How Google Works

by Eric Schmidt

starting from first principles was what got Google going.

Over time I’ve learned, surprisingly, that it’s tremendously hard to get teams to be super ambitious.

It turns out most people haven’t been educated in this kind of moonshot thinking.

They tend to assume that things are impossible, rather than starting from real-world physics and figuring...

It’s why we’ve put so much energy into hiring independent thinkers at Google,...

Because if you hire the right people and have big enough dreams, you’ll usually get there. And even if you fail, you’ll p...

It’s also true that many companies get comfortable doing what they have always done, with...

This kind of incrementalism leads to irrelevance over time, especially in technology, because change tends to be...

So you need to force yourself to place big bet...

It’s why we invest in areas that may seem wildly speculative, such as self-driving cars or ...

“What’s different now?”

This is one of Eric’s favorite ways to start a conversation

The question is always relevant. Something is always different.

Everything is speeding up, and executives from all sectors who are intrigued by the valley’s longstanding status as an innovation engine want to come and learn from it.

We wrote How Google Works because we believe that the art and science of management has changed in the twenty-first century.

Empowered by information and technology, individuals and small teams can have enormous impact, far greater than ever before.

our visitors let us know that our lessons and insights were very interesting, and were perhaps what they needed,

but were practically impossible to implement.

the “how Google worked” sentiment was one we heard several times as we talked to Googlers about the book.

It became apparent to us that as Google had grown, it had naturally become slower and more process-driven.

Larry Page doesn’t like being comfortable, which is exactly what he felt Google was becoming.

This is what led to the creation of Alphabet, which Larry announced in August 2015.

with their own culture, processes, and leadership.

They have the freedom to operate as they choose, to succeed (or fail) on their own,

and their CEOs will face the same financial pressures as any other CEO try...

The Alphabet decision was typically Larry: bold, innovative, decisive. To our knowledge, no company of our size has ever done ...

Companies create operating divisions with presidents; they don’t cleave themselves into multiple pieces, at least...

They don’t finalize the decision and announce it mere weeks later, with many of the details still to be worked out.

But all of these are things that Larry did with the Alphabet decision.

Once he decided (and the board agreed), he moved quickly an...

He didn’t have all the answers, but he knew...

Fsscinating to read this...with the benefit of hindsight in 2020, is there a consensus of whether Alphabet has been a success or a hindrance?

The core principle we espouse in How Google Works is stil...

The only way to succeed in business in the twenty-first century is to continually create great products, and the only way to do that is to attract smart creatives and give them an environment where they can succeed at scale. The problem is, as we have discovered, in a large company it becomes more and more difficult to create that environment. In fact, forces in big compa...

You aren’t just trying to climb a mountain; people are dropping rocks...

recent changes at Google have taught us a few new lessons on how to keep those smart creatives we so dearly love excited and doing amazing things.

new management principles

organizing around CEOs whose impact is the highest, (still) betting on technical insights, and

taking on “roofshot” projects as well a...

With process comes scale; you absolutely need process to grow a company profitably.

At some point, though, process starts to take over.

It becomes so entrenched that it can trum...

People stop thinking and instead just depend on the process to make decisions for them. As process gets better, judgment can weaken.

In a big company, that pendulum always pulls toward the control side. But a start-up, or any new venture that is trying to do something big and new, favors the chaos.

Start-ups don’t run on process, they run on ideas, passion, and a common set of goals.

Dependence on process, no matter how well intentioned, squelches start-ups a...

It’s not just people processes that can hurt innovation; budget processes can do it too.

The budget process dictated that operating expenses be allocated in accordance with revenue; generate more revenue, and you get more money to run your business.

Sounds familiar from my days at USAA...and I hate it! Makes no sense strategically and does not match well with product lifecycle concepts from Business School 101.

This is a classic approach to budgeting, and it makes sense if your primary objective is efficiency.

But Susan (and any other start-up CEO) doesn’t think of budget just in terms of operating ex...

It’s an investment in growing t...