How Google Works

by Eric Schmidt

We believe in staying functionally organized—with separate departments such as engineering, products, finance, and sales reporting directly to the CEO—as long as possible, because organizing around business divisions or product lines can lead to the formation of silos, which usually stifle the free flow of information and people.

whenever possible, avoid secret organizational documents.

There are times when a reorganization actually does make sense. When that day comes, we have a couple of rules. First, beware of the tendencies of different groups: Engineers add complexity, marketing adds management layers, and sales adds assistants. Manage this

When you have a company of smart creatives, you can tolerate messiness. In fact, it helps, because smart creatives find it empowering, not confusing.

The key was doing the reorg quickly and launching it before it was complete. As a result, the organization design was stronger than initially conceived, and the team was more invested in its success because it helped create the end result. Since there is no perfect organizational design, don’t try to find one. Get as close as you can and let your smart creatives figure out the rest.

The building block of organizations should be small teams. Jeff Bezos, Amazon’s founder, at one point had a “two-pizza team” rule,44 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 usuall...

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 w...

Determine which people are having the biggest impact and organize around them.

Decide who runs the company not based on function or experience, but by performance and passion.

Debbie Biondolillo, Apple’s former head of human resources, who said, “Your title makes you a manager. Your people make you a leader.”

You want to invest in the people who are going to do what they think is right, whether or not you give them permission. You’ll find that those people will usually be your best smart creatives.

This does not mean you should create a star system, in fact the best management systems are built around an ensemble, more like a dance troupe than a set of coordinated superstars. This approach creates long-term consistency, with a deep bench of high-performance talent ready to lead when the opportunity appears.

At the most senior level, the people with the greatest impact—the ones who are running the company—should be product people.

N

When a CEO looks around her staff meeting, a good rule of thumb is that at least 50 percent of the people at the table should be experts in the company’s products and services and responsible for product development. This will help ensure that the leadership team maintains focus on product excellence.

Operational components like finance, sales, and legal are obviously critical to a company’s success, but they shou...

You also want to select as your leaders people who don’t place their own interests above the company’s. We see this a lot in compan...

You should never be able to reverse engineer a company’s organizational chart from the design of its product.

Once you identify the people who have the biggest impact, give them more to do. When you pile more responsibility on your best people, trust that they will keep taking it on or tell you when enough is enough. As the old saying goes: If you want something done, give it to a busy person.

Nice humble engineers have a way of becoming insufferable when they think they are the sole inventors of the world’s next big thing. This is quite dangerous, as ego creates blind spots.

Jealous of your colleague’s success? You’re a knave.

Taking credit for someone else’s work? Knave.

Selling a customer something she doesn’t need or won’t benefit from? Knave.

Blowing up a Lean Cuisine in the company microwave and not cl...

Tagging the wall of a na...

The character of a company is the sum of the characters of its people, so if you strive for a company of sterling character, that is the standard you must set for your employees. There is no room for knaves. And g...

(Tom Peters: “There is no such thing as a minor laps...

In a healthy culture of knightish values, the knights will call out the knaves for their poor behavior until they either shape up or leave. (This is another argument for crowded offices: Humans are at their best when surrounded by soci...

You must always be firm with the people who violate the basic interests of the company. Don’t bite them, but do act swiftly and decisively. Nip crazy in the bud.

Knaves need to be dealt with as quickly as possible. But as long as their contributions match their outlandish egos, divas should be tolerated and even protected.

As long as people can figure out any way to work with the divas, and the divas’ achievements outweigh the collateral damage caused by their diva ways, you should fight for them. They will pay off your investment by doing interesting things.

Steve Jobs was one of the greatest business divas the world has ever known!)

Work-life balance. This is another touchstone of supposedly “enlightened” management practices that can be insulting to smart, dedicated employees.

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 forty-hour workweek.

(Google’s main campus courtyard on a summer evening looks like family camp, there are so many children running around while their parents enjoy a nice dinner.) The intense stretches may last for weeks or even months, especially in start-ups, but they never last forever.

Manage this by giving people responsibility and freedom. Don’t order them to stay late and work or to go home early and spend time with their families. Instead, tell them to own the things for which they are responsible, and they will do what it takes to get them done. Give them the space and the freedom to make it happen.

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

Marissa Mayer

Give your smart creatives control, and they will usually make their own best decisions about how to balance their lives.

Keeping them in small teams can help too. In small teams, teammates are more apt to sense when one member is burning out and needs...

We encourage people to take real vacations, although not to promote “work-life balance.” If someone is so critical to the company’s success that he believes he can’t unplug for a week or two without things crashing down, then there is a larger problem that must be addressed. No one should or can be indispensable. Occasionally you will encounter employees who create this situation intentionally, perhaps to feed their ego or in the mistaken belief that “indispensability” equals job security. Make such 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.)

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.

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 ...

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 o...

Every week, at Google’s TGIF all-hands meeting, all the new hires are seated in one section and provided with multicolored propeller hats to identify them.

When he hosts TGIF, his constant ad-libbed one-liners generate a lot of laughs—not laugh-at-the-founder’s-jokes-or-else laughs, but real laughs.

A great start-up, a great project—a great job, for that matter—should be fun,

Part of the fun comes from inhaling the fumes of future success. But a lot of it comes from laughing and joking and enjoying the company of your coworkers.

it’s not hard to throw a fun company party. The formula is exactly the same as fun weddings: great people (and you did hire great people, didn’t you?) + great music + great food and drink.