How Google Works Summary - Eric Schmidt

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How Google Works

How Google Works Summary
Corporate Culture & Communication, Technology & Innovation 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: 978-1455582327

Also available in audiobook


Have you ever wondered how a huge and successful company like Google works? What are the attitudes which differentiate Google from all others in the market? In his book, Eric Schmidt, former CEO of Google, explains how this company accepted the changes caused by technology and focused its business on human capital. Google treasures smart, creative employees. This Google differential made the company not only become one of the most innovative in the world but also developed a unique culture that made its employees proud to work there. If you want to foster innovation in your business and have the best and most creative employees, then stick with us in this fantastic microbook!

Provide The Best Products With The Best Employees

Technology has brought about tremendous changes in our lives in recent years. Today we can store an unlimited amount of information online and connect to the internet using any mobile device. In the business world, these innovations have brought everyone's attention to the development of the best product.

The internet has made consumers demand better products, giving them more information and choice. If customers do not like your app, they can always find others; they leave negative ratings. This power means that in this new consumer market, to retain customers, you need to have the best product possible.

Also, technological advances have changed the business world by allowing companies to develop products quickly, at a much lower cost. Even a small team of engineers can develop a new product in a few months, and then release it online and for free to millions of people.

Because of these advances, good products now use great marketing strategies. This important insight has been the guiding principle in Google since its inception. Its founders focused on developing the best search engine possible, confident that if they could achieve this goal, they would have built a great company.

Creative and smart employees are the essence of Google and its founders Larry Page and Sergey Brin are examples of such a professional. They addressed employee hiring simply, bringing the best engineers and giving them a lot of freedom in developing new products.

Your Company Needs To Encourage a Memorable Culture

What can you do to make your business more attractive to creative and intelligent people? The answer lies in the company's culture, that is, in the values under which your business is built.

Your culture needs to be strong, and all your employees must understand it and work accordingly. The culture of a company should be a pattern of behavior shared among all staff, as they go about their work. Google's culture is based on the mission of the business. It is summed up in one sentence: Organize the information of the world, making it accessible to all.

Because its mission is straightforward, employees know they do not need to ask permission to work in activities that are aligned with this culture.

In your company, instead of letting your culture develop by accident, you need to plan and promote it. Therefore, we must ask the founders and first officials:

  • What do we care about?

  • What do we believe in?

  • What do we want to be?

  • How do we want our company to behave and make decisions in the future?

By doing so, you will have honest answers and ideas that encourage creativity. The three most important aspects of a creative company's culture are natural interaction with colleagues; freedom for employees to speak their minds; and independence in decision-making.

Also, you need to figure out how to give your employees the freedom to make their own decisions. If you can not do this, at least ensure that you have a good reason to say "no."

Defining your values is another important aspect of creating a healthy culture for your company. For example, in 2004, Google's founders created a document explaining the principles that guided the company. This step will help you create an environment that attracts the best talent.

Culture is a tool to attract people similar to what the company values, rather than people who only care about pay. Finding individuals who are motivated to work hard regardless of salary will help your business grow.

In 2002, for example, Larry Page got frustrated when looking for details about a bike called "Kawasaki H1B". While doing his Google search, he ended up seeing ads for lawyers who were willing to help immigrants get an American visa called "H1-B," but received nothing on the bike. Frustrated with that, he printed the pages and posted it on the whiteboard in Google's kitchen, with the text "This ad sucks! "And went home.

A team of engineers saw this on a Friday. Although this team was not officially responsible for ads, they were inspired by the problem and worked on it that weekend. By Monday they had solved the problem: ads should be organized based on their relevance and not just the value the advertiser pays. This insight has become the basis for creating Google Adwords, Google's largest revenue source.

That does not mean that Google inspires this kind of devotion, but the company culture attracts people who are motivated and dedicated problem-solvers.

Google's Culture

Google has an interesting culture full of myths. Here are some cool things about the Google way of being inspired.

Their office is open and always crowded, maximizing interactions and energy. No one has private offices, not even the senior managers.

Teams are held together, not separated by functions. Everyone works, eats, and has fun, together. Chaos exists, but it is an expression of innovation and is encouraged.

People's ideas are judged based on the merits of the subject itself and not by who suggested it. Google's new project teams are small, and many Google products that serve millions of people are developed by small teams, although eventually, they need larger teams for product maintenance/updates.

