How Google Works - Critical summary review - Eric Schmidt

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How Google Works - critical summary review

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Technology & Innovation, Corporate Culture & Communication and Management & Leadership

This microbook is a summary/original review based on the book: How Google Works

Available for: Read online, read in our mobile apps for iPhone/Android and send in PDF/EPUB/MOBI to Amazon Kindle.

ISBN: 1455582328

Publisher: Grand Central Publishing

Critical summary review

How do you successfully lead an innovative company? Looking at how Google executives do it is probably a good start. In, “How Google Works,” Eric Schmidt, the former CEO of Google, and Jonathan Rosenberg, former head of products at Google, share their insider info on how Google became the successful and innovative business it is today. So, get ready to discover the secrets to becoming the next Google!

How Google works

Google is one of the best modern examples of a successful innovative start-up. It was founded in 1998 by Larry Page and Sergey Brin, neither of whom had any formal business experience at the time. They started as a small team, but as the company grew, they had to make sure they kept the spirit of the start-up alive. 

Generally, Google’s focus has always been on the user. That’s why they created a product that would be user-friendly and believed it would eventually pay off. And pay off it did, but it’s important to remember that Google was not founded with a money objective in mind. In fact, Google has repeatedly launched projects they knew would negatively impact their business revenues because they were focused on building customer trust.

    For the most part, Google’s success can be attributed to the people they have hired over the years. Google’s hiring priorities are applauded because people with engineering experience are valued more than those with business experience, as Google believed this would help them reach their goals. “To this day the rule of thumb is that at least half of Google employees (aka Googlers) should be engineers.” Googlers have always enjoyed the freedom to think outside the box and be creative. This is how Google has managed to respond creatively and intuitively to new challenges.

Smarter hiring

    To become a leading innovative company, you need “smart creatives.” These are employees who combine traditional business and technical skills with a creative sensibility. They are innovative thinkers, dedicated to their jobs and driven to deliver great quality. They also adopt a hands-on approach to their work.

    Smart creatives are drawn to challenges and favor start-ups, as this often gives them the freedom they need to flourish. They will never keep quiet when they disagree with something, but they often get bored easily, so they may not work for you forever. As it turns out, hiring is the single most important job of a manager and Google puts a lot of effort into implementing and revising its hiring practices. Their hiring approach is based more on the hiring practices of universities than those commonly associated with the business world. 

To make sure that Google employs interesting people, Schmidt always asks himself whether that person would be interesting to talk to if he were stuck at an airport with them for six hours. He says you don’t have to necessarily like the people you hire, it’s only important that they match you in creativity and intellect to help keep the company growing.

When interviewing a potential employee, you should ask questions that encourage the candidate to share their insights from working for other companies. The questions should also be complex enough to test the person’s mindset, and also create a lively discussion to see how well they can defend their position. Google's hiring committees are encouraged to ask brain teaser questions during the interviews to assess the candidate's intellect as well as their ability to solve problems.

Choose a team-based, rather than a hierarchical, approach to hiring. At Google, hiring decisions are made by a committee. Google always asks the assistants (who may have chatted to the candidate before or after the interview) about their impressions. Keep in mind that the candidate is interviewing you as much as you are interviewing them, as good candidates always have several options. First impressions matter. 

How to structure a company

    On a Friday afternoon in May 2002, Page was testing the Google search function by typing in random words, and was looking at the results. He quickly realized that some of the ads were not even remotely related to what he was searching. He printed out some of the offending sites, tacked them onto the wall in the kitchen at Google headquarters, and wrote underneath “These ads suck.” Then he packed up and went home for the weekend. 

    The following Monday morning, the problem had been resolved! A group of employees, who were not part of the advertising team, had taken an interest in the problem and had solved it in their free time over the weekend. This only happened because Google’s company culture is one where everyone feels dedicated to their jobs – they want the company to thrive. The best way to understand your company culture is by asking the smart creatives of the founding team.

    At Google, the aim was to create an academic environment: “A new visitor to the Googleplex will immediately notice the dazzling array of amenities available to employees: volleyball courts, bowling alleys, climbing walls and slides, gyms with personal trainers and lap pools, colorful bikes to get from building to building, free gourmet cafeterias.” 

In a team setting, everyone’s opinion should be valued equally, not just that of the “Hippo’s” (Highest-Paid Person’s Opinion). Finally, organize your company around the people who have the biggest impact in terms of their passion. Experience and function should take a backseat in this decision. When setting up your teams, make sure that at least 50 percent of employees are experts in the company’s product.

To ensure that the employees are fully dedicated to their jobs, it’s important that they feel fulfilled and motivated. Usually, companies make mistakes by assigning tasks along with a specific roadmap that employees should follow with very little personalization in how these tasks should be executed. At Google, the emphasis falls on the project itself, not on how it is done, as greater freedom will always lead to higher productivity and personal satisfaction. 

