How Google Works

By Eric Schmidt & Jonathan Rosenberg

Reading notes #books/howgoogleworks

I watched the Blitzscaling YouTube series from Greylock recently and one of the interviews was between Reid and Eric Schmidt. The interview is very insightful and Eric mentioned the book “How Google Works”, so I bought the book to check it out.

The book was originally published in 2014 and the interview happened around 2015 so the content are quite connected.

Nowadays, when you ask an engineer in the valley about their view of Google, the reaction most likely would be: it is a clumsy corporations for retirement, it takes forever to make things happen in Google; Google doesn’t build good products.

However, when I read the book, I’m impressed with the effort Eric and his team have put in nurturing an environment for smart creatives to innovate without permission.

I also had a reflection on this in previous blog post that, the culture and value that on the paper are not real culture & values. You understand how the culture and value of a company look like now by interviewing 10 people in the town hall, that is the culture; or you can cheat a bit by talking to 10 front line managers. It has been widely understood that leaders leverage culture and value to scale the company, it is much easier said than done. When there is a competing scenario of site-up vs culture fit, we always sacrifice company culture. After more and more people hired into the company not fitting the culture or having the curiosity to understand DNA of this company, the soul of the culture will fade fast.

When I read the Netflix culture deck a few years back, I was impressed with a clearly stated culture and everyone abide by and I was thinking if we have such a culture exists in our company. Later, after reading “No Rules Rules”, I was on a journey to understand more on company cultures and values; I shop ped around and read half a dozen books on leadership and culture, shockingly, I realized the culture and values of LinkedIn are among the rock solid ones, and Jeff Weiner is an awesome leader that articulates vision → values really well. I started to realize, maybe it is a thing only exists in the exec suite. Outside of the exec suite, at least during my tenure, I rarely got a chance to bump into a leader makes decision based on culture and value. My takeaway is: scaling a corporation is super challenging, culture and value evaporate fast if we don’t practice them everyday. We need to apply culture and value in every hiring, firing, and promotion, and decision making.

A bit detoured from the book… the book is a good read. Eric and pal tried really hard to maintain a free environment for smart creative to innovate. Very similar to the Netflix idea of Freedom & Responsibility, and Set Context, Remove Control. There is also an interesting discussion of Google vs Apple in building consumer products, the iconic Open vs Closed challenge. Eric’s argument is, for most people without the grit and gift of Steve, you should default to open.

Excerpts

Foreword by Larry Page

“I felt that either option (become professor or start a company) would give me a lot of autonomy — the freedom to think from first principles and real-world physics rather than having to accept the prevailing wisdom”

“It turns out most people haven’t been educated in this kind of moonshot thinking. They tend to assume that things are impossible, rather than starting from real-world physics and figuring out what’s actually possible.”

This is a pattern exhibited from wise people, they think independently, using first principles and challenging prevailing wisdoms.

How Alphabet Works

“Our conclusion: practicing what we preach in How Google Works is very difficult when a company gets big.”

“The only way to succeed in business in the 21st century is to continually create great products, and the only way to do that is to attract smart creatives and put them in an environment where they can succeed at scale.”

“At some point, process starts to take over… People stop thinking and instead just depend on the process to make decisions for them. As process gets better, judgement can weaken.”

“In How Google Works we preach that organizational design is challenging and that leaders should always organize around people whose impact is the highest. This is still absolutely the case, but we’d like to add a new corollary. As a company gets big and complex, you can’t just organize around people who create innovation; you need to organize around people who can create and lead entire new ventures and business. This is a special class of smart creative: the CEO.”

“”Bet on technical insight.”

“Not-invented-here attitudes are a real danger in big companies; you need to have leaders who are OK with acknowledging the limitations (or outright failures) of internal efforts in light of the success of outside ones.”

Bill Gates: “Spend 80% of your time on 80% of your revenue.”

“Think big, act small.” Solving big problems by taking advantage of big company assets such as talent, resources and technology, while simultaneously acting small by growing ‘startups’ built through bottom-up insights and with the autonomy to move fast.

“Set 10x goals, ask what looks like 5 years from now?“

Introduction — lessons learned from the front row

“Larry and Sergey offered their employees plenty of freedom and used communication as a tool to keep everyone moving in the same general direction.”

“Coming from academic background, Larry and Sergey had given these employees unusual freedom and power.”

“We had joined Google with the idea of bringing adult supervision to a chaotic place.”

“The way to challenge Microsoft was to create great products.”

“The results of all this turmoil is that product excellence is now paramount to business success — not control of information, not a stranglehold on distribution, not overwhelming marketing power.”

Jeff Bezos: in the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.

“The defining characteristic of today’s successful companies is the ability to continually deliver great products. And the only way to do that is to attract smart creatives and create environment where they can succeed at scale.”

“Not every smart creative has all of these characteristics, in fact very few of them do. But they all must possess business savvy, technical knowledge, creative energy, and a hands-on approach to getting things done. Those are the fundamentals.”

“We open by discussing how to attract the best smart creatives, which start with culture, because culture and success go hand in hand, and if you don’t believe your own slogans you won’t get very far.”

Culture — Believe Your Own Slogans

“Smart creatives, though, put culture at the top of the list.”

“Working from home during normal working hours, which to many represents the height of enlightened culture, is a problem that — as Jonathan frequently says — can spread throughout a company and suck the life out of its workplace. Mervin Kelly, the late chairman of the board of Bell Labs, design his company’s buildings to promote interactions between employees.”

“The Google version suggests that managers have a minimum of seven direct reports so there isn’t time to micromanage.”

“Whenever possible, avoid secret organizational documents.”

