How Google Works

How Google Works
Seasoned Google executives Eric Schmidt and Jonathan Rosenberg provide an insider's guide to Google, from its business history and disruptive corporate strategy to developing a new managment philosophy and creating a corporate culture where innovation and creativity thrive.

Book Summary - How Google Works by Eric Schmidt and Jonathan Rosenberg

Key Insights

Through tactics both innovative and practical, authors Schmidt and Rosenberg explore the secrets behind Google’s success, offering a unique perspective on what has--and what has not--worked in pushing the rapidly-growing technology company to the pinnacle of global achievement. By employing non-traditional methods, making strategic hiring decisions, and by fostering an office culture that incorporates creativity and self-care, Schmidt and Rosenberg take readers on an eye-opening journey through the inner-workings of this Silicon Valley superpower.

Key Points

Great Products

Often, we think of products as dictated by the companies that manufacture them. But what about the consumers who are driving the market? Through the Internet, customers have endless options when it comes to choosing a product. While this oversaturation could intimidate a company that is trying to enter a particular market, successful companies use the threat of competition as motivation to create the most efficient products they can.

Another shift in product development is that companies can now develop a product in just a few months and pass it along to millions with ease.

For this reason, a solid product is even more important than a strong marketing strategy. If the product is high quality, the cash-flow will follow.

Google focused on creating the most efficient search engine they could with the hope that if the product was innovative enough, it would essentially sell itself. In the end, it did.

In developing a quality product, individuals must find the sweet spot between technical expertise, business acumen, and creative skill.

Smart Creatives

After the product, authors Schmidt and Rosenberg encourage focus on another key priority: hiring smart creatives. While hiring decisions sometimes fall to a supervising manager, a comprehensive hiring committee is necessary to best represent the varied perspectives within the company.

Candidates should be reviewed analytically and then in terms of their resume, references, and past experiences. Through this thorough vetting process, companies are minimizing bias rather than leaving crucial decisions to one subjective view.

At Google, Schmidt was known for asking potential employees unique questions, based on passions and interests, rather than assessing them from career-focused data points alone.

He would then go on to ask himself if each candidate was someone he would enjoy having a conversation within an airport.

This is to assess if people are drawn to the company culture rather than the financial compensation.

However, once a smart creative is hired, the work is not over. Just as it is important to acquire motivated, hard-working individuals, it is equally necessary to retain them.

Schmidt encourages company leadership to find ways to challenge their “restless” employees when you think they might leave. For instance, when one employee was planning to leave, Schmidt invited him to a series of meetings that he had not previously been able to attend. This way, the employee was having a new experience--but still remained at the company for another two years.

Free-Thinking Culture

Authors Schmidt and Rosenberg stipulate that free-thinking culture promotes interaction among employees, the freedom to speak one’s mind, and the opportunity to make decisions autonomously.

While Google embraces the stated principles, employees are also encouraged to familiarize themselves with the organization’s overarching themes and goals, such as making the world a better place and not being ‘evil’.

When Google founder Larry Page saw some advertisements he didn’t like on a Google page, he posted them in the company kitchen for all to see. Later, a group of engineers--who were not responsible for advertising--decided to rework the campaign and re-align the promotions with Google’s core values. While this was not in their job descriptions, the employees felt so dedicated to the company values that they spent the weekend making changes on their own time.

Strategic Foundation

According to Schmidt and Rosenberg, you don’t need a traditional business plan, because most lead to failure. Instead, the authors of How Google Works recommend creating a strategic foundation rather than a static set of objectives.

A strategic foundation is an outline of core principles while a standard business plan is a step-by-step account of the events that will unfold.

When developing a business plan or strategic foundation, consider the following:

If you are too fixed in your guidelines, how will your company react if a new competitor comes on the market with a similar product? Would you want to alter your action plan to respond to the unexpected development and consider moving in a new direction?

In 2002, Rosenberg wrote a strategic foundation for Google which he had planned on delivering in a standard business plan format. However, he eventually re-wrote his presentation in a value-based style, emphasizing the need to concentrate on technical insight, fast growth, and openness rather than focusing on a prescriptive set of steps that could easily be derailed by external forces.

Lively Discussion

In many corporate environments, decision-making happens from the top down. The executives at the peak of the organization dictate a path and the rest of the employees comply.

However, if employees do not genuinely support a decision-making process, they are much less likely to follow it.

Schmidt and Rosenberg offer an alternative approach. Instead of management imposing decisions, Google employees work in teams that do not function with a hierarchical structure.