Google strives to organize the business around the individuals who make the most impact. Nothing is based on function or experience, but on performance and enthusiasm, which attracts creative and intelligent professionals.

People do not need to ask permission to do interesting things.

Google creates a fun working environment, always with parties, music, and lots of free food. The dress rules are pretty simple. They call it: You just need to be dressed. Do not be surprised if you find people in pajamas or slippers at company offices.

Retaining And Contracting Talents

Creative and intelligent people are the key to developing great products. So how could your business attract employees who fit that description?

For starters, hiring employees should be one of your priorities. In most organizations, hiring a new employee is the responsibility of the supervisor. However, one person's opinions can be highly subjective. Also, most senior executives will not want to hire someone who looks smarter than themselves, so they can maintain the company's status quo.

Google has realized that the best way to hire someone is to make decisions together, forming a committee. A team reviews the candidates using many data and supporting materials such as interview reports, compensation history, curriculum, and referrals.

While all these supporting documents are valuable, hiring high-level employees also requires imagination. Looking at a resume and evaluating a candidate based on his experiences will not help you find the most attractive, intelligent, and adaptable employees.

In addition to the standard interview questions, ask the candidates about their interests and passions. Find out what he does and what he cares about outside of work. Challenge the candidates with surprising questions.

How does Google find and hire the best professionals? The company has some interesting attitudes:

  • Google attracts people - job seekers receive resumes from their potential future co-workers, so the smart and creative will be attracted to the opportunity to work with great talents as well.

  • Google is always looking for enthusiastic people - which is the driving force of the smart and creative. So the interviewers try to get their candidates to talk about the things that matter most to them.

  • Google hires people with an appetite for learning - people who have a growth mindset and who will approach their tasks as an opportunity to learn new things.

  • Google tries to hire interesting people with different backgrounds - the kind of person who will not mind spending hours chatting at the airport if a flight is late.

Once you've hired someone creative and smart, what do you do to keep that person in the company? This question is important since innovative and intelligent people are restless and ambitious. At some point, they may want to leave your business to try something new.

To prevent this from happening too soon, find ways to challenge and intellectually engage your employees. That way, they will feel stimulated and motivated, which will suppress the urgency of leaving the company. For example, when a good engineer wanted to leave Google, Schmidt persuaded him to stay, inviting him to attend important meetings with the founders. Attending these meetings allowed the engineer to learn new things about the business, and as a result, he ended up staying with the company for another two years.

Develop Strategies That Tolerate Changes

Most CEOs think their companies need a business plan, but they are wrong. The reality is that more traditional business plans can lead to failure.

That is because the traditional plan does not give room for change. Managing a business requires you to respond to new challenges.

Let's assume you have defined a long-term strategy for your technology company. What if a new technology or a new competitor came up, demanding that you react quickly? You will not be so responsive if you are stuck with a flat plan. That is why, in terms of strategy, you will be better prepared for the unforeseen ones if you create a foundation for your strategy rather than a static plan.

The difference is that a plan is a step-by-step guide to taking care of your business while a foundation is a guiding principle that will guide you.

When Jonathan Rosenberg wrote the founding strategy for Google in 2002, he initially planned to deliver to entrepreneurs a typical business plan. However, he ended up writing a much more comprehensive document because he realized what helped guide employees in what to do.

He detailed three main points:

  • Each new product should be based on great technical insight: a new way of applying design or technology to lower the price or increase the functionality of a product.

  • Take care to create accelerated growth on a global scale, as competitors can take advantage of small benefits. The best way to scale up is to develop a platform: a combination of products and services that create new markets, bringing people together.

  • Be open. When you can, share information with the world.

Establishing these fundamental ideas has allowed Google employees to apply their talents and special skills to create innovative solutions to unexpected problems.

Do Not Make Decisions Without Discussing Possibilities With Your Employees

In traditional companies, decision making is usually hierarchical. Senior managers make important decisions, while others agree.

However, if you are fortunate enough to run a business with smart and creative employees, things will be different. The decision-making process becomes as important as the decision itself because if the officials do not support the decision, it will not go forward.

