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How Google Works

By Eric Schmidt & Jonathan Rosenberg

My rating: 7/10

Date read: 2018-08-23

Book on Amazon.com

Thoughtful advice from high Google executives on culture, hiring, communication and strategy, backed by plenty of examples and stories from inside the company.

Notes

Just talk to the engineers.

[Sergey's and Larry's] plan for creating that great search engine was simple: hire as many talented software engineers as possible and give them freedom.

To this day rule of thumb is that at least half of Google employees should be engineers.

Have you ever seen a scheduled plan that the team beat? (No) Have your teams ever delivered better products than what was in the plan (No again) Then what's the point of the plan? It's holding us back. There must be a better way. Just go talk to the engineers. Managing them by traditional planning structures wouldn't work; it might guide them but it would also hem them in. Why would you want to do that? That would be stupid

Three powerful technology trends have converged to fundamentally shift the playing field in most industries. Internet made information free, copious and ubiquitous. Mobile devices and networks made global reach and connectivity widely available. Cloud computing has put practically infinite compuring power and storage at everyone's disposal.

Today, most astonishing innovations (phones, internet, tech) aren't astonishing at all anymore. They are now seen as commonplace.

Speed of innovation and experimentation has grown significantly.

New type of workers replaced "knowledge workers" - "smart creatives". They are multidimensional, usually combining tech depth with business savvy and creative flair. They work hard and are willing to question the status quo and attack things differently.

Now the defining characteristic of successful companies is the ability to continually deliver great products. And the only way to do that is to attract smart creatives and create an environment where they can succeed at scale.

Culture

Culture is perhaps the one important aspect of a company where failed experiments hurt. Once established, company culture is very difficult to change.

Keep people "crowded". This way, nothing can get in the way of communications and flow of the ideas. (but employees should always have an option to retire to a quite place sometimes).

We invest in our offices because we expect people to work there, not from home. Your partner or roommate is probably great, but the odds of the two of you coming up with a billion-dollar business during a coffee break at home is pretty small. Make your offices crowded and load them with amenities, then expect people to use them.

It's dangerous to value people opinions more only because they get paid more, more experienced or are more senior. It doesn't matter who you are, just what you do.

Managers have a minimum of seven direct reports. This forces more flat structure, and no time for managers to micromanage.

The building block of organizations should be small teams – ones that can be fed with two pizzas.

Exile knaves (arrogant, jealous, and bad people), but fight for divas (exceptional, talented people, who can still be hard to work with).

On work-life balance: if you are a manager, it's your responsibility to keep work part lively and full, not to make sure your employees consistently have forty-hour workweeks. Manage this by giving people responsibility and freedom.

Burnout isn't caused by working too hard, but by resentment at having to give up what really matters to you.

Make "important and indespensable" people take a nice vacation and make sure their next-in-line fills in for them while they are gone. They will return refreshed and motivated, and the people who filled their shoes will be more confident (this is a huge hidden benefit of people taking maternity and paternity leaves too).

Establish a culture of yes. Approval should be default response.

Forget "team building" and have fun. True "Fun" cannot be created by fiat.

Set the boundaries of what is permissible as broadly as possible. Nothing can be sacred.

[On leadership] When Israeli tank commnders head into combat, they don't yell "Charge!", they yell "Follow me!". Anyone who aspired to lead smart creatives needs to adopt this attitude.

Don't be evil. Check this as your moral compass when making decisions.

Strategy.

Your [business] plan is wrong. That is why VC maxim is to invest in the team, not the plan.

Bet on technical insights, not market research. Every great product has to have a solid technical insight behind it.

One way of developing tech insights is to use some of [existing] accessible technologies and data and apply them in an industry to solve an existing problem in a new way.

Another potential source of tech insights is to start with a solution to a narrow problem and look for ways to broaden its scope (even the internet was initially conceived as a way for scientists and academics to share research).

Henry Ford: "If I had listened to customers, I would have gone out looking for faster horses". Don't look for faster horses.

Optimize for growth (e.g Google didn't put ads on it's homepage, like it could, it optimized for long-term growth and strategy).

Specialize. Google [in the early days] focused on one thing: being great at search. It even included links to other search engines, so users could try those if they didn't like Google's results.

Default to open, not closed. Share information. With open you trade control for scale and innovation.

Don't follow competition. Fixation on competiton leads to a never-ending spiral into mediocrity.

Start by asking what will be true (or you want to be true) in five years and work backward.

Now that there is almost perfect market information and broad availability of capital, you need to win on the product and platform.

Iteration is the most important part of the strategy. It needs to be very, very fast and always based on learning.

Talent. Hiring is the most important thing you do.

Four parts of interviewing: sourcing, interviewing, hiring, compensation.

Herd effect. Best smart creatives follow other best smart creatives to work with them. Set the bar high from the very beginning.

Passionate people don't use work "passion". They live it.

Hire learning animals – people who have "growth mindset" (who believe qualities/skills they have can be modified and cultivated through effort).

LAX test - would it be interesting to get stuck in the airport with the person you are about to hire?

Diversity – people with different backgrounds see the world differently. These are insights that can't be taught.

Everyone knows someone great.

Interviewing is the most important skill.

Schedule interview for 30 minutes, and have maximum of 5 interviews.

Urgency of the role isn't sufficiently important to compromise quality in hiring.

Prioritize the interests of the highly valued individual over the constraints of the organization.

Keep best people challenged and inspired (for example by rotating them to another team or giving them more responsibilities), to prevent them from getting bored and leaving.

People rarely leave over compensation, so listen to them: they want to be heard, relevant and valued. Loss of great people can have a big ripple effect, as they often inspire their followers to leave too.

Best way not to fire underperformers is not to hire them. If you could trade the bottom 10% of your team for new hires, would your organization improve? If so, your hiring process needs improvement. Another test: are there members of your team whom, if they told you they were leaving, you wouldn't fight hard to keep? If there are employees you would let go, then perhaps you should.

Decisions

Decide with data

Beware of bobblehead yes (people who just nod at the meeting for everything). Make people express their opinions.

Consensus is not about getting everyone to agree. It's about coming to the best idea for the company and rallying around it.

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

Know when to ring the bell - set deadline for the decision. "Do something, even if it's wrong"

We think that if we have made a clever and thoughful argument, based on data and analysis, people will change their minds. This isn't true. If you want to change people's behavior, you need to touch their hearts, not just win the argument. One simple trick is to acknowledge that "both sides of an argument are right"

Every meeting needs an owner.

Spend 80% of your time on 80% of your revenue. Focus on your core business.

World's best athletes need coaches. You need one too.

Communication

Default to open.

It must be safe to tell the truth at the company.

Innovation

Focus on the user. Feature can be released if it helps user, even if it can hurt the revenue.

Think big. 10X vs 10% improvements.

Set (almost) unattainable goals. Reaching 70% of an ambitious goal is often better than 100% of a mediocre one.

"the human race built most nobly when limitations were greatest"

Ideas come from anywhere

Ship and iterate. Move fast.

Fail well (fail fast, and learn from it)

Feed (fund) winners, and starve (provide less resources) losers

It's not about money. People are most motivated by the work itself, not money or compensation.

Conclusion.

Imagine the unimaginable. How world will look like in the future? Nobody could predict current technology 30 years ago.

Ask the hardest questions of your company and yourself.