23 Comments

Summary:

The very fact that Google has to go through an exercise to codify a process for building managers points to the fact that the company is now focusing all its energies on its biggest challenge: overcoming the curse of size.

googleplex2

The New York Times, this past weekend, ran a story about Google building a new kind of manager. It outlined Google’s attempts to create a process to find and create better managers. To me the story didn’t ask the more pertinent question — why does Google need “management mantras” in the first place? And are these needs a symptom of perhaps a malignant ailment?

My questions aside, I do like Google’s candor at admitting to the exercise, even though it gives credence to skeptics’ grumblings about Google’s lack of management structure. It was also a strong reminder that Google is willing to apply its quantitative, algorithmic and data-driven approach to building a management structure for the future.

In my opinion, this data-driven approach might work when it comes to deciding search algorithms, but not to people. After all didn’t mathematician Paul Erdos once say that a “mathematician is a machine for turning coffee into theorems.”

Jokes aside, I think Google’s issues might go beyond just finding good bosses. Though only 11 years old, Google has entered corporate middle age that is showing around its proverbial waistline. To give you sense of what I am talking about — in 2010, Google hired 4,500 people and in 2011 it plans to hire about 6,100.

At the end of 2010, Google had 24,400 employees — a stunning number by any measure, and even more jaw dropping considering that five years ago, the search engine giant had 5,680 employees. (In comparison, Microsoft had about 89,000 employees at the end of its most recent quarter.)

Baby to Big Daddy

In the lifecycle of a technology company that goes from being a start-up to a large enterprise, growth comes in three phases.

  1. Early days when the company is almost entirely focused on developing technology and figuring out a business model.
  2. Phase Two is when it revs up its engine and starts to bring in dollars, and goes on a hiring binge to support the growth of the business.
  3. Phase Three is when it starts to seek newer areas of growth in order to sustain its growth engine, and keeps hiring more and more people.

For Google, Phase One ended around 2002, while Phase Two ended sometime in 2007. Google had about 16,807 employees then. Since then it has added about 7,600 employees and by end of 2011 it will have 28,883 employees according to estimates from Ben Schachter, analyst with Macquarie Capital. It was in 2007, the company started to make a serious push into newer markets — productivity apps and Android OS, followed by Chrome OS, Google TV and the social web., over the course of the next few years.

The Challenges of Growing Up

The very fact the company has to go through an exercise to codify a process for building managers points to the fact that Google is now focusing all its energies inwards, rather than outwards. This is a crucial and perhaps Google’s biggest challenge (hence my choice of the headline.)

It so happens that somewhere between Phase Two and Phase Three, big technology companies start shifting their focus from products to managing their processes and people. The growth in the company size and scope bring in bureaucratic morass and politicking, which in turn breeds a culture of consensus.

Others, who don’t want to spend their creative energies on trying to survive (or just do they their jobs) end up leaving for greener and more importantly, intellectually more challenging enterprises — like the recent exodus of Googlers to Facebook.

These are challenges not unique to Google — pretty much every company goes through such a painful phase. The problem is that Google is facing these issues at a time when it is competing with a more nimble and definitely more formidable foe in Facebook. Furthermore, its recent success in the mobile market notwithstanding, Google cannot afford to exhale as Apple continues to breathe down its neck.

But let’s focus on the Mark Zuckerberg production for now — it is ruthless in its pursuit of its goals, and most importantly it is still in Phase One of its life. That gives the company a lot more flexibility to reshape its future. Facebook may not threaten Google’s revenue stream today, but it will eventually pose challenges to Google’s way of the web: search. It would be fun to watch how the incoming chief executive and co-founder Larry Page helps get Google’s focus back on products and overcome the curse of size.

Uh oh!

Something is wrong with your Wufoo shortcode. If you copy and paste it from the Wufoo Code Manager, you should be golden.

