How Google Works – Eric Schmidt

Here are my comments on the book:

What can we learn from how Google works? Eric Schmidt, former CEO of Novell and current CEO of Google since 2001, addresses various aspects to building the world’s largest internet company. He talks about things such as compensating employees accordingly to performance, creating an open environment, quickly learning from failures, and spending time wisely. There are just so many aspects to running the world’s largest internet company that it’s difficult to address them all. Here are some of the points to the book:

 

1. Create a work culture of “yes” where employees feel that they are able to contribute or give ideas of a project that they’d like to run. The more that the employees have a say in the decision making process, the more they’ll own up to it. Giving employees control is such a major factor in employee satisfaction. No one likes to be told how to do something, especially if in the employee’s perspective that s/he has a better way to execute on it. People are too focused on following the process rather than the results whereas Google focuses on the results. Perhaps that’s a big why Google’s at the top.We are both parents, so we understand through years of firsthand experience the dispiriting parental habit of the reflexive no. ‘Can I have a soda?’ No. ‘Can I get two scoops of ice cream instead of one?’ No. ‘Can I play video games even though my homework isn’t done?’ No. ‘Can I put the cat in the dryer?’ NO! The ‘Just Say No’ syndrome can creep into the workplace too. Companies come up with elaborate, often passive-aggressive ways to say no: processes to follow, approvals to get, meetings to attend. No is like a tiny death to smart creatives. No is a signal that the company has lost its start-up verve, that it’s too corporate. Enough no’s, and smart creatives stop asking and start heading to the exits. To keep this from happening, establish a culture of Yes. Growing companies spawn chaos, which most managers try to control by creating more processes. While some of these processes may be necessary to help the company scale, they should be delayed for as long as possible. Set the bar high for that new process or approval gate; make sure there are very compelling business reasons for it to be created. We like this quote from American academic and former University of Connecticut president Michael Hogan: ‘My first word of advice is this: Say yes. In fact, say yes as often as you can. Saying yes begins things. Saying yes is how things grow. Saying yes leads to new experiences, and new experiences will lead you to knowledge and wisdom…An attitude of yes is how you will be able to go forward in these uncertain times.’

 

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2. When it comes to getting a project done, create a smaller group rather than a big one to get it done. If Google uses Jeff Bezos’, founder and CEO of Amazon.com, ‘two-pizza team’ model, chances are is that it’s a working model. Try it out yourself and see how it works. The building block of organizations should be small teams. Jeff Bezos, Amazon’s founder, at one point had a ‘two-pizza team’ rule, which stipulates that teams be small enough to be fed by two pizzas. Small teams get more done than big ones, and they spend less time politicking and worrying about who gets credit. Small teams are like families: They can bicker and fight, or even be downright dysfunctional, but they usually pull together at crunch time. Small teams tend to get bigger as their products grow; things built by only a handful of people eventually require a much bigger team to maintain them. This is OK, as long as the bigger teams don’t preclude the existence of small teams working on the next breakthroughs. A scaling company needs both.

 

3. Keep learning everyday whether it’s through reading, watching videos, attending a class, or listening to audiobooks if you want to reach higher levels of success. In an article that I had read, it stated that one thing most millionaires had in common is that they read. It could be correlation versus causation but I believe it’s correlated. There’s a reason why those at the top have all stated, in their own way, that knowledge and learning pays out the best. Everyday, try to go to bed a little bit wiser than you woke up as was said by billionaire Charlie Munger. Think about your employees. Which of them can you honestly say are smarter than you? Who among them would you not want to face across a chessboard, on Jeopardy!, or in a crossword-puzzle duel? The adage is to always hire people who are smarter than you. How well do you follow it? This adage still holds true, but not for obvious reasons. Of course smart people know a lot and can therefore accomplish more than others less gifted. But hire them not for the knowledge they possess, but for the things they don’t yet know. Ray Kurzweil said that ‘information technology’s growing exponentially…And our intuition about the future is not exponential, it’s linear.’ In our experience raw brainpower is the starting point for any exponential thinker. Intelligence is the best indicator of a person’s ability to handle challenge. It is not, however, the only ingredient. We know plenty of very bright people who, when faced with the roller coaster of change, will choose the familiar spinning-teacups ride instead. They would rather avoid all those gut-wrenching lurches; in other words, reality. Henry Ford said that ‘anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.’ Our ideal candidates are the ones who prefer roller coasters, the ones who keep learning. These ‘learning animals’ have the smarts to handle massive change and the character to love it.

 

4. Failure is always and will always be a part of the journey to success. If Google ‘fails’ and they’re the largest internet company in the world, this goes to show that you don’t have to be right 100% of the time. However, how you deal with your failures is what will separate the successful from the unsuccessful. Learn from your ‘failures’ quickly and move on. They were right, Wave was a tremendous failure. It failed quickly: We did not pour good money after bad. It failed without anyone being stigmatized: No one on the Wave team lost their jobs, and in fact most of them were highly recruited within Google after the project shut down, precisely because they had worked on something that had pushed the boundaries. An it failed after having created a lot of valuable technology: Pieces of the Wave platform migrated to Google+ and Gmail. As a failure, Wave failed well. To innovate, you must learn to fail well. Learn from your mistakes: Any failed project should yield valuable technical, user, and market insights that can help inform the next effort. Morph ideas, don’t kill them: Most of the world’s great innovations started out with entirely different applications, so when you end a project, look carefully at its components to see how they might be reapplied elsewhere. As Larry says, if you are thinking big enough it is very hard to fail completely. There is usually something very valuable left over. And don’t stigmatize the team that failed: Make sure they land good internal jobs. The next innovators will be watching to see if the failed team is punished. Their failure shouldn’t be celebrated, but it is a badge of honor of sorts. At least they tried.

 

My rating:
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Check out the book here:

Amazon US
Amazon Canada
Amazon UK

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By Ryan Lee

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