later, team members were grudgingly acknowledging in surveys that the manager had improved.
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And a year later, its actually quite a bit better, Bock says. Its still not great. Hes nowhere near one of our best managers, but hes not our worst anymore. And he got promoted. Mark Klenk, an engineering manager whom Google made available for an interview, said the Project Oxygen findings, and the subsequent training, helped him understand the importance of giving clear and direct feedback to the people he supervises. There are cases with some personalities where they are not necessarily realizing they need a course correction, Klenk says. So its just about being really clear about saying, O.K., I understand what you are doing here, but lets talk about the results, and this is the goal. Im doing that a lot more, he says, adding that the people he manages seem to like it. Ive gotten direct feedback where theyve thanked me for being clear. Google executives say they arent crunching all this data to develop some algorithm of successful management. The point, they say, is to provide the data and to make people aware of it, so that managers can understand what works and, just as important, what doesnt. The traps can show up in areas like hiring. Managers often want to hire people who seem just like them. So Google compiles elaborate dossiers on candidates from the interview process, and hiring decisions are made by a group. We do everything to minimize the authority and power of the manager in making a hiring decision, Bock explains. A person with an opening on her team, for instance, may have short-term needs that arent aligned with the companys long-term interests. The metaphor is, if you need an administrative assistant, youre going to be really picky the first week, and at six months, youre going to take anyone you can get, Bock says. Google also tries to point out predictable traps in performance reviews, which are often done with input from a group. The company has compiled a list of cognitive biases for employees to keep handy during these discussions. For example, somebody may have just had a bad experience with the person being reviewed, and that one experience inevitably trumps recollections of all the good work that person has done in recent months. Theres also the halo/horns effect, in which a single personality trait skews someones perception of a colleagues performance. Google even points out these kinds of biases in its cafeteria line. The company stacks smaller plates next to bigger ones at the front of the line, and it tells people that research shows that diners generally eat everything on their plate, even if they are full halfway through the meal. By using the smaller plate, Google says, they could drop 10 to 15 pounds in a year. The thing that moves or nudges Googlers is facts; they like information, says Ms. Donovan, who was involved in the management effectiveness study and the effort to encourage healthier eating. They dont like being told what to do. Theyre just, Give me the facts and Im smart, Ill decide.

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The true test of Googles new management model, of course, is whether it will help its business performance of the long haul. Just a few hours after Bock was interviewed, Google surprised the world by announcing that Larry Page one of its co-founders, was taking over as C.E.O. from Eric E. Schmidt. Though Schmidt explained the move on Twitter by writing Day-to-day adult supervision is no longer needed, the company made clear that the point was to speed up decision-making and to simplify management. Google clearly hopes to recapture some of the nimbleness and innovative spirit of its early years. But will Project Oxygen help a grown-up Google get its start-up mojo back? D. Scott DeRue, a management professor at the Ross School of Business at the University of Michigan, applauds Google for its data-driven method for management. That said, he noted that while Googles approach might be unusual, its findings nevertheless echoed what other research had shown to be effective at other companies. And that, in itself, is a useful exercise. Although people are always looking for the next new thing in leadership, he said, Googles data suggest that not much has changed in terms of what makes for an effective leader. Whether Googles eight rules will still apply as the company evolves is anyones guess. They certainly arent chiseled in stone. Bocks group is continuing to test them for effectiveness, watching for results from all the training the company is doing to reinforce the behaviors. For now, Bock says he is particularly struck by the simplicity of the rules, and the fact that applying them doesnt require a personality transplant for a manager. You dont actually need to change who the person is, he says. What it means is, if Im a manager and I want to get better, and I want more out of my people and I want them to be happier, two of the most important things I can do is just make sure I have some time for them and to be consistent. And thats more important than doing the rest of the stuff. When Larry Page took over as CEO from Eric Schmidt, it was a surprise move that many felt signaled not so much a new direction, but an attempt to "Go Back to the Future" by creating the conditions and culture needed to return to Google's start-up roots. Many people that are in leadership roles have a vision of what they think success is and could be like in the future. Larry Page is no different. He has taken charge to drive the Google future...What is that you may ask? Larry Page has been very direct and quick to point towards a future that he thinks Google has to win to maintain growth and that is social. By doing this, Larry Page is exhibiting the behaviors that Project Oxygen outline, specifically these four by sending the note to the employees. 1. Empower your team and dont micromanage. Give freedom to employees in carrying out tasks, but make yourself available for advice.

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2. Be productive and results-oriented. Help the team prioritizes work and use seniority to minimize roadblocks. Dont be afraid to step in and give direction when needed. 3. Be a good communicator and listen to your team. Encourage open dialogue and listen to the concerns of your employees. 4. Have a clear vision and strategy for the team. Dont lose sight of the goal. Involve your team in setting goals and identifying the groups vision. He is telling employees what is important, but not how to get there. He is helping them to prioritize their activities around a major goal. He is being a good communicator in a major transition who is setting a clear vision for the team. Finally, like many new leaders...Larry Page adjusted the deck chairs on his leadership team. Significantly, the same thing is seen in many organizations. A new leader comes in and desires to shake things up by pushing the old guard to the side and bringing in new people to the leadership team that basically...the new leader thinks they can trust. New leaders tend to put in people much like themselves. So tactical task doers usually put in other tactical, task doers and don't look for the balance in senior leadership team strengths required to have a successful team. The other challenge is that by moving people in to these new very important leadership positions at Google or any other organization...are you putting them there because they are good, even great leaders, or because they are great technical experts. It makes a huge difference in the ability of organizations. Many of us have seen the great technical expert that understands their job and are very good at whatever that is...but can't lead people. It demoralizes and eventually saps the strength out of teams. So as Larry Page continues to bring his new Senior Leadership Team together...considering the Project Oxygen outcomes and ensuring they are "walking the talk" in relation to the identified behaviors will be important. The key to success for Google is how they will take the next step and measure the behaviors outlined in Project Oxygen, measure it and make adjustments to building the best-in-class leadership capability that Google will need for the future. Google losing an effective manager like Sheryl Sandberg to Facebook could become legendary as a tech industry misstep"Google has done so many things right, but the thing they screwed up more than anything was missing the import of people from non-engineering backgrounds and failing to appreciate the value such people can bring," says Roger McNamee, a friend of Sandberg's and a founder of Elevation Partners, which has an investment in Facebook. "As a consequence, a lot of people like Sheryl were not given an opportunity to shine to their true level. For all intents and purposes, Google chased Sheryl away."

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