How Google Works

by Eric Schmidt

But hire them not for the knowledge they possess, but for the things they don’t yet know. Ray

In our experience raw brainpower is the starting point for any exponential thinker. Intelligence is the best indicator of a person’s ability to handle change.

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.”97

Psychologist Carol Dweck has another term for it. She calls it a “growth mindset.”98 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.

If you think your abilities are fixed, you’ll set for yourself what she calls “performance goals” to maintain that self-image, but if you have a growth mindset, you’ll set “learning goals”99—goals that’ll drive you to take risks without worrying so much about how, for example, a dumb question or a wrong answer will make you look.

smart generalist doesn’t have bias, so is free to survey the wide range of solutions and gravitate to the best one.

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

hire for inexperience because it brought him people who “do not usually know what’s supposed to be impossible.”

The young marketing associate, Kevin Systrom, eventually left Google. He cofounded a company called Instagram, which he later sold to Facebook for a billion dollars.109 You’re welcome, Kevin!

it. We needed executives who understood how to build scalable engines on which a company could run at a fundamentally different pace.

People who ask good questions are curious, smarter, more flexible and interesting, and understand that they don’t have all the answers—exactly the type of smart-creative characteristics you want.

Over the years, we have done our best to make it scale efficiently anyway, but our original tenet still stands, even as we pass forty-five thousand employees: Nothing is more important than the quality of hiring.

At the opposite end of the scale, managers should reward people greatly only when they do a great job. They are managing professionals, not coaching Little League, where everyone gets a standing ovation and a trophy, even the dreamer in right field who spends the game picking daisies and hunting for four-leaf clovers.

But what’s most important in the Internet Century is product excellence, so it follows that big rewards should be given to the people who are closest to great products and innovations. This means that yes, the lower-level employee who helps create a breakthrough product or feature should be very handsomely rewarded. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.

They want to be heard, to be relevant and valued.

Bill Gates and Paul Allen saw that chips and computers were getting cheap and that software would be the key to the future of computing, so they started Microsoft. Chad Hurley saw that cheap video cameras, bandwidth, and storage would transform how video entertainment is created and consumed, so he cofounded YouTube. Reid Hoffman knew that the connecting power of the web would be vital to professionals, so he started LinkedIn. Marc Benioff believed that powerful software would live in the cloud, so he based Salesforce.com on that principle and didn’t waver during the dot-com meltdown. Steve Jobs foresaw computers as consumer accessories and it took over two decades for the technology and market to catch up to him.

If those drivers only knew how much power they have in shaping global business strategy!

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

That we were under some form of attack wasn’t unusual, in fact it happened practically every day. But this time was different. The sophistication of the attack was something we hadn’t experienced before, and so was its objective. A criminal (or, more likely, team of criminals) had somehow found a way to access Google’s corporate servers. Up until then, most bad guys who attacked us were intent on disrupting Google’s services, to shut us down or make it harder for users to access us. This time the bad guys wanted our confidential information.

Sergey immediately started working on stopping the attack and figuring out who was perpetrating it and how. In a matter of hours he formed a team of the smartest computer security experts he could find, and gathered them in a nondescript building near our Mountain View headquarters. Over the next couple of weeks, the team set up systems that ultimately allowed them to watch the attacks as they were in progress, and what they found was chilling. The hackers weren’t just stealing intellectual property, but were also trying to access Gmail accounts, including those of human rights activists. And the attacks originated from within the nation with the fastest-growing major economy in the world: China.

Different institutions take different approaches to decision-making based on their hierarchical structure.

The answer lies in understanding that when it comes to making decisions, you can’t just focus on making the right one. The process by which you reach the decision, the timing of when you reach it, and the way it is implemented are just as important as the decision itself.

It wasn’t just about making the best decision for the company, but about orchestrating the process so the company reached that decision in the best possible way.

It should go without saying—but it usually doesn’t, so we’ll say it—that data is best understood by those closest to the issue, which is often not management. As a leader, it is best not to get lost in details you don’t understand, but rather trust the smart people who work for you to understand them.