You’re subscribed! If you like, you can update your settings

  1. Sounds like a little changing of the guard for the big g, fun fun.

  2. All companies go through this – Curious, did Apple? I’m not sure they did.
    Quantifying management with algorithms seems to fit their nature/culture – Won’t solve their right brain problem at all though

    1. Yes, Apple went through this, in between Jobs 1.0 and 2.0. The succession of brand and channel managers (pay no attention to the product you’re selling) almost killed the company. They were left for dead, and have thrived since they rejected the standard practice for managing big companies.

      When you have 25,000 employees, you better have good managers, as they won’t manage themselves. There is no best way to filter bad managers, so google is doing it the best way they know how. They wouldn’t be where they are today if they ran their business like every other giant company, so I would give them the benefit of the doubt here and see what happens.

      1. Yes, I’m aware of that phase but to me it was more Apple had standard business managers – left-brained – with standard management practices. Jobs brought “vision” and his right brain and saved the company. It wasn’t just a better management structure.

    2. Apple was about to die back in the late 90s

  3. Alan Wilensky Monday, March 14, 2011

    “Google is now focusing all its energies inwards, rather than outwards.”, well, all Om?

    GE and IBM became better companies by making the “art of managing” a true field of study, along with the theory of professional development that continues throughout one’s career. Nothing wrong with that. And, Google may have a slightly inefficient core way of doing things, but they have navigated the lifecycle more than satisfactorily.

    A colleague of mine was a fairly top engineering management hire at Google – a bright, articulate, great thinker, big thinker and creative plus productive. A real asset to a product development team – scratch that, he was a engineering GM with chops. Previous job…..Big Blue big networks.

    He had to leave Google, he had no room to maneuver. In his opinion, I can just go by his words, “there are a few strong personalities at the top, and the rest of us are there to serve…we are the ones quantified and measured, fair is fair, but the top clique, admittedly bright folks that earned the right to promulgate and pilot, seemed very distant even from senior managers close to the action.”

    I’m wondering how other ex-Google senior hires feel about this very capable and accomplished man’s experience? He added one more thing, :”Google…..is not good at the discipline of bringing products to market, like an Apple, a Microsoft or IBM, and maybe they dont need to be in the new ground they are breaking. They often bring products to market without the need for instant monetization, which is liberating, although they most have a plan for making products earn out. ”

    “they are just not very ordered at the progression of bringing a “thing to the public”.

    1. The problem doesn’t surprise me – top, top management is analytic, left-brain to the core and I would imagine any early hires in power like Marissa bow to that and don’t help at all. The corporate culture was born right there and I don’t see anything really changing until that changes drastically and that doesn’t even look like a possibility. When Schmidt moved up (or is it out) and Larry took over, their fate was sealed in my opinion.

      1. Google has had more hits than misses. People leave facebook too you know.

      2. Bob – More hits than misses? Really? I could be wrong but I’m betting that if you count, it’s the opposite. Certainly they haven’t had a monetary hit beyond their original search brainstorm.

    2. He’s just one person. Mark Hurd was hailed as a great manager right? Many HP employees loathed his management style. As an IBMer, I can tell you I spend more time working on business plan, cadence review than executing the plan! I suspect when the management people are happy, the engineers at google would be saying Google has lost its soul, it’s not innovating anymore.

      I don’t think Microsoft is very good at going to market either. Xbox is good business, but they spent loads money on it. Zune was just killed. Vista was a fail, WP7 was delayed, still playing catch-up. And there’s Kin and the tablet that they killed just before launch.

      As for IBM, enterprise market is very different, it’s not comparable.

      1. I would say that Microsoft knows “how” to go to market, they just bring shit to market. Well, not really, their tools and servers are stellar, the Kinect was a coup, and who knows what else?

        The Goole man I referred to was their in the capacity of BIG NETWORK business model man. He was one man that came away from the ‘plex after a three year stint of head banging. Not a case study, let’s just say I though he was worth hearing.

        Meanwhile, hack at the ranch, I am editing everything on Google docs, indexing with Greplin (thanks guys) using dropbox for things the developers never thought of, and making the cloud my toolbox. We run our 12 year young advanced API driven EDI Network on MS server products in a data center(s) run by consumate fanatics (Sungard and Los Nettos).