Companies should also encourage time off from work, as this practice benefits both the company and the employees. Employees will be happier as a result of having more time to spend on their personal projects and with their families. In the meantime, managers should assign other employees to cover for them while they are gone. They will come back refreshed and ready to pick up where they left off.

Fostering innovation

    What does it mean to be an innovative company? It means creating new, surprising, and radically useful products. There are practical steps you can take to boost innovation in your own company. 

Forget the idea of having something like “a head of innovation.” You can’t be innovative by trying to enforce it through a bureaucratic process. Instead, the work environment needs to be one where “the different components of creation are given free rein to collide in new and interesting ways.” 

Ideas can come from anywhere, especially in times of the internet, which means more competition. The internet is also an ideal testing ground for prototypes and new ideas. For example, Google has made use of their user’s expertise before, such as in the creation of Google Maps.

Along with creating new ideas, it’s important to get other people on board with them. This is called the first-follower principle. These leaders are the people who turn a crazy concept into an idea that other people buy into. So, your company needs to encourage innovation on all levels, but also needs to make sure that people follow the innovator. To do so, foster an open work culture that encourages communication.

Once new ideas have evolved, you need to give them the freedom and space to be developed further. Good ideas need time to gestate and the best way to do that is to take calculated risks. Some of the projects that Google launched were huge failures, such as Google Wave, an alternative email provider that never quite took off and was eventually scrapped. 

Failures are an integral part of the learning process for both organizations and individuals - the only thing that matters is how you react to it. Often, some parts of the idea can be salvaged and morphed with others to create something new. For example, some features of Google Wave later contributed to the creation of Gmail. 

    As a manager, you need to create a company that can survive failures and risks. When someone’s idea fails, you should treat this as a badge of honor, because at least they tried to make something happen. This ensures that in the future, employees will venture out into the unknown, come up with new ideas that may give you a head start in the field. At Google, many of the people working on Google Wave were eventually promoted to higher positions, as they had shown such dedication to their product.

    Another way Google encourages innovation is with something called 20% time where employees are encouraged to spend 20% of their time working on the project of their choice. This approach fosters creativity and freedom, and at Google, resulted in services such as Gmail.

Communicating and leadership as one

To create an innovative work culture, the company’s higher-ups need to encourage transparency and openness, not only among employees, but also between the managers and their respective teams. As a manager it can be tempting to keep your business plan or ideas to yourself, but smart leaders understand that people work better when they understand what’s at stake and what the long term goals are. 

Furthermore, leaders need to find a way to optimize the flow of information on a daily basis to ensure that everyone’s on the same page. Approachability and open-mindedness are the makings of a great leader - meaning that you should always encourage discussion and be ready to have your ideas challenged. At Google, several high-ranking employees have done this with open office hours, or as one senior member did, wrote a user manual on how best to approach him. 

And what's more, openness, collaboration, and cooperation is encouraged by an open office layout. They also have company-wide TGIF meetings every Friday, where anyone can suggest topics for discussion. Google also sends out quarterly business reports to every employee and has introduced OKRs (Objectives and Key Results) of individuals. These are updated and published quarterly by every employee on Google’s internal server, Moma. This means when you meet someone new at Google and want to know more about them, you can go to Moma to learn about their objectives and what motivates them.

Scrap traditional business plans

    You may think that a traditional business plan will give your business security and lead it to success. But traditional business plans are flawed. They don’t factor in sudden changes or challenges, and especially in today’s rapidly evolving world, sticking too close to an established business plan can hinder your business from being truly innovative. So instead, settle for a strategic foundation. This provides the needed flexibility to adapt to changes quickly, think outside the box and apply creative solutions to complex problems.

    To start with, think about how your industry will look in five years. What could change quickly? What will stay the same? This thinking will help you adjust your goals appropriately. Your ultimate aim should always be to optimize your company for growth. Always get the input of others working with you and define time bound and measurable goals. Consider these three points that many successful companies have in common to help create your own business strategy:

  • They created a new solution for a problem.
  • They used this solution to quickly expand and grow.
  • The success was largely based on the products.

Final Notes

    To lead a successful innovative business, you need to hire smart creatives. They need to be given the freedom to develop their own ideas, and they need to be allowed to take risks. To become truly innovative, you need to ensure good communication on all company levels and create a company culture that is not dominated by hierarchies. 

    “How Google Works” is a compelling read full of insights into the secret workings of Google. Once you finish reading this book, you will likely want to work at Google as well!

12min Tip

    Next time you hire someone, make sure you get input from your team to make sure they will work well together!

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Who wrote the book?

Eric Schmidt is an American businessman and software engineer. He was CEO of Google from 2001 to 2011, and executive chairman of the company from 2011 to 2015. Afterward, he became an executive chairman and t... (Read more)

Jonathan Rosenberg is an American businessman, technologist and economist. He was a senior vice president of products at Google and is currently an advisor to the Alphabet management team and board, part... (Read more)

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