Teams are encouraged to consider compromise as a viable option in decision-making processes.

At Google, Eric Schmidt, Sergey Brin, and Larry Page could not agree on a product attribute. Instead of one of them making an executive decision and forcing the other two to go along, the team openly discussed their concerns, ultimately arriving at a solution that combined their ideas and created an entirely different product.

Still, while including many voices in the decision-making process is important, companies also need to be aware of deadlines. Find the balance between allowing employees to contribute their perspectives and rehashing a choice in a non-productive and repetitive way.

When Google was contemplating a business deal with AOL in 2002, Schmidt decided that the individuals involved would meet daily for six weeks and arrive at a conclusion within this constraint. This allowed for ample discussion time, but also ensured that the decision-making process had a definitive endpoint.

Collaborative Environment

To create a collaborative workplace environment, Google developed an internal database that stores information about all current products while also serving as a repository for employee objectives and progress reports. When key data is shared openly, employees feel invested in their company and confident that they have an accurate view.

Employees, in turn, are expected to be forthcoming about their own struggles and triumphs in the workplace. Concerns are addressed through company-wide meetings that are held on a monthly basis, for which all employees have a chance to submit questions ahead of time.

Furthermore, quarterly reports are not only provided to the board of directors at Google, but they are handed out to each company employee as well.

Because Google has created such a collaborative environment, employees feel comfortable developing their own methods of interacting with their colleagues. For instance, one employee set up weekly ‘office hours’ for others to come and ask him questions while another developed a ‘personal user manual’ to explain how to work with him most effectively.

Foster Innovation

The best way to foster innovation is by creating a climate that encourages it. Authors Schmidt and Rosenberg recommend challenging employees, being open to the possibility of failure, and allowing your employees to be creative. If the structure is too rigid, individuals will not feel that they have the bandwidth to experiment with innovative ideas in a supportive environment.

For a challenge, try to multiply every goal you set for your employees by 10. For instance, Quartz watches are 10x more accurate than mechanical watches and cost a fraction of the price. Thinking on a larger and more cost-efficient scale can differentiate your brand in a crowded market.

For being open to failure, try funding projects that are experimental or higher-risk. At Google, 10% of funding is specifically allocated to innovating in new areas.

For fostering creativity, build time for innovation in the workday.

At Google, every engineer has the ability to spend 20% of his or her time working on personal projects. In many cases, these endeavors end up integrated into Google products.

While presentations on innovation have their place in a corporation, following these engagement principles will allow your company to be active rather than passive in reaching its achievement goals.

The Main Take-away

While many organizational lessons are captured within the text of How Google Works, the most actionable takeaways from the book focus on structuring hiring processes and the general work environment so that employees feel valued, free to think critically and creatively, and motivated to work towards a common goal.

About the Authors

Eric Schmidt:

Eric Emerson Schmidt--former Chief Executive Officer (CEO) of Google for more than a decade--was born in 1955 in Falls Church, Virginia. After earning a PhD from the University of California, Berkeley in Electrical Engineering and Computer Sciences (EECS), Schmidt went on to hold leadership positions at several technology companies, including Sun Microsystems, Novell, and eventually, Google, where he assumed the role of CEO in August, 2001.

Throughout his tenure at Google, Schmidt is credited for turning the Silicon Valley start-up into a multi-dimensional, global force, while overseeing the company’s founders--Larry Page and Sergey Brin.

After 19 years, Schmidt has left his most recent role at Google--technical advisor--and will now be working with New York Governor Andrew Cuomo by chairing a commission aimed at updating the state’s technological infrastructure in response to the COVID-19 pandemic.

Jonathan Rosenberg:

Jonathan Rosenberg--former Senior Vice President (SVP) of Products at Google and current advisor for Alphabet Inc.--was born in 1961. After receiving a Masters of Business Administration from the University of Chicago, Rosenberg entered into the technical sphere by becoming Vice President of Software for palmOne, a now-defunct Sunnyvale, California-based manufacturing company that developed communications solutions at the height of the “dot-com bubble”.

After stepping away from his role at palmOne, Rosenberg joined the Google Corporation in 2002. In his position as SVP of Products, Rosenberg oversaw multiple products on both the consumer and advertiser sides of the business, including Gmail, Android, and Chrome.

Rosenberg resigned from Google in 2011 and he now serves as the Chief Operating Officer (COO) for Motorola Mobility, a consumer electronics and telecommunications subsidiary that manufactures smartphones and related products.

In addition to How Google Works, Rosenberg has another published book--Trillion Dollar Coach--which was released in 2019.


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