How Google Works

by Eric Schmidt

The best products are still the ones that are based on technical insights, those unique ideas that apply one or more technologies in a new way to solve big problems.

projects at X succeed only when they “fail to fail.”

The ethos is always to build the prototype as cheaply as possible, and to worry about scaling only after the prototype fails to fail.

Larry and Sergey’s “just go talk to the engineers” ethos

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).

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.

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. To be effective, they need to care about the place they work. This is why, when starting a new company or initiative, culture is the most important thing to consider.

Culture stems from founders, but it is best reflected in the trusted team the founders form to launch their venture.

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

(it’s easy to hold the line in a negotiation when you are, in fact, completely unable to get your side to budge!),

Offices should be designed to maximize energy and interactions, not for isolation and status. Smart creatives thrive on interacting with each other. The mixture you get when you cram them together is combustible, so a top priority must be to keep them crowded.

Messiness is not an objective in itself (if it was, we know some teens who would be great hires), but since it is a frequent by-product of self-expression and innovation, it’s usually a good sign.

For a meritocracy to work, it needs to engender a culture where there is an “obligation to dissent”.41 If someone thinks there is something wrong with an idea, they must raise that concern. If they don’t, and if the subpar idea wins the day, then they are culpable.

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.

Seoul dancing with Korean pop star PSY:

Leadership requires passion. If you don’t have it, get out now.

Bet on technical insights that help solve a big problem in a novel way, optimize for scale, not for revenue, and let great products grow the market for everyone.

Product leaders create product plans, but those product plans often (usually!) lack the most important component: What is the technical insight upon which those new features, products, or platforms will be built? A technical insight is a new way of applying technology or design that either drives down the cost or increases the functions and usability of the product by a significant factor. The result is something that is better than the competition in a fundamental way.

Giving the customer what he wants is less important than giving him what he doesn’t yet know he wants.

Find the geeks, find the stuff, and that’s where you’ll find the technical insights you need to drive success.

“What is your technical insight?” turns out to be an easy question to ask and a hard one to answer. So for your products, ask the question. If you can’t articulate a good answer, rethink the product.

Business leaders spend much of their time watching and copying the competition, and when they do finally break away and try something new, they are careful risk-takers, developing only incremental, low-impact changes.

Being close to your competition offers comfort; it’s like covering tactics in match race sailing, when the lead boat tacks whenever the follower does, to ensure that the follower doesn’t go off in a different direction and find stronger wind. Incumbents clump together so that no one finds a fresher breeze elsewhere.

If you focus on your competition, you will never deliver anything truly innovative. While you and your competitors are busy fighting over fractions of a market-share point, someone else who doesn’t care will come in and build a new platform that completely changes the game.

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

Smart coaches know that no amount of strategy can substitute for talent, and that is as true in business as it is on the field. Scouting is like shaving: If you don’t do it every day, it shows.

In a peer-based hiring process, the emphasis is on people, not organization. The smart creatives matter more than the role; the company matters more than the manager.

The best workers are like a herd: They tend to follow each other. Get a few of them, and you’re guaranteed that a bunch more will follow.

Passionate people don’t wear their passion on their sleeves; they have it in their hearts. They live it.

Henry Ford said that “anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.”

If you believe that the qualities defining you are carved in stone, you will be stuck trying to prove them over and over again, regardless of the circumstances. But if you have a growth mindset, you believe the qualities that define you can be modified and cultivated through effort. You can change yourself; you can adapt; in fact, you are more comfortable and do better when you are forced to do so.

Great people treat others well, regardless of standing or sobriety.

You must work with people you don’t like, because a workforce comprised of people who are all “best office buddies” can be homogeneous, and homogeneity in an organization breeds failure. A multiplicity of viewpoints—aka diversity—is your best defense against myopia.

When you completely delegate recruiting, quality degrades.

The urgency of the role isn’t sufficiently important to compromise quality in hiring.

If you want better performance from the best, celebrate and reward it disproportionately.

“Just because a job ends, your relationship with your employee doesn’t have to…. The first thing you should do when a valuable employee tells you he is leaving is try to change his mind. The second is congratulate him on the new job and welcome him to your company’s alumni network.”

Reid Hoffman

When people are right out of school, they tend to prioritize company first, then job, then industry. But at this point in their career that is exactly the wrong order. The right industry is paramount, because while you will likely switch companies several times in your career, it is much harder to switch industries.

The most interesting industries are those where product cycle times are accelerating, because this creates more chances for disruption and so more opportunities for fresh talent. But even businesses like energy and pharmaceuticals, where product cycle times are long, are ripe for massive transformation and opportunity.

Sheryl Sandberg: “It is the ultimate luxury to combine passion and contribution. It’s also a very clear path to happiness.”

when you are considering something that is fundamental to the existence of the company, you should meet every day.

We think that if we have made a clever and thoughtful argument, based on data and smart analysis, then 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.

(Bill Gates in 1999: “Power comes not from knowledge kept but from knowledge shared. A company’s values and reward system should reflect that idea.”)

People are afraid to ask their leaders the tough questions, so they serve up softballs instead. This doesn’t just apply to questions. It is one of the most universal of human truths: No one wants to be the bearer of bad news. Yet as a leader it is precisely the bad news that you most need to hear.

Good news will be just as good tomorrow, but bad news will be worse. That’s why you must make it safe to ask the tough questions and to tell the truth at all times, even when the truth hurts.

golden rule for management: Make sure you would work for yourself. If you are so bad as a manager that you as a worker would hate working for you, then you have some work to do.

(Champion racecar driver Mario Andretti: “If everything seems under control, you’re just not going fast enough.”)