How Google Works

by Eric Schmidt

for them, the cultural obligation to dissent gives them freed...

Others, though, may feel more uncomfortable raising dissenting views, particu...

That’s why dissent must be an obligation, not an option. Even the more naturally reticent people need to pus...

Meritocracies yield better decisions and create an environment where all employees f...

They demolish the cultur...

Reorganization

is one of the most despised phrases in the corporate lexicon,

if the company was organized differently everything would be puppies and sunshine.

Some execs “win” and others “lose.” Meanwhile, most employees remain in limbo,

Then a year or two later some other executive (or quite possibly the same one) realizes the company still has problems and orders another reorganization.

Organizational design is hard.

What works when you’re small and in one location does not work when you get bigger and have people all over the world.

put aside preconceived notions about how the company should be organized,

and adhere to a few important principles.

First, keep i...

in fact they usually long for hierarchy.

Smart creatives are different:

They prefer a flat organization, less because they want to be c...

more because they want to get things done and need direct access...

But smart creatives aren’t that different; like any other employee,

they still need a formal organization structure.

rule of seven.

Google version suggests that managers have a minimum of seven direct reports

forces flatter charts with less managerial oversight and more employee freedom.

With that many direct reports—most managers have a lot more than seven—there simply isn’t time to micromanage.

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.

Having separate P&Ls seems like a good way to measure performance, but it can have the unfortunate side effect of skewing behavior:

The leaders of a business unit are motivated to prioritize their unit’s P...

If you do have P&Ls, make sure they are driven by real external cu...

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.

Small teams get more done than big ones, and they spend less time politicking and worrying about who gets credit.

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 working on the next breakthroughs.

A scaling company ne...

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.

“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.

This does not mean you should create a star system,

in fact the best management systems are built aro...

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...

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.

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.