        We are in a time of immense power and opportunity, and Google is no doubt one of the prime movers of “thinking and infrastructure sciences” that move the ball forward.

        Not everything that Google does will be blessed as a profit center, but all of their projects will enter the corpus of tools and applied sciences that those in the vanguard of services delivery will leverage.

  4. Dawn H. Wilson Monday, March 14, 2011

    Thanks for the article. I recently launched
    aKeKee.com – The Pet Search Engine.™ and Google was one of my muses!

  5. I think Google management has finally come to the realization that brilliance (by itself) without direction or process discipline isn’t enough to survive the next 11yrs especially, in the face of massive disruption and formidable competition in the online space.

  6. I think Management Science is due for an overall makeover – Before Google came along folks said the same about Advertisement. Now it is now a well-established fact that online advertising now involves more rocket science than human touch.

    Google may or may not reinvent Management Science – but most organizations will do be doing it regularly in 20-30 years from now on. There is so much data lying around – that it would be foolish to ignore it. It is just a fact of life. One simple network analysis of email will give lot of insights into an organization structure. In fact, DARPA funds lot of universities to do the same (their goal is to find terrorists networks ultimately)

    Human intuition probably may only works well when there isn’t enough data; now-a-days computers are better at predicting illness than doctors given a list of symptoms; automatic language translations by Machine Learning outperform those systems where rules are written by linguists; the list goes ON and ON.

    One more important factor is analyzing data is now so much cheaper; there is open source software and computing power is also cheaper.

    1. “Human intuition probably may only works well when there isn’t enough data”
      Humans are complex – If it was all data, most focus groups wouldn’t fail, most products would succeed, and you wouldn’t need both right & left brains.

  7. I always think it is bad idea to ramp up your employee count in the third phase.. this happens to all companies and they end up suffering for it a lot in the long run. They must focus more on selecting right people.. focus on fewer core competent product. This will help them reinvent themselves. This is what Google needs, not quantity people but quality people.

  8. “Though only 11 years old”?

    Incorporated in 1998. It’s now 2011. How does that make it 11 years old, exactly?

  9. Google seems to create products to see where to go. Strategy should set products and know where to go, also known as Leadership.

    Apple is a big company more diversified than Google, but doesn’t seem have to have that problem or not anymore. Apple seems to have a strategy, followed byproduct teams, then management picks the products which fit the strategy best at this point in time and drives it. Case in point the tablet was developed before the iPhone, but was not build[1]. My guess Google would just have released it.

    So far Apple has 35k(?) employees. If anything I would look at Apple on how to scale a business, management. Seems to me numerical models, for design and creation or human interaction, are always short term forward looking since it’s the easiest to be measured. Basically commonality and as long as there is no competitor going for/with human creativity it might work.

    Google went from:

    Page said, “I’m glad you think Google is great, but I think it sucks.”[2]

    at 10 years old with no real progress after the initial system[3]:

    Q: What do the next 10 years hold for Google?
    A: I think there will be a continued focus on innovation, particularly in search. Search is an unsolved problem. We have a good 90 to 95% of the solution, but there is a lot to go in the remaining 10%. How do we monetize new forms of content as they come online such as video, maps and books. How do we help content providers transition their businesses online and build healthy businesses.

    to[4]:

    Yes, it’s true that a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better. I had a recent debate over whether a border should be 3, 4, or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that. I’ve grown tired of debating such minuscule design decisions…

    In other words from humble understanding its limitations, to we are the smartest and everything has to be justified by a number. Even in its early days Google knew it’s not that simple. They shouldn’t worry about tweaking management, they should worry about advances in Computing driven by new insides in Neurology and Psychology.
    For example, humans start learning from negative feedback at around 15mnth, shortly thereafter they can recognize self, after which they can learn “all”. Which is an interesting sequence of events, since there are cultures which have the concept of “many” but can not count more than 2-3. So “all” seems to be an easier concept than counting. Now “all” can be shown as the basics of math, no statistics necessary. At least if one teaches numbers and basic math to a system.
    Is this important for search, sure. Suddenly one can compare what on reads to what one knows. Since every social or animal with cognitive problem solving skills seems to have some form of self I would start looking there on how to have some fun with Apple.