A good example was when Google had to decide whether or not to enter the Chinese market. In 2004, Google opened an office in China, despite the fact that it would need to comply with the Chinese government's censorship requirements. Traffic and revenue grew for a few years, but then Google was attacked by hackers in December 2009. Google found that the hackers were sourced from China's government, who were trying to access the personal information of human rights activists and political dissidents.

So Google executives met several times to discuss the situation and decided would stop obeying the government's censorship policies. That would make Chinese Google lose traffic quickly, but it was the right thing to do.

Decision-making needs to be a team effort. This process is efficient because it involves all people and ensures that employees will support the final decision. If you want to encourage this type of decision-making in your workplace, you need to create a way for each opinion and position to be considered and discussed. As a manager, it is up to you to reinforce a discussion, not a decision.

In another situation, Eric Schmidt, Larry Page, and Sergey Brin disagreed with the functionality of a new product. In the end, none of the executives won the discussion, but debating their views together managed to come up with a better solution.

Good decisions require consensus. But when everyone discusses different opinions, reaching a decision can take a long time. Still, the timing is critical. Important decisions can and should be examined in detail, but it is still imperative to set deadlines so that decisions are not late.

For example, when Google was considering an agreement with AOL in 2002, Schmidt acknowledged the importance of that decision and set up daily meetings to deal with the matter for six weeks. That way, your team would have enough time to discuss and debate all the options, but at the same time guarantee that a timely decision.

Have a Collaborative And Creative Environment

Information is a valuable currency. It may explain why so many managers do not like to share what they know. However, this is not an option for companies that want to keep smart and creative employees. You need to have an open approach to information to maintain a creative and collaborative work environment.

In Google, quarterly company reports are not presented only to directors; each employee also receives a copy. Besides, the company's intranet, called MOMA, holds information about all products in development. It also guards each employee's individual goal and weekly reports.

In this way, everyone knows what is happening in the company, helping employees collaborate and share knowledge, even in different departments.

It is important to encourage employees to be open, making it clear that all discussions are welcome. While most companies have a very hierarchical structure, smart and creative employees work best when they have the opportunity to voice their opinions.

Google's founders encourage this trend in employees by hosting weekly meetings with the entire company. Before the start of sessions, all employees have the opportunity to submit questions to the online database. The founders answer all the questions.

As a consequence of these policies, members of Google teams are now comfortable in starting their conversations with their colleagues. An employee, for example, wrote a "user manual" about himself, with advice on how to work more efficiently with him.

Encourage Innovation

Hiring smart and creative employees is about innovation. But is it possible to force one to be innovative? Many companies try to force change artificially, for example by appointing an "innovation director," but this approach tends to fail.

One of Google's employees was a former Yahoo innovation director. His job was to stimulate innovation in the company by organizing presentations of new technologies for engineers. This approach did not seem to work, and he left Yahoo and got a job at Google. According to him, in his new job, he constantly innovated, and innovation was not imposed on other employees.

Nevertheless, if there is no way to encourage innovation, how can your business create innovative and unusual products? Although you can not make your employee more innovative, you can also follow some tips to generate a climate that encourages innovation.

First, set challenging goals for your employees. Another way to encourage innovation is by being open to taking risks. For example, in Google, 70% of the company's budget goes to the main projects, 20% to partner projects and 10% to new experiments. In this way, even projects that seem risky still receive investments, which keeps innovation in the company.

Finally, if you really want to have an innovative business, let your employees do what they've been hired to do: be smart and creative.

That's why Google allows each engineer to spend 20% of their time doing whatever they want. Including one of the company's most successful products, Gmail, was created by an engineer in his spare time.

Final Notes:

Somewhere, the next generation of creative and intelligent employees is already working to figure out how to take the lead in today's business. Get inspired make the creative and smart work for you.

If you want to develop a culture of innovation like Google's, make it your priority to hire these intelligent, creative employees. It may be that you need to give up some power or adjust your leadership style, but the result will be worth it.

12min tip: Are you a fan of Google? How about reading a book that is not about Google, but describes the company so well that it seems to be? Check out our microphone "Exponential Organizations" and find out why Google has become a huge company.

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Who wrote the book?

Eric Schmidt is president of Alphabet Inc., the company that controls Google. Eric served as CEO of Google from 2001 to 2011. During this time, he led the company's growth by taking it from a Silicon Vall... (Read more)

Jonathan joined Google in 2002 and managed the design and development of the consumer, advertiser and partner products of the company... (Read more)