Do all reorgs in a day. “First, beware of the tendencies of different groups: engineers add complexity, marketing adds management layers, and sales adds assistants. Second, do all reorgs in a day.”

“Since there is no perfect organizational design, don’t try to find one.”

“Teams should be small enough to be fed by two pizzas.”

Organize the company around the people whose impact is the highest

“One last organizational principle: determine which people are having the biggest impact and organize around them.”

“Your title makes you a manager. Your people make you a leader.”

“The ones who are running the company should be product people.. a good rule of thumb is that at least 50% of the people at the table should be experts in the company’s products and services and responsible for product development.”

Overworked in a good way

“If you are a manager, it’s your responsibility to keep the work part lively and full; it’s not a key component of your job to ensure that employees consistently have a 40 workweek.”

“Burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you. Give your smart creates control, and they will usually make their own best decisions about how to balance their lives.”

Strategy — Your Plan is Wrong

Bet on technical insights, not market research

“Bet on technical insights that help solve a big problem in a novel way, optimize for scale, not for revenue, and let great products grow the market for everyone.”

“What is the technical insight upon which those new features, products, or platforms will be built? A technical insight is a new way of applying technology or design the either drives down the cost or increases the functions and usability of the product by a significant factor.”

Don’t look for faster horses

Henry Ford: “if I had listened to customers, I would have gone out looking for faster horses.”

Default to Open, not Closed

“With open, you trade control for scale and innovation.”

“Make it easy for customers to leave.”

Don’t follow competition

“Be proud of your competitors. Just don’t follow them.”

Eric’s Notes for Strategy Meeting

1. Start by asking what will be true in five years and work backward.
2. Growth matters most.
3. Choose the right coterie wisely to work on the strategy.

Talent — Hiring Is the Most Important Thing You Do

“Smart coaches know that no amount of strategy can substitute for talent, and that is as true in business as it is on the field.”

Hiring Learning Animals

“Intelligence is the best indicator of a person’s ability to handle change.”

“Favoring specialization over intelligent is exactly wrong, especially in high tech.”

“Jonathan’s modus operand is to ask candidates to reflect on a past mistake.”

Everyone knows someone great

You hear about “fighting for headcount” a lot more than “finding great people,” because the latter is what those recruiters are for, right? Not exactly.

“We look for signs around their comfort with ambiguity, bias to action, and collaborative nature.”

“Urgency of the role isn’t sufficiently important to compromise quality in hiring.” “Hire only when you’ve found a great candidate.”

“From a compensation standpoint, stock options and other forms of equity are quite limited early in your career.”

Combine passion with contribution

Finding your passion isn’t always simple. Perhaps when you were starting out you were just happy to find a job, regardless of your passion.

Decision — The True Meaning of Consensus

“The answer lies in understanding that when it comes to making decisions, you can’t focus on making the right one. The process by which you reach the decision, the timing of when you reach it, and the way it is implemented are just as important as the decision itself.”

John Dewey: “A problem well put is half solved.”

Beware the bobblehead yes

“Bobblehead have a nasty tendency to complain and while and not do or support the very thing which they just agreed as soon as they walk out of the meeting” (passive aggressiveness)

“The right decision is the best decision, not the lowest common denominator decision upon which everyone agrees.”

Bill Campbell: “Do something, even if it’s wrong.”

Eric’s “PIA” rule can help get the best outcome: have patience, information and alternative.

“Disagree but commit, or escalate publicly.”

Every meeting needs an owner

1. Meeting should have a single decision-maker/owner.
2. The decision-maker should be hands on.
3. Even if a meeting is not a decision-making meeting, it should have a clear owner.
4. Meetings are not like government agencies, they should be easy to kill.
5. Meetings should be manageable in size.
6. Attendance at meeting is not a badge of important.
7. Timekeeping matters.
8. If you attend a meeting, attend the meeting.

“Spend 80% of your time on 80% of your revenue.”

Communications — Be a Damn Good Router

“Share everything except for the very few things that are prohibited by law or regulation.”

It must be safe to tell the truth

“No one wants to be the bearer of bad news. Yet as a leader it is precisely the bad news that you most need to hear.”

“Never skip a chance to promote open, transparent, honest communications.”

Repetition doesn’t spoil the prayer

“In most aspects of life, you need to say something about twenty times before it truly starts to sink in.”

Board meetings

“Eric made a commitment to the board that it would get to focus on issues relevant to the scale and strategy of the business. The Apple board also did this well, as the meetings were full of great conversations about products, leadership, and strategy. And there was no question who was in charge!”

“On the basis of their actions and not on the basis of their domestic ideology.”

Innovation — Create the Primordial Ooze

“The two of us learned a lot about smart creatives from working with and observing Steve, about how much personal style can influence company culture and about how that culture is directly tied to success.”

“For something to be innovative, it needs to be new, surprising, and radically useful.”

“Innovative people do not need to be told to do it, they need to be allowed to do it.”

Focus on the user

“Product excellence is the only way for a company to be consistently successful, so our prime directive when it comes to product strategy is to focus on the user.”

Set (almost) unattainable goals

1. A good OKR marries the big picture objective with a highly measurable key result.
2. A good OKR should be a stretch to achieve.
3. Most everyone does them.
4. They are scored, but this scoring isn’t used for anything and isn’t even tracked.
5. OKRs are not comprehensive; they are reserved for areas that need special focus and objectives that won’t breached without some extra oomph. Business-as-usual staff doesn’t need OKRs.

“Over investment can create a situation wherein willful confirmation bias — the tendency to see only the good things in projects in which a lot has been invested — obscures sound decision-making.”