    Think different.

    1. http://en.wikipedia.org/wiki/IPad

    2.
    http://www.niemanlab.org/2011/03/richard-j-tofel-someday-the-sun-will-set-on-seo-%E2%80%94-and-the-business-of-news-will-be-better-for-it/

    3. http://latimesblogs.latimes.com/technology/2008/09/marissa-mayer-t.html

    4. http://news.cnet.com/google-designer-leaves-blaming-data-centrism/

  10. Michal Bohanes Tuesday, March 15, 2011

    Om, I usually highly value your articles but with this one is way off. If the NY times does an interview with Google’s HR boss, what else should he talk about than HR at Google? You take the fact that Google tries to sprinkle its data magic on traditionally vague subjects such as HR and provide this as the evidence for the company becoming introspective and middle-aged? Huh? With nearly 25k employees, every company needs to have some HR processes and structures in place. It is a testimony to the ingenuity of Google that the data driven approach is also attempted in finding best managers and fostering good corporate behaviour.
    This is not the Om quality of reasoning I got used to over the past months I’ve been reading you.

  11. a peek in to the future, no, the present itself says, a lot of people look to their twitter friends and facebook buddies before they try to search for something on google. reason – the results are a lot more specific. so, for sure, it would have lost on the “search” part of the web, starting in the near future.

    all empires collapse – referring history

    1. yes empires collapse because of stretched human resources (over-expansion), revolt (social changes), or disasters (Mayan empire).

      do the math…how many people are not on twitter or facebook? minus that with those with no access to the internet and that is the number that still use google.

      google is about openness and change. apple is about iX1, iX2, iX3, iX4g etc. playing consumers for fools and locking them into their closed system (itunes etc). now they want to take a commission of all sales that is made from one of their products.

      this is called corporate greed. soon they will pick media partners and become a tool of propaganda (The Daily iPad newspaper).

      eventually in ‘phase 4′ they will decide to consolidate their business and decide to work only with the largest corporations for control of all their various revenue steams.

      funny…sounds like what wall street did and is doing regarding the global financial market.

      stop being an apple drone.

      it may look good but you all are no different from the Borg

      1. Google’s about “openness” – Ya, right
        Tell me about their search algorithm – Oooops, that’s not open.
        Have you downloaded the latest development build of android – Ooops, you can’t.
        And, tell me about Google and change – Ooops, not much to talk about there either.

  12. “Facebook cannot threaten Google’s revenue stream, and it cannot eventually pose challenges to Google’s way of the web: search.” Why? Because it is not into search and won’t be. Microsoft is — bingo, you get the picture. And Google still rules ://search bigtime if Om had studied the stats upfront. Even Apple (with a #1 market cap) is wary of getting into search and for a good reason. So why would Facebook eventually pose a challenge to Google’s search? Extending his vision of social search, why would anyone want to advertise to some ancient social friend from 8th grade (even inadvertently) that you just did a search on a specific keyword? Makes no sense. With all the love it has gotten, has facebook managed to even cross the great Chinese firewall? And it’s as if getting into the search business was so easy just ‘cos you own some popular social networking website! Analysis paralysis?! Anybody remember the heydays of altavista? How many times has search being tried and how many survived? Beating google’s search algos is no child’s play like plugging in a find my classmates algo. Perhaps high-flying technorati overwhelmed with the latest gizmos and sites have totally lost their touch in separating wheat from chaff. This only leads to mass confusion.

    BTW, an educational must read on facebook (the new Geocities?) reality check:
    http://www.pcmag.com/article2/0,2817,2381827,00.asp

Comments have been disabled for this post