How Google Works

by Eric Schmidt

It’s also true that many companies get comfortable doing what they have always done, with a few incremental changes. This kind of incrementalism leads to irrelevance over time, especially in technology, because change tends to be revolutionary not evolutionary.

when we started Google Maps, people thought that our goal of mapping the entire world, including photographing every street, would prove impossible.

Today, three factors of production have become cheaper—information, connectivity, and computing power—affecting any cost curves in which those factors are involved.

pre-Internet companies—built their businesses based on assumptions of scarcity: scarce information, scarce distribution resources and market reach, or scarce choice and shelf space.

The result of all this turmoil is that product excellence is now paramount to business success—not control of information, not a stranglehold on distribution, not overwhelming marketing power (although these are still important).

Have you ever heard of Google Notebook? How about Knol? iGoogle? Wave? Buzz? PigeonRank?18 These were all Google products that, while they had some merit, never caught on with users.

“In the old world, you devoted 30 percent of your time to building a great service and 70 percent of your time to shouting about it. In the new world, that inverts.”

You see this most dramatically in high-tech industries, where a small team of engineers, developers, and designers can create fabulous products and distribute them online globally for free.

The basis for success then, and for continual product excellence, is speed.

The primary objective of any business today must be to increase the speed of the product development process and the quality of its output.

Let data decide, she believes, but don’t let it take over.

She is always questioning, never satisfied with the status quo, seeing problems to solve everywhere and thinking that she is just the person to solve them.

She is not afraid to fail, because she believes that in failure there is usually something valuable she can salvage.

She doesn’t wait to be told what to do and sometimes ignores direction if she doesn’t agree with it.

She freely collaborates, and judges ideas and analyses on their merits and not their provenance.

“If I give you a penny, then you’re a penny richer and I’m a penny poorer, but if I give you an idea, then you will have a new idea but I’ll have it too.”

She is always on and can recite the details, not because she studies and memorizes, but because she knows them.

She is funny and expresses herself with flair and even charisma, either one-to-one or one-to-many.

they work hard and are willing to question the status quo and attack things differently.

If you can’t tell someone how to think, then you have to learn to manage the environment where they think. And make it a place where they want to come every day.

Smart creatives, though, place culture at the top of the list.

The difference, though, between successful companies and unsuccessful ones is whether employees believe the words.

Think about someplace where you’ve worked. Now, try to recite its mission statement. Can you do it? If so, do you believe in it? Does it strike you as authentic, something that honestly reflects the actions and culture of the company and its employees? Or does it seem like something a group of marketing and communications people conjured up one night with a six-pack and a thesaurus?

“do something worthwhile—they make a contribution to society…. You can look around and still see people who are interested in money and nothing else, but the underlying drives come largely from a desire to do something else—to make a product, to give a service, generally to do something which is of

People’s BS detectors are finely tuned when it comes to corporate-speak; they can tell when you don’t mean it. So when you put your mission into writing, it had better be authentic.

one of Google’s stated values has always been to “Focus on the User.”

company-wide TGIF meeting (which is hosted by Larry and Sergey, and where employees are welcome to—and often do—voice their disagreement with company

“No vision is worth the paper it’s printed on unless it is communicated constantly and reinforced with

Be very generous with the resources they need to do their work. Be stingy with the stuff that doesn’t matter, like fancy furniture and big offices, but invest in the stuff that does.

When it comes to the quality of decision-making, pay level is intrinsically irrelevant and experience is valuable only if it is used to frame a winning argument. Unfortunately, in most companies experience is the winning argument.

Jim Barksdale, erstwhile CEO of Netscape: “If we have data, let’s look at data. If all we have are opinions, let’s go with

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

“Your title makes you a manager. Your people make you a leader.”

a leader who doesn’t need him. If the company is run by a person who is performing well because she is committed to its success, and not just by making a bundle by selling to Berkshire Hathaway, then Warren will invest.

You want to invest in the people who are going to do what they think is right, whether or not you give them permission.

in fact the best management systems are built around an ensemble, more like a dance troupe than a set of coordinated superstars.

At the most senior level, the people with the greatest impact—the ones who are running the company—should be product people. 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 should not dominate the conversation.

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.

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.

(This is another argument for crowded offices: Humans are at their best when surrounded by social controls, and crowded offices have lots of social controls!)

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

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.

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 to go home early or take a vacation.

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.

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.

Set the bar high for that new process or approval gate; make sure there are very compelling business reasons for it to be created.

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