Bobblehead yessers are different from your classic “yes-men” because, unlike them, bobbleheads have a nasty tendency to complain and whine and not do or support the very thing to which they just agreed as soon as they walk out of the meeting. This is something bobblehead Buster Posey would never do.

Reaching this best idea requires conflict. People need to disagree and debate their points in an open environment, because you won’t get buy-in until all the choices are debated openly.

They’ll bobblehead nod, then leave the room and do what they want to do. So to achieve true consensus, you need dissent. If you are in charge, do not state your position at the outset of the process. The job is to make sure everyone’s voice is heard, regardless of their functional role, which is harder to achieve when the top dog puts a stake in the ground.

As General Patton famously said, “If everyone is thinking alike, then somebody isn’t thinking.”128 If you’ve hired well, there’s good news: There is dissension in the ranks. Lots of people are thinking. Smart creatives, especially at the most senior leadership level, should and usually do think of themselves as owners of the business, rather than leaders of just their particular area. Therefore they should have opinions, and quite possibly valuable insights, even about decisions that fall outside...

Be especially aware of the quiet people; call on the ones who haven’t spoken up yet. They may be dissenters who are afraid to disagree with you in public (but need to get over that fear), or they may be of the shy but brilliant type. Or perhaps they truly have nothing to say, in which case maybe they shouldn’t be at the meeting in the first place. One

As Coach Wooden once said, “Be interested in finding the best way, not in having your own way.”

If you’re not sure if a course of action is right, the best thing you can do is try it out and then correct course.135

The job of the decision-maker, then, is to get the timing just right. Exhibit a bias for action, to cut off debate and analysis that is no longer valuable, and start moving the team to rally around the decision. But don’t be a slave to a sense of urgency. Maintain flexibility until the last possible moment.

Eric’s process to get to a good resolution was similar to his general decision-making process: Identify the issue, have the argument (alone, just the three of them), and set a deadline. And he often added a corollary: Let the founders decide.

“Which one of you won?” And the response was typical: “Actually, we came up with a new idea.” It turned out to be the best solution, and the decision was made.

If you want to change people’s behavior, you need to touch their hearts, not just win the argument.

Bill Gates: Spend 80 percent of your time on 80 percent of your revenue.

(“run the clock faster without compromising the future”),

They can observe players in action and tell them how to be better.

As a business leader, you need a coach.

This is the traditional model of information flow in most companies. The upper echelons of management gather information and carefully decide which bits to distribute to those that toil beneath them. In this world, information is hoarded as a means of control and power.

But the Soviet Union collapsed, and while such a parsimonious approach to spreading information may have been successful when people were hired to work, in the Internet Century you hire people to think.

This is only partially true. In the Internet Century money is obviously critical, but information is the true lifeblood of the business.

The most effective leaders today don’t hoard information, they share it. (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.”)142 Leadership’s purpose is to optimize the flow of information throughout the company, all the time, every day. This is an entirely different skill set.

We take the material that we presented to our board and share it with all of our employees. Eric presents the slides—the exact same slides that were presented to the board—to a company-wide meeting, and the entire board letter goes out in a Google-wide email.

“We can’t put that in the letter,” they say. “What if it leaks? It would cause problems.” Or “We can’t tell employees this, even though it’s true and it’s what we told the board. It might hurt morale.”

Meanwhile, nobody complains that they don’t know what’s going on across the company. Or if they do, we tell them to read the board letter and watch Eric’s presentation.

We trust our employees with all sorts of vital information, and they honor that trust.

John Seely Brown, the former director of Xerox’s Palo Alto Research Center, once said, “The essence of being human involves asking questions, not answering them.”

If someone is in charge of a business and can’t rattle off the key issues she faces in a matter of ten seconds, then she’s not up to the job. A hands-off approach to leadership doesn’t cut it anymore. You need to know the details.

Larry listened for a few sentences and then interrupted. “That’s not what they’re doing. Here’s what they’re doing.” Larry listed some things and Eric quickly realized that Larry was right. Eric had details, but Larry had the truth. The forest always trumps the trees.